##### Table of Contents



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 December 31, 2004
 or  o
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  0-18045 
  Boundless Motor Sports Racing, Inc. 
  Colorado
    
    84-0953839(State of incorporation)
    
    (IRS Employer Identification No.)
 2500 McGee Drive, Suite 147, Norman, OK 73072 
  (405) 360-5047 or (877) 5-RACING 
  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. þ Yes o No APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuers classes of common equity, as of
the latest practicable date: There were 14,439,554 shares of common stock outstanding as of February 18, 2004, excluding
warrants for an additional 4,000,000 common shares which are exercisable for a nominal sum. Transitional Small Business Disclosure Format (Check one): Yes þ No o




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TABLE OF CONTENTS PAGEPART I - FINANCIAL INFORMATIONItem 1. Consolidated Financial StatementsConsolidated Balance Sheets  December 31, 2004 and
September 30, 2004
    
    
    3Consolidated Statements of Operations for the Three Months
Ended December 31, 2004 and 2003
    
    
    4Consolidated Statements of Shareholders Equity for the Three
Months Ended December 31, 2004
    
    
    5Consolidated Statements of Cash Flows for the Three Months
Ended December 31, 2004 and 2003
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis
    
    
    17Item 3. Controls and Procedures
    
    
    23PART II - OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    24Item 4. Submission of Matters to a Vote of Security Holders
    
    
    24Item 6. Exhibits and Reports on Form 8-K
    
    
    24Signatures
    
    
    25Rule 13a-14(a)/15d-14(a) Certification of Paul A. KrugerRule 13a-14(a)/15d-14(a) Certification of Glenn A. JacksonSection 1350 Certification
  - 2 -




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PART I  FINANCIAL INFORMATION 
 ITEM 1. FINANCIAL STATEMENTS Boundless Motor Sports Racing, Inc. 
 Consolidated Balance Sheets
 As of December 31, 2004 and September 30, 2004
 (Unaudited)
 December 31,
    
    
    September 30,2004
    
    
    2004AssetsCurrent AssetsCash and cash equivalents
    
    $
    148,903
    
    
    $
    5,005,930Accounts receivable
    
    
    26,161
    
    
    
    356,614Inventory
    
    
    71,177
    
    
    
    72,891Prepaid expense
    
    
    30,662
    
    
    
    60,840Other current assets
    
    
    167,139
    
    
    
    33,139Total Current Assets
    
    
    444,042
    
    
    
    5,529,414Land, buildings, and equipment, net
    
    
    4,098,612
    
    
    
    3,998,112Trademarks
    
    
    242,452
    
    
    
    142,452Contract rights
    
    
    1,005,000
    
    
    
    Goodwill, net of impairment of $2,954,978
    
    
    6,692,328
    
    
    
    4,431,466Other assets
    
    
    233,281
    
    
    
    214,369Total Assets
    
    $
    12,715,715
    
    
    $
    14,315,813LiabilitiesCurrent LiabilitiesAccounts payable trade
    
    $
    686,434
    
    
    $
    358,354Accrued liabilities
    
    
    1,952,521
    
    
    
    2,452,184Deferred revenue
    
    
    490,909
    
    
    
    1,259,028Notes payable
    
    
    100,000
    
    
    
    160,000Total Current Liabilities
    
    
    3,229,864
    
    
    
    4,229,566Notes
payable  long-term, net of discount of $333,330 and $1,333,330
at December 31, 2004 and September 30, 2004, respectively
    
    
    1,666,670
    
    
    
    666,667Shareholders EquityCommon stock: $0.0001 par value;100,000,000 shares authorized, 14,439,554 and 14,230,170
issued and outstanding on December 31, 2004 and September
30, 2004 (excluding warrant for an additional 4,000,000
outstanding which are exercisable for a nominal sum)
    
    
    1,444
    
    
    
    1,422Convertible preferred stock: $0.01 par value;10,000,000 shares authorized, 4,790.37 issued and outstanding
    
    
    48
    
    
    
    48Additional paid-in capital
    
    
    18,341,073
    
    
    
    17,599,906Accumulated deficit
    
    
    (10,523,384
    )
    
    
    (8,181,796
    )Total Shareholders Equity
    
    
    7,819,181
    
    
    
    9,419,580Total Liabilities and Shareholders Equity
    
    $
    12,715,715
    
    
    $
    14,315,813
 See accompanying summary of accounting policies and notes to financial statements. - 3 -




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Boundless Motor Sports Racing, Inc. 
 Consolidated Statements of Operations
For the Three Months Ended December 31, 2004 and 2003
(Unaudited)
 Three Months ended
    
    
    Three Months endedDecember 31, 2004
    
    
    December 31, 2003RevenueRace sanctioning fees
    
    $
    202,951
    
    
    $
    Admissions fees
    
    
    1,309,547
    
    
    
    Sponsorship and advertising
    
    
    227,078
    
    
    
    Merchandise sales
    
    
    172,155
    
    
    
    Other
    
    
    78,682
    
    
    
    Total revenues
    
    
    1,990,413
    
    
    
    Operating, general and administrative expensesOperating and marketing expenses
    
    
    1,563,592
    
    
    
    Cost of merchandise
    
    
    74,682
    
    
    
    General and administrative
    
    
    1,592,153
    
    
    
    227,452Depreciation and amortization
    
    
    47,100
    
    
    
    4,365Total Operating Expenses
    
    
    3,277,527
    
    
    
    231,817Operating income (loss)
    
    
    (1,287,114
    )
    
    
    (231,817
    )Other (Expenses) IncomeInterest income
    
    
    9,379
    
    
    
    4,685Interest expense
    
    
    (1,063,853
    )
    
    
    (14,978
    )Total Other Expense
    
    
    (1,054,474
    )
    
    
    (10,293
    )Net (Loss) before income taxes
    
    
    (2,341,588
    )
    
    
    (242,110
    )Provision for income taxes
    
    
    
    
    
    
    Net (Loss)
    
    $
    (2,341,588
    )
    
    $
    (242,110
    )Net (Loss) per Share, Basic and Diluted
    
    $
    (0.16
    )
    
    $
    (0.01
    )Weighted average of number of
shares outstanding
    
    
    14,343,566
    
    
    
    17,088,870
 See accompanying summary of accounting policies and notes to financial statements. - 4 -




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Boundless Motor Sports
Racing, Inc. 
 Consolidated Statements of Shareholders Equity
For the Three Month Period Ended December 31, 2004
 Convertible
    
    
    Additional
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Preferred Stock
    
    
    paid-in capital
    
    
    Accumulated
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Common
    
    
    Deficit
    
    
    Equity (Deficit)Balance, September 30, 2004
    
    
    14,230,170
    
    
    $
    1,424
    
    
    
    4,790
    
    
    $
    48
    
    
    $
    17,599,906
    
    
    $
    (8,181,796
    )
    
    $
    9,419,582Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,341,588
    )
    
    
    (2,341,588
    )Issuance of common shares, UMP acquisition
    
    
    164,384
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    599,984
    
    
    
    
    
    
    
    600,000Issuance of common stock, employee stock grants
    
    
    45,000
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    8,996
    
    
    
    
    
    
    
    9,000Issuance of common stock purchase warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    132,187
    
    
    
    
    
    
    
    132,187Balance, December 31, 2004
    
    
    14,439,554
    
    
    $
    1,444
    
    
    
    4,790
    
    
    $
    48
    
    
    $
    18,341,073
    
    
    $
    (10,523,384
    )
    
    $
    7,819,181
 See accompanying summary of accounting policies and notes to financial statements. - 5 -




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Boundless Motor Sports
Racing, Inc. 
 Consolidated Statements of Cash Flows
(Unaudited)
 Three Months Ended December 31,2004
    
