**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-KSB/A**




**Amendment
      No. 2**




**(Mark
      One)**


x
            **ANNUAL
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934**




**For
      the Fiscal Year Ended December 31, 2005**




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




**For
      the transition period from** **** **to** **** ****




**Commission
      file number: 000-27131**








**INVERTED
      PARADIGMS CORPORATION**


**F/K/A
      HORIZON HOLDING CORPORATION**


**(Exact
      name of Registrant as specified in its charter)**








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


**1583
      E. Silver Star Rd. #346**


**Ocoee,
      Florida 34761**


**(941)
      926-6180**


**(Address
      and telephone number of principal executive offices)**




Check
      whether the issuer is not required to file reports pursuant to section 13 or
      15(d) of the Exchange Act.  ̈




Indicate
      by check mark whether registrant (1) has filed all reports required to be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the preceding 12 months (or for such shorter period that the registrant was
      required to file such reports), and (2) has been subject to such filing
      requirements for the past 90 days. x Yes  ̈ No




Indicate
      by check mark 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. x




Issuer’s
      revenues for its most recent fiscal year were $33,391.




The
      number of shares of the registrant’s common stock, par value $0.001 per share,
      outstanding as of March 15, 2006 was 24,319,750 and there were 894
      stockholders of record.




Transitional
      Small Business Issuer Format:  ̈ Yes x No




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







**-
          1 -**








**EXPLANATORY
      NOTE**




Inverted
      Paradigms Corporation (the **“Company”** )
      is
      filing this Amendment No. 2 to its Annual Report on Form 10-KSB for its fiscal
      year ended December 31, 2005, as filed with the Securities and Exchange
      Commission on March 31, 2006 (the “ **Original
      December 2005 Form 10-KSB** ”)
      include dates on Exhibits 31 and 32 not included on Amendment No.1 of the Annual
      Report on Form 10-KSB for its fiscal year ended December 31, 2005 and filed
      with
      Securities and Exchange Commission on February 9, 2007.






**-
          2 -**







**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




**FORM
      10-KSB**




**TABLE
      OF CONTENTS**




**Page**PART
                I
            
            
            
            5Item
                1.
            
            Description
                of Business
            
            5Item
                2.
            
            Description
                of Property
            
            13Item
                3.
            
            Legal
                Proceedings
            
            13Item
                4.
            
            Submissions
                of Matters to a Vote of Security Holders
            
            13PART
                II
            
            
            
            14Item
                5.
            
            Market
                for Registrant’s Common Stock and Related Stockholder Matters
            
            14Item
                6.
            
            Management’s
                Discussion and Analysis or Plan of Operation
            
            16Item
                7.
            
            Financial
                Statements (As restated)
            
            21Item
                8.
            
            Changes
                In and Disagreements With Accountants on Accounting and Financial
                Disclosures
            
            21Item
                8a.
            
            Controls
                and Procedures
            
            22PART
                III
            
            
            
            22Item
                9.
            
            Directors
                and Executive Officers of the Registrant
            
            22Item
                10.
            
            Executive
                Compensation
            
            25Item
                11.
            
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            
            26Item
                12.
            
            Certain
                Relationships and Related Transactions
            
            27Item
                13.
            
            Exhibits,
                Lists and Reports on Form 8-K
            
            27Item 14.
            
            Principal
                Accountant Fees and Services
            
            28







**-
          3 -**





**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 and 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, unless legally required, 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.”





**-
          4 -**





**PART
      I**




**ITEM 1.
      DESCRIPTION OF BUSINESS**




**Overview**




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




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




On
      December 22, 2003, 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 sold
      leather bound notebooks and related products. The Company acquired Leather
      Craft
      in order to diversify its revenue streams.




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




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




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




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




In
      November 2004, the board of directors decided to discontinue the operations
      of
      Leather Craft due to a lack of sales sufficient to support the continued
      operation of Leather Craft.




In
      January 2006, in a continuing effort to build a revenue stream, we purchased
      the
      Silent Sword **TM** software
      and all trademarks, service marks, and logos. As of March 30, 2006, we have
      issued a total of 10,000,000 shares of our common stock for Silent
      Sword **TM** .
      Under
      the purchase agreement, we may issue a maximum of 20,000,000 common shares
      subject to certain provisions in the agreement. The stock issued is considered
      restricted securities as defined by the Securities Act of 1933, as amended.
      We
      anticipate this product to be available for sale in the third quarter of 2006.




Unless
      otherwise indicated, references in this Annual Report to 2005 and 2004 are
      to
      Horizon’s fiscal years ended December 31, 2005 and 2004, respectively.




Our
      principal executive offices and mailing address is 1800 2 nd Street
      East, Suite 735, Sarasota, Florida 34236, and our telephone number is (941)
      256-0436.




**-
          5 -**


**Our
      Strategy**




We
      are
      currently designing and testing our recently acquired software, Silent
      Sword **TM** .
      The
      software will offer a comprehensive set of security solutions. The solutions
      include anti-virus, anti-spyware, anti-spam, intrusion prevention, secure
      messaging, web filtering and vulnerability management. We will offer management
      tools to keep threat-protection systems up-to-date. We anticipate this product
      to be available in the third quarter of 2006.




We
      are
      continuing to explore opportunities available for our golf retailing website.
      We
      continue to seek partners in the golf industry to sell products through our
      website. By partnering with other retailers, we may add revenue to the our
      company.




**Our
      Operating Segments**




As
      of
      December 31, 2005, our operations consisted solely of our golf retailing
      website. In January 2006, we purchased the Silent Sword **TM** software
      and all trademarks, service marks, and logos. For the fiscal year 2006,
      management will account for the Silent Sword **TM** operations as a separate operating segment. Therefore, results from operations
      will consist of our software and golf retailing segments. Below are the details
      relating to our business segments.




**I.
      Silent SwordTM Software**




Silent
      Sword **TM** is
      a
      virus/mal-ware protection software. This concept was initially developed by
      Chuck Wernicke, Chief Technology Officer (CTO) in February 2004. Silent
      Sword **TM** is
      not
      only used to rid the Windows **TM** computer
      system of virus and mal-ware but further enhances the performance and operation
      of the Operating System (OS) by managing its protection in the startup boot
      of
      the OS.




Our
      retail version of Silent Sword **TM** will
      enable us to expand into the Original Equipment Manufacture (OEM) and Enterprise
      version.




**Products**




Silent
      Sword **TM** combats
      all forms of mal-ware, spy-ware and other malicious viruses. Its patent pending
      process attacks the viruses at the start-up level using a white list/black
      list
      process before it corrupts a computer. Silent Sword **TM** differentiates
      itself from other products in the way it addresses the viruses. The software
      is
      not concerned with the virus unless it causes an issue. A virus needs to
      initiate itself in the startup boot section of the Windows OS. Silent
      Sword **TM** addresses
      those active viruses. Other virus file infectors are dormant until they need
      to
      propagate. If they do propagate, then they will become active in the start-up
      sector. Silent Sword **TM** controls
      the advancement of those viruses by controlling the startup file boot sector.
      Future Silent Sword **TM** versions
      will include an OEM version that will allow Silent Sword **TM** to
      be
      customized to OEM specifications. The Enterprise version will enable Network
      Engineers to manually and automatically control the desktop programs that will
      be able to run and those that will not.




**Marketing
      and Sales Summary**




The
      primary marketing focus will be to further raise awareness of the retail
      version. Utilization of websites and a concentrated focus on the personal
      computer repair shops will allow us to create a presence in the internet and
      in
      the marketplace. Secondly, we will create mailers to key demographic sectors
      for
      purchase via the website. Thirdly, we will educate the distribution and channel
      resellers to extend the awareness and market share of the product. At this
      time,
      we plan to deliver repair retail shops of major retailers the Silent
      Sword **TM** product
      at a reduced fee to help reduce their repair time dramatically.







**-
          6 -**






The
      next
      direction will be to use media outlets. Media will be utilized to further
      promote the awareness of the product. Lastly, the modification and fluency
      of
      the website will promote usage, focus groups, knowledgebase implementation
      and
      increased traffic due to modified search indexing on the current sites. We
      plan
      to present the software to the OEM market, which consists of companies like
      Dell,




Gateway
      and HP/Compaq. Out intent is to allow OEM to customize or value-add the current
      retail version to give OEM pertinent information to speed up support and service
      calls. The enterprise version will be marketed via Trade Shows, word-of-mouth
      and computer conferences. Success will ultimately be determined by the number
      of
      gross software sales, acceptance by the technical community and the adoption
      of
      the product on the OEM and Corporate levels.




