SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 1O-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2006
Commission File Number 0-17977
BOUNDLESS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other Jurisdiction of Incorporation or Organization)
13-3469637
(I.R.S. Employer Identification No.)
50 Engineers Lane Unit 2
Farmingdale, NY
(Address of principal executive offices)
11735
(Zip Code)
(631) 962-1500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes |X| No |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2)
Yes |_| No |X|
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)
Yes |X| No |_|
As of November 6, 2006, the Registrant had approximately 4,000,000 shares of
Common Stock, $.01 par value per share which will be issued upon validation of
unsecured claims pursuant to the Amended Plan of Bankruptcy Reorganization.
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BOUNDLESS CORPORATION
INDEX
Page
No.
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Part I. Financial Information
Item 1. Financial Statements of Shell Company (the "Reorganized Company")
Condensed Balance Sheet of Boundless Corporation
as of September 30, 2006 (Unaudited) 3
Condensed Statement of Operations of Boundless Corporation
for the period June 10 through September 30, 2006 (Unaudited) 4
Condensed Statement of Cash Flows of Boundless Corporation
for the period June 10 through September 30, 2006 (Unaudited) 5
Notes to Condensed Financial Statements of the
Reorganized Company (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 8
Item 3. Controls and Procedures 10
Part II. Other Information
Item 1. Legal Proceedings 11
Item 6. Exhibits 11
Signature 12
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BOUNDLESS CORPORATION
(REORGANIZED COMPANY)
CONDENSED BALANCE SHEET
(in thousands)
September 30,
2006
-------------
ASSETS (unaudited)
Current assets $ --
Other assets --
----------
Total assets $ --
==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities $ --
Other liabilities --
----------
Total liabilities --
----------
COMMITMENTS AND CONTINGENCIES (See Notes)
Stockholders' equity: (Note 3)
Common stock to be issued 40
Additional paid-in capital 164
Asset value to be recognized upon
distribution of distributable shares (200)
Accumulated deficit (4)
----------
Total stockholders' equity --
----------
Total liabilities and stockholders' equity $ --
==========
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS
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BOUNDLESS CORPORATION
(REORGANIZED COMPANY)
CONDENSED STATEMENT OF OPERATIONS
(in thousands)
Three Months Period
Ended June 10 to
September 30, September 30
2006 2006
------------- ------------
Revenues $ -- $ --
General and administrative expense (Note 3) 3 4
---------- ----------
Net loss $ (3) $ (4)
========== ==========
Basic and diluted loss per common share $ -- $ --
========== ==========
Basic and diluted weighted average shares outstanding -- --
========== ==========
Proforma basic and diluted loss per common
share(1) $ -- $ --
========== ==========
Proforma basic and diluted weighted average
shares outstanding(1) 4,000 4,000
========== ==========
(1) Giving effect to the distribution of distributable shares (Note 1)
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS
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BOUNDLESS CORPORATION
(REORGANIZED COMPANY)
CONDENSED STATEMENT OF CASH FLOWS
(in thousands)
Period
June 10 to
September 30,
2006
-------------
Cash flows from operating activities:
Net loss $ (4)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Imputed expense 4
Changes in assets and liabilities: --
----------
Net cash from operating activities --
----------
Net cash from investing activities --
----------
Net cash from financing activities --
----------
Net change in cash and cash equivalents --
Cash and cash equivalents at beginning of period --
----------
Cash and cash equivalents at end of period $ --
==========
Cash paid for:
Interest $ --
Taxes --
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS
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BOUNDLESS CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
OF THE SHELL COMPANY (THE "REORGANIZED COMPANY")
(in thousands)
(unaudited)
1. Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code
On June 9, 2006 (the "Effective Date"), the Company and its subsidiaries emerged
from proceedings under Chapter 11 of Title 11 of the United States Code (the
"Bankruptcy Code") pursuant to the terms of its Amended Plan (as defined). On
June 1, 2006, the United States Bankruptcy Court for the Eastern District of New
York (the "Bankruptcy Court") approved the Company's fourth amended plan of
reorganization filed with the Bankruptcy Court, as modified at the confirmation
hearing (the "Amended Plan") and established June 9, 2006 as the Effective Date.
As used in this Form 10-QSB, the term "Predecessor Company" refers to the
Company and its operations for periods prior to June 10, 2006, while the term
"Reorganized Company" is used to describe the Company and its operations for
periods thereafter.
Material Features of the Amended Plan Relating to the Reorganized Company
As soon as practicable after the Effective Date, the Reorganized Company shall
take all steps necessary to arrange for the cancellation of each class of their
existing common stock and preferred stock. Holders of existing common and
preferred stock on the record date shall have his, her or its stock cancelled,
and shall receive nothing on account thereof from the Company. As of October 31,
2006, the Reorganized Company had cancelled each class of the existing common
stock and preferred stock.
On the Effective Date, the Reorganized Company shall be authorized to issue one
hundred (100,000,000) million shares of common stock ("Boundless Common Stock")
of which four million shares shall be issued to the claimants as set forth in
the Amended Plan.
