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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB/A



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Amendment No. 1

(Mark One)

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

For the quarterly period ended September 30, 2005



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

For the transition period from to

Commission file number: 000-27131



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INVERTED PARADIGMS CORPORATION

F/K/A HORIZON HOLDING CORPORATION

(Exact name of Registrant as specified in its charter)



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|                                                               |  |                                                               |  |                        
|-------------------------------------------------------------- |  | ------------------------------------------------------------- |  | -----------------------
|Delaware                                                       |  | 11523 Palm Brush Trail, #341                                  |  | 88-0381258             
|(State or other Jurisdiction of Incorporation or Organization) |  | Lakewood Ranch, FL 34202 (941) 926-6180                       |  | (IRS Employer I.D. No.)
|                                                               |  | (Address and telephone number of principal executive offices) |  |                        

5401 S. Kirkman Road Suite 310

Orlando, Florida 32819

(407) 926-0230

(Former 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

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

The number of shares of the registrants common stock, par value $0.001 per share, outstanding as of November 12, 2005 was 13,154,729 and there were 878
stockholders of record.

Transitional Small Business Issuer Format: ̈YES    x  NO

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



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##### Table of Contents

EXPLANATORY NOTE Inverted Paradigms Corporation (the Company) is filing this Amendment No. 1 to its Quarterly Report on
Form 10-QSB for its fiscal quarter ended September 30, 2005, as filed with the Securities and Exchange Commission on November 14, 2005 (the Original September 2005 Form 10-QSB), primarily to correct an error in
recording interest expense from beneficial conversion features of convertible notes in 2004 and 2005 and to correct the resulting effects upon additional paid in capital, accumulated deficit and interest expense. The Company erroneously did not record interest expense resulting from a convertible note payable with a beneficial conversion feature entered into in
July 2005 and February 2004. Actual Changes in the Original September 2005 Form 10-Q. The actual changes in the Original
September 2005 Form 10-QSB included in this Amendment No. 1 are amendments to Part I that include: (a) amended and restated Consolidated Balance Sheet as of September 30, 2005, (b) amended and restated
Consolidated Statement of Operations for the three and nine months ended September 30, 2005 and the nine months ended September 30, 2004, (c)amended and restated Consolidated Statement of Cash Flows for the nine months ended
September 30, 2005 and September 30, 2004, (d) additional discussions concerning interest expense in the Comparison of the Three and Nine Months Ended September 30, 2005 and September 30, 2004, and (e) a new
note 10 discussing the restatement. Notwithstanding that there are no changes in most of the Notes to the Consolidated Financial
Statements included in this Amendment No. 1, a complete Form 10-QSB document including a complete set of the Consolidated Financial Statements (together with all of the Notes from the Original September 2005 Form 10-QSB) has been included
in this Amendment No. 1, for convenient reference. In addition, see additional amended filings of the Company for relevant subsequent
events.




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##### Table of Contents

INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

FORM 10-QSB

INDEX



|                                         |  |                                                                                                                                        |  |   
|---------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------- |  | --
|PART I.                                  |  | FINANCIAL INFORMATION                                                                                                                  |  |   
|                                         |  |                                                                                                                                       
|Item 1.                                  |  | Financial Statements                                                                                                                   |  |   
|                                         |  | Consolidated Balance Sheet (unaudited) at September 30, 2005 (As restated)                                                             |  | 3 
|                                         |  | Consolidated Statements of Operations (unaudited) for the Three Months and Nine Months Ended September 30, 2005 and 2004 (As restated) |  | 4 
|                                         |  | Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2005 and 2004 (As restated)                  |  | 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                           |  | 20                                                                                                                                    
|                                         | 
|Exhibit 31.1 Stewart York Certification  |  |                                                                                                                                       
|                                         | 
|Exhibit 31.2 Steven Weldon Certification |  |                                                                                                                                       
|                                         | 
|Exhibit 32.1 Stewart York Certification  |  |                                                                                                                                       
|                                         | 
|Exhibit 32.2 Steven Weldon Certification |  |                                                                                                                                       



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheet



|                                                                                                        |  |                                 |             |  
|------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ----------- | -
|                                                                                                        |  | September 30,2005 (As restated) |            
|                                                                                                        |  | (unaudited)                     |            
|Assets                                                                                                  |  |                                 |             |  
|                                                                                                        | 
|Current assets:                                                                                         |  |                                 |             |  
|Cash and cash equivalents                                                                               |  | $                               | 23,146      |  
|Prepaid expenses                                                                                        |  |                                 | 175,137     |  
|                                                                                                        |  |                                 |             |  
|Total current assets                                                                                    |  |                                 | 198,283     |  
|                                                                                                        | 
|Property and equipment, net                                                                             |  |                                 | 3,626       |  
|Deposits                                                                                                |  |                                 | 3,537       |  
|                                                                                                        |  |                                 |             |  
|Total assets                                                                                            |  | $                               | 205,446     |  
|                                                                                                        |  |                                 |             |  
|Liabilities and Stockholders Equity                                                                    |  |                                 |             |  
|                                                                                                        | 
|Current liabilities:                                                                                    |  |                                 |             |  
|Accounts payable                                                                                        |  | $                               | 153,228     |  
|Other current liabilities                                                                               |  |                                 | 51,153      |  
|                                                                                                        |  |                                 |             |  
|Total current liabilities                                                                               |  |                                 | 204,381     |  
|                                                                                                        | 
|Stockholders equity:                                                                                   |  |                                 |             |  
|Common stock, $0.001 par value, 100,000,000 shares authorized, 13,154,729 shares issued and outstanding |  |                                 | 13,154      |  
|Additional paid-in capital                                                                              |  |                                 | 37,310,842  |  
|Deferred stock-based employee compensation                                                              |  |                                 | (73,444     | )
|Accumulated deficit                                                                                     |  |                                 | (37,249,487 | )
|                                                                                                        |  |                                 |             |  
|Total stockholders equity                                                                              |  |                                 | 1,065       |  
|                                                                                                        |  |                                 |             |  
|Total liabilities and stockholders equity                                                              |  | $                               | 205,446     |  
|                                                                                                        |  |                                 |             |  

