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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-KSB/A



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Amendment No. 1



ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934



For the fiscal year ended December 31, 2004



Commission File No. 000-27131



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INVERTED PARADIGMS CORPORATION

F/K/A HORIZON HOLDING CORPORATION

(Exact name of small business issuer as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 88-0381258                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

| |  |                                                      |  |           
| |  | ---------------------------------------------------- |  | ----------
| |  |                                                     
| |  | 11523 Palm Brush Trail, #341 Lakewood Ranch, FL      |  | 34202     
| |  | (Address of principal executive offices)             |  | (Zip Code)
| |  |                                                     
| |  | (941) 926-6180                                       |  |           
| |  | (Registrants telephone number, including area code) |  |           



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

None



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

Common Stock, $0.001 par value



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Indicate by check mark whether the 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.    Yes  x    No ̈



Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained herein,
and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. ̈



Indicate by check mark whether the registration is a shell company (as defined in Rule 2b-2 of the Exchange Act).

Yes ̈No  x



Issuers revenues from continuing operations for most recent fiscal
year: $909,272.



The aggregate market value of voting common
equity held by non-affiliates of the Registrant was $2,578,946 as of April 12, 2005 based upon the closing price of the Registrants common stock reported for April 12, 2005.



The number of shares of common stock of the Registrant outstanding as of March 31, 2005 was 12,894,729.



Transitional Small Business Disclosure Format (Check
one):    Yes ̈No   x



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EXPLANATORY NOTE



Inverted Paradigms Corporation (the Company) is filing this Amendment No. 1 to its Annual Report on Form 10-KSB for its
fiscal year ended December 31, 2004, as filed with the Securities and Exchange Commission on March 31, 2005 (the Original December 2004 Form 10-KSB), primarily to correct an error in recording interest expense from a beneficial
conversion feature of a convertible note and to correct the resulting effects upon additional paid in capital and accumulated deficit.



The Company erroneously did not record interest expense resulting from a convertible note payable with a beneficial conversion feature.



Actual Changes in the Original December 2004 Form 10-KSB.The actual changes in the
Original December 2004 Form 10-KSB included in this Amendment No. 1 are amendments to Part I that include: (a) amended and restated Consolidated Balance Sheet as of December 31, 2004, (b) amended and restated Consolidated Statement of
Operations for the year ended December 31, 2004, (c) amended and restated Consolidated Statement of Stockholders Equity for the year ended December 31, 2004, (d) amended and restated Consolidated Statement of Cash Flows for the
year ended December 31, 2004, and (e) a new Note 14 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-KSB document including a complete set of the Consolidated Financial Statements
(together with all of the Notes from the Original December 2004 10-KSB) 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



|         |  |                                                                                                                 |  |   
|-------- |  | --------------------------------------------------------------------------------------------------------------- |  | --
|PART I   |  |                                                                                                                 |  | 2 
|         |  |                                                                                                                
|ITEM 1.  |  | DESCRIPTION OF BUSINESS                                                                                         |  | 2 
|         |  |                                                                                                                
|ITEM 2.  |  | DESCRIPTION OF PROPERTY                                                                                         |  | 13
|         |  |                                                                                                                
|ITEM 3.  |  | LEGAL PROCEEDINGS                                                                                               |  | 13
|         |  |                                                                                                                
|ITEM 4.  |  | SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                            |  | 13
|         |  |                                                                                                                
|PART II  |  |                                                                                                                 |  | 14
|         |  |                                                                                                                
|ITEM 5.  |  | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                        |  | 14
|         |  |                                                                                                                
|ITEM 6.  |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                           |  | 16
|         |  |                                                                                                                
|ITEM 7.  |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                     |  | 21
|         |  |                                                                                                                
|ITEM 8.  |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES                           |  | 21
|         |  |                                                                                                                
|ITEM 8A. |  | CONTROLS AND PROCEDURES                                                                                         |  | 21
|         |  |                                                                                                                
|PART III |  |                                                                                                                 |  | 22
|         |  |                                                                                                                
|ITEM 9.  |  | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT |  | 22
|         |  |                                                                                                                
|ITEM 10. |  | EXECUTIVE COMPENSATION                                                                                          |  | 25
|         |  |                                                                                                                
|ITEM 11. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                  |  | 27
|         |  |                                                                                                                
|ITEM 12. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                  |  | 28
|         |  |                                                                                                                
|ITEM 13. |  | EXHIBITS AND REPORTS ON FORM 8-K                                                                                |  | 29
|         |  |                                                                                                                
|ITEM 14. |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                          |  | 30



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Forward-Looking Statements



We have made forward-looking statements, within the meaning of Section 21E of the Securities and Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended, in this Annual Report on Form 10-KSB, including the sections entitled Managements Discussion and Analysis of Financial Condition and Results of Operations and
Business that are based on our managements beliefs and assumptions and on information currently available to our management. Forward-looking statements include the information concerning our possible or assumed future results of
operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are
not historical facts and can be identified by the use of forward-looking terminology such as the words believe, expect, anticipate, intend, plan, estimate or similar
expressions.



Forward-looking statements involve risks,
uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. You should understand that many important factors, in addition to those discussed elsewhere in this Annual Report on Form
10-KSB, could cause our results to differ materially from those expressed in the forward-looking statements. These factors include, without limitation, the rapidly changing industry and regulatory environment, our limited operating history, our
ability to implement our growth strategy, our ability to integrate acquired companies and their assets and personnel into our business, our fixed obligations, our dependence on new capital to fund our growth strategy, our ability to attract and
retain quality personnel, our competitive environment, economic and other conditions in markets in which we operate, increases in maintenance costs and insurance premiums and cyclical and seasonal fluctuations in our operating results. The Company
undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.



For further information about these and other risks, uncertainties and factors, please review the disclosure included in this report under the caption
Risk Factors.



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PART I



ITEM 1. DESCRIPTION OF BUSINESS



General



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. 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 of 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 the Company closed
it retail golf operation and is going to focus on golf web site operations, by seeking to partner with an experienced golf e-tailer.



Summary of Merger with Nomadic Collaboration International, Inc.



Effective May 30, 2003, LGC Acquisition Company, a Delaware corporation and wholly owned subsidiary of Nomadic Collaboration International, Inc., a Nevada
corporation, merged with and into LiquidGolf Corporation, a Delaware corporation, such that LiquidGolf Corporation was the surviving entity, and by virtue thereof, LiquidGolf corporation became a wholly owned subsidiary of Nomadic Collaboration. In
preparation for the merger, the common stock of Nomadic Collaboration was reverse split on a 150-to-1 basis effective January 23, 2003; consequently, the 33,002,348 issued and outstanding shares of Nomadic Collaboration common stock became
approximately 220,016 post split shares, subject to rounding up of fractional shares. As consideration for the merger: (i) every three shares of LiquidGolf Corporations common stock was exchanged for one share of Nomadic Collaborations
common stock; (ii) every warrant to purchase LiquidGolf Corporations common stock was cancelled and exchanged, on a one-for-one basis, for warrants to purchase Nomadic Collaborations common stock; and (iii) fractional shares of
LiquidGolf Corporation were paid in cash at the rate of two dollars ($2.00) per share multiplied by the share fraction. After consummation of this merger, stockholders of LiquidGolf Corporation held approximately 96% of Nomadic Collaborations
issued and outstanding common stock. Thereafter, Nomadic Collaborations articles of incorporation were amended and restated to, among other things, change Nomadic Collaborations name to LiquidGolf Holding Corporation, which became
effective June 2, 2003 and the trading symbol was changed to LQDG effective June 9, 2003. On August 12, 2004 a majority of the stockholders approved changing the name of the Company from LiquidGolf Holding Corporation to Horizon Holding Corporation.
Additionally the trading symbol was changed to HRZH.



As a
direct result of this merger, and assuming exercise of the warrants, ownership of the Companys common stock (on a fully diluted basis) by (i) the stockholders and former warrant holders of LiquidGolf Corporation, as a group, and (ii) the
pre-merger Nomadic stockholders, as a group, as of May 30, 2003, was as follows:



|                                                 |  |                                                                  |  |                         |  
|------------------------------------------------ |  | ---------------------------------------------------------------- |  | ----------------------- | -
|Group of Stockholders                            |  | Number of Shares of LiquidGolf HoldingCorporation CommonStock(1) |  | Percentage Ownership(1) |  
|Former LiquidGolf Corporation Stockholders       |  | 5,784,162                                                        |  | 53.33                   | %
|Former LiquidGolf Corporation Warrant Holders(1) |  | 3,046,000                                                        |  | 28.08                   | %
|Nomadic Stockholders                             |  | 216,703                                                          |  | 2.00                    | %
|PanAmerica Capital Group(2)                      |  | 1,800,000                                                        |  | 16.59                   | %
|                                                 |  |                                                                  |  |                         |  
|Total                                            |  | 10,846,865                                                       |  | 100.00                  | %

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|(1) | Assumes the exercise of all warrants into shares of common stock.
|--- | -----------------------------------------------------------------



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|(2) | Represents shares of common stock issued subsequent to the closing of the merger pursuant to an investment banking agreement with PanAmerica Capital Group, and does not include
shares held prior to the effective time of the merger.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Industry Overview



The Golf Industry



Introduction. Over the past 20 years, the golf industry has
enjoyed rapid expansion in the number of golf facilities, the number of rounds played, and the percentage of the United States population that plays golf at least once per year. Recent statistics and trends on the golf industry have been compiled
from the National Golf Foundations Golf Participation in The United States2000 and 2003 editions, A Strategic Perspective on The Future of Golf, prepared collaboratively by the National Golf Foundation and McKinsey & Company (January
30, 1999), and The Sporting Goods Market in 2002, prepared for the National Sporting Goods Association, and are highlighted below:



The Golf Market. In 2002, there were approximately 26.2 million adult golfers in the United States, up from 25.8 million in 2001. These
numbers could be significantly greater if the industry reported on the people who would like to play more often or those who would like to try golf. Golf has become increasingly attractive to segments of the population that historically have not
been well represented among golfers. More recently, the participation of women and minorities in golf has gained significant momentum. Finally, the so-called Tiger effect, based on the enormous popularity of Tiger Woods and expanded
television coverage of major golf events, has resulted in rising equipment unit sales and numbers of rounds played, and a resurgent growth in the junior golf segment, which the industry must continue to find ways to retain.



Merchandise and Services. The golf merchandise and services
segments consist of clubs and equipment, apparel segments and instruction. The clubs and equipment segment has annual revenues of nearly $3.9 billion, and the apparel segment has annual revenues of approximately $800 million. The golf instruction
segment is very fragmented, with approximately 25,000 PGA professionals and over 335 golf schools in the United States.



Product Technology Changes. In recent years, the golf equipment industry has made major changes in product design and technology. We believe
this rapid rate of change appears to be accelerating the rate at which golfers are willing to purchase new or additional equipment. While these changes do not appear to have improved overall scores, we believe they reflect the responsiveness of
golfers to innovations that they believe will improve their game.



Demographics. The number of rounds played, is expected to grow at nearly twice the rate of participation. These changing demographic trends support the growth prospects for the game of golf. A significant portion of the
population is now entering their 50s and 60s, and are expected to live longer and healthier lives, giving them more time to pursue their leisure. The National Golf Foundation reports that the annual average rounds played per golfer
increases significantly as the golfer ages. Golfers in their 50s generally play approximately twice as much as golfers in their 30s. Golfers age 65 and older play approximately three times as many rounds annually as golfers in their
30s. Currently, approximately 75% of all golfers are less than 50 years old and nearly 45% of all golfers are between the ages of 30 and 49. As more of the population reaches their prime golfing age, they are expected to account for a 12%
increase in the total size of the industry, effectively 65 million rounds over the next 12 years. Additionally, due to the emergence of the echo boom generation (those born between 1977 and 1995) we anticipate an increase participation
in and spending on golf, as they enter their 20s, the age at which most golfers begin to play the sport.



Electronic Commerce. The Internet is an increasingly significant medium for communication, information exchange and commerce. We believe
that growth in Internet usage is being fueled primarily by easier and cheaper access to the Internet and improvements in network security, infrastructure and bandwidth. We believe that these trends are also helping to fuel the growth and consumer
acceptance of online commerce.



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Business Strategy



Golfers are an appealing demographic group, in terms of income and purchasing power, to target as a business opportunity. Our business has only availed
itself of a small portion of the golf industry. The principal elements of our business strategy are:



Expanding our online community and sales. E-commerce is the sole part of our operations and source of revenue. We have built one of the
leading online golf communities and golf e-tailing sites on the Internet. Our website, www.liquidgolf.com, will offer a wide variety of golf products. We have successfully built an online community of over 90,000 registered members and continue to
expand this base by providing those members with additional opportunities to participate in the world of golf. We believe that by partnering with an experienced golf retailer that has golf specific e-commerce experience, we will be able to bring the
golf operations to profitability.



Selectively Expanding
our Business Beyond Golf. We plan to explore other business opportunities outside the golf industry to increase our revenue base, sustain existing operations and enhance our ability to implement our growth plans. We believe that attractive
diversification opportunities are currently available.



Strategic Relationships. We have engaged several key strategic relationships to increase our access to all golfers and build brand recognition. Our principal strategic alliance and relationship is with The Golf Channel.
Chaired by Arnold Palmer, The Golf Channel is available throughout the United States, Canada and Japan through cable, satellite and wireless providers. The programming schedule includes live golf coverage of major golf tournaments, original
programming, a nightly golf news show, a live call-in talk show, a live weekly call-in show featuring viewers feedback on current golf events; Leaderboard Report, a statistical weekly recap of tournament play; and The Golf Channel Academy, a
series of half-hour instructional programs. We have purchased advertising time at a discount, and believe that we can increase our exposure to the world of golfers, improve our brand name recognition and tap into additional sources of revenue
through The Golf Channels global marketing channels.



Products and
Services



e-Commerce. When operating, (our
web site was being developed and was not operating from March 1, 2005 to April 14, 2005) we offer over 10,000 products, which we believe is a wider selection of products than is offered by most golf retailers. We offer a majority of the well-known
brands in the golf industry such as Callaway, Taylor Made, Adams and Titleist. We also offer shoes, accessories, and a variety of other products. We obtain most of our inventory directly from manufacturers and an extensive network of suppliers,
which offers us favorable selection, pricing, quality and quantity terms. We carry only name brand merchandise, which we believe is integral to maintaining strong relationships with major manufacturers. We currently derive nearly 100% of our revenue
from the sale of golf equipment, merchandise and accessories.



Customer
Service



Customer service and satisfaction are important
facets to our success and business strategy. Since approximately 35% of our business is from repeat customers, we believe that it is important for us to focus on customer service. Our e-commence golf partner has employees that are members of the
Professional Golf Association who comprise our customer service team and assist our customers with such matters as product selection and instruction. We monitor all online orders from the time they are placed through delivery by providing numerous
points of electronic, telephone and personal communication to customers. We confirm all online orders and shipments by e-mail within the hour. All non-custom products are shipped within one day of being ordered. We generally do not charge for
shipping and handling. Custom fit club orders are generally filled within 10 to 14 days. We provide our customers with an informed source of expertise (over our toll free customer service telephone line) to assist them in selecting golf clubs and
products.



