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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-QSB þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2004 33-5203-D
(Commission File Number) BOUNDLESS MOTOR SPORTS RACING, INC.  Colorado
(State or other jurisdiction of
Incorporation)
    
    84-0953839
(IRS Employer Identification No.)
 2500 McGee Drive, Suite 147
Norman, Oklahoma 73072
(Address of principal executive offices) (Zip Code) Issuer telephone number, including area code: (405) 360-5047 Indicate by check mark whether the issuer (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 the filing
requirements for at least the past 90 days. þ  Yes     o  No Transitional Small Business Disclosure Format:   o  Yes     þ  No As of May 27, 2004, 17,432,168 of the Issuers $.0001 par value common stock
were outstanding.




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TABLE OF CONTENTS PAGEPART I  FINANCIAL INFORMATIONITEM 1. CONSOLIDATED FINANCIAL STATEMENTSConsolidated Balance Sheets as of March 31, 2004 (Unaudited) and
September 30, 2003 (Audited)
    
    
    3Consolidated Statement of Operations for the Three Months Ended March 31, 2004 (Unaudited)
    
    
    4Consolidated Statement of Operations for the Six Months Ended March 31, 2004 (Unaudited)
    
    
    5Consolidated Statement of Shareholders Equity (Deficit) for the Six Months Ended March 31, 2004 (Unaudited)
    
    
    6Consolidated Statement of Cash Flows for the Six Months Ended March 31, 2004 (Unaudited)
    
    
    7Notes to Consolidated Financial Statements (Unaudited)
    
    
    8ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    16ITEM 3. CONTROLS AND PROCEDURES
    
    
    19PART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDING
    
    
    20ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
    
    
    20SIGNATURES
    
    
    22Asset Purchase AgreementAmendmentCredit AgreementPromissory NoteSecurity AgreementPromissory Note (SX)Extension AgreementCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906
  2




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Boundless Motor Sports Racing, Inc.
Consolidated Balance Sheets
As of March 31, 2004 and September 30, 2003 (Unaudited)
    
    (Audited)March 31, 2004
    
    September 30, 2003AssetsCurrent AssetsCash
    
    $
    18,062
    
    
    $
    615Inventory
    
    
    52,475
    
    
    
    Notes receivable
    
    
    
    
    
    
    612,047Prepaid expense
    
    
    60,381
    
    
    
    9,047Other current assets
    
    
    99,596
    
    
    
    Total Current Assets
    
    
    230,514
    
    
    
    621,709Deposits
    
    
    5,682,011
    
    
    
    Property and equipment, net
    
    
    230,796
    
    
    
    55,135Intangible assets
    
    
    5,049,628
    
    
    
    23,429Other assets
    
    
    675
    
    
    
    6,109Total Assets
    
    $
    11,193,624
    
    
    $
    706,382LiabilitiesCurrent LiabilitiesAccounts payable trade
    
    $
    450,092
    
    
    $
    305,651Accrued liabilities
    
    
    363,868
    
    
    
    46,113Deferred revenue
    
    
    606,545
    
    
    
    Notes payable
    
    
    6,217,196
    
    
    
    656,659Total Current Liabilities
    
    
    7,637,701
    
    
    
    1,008,423Shareholders Equity (Deficit)Preferred Stock: $0.01 par value;
10,000,000 shares
authorized, none
issued and
outstanding
    
    
    
    
    
    
    Common Stock: $0.0001 par value;
100,000,000 shares
authorized,
17,382,168 and
15,740,500 issued
and outstanding on
March 31, 2004 and
September 30, 2003,
respectively
    
    
    1,738
    
    
    
    1,574Additional paid in capital
    
    
    5,095,842
    
    
    
    171,002Accumulated Deficit
    
    
    (1,541,657
    )
    
    
    (474,617
    )Total Shareholders Equity (Deficit)
    
    
    3,555,923
    
    
    
    (302,041
    )Total Liabilities and Shareholders Equity (Deficit)
    
    $
    11,193,624
    
    
    $
    706,382
 The accompanying notes are an integral part of these consolidated financial statements. 3




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Boundless Motor Sports Racing, Inc.
Consolidated Statement of Operations
For the Three Months Ended March 31, 2004
(Unaudited) RevenueSanction and entry fees
    
    $
    190,582Sponsorship and advertising
    
    
    20,455Merchandise sales
    
    
    92,377Other
    
    
    9,449Total revenues
    
    
    312,863Operating expensesCost of merchandise
    
    
    44,348Appearance fees
    
    
    243,605Salaries, wages and benefits
    
    
    340,572General and administrative
    
    
    435,102Depreciation and amortization
    
    
    14,405Total operating expenses
    
    
    1,078,032Operating loss
    
    
    (765,169
    )Other (expense) incomeInterest income
    
    
    5,083Interest expense
    
    
    (64,844
    )Total other expense
    
    
    (59,761
    )Net loss
    
    $
    (824,930
    )Net loss per share
    
    $
    (0.05
    )Weighted average of number of
shares outstanding
    
    
    17,382,168
 The accompanying notes are an integral part of these consolidated financial statements. 4




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Boundless Motor Sports Racing, Inc.
Consolidated Statement of Operations
For the Six Months Ended March 31, 2004
(Unaudited) RevenueSanction and entry fees
    
    $
    190,582Sponsorship and advertising
    
    
    20,455Merchandise sales
    
    
    92,377Other
    
    
    9,449Total revenues
    
    
    312,863Operating expensesCost of merchandise
    
    
    44,348Appearance fees
    
    
    243,605Salaries, wages and benefits
    
    
    416,841General and administrative
    
    
    586,286Depreciation and amortization
    
    
    18,770Total operating expenses
    
    
    1,309,850Operating loss
    
    
    (996,987
    )Other (expenses) incomeInterest income
    
    
    9,769Interest expense
    
    
    (79,822
    )Total other expense
    
    
    (70,053
    )Net loss
    
    $
    (1,067,040
    )Net loss per share
    
    $
    (0.06
    )Weighted average of number of
shares outstanding
    
    
    17,225,747
 The accompanying notes are an integral part of these consolidated financial statements. 5




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Boundless Motor Sports Racing, Inc.
Consolidated Statements of Shareholders Equity (Deficit)
For the Six Months Ended March 31, 2004
(Unaudited) Additional
    
    
    
    
    
    TotalCommon Stock
    
    
    
    
    