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 endedSeptember 30, |            |               | For the nine months endedSeptember 30, |  
|                                                                                                                                                                                                                            | 2005 (As restated) Unaudited |                                         |            | 2004Unaudited |                                        |   | 2005 (As restated) Unaudited |   |  | 2004 (As restated) Unaudited |           
|Net sales                                                                                                                                                                                                                   |                              | $                                       |           |               |                                        | $ | 236,444                      |   |  | $                            | 32,016     |   |  | $ | 685,705    |  
|Cost of sales                                                                                                                                                                                                               |                              |                                         |           |               |                                        |   | 199,723                      |   |  |                              | 27,004     |   |  |   | 576,395    |  
|                                                                                                                                                                                                                            |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Gross profit                                                                                                                                                                                                                |                              |                                         |           |               |                                        |   | 36,721                       |   |  |                              | 5,012      |   |  |   | 109,310    |  
|                                                                                                                                                                                                                            |                              |                                         |            |              
|Operating expenses:                                                                                                                                                                                                         |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Sales and marketing                                                                                                                                                                                                         |                              |                                         | 74         |               |                                        |   | 60,394                       |   |  |                              | 5,751      |   |  |   | 84,125     |  
|General and administrative (inclusive of non-cash stock-based employee compensation of $28,121 and $141,874 and $299,129 and $429,430 for the
three months and nine months ended September 30, 2005 and 2004, respectively) |                              |                                         | 146,110    |               |                                        |   | 566,635                      |   |  |                              | 1,024,526  |   |  |   | 1,839,829  |  
|Technology and content                                                                                                                                                                                                      |                              |                                         | 684        |               |                                        |   | 16,519                       |   |  |                              | 13,523     |   |  |   | 47,108     |  
|Depreciation and amortization                                                                                                                                                                                               |                              |                                         | 320        |               |                                        |   | 3,853                        |   |  |                              | 960        |   |  |   | 12,067     |  
|                                                                                                                                                                                                                            |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Total operating expenses                                                                                                                                                                                                    |                              |                                         | 147,188    |               |                                        |   | 647,401                      |   |  |                              | 1,044,760  |   |  |   | 1,983,129  |  
|                                                                                                                                                                                                                            |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Loss from operations                                                                                                                                                                                                        |                              |                                         | (147,188   | )             |                                        |   | (610,680                     | ) |  |                              | (1,039,748 | ) |  |   | (1,873,819 | )
|                                                                                                                                                                                                                            |                              |                                         |            |              
|Other income (expense):                                                                                                                                                                                                     |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Interest income                                                                                                                                                                                                             |                              |                                         | 298        |               |                                        |   | 272                          |   |  |                              | 1,671      |   |  |   | 1,360      |  
|Interest expense                                                                                                                                                                                                            |                              |                                         | (15,357    | )             |                                        |   | (522                         | ) |  |                              | (15,357    | ) |  |   | (697,103   | )
|Gain on extinguishment of debt                                                                                                                                                                                              |                              |                                         |           |               |                                        |   |                             |   |  |                              | 3,374      |   |  |   | 207,964    |  
|                                                                                                                                                                                                                            |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Net other income (expense)                                                                                                                                                                                                  |                              |                                         | (15,059    | )             |                                        |   | (250                         | ) |  |                              | (10,312    | ) |  |   | (487,229   | )
|                                                                                                                                                                                                                            |                              |                                         |            |              
|Net loss from continuing operations                                                                                                                                                                                         |                              |                                         | (162,247   | )             |                                        |   | (610,930                     | ) |  |                              | (1,050,060 | ) |  |   | (2,361,598 | )
|                                                                                                                                                                                                                            |                              |                                         |            |              
|Loss from discontinued operations                                                                                                                                                                                           |                              |                                         |           |               |                                        |   | (85,702                      | ) |  |                              | (4,249     | ) |  |   | (106,073   | )
|                                                                                                                                                                                                                            |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Net loss                                                                                                                                                                                                                    |                              | $                                       | (162,247   | )             |                                        | $ | (696,632                     | ) |  | $                            | (1,054,309 | ) |  | $ | (2,467,671 | )
|                                                                                                                                                                                                                            |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Net loss per share from continuing operations  basic and diluted                                                                                                                                                           |                              | $                                       | (0.01      | )             |                                        | $ | (0.05                        | ) |  | $                            | (0.08      | ) |  | $ | (0.22      | )
|                                                                                                                                                                                                                            |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Net loss per share from discontinued operations  basic and diluted                                                                                                                                                         |                              | $                                       | 0.00       |               |                                        | $ | (0.01                        | ) |  | $                            | 0.00       |   |  | $ | (0.01      | )
|                                                                                                                                                                                                                            |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  
|Weighted average shares used in calculating basic and diluted loss per share                                                                                                                                                |                              |                                         | 12,981,396 |               |                                        |   | 11,278,476                   |   |  |                              | 12,923,618 |   |  |   | 10,909,842 |  
|                                                                                                                                                                                                                            |                              |                                         |            |               |                                        |   |                              |   |  |                              |            |   |  |   |            |  