Marketing



Our marketing strategy is designed to attract individual and business
customers to shop online, purchase business services, convert browsers to buyers, meet or exceed customer expectations, drive loyalty and repeat



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purchases while building enduring brand equity. We pride ourselves on our customer service and regularly follow up with our customers to ask them how they
enjoyed shopping at our website. We intend to further develop our brand and enhance our name recognition with the execution of an integrated marketing campaign that includes the following:



| |  |  | Advertising. Our advertising is designed to build brand equity, create awareness, and generate initial purchases of our services or merchandise. We use a mix of broadcast
media which includes of television and e-mail newsletters.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Direct Marketing. We are exploring non-traditional Internet methods of advertising such as direct marketing through mailing lists. We plan on using mailing lists and other
methods to reach out to consumers who are hesitant to buy over the Internet but would feel comfortable calling a toll free number.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Competition



We are subject to extensive competition from numerous competitors. Many of our competitors 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.



We believe golfers make their purchase decisions based on price, the feel of
equipment, word-of-mouth and magazines or other advertisements. We believe that our ability to compete depends upon many factors, including:



| |  |  | the market acceptance of our online store and services;
| | - |  | -------------------------------------------------------



| |  |  | the success of our sales and marketing efforts;
| | - |  | -----------------------------------------------



| |  |  | the performance and reliability of our services;
| | - |  | ------------------------------------------------



| |  |  | the price of our products; and
| | - |  | ------------------------------



| |  |  | the effectiveness of our customer service and support efforts.
| | - |  | --------------------------------------------------------------



Our main competitors for the sale of golf equipment and related merchandise are:



Golf Pro Shops. Traditionally golf pro shops lose money on a yearly basis due to the fact that they cannot
offer the price, selection or availability of merchandise we can offer. Many PGA professionals that own and staff the pro shops do not have the merchandising experience to manage inventory in a manner that will always provide consumers with a wide
variety of the latest in golf equipment, apparel and services.



Sporting Goods Retailers. We compete with large sporting goods retailers such as The Sports Authority, Dicks Sporting Goods and the Sports Chalet. Although some of these companies have websites, their online product
offering mirrors the limited selection of their retail stores.



Discount Golf Shops. We compete directly with discount golf retailers such as Nevada Bobs and Edwin Watts. We believe that the discount golf sector accounts for a majority of yearly golf equipment sales. In addition, our
online prices are generally cheaper than those offered at these discount stores which does not include the significant potential savings which non-Florida based customers experience since there presently is no sales tax on the sale of goods over the
Internet. As a result, such savings can be as high as an additional 8.5% in some states. In addition, we generally do not charge customers for shipping and handling.



Online Golf Retailers. Internet retailers can be classified into two categories. The first includes pure
Internet golf e-tailers. The majority of these golf e-tailers are only focused on the consumer market. In addition, many of these e-tailers do not have direct supply relationships with the manufacturers and are forced to source goods from other
retailers and pro-shops, which has reduced their margins and forced many of our competitors to either sell or close down their e-commerce operations. The second group of Internet e-tailers includes the multi sport e-tailers. Similar to brick and
mortar sporting goods retailers, these companies do not offer the selection of merchandise since they have to cater to the interests of other sports enthusiasts that visit their site. We are able to offer superior customer service as our customer
service center is staffed with PGA professionals who can assist customers making buying decisions as well as offer our customers custom clubs.



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Employees



We have assembled a management team led by our CEO, and our Chairman, Dwain Brannon. We had 4 full time employees as of January 1, 2004. As a result of
discontinuing the leather products business and partnering with our e-commerce golf partner we have reduced our staff to 1 full time and 1 part time employee. None of our employees are covered by a collective bargaining agreement, nor have we
experienced a strike or other adverse work stoppage due to organized labor. We offer our employees a benefits package that includes vacations, medical coverage, and restricted stock grants.



Intellectual Property



We regard our intellectual property rights as critical to our success. Further, we rely on copyright law, trade secret
protection, confidentiality and license agreements with our employees, customers, partners and others to protect our proprietary rights. Currently, we hold a perpetual, royalty free, exclusive license to use the term liquidgolf.com in connection
with on-line and traditional retail store services featuring sporting goods and sporting equipment. Among other things, maintenance of our license requires us to achieve annual gross sales of $3,000,000 of sporting goods and equipment under the term
liquidgolf.com. Over the term of our operating history we have not consistently achieved this annual gross sales threshold. If we are unable to perform all of the conditions required to maintain our license, including the achievement of the
specified level of gross sales, our license to use the term liquidgolf.com may be terminated, which would likely cause some harm to our business prospects and operating results, the magnitude of which would depend on many factors such as our ability
to redirect on-line traffic to a different Internet website, and our ability to carryover our brand identity, name awareness and goodwill to a new name. Additionally, we may also incur substantial costs in asserting our intellectual property or
proprietary rights against others, including our license to use the term liquidgolf.com, and/or defending any infringement suits brought against us, and there can be no assurance that we would be successful in asserting or defending our intellectual
property rights.



Governmental Regulation



Currently, a small, but growing, body of laws and regulations directly
affect the Internet. Due to the increasing popularity and use of the Internet, it is likely that a growing number of laws and regulations will be adopted at the international, federal, state and local levels, covering issues such as user privacy,
freedom of expression, pricing, characteristics and quality of products and services, taxation, advertising, intellectual property rights, information security and the convergence of traditional telecommunications services with Internet
communications. Moreover, a number of laws and regulations have been proposed and are currently being considered by federal, state and foreign governments with respect to such issues. The nature of any new laws and regulations and the manner in
which existing and new laws and regulations may be interpreted and enforced cannot be fully determined. The adoption of any future laws or regulations might decrease the growth of the Internet, decrease demand for our services 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.
The taxation of Internet use or electronic commerce transactions may be imposed. 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 majority 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.



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Risk Factors



RISKS RELATED TO OUR BUSINESS



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 registered certified public accounting firm has issued its report, which includes an explanatory paragraph for going concern uncertainty on our financial statements as of December 31, 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.



SINCE WE HAVE A LIMITED OPERATING HISTORY, IT MAY BE DIFFICULT FOR YOU TO ASSESS OUR BUSINESS AND FUTURE PROSPECTS.



We launched our website and began selling products through our online store in June 1999. We opened our single brick and mortar retail store in July 2002
and closed it in January 2005. As a consequence, we have a limited operating history available to evaluate our business and prospects. You should consider our prospects in light of the following risks, expenses and uncertainties, particularly those
that rely, in part, on the e-commerce market:



| |  |  | management of an expanding business in a rapidly changing market;
| | - |  | -----------------------------------------------------------------



| |  |  | attracting new customers and maintaining customer satisfaction;
| | - |  | ---------------------------------------------------------------



| |  |  | introducing new and enhanced websites, services, products and alliances;
| | - |  | ------------------------------------------------------------------------



| |  |  | maintaining profit margins, notwithstanding price competition or rising wholesale prices; and
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | minimizing technical difficulties, system downtime and the effect of Internet brownouts.
| | - |  | ----------------------------------------------------------------------------------------



To address these risks we must successfully:



| |  |  | develop and extend relationships with manufacturers for merchandise;
| | - |  | --------------------------------------------------------------------



| |  |  | implement an evolving and unproven business model;
| | - |  | --------------------------------------------------



| |  |  | establish internal accounting systems and controls;
| | - |  | ---------------------------------------------------



| |  |  | manage growth, if any;
| | - |  | ----------------------



| |  |  | develop and implement an efficient transaction processing system; and
| | - |  | ---------------------------------------------------------------------



| |  |  | successfully develop and market our website.
| | - |  | --------------------------------------------



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We do not have sufficient funds to follow through on these initiatives and may find that these
initiatives are more expensive than anticipated. Increases in expenses would further increase our operating losses. Moreover, the timing of such expenses can contribute to fluctuations in our quarterly operating results. If we do not successfully
manage these risks, our business will suffer. We cannot assure you that we will successfully address these risks or that our business strategy will be successful.



IF WE ARE UNABLE TO RETAIN OUR KEY PERSONNEL, WE MAY NOT BE ABLE TO IMPLEMENT OUR BUSINESS PLAN.



Our performance is substantially dependent on the performance of our senior
management. In particular, our success depends on the continued efforts of our Chief Executive Officer, Dwain Brannon. While we have an employment agreement in place with Mr. Brannon until December 31, 2005, we have not obtained any key
man or other insurance in connection with the life or employment of Mr. Brannon. The loss of Mr. Brannons services could have a material adverse affect on our business, operational results and financial condition.



WE DEPEND ON THIRD PARTY SHIPPERS AND COMMUNICATIONS PROVIDERS TO OPERATE OUR BUSINESS.



We depend on a number of third parties to deliver goods
and services to the Company and to our customers. For example, we rely on the United States Postal Service, United Parcel Service, Federal Express and other carriers to ship merchandise to customers. Strikes or other service interruptions affecting
one or more of such shippers could impair our ability to deliver merchandise on a timely basis, which may have an adverse effect on customer satisfaction and retention. We also depend on communications providers to provide our Internet users with
access to our online store. Our online store could experience disruptions or interruptions in service due to failures by these providers. In addition, our users depend on Internet service providers and website operators for access to our online
store. Each of these groups has experienced significant outages in the past and could experience outages, delays and other difficulties due to system failures unrelated to our systems. These types of occurrences could cause users to perceive our
online store as not functioning properly and therefore cause them to stop using our services. These factors may have an adverse effect on customer satisfaction and retention.



THERE CAN BE NO ASSURANCE THAT OUR WEBSITE CAN HANDLE INCREASED TRAFFIC OR THAT WE CAN PREVENT UNAUTHORIZED SECURITY BREACHES.



The key element of our strategy is to generate a high
volume of traffic on, and use of, our website. Accordingly, the satisfactory performance, reliability and availability of our website, transaction processing systems and network infrastructure are critical to our reputation and our ability to
attract and retain customers, as well as maintain adequate customer service levels. Our Internet revenues will depend on the number of visitors who shop on our website and the volume of orders we can fill on a timely basis. Problems with our website
or order fulfillment performances would reduce the volume of goods sold and the attractiveness of our merchandise and could also adversely affect consumer perception of our brand name. We may experience system interruptions from time to time. If
there is a substantial increase in the volume of traffic on our website or the number of orders placed by customers, we may be required to expand and upgrade further our technology, transaction processing systems and network infrastructure. There
can be no assurance that we will be able to accurately project the rate or timing of increases, if any, in the use of our website or that we will be able to expand and upgrade our systems and infrastructure to accommodate such increases on a timely
basis.



The success of our website depends on the secure
transmission of confidential information over public networks. We rely on encryption and authentication technology licensed from third parties to provide the security and authentication necessary to effectively secure transmission of confidential
information, such as consumer credit card numbers. There can be no assurance that advances in computer capabilities, new discoveries in the field of cryptography, or other events or developments will not result in a compromise or breach of the
algorithms we use to protect customer transaction and personal data contained in our customer database. If any such compromise of our security were to occur, it could have a material adverse affect on our reputation, business, operating results and
financial condition. The party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations. We may be required to expend significant capital and other resources to protect
against such security breaches or to alleviate problems caused by such breaches.



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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.



OUR BRAND MAY NOT ATTAIN SUFFICIENT RECOGNITION.



We believe that establishing, maintaining and enhancing our brand is a
critical aspect of our efforts to develop and expand our operations. The number of Internet sites and retail stores that offer competing services, many of which already have well-established brands in online services or the retail golf equipment
industry generally, increases the importance of establishing and maintaining brand name recognition. Promotion of our website will depend largely on our success in providing a high-quality online experience supported by a high level of customer
service, which cannot be assured. To attract and retain online users, and to promote and maintain our operations in response to competitive pressures, we may find it necessary to increase substantially our financial commitment to creating and
maintaining a strong brand loyalty among customers. This will require significant expenditures on advertising and marketing. If we are unable to provide high-quality online services or customer support, or otherwise fail to promote and maintain our
website, or if we incur excessive expenses in an attempt to promote and maintain our website, our business prospects, operating results and financial condition would be materially and adversely affected.



A SIGNIFICANT PART OF OUR BUSINESS DEPENDS ON CONTINUED GROWTH OF ELECTRONIC COMMERCE.



For the foreseeable future our revenues and profits, if
any, will depend substantially upon the acceptance and use of the Internet and other online services as an effective medium of commerce by our target customers. Rapid growth in the use of and interest in the Internet and online services is a recent
phenomenon. Acceptance and use of the Internet and other online services may not continue to develop at historical rates and a sufficiently broad base of consumers may not continue to use the Internet and other online services as a medium of
commerce. Demand and market acceptance for recently introduced services and products over the Internet are subject to a high level of uncertainty and there exist few proven services and products. Our target customer has historically used traditional
means of commerce to purchase golf equipment and apparel. For us to be successful, these customers must accept and use our online pro shop to satisfy their golf equipment and apparel needs. In addition, the Internet may not be accepted as a viable
long-term commercial marketplace for a number of other reasons beyond our control, including potentially inadequate development of the necessary network infrastructure or delayed development of enabling technologies and performance improvements. To
the extent that the Internet continues to experience significant expansion in the number of users and bandwidth growth requirements, the infrastructure for the Internet may be unable to support the demands placed upon it. In addition, the Internet
could lose its viability due to delays in the development or adoption of new standards and protocols required to handle increased levels of Internet activity, or due to increased governmental regulation. Changes in or insufficient availability of
telecommunications services to support the Internet could result in slower response times and adversely affect usage of the Internet generally and our online store in particular.



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WE HAVE LIMITED INTELLECTUAL PROPERTY RIGHTS, AND MAINTENANCE OF SUCH RIGHTS IS UNCERTAIN.



We regard our intellectual property rights as critical to our success.
Further, we rely on copyright law, trade secret protection, confidentiality and license agreements with our employees, customers, partners and others to protect our proprietary rights. Currently, we hold a perpetual, royalty free, exclusive license
to use the term liquidgolf.com in connection with on-line and traditional retail store services featuring sporting goods and sporting equipment. Among other things, maintenance of our license requires us to achieve annual gross sales of $3,000,000
of sporting goods and equipment under the term liquidgolf.com. Over the tern of our operating history we have not consistently achieved this annual gross sales threshold. If we are unable to perform all of the conditions required to maintain our
license, including the achievement of the specified level of gross sales, our license to use the term liquidgolf.com may be terminated, which would likely cause some harm to our business prospects and operating results, the magnitude of which would
depend on many factors such as our ability to redirect on-line traffic to a different Internet website, and our ability to carryover our brand identity, name awareness and goodwill to a new name. Additionally, we may also incur substantial costs in
asserting our intellectual property or proprietary rights against others, including our license to use the term liquidgolf.com, and/or defending any infringement suits brought against us, and there can be no assurance that we would be successful in
asserting or defending our intellectual property rights.



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.



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 the Company will be able to compete successfully or that competitive pressures will not damage our business.



Horizon Holdings competition includes:



| |  |  | websites maintained by other online retailers of golf products, 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 products 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.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



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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.



THE MARKET IN WHICH OUR E-COMMERCE OPERATION COMPETES IS HIGHLY COMPETITIVE WITH LOW BARRIERS TO ENTRY.



The Internet marketplace is intensely competitive, rapidly evolving and
subject to rapid technological change. We expect competition to increase because there are relatively low barriers to entry into this market and because companies can launch a new website at a relatively low cost. Many of our current and potential
competitors have longer operating histories, more established reputations, and potential partner relationships and greater financial, technical, industry and marketing resources than we do. Increased competition is likely to result in price
reductions, reduced gross margins and loss of market share. Any of these factors could adversely impact our net sales and operation results. This may place us at a disadvantage to our competitors.