**The
      Competition**




Our
      flagship software product Silent Sword **TM** addresses
      the virus/spy-ware/mal-ware issue in a completely new way. Most competitors
      are
      broken into Anti-Virus or Anti-Spy-ware software product. The main premise
      is to
      maintain a blacklist of known mal-ware/spy-ware programs and scan the entire
      file structure to detect, clean and dispose of properly the computer infectors.
      While Silent Sword’s process is


similar
      there are very consistent differences. Silent Sword handles not only the
      blacklist of definitions but also a white list of definitions of programs that
      are allowed to run on the PC. Also, Silent Sword patent-pending process
      addresses the issue in the startup section of the boot. This enables Silent
      Sword to address only propagating viruses not just the viruses that are not
      active. Again, using this method also allows Silent Sword to run faster that
      its
      competitors because scanning the startup sectors is very fast compared to
      scanning the entire file structure. The last point about Silent Sword and its
      competition involves the use of automation in the product. Most competitors
      have
      the need for interfering manual transactions. Silent Sword can virtually run
      on
      its own without interaction of the end-user.




The
      markets for our products are intensely competitive and are subject to rapid
      changes in technology. We also expect competition to increase in the near-term.
      We believe that the principal competitive factors affecting the markets for
      our
      products include, but are not limited to:




•
            
            performance,




•
            
            quality,




•
            
            breadth
                of product group,




•
            
            integration
                of products,




•
            
            introduction
                of new products,




•
            
            brand
                name recognition,




•
            
            price,




•
            
            market
                presence,




•
            
            functionality,




•
            
            innovation,




•
            
            customer
                support,




•
            
            frequency
                of upgrades and updates,




•
            
            reduction
                of production costs,




•
            
            manageability
                of products, and




•
            
            reputation.







**-
          7 -**




We
      believe that we compete favorably against our competitors in performance,
      innovation and price. However, some of our competitors have longer operating
      histories, greater brand recognition, stronger relationships with strategic
      channel partners, larger technical staffs, established relationships with
      hardware vendors and/or greater financial, technical and marketing resources.
      These factors may provide our competitors with an advantage in penetrating
      markets with their network security and management products.




Our
      principal competitors in the anti-virus market are McAfee, Symantec Corp.,
      Computer Associates International Inc. and Microsoft Corp., which expects to
      have its consumer security solution that may offer system and network protection
      products as enhancements to their operating systems, generally available in
      June
      2006. In addition to competition from large technology companies such as McAfee,
      EMC Corp., Hewlett-Packard Co., IBM, Novell Inc. and Microsoft Corp., we also
      face competition from smaller companies and shareware authors that may develop
      competing products.




**Proprietary
      Technology**




Our
      success depends significantly upon proprietary software technology. We rely
      on a
      combination of patents pending, trademarks, trade secrets and copyrights to
      establish and protect proprietary rights to our software. However, these
      protections may be inadequate or competitors may independently develop
      technologies or products that are substantially equivalent or superior to our
      products. Laws in some foreign countries either do not protect these rights
      at
      all or offer only limited protection for these rights. The steps taken by us
      to
      protect our proprietary software technology may be inadequate to deter misuse
      or
      theft of this technology.




**II.
      Online Golf Retail**




Our
      website was being redeveloped and was not operating from March 1, 2005 to April
      14, 2005. We also operated a single retail location in Apopka, Florida. The
      retail location was closed in February 2005. Our website is currently operating
      as an affiliate site and has not yet begun offering products directly. We
      currently have a limited amount of products on our website.




Through
      our website, www.liquidgolf.com, we successfully built an online community
      of
      over 90,000 registered members. We were able to build this base providing
      members with additional opportunities to participate in the world of golf.




Golfers
      are an appealing demographic group, in terms of income and purchasing power,
      to
      target as a business opportunity. Our business has only reached a small portion
      of the golf industry. Our business strategy for this segment is to partner
      with
      an experienced golf retailer that has golf specific e-commerce experience while
      utilizing our base of customers.




**Products
      and Services**




We
      offer
      a limited number of products through our website. Most golf retailers are
      currently able to offer a wider selection of products than we offer.




**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.






**-
          8 -**


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 do 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.




**Employees**




As
      of
      December 31, 2005, we had 2 full time executive management personnel. After
      the
      purchase of Silent Sword **TM** in
      January 2006, we hired 4 additional executive management and administration
      personnel. As of March 30, 2006, our 6 management personnel consists of our
      Chief Executive Officer, Chief Financial Officer, Chief Technology Officer,
      Chief Quality Officer, web developer and an administrative assistant. None
      of
      the employees are covered by a collective bargaining agreement and our
      management considers relations with our employees to be good.




**-
          9 -**





**RISK
      FACTORS**




**Risks
      Specific to Our Company**




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




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




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




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




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




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




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




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




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




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




**-
          10 -**





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




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




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




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




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




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




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




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




**Risks
      Specific to Our Industry**




**General
      economic conditions may affect consumer and business purchases.**




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




**-
          11 -**





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




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




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




**Government
      Regulations and Legal Uncertainties Could Burden Our Business**




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




**Risks
      Related to Our Securities**




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









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




**-
          12 -**







•
            
            that
                a broker or dealer approve a person’s account for transactions in penny
                stocks; and




•
            
            the
                broker or dealer receive from the investor a written agreement to
                the
                transaction, setting forth the identity and quantity of the penny
                stock to
                be purchased.•
            
            In
                order to approve a person’s account for transactions in penny stocks, the
                broker or dealer must:




•
            
            obtain
                financial information and investment experience objectives of the
                person;
                and




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




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




•
            
            sets
                forth the basis on which the broker or dealer made the suitability
                determination; and




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




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




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




**Our
      share price may be highly volatile.**




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




**ITEM 2.
      DESCRIPTION OF PROPERTY**




All
      of
      our operations, including our retail sales, are based in our facility located
      at
      1800 2 nd Street
      East, Suite 735, Sarasota, Florida 34236. Our rent for this location is
      approximately $4,100 per month and our three year lease expires on
      February 28, 2009. Our personal property consists of computer equipment
      acquired subsequent to December 31, 2005.




**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.




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




No
      matters were submitted to a vote of security holders during the last quarter
      of
      the fiscal year ended December 31, 2005.




**-
          13 -**




**PART
      II**




**ITEM 5.
      MARKET FOR REGISTRANT’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS**




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 894 stockholders
      of record as of March 15, 2006.




**High ($)**
            
            **Low ($)****Fiscal
                Year 2005**Fourth
                Quarter
            
            $
            0.20
            
            $
            0.10Third
                Quarter
            
            $
            0.18
            
            $
            0.10Second
                Quarter
            
            $
            0.25
            
            $
            0.06First
                Quarter
            
            $
            0.95
            
            $
            0.25**Fiscal
                Year 2004**Fourth
                Quarter
            
            $
            1.00
            
            $
            0.35Third
                Quarter
            
            $
            1.45
            
            $
            0.75Second
                Quarter
            
            $
            3.25
            
            $
            1.05First
                Quarter
            
            $
            3.10
            
            $
            1.05




**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**




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




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




**-
          14 -**





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




On
      July 7, 2005, we sold in a private placement, a secured promissory note in
      the amount of $5,000 to a stockholder. Interest accrued on the outstanding
      principal balance from July 7, 2005 at a rate of 8 percent per annum. The
      note holder had the sole option of converting the principal represented by
      this




note
      into
      our common stock at a strike price equal to a 50 percent discount to the average
      closing bid price of the stock for the ten days immediately prior to the
      conversion. The note holder could convert all or any part of the principal
      and
      accrued interest represented by this note. On December 6, 2005, we issued
      57,076 shares of our common stock to satisfy the promissory note conversion
      agreement.




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




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




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




**-
          15 -**





**Equity
      Compensation Plan Information**




The
      following table summarizes certain information regarding our equity compensation
      plans as of December 31, 2005. The underlying compensation plan has been
      previously approved by a vote of the shareholders.




**Plan
                category**
            
            **Number of securities**
              **to
                be issued upon**
              **exercise
                of**
              **outstanding
                options,**
              **warrants
                and rights**
            
            **Weighted-average**
              **exercise
                price of**
              **outstanding 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
            
            146,000Equity
                compensation plans not approved by shareholders
            
            N/A
            
            
            N/A
            
            N/ATotal:
            
            1,500,000
            
            $
            1.00
            
            146,000




**ITEM 6.
      MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**




*The
      following discussion of our plan of operation, financial condition and results
      of operations should be read in conjunction with the Company’s consolidated
      financial statements, and notes thereto, included elsewhere herein. This
      discussion contains forward-looking statements that involve risks and
      uncertainties. Our actual results may differ materially from those anticipated
      in these forward-looking statements as a result of various factors including,
      but not limited to, those discussed in this Annual Report.*




**Overview**




We
      were
      incorporated under the name “DP Charters” in Nevada on December 18, 1997. On
      April 18, 2002, we changed our name to “Nomadic Collaboration International,
      Inc.” Effective May 30, 2003, LGC Acquisition Company, a Delaware corporation
      and wholly owned subsidiary of Nomadic Collaboration International, Inc., a
      Nevada corporation, merged with and into LiquidGolf Corporation, a Delaware
      corporation, such that LiquidGolf Corporation was the surviving entity, and
      by
      virtue thereof, LiquidGolf corporation became a wholly owned subsidiary of
      Nomadic Collaboration. As a result of a merger, the name of the Company changed
      to LiquidGolf Holding Corporation. On September 29, 2003, the Company completed
      a re-incorporation merger into a Delaware Corporation thus changing the state
      of
      incorporation from Nevada to Delaware.