    Paid-In
    
    Accumulated
    
    Shareholders'Shares
    
    Amount
    
    Capital
    
    Deficit
    
    Equity (Deficit)Balance, September 30, 2003
    
    
    15,740,500
    
    
    $
    1,574
    
    
    $
    171,002
    
    
    $
    (474,617
    )
    
    $
    (302,041
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,067,040
    )
    
    
    (1,067,040
    )Stock issued in connection
with DIRT acquisition
    
    
    1,558,334
    
    
    
    156
    
    
    
    4,674,846
    
    
    
    
    
    
    
    4,675,002Sale of common stock
    
    
    83,334
    
    
    
    8
    
    
    
    249,994
    
    
    
    
    
    
    
    250,002Balance, March 31, 2004
    
    
    17,382,168
    
    
    $
    1,738
    
    
    $
    5,095,842
    
    
    $
    (1,541,657
    )
    
    $
    3,555,923
 The accompanying notes are an integral part of these consolidated financial statements. 6




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Boundless Motor Sports Racing, Inc.
Consolidated Statement of Cash Flows
For the Six Months Ended March 31, 2004
(Unaudited) Cash flows from operating activities:Net loss
    
    $
    (1,067,040
    )Adjustment to reconcile net loss to
net cash used in operating activities:Depreciation and amortization
    
    
    18,770Accrued interest income
    
    
    2,278Increase (decrease) in cash from changes in (excluding purchased assets):Accounts payable trade
    
    
    144,441Accrued liabilities
    
    
    327,524Deferred revenue
    
    
    81,545Inventory
    
    
    (52,475
    )Prepaid expenses
    
    
    (51,334
    )Other current assets
    
    
    (99,596
    )Other long term assets
    
    
    (1,575
    )Cash used in operating activities
    
    
    (697,462
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (194,431
    )Increase in intangibles associated with acquisition
    
    
    (898,014
    )Advances on acquisition
    
    
    (1,000,000
    )Cash used in investing activities
    
    
    (2,092,445
    )Cash flows from financing activities:Issuance of common stock
    
    
    250,002Payments on notes payable
    
    
    (390,000
    )Issuance of notes payable
    
    
    2,947,352Cash provided by financing activities
    
    
    2,807,354Net cash provided
    
    
    17,447Cash at beginning of period
    
    
    615Cash at ending of period
    
    $
    18,062Supplemental non cash disclosures:Issuance of common stock in connection with deposit for DIRT acquisition
    
    $
    4,675,002Payment of note receivable through acquisition
    
    $
    612,047Assumption of sanction deposits through acquisition
    
    $
    525,000Purchase price of acquisition funded through note payable
    
    $
    3,003,185
 The accompanying notes are an integral part of these consolidated financial statements. 7




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Boundless Motor Sports Racing, Inc.
Notes to Consolidated Financial Statements
March 31, 2004
(Unaudited) NOTE 1  THE COMPANY Nature of Business Moonstone, Inc., (Moonstone) was incorporated July 7, 1983 under the laws of
Colorado for the primary purpose of seeking acquisitions of business or
properties, without limitation as to geographic location or type of business.
The Articles of Incorporation and Bylaws were amended when Moonstone, a
publicly traded shell, merged with The Entity, Inc. Moonstone, the surviving
entity, soon thereafter changed its name to The Entity, Inc. On July 31, 2003, The Entity, Inc. acquired Boundless Motor Sports Racing,
Inc., a Nevada corporation (Boundless), and GPX Partners, L.L.C., a Texas
limited liability company (GPX). The acquisition was accounted for as a
reverse acquisition and reflected in the financial statements as a
recapitalization of Boundless. The pre-merger financial statements of
Boundless have become the historical financial statements of the combined
companies, and accordingly, the assets and liabilities of Boundless have been
brought forward at their book value, no goodwill has been recognized, the
accumulated deficit of Boundless has been brought forward, and common stock and
additional paid-in capital of the combined companies have been retroactively
restated to give effect to the exchange ratio as set forth in the merger
agreement. Boundless was incorporated in May 2003 for the purpose of creating
a racing and sports entertainment company primarily through the acquisition of
existing motor sports sanctioning bodies and venues. The pre-merger financial
statements of Boundless brought forward accordingly reflect a development stage
enterprise with an inception date of May 12, 2003. In accordance with the
merger agreement, The Entity, Inc. issued an aggregate of 14,926,400 shares of
The Entity, Inc.s common stock to the former shareholders of Boundless and
members of GPX. These shares were issued on a post-split basis. On July 31, 2003, in connection with the acquisition of Boundless and GPX, The
Entity, Inc. changed its name to Boundless Motor Sports Racing, Inc (the
Company). This name change was effected on August 12, 2003. Boundless Merger On July 31, 2003 the Company entered into an Agreement and Plan of Merger (the
Boundless Merger Agreement), by and among the Company, Boundless, the
shareholders of Boundless and TEI Acquisition, Inc., a wholly-owned subsidiary
of the Company (TEI), pursuant to which, TEI merged with and into Boundless and
Boundless emerged from the merger as the surviving corporation and a
wholly-owned subsidiary of the Company. Pursuant to the terms of the Boundless Merger Agreement, (i) each outstanding
share of the capital stock of Boundless held in its treasury was canceled and
retired, (ii) the remaining 13,461,200 outstanding shares of capital stock of
Boundless were converted into the right to receive an aggregate of 13,461,200
shares of the Companys common stock, on a post-split basis. The structure of
the Boundless Merger Agreement was determined through negotiations between the
parties thereto. No material relationship existed between the Company and
Boundless, or any affiliate, director, or officer of the Company, or any
associate of any such director or officer. The shares issued to the former shareholders of Boundless were issued without
registration in reliance upon Section 4(2) of the Securities Act of 1933, as
amended. GPX Partners, L.L.C. On July 31, 2003, the Company entered into an Agreement and Plan of Merger (the
GPX Merger Agreement), by and among the Company, GPX, the members of GPX and
GPX Acquisition, Inc., a wholly-owned subsidiary of the 8