OUR SUCCESS DEPENDS ON THE CONTINUED POPULARITY OF GOLF AND THE GROWTH OF THE MARKET FOR
GOLF-RELATED PRODUCTS.



We generate all of our net
revenues from the sale of golf-related equipment and accessories. The demand for our golf products is directly related to the popularity of golf. The number of golf participants and the number of rounds of golf being played by these participants. If
golf participation decreases, sales of our products would be adversely affected. In addition, the popularity of golf organizations, such as the PGA, also effects the sales of our golf equipment and golf-related apparel. Any significant reduction in
television coverage of PGA or other golf tournaments, or any other significant decreases in either attendance at golf tournaments or viewership of golf tournaments, will reduce the visibility of our brand and could adversely affect our sales. We
cannot assure you that the overall dollar volume of the worldwide market for golf-related products will grow, or that it will not decline in the future.



A REDUCTION IN DISCRETIONARY CONSUMER SPENDING COULD REDUCE SALES OF OUR PRODUCTS.



Our products are recreational in nature and, therefore, discretionary purchases for consumers. Consumers are generally more
willing to make discretionary purchases of golf products during favorable economic conditions. Discretionary spending is affected by many factors, including, among others, general business conditions, interest rates, the availability of consumer
credit, taxation, and consumer confidence in future economic conditions. Our customers purchases of discretionary items, including golf products, could decline during periods when disposable income is lower, or periods of actual or perceived
unfavorable economic conditions. Any significant decline in these general economic conditions or uncertainties regarding future economic prospects that adversely effect discretionary consumer spending could lead to reduced sales of our products. The
general slowdown in the United States economy and the uncertain economic outlook have adversely affected consumer spending habits, which had adversely affected our net revenues. The prolonged economic downturn could have a material adverse effect on
our business, financial condition and results of operations.



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



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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 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.



SEASONAL FLUCTUATIONS IN DEMAND FOR OUR PRODUCTS AND SERVICES MAY HAVE AN ADVERSE IMPACT ON OUR OPERATING RESULTS.



Seasonal fluctuation in the sale of golf related products could cause
significant fluctuations in our quarterly results. We have experienced, and we expect to continue to experience, seasonal fluctuations in our revenues. These seasonal patterns generally cause fluctuations in our quarterly operating results. In
particular, we expect that the fourth calendar-quarter will account for a significant percentage of our total annual sales. Consequently, in anticipation of such increased sales activity, we may find it necessary to hire several temporary employees
to bolster our current permanent staff and/or significantly increase our inventory levels to meet the anticipated demands. If, however, our revenues do not meet seasonal expectations during the fourth quarter, our annual operating results may not
meet the expectations of securities analysts and stockholders which could have an adverse impact on our stock price and valuation. In addition, it is possible that our seasonal sales patterns will become more pronounced, strain our permanent work
force, adversely affect our distribution and shipment activity, and may cause a shortfall in revenues as compared to expenses in a given period.



RISKS RELATED TO OUR SECURITIES



OUR STOCK IS DEEMED PENNY STOCK WHICH MAY REDUCE TRADING ACTIVITY IN THE SECONDARY MARKETS



The Securities and Exchange Commission has rules that regulate
broker-dealers practices in connection with transactions in penny stocks. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted
on the NASDAQ system, provided that current price and volume information with respect to transactions in that security is provided by the exchange or system). The penny stock rules require broker-dealers, prior to a transaction in penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the Securities and Exchange Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each
penny stock held in the customers account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to



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effecting the transaction and must be given to the customer in writing before or with the customers confirmation.
These disclosure requirements have the effect of reducing the level of trading activity in the secondary market for our common stock. As a result of the foregoing, investors may find it difficult to sell their shares.



ITEM 2. DESCRIPTION OF PROPERTY



All of our operations, including our retail sales, were based in our 4,000 square foot facility located at 1017 West Orange Blossom Trail, in Apopka, Florida. The facility was leased from Victoria Plaza, Inc. The lease originally expired on
July 31, 2007. Pursuant to the terms of the lease, however, we have the ability to terminate the lease at anytime upon 60 days notice. We gave that notice on December 27, 2004, paid a $10,000 termination fee, and vacated that facility on
February 28, 2005. Our current address is 1583 E Silver Star Rd. #346, Ocoee, FL 34761.



ITEM 3. LEGAL PROCEEDINGS



We are
not a party to any pending legal proceeding or litigation. In addition, none of our property is the subject of a pending legal proceeding. We are not aware of any legal proceedings against the company or our property contemplated by any governmental
authority.



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, individually or in the
aggregate, will not have a material adverse impact on our consolidated results of operations, financial position or cash flows.



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



No matters were submitted to a vote of security holders during the fourth quarter of fiscal year 2004 through the solicitation of proxies or otherwise.



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PART II



ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS



Market Information



Our
common stock is traded on the OTC Bulletin Board under the symbol HRZH.OB. The following table presents the range of high and low quotations reported on the OTC Bulletin Board during the past two years. The market quotations reflect
inter-dealer prices, without retail mark-up, markdown or commissions and may not necessarily represent actual transactions. We have a total of 550 stockholders of record as of March 31, 2005.



|               |  |       |      |      |   |     
|-------------- |  | ----- | ---- | ---- | - | ----
|               |  | High1 |      | Low1
|Fiscal 2004    |  |       |      |      |   |     
|First Quarter  |  | $     | 3.10 |      | $ | 1.05
|Second Quarter |  | $     | 3.25 |      | $ | 1.05
|Third Quarter  |  | $     | 1.45 |      | $ | 0.75
|Fourth Quarter |  | $     | 1.00 |      | $ | 0.35
|Fiscal 2003    |  |       |      |      |   |     
|First Quarter  |  | $     | 3.24 |      | $ | 2.75
|Second Quarter |  | $     | 3.10 |      | $ | 0.15
|Third Quarter  |  | $     | 3.50 |      | $ | 2.75
|Fourth Quarter |  | $     | 3.25 |      | $ | 2.00

---

|1 | Prices are adjusted to reflect reverse stock splits
|- | ---------------------------------------------------



Dividends and Dividend Policy



We have never declared or paid cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable
future. We currently intend to retain future earnings, if any, to finance the expansion of our business and for general corporate purposes. We cannot assure you that we will pay dividends in the future. Our future dividend policy is within the
discretion of our Board of Directors and will depend upon various factors, including our results of operations, financial condition, capital requirements and investment opportunities.



Recent Sales of Unregistered Securities



Commencing on or about February 24, 2003 and closing on or about October 1, 2003, the company offered and sold $732,500 in 8% convertible promissory notes
to 22 accredited investors. The convertible promissory notes were convertible, at the option of the Company, into units. Each unit consisted of one share of common stock and a warrant to purchase one share of common stock at a purchase price of
$2.00 per share. 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. The Company converted all of these notes on July 23, 2003.



On September 4, 2003, the Company issued 1,800,000 shares of common stock to PanAmerica Capital Group, Inc. as compensation under an investment banking agreement. Pursuant to the investment banking agreement, PanAmerica is obligated to
provide general business advice and assistance with financing activities for a period of two years commencing at or prior to the Companys merger with Nomadic Collaboration International, Inc. In accordance with PanAmericas obligations
under the investment banking agreement, PanAmerica advanced substantial funds to the Company prior to the Companys merger with Nomadic. The issuance of the shares was delayed until the Company had a sufficient number of disinterested directors
so that the Companys Board of Directors could approve the investment banking agreement. We deemed the securities issued to PanAmerica in



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connection with the investment banking agreement exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act as a
transaction by an issuer not involving any public offering. In connection with the issuance, PanAmerica represented its intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution
thereof, and appropriate legends were fixed to the share certificates issued to PanAmerica.



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 may convert all or any part of the principal represented by this note. As part of the same transaction, the note holder acquired a warrant, issued by the Company, to purchase 50,000 shares
of common stock at $1.25 per share.



On June 14, 2004, the Company entered into
a promissory note conversion agreement (the Agreement) with this stockholder. The agreement called for the holder of the note to exercise the option to convert the principal sum of $600,000 into shares of the Companys common stock
at the lesser of $1.25 per share or a 40% discount to the average closing bid price for the thirty days after the signing of the agreement. In addition, per the agreement, the Company paid the accrued interest on the note in cash. On August 4, 2004
the Company issued 714,285 shares of common stock to satisfy the promissory note conversion agreement.



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. As of March 21, 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.



Equity Compensation Plan Information



The following table summarizes certain information regarding our equity compensation plans as of December 31, 2004. The underlying compensation plan has
been previously approved by a vote of the shareholders.



Equity Compensation Plan Information



|                                                       |  |                                                                                       |  |                                                                           |      |                                                                                              |        
|------------------------------------------------------ |  | ------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------- | ---- | -------------------------------------------------------------------------------------------- | -------
|Plan category                                          |  | Number of securitiesto be issued uponexercise ofoutstanding option,warrants and right |  | Weighted-average exercise price ofoutstanding options,warrants and rights |      | Number of securities remaining available for future issuance under equity compensation plans
|Equity compensation plans approved by shareholders     |  | 1,500,000                                                                             |  | $                                                                         | 1.00 |                                                                                              | 146,000
|Equity compensation plans not approved by shareholders |  | N/A                                                                                   |  |                                                                           | N/A  |                                                                                              | N/A    
|                                                       |  |                                                                                       |  |                                                                           |      |                                                                                              |        
|Total:                                                 |  | 1,500,000                                                                             |  | $                                                                         | 1.00 |                                                                                              | 146,000
|                                                       |  |                                                                                       |  |                                                                           |      |                                                                                              |        



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



The following discussion should be read in conjunction with our consolidated financial statements, including the related notes, appearing elsewhere in
this Annual Report. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those discussed in the forward-looking statements as a result of
the various factors set forth under Risk Factors and elsewhere in this annual report.



General Discussion



We
market and sell golf equipment and accessories to golfing consumers. We operated from a brick and mortar retail store located in Apopka, Florida, and via the Internet through an online golf community website www.liquidgolf.com. In January of 2005 we
closed our retail store located in Apopka, Florida and in November of 2004 discontinued our operation of our leather goods segment. In 2004 revenue from our retail store and website accounted for nearly 81% of our total revenues. Revenue from
Leather Craft Technology Corporation accounted for nearly 19% of our total revenues. Specifically, we currently derive 100% of our revenue from the sale of golf equipment, merchandise, and accessories via our website.



Our website business grew from approximately $2,300,000 in revenues in 2000
(our first full year of operations) to approximately $5,000,000 for the year ended December 31, 2001. However, commencing in 2002, we experienced significant difficulties in obtaining financing for our business. This led to the discontinuance of our
website operations in February 2002. We were eventually able to reach accommodations with some of our creditors, including converting some of our debt to equity and settling certain disputes that enabled us to find limited financing through a
private placement of securities in late 2002. However, financial difficulties during this period forced us to downsize our operations and we were unable to carry sufficient inventory to support our historical sales levels. This situation continued
through out 2004 and 2003. Revenues for the twelve months ended December 31, 2004 of approximately $1,116,000 (from continuing operations and discontinued operations) was in accordance with our expectations due to our downsized operations and
limited operating funds. We believe that we will be able to partner with an experienced golf retailer to provide customer service and order fulfillment to bring our golf operations to a positive cash flow position. As a result of this our revenue
reported will only be 6-7% of our billings through our web site but our cash expenses will be significantly reduced and are expected to be 2-3% of our historical cash expenses.



On December 22, 2003, we began our Leather Products segment with the acquisition of 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, we incurred a finders fee of $22,500 relating to the acquisition. Leather Craft sells leather bound
notebooks and related products. We acquired Leather Craft in order to diversify our revenue streams. In connection with the purchase of assets, we entered into consulting agreements with the two principals of Leather Craft to provide us 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. Revenues for the twelve months ended December 31,
2004 was $206,954.



June 2, 2004, the Company acquired thorough
its subsidiary Leather Craft certain assets from Game for Golf, Inc. (Game), including the name, for 10,000 shares of our common stock. In addition to the single stock payment, the Company incurred a finders fee of $30,000 relating
to the acquisition. Game sells golf accessories including golf bags, head covers and other embroidered or embossed artwork for golfers. The Company acquired Game 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 Game to provide us consulting services for a period of three years. As compensation for services, each consultant receives 15,000 shares of our common stock.



Our Leather Products segment revenue for the twelve months ended December 31,
2004 was approximately $206,900. This was well below our expectations and led us to discontinue these operations in December of 2004.



As a result of discontinuing the operations of our Leather Products segment and the anticipation of out sourcing certain aspects of the operation of our
Internet website; the Company now only has two employees. Allan Woodlief was named President in addition to being the CFO. In addition to his financial responsibilities Mr. Woodlief is responsible for the remaining limited operations. Dwain Brannon
continues to the Companys CEO, Chairman of the Board and Secretary, his responsibilities are limited to merger and Acquisition Activities.



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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 April of 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 annual 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 growth than the corresponding revenue decrease.



We managed our business on a segment basis. We rely on an internal management reporting process that provides revenue and certain operating cost
information for making financial decisions and allocating resources. Our principal areas of measurement and decision-making are the Golf Retail sales and Leather Products sales. The leather goods segment has been discontinued.



Comparison of fiscal year ended December 31, 2004 to fiscal year ended December 31, 2003



Consolidated Financial Information



|                                    |  |               |           |   |        |   |          
|----------------------------------- |  | ------------- | --------- | - | ------ | - | ---------
|                                    |  | 2004          |           |   | 2003  
|                                    |  | Amount        |           |   | Amount
|                                    |  | (As restated) |           |   |       
|Net sales                           |  | $             | 909,272   |   |        | $ | 781,339  
|Cost of sales                       |  |               | 759,704   |   |        |   | 668,903  
|Gross profit                        |  |               | 149,568   |   |        |   | 112,436  
|General and administrative expenses |  |               | 2,369,064 |   |        |   | 1,489,418
|Interest expense, net               |  |               | 695,348   |   |        |   | 12,377   
|Write down of impaired assets       |  |               | 10,809    |   |        |   |         
|Discontinued operations             |  |               | 306,094   |   |        |   |         
|Gain on extinguishment of debt      |  |               | (310,125  | ) |        |   |         



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Net Sales. Net sales from continuing operations were $909,272 in 2004 an increase of
approximately 16% from $781,339 in 2003. This increase was due to increased marketing activity during 2004.



Cost of Sales. Cost of sales from continuing operations was $759,704 in 2004, an increase of approximately 14% from $668,903 in 2003. This
increase was the result of a 16% increase in net sales. Although cost of sales increased during 2004, its percentage to net sales has decreased from 86% in 2003 to 84% in 2004.



Gross Profit. Gross profit from continuing operations was $149,568 in 2004, an increase of approximately 33%
from gross profit of $112,436 in 2003. This increase is consistent with our 16% increase in net sales.



Golf Retail Segment



|              |  |        |         |        |   |        
|------------- |  | ------ | ------- | ------ | - | -------
|              |  | 2004   |         | 2003  
|              |  | Amount |         | Amount
|Net sales     |  | $      | 909,272 |        | $ | 781,339
|Cost of sales |  |        | 759,704 |        |   | 668,903



Sales in the Golf
Retail segment increased approximately 16%, or $127,933 in 2004 compared to 2003. The increase in the Golf Retail segment was the result of increased marketing activity during 2004.