    
    2003Cash flows from operating activities:Net loss
    
    $
    (2,341,588
    )
    
    $
    (242,110
    )Adjustment to reconcile net loss to
net cash used in operating activities:Depreciation and amortization
    
    
    47,100
    
    
    
    4,365Stock issued for expenses
    
    
    9,000Loan discount
    
    
    1,000,003Increase (decrease) in cash from changes inDecrease in accounts receivable
    
    
    330,453
    
    
    
    Decrease in inventory
    
    
    1,714(increase) in accrued interest income
    
    
    
    
    
    
    (4,685
    )Decrease in prepaid expenses
    
    
    30,178(increase) in other current assets
    
    
    (134,000
    )
    
    
    (2,047
    )Increase (Decrease) in accounts payable
    
    
    328,080
    
    
    
    (175,094
    )(Decrease) in accrued liabilities
    
    
    (499,662
    )
    
    
    (14,337
    )(Decrease) in deferred revenue
    
    
    (768,119
    )
    
    
    Cash provided by (used in) operating activities
    
    
    (1,996,841
    )
    
    
    (433,908
    )Cash flows from investing activities:(Purchase) of property, contract rights, trademarks and goodwill
    
    
    (2,802,889
    )
    
    
    (Issuance) repayments of notes receivable
    
    
    
    
    
    
    (600,000
    )Advances on acquisitions
    
    
    
    
    
    
    (500,000
    )Reduction in deposit
    
    
    2,703
    
    
    
    Cash (used in) investing activities
    
    
    (2,790,186
    )
    
    
    (1,100,000
    )Cash flows from financing activities:Issuance of common stock for cash
    
    
    
    
    
    
    250,002Payments on notes payable
    
    
    (60,000
    )
    
    
    Loan proceeds
    
    
    
    
    
    
    1,315,000Cash provided by financing activities
    
    
    (60,000
    )
    
    
    1,565,002Net increase (decrease) in cash
    
    
    (4,847,027
    )
    
    
    31,094Cash at beginning of period
    
    
    5,005,930
    
    
    
    615Cash at ending of period
    
    $
    148,903
    
    
    $
    31,709Supplemental Cash flow InformationCash paid for interest
    
    $
    63,850
    
    
    $
    Issuance of common stock for property and contract rights
    
    $
    609,000
    
    
    $
    311,676Issuance of warrants for property and contract rights
    
    $
    132,187
    
    
    $
    
 See accompanying summary of accounting policies and notes to financial statements. - 6 -




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Boundless Motor Sports Racing, Inc. 
 Notes to Consolidated Financial Statements
 December 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. (the Company or Boundless) completed a simultaneous
acquisition of Boundless Motor Sports Racing, Inc., a Nevada corporation (Boundless Track), 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 the
Company. As part of such transaction, The Entity, Inc. changed its name to Boundless Motor Sports
Racing, Inc., and the prior Boundless Motor Sports Racing, Inc. changed its name to Boundless Track
Operations, Inc. The pre-merger financial statements of Boundless Track and GPX have become the
historical financial statements of the combined company, and accordingly, the assets and
liabilities of Boundless Track and GPX have been brought forward at their book values, 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 company 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. 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 Track
and members of GPX (collectively, the Former Owners). Pursuant to the terms of the Boundless Merger Agreement, (i) each outstanding share of the capital
stock of Boundless Track held in its treasury was canceled and retired; (ii) the remaining
13,461,200 outstanding shares of capital stock of Boundless Track were converted into the right to
receive an aggregate of 13,461,200 shares of the Companys common stock. The structure of the
Boundless Merger Agreement was determined through negotiations between the parties thereto. No
material relationship existed between the Company and Boundless Track, or any affiliate, director,
or officer of the Company, or any associate of any such director of officer. GPX had a wholly owned subsidiary, GPX Acquisition, Inc. GPX Acquisition was merged into GPX on
July 31, 2003, its only asset being design drawings on which costs had been incurred in the amount
of $23,429 related to a proposed race track to be built at some future time. 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, 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 of officer. While common ownership existed between Boundless Track and GPX, because Mr. Kruger was not a
member, manager or officer of GPX, and Mr. Kruger had the option to purchase all shares of the
Company held by shareholders of Boundless Track who were also members of GPX, it was determined
that the GPX members ownership of Boundless Track common stock did not represent common control
since the full benefit of that ownership could not be realized by such GPX owners until after
consummation of the merger and the successful completion of the capital funding requirements by the
Company. Based upon this determination, the accumulated deficit of GPX was eliminated in these
financial statements. The shares issued to the Former Owners of Boundless Track were issued without registration in
reliance upon Section 4(2) of the Securities Act of 1933, as amended. On February 4, 2004, the Company finalized the acquisition of substantially all the assets of the
World of Outlaws, Inc. Prior to this event, the Company was devoting substantially all of its
efforts to establishing the business and was therefore in the development stage enterprise until
February 4, 2004. During the fiscal year ended September 30, 2004, the Company entered into a series of related
transactions resulting in the acquisition of 100% of the outstanding stock of DIRT Motorsports,
Inc. and two affiliated race tracks. Subsequent to the acquisition of DIRT Motorsports, Inc., the Company began operating under the
d/b/a name DIRT MotorSports and management plans to change the Company name to DIRT MotorSports,
Inc. in the near future. - 7 -




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During the quarter ended December 31, 2004, the Company entered into an Asset Purchase Agreement
with Lernerville Speedway, Inc. The total consideration to be given for the assets acquired is
$3,455,830. See note 4 for further details. Also during the quarter ended December 31, 2004, the Company, entered into and consummated a
Membership Interests Purchase Agreement by and among United Midwestern Promoters Motorsports, LLC,
hereafter UMP. See Note 4 below. 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 $2,341,588 for the three month period ended December 31, 2004 and has an
accumulated deficit of $10,523,384 and negative working capital of ($2,785,822) as of December 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 and
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. We anticipate raising funds through additional private placements of preferred stock and additional
sources of long-term financing. We believe the Companys operations and sponsorship revenues will
also provide additional cash flows as the Company strived to achieve profitability through
operations. 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. Revenue Recognition and Deferred Revenue The Company recognizes sanction fees upon the successful completion of a scheduled sanctioned race.
Sanction fees collected prior to a scheduled race event are deferred and recognized when earned
upon the occurrence of the scheduled race event. 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 estimated returns and
allowances, if any. Attendance fees are recognized as revenues on the day of the event. Membership
income is recognized proratedly over the term of the membership. Net loss Per Share Basic and diluted earnings per share (EPS) are calculated in accordance with FASB Statement No.
128, Earnings per Share. For the period ended December 31, 2004, the net loss per share has been
computed by dividing the net loss by the weighted average number of common shares outstanding. For the quarter ended December 31, 2004 the Company had the following warrants outstanding:  
    Series A warrants to purchase 3,832,296 shares of common stock - 8 -




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
    Conversion Warrant to purchase 4,000,000 shares of common stock  
    Placement Agent Warrants to purchase 862,266 shares of common stock  
    Warrants to purchase 40,000 shares of common stock issued in connection with the UMP acquisition In addition, as of December 31, 2004, the Companys Series A Preferred Stock was convertible into
4,790,370 shares of common stock. None of these were included in the computation of diluted EPS
because the Company had a net loss and all potential issuance of common stock would have been
anti-dilutive. Inventories Inventories of retail merchandise are stated at the lower of cost or market on the first in, first
out method. 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 30 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 December 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 acquisitions of 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 are to be amortized over the respective estimated
useful lives or anticipated future cash flow streams when appropriate. At least annually the Company tests for possible impairment of definite-lived intangible assets
whenever events or changes in circumstances, such as a reduction in operating cash flow or a
dramatic change in the manner that the asset is intended to be used indicate that the carrying
amount of the asset is not recoverable. If indicators exist, the Company compares the discounted
cash flows related to the asset to the carrying value of the asset. If the carrying value is
greater than the discounted cash flow amount, an impairment charge is recorded in the operating
expense section in the statement of operations for amounts necessary to reduce the carrying value
of the asset to fair value. The Company has chosen the fourth quarter of its fiscal year to conduct
its annual impairment test. Concentration of Credit Risk As of December 31, 2004 the Company does not believe it has any material concentration of credit
risks. New Accounting Pronouncements 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 - 9 -




