10-Q 1 ipa10q.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ----------------- FORM 10Q ----------------- (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2010 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________ to ___________ Commission file number: 000-53464 INTERNATIONAL PAINTBALL ASSOCIATION, INC. ----------------------------------------- (Exact name of registrant as specified in its charter) Colorado 20-1207864 -------- ------------ (State of Incorporation) (IRS Employer ID Number) 2600 E. Southlake Blvd, Ste 120-366, Southlake, TX 76092 ------------------------------------------------------------------- (Address of principal executive offices) 817-491-8611 ------------ (Registrant's Telephone number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [] Indicate by check mark whether the registrant is a large accelerated file, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] Indicate the number of share outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of August 17, 2010, there were 10,449,166 shares of the registrant's common stock outstanding.

PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Page ---- Balance Sheets - ~~March~~June 3130, 2010 and December 31, 2009 F-1 Statements of Operations - Three and Six months ended ~~March~~June 3130, 2010 and 2009 and From May 24, 2004 (Inception) to ~~March~~June 3130, 2010 F-2 Statements of Changes in Shareholders' Deficit - From May 24, 2004 (Inception) to ~~March~~June 3130, 2010 F-3 Statements of Cash Flows - ~~Three~~Six months ended ~~March~~June 3130, 2010 and 2009 and From May 24, 2004 (Inception) to ~~March~~June 3130, 2010 F-4 Notes to the Financial Statements F-5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 1 Item 3. Quantitative and Qualitative Disclosures About Market Risk - Not Applicable 3 Item 4. Controls and Procedures 3 Item 4T. Controls and Procedures 4 PART II - OTHER INFORMATION Item 1. Legal Proceedings -Not Applicable 54 Item 1A. Risk Factors - Not Applicable Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 54 -Not Applicable Item 3. Defaults Upon Senior Securities - Not Applicable 5 Item 4. Submission of Matters to a Vote of Security Holders - Not Applicable 5 Item 5. Other Information - Not Applicable 5 Item 6. Exhibits 5 SIGNATURES 6

PART I ITEM 1. FINANCIAL STATEMENTS

INTERNATIONAL PAINTBALL ASSOCIATION, INC. (A Development Stage Company) Balance Sheets ~~March~~June 3130, December 31, -------------------- 2010 2009 --------- --------- (Audited) ASSETS: Current Assets: Cash $ 227 $ 38 Accounts receivable 125 --------- --------- Total Current Assets ~~147~~132 38 Furniture & Fixtures (Net) - - --------- --------- Total Fixed Assets - - --------- --------- TOTAL ASSETS $ ~~147~~132 $ 38 ========= ========= LIABILITIES & STOCKHOLDERS' DEFICIT Current Liabilities Accounts Payable $ ~~208~~241,~~961~~639 $ 176,834 Accounts Payable, related parties 3644,~~032~~582 40,833 Accrued liabilities ~~104~~111,~~578~~427 95,743 Note payable 478,500 478,500 Notes payable, convertible 200,534 200,534 --------- --------- Total Current Liabilities 1,~~028~~076,~~605~~682 992,444 Stockholders' Deficit Common Stock, no par value; 100,000,000 shares authorized 10,449,166 issued and outstanding at ~~March~~June 3130, 2010 and December 31, 2009, respectively 930,358 930,358 Preferred Class A stock, no par value 240,000 shares authorized. No shares issued and outstanding at ~~March~~June 3130, 2010 and December 31, 2009, respectively - - Preferred Class B stock, no par value 1,600,000 shares authorized. No shares issued and outstanding at ~~March~~June 3130, 2010 and December 31, 2009- respectively - - Additional Paid-in Capital 124,371 124,371 Treasury Stock (40) (40) Deficit accumulated during the development stage (2,~~083~~131,~~147~~239)(2,047,095) --------- --------- Total Stockholders' Deficit (1,~~028~~076,~~458~~550) (992,406) --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ ~~147~~132 $ 38 ========= ========= The accompanying notes are an integral part of these financial statements. F-1