Leather Products Segment



|              |  |        |         |        |   |  
|------------- |  | ------ | ------- | ------ | - | -
|              |  | 2004   |         | 2003  
|              |  | Amount |         | Amount
|Net sales     |  | $      | 206,954 |        | $ | 
|Cost of sales |  |        | 147,910 |        |   | 



Sales in the Leather
Products segment increased by $206,954 for 2004 compared to 2003. The increases in revenue are due to the acquisition of Leather Craft Technology, Inc. in December 2003. In November of 2004 the Company discontinued its leather goods product segment.
Accordingly, this activity has been reported as a component of discontinued operations.



Operating Expenses



|                           |  |        |           |        |   |          
|-------------------------- |  | ------ | --------- | ------ | - | ---------
|                           |  | 2004   |           | 2003  
|                           |  | Amount |           | Amount
|General and administrative |  | $      | 2,369,064 |        | $ | 1,489,418



General and
Administrative. General and Administrative expenses were $2,369,064 in 2004, an increase of 59% from $1,489,418 in 2003. In 2004, a $981,000 non-cash expense was recorded for the amortization of a prepaid expense recorded in connection with
an investment banking commitment retaining PanAmerica Capital Group, Inc. to assist the Company in all financial activities of the Company. This was a 72% increase from $572,000 in 2003. The compensation was 1,800,000 shares of common stock and the
remaining term of the agreement is five months. The additional increase in 2004 is due to a $572,324 non-cash expense for the amortization of deferred restricted stock compensation an increase of 80% from $317,083 in 2003.



Other Income and Expenses



Interest income and expense, net. Net interest expense was
$695,348 in 2004, a net increase of $682,971 from $12,377 in 2003. The increase in interest expense is a result of the secured promissory note in the amount of $600,000 that we sold in February 2004 in a private placement to a stockholder and loan
cost of $60,000. In addition, we recognized interest expense of $600,000 for the beneficial conversion feature of this note. Interest



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accrued on the outstanding principal balance from and after February 16, 2004 at a rate of 18 percent per annum. 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.



Write down of impaired assets. Write down of impaired assets increased $13,089 or 100% in 2004. This increase was due to the write down of
certain property and equipment that was abandoned or sold when we discontinued our Leather Products operations and closed our golf retail facility in February 2005. The portion of this impairment related to the leather goods product segment has been
reported as a component of discontinued operations



Gain
on extinguishment of debt. Gain on settlement of liabilities was $310,125 for 2004 compared to $0 for the same period in 2003. This gain was the result of our determination that this was not owed for these obligations in 2004 or were
obtained through negotiations with our vendors in 2004.



Write down of Goodwill. Write down of Goodwill was $108,400 for 2004 compared to $0 for the same period in 2003. This write down was due to the discontinuing the operations of our Leather Products segment. This amount is
included in the loss from discontinued operations of $306,094.



Liquidity
and Capital Resources



We had cash balances totaling
approximately $249,000 as of December 31, 2004. 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 believe that we will require an additional $300,000 to fund our currently
anticipated requirements for ongoing operations for our existing business for the next twelve-month period. 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.



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.



Cash flows from financing activities. Net cash provided by financing activities was generated from a secured
promissory note in the amount of $600,000 that we sold in February 2004 in a private placement to a stockholder. 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. On August 4, 2004 the Company issued 714,285 shares of common stock to satisfy the promissory note conversion agreement.



On or about August 14, 2004 the Company the $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. As of March 21, 2005 the Company has sold $371,185 in units to 12 accredited investors.



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Variables and Trends



We anticipate experiencing greater sales in the third and fourth quarters of the calendar year, as opposed to the first and second 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 products 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 products. 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.



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



Critical Accounting Policies



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



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 Securities and Exchange Commissions (SEC)
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. Revenue is
earned by the Company from the sale of golf equipment and related accessories through its online retail store and its retail location. 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. The Company provides for estimated returns at the time of shipment based on historical data. For the years ended December 31, 2004 and 2003, no
allowance for returns was recorded because the estimated amounts were immaterial.



Inventory Valuation



Inventories are stated at
the lower of cost or market with cost being determined using the average cost method, which closely approximates the first-in, first-out (FIFO) method. At each balance sheet date, we evaluate our ending inventory for excess quantities and
obsolescence. We provide reserves for estimated obsolescence equal to the difference between the cost of the inventory and its estimated market value. We fully reserve for inventories deemed obsolete. If future demand or market conditions are less
favorable than our projections, additional inventory write-downs may be required.



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. Accordingly, no compensation cost is recognized for our restricted stock granted to employees when the exercise price of each option equals or exceeds the
fair value of the underlying common stock as of the grant date for each stock option.



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Recent Accounting Pronouncements



In December 2004, the FASB issued Statement No. 123R, Share-Based Payment, which requires companies to recognize
in the statement of operations all share-based payments to employees, including grants of employee stock options, based on their fair values. Accounting for share-based compensation transactions using the intrinsic method supplemented by pro forma
disclosures will no longer be permissible. The new statement will be effective for public entities in periods beginning after June 15, 2005. We have not yet completed our analysis of the impact of adopting FASB Statement No. 123R and therefore we
are currently unable to quantify its effect on our results of operations. However, we know that the adoption of this new statement will have a significant impact on the results of operations and net income per share as we will be required to expense
the fair value of all share based payments.



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.



ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



The financial statements required to be filed hereunder are set forth on pages F-1 through F-17 and are incorporated herein by this reference.



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



None.



ITEM 8A. CONTROLS AND PROCEDURES



We have evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2004. 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 reports filed
under the Securities Exchange Act of 1934, as amended, within the time periods specified by the Securities and Exchange Commissions rules and forms.



During the 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.



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PART III



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



Executive Officers and Directors



The names of our executive officers and directors, their ages as of March 1, 2005, and the positions currently held by each are as follows:



|                |  |     |  |                                                
|--------------- |  | --- |  | -----------------------------------------------
|Name            |  | Age |  | Position                                       
|Dwain Brannon   |  | 43  |  | Chief Executive Officer, Secretary and Director
|Larry Abraham   |  | 66  |  | Director                                       
|William Parsons |  | 57  |  | Director                                       
|Dwight Day      |  | 41  |  | Director                                       
|Skip McElvery   |  | 58  |  | Director                                       
|Allan Woodlief  |  | 47  |  | President and Chief Financial Officer          



Dwain Brannon
Mr. Brannon has served as our Chief Executive Officer since the Board of Directors appointed him to such offices following the close of the merger with Nomadic Collaboration on May 29, 2003. Mr. Brannon has been a Director since
August 13, 2003. Subsequently, on October 27, 2003, Mr. Brannon was appointed by the Board of Directors to serve as Secretary. From 1998 to the present, Mr. Brannon has been the president and owner of Brannon Capital, a consulting firm. From 2000 to
December 2004 Mr. Brannon has been president of LiquidGolf Corporation, our wholly owned subsidiary. From 1996 to 1998 Mr. Brannon was a salesman for MarketShare, Inc., an advertising company. Mr. Brannon earned an A.A. degree in Marketing and
Merchandising from Spartanburg Methodist College in 1981.



Larry Abraham  Mr. Abraham has been the president of AMDG, Ltd., since 1983. Mr. Abraham has been the Chairman for PanAmerican Capital Group since 1998 and is also the Chairman of Bell House Ventures. Additionally, Mr.
Abraham sits on various boards of directors and is a partner in two venture capital partnerships. Mr. Abraham attended Ganzaga University in Spokane and University of Puget Sound, Tacoma Washington.



William Parsons  Mr. Parsons was a Partner with Arthur
Anderson from 1992-2002. Mr. Parsons is currently an Executive Vice President and Partner with SENN-Delaney Leadership, where he has been since 2002. In addition, Mr. Parsons is the general partner of Parsons Partners. Mr. Parsons received his
Bachelor of Science degree at Clarkson University and his Masters in Business Administration from UCLA.



Dwight Day Mr. Day has served as a Director of the Company since August 13, 2003. Mr. Day has served as a Director of BAC
International since 2002. Mr. Day has served as Vice President of Mechanical Associates, Inc. from 2001 to 2004 and HVAC Contractors Supply since 1994. Additionally, Mr. Day has been President of KMA Mechanical from 1991 to the present.



Skip McElvery Mr. McElvery has served as a Director
of the Company since August 13, 2003. Mr. McElvery has been President of Tower Parking Systems since its inception in April 2003. Since January 2002, Mr. McElvery has served as Vice President for Synergy Structure Systems. From January 1998 to
December 2002, Mr. McElvery was the National Installation Director for Commercial Cabling Contractors, Inc. Mr. McElvery attended Pace College in Pleasantville New York.



Allan Woodlief Mr. Woodlief has served as our Chief Financial Officer since January 2004 and was named
President in December 2004. Mr. Woodlief has served as Vice President and Chief Financial Officer of LiquidGolf Corporation, our wholly owned subsidiary, since July 1999. Prior to joining LiquidGolf Corporation, Mr. Woodlief served for 14 years with
IKON Office Solutions and recently served as Chief Financial Officer of the Florida division of IKON Office Solutions.



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Board of Directors and Committees



The directors are elected to one-year terms. Each director holds office until the expiration of the directors term,
until the directors successor has been duly elected and qualified or until the earlier of such directors resignation, removal or death.



We have established an Audit Committee, Executive Compensation Committee and a Restricted Stock Plan Distribution Committee.



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The Audit Committee approves the selection of our independent accountants and meets and interacts with
the independent accountants to discuss issues related to our financial reporting. In addition, the Audit Committee reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants
our annual operating results, considers the adequacy of our internal accounting procedures and considers and reports to the Board of Directors with respect to other auditing and accounting matters, fees to be paid to our independent auditors and the
performance of our independent auditors. The Audit Committee consists of Messrs. Day, McElvery, both of whom are non-employee directors, and Woodlief. The Board of Directors has not adopted a written charter of the Audit Committee. As CFO, Mr.
Woodlief is not considered independent as that term is defined by Rule 4200(a)(15) of the NASDs listing standards. The Audit Committee met 5 times in 2004. The Board of Directors has determined that it does not have a
financial expert, as defined in Item 401 of Regulation S-B. We believe that the cost related to retaining a financial expert at this time is prohibitive. Further, because we cannot afford director and officer liability insurance, it is
difficult to attract qualified candidates to serve on the Board of Directors.



The Executive Compensation Committee reviews and recommends to the Board of Directors the salaries, and benefits of all employees, consultants, directors and other individuals compensated by us. The Executive
Compensation Committee currently consists of Messrs. Day and McElvery, both of whom are non-employee directors. None of our executive officers or directors presently serves, or has served, on the Executive Compensation Committee of another company
whose executive officers or directors served on our Board of Directors. Members of our Board of Directors own our common stock, as further described in, the Principal Stockholders section of this prospectus. The Executive
Compensation Committee met 1 time in 2004.



The Restricted
Stock Plan Distribution Committee selects eligible persons to receive restricted stock awards under the Companys 2003 Restricted Stock Plan, determines the number of restricted stock awards to be granted  the number of shares of common
stock to which such restricted stock awards will relate, specifies times at which restricted stock awards will be vested, sets other terms and conditions of restricted stock awards, prescribes forms of restricted stock award agreements, interprets
and specifies rules and regulations relating to the 2003 Restricted Stock Plan, and makes all other determinations that may be necessary or advisable for the administration of the 2003 Restricted Stock Plan. Members of our Restricted Stock Plan
Distribution Committee include Messrs. Brannon, Day and McElvery. The Restricted Stock Plan Distribution Committee met 2 times in 2004.



Section 16(a) Beneficial Ownership Reporting Compliance



Based solely upon a review of Forms 3, 4 and 5, and amendments to these forms furnished to us, each of the following parties, who are subject to the
reporting requirements of Section 16(a) of the Exchange Act, were delinquent in filing all such required reports with respect to fiscal year 2004:



Allan Woodlief  Mr. Woodlief failed to file a Form 4 regarding shares received pursuant to our 2003 Restricted Stock Plan.



Dwight Day  Mr. Day failed to file a Form 4 regarding
shares received as compensation for his service on the Board of Directors.



Skip McElveryMr. McElvery failed to file a Form 4 regarding shares received as compensation for his service on the Board of Directors.



Harmon BurnsMr. Burns failed to file a Form 3
regarding shares he acquired that increased his ownership over ten percent of the outstanding stock of the company.



The Company has taken steps to educate its officers, directors and ten percent owners regarding their personal reporting obligations and has provided them
with additional information to prevent further delinquent filings.



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Code of Ethics



The Company has adopted the Horizon Holdings Corporation Code of Ethics (the Code of Ethics) which applies to our Chief Executive Officer,
Chief Financial Officer and other finance organization employees. If we make any substantive amendments to the Code of Ethics or grant to our Chief Executive Officer or Chief Financial Officer any waiver, including any implicit waiver, from a
provision of the Code of Ethics, we will disclose the nature of such amendment or waiver on that website or in a report on Form 8-K.



ITEM 10. EXECUTIVE COMPENSATION



We did not have any other executive officers or other employees serving at the end of fiscal year 2004 whose total annual salary and bonus exceeded $100,000. The following table sets forth certain information regarding the compensation our
Chief Executive Officer for 2004, 2003 and 2002.



Summary
Compensation Table



|                                                              |  |          |  |                    |        |                             |   |                            |           |                       |  
|------------------------------------------------------------- |  | -------- |  | ------------------ | ------ | --------------------------- | - | -------------------------- | --------- | --------------------- | -
|                                                              |  |          |  | AnnualCompensation |        | Long-TermCompensationAwards |   |                           
|Name and Principal Position                                   |  | Year     |  | Salary             |        | Bonus                       |   | Restricted StockAwards (1) |           | All OtherCompensation
|Dwain Brannon Chief Executive Officer, Secretary and Director |  | 12/31/04 |  | $                  | 99,092 |                             |  |                            |          |                       | 
|                                                              |  |          |  |                    |       
|Dwain Brannon Chief Executive Officer, Secretary and Director |  | 12/31/03 |  | $                  | 90,000 |                             |  |                            | 1,000,000 |                       | 
|                                                              |  |          |  |                    |       
|Ricardo Garcia de Paredes Carbone Chief Executive Officer     |  | 12/31/02 |  |                    | -0-    |                             |  |                            |          |                       | 

---

|(1) | Represents shares received pursuant to the Companys 2003 Restricted Stock Plan.
|--- | --------------------------------------------------------------------------------



Employment Agreements



On May 30, 2003, we entered into an employment agreement with Mr. Dwain
Brannon, who is our Chief Executive Officer. Mr. Brannons employment agreement expires December 31, 2005, unless sooner terminated or extended pursuant to the terms therein. Pursuant to his employment agreement, Mr. Brannon will receive an
initial annual base salary of $90,000. Commencing on January 1, 2004 Mr. Brannons annual base salary was to be increased by $12,000. In December of 2004 Mr. Brannon voluntarily reduced is annual base salary to $1,200. Mr. Brannons base
salary shall be reviewed annually, and may be increased for merit in the discretion of our Board of Directors. Additionally, bonuses may be paid to Mr. Brannon at the discretion of the Board of Directors; however, Mr. Brannon shall be deemed to have
earned a bonus equivalent to 100% of his annual base salary in the years 2003, 2004, and 2005, if our total revenues exceed $1,000,000, $5,000,000, and $10,000,000 respectively.