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




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




In
      January 2006, in a continuing effort to build a revenue stream, we purchased
      the
      Silent Sword **TM** software
      and all trademarks, service marks, and logos. As of March 30, 2006, we have
      issued a total of 10,000,000 shares of our common stock for Silent
      Sword **TM** .
      Under
      the purchase agreement, we may issue a maximum of 20,000,000 common shares
      subject to certain provisions in the agreement. The stock issued is considered
      restricted securities as defined by the Securities Act of 1933, as amended.
      We
      anticipate this product to be available for sale in the third quarter of 2006.
      We are currently re-engineering,




**-
          16 -**




re-designing
      and re-testing our software, Silent Sword **TM** .
      The
      re-designing is being completed by our Chief Technology Officer and his team.
      This process will include redefining core business requirements along with
      re-documentation and re-testing of all operating systems and applicable
      applications. Re-testing of the software has required an addition employee
      and
      the addition of a development and testing sandbox environment that has been
      purchased. The costs associated with redesign and retesting are approximately
      $100,000 for labor, inclusive of officer’s salary of $66,000, and $10,000 for
      equipment. The redesign and retesting costs were incurred prior to June 2006
      and
      have not been delayed since cash required for this process has been acquired
      through financing. Additional capital for marketing, packaging and customer
      services will be needed after the product is complete. If the capital is not
      available after June 2006, the release of the product could be delayed.




**Plan
      of Operation**




We
      plan
      to grow our business with the purchase of the Silent Sword **TM** software. The purchase of the software will help diversify our revenue beyond
      golf retailing. We are currently designing and testing our software, Silent
      Sword **TM** and we
      anticipate this product will be available to end consumers in the third quarter
      of 2006. We are continuing to explore opportunities for our golf retailing
      segment. We are constantly reviewing our segments to determine our best overall
      strategy.




Based
      upon the Company’s current level of revenues and cash position, we will need to
      raise additional capital in order to fund current operations. These factors
      raise substantial doubt about our ability to continue as a going concern. We
      are
      pursuing several alternatives to address this situation, including raising
      additional funding through an equity or debt financing. As a part of our
      purchase of the Silent Sword **TM** software, the seller is required to raise a minimum of two million dollars
      to
      help fund operations. If the funds are not raised, the seller will only be
      entitled to 50% of the $300,000 purchase price. On March 9, 2006, we sold in
      a
      private placement, a secured promissory note in the amount of $250,000 to a
      stockholder of the Company. On April 3, 2006, we signed an agreement to sell
      up
      to 35 million shares of restricted stock with an investor. On April 17, 2006,
      the investor purchased 4 million shares for $180,000. We are also currently
      in
      negotiations to sell approximately 3 million shares to another investor. There
      can be no assurance that the requisite financing will be consummated in the
      necessary time frame or on terms acceptable to us. Should we be unable to raise
      sufficient funds, we may be required to curtail our operating plans or worst
      case, cease operations. No assurance can be given that we will be able to
      operate profitably on a consistent basis, or at all, in the future.




**-
          17 -**




***Cash
      Requirements***




We
      believe we will need an additional $2,400,000 to continue operations over the
      next twelve months. These expenses include the following:




Marketing
            
            $
            1,100,000Officers’
                salaries and related taxes
            
            
            390,000Other
                general and admin expenses
            
            
            240,000Management
                consultants
            
            
            160,000Payroll
                and related taxes
            
            
            135,000Health
                and liability insurance
            
            
            100,000Legal,
                accounting and other professional fees
            
            
            100,000Rent
            
            
            57,000Travel
            
            
            40,000Director
                fees
            
            
            30,000Web
                design and hosting
            
            
            22,000Other
                computer and office equipment
            
            
            16,000Computer
                equipment for testing
            
            
            10,000$
            2,400,000




If
      we are
      unable to raise the required capital, we will need to reduce current and
      expected expenses in the future. The most significant reduction would be in
      marketing of our product. This may greatly reduce our ability to generate sales.




If
      additional capital is raised, we plan to use the capital to further enhance
      our
      software, increase marketing, and accelerate our ability to reach the retail
      market by selling our product in retail stores. We currently are planning to
      sell our software exclusively on our website. Additional capital would also
      allow us to pay for packaging and distribution of our software in a compact
      disc
      format.




**Results
      of Operations**




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 for the fiscal year 2005 were the Golf Retail
      and Leather Products sales segments. As of December 2004, the leather goods
      segment was discontinued.




**Comparison
      of the fiscal year ended December 31, 2005 and December 31, 2004.**




**CONSOLIDATED
      FINANCIAL INFORMATION**




**2005**
            
            
            **2004**Net
                sales
            
            $
            33,391
            
            
            $
            909,272Cost
                of sales
            
            
            27,004
            
            
            
            759,704Gross
                profit
            
            
            6,387
            
            
            
            149,568General
                and administrative
            
            
            1,135,778
            
            
            
            2,058,939Interest
                (income) expense , net
            
            
            67,001
            
            
            
            645,348Write
                down of impaired assets
            
            
            2,666
            
            
            
            10,809(Gain)
                Loss on Discontinued Operations
            
            
            (13,200
            )
            
            
            306,094Gain
                on extinguishment of debt
            
            
            (3,374
            )
            
            
            —







**-
          18 -**




***Net
      Sales.*** Net
      sales from continuing operations were $33,391 in 2005 a decrease of
      approximately 96% from $909,272 in 2004. This decrease was due to the closing
      of
      the retail store activity during 2005.




**2005**
            
            **2004**Net
                sales
            
            $
            33,391
            
            $
            1,116,226Cost
                of sales
            
            
            27,004
            
            $
            907,614




Sales,
      including sales from discontinued operations, decreased approximately 97%,
      or
      $1,082,835 in 2005 compared to 2004. The decrease was the result of closing
      our
      retail store in February 2005 and the discontinuing the operations of Leather
      Craft Technology, Inc. in November 2004.




***Cost
      of Sales.*** Cost of
      sales from continuing operations was $27,004 in 2005, an decrease of
      approximately 96% from $759,704 in 2004. This decrease was the result of a
      96%
      decrease in net sales.




***Gross
      Profit.*** Gross
      profit from continuing operations was $6,387 in 2005, an decrease of
      approximately 96% from gross profit of $149,568 in 2004. This decrease is
      consistent with our 96% decrease in net sales.




**Operating
      Expenses**




**2005**
            
            **2004**General
                and administrative
            
            $
            1,132,404
            
            $
            2,058,939




*General
      and Administrative Expenses* .
      General
      and Administrative expenses were $1,132,404 in 2005, a decrease of 45% from
      $2,058,939 in 2004. In 2005, a $408,750 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 58% decrease
      from
      $981,000 in 2004. The compensation was 1,800,000 shares of common stock and
      the
      remaining term of the agreement was fully amortized as of May 30, 2005. The
      additional decrease in 2005 is due to a $314,867 non-cash expense for the
      amortization of deferred restricted stock compensation an decrease of 45% from
      $572,324 in 2004. During 2005, as compared to 2004, we incurred approximately
      $180,000 of fewer expenses due to the closing of our single retail location.
      We
      also incurred $91,000 and $122,000 less in advertising and administrative
      salaries during 2005 as we implemented cost control measures.




**Other
      Income and Expenses**




***Interest
      income and expense, net*** .
      Net
      interest expense was $67,001 in 2005, a net decrease of $628,347 from $695,348
      of interest expense in 2004. The decrease interest expense is the result of
      interest expense paid on promissory notes and $600,000 of interest expense
      recognized from a beneficial conversion during 2004.




***Write
      down of impaired assets*** .
      Write
      down of impaired assets decreased $8,143 or 75% in 2005. This decrease was
      due
      to the write down of certain property and equipment that was abandoned or sold
      when we discontinued our Leather Products operations in 2004 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 $3,374 for 2005 compared to $310,125 for the
      same
      period in 2004. This decrease was the result of our determination that these
      amounts were not owed for obligations in 2005 and 2004 or were obtained through
      negotiations with our vendors in the corresponding year. These amounts have
      been
      recorded as a reduction of operating expenses during 2005 and 2004.




**-
          19 -**




**Liquidity
      and Capital Resources**




We
      had
      cash balances totaling approximately $169,000 as of December 31, 2005.
      Historically, our principal source of funds has been cash generated from
      financing activities. Our operations are seasonal and our source of liquidity
      may vary during the year.