INTERNATIONAL PAINTBALL ASSOCIATION, INC. (A Development Stage Company) Statements of Operations (Unaudited) May 24, 2004 For the Three Months Ended For the Six Months Ended (Inception) to ~~March~~June 3130, ~~March~~June 3130, June 30, 2010 2009 2010 2009 2010 ------------- ---- --------- -------------- -------------- --------------- Revenue $ - $ 125 $ - $ 63,848 Cost of Goods Sold - - - - 36,479 ------------- ---- --------- -------------- -------------- --------------- Gross Profit - - 125 - 27,369 Amortization and Depreciation - - 60 8,364 Write offs - - - - 109,415 General and administrative 2335,~~738~~844 3730,~~870~~583 58,582 67,654 1,~~827~~862,~~475~~319 ------------- ---- --------- -------------- -------------- --------------- Total Expenses 2335,~~738~~844 3730,~~930~~583 58,582 67,714 1,~~945~~980,~~254~~098 ------------- ---- --------- -------------- -------------- --------------- Net Operating Loss (2335,~~613~~844) (3730,~~930~~583) (58,457) (67,714) (1,~~917~~952,~~885~~729) ------------- ---- --------- -------------- -------------- --------------- Other Income (Expense) Miscellaneous Income - - - - 4,052 Gain on debt settlement - - - 15,100 Interest (12,~~439~~247) (912,~~472~~586) (~~184~~25,~~414~~687) (22,058) (197,662) ------------- ---- --------- -------------- -------------- --------------- Total Other Income (Expense) (12,~~439~~247) (912,~~472~~586) (~~165~~25,~~262~~687) (22,058) (178,510) Net Loss $ (3648,~~052~~091) $ (4743,~~402~~169) $ (84,144) $ (89,772) $(2,~~083~~131,~~147~~239) ============= ==== ========= ============== ============== =============== Net Income/Loss per common share equivalent $ (0.00) $ (0.00)) $ (0.01) $ (0.01)) ============= ============= ============== ============== Weighted average number of common shares equivalent outstanding 10,449,166 10,449,166 10,449,166 10,449,166 ============= ============= ============== ============== * Less than ($0.01) per share. The accompanying notes are an integral part of these financial statements. F-2

INTERNATIONAL PAINTBALL ASSOCIATION, INC. (A Development Stage Company) Statement of Stockholders' Equity (Deficit) From May 24, 2004 (Inception) through ~~March~~June 3130, 2010 (Unaudited) Additional Deferred Common Stock Preferred A Stock Preferred B Stock Paid-in Offering # of Shares Amount # of Shares Amount # of Shares Amount Capital Expense ----------- ----------- ---------- ----------- --------- ----------- --------- ----------- Balances - May 24, 2004 - $ - - $ - - $ - $ - $ - June 2004 Stock issued for assets 200,000 100,000 June 2004 Stock issued for cash 8,000 1,000 June 2004 Stock issued for cash 240,000 30,000 139,000 69,500 Aug 2004 H Hill accrued salary 166,666 20,833 settlement for stock Deferred options 50,714 (3,720) Net Loss for period ----------- ---------- ---------- ---------- --------- --------- --------- --------- Balance - December 31, 2004 374,666 121,833 240,000 30,000 139,000 69,500 50,714 (3,720) Stock for services, several @$.10-$.50 1,958,000 343,000 Stock for debt/settlement, several 235,000 117,500 @ $.50 Stock for interest, several @ $0.01 450,000 4,500 Treasury stock (200,000) Deferred Offering Expense - Vested Options 882 Vested options - Cancellations (2,722) 2,722 Paid-in Capital RP Debt Cancellation 76,379 Net Loss for period ----------- ---------- ---------- ---------- --------- --------- --------- --------- Balance - December 31, 2005 2,817,666 586,833 240,000 30,000 139,000 69,500 124,371 (116) Stock for services, several @ $.50 350,000 175,000 Stock for interest, several @ $various 2,382,500 23,825 Deferred Offering Expense - Vested Options 116 Net Loss for period ----------- ---------- ---------- ---------- --------- --------- --------- --------- Balance - December 31, 2006 5,550,166 785,658 240,000 30,000 139,000 69,500 124,371 - Stock for interest, several @ $.01 2,060,000 20,600 Stock for services, several @ $.01 300,000 3,000 Net Loss for period ----------- ---------- ---------- ---------- --------- --------- --------- --------- Balance - December 31, 2007 7,910,166 809,258 240,000 30,000 139,000 69,500 124,371 - Stock for interest, several @ $.01 @3/31/08 200,000 2,000 Stock for interest, several @ $.01 @6/30/08 170,000 1,700 Stock for interest, several @ $.01 @9/30/08 640,000 6,400 Stock for interest, several @ $.01 @12/31/08 200,000 2,000 Stock for services, several @ $.01 @ 3/31/08 700,000 7,000 Stock for services, several @ $.01 @ 9/30/08 250,000 2,500 03/12/08 Conversion of Class A & B to common by Directors Meeting, one for one 379,000 99,500 (240,000) (30,000) (139,000) (69,500) Net Loss for period ----------- ---------- ---------- ---------- --------- --------- --------- --------- Balances - December 31, 2008 10,449,166 930,358 - - - - 124,371 - Net Loss for period ----------- ---------- ---------- ---------- --------- --------- --------- --------- Balances - December 31, 2009 10,449,166 930,358 - - - - 124,371 - Net loss for the period - - - - - - - - ----------- ---------- ---------- ---------- --------- --------- --------- --------- Balances - ~~March~~June 3130, 2010 10,449,166 $930,358 - $ - - $ - $124,371 $ - =========== ========== ========== ========== ========= ========= ========= ========= The accompanying notes are an integral part of these financial statements. F-3