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Company (GAI), pursuant
to which, GAI merged with and into GPX and GPX emerged from the merger as the
surviving corporation and a wholly-owned subsidiary of the Company. Pursuant to the terms of the GPX Merger Agreement, the outstanding membership
interests of GPX were converted into the right to receive an aggregate of
1,465,200 shares of the Companys common stock, on a post-split basis, and GPX
became a wholly owned subsidiary of the Company. The structure of the GPX
Merger Agreement was determined through negotiations between the parties
thereto. No material relationship existed between the Company and GPX, or any
affiliate, director, or officer of the Company, or any associate of any such
director or officer. The shares issued to the former members of GPX were issued without registration
in reliance upon Section 4(2) of the Securities Act of 1933, as amended. On February 4, 2004, as described in footnote 4, the Company finalized the
acquisition of substantially all the assets of the World of Outlaws. Prior to
this event, the Company was devoting substantially all of its efforts to
establishing the business and was therefore in the development stage until
February 4, 2004. As a Development Stage Company, no ongoing operations were
conducted and no revenues were generated prior to the acquisition. Operating
expenses incurred during this period and for the periods up through February 4,
2004, were general and administrative expenses associated with maintaining the
Company while the aforementioned acquisitions were pursued. Accounts payable
at September 30, 2003 reflect amounts owed for these general and administrative
expenses incurred such as postage and shipping, legal and accounting fees,
travel expenses, and office utilities. As an accounting reporting entity, the Company was not in existence during the
three and six months ended March 31, 2003, therefore, no prior year comparisons
are available. NOTE 2  GOING CONCERN The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States
of America, which contemplates continuation of the Company as a going concern.
As shown in the consolidated financial statements, the Company incurred a net
loss of $1,067,040 for the six month period ended March 31, 2004 and has an
accumulated deficit of $1,541,657 as of March 31, 2004, which raises
substantial doubt about the Companys ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty. The future success of the Company is dependent on its ability to attain
profitable operations or upon its ability to obtain additional capital. There
can be no assurance that the Company will attain positive cash flows from
operations or be successful in obtaining such financing. NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly
liquid investments with original maturities of three months or less to be cash. Income Taxes The Company accounts for income taxes under Financial Accounting Standards
Number 109 (SFAS 109), Accounting for Income Taxes. Deferred income tax
assets and liabilities are determined based upon differences between financial
reporting and tax basis of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to be reversed. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. 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 amount of
assets and liabilities and disclosures 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. 9




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Revenue Recognition and Deferred Revenue The Company recognizes sanction fees upon the successful completion of a
scheduled sanctioned race. Upon execution of a sanction agreement with race
promoters and race track owners, the Company receives a sanction fee deposit in
advance. Advance sanction deposits are deferred and recognized when earned
upon the occurrence of the scheduled race event. In addition to the deposits
received in connection with the execution of sanction agreements, the Company
receives sanction advances from time to time that are also included in deferred
revenue and recognized when earned. The Company recognizes revenue from
sponsorship agreements when earned in the applicable racing season as set forth
in the sponsorship agreement. Revenue from merchandise sales are recognized at
the time of sale less any estimated returns and allowances, if any. Other
revenues from royalties are recognized when earned. Net Loss Per Share Net loss per share has been computed by dividing net loss by the weighted
average number of common shares and equivalents outstanding. The Company has
not issued any stock equivalents, thus there is no diluted earnings per share
or stock-based compensation disclosure. Inventories Inventories of retail merchandise are stated at the lower of cost or market.
Shipping, handling and freight costs related to merchandise inventories are
charged to cost of merchandise. Property and Equipment Property and equipment are stated at cost. Depreciation is provided for
financial reporting purposes using the straight-line method over the estimated
useful lives of the related assets ranging from 3 to 7 years. Expenditures for
maintenance, repairs and minor renewals are expensed as incurred; major
renewals and betterments are capitalized. At the time depreciable assets are
retired or otherwise disposed of, the cost and the accumulated depreciation of
the assets are eliminated from the accounts and any profit or loss is
recognized. The carrying values of property and equipment are evaluated for impairment
based upon expected future undiscounted cash flows. If events or circumstances
indicate that the carrying value of an asset may not be recoverable, an
impairment loss would be recognized equal to the difference between the
carrying value of the asset and its fair value. As of March 31, 2004, the
Company believes there is no impairment of property and equipment. Principles of Consolidation The accompanying consolidated financial statements include the accounts of
Boundless Motor Sports Racing, Inc. and its wholly-owned subsidiaries. All
material intercompany accounts and transactions have been eliminated in
consolidation. Purchase Accounting The company accounted for its acquisition of the assets in accordance with
Statement of Financial Accounting Standards No. 141 (SFAS No. 141), Business
Combinations and Statement of Financial Accounting Standards No. 142, Goodwill
and Intangible Assets (SFAS No. 142). SFAS no. 141 requires that all
business combinations entered into subsequent to June 30, 2001 be accounted for
under the purchase method of accounting and that certain acquired intangible
assets in a business combination be recognized and reported as assets apart
from goodwill. Intangible Assets Upon its inception, the Company adopted Statement of Financial Accounting
Standard (SFAS) No. 142, Goodwill and Other Intangible Assets. Under SFAS
No. 142 goodwill and intangible assets with indefinite lives are not to be
amortized but are tested for impairment at least annually. Intangible assets
with definite useful lives will continue to be amortized over the respective
estimated useful lives. As of March 31, 2004, the Company believes that there
is no impairment of intangible assets. 10




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New Accounting Pronouncements In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others (FIN 45). The interpretation requires a
guarantor to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the guarantee and expands
the disclosures required. Initial recognition and measurement provisions of FIN
45 are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The adoption of FIN 45 had no effect on our financial
position, results of operations, or cash flows. In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based
CompensationTransition and Disclosure, (SFAS 148). SFAS 148 amends Statement
123, Stock-Based Compensation, with respect to Statement 123s transition
provisions and required disclosures. The adoption of SFAS 148 had no impact on
our financial position, results of operations or cash flows. In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities  an Interpretation of ARB No. 51 (FIN 46). FIN 46
clarifies the consolidation requirements of variable interest entities. The
adoption of FIN 46 had no effect on our financial position, results of
operations, or cash flows. In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities  (SFAS 149). SFAS 149 amends
and clarifies certain derivative instruments embedded in other contracts, and
for hedging activities under SFAS 133. SFAS 149 is effective for certain
contracts entered into or modified by the Company after June 30, 2003. The
adoption of SFAS 149 had no impact on our financial position, results of
operations, or cash flows. In May 2003, the FASB issued SFAS No. 150, Accounting for Instruments with
Characteristics of Both Debt and Equity (SFAS 150). Statement 150 requires
liability classification for three types of instruments: 1) Mandatory
redeemable shares that obligate the company to deliver cash or other assets to
shareholders on fixed or determinable dates; 2) Freestanding written put
options and forward purchase contracts on a companys own shares that obligate
the company to deliver cash or other assets, and 3) Contracts that obligate a
company to issue its own shares in amounts that are unrelated to, or inversely
related to, the value of the shares. The adoption of SFAS 150 had no impact on
our financial position, results of operations, or cash flows. NOTE 4  ACQUISITION On February 4, 2004, the Company, through its wholly owned subsidiary WOWI
Acquisition, Inc. (WOWI), finalized the acquisition of substantially all the
assets of World of Outlaws, Inc. (WoO). In exchange for the assets acquired,
the Company paid to WoO $5,000,000, which amount was offset by $1,450,000 in
pre-acquisition cash advances, plus interest of $21,815 provided by the Company
to WoO in connection with the Purchase Agreement and $525,000 in deposits WoO
had received for sanctioning of future sprint car racing events. The net
purchase price of $3,003,185, was paid by a twelve month promissory note
bearing interest at the rate of seven percent (7%) per annum, with principal
payments on the note due in the following increments: (a) $100,000 on March 1,
2004, (b) $400,000 on May 1, 2004, and (c) $500,000 on September 1, 2004, with
the remaining principal balance due on maturity; and accrued interest due and
payable quarterly. The promissory note is secured by the assets that were
acquired from WoO, plus all future assets acquired by WOWI. The promissory
note is also guaranteed by Mr. Paul A. Kruger, the Companys Chief Executive
Officer and significant shareholder. The purchase was accounted for under the purchase method of accounting and
accordingly the purchase price of $5,000,000, including estimated costs of
acquisition of $220,000 was allocated as follows: Transportation equipment
    