See accompanying notes to unaudited consolidated financial statements.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows



|                                                                        |  |                                 |            |   |                    |   |            |  
|----------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------ | - | ---------- | -
|                                                                        |  | Nine months ended September 30, |           
|                                                                        |  | 2005 (As restated)              |            |   | 2004 (As restated) |  
|                                                                        |  | (unaudited)                     |            |   | (unaudited)        |  
|Operating activities:                                                   |  |                                 |            |   |                    |   |            |  
|                                                                        |  |                                
|Net Loss                                                                |  | $                               | (1,054,309 | ) |                    | $ | (2,467,671 | )
|                                                                        |  |                                
|Adjustments to reconcile net loss to cash used in operations:           |  |                                 |            |   |                    |   |            |  
|Amortization of deferred stock-based employee compensation              |  |                                 | 299,129    |   |                    |   | 429,430    |  
|Interest on beneficial conversion                                       |  |                                 | 15,000     |   |                    |   | 600,000    |  
|Gain on extinguishment of debt                                          |  |                                 | (3,374     | ) |                    |   | (207,964   | )
|Amortization of stock issued for services                               |  |                                 | 408,750    |   |                    |   | 735,750    |  
|Stock issued to directors for services                                  |  |                                 | 24,000     |   |                    |   | 4,904      |  
|Depreciation and amortization                                           |  |                                 | 960        |   |                    |   | 70,053     |  
|Discontinued operations:                                                |  |                                 |            |   |                    |   |            |  
|Impairment of property and equipment                                    |  |                                 |           |   |                    |   | 2,280      |  
|(Increase) decrease in assets:                                          |  |                                 |            |   |                    |   |            |  
|Accounts receivable                                                     |  |                                 | 35,000     |   |                    |   |           |  
|Inventories                                                             |  |                                 | 48,172     |   |                    |   | 109,497    |  
|Prepaid expenses                                                        |  |                                 | 1,935      |   |                    |   | (19,233    | )
|Other assets                                                            |  |                                 | 720        |   |                    |   |           |  
|Increase (decrease) in liabilities:                                     |  |                                 |            |   |                    |   |            |  
|Accounts payable                                                        |  |                                 | 5,177      |   |                    |   | (99,171    | )
|Other current liabilities                                               |  |                                 | 16,466     |   |                    |   | 203,146    |  
|                                                                        |  |                                 |            |   |                    |   |            |  
|Net cash used in operating activities                                   |  |                                 | (202,374   | ) |                    |   | (638,979   | )
|                                                                        |  |                                 |            |   |                    |   |            |  
|Net cash used in discontinued operations                                |  |                                 | (10,794    | ) |                    |   | (241,318   | )
|                                                                        |  |                                 |            |   |                    |   |            |  
|Cash flows from investing activities:                                   |  |                                 |            |   |                    |   |            |  
|Purchase of property and equipment                                      |  |                                 |           |   |                    |   | (2,279     | )
|Purchase of Games for Golf                                              |  |                                 |           |   |                    |   | (30,000    | )
|Proceeds from disposition of property and equipment                     |  |                                 | 500        |   |                    |   |           |  
|                                                                        |  |                                 |            |   |                    |   |            |  
|Net cash provided by (used in) investing activities                     |  |                                 | 500        |   |                    |   | (32,279    | )
|                                                                        |  |                                 |            |   |                    |   |            |  
|Cash flows from financing activities:                                   |  |                                 |            |   |                    |   |            |  
|Payments on deferred loan costs                                         |  |                                 |           |   |                    |   | (60,000    | )
|Proceeds from the sale of common stock                                  |  |                                 |           |   |                    |   | 308,154    |  
|Payments on capital lease                                               |  |                                 | (9,915     | ) |                    |   | (9,835     | )
|Proceeds from notes payable                                             |  |                                 |           |   |                    |   | 600,000    |  
|Fees paid to issue convertible note                                     |  |                                 | (3,000     | ) |                    |   | (30,000    | )
|Fees paid to convert warrants                                           |  |                                 |           |   |                    |   | (20,000    | )
|                                                                        |  |                                 |            |   |                    |   |            |  
|Net cash provided by (used in) financing activities                     |  |                                 | (12,915    | ) |                    |   | 788,319    |  
|                                                                        |  |                                 |            |   |                    |   |            |  
|Net decrease in cash and cash equivalents                               |  |                                 | (225,583   | ) |                    |   | (124,257   | )
|                                                                        |  |                                 |            |   |                    |   |            |  
|Cash and cash equivalents, beginning of period                          |  |                                 | 248,729    |   |                    |   | 427,803    |  
|                                                                        |  |                                 |            |   |                    |   |            |  
|Cash and cash equivalents, end of period                                |  | $                               | 23,146     |   |                    | $ | 303,546    |  
|                                                                        |  |                                 |            |   |                    |   |            |  
|Supplemental disclosures of cash flow information:                      |  |                                 |            |   |                    |   |            |  
|Cash paid during the period for Interest                                |  | $                               |           |   |                    | $ | 37,103     |  
|                                                                        |  |                                 |            |   |                    |   |            |  
|Supplement disclosure of non - cash investing and financing activities: |  |                                 |            |   |                    |   |            |  
|Issuance of common stock for the purchase of games for Golf, Inc.       |  | $                               |           |   |                    | $ | 10,900     |  
|                                                                        |  |                                 |            |   |                    |   |            |  
|Conversion of Note payable to Common Stock                              |  | $                               |           |   |                    | $ | 600,000    |  
|                                                                        |  |                                 |            |   |                    |   |            |  

See accompanying notes to unaudited consolidated financial statements.