INTERNATIONAL PAINTBALL ASSOCIATION, INC. (A Development Stage Company) Statement of Stockholders' Equity (Deficit) From May 24, 2004 (Inception) through ~~March~~June 3130, 2010 (Unaudited) (continued) Deficit Accum. During Treasury the Development Stock Stage Totals --------- ----------- ------------ Balances - May 24, 2004 $ - $ - $ - June 2004 Stock issued for assets 100,000 June 2004 Stock issued for cash 1,000 June 2004 Stock issued for cash 99,500 Aug 2004 H Hill accrued salary 20,833 settlement for stock - Deferred options 46,994 - Net Loss for period (326,910) (326,910) --------- ----------- ------------ Balance - December 31, 2004 - (326,910) (58,583) Stock for services, several @$.10-$.50 343,000 Stock for debt/settlement, several 117,500 @ $.50 - Stock for interest, several @ $0.01 4,500 Treasury stock (40) (40) Deferred Offering Expense - Vested Options 882 Vested options - Cancellations - Paid-in Capital RP Debt Cancellation 76,379 - Net Loss for period (690,979) (690,979) --------- ----------- ------------ Balance - December 31, 2005 (40) (1,017,889) (207,341) Stock for services, several @ $.50 175,000 Stock for interest, several @ $various 23,825 Deferred Offering Expense - Vested Options 116 Net Loss for period (363,762) (363,762) --------- ----------- ------------ Balance - December 31, 2006 (40) (1,381,651) (372,162) Stock for interest, several @ $.01 20,600 Stock for services, several @ $.01 3,000 Net Loss for period (310,999) (310,999) --------- ----------- ------------ Balance - December 31, 2007 (40) (1,692,650) (659,561) Stock for interest, several @ $.01 @3/31/08 2,000 Stock for interest, several @ $.01 @6/30/08 1,700 Stock for interest, several @ $.01 @9/30/08 6,400 Stock for interest, several @ $.01 @12/31/08 2,000 Stock for services, several @ $.01 @ 3/31/08 7,000 Stock for services, several @ $.01 @ 9/30/08 2,500 03/12/08 Conversion of Class A & B to common by Directors Meeting, one for one - Net Loss for period (205,597) (205,597) --------- ----------- ------------ Balances - December 31, 2008 (40) (1,898,247) (843,558) Net Loss for period (148,848) (148,848) --------- ----------- ------------ Balances - December 31, 2009 (40) (2,047,095) (992,406) Net loss for the period - (3684,~~052~~144) (3684,~~052~~144) --------- ----------- ------------ Balances - ~~March~~June 3130, 2010 $ (40) $(2,~~083~~131,~~147~~239) $(1,~~028~~076,~~458~~550) ========= =========== ============ The accompanying notes are an integral part of these financial statements. F-4

INTERNATIONAL PAINTBALL ASSOCIATION, INC. (A Development Stage Company) STATEMENTS OF CASHFLOWS (Unaudited) May 24, 2004 For the ~~Three~~Six Months Ended (Inception) to ~~March~~June 3130, ~~March~~June 3130, 2010 2009 2010 ----------------- ----------------- ----------------- Cash Flows from Operating Activities Net Profit (Loss) $ (3684,~~052~~144) $ (4789,~~402~~772) $ (2,~~083~~131,~~147~~239) Depreciation - 6260 8,364 Compensatory stock issuances - - 591,525 Option expense - 47,992 Write offs - 109,415 Adjustments to reconcile net loss to net cash used by operating activities Changes in operating assets and liabilities Bank overdraft - ~~406~~270 - Increase in Accounts Payable - related party 3,749 3,749 Increase in Accounts Payable and accrued liabilities 3680,~~161~~489 4689,~~934~~442 ~~665~~709,~~479~~807 ~~----------------- ----------------- -----------------~~ (Increase) / Decrease receivables and accruals (125) - 46,798 ----------------- ----------------- ----------------- Net Cash Flows Used by Operating Activities (1631) - (613,~~574~~589) ----------------- ----------------- ----------------- Cash Flows from Investing Activities Acquisition of Fixed Assets - - (8,364) Notes receivable - - 12,000 ----------------- ----------------- ----------------- Net Cash Flows Provided (Used) by Investing Activities - - 3,636 ----------------- ----------------- ----------------- Cash Flows from Financing Activities Funds received from note payables - - 561,450 Payments of note payables - - (51,950) Sales of common stock - - 100,500 Repurchase of treasury stock - - (40) ----------------- ----------------- ----------------- Net Cash Flows Provided by Financing Activities - - 609,960 ----------------- ----------------- ----------------- Net Increase (Decrease) in Cash (1631) - 227 ----------------- ----------------- ----------------- Cash at Beginning of Period 38 - - ----------------- ----------------- ----------------- Cash at End of Period $ 227 $ - $ 227 ================= ================= ================= Supplemental Disclosure of Cash Flow Information Cash paid for interest $ - $ - $ 15,129 ================= ================= ================= Cash paid for taxes $ - $ - $ - ================= ================= ================= Supplemental Disclosure of Non-Cash Investing and Financing Activities: Common stock issued for services $ - $ 9,500 $ 530,500 ================= ================= ================= Common stock issued for interest $ - $ 16,100 $ 61,025 ================= ================= ================= Common stock issued for assets $ - $ - $ 100,000 ================= ================= ================= Debt converted to capital $ - $ - $ 214,712 ================= ================= ================= Accounts payable transferred to convertible note payable $ - $ - $ 200,534 ================= ================= ================= The accompanying notes are an integral part of these financial statements. F-5