    $
    184,926Other equipment
    
    
    8,875Excess cost over fair value of net tangible assets acquired
    
    
    5,026,199$
    5,220,000
 The allocation of the purchase price to transportation and other equipment was
based upon estimated fair market values determined at the acquisition date.
The Company recorded $5,026,199 in intangible assets in connection with the
acquisition. The Company is in the process of evaluating the components of the
intangible assets. 11




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The following pro forma financial information presents a summary of the results
of operations as if the acquisition had occurred on October 1, 2003: Three months ended
    
    Six months endedMarch 31, 2004
    
    March 31, 2004Revenues
    
    $
    312,863
    
    
    $
    642,023Expenses
    
    
    1,220,150
    
    
    
    2,038,490Net loss
    
    $
    (907,287
    )
    
    $
    (1,396,467
    )Net loss per share
    
    $
    (0.05
    )
    
    $
    (0.08
    )Weighted average of number of
shares outstanding
    
    
    17,382,168
    
    
    
    17,225,747
 NOTE 5  NOTES RECEIVABLE In June 2003, the Company executed a promissory note with WoO in the amount of
$600,000. The note was unsecured, and bore interest at 8% annually. In
October 2003 the promissory note was amended to include an additional advance
of $600,000 by the Company and the interest rate was changed to 4.25%. During
January 2004 an additional $250,000 was advanced. As described in Footnote 4,
the total amount advanced, $1,450,000 plus accrued interest of $21,815 was
applied towards the purchase by the Company of substantially all the assets of
the WoO. NOTE 6  DEPOSITS The Company paid a deposit of $1,000,000 and issued 1,558,334 shares of common
stock valued at $3.00 per share to the sellers of Dirt Motorsports, Inc. and
its affiliates to be applied toward the purchase price upon consummation of the
expected closing of the acquisition of Dirt Motorsports, Inc. and its
affiliates by the Company. See Subsequent Events Footnote 15. NOTE 7 PROPERTY AND EQUIPMENT Property and equipment consisted of the following at March 31, 2004: Transportation equipment
    
    $
    184,926Computers
    
    
    37,458Office furniture
    
    
    9,524Office equipment
    
    
    10,261Other
    
    
    9,505251,674Less accumulated depreciation
    
    
    (20,878
    )Property and equipment, net
    
    $
    230,796
 Depreciation expense for the three months and six months
ended March 31, 2004 was $14,405 and $18,770,
respectively. NOTE 8  INTANGIBLE ASSETS At March 31, 2004, intangible assets are composed of (1) $5,026,199
representing the excess of cost over the fair value of the net assets acquired
in connection with the acquisition of substantially all of the assets of WoO,
and (2) $23,429 representing the actual costs incurred for the creation of
blueprints, plans and drawings for documenting a conceptual raceway venue that
the Company is contemplating constructing in the future for addition to its
portfolio 12




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of motor sports entertainment assets and operations. As of March 31,
2004, the Company believes that there is no impairment of intangible assets. NOTE 9  NOTES PAYABLE Notes payable at March 31, 2004 consisted of the following:  $2,903,185, 7% note payable to WoO, due February 3, 2005 after
principal payments of $400,000 on May 1, 2004 and $500,000 on
September 1, 2004. Secured by the assets of WOWI and the
guarantee of Paul Kruger Chairman and CEO and a significant
shareholder of the Company. Interest is payable quarterly. See
Footnote 4 regarding the acquisition of WoO.$2,194,011, 4% notes payable to Paul Kruger, Chairman and CEO
and a significant shareholder of the Company. The note was
amended on April 15, 2004 to accrue interest at a rate of 10%.
The entire principal balance and accrued interest thereon are
payable in full on July 1, 2004; provided, however, the
principal balance and accrued but unpaid interest on these notes
shall be due and payable upon the closing of any public or
private offering by the Company in which the gross proceeds from
such offering are at least $3 million. See related party
Footnote 11.$1,000,000, note payable dated January 23, 2004 due to SXJE,
LLC. The note bears interest at an initial rate of 6% per
annum, increasing to 12% per annum on May 23, 2004. The note
matures on January 23, 2005, but provides for prepayment
following the closing of an offering of at least $4,000,000.
The note is secured by certain assets of the Company and its
subsidiaries, and is guaranteed by Mr. Kruger. Interest is
payable quarterly in cash or stock at the option of the Company
beginning April 23, 2004.$120,000, 6% note payable to an individual, dated February 4,
2004, due February 4, 2005. Principal and interest payable
monthly. NOTE 10  SHAREHOLDERS EQUITY (DEFICIT) On December 2, 2003 in exchange for cash, the Company sold 83,334
shares of unregistered common stock at a price of $3.00 per share,
which equaled the quoted market price for the Companys common stock
on December 1, 2003. On October 15, 2003 the Company issued 1,558,334 shares of
unregistered common stock in connection with the pending acquisition
of DIRT Motorsports, Inc. (DIRT) (see Note 6  DEPOSITS). The stock
was issued at a price of $3.00 per share as negotiated and agreed
upon between the Company and the seller of DIRT. The quoted market
price for the Companys common stock on October 15, 2003 was $3.50
per share. NOTE 11  RELATED PARTY TRANSACTIONS Notes Payable to Shareholder Paul Kruger, Chairman and CEO and a significant shareholder, as of the date of
this filing has provided approximately $2.5 million in funding for the Company,
of which, $2,286,011 is in the form of promissory notes from the Company. The amount lent by Mr. Kruger as of March 31, 2004, including accrued interest,
is $2,237,735. These notes accrue interest at a rate of 4% per annum prior to
April 15, 2004 and 10% thereafter.. The entire principal balance, and
accrued interest on these notes, are payable in full on July 1, 2004; provided,
however, the principal balance and accrued but unpaid interest on these notes
shall be due and payable upon the closing of any public or private offering by
the Company in which the gross proceeds from such offering are at least $3
million. 13




