UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended                           Commission File Number 0-21138
   March 31, 2001


                                 INPRIMIS, INC.
             (Exact name of registrant as specified in its charter)

         Florida                                         59-2479377
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

    1601 Clint Moore Road
     Boca Raton, Florida
    (Address of principal                                   33487
      executive offices)                                 (Zip Code)

                                 (561) 997-6227
              (Registrant's telephone number, including area code)

              (Former name, former address and former fiscal year
                          if changed since last report)

         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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

                                                             Outstanding as of
         Class                                                  May 12, 2001
         -----                                                ----------------
  Common stock, par value                                       11,623,604
      $.01 per share


                                       1
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
                 Form 10-Q for the Quarter Ended March 31, 2001

                                      INDEX
                                                                          Page
                                                                          ----
Part I.  FINANCIAL INFORMATION
   Item 1.  Financial Statements

               Condensed Consolidated Balance Sheets
                (unaudited) as of March 31, 2001 and
                December 31, 2000...............................            3

               Condensed Consolidated Statements of
                Operations (unaudited) for the three
                months ended March 31, 2001 and 2000............            4

               Condensed Consolidated Statements of
                Cash Flows (unaudited) for the three
                months ended March 31, 2001 and 2000............            5

               Notes to Condensed Consolidated
                Financial Statements (unaudited)................            6

   Item 2.  Management's Discussion and Analysis of
             Financial Condition and Results of
             Operations.........................................           14

Part II. OTHER INFORMATION
   Item 1.     Legal Proceedings................................           25

   Items 2-3.  Not applicable...................................           25

   Item 4.     Submission of Matters to a Vote of
                Security Holders................................           25

   Item 5.     Other Information................................           25

   Item 6.     Exhibits and Reports on Form 8-K.................           25

   Signatures...................................................           26


                                       2
<PAGE>

PART I.  Item 1.

                         INPRIMIS, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                        (In thousands except share data)
<TABLE>
<CAPTION>
                                                                                    March 31,     December 31,
                                                                                      2001            2000
                                                                                    ---------     ------------
                                     ASSETS
<S>                                                                                 <C>           <C>
Current assets:
   Cash and cash equivalents................................                         $ 2,718        $ 5,454
   Trade receivables, net...................................                             566          1,204
   Prepaid expenses and other current assets................                             250            661
                                                                                     -------        -------
     Total current assets...................................                           3,534          7,319
Property and equipment, net.................................                             936            971
Other assets................................................                             630            795
                                                                                     -------        -------
     Total assets...........................................                         $ 5,100        $ 9,085
                                                                                     =======        =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable.........................................                         $ 1,224        $ 1,259
   Deferred revenue.........................................                              13            161
   Accrued expenses and other current liabilities...........                           1,624          3,277
                                                                                     -------        -------
     Total current liabilities                                                         2,861          4,697
                                                                                     -------        -------

Other non-current liabilities...............................                               9             --
                                                                                     -------        -------
Commitments and contingencies
Stockholders' equity:
   Preferred stock, 5,000,000 $.01 par value shares
    authorized, none issued and outstanding at March 31,
    2001 and December 31, 2000..............................                              --             --
   Common stock, 25,000,000 $.01 par value shares authorized,
    11,623,604 issued and outstanding at March 31, 2001,
    11,608,788 issued and outstanding at December 31, 2000..                             116            116
   Additional paid-in capital...............................                          40,055         40,043
   Accumulated deficit......................................                         (37,941)       (35,771)
                                                                                     -------        -------
     Total stockholders' equity.............................                           2,230          4,388
                                                                                     -------        -------
     Total liabilities and stockholders' equity.............                         $ 5,100        $ 9,085
                                                                                     =======        =======
</TABLE>

           See notes to condensed consolidated financial statements.


                                       3
<PAGE>

                         INPRIMIS, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (In thousands except per share data)
<TABLE>
<CAPTION>
                                                                                                 Three Months
                                                                                               Ended March 31,
                                                                                               ---------------
                                                                                             2001           2000
                                                                                             ----           ----
<S>                                                                                     <C>              <C>
Net sales
  Product sales................................................                         $     161        $   4,280
  Engineering Services.........................................                               653              375
                                                                                        ---------        ---------
        Total..................................................                               814            4,655
Cost of goods sold.............................................                             1,974            4,259
                                                                                        ---------        ---------
  Gross profit (loss)..........................................                            (1,160)             396
                                                                                        ---------        ---------
Operating expenses:............................................
  Research and development.....................................                               128              718
  Selling, general and administrative..........................                               969            3,226
                                                                                        ---------        ---------
  Total operating expenses.....................................                             1,097            3,944
                                                                                        ---------        ---------
Loss from operations...........................................                            (2,257)          (3,548)
Non-operating income, net......................................                                88            1,153
                                                                                        ---------        ---------
Loss before income taxes.......................................                            (2,169)          (2,395)
Income taxes...................................................                                 1               --
                                                                                        ---------        ---------
Net loss.......................................................                         $  (2,170)       $  (2,395)
                                                                                        =========        =========
Net loss per share (basic and diluted).........................                         $   (0.19)       $   (0.21)
                                                                                        =========        =========
Weighted average shares outstanding............................                            11,624           11,526
                                                                                        =========        =========
</TABLE>