INTERNATIONAL PAINTBALL ASSOCIATION, INC. (A Development Stage Company) Notes to the Financial Statements For the Six Months Ended June 30, 2010 (Unaudited) NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 4-G Paintball, Inc. was incorporated in the State of Texas on May 24, 2004, and on September 16, 2008 was redomiciled as a Colorado corporation through a one for one share exchange with its wholly owned subsidiary International Paintball Association, Inc., which was incorporated in the State of Colorado on June 19, 2008. 4-G Paintball, Inc. and International Paintball Association, Inc. are referred to hereinafter as (the "Company"). The Company was organized to further the interest and participation in the sport of paintball competition and to operate paintball competition arenas. Also, the Company may pursue any other lawful business opportunity as decided upon by the board of directors. The Company's fiscal year end is December 31st. Basis of presentation - development stage company ------------------------------------------------- The Company has not earned significant revenues from limited operations. Accordingly, the Company's activities have been accounted for as those of a Development Stage Enterprise. Among the disclosures are that the Company's financial statements be identified as those of a development stage company, and that the statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception. Reclassification of prior year amounts -------------------------------------- Certain prior year accounts have been reclassified to reflect current year's presentation. Interim Accounting ------------------ The accompanying unaudited condensed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the six months ended June 30, 2010 are not necessarily indicative of results that may be expected for the year ending December 31, 2010. The condensed financial statements are presented on the accrual basis. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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. F-6 Cash and cash equivalents ------------------------- The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. Accounts receivable ------------------- The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At June 30, 2010 and December 31, 2009, the Company had no balance in its allowance for doubtful accounts. Property and equipment ---------------------- Property and equipment are recorded at cost and depreciated under straight line methods over each item's estimated useful life. The Company uses a five year life for furniture and fixtures, and three years for computer equipment. Revenue recognition ------------------- Revenue is recognized on an accrual basis after services have been performed or products sold under contract terms, the price to the client is fixed or determinable, and collectability is reasonably assured. Advertising costs ----------------- Advertising costs are expensed as incurred. The Company did not record any advertising costs during the three and six months ended June 30, 2010. Net income (loss) per share --------------------------- The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share. Financial Instruments --------------------- The carrying value of the Company's financial instruments, as reported in the accompanying balance sheets, approximates fair value. F-7 Long-Lived Assets ----------------- In accordance with FASB ASC No.'s 350 and 360, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value. Segment information ------------------- The Company is structured to operate primarily in a single operating segment, namely the competition arena of paintball sports and the furthering of private and commercial interests in the activity. Stock based compensation ------------------------ The Company follows FASB Accounting Standards Codification No. 718 - Compensation - Stock Compensation for share based payments to employees. The Company follows FASB Accounting Standards Codification No. 505 for share based payments to Non-Employees, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Recent Accounting Pronouncements -------------------------------- In October 2009, the Financial Accounting Standards Board ("FASB") issued an Accounting Standard