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##### Table of Contents



Other Related Party Transactions Mr. Kruger leases an aircraft to Business Jet, a company that the Company
utilizes for travel services. The Company incurred travel costs of
approximately $27,000 with Business Jet for aircraft charter services during
the three and six months ended March 31, 2004. Mr. Kruger owns a second aircraft that is also used on occasion for Company
purposes. During the three and six months ended December 31, 2003 and March
31, 2004, $8,960 and $15,860 of expenses associated with use of the aircraft
was incurred, respectively. The Company rents office space in Norman, Oklahoma, on a month-to-month basis,
from an entity controlled by Mr. Kruger. During the three and six months ended
March 31, 2004, the Company paid $0 and $25,140, respectively, in rent expense
for use of the Norman office. Contemporaneously with the closing of the WoO purchase, the Companys
subsidiary, WOWI, entered into a two year employment agreement with Mr. Ted
Johnson the sole shareholder of the WoO and a two year lease with WoO for the
lease of office and warehouse space in Allen, Texas. Monthly lease payments
are $7,420. See Footnote 13  Commitments. Richard F. Dahlson, formally a director of the Company, is a partner with
Jackson Walker L.L.P., a law firm that serves as outside legal counsel to the
Company. The Company incurred $80,662 in legal fees during the six month
period ended March 31, 2004 and $39,452 of legal services during the three
month period ended March 31, 2004. NOTE 12  INCOME TAXES: The Company accounts for income taxes under Financial Accounting Standards
Number 109 (SFAS 109), Accounting for Income Taxes. Deferred income tax
assets and liabilities are determined based upon differences between financial
reporting and tax basis of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to be reversed. At March 31, 2004, the Company had net operating loss carry forwards of
approximately $1,542,000 for federal income tax purposes. Net operating loss
carry forwards generated prior to the merger, of approximately $120,000, of The
Entity, Inc. will be limited due to change in control regulations under the
Internal Revenue Code. The statutory income tax benefit calculated at 34% of income before tax
resulting from of the Companys net operating loss carry forwards has been
fully reserved. The valuation allowance has been provided due to the
uncertainty that the Company will generate future profitable operations to
utilize this net operating loss carry forward. NOTE 13  COMMITMENTS A wholly-owned subsidiary of the Company entered into a 72 month lease
beginning July 15, 2003 for approximately 5,200 square feet of office space at
1801 Gateway Blvd, Suite 105, Richardson, TX 75080. Contemporaneously with the acquisition of certain assets from the WoO, the
Company entered into a two year lease for approximately 15,000 square feet of
office and warehouse space at 15 Prestige Circle, Allen Texas 75002. Total scheduled future minimum lease payments, under these operating leases are
as follows: Year Ending2004
    
    $
    68,9562005
    
    
    162,3482006
    
    
    110,4082007
    
    
    73,3082008
    
    
    73,308Thereafter
    
    
    42,763$
    531,091
 14




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##### Table of Contents



NOTE 14  LITIGATION AND CONTINGENCIES On March 19, 2004, Boundless Track Operations, Inc. one of the Companys
subsidiaries (BTO), was served a complaint filed by Greenway-University Centre
Partners, L.P. (GUCP), alleging that BTO breached a lease agreement with GUCP
and committed fraud in connection with entering into the lease agreement. BTO
has denied these allegations and intends to vigorously defend this litigation.
This litigation is still in its early stages and no discovery has been
conducted at this time. NOTE 15  SUBSEQUENT EVENTS Borrowings On May 21, 2004, the Company borrowed $2,000,000 from Boundless
Investments LLC. This loan bears interest at a rate of twelve percent (12%)
per annum. The loan matures on May 21, 2007, but provides for prepayment
following the closing of an offering of at least $4,000,000 during the first 12
months following the date of the note. From the 13th month following the date
of the note until the maturity date, at the option of the holder, the
outstanding principal amount plus accrued and unpaid interest shall convert
into such number of shares of Common Stock of the Company equal to 110% of the
principal and interest amounts being converted at $4.00 per share. The loan is
to be secured by certain assets of the Company and its subsidiaries, and is
guaranteed by Mr. Kruger. Acquisition Effective as of May 24, 2004, the Companys wholly owned subsidiary, Boundless
Racing Inc. acquired the Rolling Wheels dirt race track located in Elbridge,
New York for $1,800,000. As the track was part of the Dirt acquisition,
$750,000 of the amount placed on deposit with the sellers of Dirt was applied
toward the purchase price. The net purchase price of $1,050,000 was paid with
a cash payment of $1,000,000 and the delivery of 50,000 shares of the Companys
$.001 par value common stock. See Deposits Footnote 6. 15