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June 30, 2003. The adoption of SFAS 149 had no impact on the Companys 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 the Companys financial position, results of operations, or cash flows. In November 2004, the FASB issued SFAS No. 151 Inventory Costs  an amendment of ARB No. 43,
Chapter 4. Statement No. 151 requires that certain abnormal costs associated with the
manufacturing, freight, and handling costs associated with inventory be charged to current
operations in the period in which they are incurred. The adoption of SFAS 151 had no impact on the
Companys financial position, results of operations, or cash flows. In December 2004, the FASB issued a revision of SFAS No. 123 Share-Based Payment. The statement
establishes standards for the accounting for transactions in which an entity exchanges its equity
investments for goods and services. It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value of the entitys
equity instruments or that may be settled by the issuance of those equity instruments. The
statement does not change the accounting guidance for share-based payments with parties other than
employees. The statement requires a public entity to measure the cost of employee service received in exchange
for an award of equity instruments based on the grant date fair value of the award (with limited
exception). That cost will be recognized over the period during which an employee is required to
provide service in exchange for the award (usually the vesting period). A public entity will
initially measure the cost of employee services received in exchange for an award of liability
instrument based on its current fair value; the fair value of that award will be re-measured
subsequently at each reporting date through the settlement date. Changes in fair value during the
requisite service period will be recognized as compensation over that period. The grant-date for
fair value of employee share options and similar instruments will be estimated using option-pricing
models adjusted for the unique characteristics of these instruments. The statement is effective
for the quarter beginning January 1, 2006. In December 2004, the FASB issued SFAS No. 153 Exchanges of Non-monetary Assets-amendment of APB
Opinion No. 29. Statement 153 eliminates the exception to fair value for exchanges of similar
productive assets and replaces it with a general exception for exchange transaction that do not
have commercial substance, defined as transaction that are not expected to result in significant
changes in the cash flows of the reporting entity. This statement is effective for exchanges of
non-monetary assets occurring after June 15, 2005. NOTE 4  ACQUISITIONS World of Outlaws, Inc.: On February 4, 2004 the Company completed the acquisition of substantially all the assets of the
assets of World of Outlaws, Inc. (World of Outlaws). World of Outlaws is a sanctioning body for
dirt track racing across the United States. The acquisition will allow the Company to pursue its
business plan to create a racing and sports entertainment company. The purchase price consisted of:  
    Cash and acquisition costs of $2,419,319  
    Forgiveness of $1,450,000 plus accrued interest of $21,815 promissory note payable to the Company  
    Assumptions of obligations for $525,000 in deposits World of Outlaws had received for
sanctioning of future sprint car racing events  
    Assumption of $777,325 of other obligations of World of Outlaws The following table summarizes the estimated fair value of the assets acquired and liabilities
assumed at the date of acquisition: Transportation equipment
    
    $
    184,926Other equipment
    
    
    8,875Trade-marks and Trade-names
    
    
    142,452Goodwill
    
    
    4,857,206Total assets acquired
    
    
    5,193,459
 - 10 -




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Advances from promoters
    
    
    525,000Other current obligations
    
    
    777,325Total liabilities assumed
    
    
    1,302,325Net consideration paid in cash and debt forgiveness
    
    $
    3,891,134
 Subsequent to closing the
Company incurred an additional $2,070 in closing costs which was
allocated to goodwill bring the investment in goodwill to $4,859,276. The goodwill will be
deductible for tax purposes over 17 years. With the purchase of World of Outlaws, the Company has acquired the corporate name World of
Outlaws, Inc. and all associated trade-names, trade-marks, and trade-mark registrations. This will
allow the Company to sanction World of Outlaws sprint-car racing events and expand into other
series such as a World of Outlaws late-model series without restrictions. Dirt Motorsports Inc. In October 2003, the Company made a cash deposit of $1,000,000 and issued 1,558,334 shares of its
common stock to the owners of Dirt Motorsports, Inc. (DIRT) and two affiliated tracks known as
Rolling Wheels Dirt Race Track and Cayuga County Dirt Track towards the acquisition of these
properties. This series of transactions is referred to as the Dirt Acquisitions. Effective May 24, 2004, the Company, through its wholly owned subsidiary, Boundless Racing, Inc., a
Texas corporation, consummated the acquisition of substantially all of the assets of Finger Lake
International, Inc., a New York corporation (FLI), pursuant to an Asset Purchase Agreement. The
Company, through a separate wholly-owned subsidiary, had previously entered into an agreement to
purchase the FLI assets (the First Asset Purchase Agreement), but the previous arrangement was
mutually terminated in favor of the Asset Purchase Agreement. In exchange for the assets and real property acquired, which consisted of the Rolling Wheels motor
sports racing track located in Elbridge, New York, the Company paid $1,088,777 to FLI consisting of
(a) cash in an aggregate of $1,000,000, and (b) 300,000 shares of the Companys common stock,
$.0001 par value per share. The Company also incurred $28,777 of costs relating to the acquisition. The Shares issued to FLI in connection with this acquisition were issued by the Company pursuant to
an exemption (Section 4(2)) from the registration requirements of the Securities Act of 1933, as
amended and are restricted shares. Effective August 6, 2004, the Company, through its wholly owned subsidiary, Boundless Racing,
Inc., a Texas corporation (as the assignee of Boundless Track), consummated the acquisition of all
of the outstanding shares of capital stock of DIRT, pursuant to a Stock Purchase Agreement, dated
August 13, 2003, as amended and extended. In exchange for the outstanding capital stock of DIRT, the Company paid to Mr. Glenn Donnelly, the
sole shareholder of DIRT, $2,107,180 consisting of (a) cash in an aggregate amount of $1,775,000,
of which $925,000 remained unpaid at year end pending a final accounting which could ultimately
reduce the purchase price, and (b) 591,667 shares of the Companys common stock, all of which
shares had been previously paid to Mr. Donnelly in October 2003. Mr. Donnelly has been retained by
the Company in a consultative capacity to assist the Company with its Super Dirt Week racing
events pursuant to the terms of a Consulting Agreement. The Company also incurred $221,308 of costs
relating to the acquisition. The Shares issued to Mr. Donnelly in connection with the acquisition of DIRT were issued by the
Company pursuant to an exemption (Section 4(2)) from the registration requirements of the
Securities Act of 1933, as amended and are restricted shares. On August 31, 2004 the Company consummated the acquisition of the Cayuga County race track. In
exchange for the assets and real property acquired, which consisted of the Cayuga County motor
sports racing track located in Cayuga County, New York, the Company paid $2,293,333 consisting of
(a) cash in of $2,150,000, and (b) 716,667 shares of the Companys common stock which were
previously paid and credited toward the purchase price. - 11 -




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The following table summarizes the estimated fair value of the assets acquired and liabilities
assumed at the date of acquisitions for the DIRT transactions: Rolling
    
    
    CayugaDIRT
    
    
    Wheels
    
    
    CountyCurrent assets
    
    $
    459,217
    
    
    $
    
    
    
    $
    Property and Equipment
    
    
    249,635
    
    
    