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##### Table of Contents

INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2005

Note 1  History and Organization

Formerly Nomadic Collaboration International, Inc. and LiquidGolf Holding
Corporation, Horizon Holding Corporation and subsidiaries (collectively the Company) was incorporated on February 16, 1999 under the laws of the State of Delaware and commenced operations in May 1999. On August 12, 2004, a
majority of the stockholders approved changing the name of the Company from LiquidGolf Holding Corporation to Horizon Holding Corporation.

We are an online community for golfers worldwide which operates an e-commerce marketplace for golf equipment and related accessories. Our website was being redeveloped and was not operating from March 1, 2005 to April 14, 2005.
The Company also operated a single retail location in Apopka, Florida. The retail location was closed in February 2005. The Companys web site is operating as an affiliate site and has not yet begun offering products directly. Affiliate
commissions are reported to the Company 90 days in arrears and no commissions were reported as of September 30, 2005.

Note 2  Summary of
Significant Accounting Policies

Principles of Consolidation. The consolidated financial statements include the accounts
of Horizon Holding Corporation and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in the consolidated financial statements.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the 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.

Stock-Based Compensation. The Company has elected to account for
its stock-based compensation granted to employees in accordance with the provisions of Accounting Principles Board Opinion 25 (APB 25), Accounting for Stock Issued to Employees. Under APB 25, compensation expense is based on the difference,
if any, on the date of the grant, between the fair value of the Companys stock and the amount the employee is required to pay. Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation
(Statement 123). Stock issued to non-employees is accounted for under the provisions of Statement 123, Accounting for Stock  Based Compensation and the Emerging Issues Task Force (EITF) Consensus in Issue No. 96-18, Accounting for
Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with, Selling Goods or Services(EITF 96-18).

Under Statement 123, non-employee stock-based compensation is accounted for based on the fair value of the consideration received or equity instruments issued, whichever is more readily determinable. However,
Statement 123 does not address the measurement date and recognition period. EITF 96-18 states a consensus that the measurement date should be the earlier of the date at which a commitment for performance by the counterparty is reached or the date at
which the counterpartys performance is complete. The Companys non-employee stock-based compensation is determined using the fair value of the Companys equity instruments.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

Note 3  Basis of Presentation

The accompanying unaudited consolidated financial statements as of and for the three
and nine months ended September 30, 2005 and 2004 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 September 30, 2005
and 2004 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, 2004 consolidated financial statements and related
notes included in the Companys Annual Report on Form 10-KSB for the year ended December 31, 2004.

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 $37,200,000 as of September 30, 2005. 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, as well as the growth of the business, through a series of private placements. The Company is
continuing to seek other sources of financing and attempting to increase revenues through a diversification of revenue streams within its core business of golf equipment sales. This diversification includes exploring alternate ways of generating
revenues through partnerships with other businesses. Conversely, the ongoing development and maintenance of its website 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 4  Acquisitions

On December 22, 2003, the Company 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 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.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

Note 4  Acquisitions (continued)

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.

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 is accounted for as a part of Leather Craft. Game Fore Golf distributes 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 exceeds the fair values of the assets acquired by that amount. The Company expects all of the goodwill to be deducted for tax purposes.

In November, 2004 the Company 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 (the Companys leather goods product segment). As a result of this the Company recorded losses from discontinued operations of $0 and $85,702 and $4,249 and $106,073 for the
three and nine months ended September 30, 2005 and 2004, respectively.

Note 5  Stockholders Equity

Common Stock.The Board of Directors has authorized 100,000,000 shares of common stock with a par value of $0.001. Each share of common
stock entitles its holder to one vote on all matters submitted to vote of the stockholders. The holders of common stock do not have cumulative voting rights or preemptive rights.

Investment Banking Agreement. In September of 2003, the Company issued 1,800,000 shares of its common stock in connection with an
investment banking commitment as required by the merger agreement made by the Company after taking the necessary Board of Directors action to retain PanAmerica Capital Group, Inc. to assist the Company in all financial activities of the corporation
including, but not limited, to capital raising, mergers and acquisitions, and future financings. The term of the agreement is two years and the compensation is 1,800,000 shares of common stock. The expenses associated with this agreement is being
recognized ratably over the two-year term.

Warrants. On July 23, 2003, the Company notified the holders of the
Companys convertible notes of the Companys intent to exercise the option to convert the notes into shares of common stock at a $1.00 per share and a warrant to purchase an equal number of shares at $1.50 per share. The warrants have an
exercise price of $1.50, are exercisable at issuance, and have a contractual life of three years expiring three years from the date of the convertible note. As of July 23, 2003 the Company issued 744,505 shares of common stock and warrants for
744,505 shares of common stock in connection with the conversion.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

Note 5  Stockholders Equity (continued)

In 2000, the Company granted, to a Company related by stock ownership,
a warrant as payment for consulting services, containing the right to purchase up to 25,000 post-stock split shares with an exercise price of $8 per share and had a contractual life of five years and expired in June of 2005.