As additional compensation, subject to employment for a minimum of two years, we granted Mr. Brannon 1,000,000 shares of
restricted common stock under the 2003 Restricted Stock Plan. Mr. Brannon receives non-accountable automobile allowance in the amount of $400 per month. In the event we terminate Mr. Brannon without cause, or he voluntarily terminates his employment
for good cause, as that term is defined in the employment agreement, we will pay Mr. Brannon: (a) any unpaid base salary accrued through the effective date of termination; and (b) an amount equal to the product of (x) the sum of Mr.
Brannons then base salary plus the amount of the highest annual bonus or other incentive compensation payment made by the Company to Mr. Brannon, multiplied times (y) three.



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2003 Restricted Stock Plan.On June 30, 2003, our 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 terms of the 2003 Plan provide for grants of restricted stock awards. The
purpose of the 2003 Plan is to provide a means through which the Company and its subsidiaries may attract key personnel to enter into and remain in the employ of the Company and its subsidiaries, as well as to provide a means whereby those key
persons upon whom the responsibilities of the successful administration and management of the Company rest, and whose present and potential contributions to the welfare of the Company are of importance, can acquire and maintain stock ownership,
thereby strengthening their commitment to the welfare of the Company and promoting the mutuality of interests between those key individuals and the Companys stockholders. The effective date of the 2003 Plan was the date of the 2003 Annual
Stockholders Meeting (August 13, 2003).



Under the plan, the
total number of shares of common stock that may be subject to the granting of awards under the plan during the term of the plan shall be equal to 1,500,000 shares, plus the number of shares with respect to which awards previously granted thereunder
that are forfeited or cancelled or terminated. As of December 31, 2004, we have granted 1,000,000 shares of restricted stock under the Plan to Dwain Brannon, 202,000 shares of restricted stock under the plan to Allan Woodlief, and 102,000 shares of
restricted stock under the plan to Dan McIlroy, our warehouse manager. The 35,000 shares of restricted stock issued under the plan to Bradford Doyle, our former operations manager was forfeited when Mr. Doyle employment ended. The 35,000 shares were
combined with an additional 15,000 shares under the plan and the 50,000 share of restricted stock under the plan were issued to Darren DeCarlo operations manager.



Compensation of Directors



Non-employee directors are paid a monthly retainer of $1,000 for serving on the Board of Directors, $500 each meeting attended, and $250 per meeting if a
member is unable to attend in person but attends telephonically. Each Board member also receives 1,500 shares of our common stock per quarter of service. We also reimburse directors for reasonable travel expenses incurred in connection with
traveling to meetings, including first class air travel and accommodations.



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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The following table sets forth certain information as of December 31, 2004 with respect to the beneficial ownership of common stock by: (a) each
shareholder known by the Company to be the beneficial owner of more than 10% of the Company common stock; (b) each director; (c) each executive officer named in the Summary Compensation Table; and (d) all executive officers and directors as a group.



|                                                 |  |                                                     |      |  |                                        
|------------------------------------------------ |  | --------------------------------------------------- | ---- |  | ---------------------------------------
|Name and Address(2)of Beneficial Owner(1)        |  | Number of Shares of Common Stock Beneficially Owned |      |  | Percentage of Shares Beneficially Owned
|Dwain Brannon                                    |  | 1,250,332                                           | (3)  |  | 9.69                                   
|Larry Abraham                                    |  | 4,500                                               |      |  | 0.03                                   
|William Parsons                                  |  | 11,333                                              |      |  | 0.09                                   
|Dwight Day                                       |  | 443,143                                             |      |  | 3.43                                   
|Skip McElvery                                    |  | 130,707                                             | (5)  |  | 1.01                                   
|Allan Woodlief(6)                                |  | 222,833                                             |      |  | 1.72                                   
|John and Brandy Puls(7)                          |  | 937,707                                             | (8)  |  | 6.85                                   
|Peter Vole(9)                                    |  | 556,651                                             | (10) |  | 4.28                                   
|Harmon Burns(11)                                 |  | 4,388,451                                           | (12) |  | 28.69                                  
|All officer and directors as a group (4 persons) |  | 2,062,848                                           | (4)  |  | 15.94                                  

---

|(1) | Based on 12,894,729 shares actually outstanding, and additional shares deemed to be outstanding as to a particular person in accordance with the following applicable
rules of the SEC. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants or convertible securities
that are exercisable within 60 days of the date of December 31, 2004, are deemed outstanding for computing the percentage of the person holding such options, warrants or convertible securities but are not deemed outstanding for computing the
percentage of any other person. Except as indicated by footnote and subject to community property laws where applicable, the persons named in the tables have sole voting and investment power with respect to all shares of common stock shown as
beneficially owned by them.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Unless otherwise noted, the address of each person listed isc/o Horizon Holding Corporation, 1583 E. Silver Star Rd # 346, Ocoee, Florida 34761
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes 1,000,000 shares of restricted common stock in the Company granted under the Companys 2003 Restricted Stock Plan pursuant to an employment agreement
between Mr. Brannon and the Company entered into on May 30, 2003.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes: (a) 50,690 shares of common stock issuable pursuant to warrants exercisable within the next 60 days; and (b) 1,202,000 shares of restricted common stock
issues under the Companys 2003 Restricted Stock Plan.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes 127,707 shares of common stock owned by Mr. McElverys spouse.
|--- | -----------------------------------------------------------------------

|(6) | Includes 202,000 shares of restricted common stock in the Company granted pursuant to the Companys 2003 Restricted Stock Plan.
|--- | -------------------------------------------------------------------------------------------------------------------------------

|(7) | Mr. and Mrs. Puls address is 5138 Longfellow, Tampa, FL 33629.
|--- | ---------------------------------------------------------------

|(8) | Includes 800,000 shares of common stock issuable pursuant to warrants exercisable within the next 60 days.
|--- | ----------------------------------------------------------------------------------------------------------

|(9) | Mr. Voles address is 37 Kings Cross Drive, Linconshire, IL 60069.
|--- | ------------------------------------------------------------------

|(10) | Includes: (a) 19,242 shares of common stock held by V.I.P. Holdings Company, of which Mr. Vole is the president and controlling stockholder; and (b) 102,038 shares
of common stock issuable pursuant to warrants exercisable within the next 60 days.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Harmon Burnss address is c/o Franklin Templeton Trust Co., 1 Franklin Pkwy 970/2, San Mateo, CA 94403.
|---- | -------------------------------------------------------------------------------------------------------

|(12) | Includes 2,400,000 shares of common stock issuable pursuant to warrants exercisable within
the next 60 days.
|---- | ------------------------------------------------------------------------------------------------------------



27



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##### Table of Contents

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



From December 2001 through May 2002, PanAmerica Capital Group, Inc., a principal stockholder of Nomadic Collaboration, beneficially owned 160,000 pre-Reverse Stock Split shares of the Nomadics common stock
issued in November 2001 in consideration for certain business advisory services provided to Nomadic Collaboration. From December 2001 through May 2002, PanAmerica advanced $490,000 to the Company pursuant to a promissory note. The promissory note
bore interest at 10% per annum, was due on demand and was unsecured. On September 18, 2002, the promissory note of $490,000 plus accrued interest of $12,250 was converted into a convertible promissory note in the amount of $502,250. The convertible
promissory note bore interest at 10% per annum and was convertible into common stock at a conversion price of $0.04 per share (or $6.00 per share after giving effect to the Reverse Stock Split), being the market rate for the Companys common
stock over the prior 30-day period. On September 27, 2002, the convertible promissory note of $502,250 was converted into 12,556,250 shares of common stock of the Company, or 83,709 shares after giving effect to the Reverse Stock Split



From October to November 2002, the Company was advanced funds and
subsequently issued a convertible promissory note in the principal amount of $46,100 and a demand promissory note in the principal amount of $7,000 to PanAmerica Capital Group, Inc., a principal stockholder of Nomadic Collaboration. The convertible
note was unsecured, bore interest at 8% per annum and was due on November 6, 2003. The demand promissory note was unsecured, bore interest at 8% per annum, and was due on demand. The principal amount and accrued interest under the convertible
promissory note was convertible into shares of common stock at a price of $6.00 per share after giving effect to the Reverse Stock Split. The Company paid both notes in full on June 30, 2003.



As of June 30, 2003, PanAmerica had advanced approximately $77,000 in
additional funds to the Company. The Company paid PanAmerica approximately $131,000 in full satisfaction of all outstanding notes and advances. At that period of time, Ricardo Garcia de Paredes Carbone, the Companys former President, was an
employee of PanAmerica.



Following the merger with Nomadic
Collaboration, the independent directors of the Company approved and entered into an investment banking agreement with PanAmerica. Pursuant to the agreement, PanAmerica provides general business advice and assists the Company in all of its financial
activities including, but not limited to, capital raising, mergers and acquisitions and future financing activities. The term of the investment banking agreement is two years, and the Company has issued 1,800,000 shares of common stock as
compensation to PanAmerica.



Mr. Dwain Brannon was the Chief
Executive Officer of LiquidGolf Corporation and has served in that position since July 2000. Mr. Brannon was Chief Operating Officer and Director for LiquidGolf Corporation from its inception in November 1998 until July of 2000. Following the
Acquisition, Mr. Brannon was appointed to Chief Executive Officer of Horizon Holding on May 30, 2003.



28



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##### Table of Contents

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K



|(A) | Financial Statements and Schedules
|--- | ----------------------------------



See Index to Financial Statements.



|(B) | Exhibits
|--- | --------



|     |  |                                                                                                                                                                                
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Form of Articles of Incorporation of LiquidGolf Holding Corporation(1)                                                                                                         
|     | 
|3.2  |  | Bylaws of LiquidGolf Holding Corporation(2)                                                                                                                                    
|     | 
|10.1 |  | Agreement and Plan of Merger by and among Nomadic Collaboration International, Inc., LGC Acquisition Company, and LiquidGolf Corporation dated February 12, 2003(3)            
|     | 
|10.2 |  | LiquidGolf Holding Corporation 2003 Restricted Stock Plan(4)                                                                                                                   
|     | 
|10.3 |  | Employment Agreement between the Company and Dwain Brannon dated May 29, 2003(5)                                                                                               
|     | 
|10.4 |  | Lease Agreement dated May 2, 2002, between the Company and Victoria Plaza, Inc.(6)                                                                                             
|     | 
|21.1 |  | Subsidiaries of the Company(7)                                                                                                                                                 
|     | 
|31.1 |  | Certification of Chief Executive Officer Pursuant to Securities and Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.*
|     | 
|31.2 |  | Certification of Chief Financial Officer Pursuant to Securities and Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.*
|     | 
|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.*                            
|     | 
|99.1 |  | Audit Committee Pre-Approval Policy(8)                                                                                                                                         



|(C) | Reports on Form 8-K
|--- | -------------------



On October 26, 2004, the Company filed a Current Report on Form 8-K to report the termination of a material definitive agreement with R G Golf.



On November 23, 2004 the Company filed a Current Report on
Form 8-K to report cost associated with exit activities associated with closing of its leather goods product segment and its golf operations. Also the Company reported an appointment of a principal officer, Allan Woodlief was appointed President and
CFO. Additionally the Company reported the signing of a non binding letter of intent to acquire Vacations Only.



---

|* | Filed Herewith
|- | --------------

|(1) | Incorporated by reference to Exhibit 3.1 of the Companys Form SB-2 (filed 1/30/03) (No. 333-111865).
|--- | -----------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Exhibit 3.2 of the Companys Form SB-2 (filed 1/30/03) (No. 333-111865).
|--- | -----------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to Exhibit 10.1 of the Companys Form SB-2 (filed 1/30/03) (No. 333-111865).
|--- | ------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to the Companys Proxy Statement on Schedule 14A (filed 8/01/03 (No. 000- 27131.
|--- | ----------------------------------------------------------------------------------------------------------

|(5) | Incorporated by reference to Exhibit 10.3 of the Companys Form SB-2 (filed 1/30/03) (No. 333-111865).
|--- | ------------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference to Exhibit 10.4 of the Companys Form SB-2 (filed 1/30/03) (No. 333-111865).
|--- | ------------------------------------------------------------------------------------------------------

|(7) | Incorporated by reference to Exhibit 21.1 of the Companys Form 10KSB (filed 3/29/04) (No. 000-27131).
|--- | ------------------------------------------------------------------------------------------------------

|(8) | Incorporated by reference to Exhibit 99.1 of the Companys Form 10KSB (filed 3/29/04) (No. 000-27131).
|--- | ------------------------------------------------------------------------------------------------------



29



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##### Table of Contents

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



Independent Accountant Fees



The Companys board of
directors reviews and approves audit and permissible non-audit services performed by its independent accountants, as well as the fees charged for such services. In its review of non-audit service fees and its appointment of Tedder, James &
Worden and Associates, P.A. as the Companys independent accountants, the board of directors considered whether the provision of such services is compatible with maintaining independence. All of the services provided and fees charged by Tedder,
James & Worden and Associates, P.A. in 2004 and 2003 were approved by the board of directors. The following table presents fees for audit services rendered by Tedder, James, Worden & Associates, P.A. for the audit of the Companys
annual financial statements for the years ended December 31, 2004 and 2003 and fees billed for other services rendered by Tedder, James, Worden & Associates, P.A. during those periods.



|                      |  |             |        |             |   |       
|--------------------- |  | ----------- | ------ | ----------- | - | ------
|                      |  | Fiscal 2004 |        | Fiscal 2003
|Audit Fees(1)         |  | $           | 46,500 |             | $ | 35,373
|Audit-Related Fees(2) |  |             | -0-    |             |   | -0-   
|Tax Fees(3)           |  |             | 8,123  |             |   | -0-   
|                      |  |            
|Subtotal              |  | $           | 54,623 |             | $ | 35,373
|                      |  |            
|All other Fees(4)     |  |             | -0-    |             |   | -0-   
|                      |  |            
|Total                 |  | $           | 54,623 |             | $ | 35,373
|                      |  |             |        |             |   |       

---

|(1) | Audit Fees  Audit fees billed to the Company by Tedder, James, Worden &
Associates, P.A. for auditing the Companys annual financial statements and reviewing the financial statements included in the Companys Quarterly Reports on Form 10-QSB.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit-Related Fees  There were no other fees were billed by Tedder, James,
Worden & Associates, P.A. during the last two fiscal years for assurance and related services that were reasonably related to the performance of the audit or review of the Companys financial statements and not reported under Audit
Fees above.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Tax Fees  Tax fees billed to the Company by Tedder, James, Worden &
Associates, P.A. include the preparation of all state and federal returns for 2003. The Company anticipates billings by Tedder, James, Worden & Associates, P.A. for the preparation of all state and federal returns for 2004 to be approximately
$7,500.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | All Other Fees  There were no other fees billed by during the last two fiscal
years for products and services provided.
|--- | ------------------------------------------------------------------------------------------------------------------------



Pre-approval of
Audit and Non-Audit Services of Independent Auditor



The
Audit Committees policy is to pre-approve all audit and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. The Audit Committees
pre-approval policy with respect to non-audit services is included as Exhibit 99.1 to this Annual Report. Pre-approval is generally provided for up to 12 months from the date of pre-approval and any pre-approval is detailed as to the particular
service or category of services. The Audit Committee may delegate pre-approval authority to one or more of its members when expedition of services is necessary. The Audit Committee has determined that the provision of non-audit services by Tedder,
James, Worden & Associates, P.A. is compatible with maintaining its independence.