    1,088,777
    
    
    
    2,293,333Goodwill
    
    
    2,536,700
    
    
    
    
    
    
    
    Total assets acquired
    
    
    3,245,552
    
    
    
    1,088,777
    
    
    
    2,293,333Current liabilities
    
    
    1,130,910
    
    
    
    
    
    
    
    Net assets acquired
    
    $
    2,114,642
    
    
    $
    1,088,777
    
    
    $
    2,293,333
 The goodwill associated with the acquisition of the DIRT capital stock will not be amortizable
for tax purposes. United Midwestern Promoters Motorsports, LLC Effective November 30, 2004, the Company, entered into and consummated a Membership Interests
Purchase Agreement by and among United Midwestern Promoters Motorsports, LLC, hereafter (UMP),
National Speedways of Iowa, Inc., Track Enterprises, Inc., Ken Schrader Racing, Inc., and Lebanon
Valley Auto Racing Corp. (the Purchase Agreement), pursuant to which the Company acquired all of
the outstanding membership interests in UMP, in exchange for an aggregate purchase price of
$2,400,000, of which, $200,000 was previously paid under the terms of a letter of intent among the
parties, 1,600,000 was paid in cash at closing, and the remaining $600,000 was satisfied through
the issuance of 164,384 shares of the Companys common stock. In addition, at closing the Company
has provided warrants to purchase an aggregate of 40,000 shares of the Companys common stock for
$3.65 per share. These warrants were valued at an aggregate amount of $132,187 based on
Black-Scholes modeling and the fair market value of the warrants at the time of issuance. UMP is a dirt track race sanctioning body, and as such, sanctions races for both late model and
open wheel modified cars. UMP assets include its agreements with drivers competing in its races,
and sponsorship agreements with racing event sponsors. Under the terms of the Purchase Agreement,
if the average closing price of the Companys common stock for the ten-trading days immediately
preceding the one-year anniversary of the date of the closing of the acquisition (the Average
Anniversary Price) is less than $3.65 per share, then the Company shall, at its sole election,
either (a) issue additional shares of its common stock equal to the difference between: (i)
$600,000 divided by the Average Anniversary
Price, less (ii) 164,384, or (b) purchase, at a purchase price of $3.65 a share, the Shares. The UMP acquisition amount was allocated as follows: Cash paid for acquisition
    
    $
    1,800,000Value of stock issued
    
    
    600,000Value of warrants issued
    
    
    132,187Accrued points fund
    
    
    443,200Accounts payable assumed
    
    
    355,000Accrued closing costs
    
    
    100,000Closing expenses paid
    
    
    25,443$
    3,455,830Allocation to goodwill
    
    $
    2,251,330Allocation to land, buildings and equipment
    
    
    99,500Allocation to trademarks
    
    
    100,000Allocation to contract rights
    
    
    1,005,0003,455,830
 The purchase agreement provides for the Companys assumption of certain obligations including
$300,000 in liabilities to be paid in the form of commissions based on 50% of the net sponsorship
dollars generated from certain sponsorship agreements existing at the time of purchase. The
purchase contract also obligates UMP to commissions of 25% of the net sponsorship money obtained
for UMP by sellers (including the proceeds from a contract with NVE Pharmaceutical (the NVE
Contract) for the first year after the $300,000 commission has been paid, and 10% thereafter for
the life of the NVE contract including any extensions or renewals of the contract. -  12 -




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As part of the UMP acquisition, the Company acquired the contractual rights to the NVE
Pharmaceuticals, Inc sponsorship agreement. This is a ten year sponsorship agreement that
commenced in 2004. Future sponsorship commitments under this agreement by year are as follows: SponsorshipYear
    
    Commitment2005
    
    $
    1,100,0002006
    
    
    1,210,0002007
    
    
    1,270,5002008
    
    
    1,334,0252009
    
    
    1,400,7262010
    
    
    1,470,7622011
    
    
    1,544,3002012
    
    
    1,621,5152013
    
    
    1,702,591Total
    
    
    12,654,419
 The NVE contract contains various performance criteria on the part of the Company for which the
failure to comply would result in the termination of this agreement. During 2004 NVE
Pharmaceuticals, Inc. paid $1,000,000 in sponsorship fees to the Extreme Dirt Car, Inc., the
previous party to this agreement. The Company also has sponsorship agreements in place with a tire company, which call for payments
of sponsorship fees based solely on the number of tires sold at each of the Companys races.
During the year ended November 30, 2004, UMP received $532,417 in sponsorship revenues from this
tire company. These tire sponsorship agreements expire in 2007. Lernerville Speedway Effective November 7, 2004, the Company, through its wholly owned subsidiary, Boundless Racing,
Inc., a Texas corporation (BRI), entered into an Asset Purchase Agreement (the Lernerville
Agreement) with Lernerville Speedway, Inc., a corporation organized under the Commonwealth of
Pennsylvania (the LSI), and Helen W. Martin, Donny Martin-Roenigk, and Patty Martin-Roenigk (the
Purchase Agreement), pursuant to which the Company intends to purchase substantially all of the
assets of LSI and certain real estate owned by Ms. Martin and comprising the racing facility used
by LSI and known as the Lernerville Speedway (the Assets). The terms of the Lernerville Agreement require BRI to pay a total purchase price of $3,240,000 for
the Assets, and assume certain of LSIs liabilities. The purchase price is payable by BRI as
follows:  (a)
    $500,000 will be payable at the closing of the transactions under the Lernerville
Agreement;(b)
    $110,000 will be payable on or prior to May 30, 2005, $3,500 of which shall be deemed
to be interest;(c)
    $110,000 will be payable on or prior to October 30, 2005, $6,500 of which shall be
deemed to be interest;(d)
    $110,000 will be payable on or prior to May 30, 2006, $12,000 of which shall be deemed
to be interest;(e)
    $110,000 will be payable on or prior to May 30, 2007, $18,000 of which shall be deemed
to be interest; and(f)
    the remaining $2,300,000 will be payable pursuant to the terms of a four year
promissory note bearing interest at seven percent per year, with accrued interest payable
annually. The four $110,000 payments described above, as well as the promissory note, will be secured by a
mortgage on the Lerner Speedway facility, and will be guaranteed by the Company. The closing of the
transactions under the Lernerville Agreement is subject to several conditions, including the
completion by BRI of a due diligence review of LSI and the racing facility operations. This agreement had not been finalized at December 31, 2004 and was not reflected in the Companys
financial statements on that date. -  13 -




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NOTE 5  PROPERTY AND EQUIPMENT Property and equipment consisted of the following at December 31, 2004: Cost
    
    
    Depreciable LifeLand
    
    $
    2,935,611
    
    
    N/ATransportation equipment
    
    
    637,037
    
    
    5 - 7 yearsBuildings and grandstands
    
    
    677,135
    
    
    7 - 40 yearsOffice furniture and equipment
    
    
    119,549
    
    
    3 - 7 yearsAudio / Video equipment
    
    
    142,520
    
    
    5 - 7 years4,511,852Less accumulated depreciation
    
    
    (413,240
    )Property and equipment, net
    
    $
    4,098,612
 Depreciation is computed on a straight-line basis. Depreciation expense for the quarter ended
December 31, 2004 was $45,287. NOTE 6  GOODWILL Goodwill included in the financial statements as of December 31, 2004 are as follows: Goodwill incurred in connection with World of Outlaws acquisition
    
    $
    4,859,276Goodwill incurred in connection with the DIRT acquisition
    
    
    2,536,700Goodwill incurred in connection with the UMP acquisition
    
    
    2,251,330Less impairment of goodwill associated with the
World of Outlaws acquisition
    