We
      believe that we will require an additional $2,400,000 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 secured promissory notes
      in
      the amounts of $10,000, $5,000, $200,000 and $50,000 that we sold in a private
      placement to four stockholders. In December 2005, we entered into a promissory
      note conversion agreement with two stockholders and converted $15,000, plus
      $562
      of accrued interest, into common stock. Cash flows from discontinued operations
      consisted of impaired goodwill of $108,400, impaired property and equipment
      of
      $2,280, a change in prepaids of $8,393, a change in other assets of $5,879,
      a
      change in accounts payable of $35,900 and a change in other liabilities of
      $24,250 for the year ended December 31, 2004. In 2005, cash flows from
      discontinued operations consisted of a change in accrued expenses of $18,825.
      We
      believe that cash flows from discontinued operations will benefit us since
      less
      cash will be used to fund the operations of this business that was unable to
      generate the cash needed to support its own operations.




**Variables
      and Trends**




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




**Critical
      Accounting Policies**




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




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.**




Revenue
      was earned by the Company from the sale of golf equipment and related
      accessories through its online retail store and its retail location which was
      closed in February 2005. Online merchandise revenue was recognized upon the
      shipment of the merchandise, which accrued only after credit card authorization
      was obtained. Customers were allowed to return items for credit within 14 days
      of purchase. The Company provided for estimated returns at the time of shipment
      based on historical data. For the years ended December 31, 2005 and 2004, no
      allowance for returns was recorded because the estimated amounts were
      immaterial.




**-
          20 -**





Upon
      the
      roll-out of Silent Sword TM ,
      we will
      recognize revenue from the sale of software upon delivery of a license to the
      customer, provided that persuasive evidence of an arrangement exists, the
      license fee is fixed and determinable, and collection of the fee is considered
      probable.




The
      Company recognizes revenues on a gross basis when the goods are shipped to
      the
      end user. The Company uses the gross method of revenue recognition, as
      prescribed under EITF 99-19, “Reporting Revenue Gross as a Principal versus Net
      as an Agent,” as the Company is the primary obligor in the transaction and is
      obligated to pay the supplier for work performed regardless of whether the
      customer accepts the product.




**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.




**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, and, accordingly, will
      be adopted by us in the first quarter of calendar year 2006. The actual impact
      of adoption of SFAS 123R cannot be fully predicted at this time because it
      will
      depend on levels of share-based payments granted in the future. The adoption
      of
      this new statement will have no effect until share-based compensation is issued
      by the Company.




**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**




The
      financial statements required to be filed hereunder are set forth on pages
      F-1
      through F-14 and are incorporated herein by this reference.




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




None.




**-
          21 -**




**ITEM 8A.**
            **CONTROLS
                AND PROCEDURES**




*(a)
      Evaluation of disclosure controls and procedures.* Under
      the supervision and with the participation of our senior management, including
      our chief executive officer and principal financial officer, we conducted an
      evaluation of the effectiveness of the design and operation of our disclosure
      controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under
      the
      Securities Exchange Act of 1934, as amended, as of the end of the period covered
      by this Annual Report (the “Evaluation Date”). Based on this evaluation, our
      chief executive officer and principal financial officer concluded as of the
      Evaluation Date that our disclosure controls and procedures were, to the best
      of
      their knowledge, effective such that the information relating to Horizon,
      including our consolidated subsidiaries, required to be disclosed in our
      Securities and Exchange Commission (“SEC”) reports (i) is recorded,
      processed, summarized and reported within the time periods specified in SEC
      rules and forms, and (ii) is accumulated and communicated to Horizon’s
      management, including our chief executive officer and principal financial
      officer, as appropriate to allow timely decisions regarding required disclosure.




*(b)
      Changes in internal control over financial reporting* .
      There
      have been no changes in our internal control over financial reporting that
      occurred during the quarter ended December 31, 2005 that have materially
      affected or are reasonably likely to materially affect our internal control
      over
      financial reporting.




**PART
      III**




**ITEM 9.
      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT**




The
      names
      of our executive officers and directors, their ages as of March 1, 2006,
      and the positions currently held by each are as follows:




**Name**
            
            **Age**
            
            **Position**Stewart
                York
            
            38
            
            Chief
                Executive Officer and DirectorCharles Wernicke
            
            39
            
            Chief
                Technology Officer and DirectorSteven Weldon
            
            30
            
            Chief
                Financial OfficerWilliam Parsons
            
            58
            
            DirectorDwight
                Day
            
            42
            
            Director




***Stewart
      York*** has
      served as the Chief Executive Officer of the Company since February 1,
      2006. From February 2005 to December 2005, Mr. York was self-employed as an
      IT consultant. From January 2001 to February 2005, Mr. York was the
      director of information technology for MicroMo Electronics, Inc., a motor and
      gear head manufacturer. Mr. York was self-employed as the publisher of a
      weekly magazine from June 2002 to January 2003. From April 2001 to June 2002,
      Mr. York was the production systems manager for Tecstar Electronics, Inc.,
      an airplane parts manufacturer. Mr. York was the Vice President of
      Operation for Andco Industries, Inc. an architectural signage company from
      May
      1995 to April 2001. Mr. York received a Bachelor of Science degree at the
      University of Rio Grande and a Bachelor of Arts from University of North
      Carolina.




***Charles
      Wernicke*** has
      served as the Chief Technology Officer and Director of the Company beginning
      in
      February 2006. Mr. Wernicke has been the President of Emergency Computer
      Services, Inc., a computer service company since January 1993 and was the Chief
      Technology Officer of Delta Insights, LLC from June 2004 to January 2006.
      Mr. Wernicke attended Manatee Community College.




**-
          22 -**





***Steven
      Weldon*** ,
      a
      Certified Public Accountant ***,*** has
      served as our Chief Financial Officer since September 2005. Prior to joining
      Horizon Holding Corporation, Mr. Weldon was the Tax Manager for Westgate
      Resorts, Ltd., a timeshare developer, since July 2000. Mr. Weldon was an
      adjunct professor at Florida Southern College from January 2002 to October
      2005.
      Since May 2005, Mr. Weldon has served as the president, sole stockholder
      and director of Steven W. Weldon, PA, a public accounting firm providing tax
      and
      accounting services. Mr. Weldon received his Bachelor of Science degree and
      his Masters in Business Administration from Florida Southern College.
      Mr. Weldon is also a Certified Public Accountant licensed by the State of
      Florida.




***William
      Parsons*** has
      served as a Director of the Company since August 2004. 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.




**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.




*Audit
      Committee.* 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, Parsons, both of whom
      are
      non-employee directors, and Weldon. The Board of Directors has not adopted
      a
      written charter of the Audit Committee. The Audit Committee also includes at
      least one member — Mr. William Parson — determined by the Board to meet the
      qualifications of an “audit committee financial expert,” as defined by SEC
      rules. Stockholders should understand that these designations related to an
      Audit Committee member’s experience and understanding do not impose upon him any
      duties, obligations or liabilities greater than those generally imposed on
      a
      member of the Audit Committee or the Board. As CFO, Mr. Weldon 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 2005.




*Executive
      Compensation Committee* .
      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 Parsons, 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.




**-
          23 -**





*Restricted
      Stock Plan Distribution Committee* .
      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. York, Day and Parsons.




**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 2005:




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




***Larry
      Abraham*** -
      Mr. Abraham failed to file a Form 4 regarding shares received as
      compensation for his service on the Board of Directors.




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




***William
      Parsons*** *-* Mr. Parsons
      failed to file a Form 4 regarding shares received as compensation for his
      service on the Board of Directors.




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.




**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.




**-
          24 -**




**ITEM 10.
      EXECUTIVE COMPENSATION**




We
      did
      not have any other executive officers or other employees serving at the end
      of
      fiscal year 2005 whose total annual salary and bonus exceeded $100,000. The
      following table sets forth certain information regarding the compensation our
      Chief Executive Officer for 2005, 2004 and 2003.




**Summary
      Compensation Table**




**Annual
                Compensation**
            
            **Long-Term
                Compensation**
              **Awards****Name
                and Position**
            
            **Year**
            
            **Salary ($)**
            
            **Other
                Annual**
              **Compensation**
              **($)**
            
            **Restricted**
              **Stock Awards**
            
            **All
                Other**
              **Compensation**Dwain
                Brannon, CEO
            
            2005
            
            $
            14,533
            
            —
            
            —
            
            —2004
            
            
            99,092
            
            —
            
            —
            
            —2003
            
            
            90,000
            
            —
            
            1,000,000
            
            —




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









**Employment
      Agreements**




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




**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 was submitted and
      approved by our stockholders 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.




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.




**-
          25 -**




**Directors’
      Compensation**




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.




**ITEM 11.
      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS**




The
      following table presents information known to us, as of March 5, 2006,
      relating to the beneficial ownership of common stock by:




•
            
            each
                person who is known by us to be the beneficial holder of more than
                5% of
                our outstanding common stock;




•
            
            each
                of our named executive officers and directors; and




•
            
            our
                directors and executive officers as a group.




We
      believe that all persons named in the table have sole voting and investment
      power with respect to all shares beneficially owned by them, except as noted.