All assets of the Reorganized Company, if any, not owned by Boundless
Technologies, Inc. ("Technologies"), a wholly-owned subsidiary of the
Predecessor Company, shall be transferred to Technologies and any and all
liabilities of the Reorganized Company, including guarantees, shall be assumed
by Technologies or canceled. On the Effective Date, Boundless Manufacturing
Services, Inc. and Boundless Acquisition Corp. shall be dissolved.
On the Effective Date, Boundless shall issue to Vision Technologies, Inc.,
2,040,000 shares of Boundless Common Stock. In addition, each holder of Claims
shall also receive its pro rata share of 1,960,000 shares of Boundless Common
Stock, which shares shall be issued in accordance with ss. 1145 of the
Bankruptcy Code. As of November 6, 2006, the Reorganized Company was in the
process of validating the Claims for the purpose of determining the appropriate
share distribution amongst the holders of approved Claims.
Subsequent to the Effective Date, the Reorganized Company contemplates acquiring
(the "Acquisition") an interest in an operating company which desires to become
a public company. In effecting this subsequent transaction under the Amended
Plan, the Reorganized Company will issue Boundless Common Stock to acquire its
interests in the operating company. The Boundless Common Stock issued to Vision
and holders of Claims will represent approximately 10% of the outstanding common
stock of the Reorganized Company after the Acquisition is consummated and the
owners of the operating company will own approximately 90% of the outstanding
common stock of the Reorganized Company after the transaction. The consummation
of this transaction will be undertaken in compliance with the Securities Laws of
the United States and all other jurisdictions, if any, which require such
compliance. In this regard, the Predecessor Company filed a Form 8-K with the
Securities and Exchange Commission with respect to this transaction on June 13,
2006.
Pursuant to the Amended Plan, the amount of cash payable by Technologies to
holders of Claims shall be subject to reduction pro rata, in an amount equal to
75% of the average closing prices of the Boundless Common Stock traded on the
electronic bulletin board during the twenty trading day period beginning 60
calendar days after the shares are
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listed on any of the following: (i) the Nasdaq Electronic Bulletin Board, (ii)
Nasdaq'a Small Cap or National Market or (iii) any exchange (collectively, a
"Trading Market"). For this purpose, if such shares do not trade on a particular
trading day, the closing price for that day that shall be used in determining
the average closing price of such shares shall be the closing price for the
shares on the last day it did trade. No holder of a Claim shall be required to
return any cash distributions to Technologies as a result of the adjustments
provided herein notwithstanding the value of the Boundless Common Stock. Holders
of Claims will be notified promptly after any such shares are listed on a
Trading Market and of any adjustments hereunder.
Financial Statement Presentation.
The unaudited condensed interim financial statements, and accompanying notes
included herein, have been prepared by the Reorganized Company pursuant to the
rules and regulations of the Securities and Exchange Commission ("SEC") and
reflect all adjustments which are of a normal recurring nature and which, in the
opinion of management, are necessary for the fair statement of the results of
the three months ended September 30, 2006, and the period June 10, 2006 through
September 30, 2006. Certain information and footnote disclosures have been
condensed or omitted pursuant to such regulations. The Reorganized Company has
no operating business, no assets, and its imputed operating overhead is funded
by Technologies. The results for the current interim periods are not necessarily
indicative of the results for the full year, particularly if the Company
consummates an acquisition. These consolidated financial statements should be
read in conjunction with the consolidated financial statements and the notes
thereto in the Predecessor Company's latest annual report filed with the SEC on
Form 10-K for the year ended December 31, 2005.
Comparability of Financial Information/ Going Concern
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern and, accordingly, do not include any
adjustments that might result from the outcome of the uncertainties described
herein.
Since the Effective Date, the Reorganized Company has no operating business, no
assets, and its imputed operating overhead is funded by Technologies. As
described herein, the Reorganized Company is actively negotiating to acquire an
operating business. There can be no assurances that the operating entity will be
acquired or that a merger transaction will be consummated. As a result, there is
substantial doubt about the Reorganized Company's ability to continue as a going
concern. No adjustments have been made with respect to the financial statements
to record the results of the ultimate outcome of this uncertainty on the
Reorganized Company.
2. Summary of Certain Accounting Policies
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. Stockholders' Equity
At September 30, 2006 the stockholders' equity of the Reorganized Company
consisted of the
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following:
Reorganized
Company
-------------
September 30,
2006
-------------
Common stock, $0.01 par value, 100,000,000 shares
authorized, 4,000,000 shares distributable $ 40
Additional paid-in capital 164
Asset value to be recognized upon
distribution of distributable shares (200)
Accumulated deficit (4)
-----------
Total stockholders' deficit $ --
===========
As of the Effective Date, the Reorganized Company is authorized to issue one
hundred (100,000,000) million shares of common stock ("Boundless Common Stock")
of which four million shares are distributable to Vision Technologies, Inc. and
the claimants as set forth in the Amended Plan. (See Note 1) As of October 31,
2006, the shares have not been distributed.