In 2002, in connection with the sale of 1,220,000 shares of Common Stock for $0.25 per share, the Company issued fully vested warrants in two classes to
purchase 1,220,000 shares of Common Stock in a Class A Warrant and 1,220,000 shares of Common Stock in a Class B Warrant.

These
warrants were issued in connection with a certain Confidential Private Offering Memorandum dated April 16, 2002. These Class A and Class B Warrants have an exercise price of $1.00 and $1.50 respectively, are exercisable at issuance and
have a contractual life of five years with the last of the warrants expiring in May of 2007.

On February 16, 2004, the Company sold,
in a private placement, a secured promissory note in the amount of $600,000 to a stockholder. As part of that transaction, the note holder acquired a warrant, issued by the Company, to purchase 50,000 shares of common stock at $0.92 per share and
the warrant is exercisable at issuance.

Commencing on or about August 14, 2004 the Company 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 common stock at a purchase price of $0.75 per share and expire in October 2007. As of September 30, 2005 the Company has 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.



|     |  |                                          |  |                |   |  |                |  |                 |  |              |       
|---- |  | ---------------------------------------- |  | -------------- | - |  | -------------- |  | --------------- |  | ------------ | ------
|Year |  | Warrant Type                             |  | Warrant Shares |   |  | Exercise Price |  | Expiration Date |  | Net Proceeds
|2002 |  | Class A warrants                         |  | 1,220,000      |   |  | 1.00           |  | May-07          |  |              |       
|2003 |  | Class A warrants cancelled               |  | (160,000       | ) |  |                |  |                 |  |              |       
|2003 |  | Class A warrants exercised               |  | (63,000        | ) |  |                |  | 1.00            |  | $            | 63,000
|     |  |                                          |  |                |   |  |                |  |                 |  |              |       
|     |  | Total Class A warrants outstanding       |  | 997,000        |   |  |                |  |                 |  |              |       
|     |  |                                          |  |                |  
|2002 |  | Class B warrants                         |  | 1,220,000      |   |  | 1.50           |  | May-07          |  |              |       
|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           |  | Jun-06          |  |              |       
|2004 |  | Notes payable warrants                   |  | 50,000         |   |  | 0.92           |  | None            |  |              |       
|     |  |                                          |  |                |  
|2004 |  | Private placement warrants               |  | 3,718,491      |   |  | 0.75           |  | Oct-07          |  |              |       
|     |  |                                          |  |                |  
|     |  | Total warrants outstanding               |  | 6,569,996      |   |  |                |  |                 |  |              |       
|     |  | Total proceeds from warrants exercised   |  |                |   |  |                |  |                 |  | $            | 63,000



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

Note 6  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 September 30, 2005, 1,354,000 shares have been issued under this Plan.

Note 7  Commitments and Contingencies

Employment Agreement. On May 30, 2003 the Company entered into an employment agreement with its Chief Executive
Officer. The agreement commenced on May 29, 2003 and expires on December 31, 2005 but shall be automatically extended for two additional years unless written notice is given by either party 90 days prior to expiration.

The employment agreement includes the payment of a base salary of $90,000, an incentive compensation bonus equal to 100% of the base salary, based on
revenue growth targets, and a restricted stock grant of 1,000,000 shares of common stock. The executive must be employed by the Company for a minimum of two years from the date of the agreement in order to take delivery of the shares. The cost of
these shares is being amortized ratably over the twenty-month employment agreement.

Note 8  Extinguishment of Debt

The Company had $3,374 of certain accounts payable, accrued liabilities and other liabilities as of June 30, 2005 that the Company determined were no
longer obligations. Therefore, the Company recognized a gain on the extinguishment of debt in the amount of $0 and $3,374 and $0 and $207,964 for the three and nine months ended September 30, 2005 and 2004 respectively.

Note 9  Subsequent Events

Resignation of
Executive Officer. On October 26, 2005, Allan Woodlief resigned as President and Chief Financial Officer of Horizon Holding Corporation (the Company). Mr. Woodlief has resigned as President and Chief Financial Officer
of the Company to pursue other personal interests. At the time of his resignation, Mr. Woodlief possesses 222,833 shares of the Company securities, which include 202,000 shares of restricted common stock in the Company granted pursuant to the
Companys 2003 Restricted Stock Plan. He is not owed any compensation for his services as President and Chief Financial Officer of the Company.

Hiring of Executive Officer. On October 26, 2005, the Board of Directors appointed Steven Weldon as the Chief Financial Officer of the Company. Since July, 2001 Mr. Weldon has been the tax
manager for Westgate Resorts, Ltd., a timeshare developer. Mr. Weldon has been an adjunct professor at Florida Southern College since January, 2002. Since May, 2005 Mr. Weldon has served as the president, sole stockholder and director of
Steven W. Weldon, PA, a public accounting firm providing tax and accounting services.

Note 10  Restatement

The Company erroneously did not record interest expense in the amount of $15,000 from the beneficial conversion feature of two convertible promissory
notes entered into on July 5, 2005. This created a restatement of interest expense from $357, as originally filed, to $15,357 on the amended consolidated statement of operations for the three and nine months ended September 30, 2005.

In addition, the Company did not record interest expense in the amount of $600,000 from the beneficial conversion feature of a convertible
promissory note entered into on February 16, 2004. This created a restatement of additional paid in capital and accumulated deficit of $600,000 as of September 30, 2005 and a restatement of interest expense from $97,103, as originally filed, to
$697,103 on the amended consolidated statement of operations for the nine months ended September 30, 2004.