    
    (2,954,978
    )Total net goodwill
    
    $
    6,692,328
 As discussed in Note 3 to the Consolidated Financial Statements, the Company conducts and
annual impairment test as required by SFAS No. 142. Under SFAS 142, goodwill impairment is deemed
to exist if the carrying value of a reporting unit exceeds its estimated fair value. In calculating
the impairment charge, the fair values of the reporting units were estimated using the expected
present value of future cash flows from those units. The World of Outlaws acquisition and the DIRT
acquisition were treated as separate reporting units for purposes of making these impairment
calculations. As of September 30, 2004, the World of Outlaws goodwill was determined to be impaired
by $2,954,978. Due to the extended amount of time needed to complete additional acquisitions, the World of Outlaws
reporting units operating profit and cash flows were lower than expected in the year ended
September 30, 2004. Based on these factors the revenue forecasts for World of Outlaws were reduced
resulting in the impairment of the goodwill. NOTE 7  ACCRUED LIABILITIES Accrued liabilities at December 31, 2004 and September 30, 2004 consisted of the following: December 31,
    
    
    September 30,2004
    
    
    2004Points fund accrual
    
    $
    433,200
    
    
    $
    1,282,992Accrued
Purchase settlement - DIRT acquisition
    
    
    925,000
    
    
    
    925,000Accrued lease settlement
    
    
    150,000
    
    
    
    Accrued interest
    
    
    147,333
    
    
    
    86,435Other accrued liabilities
    
    
    296,988
    
    
    
    157,757Total Accrued Liabilities
    
    $
    1,952,521
    
    
    $
    2,452,184
 NOTE 8  DEFERRED REVENUES Deferred revenues at December 31, 2004 consist of sanction fee advances on future races of $207,700
and sponsorship prepayments received of $283,209. NOTE 9  NOTES PAYABLE On July 30, 2004, the Company entered into an agreement with Boundless Investments, LLC to
refinance an existing $2,000,000 note dated May 19, 2004. Terms of this refinancing reduced the
interest rate from 12% to 8%, eliminated the collateral requirement, and eliminated the requirement
for certain shareholders guarantees. In consideration for this exchange of debt instruments,
certain shareholders gave Boundless Investments, LLC 4,000,000 shares of their personal restricted
common stock of the Company. -  14 -




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##### Table of Contents



Boundless Investment, LLC then returned these 4,000,000 shares of common stock to the Company in
exchange for warrants to buy 4,000,000 shares of the Company common stock for at an exercise price
of $0.001 per share or $4,000 in total. Boundless Investments, LLC then sold these warrants to an unrelated third party for $800,000 or
$0.20 per share. In accordance with Emerging Issues Task Force Pronouncement 96-19, $800,000 was charged to current
operations as a debt extinguishment expense. Notes payable at December 31, 2004 consisted of the following: $2,000,000 note payable dated July 30, 2004 due to Boundless Investments, LLC. This note
bears interest at eight percent per annum, payable quarterly, and matures on May 19, 2007.
Commencing six months after the date of this note, the note holder has the option to convert
the outstanding principal plus accrued interest into shares of Series A Convertible
Preferred Stock at a conversion ratio equal to 110% of the outstanding principal and
interest at the conversion date. The Company incurred loan acquisition fees of $201,765
which are being amortized over the life of the loan. Amortization of $1,813.76 was recorded
in the three month period ended December 31, 2004 on these fees. The proceeds from the issuance of the note payable, the beneficial conversion ratio
effective six months after the conversion date, and the warrants associated with the
beneficial conversion rights were allocated to each instrument based on their fair values.
The sum of the relative fair value of the beneficial conversion ratio and the warrants
associated with the beneficial conversion rights was determined to be in excess of the total
proceeds received by the Company; therefore, the entire amount of proceeds was considered
non-cash discount. The debt discount is being amortized as interest expense over the period
from the date of issuance to the date of earliest conversion which is six months from the
date of issuance. The debt discount was recorded at the date of issuance and the
amortization of the debt discount in the amount of $1,000,000 was included in the
determination of net loss as interest expense in the three months ended December 31, 2004. $100,000, 6% note payable to an individual, dated August 6, 2004, due August 6, 2005.
Principal $10,000 and interest payable monthly. The aggregate amounts of maturities of debt during each of the years ending September 30,
2005 through 2009 are: 2005
    
    $
    100,0002006
    
    
    2007
    
    
    2,000,0002008
    
    
    2009
    
    
    $
    2,100,000
 NOTE 10  SHAREHOLDERS EQUITY On November 30, 2004, the Company issued 164,384 shares of unregistered common stock and warrants
to purchase 40,000 shares of the Companys common stock in connection with the UMP acquisition as
described in Note 4 above. The stock was valued at $600,000 and the warrants were valued at
$132,187. On December 23, 2004, the Company issued 45,000 shares of unregistered common stock as employee
stock grants. The stock was valued at $.20 per share and was charged against the current periods
operations. Issuance of Preferred Stock The Company issued 4,790.37 shares of its Series A Convertible Preferred Stock, par value $0.01 per
share (Series A Stock) and warrants to purchase 3,832,297 shares of its common stock, $0.0001 par
value per share (the Series A Warrants) as filed in the 8-K dated August 4, 2004. NOTE 11  RELATED PARTY TRANSACTIONS The Companys Chief Executive Officer, Paul A. Kruger leases an aircraft to Business Jet, another
company that the Company utilizes for travel services. The Company has spent approximately $27,000
and $0 with Business Jet for aircraft charter services during the three months ended December 31,
2004 and 2003 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 months ended December 31, 2004 and 2003 respectively,
the Company incurred $14,820 and $0 of rent expense for use of the Norman office. -  15 -




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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 September 30, 2004, the Company had net operating loss carry forwards of approximately
$5,500,000 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 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 The Company leases a semi-truck for use in transporting merchandise and equipment to the tracks in
connection with the Companys weekly racing series. The lease agreement continues through
November, 2005 at a monthly rate of $1,316. A wholly-owned subsidiary of the Company has a lease agreement for the Canadaigua Track through
July 1, 2006 at a yearly rate of $22,000. A wholly-owned subsidiary of the Company has a lease agreement for an office copier at $334 per
month through February 7, 2005. Total scheduled future minimum lease payments, under these operating leases are as follows: Payment Due by PeriodLess than
    
    
    2 to 3
    
    
    4 to 5
    
    
    After 5Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsContractual obligationsOperating leases
    
    $
    59,144
    
    
    $
    37,144
    
    
    $
    22,000
    
    
    $
    
    
    
    $
    Notes payable and accrued interest
    
    $
    2,100,000
    
    
    $
    100,000
    
    
    $
    2,000,000
    
    
    $
    
    
    
    $
    
 The Company has employment agreements with its executive officers and other employees, the
terms of which expire at various times over the next three years. The aggregate commitment for
future salaries at December 31, 2004 was $1,024,000. NOTE 14  LITIGATION AND CONTINGENCIES We are from time to time involved in various legal proceedings incidental to the conduct of our
business. We believe that the outcome of all such pending legal proceedings will not in the
aggregate have a material adverse effect on our business, financial condition, results of
operations or liquidity. NOTE 15  SUBSEQUENT EVENTS On January 13, 2005, the Company entered into three promissory notes pursuant to which certain of
its shareholders loaned the Company an aggregated principle amount of $700,000. The promissory
notes bear interest at the rate of eight percent per annum and become due and payable on February
28, 2005. On February 14, 2005, the Company entered into an additional promissory note pursuant to which
certain of its shareholders loaned the Company an additional amount of $200,000. The promissory
note bears interest at the rate of eight percent per annum and becomes due and payable on February
28, 2005. -  16 -