Percentage
      ownership in the following table is based on 24,319,750 shares of common stock
      outstanding as of March 5, 2006. A person is deemed to be the beneficial
      owner of securities that can be acquired by that person within 60 days from
      the
      date of this Annual Report upon the exercise of options, warrants or convertible
      securities. Each beneficial owner’s percentage ownership is determined by
      dividing the number of shares beneficially owned by that person by the base
      number of outstanding shares, increased to reflect the shares underlying
      options, warrants or other convertible securities included in that person’s
      holdings, but not those underlying shares held by any other person.




**Name
                of Beneficial Owner**
            **Number
                of**
              **Shares of Common**
              **Stock
                Beneficially**
              **Owned**
            
            **Percentage of Shares**
              **Beneficially
                Owned**Charles
                Wenicke
            3,666,907
            
            15.08
            %Dwain
                Brannon(2)
            1,500,332
            (3)
            6.17Brunswick
                Growth Ventures, LLC
            1,387,673
            
            5.71San
                Rafael Consulting Group, LLC(5)
            1,387,673
            
            5.71Dwight
                Day(1)
            658,143
            
            2.71Skip
                McElvery(6)
            345,707
            (4)
            1.42Stewart
                York
            309,171
            
            1.27William
                Parsons(1)
            226,333
            
            0.93Larry
                Abraham(7)
            219,500
            
            0.90All
                directors and officers (7 persons)
            2,875,000
            
            28.49
            %




(1)
            Unless
                otherwise noted, the address of each person listed isc/o
                Horizon Holding Corporation, 1800 2ndStreet, Suite 735, Sarasota, Fl, 34236.





(2)
            Dwain
                Brannon’s address is 4044 W. Lake Mary Blvd., #104-347, Lake Mary, Florida
                32746.





(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
                127,707 shares of common stock owned by Mr. McElvery’s spouse.





(5)
            San
                Rafael Consulting Group’s address is 8560 Heron Lagoon Circle, Sarasota,
                Fl 34242.





(6)
            Skip
                McElvery’s address is 3171 Saint Ives Country Club, Diluth, Georgia 30097.





(7)
            Larry
                Abraham’s address is 4012 52ndAvenue NW, Mineral, Washington 98355.




**-
          26 -**


**ITEM 12.
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**




None




**ITEM 13.
      EXHIBITS, LISTS AND REPORTS ON FORM 8-K**




**Exhibits
      and Financial Statements.**




(A)
            Financial
                Statements and Schedules




See
      “Index to Financial Statements”




(B)
            Exhibits




**EXHIBIT**
              **NUMBER**
            
            **DESCRIPTION**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)10.5
            
            Software
                Purchase Agreement date January 31, 2006 between the Company and
                Delta
                Insights, LLC(10)10.6
            
            Employment
                Agreement between Company and Chuck Wernicke dated February 23,
                2006(9)21.1
            
            Subsidiaries
                of the Company(7)31.1
            
            Certification
                of Chief Executive Officer and 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 and 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)








**-
          27 -**







*
            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).





(9)
            Incorporated
                by reference to Exhibit 10.1 of the Company’s Form 8-K (filed 2/27/06)
                (No. 000-27131).





(10)
            Incorporated
                by reference to Exhibit 99.1 of the Company’s Form 8-K (filed 2/02/06)
                (No. 000-27131).




**ITEM 14.
      PRINCIPAL ACCOUNTANT FEES AND SERVICES**




**Fiscal 2005**
            
            **Fiscal 2004**Audit
                Fees(1)
            
            $
            48,000
            
            $
            46,500Audit-Related
                Fees(2)
            
            
            -0-
            
            
            -0-Tax
                Fees(3)
            
            
            7,500
            
            
            8,123Subtotal
            
            $
            55,500
            
            $
            54,623All
                other Fees(4)
            
            
            -0-
            
            
            -0-Total
            
            $
            55,500
            
            $
            54,623




(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 billed by 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 2004. The Company anticipates billings by Tedder, James,
                Worden & Associates, P.A. for the preparation of all state and
                federal returns for 2005 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
      Board
      of Director’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. 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 Board of Directors may delegate pre-approval authority to one or more of
      its
      members when expedition of services is necessary. The Board of Directors has
      determined that the provision of non-audit services by Tedder, James,
      Worden & Associates, P.A. is compatible with maintaining its
      independence.




**-
          28 -**




SIGNATURES




In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      the registrant caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.




INVERTED
                PARADIGMS CORPORATIONDated:
                May 16, 2007By:
            
            /S/
                Steven WeldonName:
            
            Steven
                WeldonTitle:
            
            Chief
                Executive Officer and Chief Financial
                Officer




In
      accordance with the Securities Exchange Act of 1934, this report has been signed
      below by the following persons on behalf of the registrant and in the capacities
      and on the dates indicated.




INVERTED
                PARADIGMS CORPORATIONDated:
                May 16, 2007By:
            
            /S/
                Steven WeldonName:
            
            Steven
                WeldonTitle:
            
            Chief
                Executive Officer and Chief Financial OfficerBy:
            
            /S/
                Dwight DayName:
            
            Dwight
                DayTitle:
            
            DirectorBy:
            
            /S/
                William ParsonsName:
            
            William
                ParsonsTitle:
            
            Director




**-
          29 -**








**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**


**(Formerly
      Horizon Holding Corporation)**




**Consolidated
      Financial Statements (As Restated)**




**December 31,
      2005**




**Table
      of Contents**




Report
                of Independent Registered Certified Public Accounting Firm
            
            31Consolidated
                Financial Statements:Consolidated
                Balance Sheet - December 31, 2005 (As restated)
            
            32Consolidated
                Statements of Operations - Years ended December 31, 2005 and 2004 (As
                restated)
            
            33Consolidated
                Statements of Stockholders’ Equity (Capital Deficiency) - Years ended
                December 31, 2005 and 2004 (As restated)
            
            34Consolidated
                Statements of Cash Flows - Years ended December 31, 2005 and 2004 (As
                restated)
            
            35Notes
                to Consolidated Financial Statements
            
            36







**-
          30 -**










Report
      of Independent Registered Certified Public Accounting Firm




To
      the
      Board of Directors and Stockholders of


Inverted
      Paradigms and Subsidiaries:




We
      have
      audited the consolidated balance sheet of Inverted Paradigms Corporation
      (formerly Horizon Holding Corporation) and Subsidiaries as of December 31,
      2005, and the related consolidated statements of operations, stockholders’
equity (capital deficiency), and cash flows for the years ended
      December 31, 2005 and 2004. 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, 2005, and the results of
      their operations and their cash flows for the years ended December 31, 2005
      and 2004, in conformity with U.S. generally accepted accounting principals.




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 its 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 13,
      2006, except for Notes 2, 3, 4, 8, 9


and
      13 as
      to which the date


is
      February 7, 2007




**-
          31 -**







**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**


**Consolidated
      Balance Sheet (As Restated)**


**December 31,
      2005**




**Assets**Current
                assets:Cash and cash equivalents
            
            $
            169,505Loan receivable
            
            
            10,000Prepaid expenses
            
            
            9,267Total current assets
            
            
            188,772Other assets
            
            
            180Total assets
            
            $
            188,952**Liabilities
                and Stockholders’ Equity (Capital Deficiency)**Current
                liabilities:Accounts payable
            
            $
            139,529Other current liabilities
            
            
            40,325Notes payable to stockholders
            
            
            255,000Total current liabilities
            
            
            434,854Stockholders’
                equity (capital deficiency)Common stock, $0.001 par , 100,000,000 shares authorized, 13,420,068
                shares issued and outstanding
            
            
            13,420Additional paid-in capital
            
            
            37,397,104Deferred stock-based employee compensation
            
            
            (57,706
            )Accumulated deficit
            
            
            (37,598,720
            )Total capital deficiency
            
            
            (245,902
            )Total liabilities and stockholders’ equity (capital
                deficiency)
            
            $
            188,952




See
      accompanying notes to consolidated financial statements.