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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 2005, 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 are an online community for golfers that provides 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. 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. As a result of the 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 August 12, 2004 a majority of the stockholders approved changing the name of the Company from LiquidGolf Holding Corporation to Horizon Holding Corporation to reflect its new business direction of
diversifying its revenue streams. In November 2004, the board of directors decided to discontinue the operations of Leather Craft due to a lack of sales sufficient to support the continued operation of Leather Craft. In addition we closed our retail
golf operation and is going to focus on golf web site operations, by seeking to partner with an experienced golf e-tailer.

Plan of Operation

We plan to grow our business through the acquisition of or merger with one or more companies seeking to gain access to the public
securities market. There can be no assurance that we will be able to successfully complete any acquisitions or mergers. If we are able to complete any acquisitions or mergers there can be no assurance that we will be able to obtain terms favorable
to the Company.

We have not generated sufficient operating revenue or had access to sufficient capital to implement our business plan to
grow and expand our website. 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 November 2005. 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 outsource of certain online operations. 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.



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CONSOLIDATED FINANCIAL INFORMATION



|                    |  |                                 |          |   |                                |   |          |                    |  |   |                    |   |  |   |            |  
|------------------- |  | ------------------------------- | -------- | - | ------------------------------ | - | -------- | ------------------ |  | - | ------------------ | - |  | - | ---------- | -
|                    |  | Three Months EndedSeptember 30, |          |   | Nine Months EndedSeptember 30, |  
|                    |  | 2005 (As restated)              |          |   | 2004                           |   |          | 2005 (As restated) |  |   | 2004 (As restated) |  
|Total sales         |  | $                               |         |   |                                | $ | 236,400  |                    |  | $ | 32,000             |   |  | $ | 685,700    |  
|Total cost of sales |  |                                 |         |   |                                |   | 199,700  |                    |  |   | 27,000             |   |  |   | 576,400    |  
|Operating expenses  |  |                                 | 147,200  |   |                                |   | 647,400  |                    |  |   | 1,044,800          |   |  |   | 1,983,100  |  
|Net loss            |  |                                 | (162,200 | ) |                                |   | (696,600 | )                  |  |   | (1,054,300         | ) |  |   | (2,467,700 | )

Comparison of Three Months Ended September 30, 2005 and September 30, 2004.

Net Sales. Net sales decreased by $236,400 or 100% to $0 in 2005 from $236,400 in 2004. This sales decrease is due to the discontinuation of our
leather goods segment, reduced online operations, and the closing of our brick and mortar store.

Gross Profit. Gross profit
decreased $36,700 or 100% to $0 in 2005 from $36,700 in 2004. This decrease is due to the discontinuation of our leather goods segment, reduced online operations, and the closing of our brick and mortar store.

Selling, General and Administrative. Selling, General and Administrative Expenses decreased approximately $500,200 or 77% to $147,200 in 2005 from
$647,400 in 2004. This decrease is due to a decrease in overall expenses because of the discontinuation of our leather goods segment, reduced online operations, stock based compensation expense and the closing of our brick and mortar store.

Interest Expense. Interest expense increased by $14,800 to $15,400 in 2005 from $600 in 2004. This increase reflected the interest
recognized from the beneficial conversion feature of two notes payable totaling $15,000.

Comparison of Nine Months Ended September 30, 2005 and
September 30, 2004.

Net Sales. Net sales decreased by approximately $653,700 or 95% to $32,000 in 2005 from $685,700 in
2004. This sales decrease is due to the discontinuation of our leather goods segment, reduced online operations, and the closing of our brick and mortar store.

Gross Profit. Gross profit decreased approximately $104,300 or 95% to $5,000 in 2005 from $109,300 in 2004. This decrease is due to the discontinuation of our leather goods segment, reduced online operations,
and the closing of our brick and mortar store.

Selling, General and Administrative. Selling, General and Administrative Expenses
decreased approximately $938,300 or 47% to $1,044,800 in 2005 from $1,983,100 in 2004. This decrease is due to a decrease in overall expenses because of the discontinuation of our leather goods segment, reduced online operations, stock based
compensation expense and the closing of our brick and mortar store.

Interest Expense, Interest expense decreased by $675,700 to
$15,400 in 2005 from $691,100 in 2004. This decrease reflected the conversion of a note payable to common stock and interest from a beneficial conversion feature of $600,000 on a note payable during 2004.

Liquidity and Capital Resources

We had cash balances
totaling approximately $23,000 as of September 30, 2005. Historically, our principal source of funds has been cash generated from financing activities. Our operations are seasonal and our source of liquidity may vary during the year.

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



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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
frequently change our pricing structure to take into account our customers fluctuating cash flows, service and product needs. 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 anticipate experiencing greater sales in the fourth quarter of the calendar year, as opposed to the first, second and third quarters of the calendar year. The seasonality of our sales will be directly related to the golf season in the
third quarter and the holiday season in the fourth quarter. The third and fourth quarters of the calendar year are usually our strongest revenue producing quarters as more customers are playing golf at the height of the golf season and purchasing
Golf Retail for gifts for the holiday season in the fourth quarter. The first quarter of the calendar year is usually the slowest due to the winter weather and not as many customers are playing golf or purchasing Golf Retail. The second quarter of
the calendar year is slow and the season is just beginning. Comparisons of our sales and operating results between different quarters within a single year are, therefore, not necessarily accurate indicators of our future performance.