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD LOOKING STATEMENTS This Form 10-QSB includes certain statements that may be deemed to be forward-looking statements
within the meaning of Section 27A of the Securities Act. All statements, other than statements of
historical fact, included in this Form 10-QSB that addresses activities, events or developments
that the Company expects, projects, believes, or anticipates will or may occur in the future,
including matters having to do with expected and future revenues, the Companys ability to fund its
operations and repay debt, business strategies, expansion and growth of operations and other such
matters, are forward-looking statements. These statements are based on certain assumptions and analyses made by our
management in light of its experience and its perception of historical trends, current conditions,
expected future developments, and other factors it believes are appropriate in the circumstances.
These statements are subject to a number of assumptions, risks and uncertainties, including general
economic and business conditions, the business opportunities (or lack thereof) that may be
presented to and pursued by the Company, the Companys performance on its current contracts and its
success in obtaining new contracts, the Companys ability to attract and retain qualified
employees, and other factors, many of which are beyond the Companys control. You are cautioned
that these forward-looking statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected in such statements. The Company was a development stage company until February 4, 2004. Thus, no ongoing operations
were conducted and no revenues were generated during the period ended September 30, 2003. Operating
expenses incurred were general and administrative expenses associated with maintaining the Company
while the aforementioned acquisitions were pursued. Nature of Business 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. (the Company or Boundless) completed a simultaneous
acquisition of Boundless Motor Sports Racing, Inc., a Nevada corporation (Boundless Track), 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 the
Company. As part of such transaction, The Entity, Inc. changed its name to Boundless Motor Sports
Racing, Inc., and the prior Boundless Motor Sports Racing, Inc. changed its name to Boundless Track
Operations, Inc. The pre-merger financial statements of Boundless Track and GPX have become the
historical financial statements of the combined company, and accordingly, the assets and
liabilities of Boundless Track and GPX have been brought forward at their book values, 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 company 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. 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 Track
and members of GPX (collectively, the Former Owners). Pursuant to the terms of the Boundless Merger Agreement, (i) each outstanding share of the capital
stock of Boundless Track held in its treasury was canceled and retired; (ii) the remaining
13,461,200 outstanding shares of capital stock of Boundless Track were converted into the right to
receive an aggregate of 13,461,200 shares of the Companys common stock. The structure of the
Boundless Merger Agreement was determined through negotiations between the parties thereto. No
material relationship existed between the Company and Boundless Track, or any affiliate, director,
or officer of the Company, or any associate of any such director of officer. GPX had a wholly owned subsidiary, GPX Acquisition, Inc. GPX Acquisition was merged into GPX on
July 31, 2003, its only asset being design drawings on which costs had been incurred in the amount
of $23,429 related to a proposed race track to be built at some future time. 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, 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 of officer. While common ownership existed between Boundless Track and GPX, because Mr. Kruger was not a
member, manager or officer of GPX, and Mr. Kruger had the option to purchase all shares of the
Company held by shareholders of Boundless Track who were also members of GPX, it was determined
that the GPX members ownership of Boundless Track common stock did not represent common control
since the full benefit of that ownership could not be realized by such GPX owners until after
consummation of the merger and the successful completion of the capital funding requirements by the
Company. Based upon this determination, the accumulated deficit of GPX was eliminated in these
financial statements. The shares issued to the Former Owners of Boundless Track were issued without registration in
reliance upon Section 4(2) of the Securities Act of 1933, as amended. - 17 -




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World of Outlaws 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. In
exchange for the assets acquired, the Company paid to World of Outlaws $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 World of Outlaws in connection with the Purchase Agreement and $525,000 in deposits
World of Outlaws 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 World of Outlaws,
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. In August 2004, the
Company completed the payment for World of Outlaws. The purchase was accounted for under the purchase method of accounting and accordingly the purchase
price of $5,000,000 and costs of acquisition of $195,529 was allocated as follows: Transportation equipment
    
    $
    184,926Other equipment
    
    
    8,875Trade-marks and Trade-names
    
    
    142,452Goodwill
    
    
    4,859,276Total assets acquired
    
    $
    5,195,529
 The allocation of the purchase price to transportation and other equipment was based upon
estimated fair market values determined at the acquisition date. DIRT Acquisitions In October 2003, the Company made a cash deposit of $1,000,000 and issued 1,558,334 shares of its
common stock to the owners of DIRT Motorsports, Inc. and two affiliated tracks known as Rolling
Wheels DIRT Race Track and Cayuga County Dirt Track towards the acquisition of these properties.
This series of transactions is referred to as the Dirt Acquisitions. Effective May 24, 2004, the Company, through its wholly owned subsidiary, Boundless Racing, Inc., a
Texas corporation, consummated the acquisition of substantially all of the assets of Finger Lake
International, Inc., a New York corporation (FLI), pursuant to an Asset Purchase Agreement. The
Company, through a separate wholly-owned subsidiary, had previously entered into an agreement to
purchase the FLI assets (the First Asset Purchase Agreement), but the previous arrangement was
mutually terminated in favor of the Asset Purchase Agreement. In exchange for the assets and real property acquired, which consisted of the Rolling Wheels motor
sports racing track located in Elbridge, New York, the Company paid $1,088,777 to FLI consisting of
(a) cash in an aggregate of $1,000,000, and (b) 300,000 shares of the Companys common stock,
$.0001 par value per share (the Shares), valued at $60,000. The Company also incurred $28,777 of
costs relating to the acquisition. The Shares issued to FLI in connection with this acquisition were issued by the Company pursuant to
an exemption (Section 4(2)) from the registration requirements of the Securities Act of 1933, as
amended and are restricted shares. Effective August 6, 2004, the Company, through its wholly owned subsidiary, Boundless Racing, Inc.,
a Texas corporation (as the assignee of Boundless Track Operations, Inc., a Nevada corporation and
wholly-owned subsidiary of the Company (BOTI)), consummated the acquisition of all of the
outstanding shares of capital stock of DIRT Motorsports, Inc., a New York corporation (DIRT),
pursuant to a Stock Purchase Agreement, dated August 13, 2003, as amended and extended. In exchange for the outstanding capital stock of DIRT, the Company paid to Mr. Glenn Donnelly, the
sole shareholder of DIRT, $2,107,180 consisting of (a) cash in an aggregate amount of $1,775,000,
of which $925,000 remained unpaid at year end pending a final accounting which could ultimately
reduce the purchase price, and (b) 591,667 shares of the Companys common stock, $.0001 par value
per share, valued at $118,333, (the Shares), all of which shares had been previously paid to Mr.
Donnelly in October 2003. Mr. Donnelly has been retained by the Company in a consultative capacity
to assist the Company with its Super Dirt Week racing events pursuant to the terms of a
Consulting Agreement. The Company also incurred $221,308 of costs relating to the acquisition. The Shares issued to Mr. Donnelly in connection with the acquisition of DIRT were issued by the
Company pursuant to an exemption (Section 4(2)) from the registration requirements of the
Securities Act of 1933, as amended and are restricted shares. On August 31, 2004 the Company consummated the acquisition of the Cayuga County race track. In
exchange for the assets and real property acquired, which consisted of the Cayuga County motor
sports racing track located in Cayuga - 18 -




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County, New York, the Company paid $2,293,333 consisting of (a) cash in of $2,150,000, and (b)
716,667 shares of the Companys common stock, $.0001 par value per share (the Shares), valued at
$143,333 which were previously
paid and credited toward the purchase price. The following table summarizes the estimated fair value of the assets acquired and liabilities
assumed at the date of acquisitions for the DIRT transactions: DIRT
    
    
    Rolling Wheels
    
    
    Cayuga CountyCurrent Assets
    
    $
    459,217
    
    
    $
    
    
    