**-
          32 -**




**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**


**Consolidated
      Statements of Operations (As Restated)**


**For
      the years ended December 31, 2005 and 2004**




**2005**
            
            
            **2004**Net
                sales
            
            $
            33,391
            
            
            $
            909,272Cost
                of sales
            
            
            27,004
            
            
            
            759,704Gross profit
            
            
            6,387
            
            
            
            149,568Operating
                expenses:Sales and marketing
            
            
            182,326
            
            
            
            104,942General and administrative (inclusive of non-cash stock-based employee
                compensation of $314,867 and $572,324 in the years ended December 31,
                2005 and 2004)
            
            
            1,132,404
            
            
            
            2,058,939Technology and content
            
            
            20,549
            
            
            
            58,478Write down of impaired assets
            
            
            2,666
            
            
            
            10,809Depreciation and amortization
            
            
            1,920
            
            
            
            16,034Total operating expenses
            
            
            1,339,865
            
            
            
            2,249,202Loss from operations
            
            
            (1,333,478
            )
            
            
            (2,049,634
            )Other
                income (expense):Interest income
            
            
            1,737
            
            
            
            1,931Interest expense
            
            
            (68,738
            )
            
            
            (697,279
            )Other
            
            
            (16,263
            )
            
            
            —Net other (expense) income
            
            
            (83,264
            )
            
            
            (695,348
            )Net loss from continuing operations
            
            
            (1,416,742
            )
            
            
            (2,794,982
            )Gain (loss) from discontinued operations
            
            
            13,200
            
            
            
            (306,094
            )Net loss
            
            
            (1,403,542
            )
            
            $
            (3,101,076
            )Net
                loss per share from continuing operations - basic
            
            $
            (0.11
            )
            
            $
            (0.25
            )Net
                loss per share from discontinued operations - basic
            
            $
            (0.00
            )
            
            $
            (0.03
            )Weighted average shares used in calculating basic loss per
                share
            
            
            13,004,154
            
            
            
            11,373,354




See
      accompanying notes to consolidated financial statements.




**-
          33 -**







**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**


**Consolidated
      Statements of Stockholders’ Equity (Capital Deficiency) (As Restated)**


**For
      the years ended December 31, 2005 and 2004**




**Additional**
              **paid-in**
              **capital**
            
            
            **Deferred**
              **stock-based**
              **employee**
              **compensation**
            
            
            **Accumulated**
              **deficit**
            
            
            **Total****Common
                stock**
            
            **Treasury
                stock****Shares**
            
            
            **Amount**
            
            **Shares**
            
            
            **Amount**Balance,
                December 31, 2003
            10,742,447
            
            
            $
            10,742
            
            —
            
            
            —
            
            
            $
            35,706,315
            
            
            $
            (852,917
            )
            
            $
            (33,094,102
            )
            
            $
            1,770,038Cost
                incurred in conjunction with the exercise of warrants
            
            
            
            
            
            
            
            
            
            
            
            
            
            (20,000
            )
            
            
            
            
            
            
            
            
            
            
            (20,000
            )Amortization
                of deferred stock based employee compensation
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            572,324
            
            
            
            
            
            
            
            572,324Treasury
                stock acquired 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
            
            
            
            
            
            
            
            
            
            
            
            4,904Cost
                incurred in conjunction with conversion of note payable
            
            
            
            
            
            
            
            
            
            
            
            
            
            (30,000
            )
            
            
            
            
            
            
            
            
            
            
            (30,000
            )Issuance
                of common stock for Game for Golf acquisition
            10,000
            
            
            
            10
            
            
            
            
            
            
            
            
            10,890
            
            
            
            
            
            
            
            
            
            
            
            10,900Issuance
                of common stock for conversion of note payable
            714,285
            
            
            
            714
            
            
            
            
            
            
            
            
            599,286
            
            
            
            
            
            
            
            
            
            
            
            600,000Proceeds
                from the issuance of common stock
            1,239,497
            
            
            
            1,240
            
            
            
            
            
            
            
            
            311,914
            
            
            
            
            
            
            
            
            
            
            
            313,154Issuance
                of employee restricted stock
            219,000
            
            
            
            184
            
            (35,000
            )
            
            28,279
            
            
            
            91,796
            
            
            
            (120,259
            )
            
            
            
            
            
            
            —Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (3,101,076
            )
            
            
            (3,101,676
            )Interest
                on beneficial conversion feature of note payable
            
            
            
            
            
            
            
            
            
            
            
            
            
            600,000
            
            
            
            
            
            
            
            
            
            
            
            600,000Balance,
                December 31, 2004
            12,894,729
            
            
            $
            12,894
            
            —
            
            
            —
            
            
            $
            37,275,101
            
            
            $
            (372,573
            )
            
            $
            (36,195,178
            )
            
            $
            720,244Amortization
                of deferred stock based employee compensation
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            314,867
            
            
            
            
            
            
            
            314,867Issuance
                of common stock for Directors compensation
            272,000
            
            
            
            272
            
            
            
            
            
            
            
            
            35,728
            
            
            
            
            
            
            
            
            
            
            
            36,000Cost
                incurred in conjunction with conversion of note payable
            
            
            
            
            
            
            
            
            
            
            
            
            
            (3,000
            )
            
            
            
            
            
            
            
            
            
            
            (3,000
            )Issuance
                of common stock for conversion of note payable
            129,595
            
            
            
            130
            
            
            
            
            
            
            
            
            10,238
            
            
            
            
            
            
            
            
            
            
            
            10,368Issuance
                of common stock for conversion of note payable
            57,076
            
            
            
            57
            
            
            
            
            
            
            
            
            5,137
            
            
            
            
            
            
            
            
            
            
            
            5,194Issuance
                of common stock for services
            66,668
            
            
            
            67
            
            
            
            
            
            
            
            
            6,600
            
            
            
            
            
            
            
            
            
            
            
            6,667Interest
                on beneficial conversion feature of note payable
            
            
            
            
            
            
            
            
            
            
            
            
            
            65,000
            
            
            
            
            
            
            
            
            
            
            
            65,000Warrants
                issued to broker
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,300
            
            
            
            
            
            
            
            
            
            
            
            2,300Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,403,542
            )
            
            
            (1,403,542
            )Balance,
                December 31, 2005
            13,420,068
            
            
            $
            13,420
            
            —
            
            
            —
            
            
            $
            37,397,104
            
            
            $
            (57,706
            )
            
            $
            (37,598,720
            )
            
            $
            (245,902
            )




See
      accompanying notes to consolidated financial statements.






**-
          34 -**


**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**


**Consolidated
      Statements of Cash Flows**


**For
      the years ended December 31, 2005 and 2004**




**2005**
            
            
            **2004****(As
                restated)**
            
            
            **(As
                restated)**Cash
                flows from operating activities:Net Loss
            
            $
            (1,403,542
            )
            
            $
            (3,101,076
            )Adjustments to reconcile net loss to cash used in
                operations:Interest from beneficial conversion feature of notes
                payable
            
            
            65,000
            
            
            
            600,000Amortization
                of deferred stock-based employee compensation
            
            
            314,867
            
            
            
            572,324Gain on extinguishment of debt
            
            
            (3,374
            )
            
            
            (310,125
            )Amortization of stock issued for services
            
            
            408,750
            
            
            
            1,030,545Stock issued to directors for services
            
            
            36,000
            
            
            
            4,904Stock issued to vendor for services
            
            
            6,667
            
            
            
            —Impairment of property and equipment
            
            
            2,666
            
            
            
            10,809Depreciation and amortization
            
            
            1,920
            
            
            
            76,414Interest
            
            
            2,200
            
            
            
            —Loss on disposal of fixed assets
            
            
            500
            
            
            
            —Discontinued operations:Impairment of goodwill
            
            
            —
            
            
            
            108,400Impairment of property and equipment
            
            
            —
            
            
            
            2,280Changes in operating assets and liabilities:Inventories
            
            
            48,967
            
            
            
            227,109Other current assets
            
            
            181,582
            
            
            
            33,980Other assets
            
            
            4,077
            
            
            
            12,177Accounts payable
            
            
            (10,942
            )
            
            
            (179,698
            )Accrued expenses
            
            
            (31,034
            )
            
            
            (89,395
            )Net
                cash used in continuing operations
            
            
            (375,696
            )
            
            
            (1,001,253
            )Net cash provided by discontinued operations
            
            
            18,825
            
            
            
            62,664Net cash used in operating activities
            
            
            (356,871
            )
            
            
            (938,589
            )Cash
                flows from investing activities:Proceeds from sale of certificate of deposit
            
            
            35,000
            
            
            
            —Issuance of loan receivable
            
            
            (10,000
            )
            
            
            —Purchase of Games for Golf
            
            
            —
            
            
            
            (30,000
            )Purchase of property and equipment
            
            
            —
            
            
            
            (2,279
            )Net cash provided by (used in) in investing activities:
            
            
            25,000
            
            
            
            (32,279
            )Cash
                flows from financing activities:Payments on deferred loan costs
            
            
            —
            
            
            
            (60,000
            )Proceeds from the sale of common stock
            
            
            —
            
            
            
            313,154Payments on capital lease
            
            
            (9,915
            )
            
            
            (11,360
            )Proceeds from notes payable
            
            
            265,562
            
            
            
            600,000Fees paid to issue convertible note
            
            
            (3,000
            )
            
            
            (30,000
            )Fees paid to convert warrants
            
            
            —
            
            
            
            (20,000
            )Net cash provided by financing activities
            
            
            252,647
            
            
            
            791,794Net
                decrease in cash and cash equivalents
            
            
            (79,224
            )
            
            
            (179,074
            )Cash
                and cash equivalents, beginning of period
            
            
            248,729
            
            
            
            427,803Cash
                and cash equivalents, end of period
            
            $
            169,505
            
            
            $
            248,729Supplemental
                disclosures of cash flow information:Cash paid during the period for Interest
            
            $
            561
            
            
            $
            36,494Supplemental
                schedule of noncash investing and financing activities:Issuance of common stock for acquisition of Games for Golf
            
            $
            —
            
            
            $
            10,900Conversion of note payable into common stock
            
            $
            15,562
            
            
            $
            600,000Issuance of common stock and warrants in connection with note
                payable
            
            $
            7,300
            
            
            $
            —




See
      accompanying notes to consolidated financial statements.