Although we have a limited operating history in connection with the operation of our web site we have no operating history with respect to our plans for
the expansion of our business. To date, we have been unsuccessful in our efforts to obtain sufficient financing to implement our business plan; however, in the event we are able to move forward with our plans for growth, we expect our expenses to
increase significantly as we grow our business and enter into new markets through acquisitions. 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.

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.

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

Revenue Recognition

We recognize revenue in accordance with the provisions of the SECs Staff Accounting Bulletin (SAB) No. 104, Revenue
Recognition. Specifically, sales and the related cost of goods sold are generally recognized at the latter of the time of shipment or when title passes to customers. We earn revenue from the sale of golf equipment and related accessories
through our online retail store. Online merchandise revenue is recognized upon the shipment of the merchandise, which occurs only after credit card authorization is obtained. Customers are allowed to return items for credit within 14 days of
purchase. We provide for estimated returns at the time of shipment based on historical data. For the three and nine months ended September 30, 2005 and 2004, no allowance for returns was recorded because the estimated amounts were immaterial.

Stock-Based Compensation

We account
for our employee stock-based compensation plans in accordance with APB Opinion No. 25 (APB No. 25), Accounting for Stock Issued to Employees and Financial Accounting Standards Board Interpretation No. 44, Accounting
for Certain Transactions Involving Stock Compensationan Interpretation of APB Opinion No. 25.



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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, 2004 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 THE 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 certified public accountants have issued their report, which includes an explanatory paragraph for going concern
uncertainty, on our financial statements as of December 31, 2004. 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.

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.

THE COMPANY MAY BE SUBJECT TO SALES AND OTHER TAXES.

We do not currently collect sales or other similar taxes for physical shipments of goods into states other than Florida. One or more local, state or foreign jurisdictions may seek to impose sales tax collection obligations on our business.
In addition, any new operation in states outside Florida could subject our shipments in such states to state sales taxes under current or future laws. If one or more states or any foreign country successfully asserts that we should collect sales or
other taxes on the sale of our products the resulting tax liability could impair our business. Any such liability could also include liability for back taxes and penalties, which could cause significant harm to our financial condition and may
require us to restate earnings for prior periods.

WE MAY HAVE DIFFICULTY OBTAINING MERCHANDISE.

We want to offer a competitive source of golf apparel and merchandise. There can be no assurance that we will be able to obtain the quantity, selection or
brand quality of items that we believe is necessary. We have no long-term contracts or arrangements with any of our suppliers that guarantee the availability of merchandise or the continuation of particular pricing practices. Our contracts with our
suppliers typically do not restrict such suppliers from selling products to other buyers. There can be no assurance that our current suppliers will continue to sell products to us on current terms or that we will be able to establish new or
otherwise extend current supply relationships to ensure acquisitions of product in a timely and efficient manner and on acceptable commercial terms. Our ability to obtain favorable contracts with reputable suppliers, obtain high quality merchandise
from those suppliers and the ability of the suppliers to produce, stock and deliver high quality products to our customers is critical to our success. If we are unable to satisfy any of these elements or we are unable to develop and maintain
relationships with suppliers that would allow us to obtain a sufficient variety and quantity of quality merchandise on acceptable commercial terms, our business, operating results and financial condition would be materially and adversely affected.



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OUR MANAGEMENT MAY BE UNABLE TO EFFECTIVELY INTEGRATE OUR ACQUISITIONS AND TO MANAGE OUR GROWTH AND WE MAY BE UNABLE
TO FULLY REALIZE ANY ANTICIPATED BENEFITS OF THESE ACQUISITIONS.

Our future results will depend in part on our success in implementing
our acquisition strategy. This strategy is limited to effecting acquisitions of desirable new product lines, strategic locations and attractive customer bases and supplier relationships. Our ability to implement this strategy will be dependent on
our ability to identify, consummate and successfully assimilate acquisitions on economically favorable terms. In addition, acquisitions involve a number of special risks that could adversely effect our operating results, including the diversion of
managements attention, failure to retain key acquired personnel, risks associated with unanticipated events or liabilities, legal, accounting and other expenses associated with any acquisition, some or all of which could increase our operating
costs, reduce our revenues and cause a material adverse effect on our business, financial condition and results of operations.

RISKS RELATED TO OUR
INDUSTRY

WE OPERATE IN A HIGHLY COMPETITIVE MARKET AND COMPETE WITH COMPANIES THAT HAVE SIGNIFICANTLY LARGER OPERATIONS AND GREATER FINANCIAL
RESOURCES; WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AGAINST SUCH COMPANIES, WHICH COULD RESULT IN ADDITIONAL LOSSES.

We are subject to
extensive competition from numerous competitors. We cannot assure you that we will be able to compete successfully or that competitive pressures will not damage our business.

Our competition includes:



| |  |  | websites maintained by other online retailers of Golf Retail, including, but not limited to, sporting goods retailers, discount retailers and golf shops;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | traditional department stores and stand-alone golf retailers;
| | - |  | -------------------------------------------------------------



| |  |  | nationally known discount golf retailers;
| | - |  | -----------------------------------------



| |  |  | other retailers of Golf Retail who seek to purchase high demand or limited supply products;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | catalog retailers of golf equipment, apparel and other golf-related merchandise; and
| | - |  | ------------------------------------------------------------------------------------



| |  |  | Internet portals and on-line service providers that feature shopping services, such as America Online, Yahoo!, Excite and Lycos.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

Many of our competitors are larger and have substantially greater financial, distribution and marketing resources. In addition, many of our competitors
may be able to secure products from vendors on more favorable terms, fulfill customer orders more efficiently and adopt more aggressive pricing or inventory availability policies than we can. Traditional store-based retailers also enable customers
to see, feel and test products in a manner that is not possible over the Internet. Some online competitors may be able to use the Internet as a marketing medium to reach significant numbers of potential customers more effectively than we can. If we
cannot compete successfully against such competitors, it will impair our ability to maintain our market position.