30



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##### Table of Contents

SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Inverted Paradigms Corporation has
duly caused this Annual Report to be signed on its behalf by the undersigned thereunto duly authorized, onFebruary
8, 2007.



INVERTED PARADIGMS CORPORATIONBy:

/s/ Stewart YorkStewart YorkChief 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.



|                    |  |                         |  |                       
|------------------- |  | ----------------------- |  | ----------------------
|                    |  |                        
|/s/ Steven Weldon   |  | Chief Financial Officer |  | February 8, 2007(Date)
|                    |  |                        
|/s/ Dwight Day      |  | Director                |  | February 8, 2007(Date)
|                    |  |                        
|/s/ William Parsons |  | Director                |  | February 8, 2007(Date)



31



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##### Table of Contents

INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

(FORMERLY LIQUIDGOLF HOLDING CORPORATION)

CONSOLIDATED FINANCIAL STATEMENTS



Table of Contents



|                                                                  |  |    
|----------------------------------------------------------------- |  | ---
|Report of Independent Registered Certified Public Accounting Firm |  | F-1
|                                                                  | 
|Consolidated Financial Statements:                                |  |    
|                                                                  | 
|Consolidated Balance Sheet (As restated)                          |  | F-2
|                                                                  | 
|Consolidated Statements of Operations (As restated)               |  | F-3
|                                                                  | 
|Consolidated Statements of Stockholders Equity (As restated)     |  | F-4
|                                                                  | 
|Consolidated Statements of Cash Flows (As restated)               |  | F-5
|                                                                  | 
|Notes to Consolidated Financial Statements                        |  | F-7



---

##### Table of Contents

Report of Independent Registered Certified Public Accounting Firm



To the Board of Directors and Stockholders of

Inverted Paradigms Corporation and Subsidiaries:



We have audited the consolidated balance sheet of Inverted Paradigms Corporation (formerly
Horizon Holding Corporation and Liquid Golf Holding Corporation) and Subsidiaries as of December 31, 2004, and the related consolidated statements of operations, stockholders equity, and cash flows for the years ended December 31, 2004 and
2003. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.



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



In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the financial position of Inverted Paradigms Corporation and Subsidiaries as of December 31, 2004, and the results of their operations and their cash flows for the years ended December 31,
2004 and 2003, in conformity with U.S. generally accepted accounting principles.



The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has incurred net losses and
negative cash flows from operations since inception. These factors, and the need for additional financing in order for the Company to meet its business plans, raise substantial doubt about their ability to continue as a going concern.
Managements plans in regard to these matters are also discussed in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ TEDDER, JAMES, WORDEN & ASSOCIATES, P. A.

Orlando, Florida

March 11, 2005, except for Notes 3 and 14,

as to which the date is February 7, 2007



F-1



---

##### Table of Contents

INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheet (As Restated)

December 31, 2004



|                                                                                                        |  |   |             |  
|------------------------------------------------------------------------------------------------------- |  | - | ----------- | -
|Assets                                                                                                  |  |   |             |  
|Current assets:                                                                                         |  |   |             |  
|Cash and cash equivalents                                                                               |  | $ | 248,729     |  
|Investments  certificates of deposit                                                                   |  |   | 35,000      |  
|Inventories, net                                                                                        |  |   | 48,967      |  
|Prepaid expenses                                                                                        |  |   | 594,499     |  
|                                                                                                        |  |   |             |  
|Total current assets                                                                                    |  |   | 927,195     |  
|                                                                                                        | 
|Property and equipment, net                                                                             |  |   | 5,086       |  
|Other assets                                                                                            |  |   | 4,257       |  
|                                                                                                        |  |   |             |  
|Total assets                                                                                            |  | $ | 936,538     |  
|                                                                                                        |  |   |             |  
|Liabilities and Stockholders Equity                                                                    |  |   |             |  
|Current liabilities:                                                                                    |  |   |             |  
|Accounts payable                                                                                        |  | $ | 150,471     |  
|Other current liabilities                                                                               |  |   | 65,823      |  
|                                                                                                        |  |   |             |  
|Total liabilities                                                                                       |  |   | 216,294     |  
|                                                                                                        | 
|Stockholders equity                                                                                    |  |   |             |  
|Common stock, $0.001 par value, 100,000,000 shares authorized, 12,894,729 shares issued and outstanding |  |   | 12,894      |  
|Additional paid-in capital                                                                              |  |   | 37,275,101  |  
|Deferred stock-based employee compensation                                                              |  |   | (372,573    | )
|Accumulated deficit                                                                                     |  |   | (36,195,178 | )
|                                                                                                        |  |   |             |  
|Total stockholders equity                                                                              |  |   | 720,244     |  
|                                                                                                        |  |   |             |  
|Total liabilities and stockholders equity                                                              |  | $ | 936,538     |  
|                                                                                                        |  |   |             |  



See accompanying notes
to consolidated financial statements.



F-2



---

##### Table of Contents

INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

For the years ended December 31, 2004 and 2003



|                                                                                                                                                                           |  |               |            |   |      |   |            |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ---- | - | ---------- | -
|                                                                                                                                                                           |  | 2004          |            |   | 2003 |  
|                                                                                                                                                                           |  | (As Restated) |            |   |      |  
|Net sales                                                                                                                                                                  |  | $             | 909,272    |   |      | $ | 781,339    |  
|Cost of sales                                                                                                                                                              |  |               | 759,704    |   |      |   | 668,903    |  
|                                                                                                                                                                           |  |               |            |   |      |   |            |  
|Gross profit                                                                                                                                                               |  |               | 149,568    |   |      |   | 112,436    |  
|                                                                                                                                                                           |  |              
|Operating expenses:                                                                                                                                                        |  |               |            |   |      |   |            |  
|Sales and marketing                                                                                                                                                        |  |               | 104,942    |   |      |   | 278,270    |  
|General and administrative (inclusive of non-cash stock-based employee compensation of $572,324 and $317,083 for the years ended December 31,
2004 and 2003, respectively) |  |               | 2,369,064  |   |      |   | 1,489,418  |  
|Technology and content                                                                                                                                                     |  |               | 58,478     |   |      |   | 71,561     |  
|Loss on impairment of property and equipment                                                                                                                               |  |               | 10,809     |   |      |   |           |  
|Depreciation and amortization                                                                                                                                              |  |               | 16,034     |   |      |   | 14,616     |  
|                                                                                                                                                                           |  |               |            |   |      |   |            |  
|Total operating expenses                                                                                                                                                   |  |               | 2,559,327  |   |      |   | 1,853,865  |  
|                                                                                                                                                                           |  |               |            |   |      |   |            |  
|Loss from operations                                                                                                                                                       |  |               | (2,409,759 | ) |      |   | (1,741,429 | )
|                                                                                                                                                                           |  |              
|Other income (expense):                                                                                                                                                    |  |               |            |   |      |   |            |  
|Interest income                                                                                                                                                            |  |               | 1,931      |   |      |   | 1,311      |  
|Interest expense                                                                                                                                                           |  |               | (697,279   | ) |      |   | (13,688    | )
|Gain on extinguishment of debt                                                                                                                                             |  |               | 310,125    |   |      |   |           |  
|                                                                                                                                                                           |  |               |            |   |      |   |            |  
|Net other income (expense)                                                                                                                                                 |  |               | (385,223   | ) |      |   | (12,377    | )
|                                                                                                                                                                           |  |              
|Net loss from continuing operations                                                                                                                                        |  |               | (2,794,982 | ) |      |   | (1,753,806 | )
|                                                                                                                                                                           |  |              
|Loss from discontinued operations                                                                                                                                          |  |               | (306,094   | ) |      |   | (4,923     | )
|                                                                                                                                                                           |  |               |            |   |      |   |            |  
|Net loss                                                                                                                                                                   |  |               | (3,101,076 | ) |      |   | (1,758,729 | )
|                                                                                                                                                                           |  |               |            |   |      |   |            |  
|Net loss per share from continuing operations  basic and diluted                                                                                                          |  | $             | (0.25      | ) |      | $ | (0.22      | )
|                                                                                                                                                                           |  |               |            |   |      |   |            |  
|Net loss per share from discontinued operations  basic and diluted                                                                                                        |  | $             | (0.03      | ) |      |   |           |  
|                                                                                                                                                                           |  |               |            |   |      |   |            |  
|Weighted average shares used in calculating basic and diluted loss per share                                                                                               |  |               | 11,373,354 |   |      |   | 7,876,523  |  
|                                                                                                                                                                           |  |               |            |   |      |   |            |  



See accompanying notes
to consolidated financial statements.



F-3



---

##### Table of Contents

INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders Equity

For the years ended December 31, 2004 and 2003



|                                                                       |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   |            |               |  |   |             |   |  |   |             |  
|---------------------------------------------------------------------- |  | --------------- | - |  | ------------ | ---- | -------------- | ------ | ----------- | --------------------------- | ------ | - | ------------------------- |  | ------- | --------------------------------------- |  | ------- | ------------------ |  | - | ------------- | - |  | - | ---------- | - | ------------- | - | ---------- | ------------- |  | - | ----------- | - |  | - | ----------- | -
|                                                                       |  | Preferred stock |   |  | Common stock |      | Treasury stock |        |             | Stocksubscriptionreceivable |        |   | Additionalpaid-in capital |  |         | Deferredstock-basedemployeecompensation |  |         | Accumulateddeficit |  |   | Total         |  
|                                                                       |  | Shares          |   |  | Amount       |      |                | Shares |             |                             | Amount |   | Shares                    |  |         | Amount                                  |  |         |                    |  |   |              
|                                                                       |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   | (As restated) |   |  |   |            |   | (As restated) |   |            | (As restated) | 
|Balance, December 31, 2002                                             |  | 418,236         |   |  | $            | 42   |                |        | 15,047,925  |                             |        | $ | 1,505                     |  |         |                                         |  |         |                    |  | $ | (50,000       | ) |  |   | 16,259,932 |   |               | $ |           |               |  | $ | (31,335,373 | ) |  | $ | (15,123,894 | )
|Proceeds from stock subscription receivable                            |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   | 50,000        |   |  |   |            |   |               |   |            |               |  |   |             |   |  |   | 50,000      |  
|Preferred Series B Stock loss of redemption rights                     |  | 1,863,845       |   |  |              | 187  |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   | 14,854,208 |   |               |   |            |               |  |   |             |   |  |   | 14,854,395  |  
|Conversion of preferred stock to common stock                          |  | (2,282,081      | ) |  |              | (229 | )              |        | 2,282,081   |                             |        |   | 229                       |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   |            |               |  |   |             |   |  |   |             |  
|Recapitalization of LiquidGolf Holding Corporation common stock        |  |                 |   |  |              |      |                |        | (11,336,846 | )                           |        |   | 4,258                     |  |         |                                         |  |         |                    |  |   |               |   |  |   | (425,334   | ) |               |   |            |               |  |   |             |   |  |   | (421,076    | )
|Payment of fractional shares as a result of the merger stock exchange  |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   | (429       | ) |               |   |            |               |  |   |             |   |  |   | (429        | )
|Issuance of restricted stock to employees                              |  |                 |   |  |              |      |                |        | 1,170,000   |                             |        |   | 1,170                     |  |         |                                         |  |         |                    |  |   |               |   |  |   | 1,168,830  |   |               |   | (1,170,000 | )             |  |   |             |   |  |   | 0           |  
|Cost incurred in conjuction with the sale of convertible notes payable |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   | (63,650    | ) |               |   |            |               |  |   |             |   |  |   | (63,650     | )
|Amortization of deferred stock based employee compensation             |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   | 317,083    |               |  |   |             |   |  |   | 317,083     |  
|Issuance of common stock in settlement of liability                    |  |                 |   |  |              |      |                |        | 11,667      |                             |        |   | 12                        |  |         |                                         |  |         |                    |  |   |               |   |  |   | 87,136     |   |               |   |            |               |  |   |             |   |  |   | 87,148      |  
|Issuance of common stock for an advertising agreement                  |  |                 |   |  |              |      |                |        | 200,000     |                             |        |   | 200                       |  |         |                                         |  |         |                    |  |   |               |   |  |   | 217,800    |   |               |   |            |               |  |   |             |   |  |   | 218,000     |  
|Conversion of note payable to common stock                             |  |                 |   |  |              |      |                |        | 744,505     |                             |        |   | 745                       |  |         |                                         |  |         |                    |  |   |               |   |  |   | 743,760    |   |               |   |            |               |  |   |             |   |  |   | 744,505     |  
|Issuance of common stock for endorsement agreements                    |  |                 |   |  |              |      |                |        | 154,615     |                             |        |   | 155                       |  |         |                                         |  |         |                    |  |   |               |   |  |   | 154,460    |   |               |   |            |               |  |   |             |   |  |   | 154,615     |  
|Issuance of common stock in investment banking agreement               |  |                 |   |  |              |      |                |        | 1,800,000   |                             |        |   | 1,800                     |  |         |                                         |  |         |                    |  |   |               |   |  |   | 1,960,200  |   |               |   |            |               |  |   |             |   |  |   | 1,962,000   |  
|Warrants for common stock exercised at $1.00                           |  |                 |   |  |              |      |                |        | 463,000     |                             |        |   | 463                       |  |         |                                         |  |         |                    |  |   |               |   |  |   | 462,537    |   |               |   |            |               |  |   |             |   |  |   | 463,000     |  
|Warrants for common stock exercised at $1.60                           |  |                 |   |  |              |      |                |        | 202,500     |                             |        |   | 202                       |  |         |                                         |  |         |                    |  |   |               |   |  |   | 323,798    |   |               |   |            |               |  |   |             |   |  |   | 324,000     |  
|Cost incurred in conjuction with the exercise of warrants              |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   | (40,200    | ) |               |   |            |               |  |   |             |   |  |   | (40,200     | )
|Issuance of common stock for Directors compensation                    |  |                 |   |  |              |      |                |        | 3,000       |                             |        |   | 3                         |  |         |                                         |  |         |                    |  |   |               |   |  |   | 3,267      |   |               |   |            |               |  |   |             |   |  |   | 3,270       |  
|Net loss as of December 31 2003                                        |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   |            |               |  |   | (1,758,729  | ) |  |   | (1,758,729  | )
|                                                                       |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   |            |               |  |   |             |   |  |   |             |  
|Balance, December 31, 2003                                             |  |                |   |  |              |     |                |        | 10,742,447  |                             |        |   | 10,742                    |  |        |                                         |  |        |                    |  |   | 0             |   |  |   | 35,706,315 |   |               |   | (852,917   | )             |  |   | (33,094,102 | ) |  |   | 1,770,038   |  
|                                                                       |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   |            |               |  |   |             |   |  |   |             |  
|Cost incurred in conjuction with the exercise of warrants              |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   | (20,000    | ) |               |   |            |               |  |   |             |   |  |   | (20,000     | )
|Amortization of deferred stock based employee compensation             |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   | 572,324    |               |  |   |             |   |  |   | 572,324     |  
|Treasury stock aquired due to forfeiture in restricted stock plan      |  |                 |   |  |              |      |                |        | (35,000     | )                           |        |   |                           |  | 35,000  |                                         |  | (28,279 | )                  |  |   |               |   |  |   |            |   |               |   | 28,279     |               |  |   |             |   |  |   |            |  
|Issuance of common stock for Directors compensation                    |  |                 |   |  |              |      |                |        | 4,500       |                             |        |   | 4                         |  |         |                                         |  |         |                    |  |   |               |   |  |   | 4,900      |   |               |   |            |               |  |   |             |   |  |   | 4,904       |  
|Cost incurred in conjuction with conversion of note payable            |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   | (30,000    | ) |               |   |            |               |  |   |             |   |  |   | (30,000     | )
|Issuance of common stock for Game for Golf acquisition                 |  |                 |   |  |              |      |                |        | 10,000      |                             |        |   | 10                        |  |         |                                         |  |         |                    |  |   |               |   |  |   | 10,890     |   |               |   |            |               |  |   |             |   |  |   | 10,900      |  
|Issuance of common stock for conversion of note payable                |  |                 |   |  |              |      |                |        | 714,285     |                             |        |   | 714                       |  |         |                                         |  |         |                    |  |   |               |   |  |   | 599,286    |   |               |   |            |               |  |   |             |   |  |   | 600,000     |  
|Proceeds from the issuance of common stock                             |  |                 |   |  |              |      |                |        | 1,239,497   |                             |        |   | 1,240                     |  |         |                                         |  |         |                    |  |   |               |   |  |   | 311,914    |   |               |   |            |               |  |   |             |   |  |   | 313,154     |  
|Issuance of restricted stock to employees                              |  |                 |   |  |              |      |                |        | 219,000     |                             |        |   | 184                       |  | (35,000 | )                                       |  | 28,279  |                    |  |   |               |   |  |   | 91,796     |   |               |   | (120,259   | )             |  |   |             |   |  |   |            |  
|Interest on beneficial conversion feature of note payable              |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   | 600,000    |   |               |   |            |               |  |   |             |   |  |   | 600,000     |  
|Net loss                                                               |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   |            |               |  |   | (3,101,076  | ) |  |   | (3,101,076  | )
|                                                                       |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   |            |               |  |   |             |   |  |   |             |  
|Balance, December 31, 2004                                             |  |                |   |  |              |     |                |        | 12,894,729  |                             |        | $ | 12,894                    |  |        |                                         |  |        |                    |  |   |              |   |  | $ | 37,275,101 |   |               |   | (372,573   | )             |  | $ | (36,195,178 | ) |  | $ | 720,244     |  
|                                                                       |  |                 |   |  |              |      |                |        |             |                             |        |   |                           |  |         |                                         |  |         |                    |  |   |               |   |  |   |            |   |               |   |            |               |  |   |             |   |  |   |             |  