For the period June 10, 2006 through September 30, 2006, the Reorganized Company
recognized imputed expenses of $4, representing the estimate of expenses
(principally salaries) incurred by Technologies for the benefit of the
Reorganized Company following emergence from Chapter 11.
4. Income Taxes
The Company's loss for the interim period is not a tax loss and accordingly no
tax benefit is recorded herein.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS - REORGANIZED COMPANY
Upon emergence from bankruptcy, the assets and liabilities of the Predecessor
Company were assumed by Technologies. The Reorganized Company is a shell company
as defined by Rule 12b-2 of the Exchange Act.
For the three months and cumulative period ended September 30, 2006, the
Reorganized Company recognized imputed expenses of $3 and $4, respectively,
representing the estimate of expenses (principally salaries) incurred by
Technologies for the benefit of the Reorganized Company following emergence from
Chapter 11.
LIQUIDITY AND CAPITAL RESOURCES
The matters described in "Liquidity and Capital Resources," to the extent that
they relate to future events or expectations, may be significantly affected by
the terms of the Amended Plan.
As discussed in Note 1, on the Effective Date, the assets and liabilities of the
Predecessor Company were assumed by Technologies.
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Subsequent to the Effective Date, the Reorganized Company contemplates acquiring
(the "Acquisition") an interest in an operating company which desires to become
a public company. In effecting this subsequent transaction under the Amended
Plan, the Reorganized Company will issue Boundless Common Stock to acquire its
interests in the operating company. As a result of these stock issuances, the
Boundless Common Stock issued to Vision and to holders of Claims will represent
approximately 10% of the outstanding common stock of the Reorganized Company
after the Acquisition is consummated and the owners of the operating company
will own approximately 90% of the outstanding common stock of the Reorganized
Company after the transaction. The consummation of this transaction will be
undertaken in compliance with the Securities Laws of the United States and all
other jurisdictions, if any, which require such compliance. In this regard, the
Reorganized Company will file a Form 8-K with the Securities and Exchange
Commission with respect to this transaction.
Since the Effective Date, the Reorganized Company has no operating business, no
assets, and its imputed operating overhead is funded by Technologies. As
described herein, the Reorganized Company is actively negotiating to acquire an
operating business. There can be no assurances that the operating entity will be
acquired or that a merger transaction will be consummated. As a result, there is
substantial doubt about the Reorganized Company's ability to continue as a going
concern. No adjustments have been made with respect to the consolidated
financial statements to record the results of the ultimate outcome of this
uncertainty on the Reorganized Company.
FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE
This Form 10-QSB contains various "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Forward-looking
statements represent the Company's expectations and beliefs concerning future
events, based on information available to us on the date of the filing of this
Form 10-QSB, and are subject to various risks and uncertainties. We disclaim any
intent or obligation to update or revise any of the forward-looking statements,
whether in response to new information, unforeseen events or changed
circumstances except as required to comply with the disclosure requirements of
the federal securities laws.
Forward looking statements necessarily involve known and unknown risks,
uncertainties and other factors that may cause the actual results, levels of
activity, performance, or achievements to be materially different from any
future results, levels of activity, performance, or achievement expressed or
implied by such forward-looking statements. Readers are cautioned to review
carefully the discussion concerning these and other risks which can materially
affect the Company's business, operations, financial condition and future
prospects.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "could," "intend," "expect," "anticipate,"
"assume", "hope", "plan," "believe," "seek," "estimate," "predict,"
"approximate," "potential," "continue", or the negative of such terms.
Statements including these words and variations of such words, and other similar
expressions, are forward-looking statements. Although the Company believes that
the expectations reflected in the forward-looking statements are reasonable
based upon its knowledge of its business, the Company cannot absolutely predict
or guarantee its future results, levels of activity, performance, or
achievements. Moreover, neither the Company nor any other person assumes
responsibility for the accuracy and completeness of such statements.
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Item 3. Controls and Procedures
An evaluation was carried out under the supervision and with the participation
of the Company's management, including the Chief Executive Officer ("CEO") and
Chief Financial Officer ("CFO"), of the effectiveness of the Company's
disclosure controls and procedures as of September 30, 2006. Based on that
evaluation, the Company's management, including the CEO and CFO, has concluded
that the Company's disclosure controls and procedures are effective. During the
period covered by this report, there was no change in the Company's internal
control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Matters
None.
Item 2. Changes in Securities
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 31.1: Certification of Acting Chief Executive Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
Exhibit 31.2: Certification of Chief Financial Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
Exhibit 32: Certification of Acting Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed with the Securities and Exchange
Commission on June 13, 2006, announcing the emergence from bankruptcy and
describing the terms of the Amended Plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: November 08, 2006
Boundless Corporation
By: /s/ Joseph Gardner
----------------------------------------
Joseph Gardner
Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)
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