    $
    Property and Equipment
    
    
    249,635
    
    
    
    1,088,777
    
    
    
    2,293,333Goodwill
    
    
    2,536,700Total assets acquired
    
    
    3,245,552
    
    
    
    1,088,777
    
    
    
    2,293,333Current Liabilities
    
    
    1,130,910
    
    
    
    
    
    
    
    Net assets acquired
    
    $
    2,114,642
    
    
    $
    1,088,777
    
    
    $
    2,293,333
 The goodwill associated with the acquisition of the DIRT stock will not be amortizable for tax
purposes. United Midwestern Promoters Motorsports (UMP) Acquisition Effective November 30, 2004, the Company, entered into and consummated a Membership Interests
Purchase Agreement by and among United Midwestern Promoters Motorsports, LLC, hereafter UMP,
National Speedways of Iowa, Inc., Track Enterprises, Inc., Ken Schrader Racing, Inc., and Lebanon
Valley Auto Racing Corp. (the Purchase Agreement), pursuant to which the Company acquired all of
the outstanding membership interests in UMP, in exchange for an aggregate purchase price of
$2,400,000, of which, $200,000 was previously paid under the terms of a letter of intent among the
parties, 1,600,000 was paid in cash at closing, and the remaining $600,000 was satisfied through
the issuance of 164,384 shares of the Companys common stock, par value $.0001 per share (the
Shares). In addition, at closing the Company has provided warrants to purchase an aggregate of
40,000 shares of the Companys common stock for $3.65 per share. These warrants were valued at an
aggregate amount of $132,187 based on Black-Scholes modeling and the fair market value of the
warrants at the time of issuance. UMP is a dirt track race sanctioning body, and as such, sanctions races for both late model and
open wheel modified cars. UMP assets include its agreements with drivers competing in its races,
and sponsorship agreements with racing event sponsors. Under the terms of the Purchase Agreement,
if the average closing price of the Companys common stock for the ten-trading days immediately
preceding the one-year anniversary of the date of the closing of the acquisition (the Average
Anniversary Price) is less than $3.65 per share, then the Company shall, at its sole election,
either (a) issue additional shares of its common stock equal to the difference between: (i)
$600,000 divided by the Average Anniversary
Price, less (ii) 164,384, or (b) purchase, at a purchase price of $3.65 a share, the Shares. The UMP acquisition amount was allocated as follows: Cash paid for acquisition
    
    $
    1,800,000Value of stock issued
    
    
    600,000Value of warrants issued
    
    
    132,187Accrued liabilities assumed
    
    
    498,200Accounts payable assumed
    
    
    300,000Accrued and paid closing costs
    
    
    125,443$
    3,455,830Allocation to goodwill
    
    $
    2,251,330Allocation to land, buildings and equipment
    
    
    99,500Allocation to trademarks
    
    
    100,000Allocation to contract rights
    
    
    1,005,000$
    3,455,830
 The purchase contract called for the $300,000 to be paid in the form of commissions based
on 50% of the net sponsorship dollars generated by the sellers. When UMP was sold, this obligation
became due in full from the sales proceeds. The purchase contract also obligates the UMP to
commissions of 25% of the net sponsorship money obtained for UMP by sellers (including the proceeds
from the NVE Pharmaceutical contract) for the first year after the $300,000 commission has been - 19 -




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paid, and 10% thereafter for the life of the NVE Pharmaceutical contract including any extensions
or renewals of the contract. On September 22, 2004 the Company acquired the contractual rights to the NVE Pharmaceuticals, Inc
sponsorship agreement. This is a ten year sponsorship agreement commencing in 2004: Future
sponsorship commitments under this agreement by year are as follows: SponsorshipYear
    
    Commitment2005
    
    $
    1,100,0002006
    
    
    1,210,0002007
    
    
    1,270,5002008
    
    
    1,334,0252009
    
    
    1,400,7262010
    
    
    1,470,7622011
    
    
    1,544,3002012
    
    
    1,621,5152013
    
    
    1,702,591Total
    
    
    12,654,419
 This contract contains various performance criteria on the part of the Company for which the
failure to comply would result in the termination of this agreement. During 2004 NVE
Pharmaceuticals, Inc. paid $1,000,000 in sponsorship fees to the Extreme Dirt Car, Inc., the
previous party to this agreement. The Company also has Sponsorship agreements in place with a tire company, which call for payments
of sponsorship fees based solely on the number of tires sold at each of the Companys races.
During the year ended November 30, 2004, the Company received $532,417 in sponsorship revenues from
this tire company. These tire sponsorship agreements expire in 2007. Lernerville Speedway Acquisition Effective November 7, 2004, the Company, through its wholly owned subsidiary, Boundless Racing,
Inc., a Texas corporation (BRI), entered into an Asset Purchase Agreement (the Lernerville
Agreement) with Lernerville Speedway, Inc., a corporation organized under the Commonwealth of
Pennsylvania (the LSI), and Helen W. Martin, Donny Martin-Roenigk, and Patty Martin-Roenigk (the
Purchase Agreement), pursuant to which the Company intends to purchase substantially all of the
assets of LSI and certain real estate owned by Ms. Martin and comprising the racing facility used
by LSI and known as the Lernerville Speedway (the Assets). The terms of the Lernerville Agreement require BRI to pay a total purchase price of $3,240,000 for
the Assets, and assume certain of LSIs liabilities. The purchase price is payable by BRI as
follows:  (g)
    $500,000 will be payable at the closing of the transactions under the Lernerville
Agreement;(h)
    $110,000 will be payable on or prior to May 30, 2005, $3,500 of which shall be deemed
to be interest;(i)
    $110,000 will be payable on or prior to October 30, 2005, $6,500 of which shall be
deemed to be interest;(j)
    $110,000 will be payable on or prior to May 30, 2006, $12,000 of which shall be deemed
to be interest;(k)
    $110,000 will be payable on or prior to May 30, 2007, $18,000 of which shall be deemed
to be interest; and(l)
    the remaining $2,300,000 will be payable pursuant to the terms of a four year
promissory note bearing interest at seven percent per year, with accrued interest payable
annually. The four $110,000 payments described above, as well as the promissory note, will be secured by a
mortgage on the Lerner Speedway facility, and will be guaranteed by the Company. The closing of the
transactions under the Lernerville Agreement is subject to several conditions, including the
completion by BRI of a due diligence review of LSI and the racing facility operations. This purchase was not finalized as of December 31, 2004 and was not reflected on the Companys
financial statements at that date. - 20 -




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Results of Operations During the three month period ended December 31, 2004, the Company incurred $3,230,427 in
operating, general and administrative expenses excluding depreciation. The Company had a loss from
operations of $2,341,588 and an associated loss per share of $0.16 for the three month period ended
December 31, 2004. Depreciation and amortization expense during the three month period ended December 31, 2004
increased to $47,100 or 979% from $6,473 during the three month period ended December 31, 2003 due
to an increase in assets as a result of the acquisitions described herein. Interest expense during the three month period ended December 31, 2004 increased to $1,063,853 or
7,003% from $14,978 during the three month period ended December 31, 2003 due to an increase in
financing activities and amortization of the debt discount in the amount of $1,000,000 in
connection with the beneficial conversion rights of the outstanding $2 million note payable. During the three month period ended December 31, 2004, 10% of gross revenues were generated through
race sanctioning fees; admission fees generated 66% of revenues; sponsorships generated 11% of
revenues; merchandise sales generated 9% of revenues; and 4% of revenues was generated through
other sources. Liquidity and Capital Resources At December 31, 2004,
the Companys had a negative working capital of $2,785,822. We generated $1,990,413 in
revenues during the three months ended December 31, 2004 however, we have not yet achieved a
profitable level of operations .Our primary source of funding acquisitions and operating deficits
through December 31, 2004 has been from issuance of preferred stock and from the Companys 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, the Company has sold 4,790.37 shares of
its Series A preferred stock, resulting in net proceeds to the Company of $10,687,269 and Mr.
Kruger has provided approximately $2.5 million in funding to the Company, of which, approximately
$2.3 million was in the form of promissory notes which were subsequently converted to additional
paid in capital on July 31, 2004. Subsequent to year end, the Company has received loan proceeds totaling $900,000 as described in
Note 15 above. We anticipate raising funds through additional private placements of preferred stock and additional
sources of long-term financing. We believe the Companys operations and sponsorship revenues will
also provide additional cash flows as the Company progresses toward attaining increased
profitability through operations. As the future success of the Company is dependent on our ability to fund operations, 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 December 31, 2004: Payment Due by PeriodLess than
    