**-
          35 -**




**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




***Notes
      to Consolidated Financial Statements***




**NOTE
      1 - ORGANIZATION AND PRINCIPLES OF CONSOLIDATIONS**




***Reporting
      Entity.*** Horizon
      Holding Corporation and Subsidiaries (“Horizon” or the “Company”) were
      incorporated in the State of Nevada on December 18, 1997. On September 29,
      2003,
      the Company completed a re-incorporation merger into a Delaware Corporation
      thus
      changing the state of incorporation from Nevada to Delaware. The Company is
      in
      the business of operating a golf retail website where manufactures can link
      to
      their products.




***Name
      Change.*** On
      August 12, 2004 a majority of the stockholders approved changing the name
      of the Company from LiquidGolf Holding Corporation to Horizon Holding
      Corporation.




**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - AS RESTATED**




***Principles
      of Consolidation.*** The
      consolidated financial statements include the accounts of Horizon Holding
      Corporation and its two 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.






***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.




***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.




***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 have been excluded from the diluted
      loss per share computation since their effect is anti-dilutive.


**Stock-Based
      Compensation.** The
      Company has elected to account for its stock-based compensation granted to
      employees in accordance with the provisions of Accounting Principles Board
      Opinion 25 (APB 25), *Accounting
      for Stock Issued to Employees* .
      Under
      APB 25, compensation expense is based on the difference, if any, on the date
      of
      the grant, between the fair value of the Company’s stock and the amount the
      employee is required to pay. Stock issued to non-employees is accounted for
      under the provisions of




**-
          36 -**





**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




***Notes
      to Consolidated Financial Statements***




**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED**




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.




***Revenue
      Recognition.*** Revenue
      was earned by the Company from the sale of golf equipment and related
      accessories through its online retail store and its retail location which was
      closed in February 2005. Online merchandise revenue was recognized upon the
      shipment of the merchandise, which accrued only after credit card authorization
      was obtained. Customers were allowed to return items for credit within 14 days
      of purchase. The Company provided for estimated returns at the time of shipment
      based on historical data. For the years ended December 31, 2005 and 2004, no
      allowance for returns was recorded because the estimated amounts were
      immaterial.




Upon
      the
      roll-out of Silent SwordTM, we will recognize revenue from the sale of software
      upon delivery of a license to the customer, provided that persuasive evidence
      of
      an arrangement exists, the license fee is fixed and determinable, and collection
      of the fee is considered probable.




The
      Company recognizes revenues on a gross basis when the goods are shipped to
      the
      end user. The Company uses the gross method of revenue recognition, as
      prescribed under EITF 99-19, “Reporting Revenue Gross as a Principal versus Net
      as an Agent,” as the Company is the primary obligor in the transaction and is
      obligated to pay the supplier for work performed regardless of whether the
      customer accepts the product.




***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 $7,700 and $42,500 for the years ended December 31, 2005 and
      2004,
      respectively. These amounts are included in technology and content expense
      in
      the accompanying consolidated statements of operations.




***Software
      Development Costs -*** The
      Company capitalizes software development costs incurred to develop certain
      of
      the Company’s products in accordance with Financial Accounting Standards No. 86,
“Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise
      Marketed” (SFAS 86). Costs are capitalized only after the technological
      feasibility of the project has been established. In accordance with Statement
      of
      Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets”
(SFAS No.142), the Company has recorded its software development costs as a
      definite-lived intangible asset and is amortizing these costs over the
      three-year estimated useful life of the software. All other costs to develop
      software, either in the preliminary project stage or post implementation stage
      are expensed as incurred.






**-
          37 -**




**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




***Notes
      to Consolidated Financial Statements***




**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED**




***Fair
      Value of Financial Instruments.*** The
      carrying amount of cash and cash equivalents, loan receivable, accounts payable,
      and other current liabilities approximates fair value because of the short
      maturity of those instruments.




***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, and, accordingly, will
      be adopted by us in the first quarter of calendar year 2006. The adoption of
      this new statement will have no effect until share-based compensation is issued
      by the Company.




**NOTE
      3 - BASIS OF PRESENTATION - AS RESTATED**




The
      Company’s consolidated financial statements have been prepared assuming the
      Company will continue as a going concern. The Company has experienced net losses
      since February 16, 1999 (date of inception), which losses have caused an
      accumulated deficit of approximately $37,600,000 as of December 31, 2005.
      In addition, the Company has consumed cash in its operating activities of
      approximately $376,000 and $1,001,000 for the years ended December 31, 2005
      and 2004, respectively. These factors, among others, raise substantial doubt
      about the Company’s ability to continue as a going concern.




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




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




**NOTE
      4 - DISCONTINUED OPERATIONS - AS RESTATED**




*Acquisition
      of Leather Craft* .
      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.




**-
          38 -**




**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




***Notes
      to Consolidated Financial Statements***




**NOTE
      4 - DISCONTINUED OPERATIONS (CONTINUED) - AS RESTATED**




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




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




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




*Discontinued
      Operations* .
      In
      November 2004, the Company decided to discontinue the operations of Leather
      Craft and Game Fore Golf, due to significantly fewer orders than expected for
      leather goods from Leather Craft’s largest customer (the Company’s leather goods
      product segment). As a result of this the Company recorded a gain from
      discontinued operations of $13,200 and a loss from discontinued operations
      of
      $306,094 as of December 31, 2005 and 2004, respectively. The loss from
      discontinued operations in 2004 includes a loss of $108,400 which was all
      goodwill associated with the purchase of Leather Craft and Game Fore Golf.
      The
      remaining loss corresponds to operations for the year ended December 31, 2004.




**NOTE
      5 - LOAN RECEIVABLE**




During
      2005, the Company loaned Delta Insights, LLC the principal sum of $10,000.
      The
      loan bears interest at 10%, was due and paid in full on January 18, 2006.
      Subsequent to the issuance of the loan, the Company closed a significant
      software purchase with the borrower. See Note 12.




**NOTE
      6 - OTHER CURRENT LIABILITIES**




Other
      current liabilities consist of the following as of December 31, 2005:




Accrued
                payroll
            $
            12,537Accrued
                interest
            
            977Accrued
                director fees
            
            24,000Other
            
            2,811$
            40,325







**-
          39 -**







**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




***Notes
      to Consolidated Financial Statements***




**NOTE
      7 - NOTES PAYABLE - STOCKHOLDERS**




Notes
      payable stockholders are summarized as follows as of December 31, 2005:




Unsecured
                Promissory note payable to Burns Family Trust for $200,000 including
                interest at a fixed rate of 11%. The maturity date is April 2006
                at which
                time all principal and interest is due. As additional consideration,
                50,000 shares of stock will be delivered (see Note 9).
            
            $
            200,000Unsecured
                Promissory note payable to Ken Hall for $50,000 including interest
                at a
                fixed rate of prime plus 8% (15% at December 31, 2005). The note
                holder
                has the sole option of converting the principle represented by this
                note
                into our common stock at a strike price equal to a 50 percent discount
                to
                the average closing bid price of the stock 10 days immediately prior
                to
                the conversion (see Note 9). The maturity date is December 2006 at
                which
                time all principal and interest is due.
            
            
            50,000250,000Less:
                current portion
            
            
            250,000$
            —






**NOTE
      8- INCOME TAXES-AS RESTATED**




At
      December 31, 2005, the Company had net operating loss carryforwards for
      income tax purposes of approximately $37,452,000 available as offsets against
      future taxable income. The net operating loss carryforwards are expected to
      expire at various times from 2019 through 2025.




The
      tax
      effects of the primary temporary differences giving rise to the Company’s
      deferred tax assets and liabilities are as follows for the year ended
      December 31, 2005:




**2005**Deferred
                tax assets:Net operating loss carryforward
            $
            14,093,266Start-up costs
            
            4,265Stock
                based compensation
            
            23,315Total deferred tax assets
            
            14,120,846Deferred
                tax liabilities:Depreciation
            
            (1,512
            )Net deferred tax assets
            
            14,122,358Less
                valuation allowance
            
            (14,122,358
            )Net deferred tax asset
            $
            —




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, 2005, the increase in
      deferred tax asset valuation allowance amounted to approximately $693,000.