Update ("ASU") No. 2009-13, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services separately rather than as a combined unit and modifies the manner in which the transaction consideration is allocated across the separately identified deliverables. The ASU significantly expands the disclosure requirements for multiple-deliverable revenue arrangements. The ASU will be effective for the first annual reporting period beginning on or after June 15, 2010, and may be applied retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the adoption date. Early adoption is permitted, provided that the guidance is retroactively applied to the beginning of the year of adoption. The Company does not expect the adoption of ASU No. 2009-13 to have any effect on its financial statements upon its required adoption on January 1, 2011. There were various other accounting standards and interpretations issued, none of which are expected to have a material impact on the Company's financial position, operations or cash flows. NOTE 2. GOING CONCERN The Company has suffered recurring losses from operations and has a working capital deficit and stockholders' deficit, and in all likelihood will be required to make significant future expenditures in connection with continuing marketing efforts along with general administrative expenses. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from individuals and financial institutions. By doing so, the Company hopes through increased marketing efforts to generate revenues from the operation of competition paintball arenas and sales of related products. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. F-8 NOTE 3. FIXED ASSETS Fixed asset values recorded at cost are as follows: June 30, December 31, 2010 2009 ---- ---- Computer equipment $ 4,622 $ 4,622 Furniture and fixtures 3,742 3,742 ----------- ------------ 8,364 8,364 Less accumulated depreciation (8,634) (8,634) ------------ ------------ Total $ - $ - ============ ============ During the year ended December 31, 2009, the Company fully depreciated its fixed assets. NOTE 4. NOTES PAYABLE At June 30, 2010 and December 31, 2009, the Company had $478,500 in outstanding notes payable to various individuals, unsecured, bearing interest at 6% - 9% per annum, due in full on term expiration, with all amounts at each date either presently due or due within one year. The Company incurred interest expense under the notes during the three and six months ended June 30, 2010 of $9,577 and $19,050, respectively. Accrued interest at June 30, 2010 and December 31, 2009 amounted to $105,700 and $86,651, respectively. NOTE 5. NOTES PAYABLE, CONVERTIBLE In April 2009, a related party owed $200,534 for accounts payable agreed to convert the amount owed to it into a Convertible Promissory Note. The Convertible Promissory note is unsecured, has an interest rate of 6% and a due date of April 10, 2010. The promissory note provides the holder with the right to convert part or all of the outstanding principal and/or interest into shares of the Company's common stock at a rate of $0.50 per share. At June 30, 2010 and December 31, 2009, $200,534 was outstanding. During the three and six months ended June 30, 2010 interest expense was $2,670 and $5,636, respectively. Accrued interest at June 30, 2010 and December 31, 2009 amounted to $8,736 and $14,373 respectively. NOTE 6. STOCKHOLDERS' EQUITY Common stock ------------ The Company has 100,000,000 shares of authorized common stock, no par value, with 10,449,166 shares issued and 10,249,166 shares outstanding as of June 30, 2010 and December 31, 2009 with 200,000 shares in treasury at each date. Stock options ------------- At June 30, 2010, the Company had stock options outstanding as described below. F-9 Non-employee stock options The Company accounts for non-employee stock options under FASB Accounting Standards Codification No. 505 whereby option costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Unless otherwise provided for, the Company covers option exercises by issuing new shares. The Company has no non-employee stock options outstanding. Employee stock options ---------------------- The Company accounts for employee stock options under FASB Accounting Standards Codification No. 718 - Compensation - Stock Compensation. Unless otherwise provided for, the Company covers option exercises by issuing new shares. At the beginning of 2010 the Company had 5,000 options outstanding and exercisable. During the six months ended June 30, 2010, no options were granted, exercised or cancelled, leaving a balance at June 30, 2010 of 5,000 outstanding employee stock options. NOTE 7. CONTINGENCIES A law firm which has represented the Company on various matters, has asserted that the Company owes the firm approximately $13,000 more in legal fees than the Company has recorded. The Company and the law firm are currently in discussions over what, if any additional fees are owed. A former director claims the Company owes her an additional $24,425 over what the Company has recorded. The Company disputes the assertion. NOTE 8. SUBSEQUENT EVENTS The Company evaluated events through August __, 2010 for subsequent events to be included in its June 30, 2010 financial statements herein, and has determined that there are no subsequent events that require disclosure. F-10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward-looking statements. The independent registered public accounting firm's report on the Company's financial statements as of December 31, 2009, and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph, that describes substantial doubt about the Company's ability to continue as a going concern. OPERATIONS Business Overview International Paintball Association (the Company) was formed for the purpose of providing services and products in connection with paintball sport activities. Paintball sport activities are those activities by persons who are using paintball equipment and accessories for entertainment in various interactions with other paintball enthusiasts whether organized formally or in ad hoc activities. The Company's primary activities to date have consisted of organizing the company, designing a business plan and obtaining public reporting status with the Securities Exchange Commission (SEC). The Company has not engaged any vendors, at the time of this filing. The independent registered public accounting firm's report on the Company's financial statements as of December 31, 2009, and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph, that describes substantial doubt about the Company's ability to continue as a going concern. The Company is dependent on raising additional equity and/or, debt to fund any negotiated settlements with its outstanding creditors and meet the Company's ongoing operating expenses. There is no assurance that International Paintball will be able to raise the necessary equity and/or debt that it will need to be able to negotiate acceptable settlements with its outstanding creditors or fund its ongoing operating expenses. International Paintball cannot make any assurances that it will be able to raise funds through such activities. RESULTS OF OPERATIONS For the Three Months Ended June 30, 2010 Compared to the Three Months Ended June 30, 2009 1 During the three months ended June 30, 2010 and 2009, we did not recognize any revenues from our operations. During the three months ended June 30, 2010, we incurred an operational loss of $35,844 compared to $30,583 during the three months ended June 30, 2009. The increase of $5,261 was a result of the increase in general and administrative expenses as a result of the Company's activities in maintaining its public reporting status. During the three months ended June 30, 2010, we incurred a net loss of $48,091 compared to $43,169 during the three months ended June 30, 2009. The increase of $4,922 is a result of the $5,261 increase in operational expenses offset by a $339 decrease in interest expense. For the Six Months Ended June 30, 2010 Compared to the Six Months Ended June 30, 2009 During the six months ended June 30, 2010, we recognized revenue of $125 from our operational activities. During the six months ended July 30, 2009, we did not recognize any revenues from our operations. During the six months ended June 30, 2010, we incurred an operational loss of $58,457 compared to $67,714 during the six months ended June 30, 2009. The decrease of $9,257 was a result of the $9,072 decrease in general and administrative expenses as a result of the Company's limited operational activities. During the six months ended June 30, 2010, we incurred a net loss of $84,144 compared to $89,772 during the six months ended June 30, 2009. The decrease of $5,628 is a result of the $9.072 decrease in operational expenses offset by a $3,629 increase in interest expenses. LIQUIDITY At June 30, 2010, we had current assets of $132, consisting of cash $7 and accounts receivable of $125, we had total current liabilities of $1,076,282, consisting of accounts payable of $286,221, $111,427 in accrued expenses and liabilities, $478,500 in promissory notes and $200,534 in convertible promissory notes. Our current liabilities exceed our current assets by $1,076,150 and we will be reliant upon shareholder loans or private placements of equity to fund any kind of operations. We have secured no sources of loans or private placements at this time. During the six months ended June 30, 2010, we used $16 in operational activities. During the six months ended June 30, 2010, we recognized a net loss of $84,144, which was not adjusted for any non-cash expenses. During the six months ended June 30, 2009, we did not use or receive funds from our operational activities. During the six months ended June 30, 2009, we recognized a net loss of $89,773, which was adjusted for depreciation of $61. During the six months ended June 30, 2010 and 2009, we did not use or receive any funds from investment activities. During the six months ended June 30, 2010 and 2009, we did not receive or use any funds from our financing activities. 