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Operations Boundless Motor Sports Racing, Inc. (the Company) was incorporated under the
laws of the State of Colorado and is focusing its efforts on developing a dirt
track style racing and sports entertainment company primarily through the
acquisition and operation of motor sports sanctioning bodies and racing venues. The Companys general business plan is to acquire and operate motor sports
sanctioning bodies and venues and seek to nationalize dirt-track style motor
racing. The Company believes that much of the current success of motor sport
racing is due to the efforts of NASCAR in consolidating, marketing and
promoting its stock car races, and the Companys current strategy is to utilize
this model for dirt-track style racing. Under this business model, the Company
anticipates revenues from the primary sources that typically generate revenue
for motors sport sanctioning bodies: (1) sanctioning fees; (2) merchandise
sales and licensing fees; (3) sponsorships; (4) television and electronic media
distribution rights; (5) membership fees; and (6) event ticket sales. The Company was a development stage company until February 2004, at which time
it emerged from development stage status upon the acquisition of WoO, and the
introduction and commencement of a new racing series for the 2004 season known
as the Late Model Dirt Racing Car Series (Late Model Series). The Late Model
Series held its first race in February 2004, and is independent of the of DIRT
and WoO operations mentioned below. Prior to the emergence from development
stage status, no ongoing operations were conducted and no revenues were
generated prior to the acquisition. Operating expenses incurred this period
and for the periods up through February 4, 2004, were general and
administrative expenses associated with maintaining the Company while the
aforementioned acquisitions were pursued. Accounts payable at September 30,
2003 reflect amounts owed for these general and administrative expenses
incurred such as postage and shipping, legal and accounting fees, travel
expenses, and office utilities. In pursuing its business plan, the Company entered into a definitive agreement
to acquire DIRT Motorsports, Inc. (DIRT), and on February 4, 2004 completed the
acquisition of World of Outlaws, Inc. (WoO), as discussed below. Both DIRT and
WoO are dirt-track style racing sanctioning bodies. In addition to sanctioning
races, DIRT also owns and operates two racing facilities, and operates an
additional three leased facilities, which are included in the pending
acquisition of DIRT. The Company has paid a deposit of $1,000,000 and issued
1,558,334 shares of common stock valued at $3.00 per share to the sellers of
Dirt Motorsports, Inc., to be applied toward the purchase price upon
consummation of the expected closing of the acquisition of Dirt Motorsports,
Inc. by the Company. Effective as of May 24, 2004, the Companys wholly owned
subsidiary, Boundless Racing Inc. acquired the Rolling Wheels dirt race track
located in Elbridge, New York. In exchange for the assets acquired, the
Company paid to the sellers $1,800,0000. As the track was part of the Dirt
acquisition, $750,000 of the amount placed on deposit with the sellers of Dirt
was applied towards the purchase price. The net purchase price of $1,050,000
was paid with a cash payment of $1,000,000 and the delivery of 50,000 shares of
the Companys $.001 par value common stock. As an accounting reporting entity, the Company, was not in existence during the
three months and six months ended March 31, 2003, therefore no prior year
comparisons are available. During the quarter ended March 31, 2004, the
Company generated revenues of $312,863, and for the quarter and six months
ended March 31, 2004 incurred $1,078,032 and $1,309,849, respectively, in
operating expenses. The Company had operating losses for the quarter and six
months ended March 31, 2004 of $765,169 and $996,987, respectively. For the
quarter and six months ended March 31, 2004 the Company had net losses of
$824,930, or $.05 per share, and $1,067,040, or $.06 per share, respectively. On February 4, 2004, the Company, through its wholly owned subsidiary WOWI
Acquisition, Inc. (WOWI), finalized the acquisition of substantially all the
assets of World of Outlaws, Inc. (WoO). In exchange for the assets acquired,
the Company paid to WoO $5,000,000, which amount was offset by $1,450,000 in
pre-acquisition cash advances, plus interest of $21,815 provided by the Company
to WoO in connection with the Purchase Agreement and $525,000 in deposits WoO
had received for sanctioning of future sprint car racing events. The net
purchase price of $3,003,185, was paid by a twelve month promissory note
bearing interest at the rate of seven percent (7%) per annum, with principal
payments on the note due in the following increments: (a) $100,000 on March 1,
2004, (b) $400,000 on May 1, 2004, and (c) $500,000 on September 1, 2004, with
the remaining principal balance due on maturity; and accrued interest due and
payable quarterly. The promissory note is secured by the assets that were
acquired from WoO, plus all future assets acquired by WOWI. The promissory
note is also guaranteed by Mr. Paul A. Kruger, the Companys Chief Executive
Officer and significant shareholder. 16




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##### Table of Contents



Liquidity and Capital Resources The Companys primary source of funding through March 31, 2004 has been from
Chairman and CEO, Paul A. Kruger, via a combination of an original equity
investment in the Company and subsequent promissory notes. As of the date of
this filing, Mr. Kruger has provided approximately $2.5 million in funding to
the Company, of which, approximately $2.3 million is in the form of promissory
notes as of March 31, 2004. These notes accrue interest at a rate of 4% per
annum prior to April 15,2004 and 10% thereafter. The entire principal balance,
and accrued interest on these notes are payable in full on July 1, 2004;
provided, however, that notwithstanding the above, the principal balance and
accrued but unpaid interest on these notes shall be due and payable upon the
closing of any public or private offering by the Company in which the gross
proceeds from such offering are at least $3 million. These notes are secured
by certain assets of the Company and its subsidiaries. On January 23, 2004, the Company borrowed $1,000,000 from SXJE, LLC. This loan
bears interest at an initial rate of 6% per annum, increasing to 12% per annum
on May 23, 2004. The loan matures on January 23, 2005, but provides for
prepayment following the closing of an offering of at least $4,000,000. The
loan is to be secured by certain assets of the Company and its subsidiaries,
and is guaranteed by Mr. Kruger. On May 21, 2004, the Company borrowed $2,000,000 from Boundless Investments,
LLC. This loan bears interest at a rate of twelve percent (12%) per annum.
The loan matures on May 20, 2007, but provides for prepayment following the
closing of an offering of at least $4,000,000 during the first 12 months
following the date of the note. From the 13th month following the date of the
note, at the option of the holder, the principal amount and accrued and unpaid
interest shall convert into such number of shares of Common Stock of the
Company equal to 110% of the principal and interest amounts being converted at
$4.00 per share. The loan is to be secured by certain assets of the Company
and its subsidiaries, and is guaranteed by Mr. Kruger. Management is currently seeking additional funding in the form of loans, equity
investments, or a combination thereof to complete the acquisition of DIRT, pay
off the promissory note issued in connection with the acquisition of WoO,
operate the new Late Model Series, and provide working capital to fund the
operations of the Company. Approximately $9,000,000 is needed to complete
these objectives. There is no assurance that the Company will be successful in obtaining the
funding necessary to complete the acquisition transactions and meet its working
capital requirements. The Company will not be able to sustain operations if it
is not successful in obtaining additional funding, for which there is currently
no identified source, with the exception of Mr. Kruger; however, there can be
no assurances that Mr. Kruger will provide such additional funding, or if he
does, that the terms of any additional funding will be acceptable. As the future success of the Company is dependent on its ability to fund
operations and close the acquisitions described herein, the Companys ability
to continue as a going concern is at a high degree of risk. The following table summarizes our contractual obligations as of March 31,
2004: Payment Due by PeriodLess than
    