**-
          40 -**


**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




***Notes
      to Consolidated Financial Statements***




**NOTE
      8- INCOME TAXES (CONTINUED)-AS RESTATED**




U.S.
      tax
      rules impose limitations on the use of net operating losses and tax credits
      following certain defined changes in stock ownership under Section 382 of the
      Internal Revenue Code and the accompanying Treasury Regulations. Calculating
      the
      impact of Section 382 would be a very costly and time consuming process. By
      completing this calculation, we would be required to include a valuation
      allowance for the amount of net operating losses limited by Section 382. Since
      we currently offset 100% of our deferred asset with a valuation allowance,
      we
      believe we do not need to complete this calculation until such time we become
      profitable and are required to for the filing of our federal income tax return
      in a profitable year.






**NOTE
      9- STOCKHOLDER’S EQUITY - AS RESTATED**




***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.




***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.




*2002
      Warrants* .
      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 and expire from April to May of 2007.




*2004
      Secured Promissory Note* .
      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 note holder had the sole option of
      converting the principal represented by this note into the Company’s 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. As a result of this beneficial conversion feature, the Company
      recognized interest expense of $600,000 during the year ended December 31,
      2004. The note holder may convert all or any part of the principal represented
      by this note. As part of the same transaction, the note holder acquired a
      warrant, issued by the Company, to purchase 50,000 shares of the Company’s
      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.







**-
          41 -**


**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




***Notes
      to Consolidated Financial Statements***




**NOTE
      9- STOCKHOLDER’S EQUITY (CONTINUED) - AS RESTATED**




*2004
      Private Placement* .
      Commencing on or about August 14, 2004, the Company offered $1,500,000 in
      $0.30 units. Each unit consisted 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.
      The Company 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.




*2005
      Secured Promissory Notes* .
      On
      July 7, 2005, the Company sold in a private placement, secured promissory
      notes in the amounts of $5,000 and $10,000 to two stockholders. The note holder
      has the sole option of converting the principal represented by this note into
      our common stock at a strike price equal to a 50 percent discount to the average
      closing bid price of the stock for the ten days immediately prior to the
      conversion. Due to the beneficial conversion feature of these notes, the Company
      charged $15,000 to interest expense during the year ended December 31,
      2005. On November 28, 2005 we issued 129,595 shares of our common stock to
      satisfy the principal and accrued interest of the $10,000 promissory note.
      On
      December 6, 2005 we issued 57,076 shares of our common stock to satisfy the
      principal and interest of the $5,000 promissory note.




The
      Company sold, in a private placement, secured promissory notes in the amounts
      of
      $200,000 (the “November 2005 Loan”) and $50,000 to two stockholders in November
      and December of 2005, respectively. At maturity, in addition to the payment
      of
      principal and accrued interest, the Company will deliver, as additional
      incentive for making the November 2005 Loan, 50,000 shares of our common stock.
      These shares will be restricted securities, as defined by the Securities Act
      of
      1933, as Amended. The November 2005 Loan agreement became effective on November
      15, 2005, at which time our stock was trading at $0.10 per share. As a result,
      $5,000 will be amortized as interest expense over the life of the loan. The
      $50,000 note payable has a conversion feature for which the Company recognized
      $50,000 to interest expense during the year ended December 31, 2005 as a
      result of the beneficial conversion feature. As of December 31, 2005, the
      unamortized portion of $3,500 is included in prepaid expenses in the
      accompanying consolidated balance sheet. In addition, $1,500 has been charged
      to
      interest expense for the year ended December 31, 2005 in the accompanying
      consolidated statement of operations.




Also,
      as
      part of the November 2005 Loan agreement, the broker acquired a warrant as
      compensation, issued by the Company, to purchase 50,000 shares of common stock
      at $0.50 per share and the warrant is exercisable at issuance. The fair value
      of
      the warrant amounts to $2,300 based on the Black-Scholes pricing model and
      will
      be amortized over the life of the loan. The Company used the following
      assumptions in determining this value:




Risk-free
                rate
            4.5
            %Expected
                life
            3 yearsVolatility
            121
            %Dividend
                Yield
            0
            %




As
      of
      December 31, 2005, the unamortized portion of $1,600 is included in prepaid
      expenses in the accompanying consolidated balance sheet. In addition, $700
      has
      been charged to interest expense for the year ended December 31, 2005 in the
      accompanying consolidated statement of operations.







**-
          42 -**


**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




***Notes
      to Consolidated Financial Statements***




**NOTE
      9- STOCKHOLDER’S EQUITY, CONTINUED**




**Year**
            
            **Warrant
                Type**
            
            **Warrant**
              **Shares**
            
            
            **Exercise**
              **Price**
            
            **Expiration
                Date**
            
            **Net**
              **Proceeds**2002
            
            Class
                A warrants
            
            1,220,000
            
            
            $
            1.00
            
            April - May 20072003
            
            Class
                A warrants cancelled
            
            (160,000
            )2003
            
            Class
                A warrants exercised
            
            (63,000
            )
            
            
            1.00
            
            
            
            $
            63,000997,0002002
            
            Class
                B warrants
            
            1,220,000
            
            
            
            1.50
            
            April - May
                20072002
            
            Class
                B warrants cancelled
            
            (160,000
            )Total
                Class B warrants outstanding
            
            1,060,000Total
                Notes payable warrants outstanding
            
            —Convertible
                Notes payable warrants
            
            744,505
            
            
            
            1.50
            
            June
                20062004
            
            Notes
                payable warrants
            
            50,000
            
            
            
            0.92
            
            None2004
            
            Private
                placement warrants
            
            3,718,491
            
            
            
            0.75
            
            Aug. - Oct. 20072005
            
            Broker
                warrants
            
            50,000
            
            
            
            0.50
            
            Dec.
                2008Total
                warrants outstanding
            
            6,619,996Total
                proceeds from warrants exercised
            
            
            
            
            
            
            
            
            
            $
            63,000




**NOTE
      10- RESTRICTED STOCK BASED COMPENSATION**




On
      June 10, 2003, the Board of Directors adopted the Horizon Holding
      Corporation 2003 Restricted Stock Plan (the “2003” Plan”) and it was approved by
      our stockholders 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, 2005, 1,354,000 shares have been issued
      under this Plan.




**NOTE
      11 - COMMITMENTS AND CONTINGENCIES**




***Gain
      on Extinguishment of Debt.*** Gain on
      extinguishment of debt was $3,374 and $310,125 for 2005 and 2004, respectively.
      This gain was the result of our determination that these amounts were not owed
      for these obligations in 2005 and 2004 or were obtained through negotiations
      with our vendors and were legally released from these agreements in the
      corresponding year.






**-
          43 -**


**INVERTED
      PARADIGMS CORPORATION AND SUBSIDIARIES**




***Notes
      to Consolidated Financial Statements***




**NOTE
      12 - SUBSEQUENT EVENTS**




*Resignation
      of Chief Executive Officer.* On
      January 31, 2006, Dwain Brannon resigned from the positions of Chief
      Executive Officer, Secretary and Director of the Company.




*Software
      Purchase* .
      The
      Company closed a Software Purchase and Development Agreement with Delta
      Insights, LLC. to purchase its Silent Sword software and all trademarks, service
      marks, and logos. As of March 30, 2006, we have issued a total of 10,000,000
      shares of our common stock for Silent Sword TM .
      Under
      the purchase agreement, we may issue a maximum of 20,000,000 common shares
      subject to certain provisions in the agreement. The stock issued is considered
      restricted securities as defined by the Securities Act of 1933, as amended.
      The
      Company plans on developing this as a new segment of business.




*Operating
      Lease.* On
      February 7, 2006, the Company committed to a non-cancelable operating lease
      on operating facilities which expires February 28, 2009. The following is a
      schedule of future minimum rental commitments, by year and in the aggregate,
      to
      be paid under this non-cancelable operating lease.






**For
                the year ending December 31,**2006
            $
            41,0002007
            
            49,2002008
            
            49,2002009
            
            8,200Total
            $
            147,600




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




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




**NOTE
      13 - RESTATEMENT**




The
      Company erroneously did not record interest expense in the amount of $65,000
      from the beneficial conversion feature of convertible promissory notes entered
      into in July 2005 and November 2005. In addition, the Company did not record
      interest expense of $600,000 from the beneficial conversion feature of a
      convertible promissory note entered into in 2004. Also, the Company erroneously
      did not record interest expense from the amortization of warrants issued as
      compensation and the amortization of the value of common stock to be issued
      as
      an inducement at the maturity of a promissory note entered into in November
      2005.




This
      created a restatement of interest expense from $1,538, as originally filed,
      to
      $68,738 and $97,279, as originally filed, to $697,279 on the amended
      consolidated statements of operations for the years ended December 31, 2005
      and
      2004, respectively. In addition, prepaid expenses have been restated to $9,267
      from $ 4,167, notes payable to stockholders to $255,000 from $250,000 due to
      the
      valuation of warrants; additional paid-in capital to $37,397,104 from
      $36,729,804 and accumulated deficit to $37,598,720 from $36,931,520 on the
      December 31, 2005 consolidated balance sheet.


**-
          44 -**