GOVERNMENT REGULATION AND LEGAL
UNCERTAINTIES COULD BURDEN OUR BUSINESS.

The adoption or modification of laws or regulations applicable to the Internet could harm our
business. The United States Congress passed laws regarding childrens online privacy, copyrights and taxation. The law governing the Internet, however, remains largely unsettled. New laws may impose burdens on companies conducting business over
the Internet. Although our online transmissions generally originate in Orlando, Florida, the governmental agencies of other states or foreign countries might attempt to regulate our transmissions or levy sales or other taxes relating to our
activities. It may take years to determine whether and how existing laws governing intellectual property, privacy, libel and taxation apply to the Internet and online advertising. In addition, the growth and development of online commerce may



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prompt calls for more stringent consumer protection laws, in both the United States and abroad. We also may be subject to
regulation not specifically related to the Internet, including laws affecting direct marketers.

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 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.
| | - |  | ----------------------------------------------------------------------------------------------------------



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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.



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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 September 30, 2005. 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 February 16, 2004, the Company 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 lender had the sole option of converting the principal represented by this note into 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 lender had the option to convert all or any part of the principal represented by this note. As part of the same transaction, the note holder
purchased a warrant, issued by the Company, to purchase 50,000 shares of common stock at $0.92 per share. We sold the promissory note in reliance upon an exemption from registration set forth in Section 4(2) of the Securities Act of 1933 and
Rule 506 of Regulation D promulgated there under. The issuance of these securities was undertaken without general solicitation or advertising. The purchaser represented to us that, among other things, it was acquiring the promissory note for
investment purposes only and not with a view towards public distribution and that it was an accredited investor within the meaning of Rule 501 of Regulation D.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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.

Beginning in August 2004 and ending on or about September 30, 2004, the Company sold 1,222,831 units for total net proceeds
of $308,100. Each unit consisted of one share of common stock and one warrant. Each warrant allowed the holder to purchase an additional three shares of common stock at an exercise price of $0.75 per share. The warrants are exercisable at issuance
and have a contractual life of three years expiring from the date the unit was purchased. The proceeds from the sale of units will be used for working capital.



18



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On September 1, 2005, we issued 260,000 shares of the Companys common stock to four directors.
This was payment for $24,000 in directors fees owned to the directors.

Item 3. Defaults Upon Senior Securities.

Not Applicable.

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

On September 9, 2005 the Company held its annual
meeting of shareholders at which time the shareholders: (i) elected Dwain Brannon, Dwight Day, Skip McElvery, Larry Abraham and Bill Parsons as directors to hold office until the election of their successors; (ii) ratified the
Companys selection and appointment of Tedder, James, Worden & Associates, P.A. as independent auditors for 2006. The director nominees who received shareholder approval accepted the invitation to succeed directors on September 9,
2005. The following table indicates the voting tabulations of the shareholders present in person or by proxy at the 2005 annual meeting of shareholders:



|                                                        |  |            |  |         |  |         
|------------------------------------------------------- |  | ---------- |  | ------- |  | --------
|                                                        |  | For        |  | Against |  | Withheld
|Election of Dwain Brannon                               |  | 12,880,587 |  |         |  | 14,142  
|Election of Dwight Day                                  |  | 12,880,587 |  |         |  | 14,142  
|Election of Skip McElvery                               |  | 12,880,587 |  |         |  | 14,142  
|Election of Larry Abraham                               |  | 12,880,587 |  |         |  | 14,142  
|Election of William Parsons                             |  | 12,880,587 |  |         |  | 14,142  
|Appointment of Tedder, James, Worden & Associates, P.A. |  | 12,885,795 |  | 1,041   |  | 7,893   

Item 5. Other Information.

Not Applicable.

Item 6. Exhibits

(a) Exhibits



|              |  |                                                                                                                                                           
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBITNUMBER |  | DESCRIPTION                                                                                                                                               
|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.
|- | ---------------



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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: February 8, 2007 |  |                                |  |                                                           
|                       | 
|                       |  | INVERTED PARADIGMS CORPORATION
|                       |  |                               
|                       |  | By:                            |  | /s/ Stewart York                                          
|                       |  | Name:                          |  | Stewart York                                              
|                       |  | Title:                         |  | Chief Executive Officer, President, 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       |  | February 8, 2007
|Name:  |  | Steven Weldon           | 
|Title: |  | Chief Financial Officer | 
|       |  |                        
|By:    |  | /s/ Dwight Day          |  | February 8, 2007
|Name:  |  | Dwight Day              | 
|Title: |  | Director                | 
|       |  |                        
|By:    |  | /s/ William Parsons     |  | February 8, 2007
|Name:  |  | William Parsons         | 
|Title: |  | Director                | 



20



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EXHIBIT INDEX



|              |  |                                                                                                                                                           
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBITNUMBER |  | DESCRIPTION                                                                                                                                               
|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.
|- | ---------------



21