    2 to 3
    
    4 to 5
    
    After 5Contractual obligations
    
    Total
    
    1 Year
    
    Years
    
    Years
    
    YearsOperating leases
    
    $
    531,091
    
    
    $
    68,956
    
    
    $
    272,756
    
    
    $
    146,616
    
    
    $
    42,763Notes payable and accrued interest
    
    $
    6,303,676
    
    
    $
    6,303,676
    
    
    
    
    
    
    
    
    
    
    
    
 The Companys significant accounting policies include: Cash and Cash Equivalents For purpose of the statement of cash flows, the Company considers all highly
liquid investments with maturities of three months or less to be cash. 17




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##### Table of Contents



Income Taxes The Company accounts for income taxes under Financial Accounting Standards
Number 109 (SFAS 109), Accounting for Income Taxes. Deferred income tax
assets and liabilities are determined based upon differences between financial
reporting and tax basis of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to be reversed. Deferred tax assets are reduced by a valuation
allowance when in the opinion of management it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Use of Estimates The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosures 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. Revenue Recognition and Deferred Revenue The Company recognizes sanction fees upon the successful completion of a
scheduled sanctioned race. Upon execution of a sanction agreement with race
promoters and race track owners, the Company receives a sanction fee deposit in
advance. Advance sanction deposits are deferred and recognized when earned
upon the occurrence of the scheduled race event. In addition to the deposits
received in connection with the execution of sanction agreements, the Company
receives sanction advances from time to time that are also included in deferred
revenue and recognized when earned. The Company recognizes revenue from
sponsorship agreements when earned in the applicable racing season as set forth
in the sponsorship agreement. Revenue from merchandise sales are recognized at
the time of sale less any estimated returns and allowances, if any. Other
revenues from royalties are recognized when earned. Net loss per share Net loss per share has been computed by dividing net loss by the weighted
average number of common shares and equivalents outstanding. The Company has
not issued any stock equivalents, thus there is no diluted earnings per share
or stock-based compensation disclosure. Inventories Inventories of retail merchandise are stated at the lower of cost or market.
Shipping, handling and freight costs related to merchandise inventories are
charged to cost of merchandise. Property and Equipment Property and equipment are stated at cost. Depreciation is provided for
financial reporting purposes using the straight-line method over the estimated
useful lives of the related assets ranging from 3 to 7 years. Expenditures for
maintenance, repairs and minor renewals are expensed as incurred; major
renewals and betterments are capitalized. At the time depreciable assets are
retired or otherwise disposed of, the cost and the accumulated depreciation of
the assets are eliminated from the accounts and any profit or loss is
recognized. The carrying values of property and equipment are evaluated for impairment
based upon expected future undiscounted cash flows. If events or circumstances
indicate that the carrying value of an asset may not be recoverable, an
impairment loss would be recognized equal to the difference between the
carrying value of the asset and its fair value. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All material intercompany accounts
and transactions have been eliminated in consolidation. 18




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##### Table of Contents



Purchase Accounting The company accounted for its acquisition of the assets in accordance with
Statement of Financial Accounting Standards No. 141 (SFAS No. 141), Business
Combinations and Statement of Financial Accounting Standards No. 142, Goodwill
and Intangible Assets (SFAS No. 142). SFAS no. 141 requires that all
business combinations entered into subsequent to June 30, 2001 be accounted for
under the purchase method of accounting and that certain acquired intangible
assets in a business combination be recognized and reported as assets apart
from goodwill. Intangible Assets Upon its inception, the Company adopted Statement of Financial Accounting
Standard (SFAS) No. 142, Goodwill and Other Intangible Assets. Under SFAS
No. 142 goodwill and intangible assets with indefinite lives are not to be
amortized but are tested for impairment at least annually. Intangible assets
with definite useful lives will continue to be amortized over the respective
estimated useful lives. As of March 31, 2004, the Company believes that there
is no impairment of intangible assets. New Accounting Pronouncements In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others (FIN 45). The interpretation requires a
guarantor to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the guarantee and expands
the disclosures required. Initial recognition and measurement provisions of FIN
45 are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The adoption of FIN No. 45 had no effect on our financial
position, results of operations, or cash flows. In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based
CompensationTransition and Disclosure, (SFAS 148). SFAS 148 amends Statement
123, Stock-Based Compensation, with respect to Statement 123s transition
provisions and required disclosures. The adoption of SFAS had no impact on our
financial position, results of operations or cash flows. In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities  an Interpretation of ARB No. 51 (FIN 46). FIN 46
clarifies the consolidation requirements of variable interest entities. The
adoption of FIN 46 had no effect on our financial position, results of
operations, or cash flows. In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities (SFAS 149). SFAS 149 amends and
clarifies certain derivative instruments embedded in other contracts, and for
hedging activities under SFAS 133. SFAS 149 is effective for certain contracts
entered into or modified by the Company after June 30, 2003. The adoption of
SFAS No. 149 had no impact on our financial position, results of operations, or
cash flows. In May 2003, the FASB issued SFAS No. 150, Accounting for Instruments with
Characteristics of Both Debt and Equity (SFAS 150). Statement 150 requires
liability classification for three types of instruments: 1) mandatorily
redeemable shares that obligate the company to deliver cash or other assets to
shareholders on fixed or determinable dates; 2) freestanding written put
options and forward purchase contracts on a companys own shares that obligate
the company to deliver cash or other assets, and 3) contracts that obligate a
company to issue its own shares in amounts that are unrelated to, or inversely
related to, the value of the shares. The effective date of SFAS 150 has been
deferred indefinitely. The adoption of SFAS No. 150 had no impact on our
financial position, results of operations or cash flows. 
 Item 3. Controls and Procedures Prior to the date of filing of this report, the Company carried out an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information relating to us (including our consolidated subsidiaries)
required to be included in our periodic SEC filings. There have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the
date we carried out this evaluation. 19




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##### Table of Contents



PART II OTHER INFORMATION 
 Item 1. Legal Proceedings On March 19, 2004, Boundless Track Operations, Inc. one of the Companys
subsidiaries (BTO), was served a complaint filed by Greenway-University Centre
Partners, L.P. (GUCP), alleging that BTO breached a lease agreement with GUCP
and committed fraud in connection with entering into the leased agreement. BTO
has denied these allegations and intends to vigorously defend this litigation.
This litigation is still in its early stages and no discovery has been
conducted at this time. 
 Item 6. Exhibits and Reports on Form 8-K The following documents are filed as part of this report: (a) Exhibits  2.1
    