    
    2 to 3
    
    
    4 to 5
    
    
    After 5Contractual obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsOperating leases
    
    $
    59,144
    
    
    $
    37,144
    
    
    $
    22,000
    
    
    $
    
    
    
    $
    Notes payable and accrued interest
    
    $
    2,100,000
    
    
    $
    100,000
    
    
    $
    2,000,000
    
    
    $
    
    
    
    $
    
 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. 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. - 21 -




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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. Attendance fees are recognized in revenues on the day of the event.
Membership income is recognized proratedly over the term of the membership. 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. There are warrants to purchase 8,368,633 shares of common stock
outstanding as of September 30, 2004. Due to net losses in 2004, the warrants were not included in
diluted earnings per share as the effect would have been anti-dilutive. 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. 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 are to be amortized over the respective estimated
useful lives or anticipated future cash flow streams when appropriate. At least annually the Company tests for possible impairment of definite-lived intangible assets
whenever events or changes in circumstances, such as a reduction in operating cash flow or a
dramatic change in the manner that the asset is intended to be used indicate that the carrying
amount of the asset is not recoverable. If indicators exist, the Company compares the undiscounted
cash flows related to the asset to the carrying value of the asset. If the carrying value is
greater than the - 22 -




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undiscounted cash flow amount, an impairment charge is recorded in the operating expense section in
the statement of operations for amounts necessary to reduce the carrying value of the asset to fair
value. The Company has chosen the fourth quarter to conduct its annual impairment test. New Accounting Pronouncements 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. In November 2004, the FASB issued SFAS No. 151 Inventory Costs  an amendment of ARB No. 43,
Chapter 4. Statement No. 151 requires that certain abnormal costs associated with the
manufacturing, freight, and handling costs associated with inventory be charged to current
operations in the period in which they are incurred. The adoption of SFAS 151 had no impact on the
Companys financial position, results of operations, or cash flows. In December 2004, the FASB issued a revision of SFAS No. 123 Share-Based Payment. The statement
establishes standards for the accounting for transactions in which an entity exchanges its equity
investments for goods and services. It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value of the entitys
equity instruments or that may be settled by the issuance of those equity instruments. The
statement does not change the accounting guidance for share-based payments with parties other than
employees. The statement requires a public entity to measure the cost of employee service received in exchange
for an award of equity instruments based on the grant date fair value of the award (with limited
exception). That cost will be recognized over the period during which an employee is required to
provide service in exchange for the award (usually the vesting period). A public entity will
initially measure the cost of employee services received in exchange for an award of liability
instrument based on its current fair value; the fair value of that award will be re-measured
subsequently at each reporting date through the settlement date. Changes in fair value during the
requisite service period will be recognized as compensation over that period. The grant-date for fair value of employee share options and similar instruments will be estimated
using option-pricing models adjusted for the unique characteristics of these instruments. The statement is effective for the quarter beginning January 1, 2006. In December 2004, the FASB issued SFAS No. 153 Exchanges of Non-monetary Assets-amendment of APB
Opinion No. 29. Statement 153 eliminates the exception to fair value for exchanges of similar
productive assets and replaces it with a general exception for exchange transaction that do not
have commercial substance, defined as transaction that are not expected to result in significant
changes in the cash flows of the reporting entity. This statement is effective for exchanges of
non-monetary assets occurring after June 15, 2005. 
 ITEM 3. CONTROLS AND PROCEDURES The Companys Chief Executive Officer and the Companys principal financial officer, after
evaluating the effectiveness of the Companys disclosure controls and procedures (as defined in the
Securities Exchange Act of 1934 Rule 13a-14(c) and 15d-14(c) as of the date of the financial
statements included in this report on Form 10-QSB, have concluded that as of the evaluation date,
the Companys disclosure controls and procedures are adequate and effective to ensure that material
information relating to the Company (including consolidated subsidiaries) required to be included
in our periodic SEC filings would be made known to them by others within those entities. There have been no significant changes in the Companys internal controls or in other factors that
could significantly affect the Companys disclosure controls and procedures subsequent to the
evaluation date, nor any significant deficiencies or material weaknesses in such disclosure
controls and procedures requiring corrective actions. As a result, no corrective actions were
taken. - 23 -




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PART II  OTHER INFORMATION 
 ITEM 1. LEGAL PROCEEDINGS On March 18, 2004, Plaintiff Greenway-University Centre Partners, L.P. sued Boundless Track
Operations, Inc., one of our subsidiaries, for breach of a written lease agreement. The Plaintiff
was seeking to hold the Company liable for the lease obligation even though the Company is not a
party to, nor did it assume, the lease. We have settled this lawsuit and cancelled the lease
pursuant to a settlement agreement under which we will pay the plaintiff $150,000. We are from time to time involved in various legal proceedings incidental to the conduct of our
business. We believe that the outcome of all such pending legal proceedings will not in the
aggregate have a material adverse effect on our business, financial condition, results of
operations or liquidity. 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K The following documents are filed as part of this report: (a) Exhibits  2.12
    Membership Interests Purchase Agreement, dated as of November 30, 2004, by and among United
Midwestern Promoters Motorsports, LLC, National Speedways of Iowa, Inc., Track Enterprises,
Inc., Ken Schrader Racing, Inc., Lebanon Valley Auto Racing Corp., and Boundless Motor Sports Racing, Inc. (Incorporated by reference to Exhibit
2.1 of the Companys Current Report on Form 8-K filed with the Commission on December 6,
2004).31.1
    Rule 13a-14(a)/15d-14(a) Certification of Paul A. Kruger *31.2
    Rule 13a-14(a)/15d-14(a) Certification of Glenn A. Jackson *32
    Section 1350 Certification of Paul A. Kruger and Glenn A. Jackson *   *Filed herewith (b) Reports on Form 8-K: The Company filed the following reports on Form 8-K during the quarter ended December 31, 2004: (1)
    
    Form 8-K/A filed on October 5, 2004 reporting under items 4 and 9, changes in Registrants
certifying accountant.(2)
    
    Form 8-K/A filed on October 22, 2004 reporting under item 9, the financial statements and pro
forma financial information related to the acquisition of DIRT Motorsports, Inc.(3)
    
    Form 8-K filed on November 10, 2004 reporting under items 1 and 9 the entry into a material
definitive agreement for the acquisition of substantially all of the assets of Lernerville
Speedway.(4)
    
    Form 8-K filed on December 6, 2004 reporting under item 1, 2, 3, and 9, the Membership
Interests Purchase Agreement for the acquisition of United Midwestern Promoters Motorsports,
LLC (UMP).
 - 24 -




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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: February 22, 2005
    
    /s/ Paul A. KrugerPaul A Kruger, Chief Executive OfficerDate: February 22, 2005
    
    /s/ Glenn A. JacksonGlenn A. Jackson, Chief Accounting Officer
 - 25 -