2 At June 30, 2010 and December 31, 2009, the Company had $478,500 in outstanding notes payable to various individuals, unsecured, bearing interest at 6% - 9% per annum, due in full on term expiration, with all amounts at each date either presently due or due within one year. The Company incurred interest expense under the notes during the three and six months ended June 30, 2010 of $9,577 and $19,050, respectively. Accrued interest at June 30, 2010 and December 31, 2009 amounted to $105,700 and $86,651, respectively. In April 2009, a related party owed $200,534 for accounts payable agreed to convert the amount owed to it into a Convertible Promissory Note. The Convertible Promissory note is unsecured, has an interest rate of 6% and a due date of April 10, 2010. The promissory note provides the holder with the right to convert part or all of the outstanding principal and/or interest into shares of the Company's common stock at a rate of $0.50 per share. At June 30, 2010 and December 31, 2009, $200,534 was outstanding. During the three and six months ended June 30, 2010 interest expense was $2,670 and $5,636, respectively. Accrued interest at June 30, 2010 and December 31, 2009 amounted to $8,736 and $14,373 respectively. Short Term. On a short-term basis, we do not generate any revenue or revenues sufficient to cover operations. Based on prior history, we will continue to have insufficient revenue to satisfy current and recurring liabilities. For short term needs we will be dependent on receipt, if any, of offering proceeds. Capital Resources We have only common stock as our capital resource. We have no material commitments for capital expenditures within the next year, however if operations are commenced, substantial capital will be needed to pay for participation, investigation, exploration, acquisition and working capital. Need for Additional Financing We do not have capital sufficient to meet our cash needs. We will have to seek loans or equity placements to cover such cash needs. No commitments to provide additional funds have been made by our management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not Applicable ITEM 4. CONTROLS AND PROCEDURES Disclosures Controls and Procedures 3 We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure. As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer, has concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of the deficiency in our internal control over financial reporting discussed below. ITEM 4T. CONTROLS AND PROCEDURES Management's Quarterly Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made on in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management's assessment of the effectiveness of the registrant's internal control over financial reporting is as of the quarter ended June 30, 2010. In making this assessment, Management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control--Integrated Framework. Management believes that internal control over financial reporting is effective. The Company has not identified any, current material weaknesses, considering the nature and extent of the Company's current operations and any risks or errors in financial reporting under current operations. 4 This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm. There was no change in our internal control over financial reporting that occurred during the quarter ended June 30, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS NONE. ITEM 1A. RISK FACTORS Not Applicable to Smaller Reporting Companies. ITEM 2. CHANGES IN SECURITIES NONE. ITEM 3. DEFAULTS UPON SENIOR SECURITIES NONE. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE. ITEM 5. OTHER INFORMATION NONE. ITEM 6. EXHIBITS Exhibits. The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K. Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act Exhibit 32.1 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act 5 SIGNATURES Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTERNATIONAL PAINTBALL ASSOCIATION, INC. (Registrant) Dated: November 16, 2010 By: /s/ Brenda Webb --------------- Brenda Webb (Acting Chief Executive Officer and Acting Principal Accounting Officer) 6

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