    Asset Purchase Agreement, dated as of February 4, 2004, by and among
World Of Outlaws, Inc. a Texas corporation, Ted Johnson, Boundless Motor
Sports Racing, Inc., a Colorado corporation, and WOWI Acquisition, Inc., a
Texas corporation (Incorporated by reference to Exhibit 2.1 of the
Companys Current Report on Form 8-K filed with the Commission on February
10, 2004).2.2
    
    Amendment No. 1 to Contract of Sale dated as of October 3, 2003, by and
among Mr. Glenn Donnelly, the Company, and Boundless Track Operations,
Inc. a Nevada corporation (Incorporated by reference to Exhibit 2.8 of the
Companys Annual Report on Form 10-KSB filed for the year ended September
30, 2003).2.3
    
    Stock Purchase Agreement, dated as of August 12, 2003, by and among World
of Outlaws, Inc., a Texas corporation (WoO), Ted Johnson, the holder of
all outstanding capital of WoO, and the Company. (Incorporated by
reference to Exhibit 2.9 of the Companys Annual Report on Form 10-KSB
filed for the year ended September 30, 2003).2.4
    
    Amendment No. 1 to Stock Purchase Agreement dated as of November 28,
2003, by and among World of Outlaws, Inc., a Texas corporation (WoO),
Ted Johnson, the holder of all outstanding capital of WoO, and the
Company. (Incorporated by reference to Exhibit 2.10 of the Companys
Annual Report on Form 10-KSB filed for the year ended September 30, 2003).2.5
    
    Asset Purchase Agreement dated as of May 24, 2004, by and among Finger
Lake International, Inc., a New York corporation, Glenn Donnelly, Bruno M.
DiMatteo and Paul Vitale, Boundless Motor Sports Racing, Inc., and
Boundless Racing, Inc.*10.1
    
    Promissory Note dated as of February 4, 2004. (Incorporated by reference
to Exhibit 10.1 of the Companys Current Report on Form 8-K filed with the
Commission on February 10, 2004).10.2
    
    Security Agreement dated as of February 4, 2004, by and between WOWI
Acquisition, Inc., a Texas corporation, and World of Outlaws, Inc
(Incorporated by reference to Exhibit 10.2 of the Companys Current Report
on Form 8-K filed with the Commission on February 10, 2004).10.3
    
    Amendment No. 1 to Promissory Note dated as of October 30, 2003, by and
between World of Outlaws, Inc., a Texas corporation, and the Company
(Incorporated by reference to Exhibit 10.4 of the Companys Annual Report
on Form 10-KSB filed for the year ended September 30, 2003).10.4
    
    Amendment No. 2 to Promissory Note dated as of November 28, 2003, by and
between World of Outlaws, Inc., a Texas corporation, and the Company
(Incorporated by reference to Exhibit 10.5 of the Companys Annual Report
on Form 10-KSB filed for the year ended September 30, 2003).10.5
    
    Pledge Agreement dated as of June 26, 2003 by and between the Company and
Ted Johnson. (Incorporated by reference to Exhibit 10.6 of the Companys
Annual Report on Form 10-KSB filed for the year ended September 30, 2003).10.6
    
    Promissory Note dated January 23, 2004 by and between the Company and
SXJE, LLC (Incorporated by reference to Exhibit 10.7 of the Companys
Annual Report on Form 10-KSB filed for the year ended September 30, 2003).10.7
    
    Guaranty dated January 23, 2004 by Paul Kruger in favor of SXJE, LLC.
(Incorporated by reference to Exhibit 10.8 of the Companys Annual Report
on Form 10-KSB filed for the year ended September 30, 2003). 20




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##### Table of Contents



10.8
    
    Amendment to Promissory Notes and Loans dated as of April 15, 2004 by and
between Mr. Paul Kruger and the Company *10.9
    
    Credit Agreement dated as of April 15, 2004, by and between the Company
and Mr. Paul A. Kruger.*10.10
    
    Promissory Note dated as of April 15, 2004 issued by the Company as
maker to Mr. Paul Kruger as Payee.*10.11
    
    Security Agreement dated as of April 15, 2004, by and between the
Company and Mr. Paul A. Kruger.*10.12
    
    Promissory Note dated May 19, 2004, by and between the Company and
Boundless Investments, LLC*10.13
    
    Extension Agreement dated as of May 21, by and among DIRT Motorsports,
Inc., Glenn Donnelly, Bruno M. DiMatteo, Paul Vitale, the Company,
Boundless Track Operations, Inc., Boundless Racing, Inc., and Finger Lakes
International, Inc.*16.1
    
    Letter from Michael Johnson and Co., LLC dated April 28, 2004 regarding
change in Certifying Accountant (incorporated by reference to Exhibit 16.1
of the Companys Current Report on Form 8-K reporting under Item 4 filed
with the Commission on April 28, 2004).31.1
    
    Rule 13a-14(a)/15d-14(a) Certifications.*31.2
    
    Rule 13a-14(a)/15d-14(a) Certifications.*32.1
    
    Section 1350 Certifications.*32.2
    
    Section 1350 Certifications.*   *
    
    Filed herewith (b) Reports on Form 8-K: The Company filed the following reports on Form 8-K during the quarter ended
March 31, 2004:  (1)
    
    Form 8-K/A filed with the Commission on January 9, 2004 reporting
under Item 7, the pro forma financial information related to the
acquisitions of Boundless and GPX;(2)
    
    Form 8-K filed on January 13, 2004 reporting, under Item 5, the
anticipated filing date for the Companys Form 10-KSB;(3)
    
    Form 8-K filed on January 28, 2004 reporting, under Item 5, a
revised anticipated filing date for the Companys Form 10-KSB;(5)
    
    Form 8-K filed on February 10, 2004 reporting under Item 2 and 7,
reporting the acquisition of substantially all of the assets of World
of Outlaws, Inc.;(6)
    
    Form 8-K filed on April 28, 2004 reporting under Item 4, changes in
Registrants certifying accountant; and(7)
    
    Form 8-K/A filed on May 25, 2004 reporting under item 7, the
audited financial statements World of Outlaws, Inc. and the pro forma
financial information related to the acquisition of World of Outlaws,
Inc. 21




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SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized. BOUNDLESS MOTOR SPORTS RACING, INC.
(Registrant)Date:  May 27, 2004
    
    /s/ Paul A. KrugerPaul A Kruger, Chief Executive Officer Date:  May 27, 2004
    
    /s/ Thomas L. EarnshawChief Financial Officer 22