See accompanying notes
to consolidated financial statements.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2004 and 2003



|                                                                                 |  |               |            |   |      |   |            |  
|-------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ---- | - | ---------- | -
|                                                                                 |  | 2004          |            |   | 2003 |  
|                                                                                 |  | (As restated) |            |   |      |  
|Cash flows from operating activities:                                            |  |               |            |   |      |   |            |  
|                                                                                 |  |              
|Net loss                                                                         |  | $             | (3,101,076 | ) |      | $ | (1,758,729 | )
|                                                                                 |  |              
|Adjustments to reconcile net loss to cash used in operating activities:          |  |               |            |   |      |   |            |  
|Interest on beneficial conversion feature of note payable                        |  |               | 600,000    |   |      |   |           |  
|Amortization of deferred stock-based employee compensation                       |  |               | 572,324    |   |      |   | 317,083    |  
|Gain on extinguishment of debt                                                   |  |               | (310,125   | ) |      |   |           |  
|Impairment of property and equipment                                             |  |               | 10,809     |   |      |   |           |  
|Stock issued to directors for services                                           |  |               | 4,904      |   |      |   | 3,270      |  
|Stock issued for services                                                        |  |               |           |   |      |   | 154,615    |  
|Amortization of stock issued for services                                        |  |               | 1,030,545  |   |      |   | 572,250    |  
|Depreciation and amortization                                                    |  |               | 76,414     |   |      |   | 14,616     |  
|Discontinued operations:                                                         |  |               |            |   |      |   |            |  
|Impairment of goodwill                                                           |  |               | 108,400    |   |      |   |           |  
|Impairment of property and equipment                                             |  |               | 2,280      |   |      |   |           |  
|Changes in operating assets and liabilities:                                     |  |               |            |   |      |   |            |  
|Inventories                                                                      |  |               | 227,209    |   |      |   | (92,750    | )
|Prepaid expenses                                                                 |  |               | 33,980     |   |      |   | (25,950    | )
|Other assets                                                                     |  |               | 12,177     |   |      |   | (8,394     | )
|Accounts payable                                                                 |  |               | (179,699   | ) |      |   | 124,389    |  
|Due to related party                                                             |  |               |           |   |      |   | (65,015    | )
|Other current liabilities                                                        |  |               | (89,395    | ) |      |   | (136,635   | )
|                                                                                 |  |               |            |   |      |   |            |  
|Net cash used in continuing operations                                           |  |               | (1,001,253 | ) |      |   | (901,250   | )
|                                                                                 |  |               |            |   |      |   |            |  
|Net cash provided by discontinued operations                                     |  |               | 62,664     |   |      |   |           |  
|                                                                                 |  |               |            |   |      |   |            |  
|Net cash used in operating activities                                            |  |               | (938,589   | ) |      |   | (901,250   | )
|                                                                                 |  |               |            |   |      |   |            |  
|Cash flows from investing activities:                                            |  |               |            |   |      |   |            |  
|Purchase of Leather Craft Technology, Inc.                                       |  |               |           |   |      |   | (67,500    | )
|Purchase of Game Fore Golf                                                       |  |               | (30,000    | ) |      |   |           |  
|Purchase of property and equipment                                               |  |               | (2,279     | ) |      |   | (13,649    | )
|                                                                                 |  |               |            |   |      |   |            |  
|Net cash used in investing activities                                            |  |               | (32,279    | ) |      |   | (81,149    | )
|                                                                                 |  |               |            |   |      |   |            |  
|Cash flows from financing activities:                                            |  |               |            |   |      |   |            |  
|Proceeds from issuance of notes payable                                          |  |               | 600,000    |   |      |   | 805,310    |  
|Payments of deferred loan cost                                                   |  |               | (60,000    | ) |      |   |           |  
|Fee paid to convert notes payable to common stock                                |  |               | (30,000    | ) |      |   | (63,650    | )
|Redemption of preferred stock                                                    |  |               |           |   |      |   | (69,375    | )
|Payments on notes payable                                                        |  |               |           |   |      |   | (187,893   | )
|Payments on capital lease                                                        |  |               | (11,360    | ) |      |   | (8,432     | )
|Collection of stock subscription receivable                                      |  |               |           |   |      |   | 50,000     |  
|Payment of fractional shares in connection with the Nomadic Collaboration merger |  |               |           |   |      |   | (429       | )
|Fees paid to exercise warrants                                                   |  |               | (20,000    | ) |      |   | (40,200    | )
|Proceeds from sale of common stock                                               |  |               | 313,154    |   |      |   | 787,000    |  
|                                                                                 |  |               |            |   |      |   |            |  
|Net cash provided by financing activities                                        |  |               | 791,794    |   |      |   | 1,272,331  |  
|                                                                                 |  |               |            |   |      |   |            |  



See accompanying notes
to consolidated financial statements.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2004 and 2003



|                                                                     |  |               |          |   |      |   |           
|-------------------------------------------------------------------- |  | ------------- | -------- | - | ---- | - | ----------
|                                                                     |  | 2004          |          |   | 2003
|                                                                     |  | (as restated) |          |   |     
|Net increase (decrease) in cash and cash equivalents                 |  |               | (179,074 | ) |      |   | 289,932   
|                                                                     |  |               |          |   |      |   |           
|Cash and cash equivalents, beginning of year                         |  |               | 427,803  |   |      |   | 137,871   
|                                                                     |  |               |          |   |      |   |           
|Cash and cash equivalents, end of year                               |  | $             | 248,729  |   |      | $ | 427,803   
|                                                                     |  |               |          |   |      |   |           
|Supplemental disclosures of cash flow information:                   |  |               |          |   |      |   |           
|Cash paid during the period for:                                     |  |               |          |   |      |   |           
|Interest                                                             |  | $             | 36,494   |   |      |   | 12,903    
|                                                                     |  |               |          |   |      |   |           
|Supplemental schedule of noncash investing and financing activities: |  |               |          |   |      |   |           
|Conversion of Series B Preferred Stock                               |  |               |         |   |      | $ | 14,854,395
|                                                                     |  |               |          |   |      |   |           
|Issuance of common stock in conversion of debt                       |  |               |         |   |      | $ | 744,505   
|                                                                     |  |               |          |   |      |   |           
|Issuance of common stock in settlement of liability                  |  |               |         |   |      | $ | 87,148    
|                                                                     |  |               |          |   |      |   |           
|Issuance of common stock for acquisition of Game Fore Golf           |  | $             | 10,900   |   |      |   |          
|                                                                     |  |               |          |   |      |   |           
|Conversion of note payable into common stock                         |  | $             | 600,000  |   |      |   |          
|                                                                     |  |               |          |   |      |   |           



During the year ended December 31,
2003, in connection with its acquisition of Nomadic Collaboration International, Inc., the Company acquired net liabilities of $421,076 for Common Stock. See Note 1 of the consolidated financials statements.



See accompanying notes to consolidated financial statements.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the years ended December 31, 2004 and 2003



|(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.



The
Company is an online community for golfers worldwide which operates an e-commerce marketplace for golf equipment and related accessories. The Companys 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.



Merger with LiquidGolf Corporation. On February 12, 2003, an Agreement and Plan of Merger was entered into by and among the Company, LGC
Acquisition Company (Acquisition Sub) a Delaware corporation and wholly owned subsidiary of the Company, and LiquidGolf Corporation, a Delaware Corporation (LiquidGolf Corporation). Pursuant to the Merger Agreement, the
Company agreed, among other things, to: (i) merge Acquisition Sub into LiquidGolf Corporation with LiquidGolf Corporation the surviving corporation; (ii) exchange one share of the Companys Common Stock for every three shares of LiquidGolf
Corporation common stock held by the LiquidGolf Corporation stockholders (with fractional shares paid in cash at $2.00 per share); (iii) convert, on a one-for-one basis, warrants to purchase LiquidGolf Corporation stock (the LiquidGolf
Warrants) into warrants to purchase Nomadic Common Stock at the purchase price and on substantially the same terms set forth in the LiquidGolf Warrants; (iv) change the Companys name to LiquidGolf Holding Corporation; (v) effect the
January 10, 2003 reverse stock split; and (vi) increase the authorized shares of the Companys Common Stock from 666,666 to 100,000,000 shares.



On May 30, 2003, the Company (then known as Nomadic Collaboration International, Inc.) closed the merger and acquired all of the issued and outstanding
shares of capital stock of LiquidGolf Corporation, which thereby became a subsidiary of the Company. However, since the stockholders of LiquidGolf Corporation obtained a majority of the voting rights of the Company as a result of the transaction,
the transaction was accounted for as a purchase of Nomadic Collaboration International, Inc. by LiquidGolf Corporation (a reverse acquisition in which LiquidGolf Corporation is considered the acquirer for accounting purposes). Accordingly, the
financial statements of the Company for the periods prior to May 30, 2003, are those of LiquidGolf Corporation, which was incorporated on February 16, 1999. For accounting purposes, LiquidGolf Corporation is treated as a predecessor to the Company.
The acquisition of the predecessor was recorded as a purchase with the assets and liabilities assumed recorded at their estimated fair values and their results of operations included in the consolidated financial statements of the Company since its
date of acquisition.



|(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.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements



|(2) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
|--- | -----------------------------------------------------



Revenue Recognition. Revenue is earned by the Company from the sale of golf equipment and related accessories through its online retail
store and its retail location closed in February, 2005. 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. The Company provides for estimated returns at the time of shipment based on historical data. For the years ended December 31, 2004 and 2003, no allowance for returns was recorded because the estimated amounts were
immaterial.



Cash and Cash Equivalents.The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.



Investments.The Companys investments, consisting of certificates of deposit that have an original maturity of one year, are carried
at cost, which approximates market.



Inventories.Inventories are stated at the lower of cost or market, determined using the average cost method, which closely approximates the first-in, first-out method. Inventories are reviewed periodically and items considered to be slow moving are
written down to their estimated net realizable value.



Property and Equipment.Property and equipment are carried at cost, less accumulated depreciation. Major replacements and improvements that extend the useful lives of property and equipment are capitalized. Routine maintenance
and repairs are charged to expense when incurred. Depreciation is computed using the straight-line method over the following estimated useful lives of the related assets.



|                        |  |                       
|----------------------- |  | ----------------------
|Description             |  | Estimated Useful Lives
|Computers and equipment |  | 3  5 years           
|Furniture and fixtures  |  | 5                     



Goodwill. Goodwill represents the excess of the purchase price over the fair value of assets acquired. Goodwill arising from the Companys December 22, 2003, acquisition (see Note 4) is not being amortized in accordance
with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires the use of a nonamortization approach to account for purchased goodwill. Under a nonamortization
approach, goodwill is not amortized into results of operations, but instead is reviewed for impairment at least annually and written down and charged to results of operations in the periods in which the recorded value of goodwill is determined to be
greater than its fair value.



Impairment of Long-Lived
Assets.The carrying values of long-lived assets are reviewed if the facts and circumstances indicate a potential impairment of their carrying values. Management evaluates the recoverability of the net carrying value of its property and
equipment and goodwill by comparing the carrying values to the estimated future undiscounted cash flows. A deficiency in these cash flows relative to the carrying amounts is an indication of the need for a write-down due to impairment. The
impairment write-down would be the difference between the carrying amounts and the fair value of these assets. Any loss on impairment is recognized by a charge to operations in the period identified.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements



|(2) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
|--- | -----------------------------------------------------



Income Taxes.The Company accounts for income taxes utilizing the asset and liability method. This approach requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss
and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enacted date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be
realized.



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, and stock options have been excluded from the diluted
loss per share computation since their effect is anti-dilutive.



Advertising.Advertising consists primarily of magazine advertisements, television advertisements and trade shows. All costs are expensed at the time the advertisement takes place. Advertising expense for the years ended
December 31, 2004 and 2003 totaled approximately $104,900 and $238,100, respectively, and is included in sales and marketing expense in the accompanying consolidated statements of operations.



Website Design Costs.Website design costs include direct
costs incurred by the Company to develop and enhance the Companys website. Website design costs are expensed as incurred and totaled approximately $47,800 and $45,100 for the years ended December 31, 2004 and 2003, respectively. These amounts
are included in technology and content expense in the accompanying consolidated statements of operations.



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. Stock issued to non-employees is accounted for under the provisions of Statement of Financial Accounting Standards (SFAS)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 nonemployee 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



|(2) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
|--- | -----------------------------------------------------



Concentration of Risk.Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of
cash and cash equivalents and short-term investments. Cash and cash equivalents in excess of federally insured limits potentially subject the Company to a concentration of credit risks. Short-term investments, composed of certificates of deposit,
are maintained with one financial institution and maturities are regularly monitored by management.



The Company purchases its inventory from a limited number of product manufacturers through the use of nonexclusive contractual agreements. The Company may
not be able to renew these contracts on favorable terms, which could have a material adverse effect on the Companys business, financial position, and results of operations.



Fair Value of Financial Instruments. The carrying amount of cash and cash equivalents, accounts payable and
accrued expenses approximates fair value because of the short maturity of those instruments. The fair value of the capital lease obligation is assumed to approximate the recorded value because the then-prevailing market conditions have not changed.



Reclassifications.Certain prior periods
balances have been reclassified to conform to the current year consolidated financial statement presentation. These reclassifications had no impact on previously reported consolidated results of operations or stockholders equity.



Shipping and Handling Cost. Shipping costs include the
direct costs incurred by the Company to ship golf equipment and related accessories. Costs are expensed upon shipment and are included as a component of cost of goods sold. Shipping expense for the years ended December 31, 2004 and 2003 totaled
approximately $45,000 and $47,000, respectively. Fees charged to customers in excess of the direct cost are included as a component of net sales. Shipping fee revenue for the years ended December 31, 2004 and 2003 totaled approximately $28,000 and
$23,000, respectively.



Recent Accounting
Pronouncements. In December 2004, the FASB issued Statement No. 123R, Share-Based Payment, which requires companies to recognize in the statement of operations all share-based payments to employees, including grants of employee
stock options, based on their fair values. Accounting for share-based compensation transactions using the intrinsic method supplemented by pro forma disclosures will no longer be permissible. The new statement will be effective for public entities
in periods beginning after June 15, 2005. We have not yet completed our analysis of the impact of adopting FASB Statement No. 123R and therefore we are currently unable to quantify its effect on our results of operations. However, we know that the
adoption of this new statement will have a significant impact on the results of operations and net income per share as we will be required to expense the fair value of all share based payments.



|(3) | BASIS OF PRESENTATION
|--- | ---------------------



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 $36,200,000 as of December 31, 2004. In addition, the Company has consumed cash in its operating activities of approximately
$939,000 and $901,000 for the years ended December 31, 2004 and 2003, respectively. These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements



|(3) | BASIS OF PRESENTATION, CONTINUED
|--- | --------------------------------



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 explore 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.



|(4) | BUSINESS 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.



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 share of its common stock for this acquisition. Game Fore Golf is accounted for as a part of Leather Craft. Game For 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 a loss from discontinued operations of $306,094 as of December 31, 2004. This amount includes a write down of goodwill of $108,400.



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##### Table of Contents

INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements



|(5) | PROPERTY AND EQUIPMENT
|--- | ----------------------



Property and equipment consist of the following as of December 31, 2004:



|                              |  |   |        |  
|----------------------------- |  | - | ------ | -
|Computers and equipment       |  | $ | 5,866  |  
|Furniture and fixtures        |  |   | 500    |  
|                              |  |   |        |  
|                              |  |   | 6,366  |  
|Less accumulated depreciation |  |   | (1,280 | )
|                              |  |   |        |  
|                              |  | $ | 5,086  |  
|                              |  |   |        |  



Depreciation expense
charged to operations was $16,034 and $14,616 for the years ended December 31, 2004 and 2003, respectively.



During the year ended December 31, 2004, the Company recognized an impairment loss on its property and equipment of $13,089. A portion of the impairment
loss $10,809, relates to the Companys ongoing e commerce golf operations and has been separately disclosed in the Statement of Operations. The remaining impairment, $2,280, has been recognized in connection with the discontinuance of the
Companys leather goods segment and has been included as a component of discontinued operations in the Consolidated Statements of Operations.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements



|(6) | LEASE OBLIGATIONS
|--- | -----------------



The Company leases certain equipment under an agreement that is classified as a capital lease. The cost of the equipment under this capital lease is
included in the balance sheet as computer and equipment and was $50,541 at December 31, 2004. Accumulated amortization of the leased equipment at December 31, 2004 was $45,126. Amortization of the asset under the capital lease amounted to $11,108
for the years ended December 31, 2004 and 2003 and is included in depreciation in the accompanying consolidated statements of operations. The Company terminated the capital lease in January 2005 by making a single payment for the present value of
the remaining payments plus accumulated late fees.



The
Company also has several other non-cancelable operating leases, primarily for its corporate office facilities and equipment, which expire at various dates through July 2007. Rental expense during the years ended December 31, 2004 and 2003 amounted
to approximately $60,100 and $52,500, respectively. In February of 2005 the Company closed its brick and mortar operation and terminated its facility lease according to the early termination terms of the lease.



Future minimum lease payments under non-cancelable operating leases (with
initial or remaining terms in excess of one year) and future minimum capital lease payments as of December 31, 2004 are as follows:



|                                                                 |  |               |        |   |                 |       
|---------------------------------------------------------------- |  | ------------- | ------ | - | --------------- | ------
|Year ended December 31,                                          |  | Capitalleases |        |   | Operatingleases
|2005                                                             |  | $             | 10,212 |   |                 | 75,324
|2006                                                             |  |               |       |   |                 | 8,247 
|                                                                 |  |               |        |   |                 |       
|Total minimum lease payments                                     |  |               | 10,212 |   |                 | 83,571
|                                                                 |  |               |        |   |                 |       
|Less amounts representing interest                               |  |               | (297   | ) |                 |       
|                                                                 |  |               |        |   |                 |       
|Present value of net minimum capital lease payments              |  |               | 9,915  |   |                 |       
|Less current installments of obligations under capital leases    |  |               | (9,915 | ) |                 |       
|                                                                 |  |               |        |   |                 |       
|Obligations under capital leases, excluding current installments |  | $             |       |   |                 |       
|                                                                 |  |               |        |   |                 |       



|(7) | OTHER CURRENT LIABILITIES
|--- | -------------------------



Other current liabilities consist of the following as of December 31, 2004:



|                                 |  |   |       
|-------------------------------- |  | - | ------
|Legal and professional fees      |  | $ | 31,750
|Deferred revenue                 |  |   | 6,355 
|Accrued salaries and vacation    |  |   | 11,883
|Current portion of capital lease |  |   | 9,915 
|Accrued taxes                    |  |   | 3,074 
|Other                            |  |   | 2,846 
|                                 |  |   |       
|                                 |  | $ | 65,823
|                                 |  |   |       



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements



|(8) | INCOME TAXES
|--- | ------------



No provision for current federal or state income taxes was made due to the taxable losses for the years ended December 31, 2004 and 2003.



The deferred income tax assets and liabilities are comprised of the
following as of December 31, 2004:



|                                |  |   |             |  
|------------------------------- |  | - | ----------- | -
|Deferred tax assets:            |  |   |             |  
|Net operating loss carryforward |  | $ | 13,490,094  |  
|Start-up costs                  |  |   | 4,767       |  
|Stock-based compensation        |  |   | 119,318     |  
|Other                           |  |   | 14,014      |  
|                                |  |   |             |  
|Gross deferred tax assets       |  |   | 13,628,193  |  
|                                | 
|Deferred tax liabilities:       |  |   |             |  
|Depreciation                    |  |   | (1,628      | )
|                                |  |   |             |  
|Net deferred tax assets         |  |   | 13,629,821  |  
|Valuation allowance             |  |   | (13,629,821 | )
|                                |  |   |             |  
|                                |  | $ |            |  
|                                |  |   |             |  



Because of the
Companys lack of earnings history, the deferred tax assets have been fully offset by a valuation allowance. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during those periods that the temporary differences become deductible. During the years ended
December 31, 2004 and 2003, the increase in deferred tax asset valuation allowance amounted to approximately $1,155,000 and $672,000, respectively.



The Companys net operating loss carryforward for federal and state income tax purposes at December 31, 2004 is approximately $33,376,000. If not
used, the net operating loss carryforward will expire at various times from 2019 through 2023. U.S. tax rules impose limitations on the use of net operating losses and tax credits following certain defined changes in stock ownership. The Company has
not completed the complex analysis required by the Internal Revenue Code to determine if an ownership change has occurred. If such a change were deemed to have occurred, the limitation could reduce or eliminate the amount of these benefits that
would be available to offset future taxable income each year, starting with the year of ownership change.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements



|(9) | SERIES B REDEEMABLE PREFERRED STOCK
|--- | -----------------------------------



By April 2003, LiquidGolf had received redemption requests by Series B stockholders for 23,125 shares, amounting to $69,375. On May 30, 2003 LiquidGolf
Corporation completed a reverse merger with Nomadic Collaboration International, Inc. As a result of this merger (Note 1) all remaining 1,863,845 shares of Series B preferred stock outstanding were converted to common stock on a one for one basis.
As of December 31, 2004 no Series B redeemable preferred stock was issued or outstanding.



|(10) | STOCKHOLDERS EQUITY (DEFICIT)
|---- | ------------------------------



Common Stock.The Board of Directors has authorized 100,000,000 shares of common stock with a par value of $.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.



Convertible Note Offering - 2003.On February 24, 2003, the Company issued a Confidential Private Offering Memorandum offering for sale, only to persons who qualify as accredited investors (as defined in the
Memorandum), convertible promissory notes (the Notes) at a minimum investment increment of $1,000), for a maximum aggregate principal investment amount of $750,000. The Notes had a term of 1 year and bore interest at the rate of 8% per
annum. Principal and interest were payable in full in a single payment upon maturity of the Note.



The Notes were convertible, at the option of the Company, into units (the Units), by dividing the total amount of principal plus accrued but
unpaid interest of the Notes by the conversion price of $1.00. Each Unit consisted of one (1) share of common stock, par value $.001 per share and one (1) warrant to purchase one (1) share of common stock, at a purchase price of $1.50 per share. The
warrants have a three (3) year term. Each share of common stock and warrant constituting a Unit will be immediately separable.



The Company sold the Notes in this offering through the Companys officers and through registered broker dealers. The Notes were offered on a
best efforts basis. There were no minimum purchase requirements and no requirement to place funds in an escrow, trust or similar account. The funds raised from this offering will be available for immediate use. The Company sold 41 notes
totaling $732,500 and incurred interest expense of $12,005. The Company converted these notes into shares of the Companys common stock on July 23, 2003.



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.



In 1999, the Company issued post-stock-split fully-vested
warrants to purchase 37,500, 31,250, and 31,250 shares of common stock to certain investors for services provided at an exercise price of $8, $12, and $16 per share, respectively. The warrants are not exercisable until one year after the IPO of the
Companys common stock and have a contractual life of five years expiring in March 2005.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements



|(10) | STOCKHOLDERS EQUITY (DEFICIT), 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 have a contractual life of five years expiring 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. As of March 21, 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 |              | NetProceeds
|2000 |  | Investors services warrants                      |  | 37,500         |   |  | $              | 8.00  |                 | March-05     |             |   |        
|     |  | Investors services warrants                      |  | 31,250         |   |  |                | 12.00 |                 | March-05     |             |   |        
|     |  | Investors services warrants                      |  | 31,250         |   |  |                | 16.00 |                 | March-05     |             |   |        
|     |  |                                                  |  |                |   |  |                |       |                 |              |             |   |        
|     |  | Total investor services                          |  | 100,000        |   |  |                |       |                 |              |             |   |        
|     |  |                                                  |  |                |  
|2000 |  | Consulting services warrants                     |  | 25,000         |   |  |                | 8.00  |                 | June-05      |             |   |        
|     |  |                                                  |  |                |  
|     |  | Notes payable warrants                           |  | 381,000        |   |  |                | 4.00  |                 | August-03    |             |   |        
|2003 |  | Notes payable warrants expired                   |  | (381,000       | ) |  |                |       |                 |              |             |   |        
|     |  |                                                  |  |                |   |  |                |       |                 |              |             |   |        
|     |  | Total 2000 warrants outstanding                  |  | 125,000        |   |  |                |       |                 |              |             |   |        
|     |  |                                                  |  |                |  
|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       |             |   |        
|     |  | Class B warrants cancelled                       |  | (160,000       | ) |  |                |       |                 |              |             |   |        
|     |  |                                                  |  |                |   |  |                |       |                 |              |             |   |        
|     |  | Total Class B warrants outstanding               |  | 1,060,000      |   |  |                |       |                 |              |             |   |        
|     |  |                                                  |  |                |  
|2003 |  | Notes payable warrants                           |  | 952,500        |   |  |                | 1.60  |                 | September-03 |             |   |        
|2003 |  | Notes payable warrants exercised                 |  | (202,500       | ) |  |                |       |                 |              |             |   | 308,800
|2003 |  | Notes payable warrants expired                   |  | (750,000       | ) |  |                |       |                 |              |             |   |        
|     |  |                                                  |  |                |   |  |                |       |                 |              |             |   |        
|     |  | Total Notes payable warrants outstanding         |  |               |   |  |                |       |                 |              |             |   |        
|     |  |                                                  |  |                |  
|     |  | Convertible Notes payable warrants               |  | 744,505        |   |  |                | 1.50  |                 | June-06      |             |   |        
|     |  |                                                  |  |                |  
|2003 |  | Warrants issued for cancelled warrants           |  | 400,000        |   |  |                | 1.00  |                 | September-03 |             |   |        
|     |  | Warrants issued for cancelled warrants exercised |  | (400,000       | ) |  |                |       |                 |              |             |   | 375,000
|     |  |                                                  |  |                |   |  |                |       |                 |              |             |   |        
|2004 |  | Notes payable warrants                           |  | 50,000         |   |  |                | 0.92  |                 | None         |             |   |        
|     |  |                                                  |  |                |  
|2004 |  | Private placement warrants                       |  | 3,718,491      |   |  |                | 0.75  |                 | October-07   |             |   |        
|     |  |                                                  |  |                |  
|     |  | Total warrants outstanding                       |  | 6,694,996      |   |  |                |       |                 |              |             |   |        
|     |  | Total proceeds from warrants exercised           |  |                |   |  |                |       |                 |              |             | $ | 746,800



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

(Notes to Consolidated Financial Statements)



|(11) | RESTRICTED STOCK BASED COMPENSATION
|---- | -----------------------------------



The Company cancelled the 1999 Stock Option Plan on January 15, 2003 as a requirement of the merger agreement with Nomadic Collaboration International,
Inc.



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 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 December 31, 2004, 1,354,000 shares have been issued under this Plan.



|(12) | 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 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.



Letters of Credit. The Company has issued two separate Letters of Credit in favor of two separate suppliers in
a total amount of $35,000. These Letters of Credit have an open term and can be cancelled by the company with notice and with full payment to the suppliers. These Letters of Credit are collateralized by certificates of deposits that are accounted
for as investments in the accompanying Consolidated Balance Sheet.



Gain onExtinguishment of Debt. Gain on extinguishment of debt was $310,125 for 2004. This gain was the result of our determination that these amounts were not owed for these obligations in 2004 or were obtained through
negotiations with our vendors in 2004.



|(13) | SUBSEQUENT EVENTS
|---- | -----------------



In February of 2005 the Company closed its brick and mortar operation and terminated its facility lease according to the early termination terms of the
lease. The early termination terms call for a 60 day notice to terminate early, which was given in December of 2004 and a forfeiture of $10,000 in rent security deposit that was recorded as rent expense as of December 31,2004.



|(14) | RESTATEMENT
|---- | -----------



The Company erroneously 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 interest expense from $97,279, as originally filed, to $697,279 on the amended consolidated statement of operations for the year ended December 31, 2004.



F-17