           See notes to condensed consolidated financial statements.


                                       4
<PAGE>

                         INPRIMIS, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                             Three Months
                                                                                            Ended March 31,
                                                                                            ---------------
                                                                                          2001           2000
                                                                                          ----           ----
<S>                                                                                 <C>            <C>
Cash provided by (used in):
Operating activities:
   Net loss..........................................................               $    (2,170)   $    (2,395)
   Depreciation and amortization.....................................                       171            682
   Gain on sale of shares received under marketing agreement.........                        --           (956)
   Gain on sale of fixed assets......................................                        --           (292)
   Changes in assets and liabilities.................................                      (733)          (210)
                                                                                    -----------    -----------
   Net cash used in operating activities.............................                    (2,732)        (3,171)
                                                                                    -----------    -----------
Investing activities:
   Proceeds from sale of shares received under marketing agreement
    and shares in foreign investment.................................                        --          1,156
   Proceeds from sale of fixed assets................................                        --            715
   Payment received on note from Boundless...........................                        63             --
   Capital expenditures..............................................                       (79)          (325)
                                                                                    -----------    -----------
   Net cash provided by (used in) investing activities...............                       (16)         1,546
                                                                                    -----------    -----------
Financing activities - Issuance of common stock......................                        12            470
                                                                                    -----------    -----------
Net decrease in cash and cash equivalents............................                    (2,736)        (1,155)
Cash and cash equivalents, beginning of period.......................                     5,454         11,819
                                                                                    -----------    -----------
Cash and cash equivalents, end of period.............................               $     2,718    $    10,664
                                                                                    ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during the quarter for income taxes                                    $         1    $        --
                                                                                    ===========    ===========
   Non cash investing and financing activities:
       Capital lease obligation incurred for equipment purchases                    $        17    $        --
                                                                                    ===========    ===========
       Decrease in note receivable from Boundless as an offset for
        payment against the minimum purchase guarantee and
        accounts payable to Boundless                                               $       562    $        --
                                                                                    ===========    ===========
</TABLE>

            See notes to condensed consolidated financial statements


                                       5
<PAGE>

                         INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Basis of Presentation and Going Concern

        The condensed consolidated financial statements include the accounts of
Inprimis, Inc. and subsidiaries (the "Company") and have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission regarding interim financial reporting and, accordingly, they do not
include all of the information and disclosures required by accounting principles
generally accepted in the United States of America ("Generally Accepted
Accounting Principles"). In the opinion of management, the condensed
consolidated financial statements contain all adjustments (consisting of normal
recurring accruals) necessary to present fairly the financial position of the
Company as of March 31, 2001, the results of its operations for the three month
periods ended March 31, 2001 and 2000, and its cash flows for the three month
periods ended March 31, 2001 and 2000. These results have been determined on the
basis of generally accepted accounting principles and practices applied
consistently with those used in the preparation of the Company's 2000 audited
consolidated financial statements.

        The accompanying condensed consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. The
Company has experienced net operating losses since 1997 and as of March 31,
2001, had an accumulated deficit of $37.9 million. Cash used in operations for
the three months ended March 31, 2001 was $2.7 million. An unfavorable outcome
of the legal contingencies (see "Commitments and Contingencies") would also have
an adverse affect on the Company's cash flow. Such conditions raise substantial
doubt that the Company will be able to continue as a going concern for a
reasonable period of time. The Company has implemented efforts to bring the
Company's expense structure in line with the reduced revenue levels being
achieved and revenue levels that are forecasted. In April 2001, the Company
further reduced its number of employees from 53 to 37. The Company has also
taken steps to increase customer proposal activity in order to improve sales.
There can be no assurances that the Company will return to profitable operations
in the near term and therefore it is likely the Company's operations will
continue to consume cash over the foreseeable future. The Company has limited
cash resources and therefore the Company must reduce its negative cash flow in
the near term to continue operating. In April 2001, the Company hired an
investment banker to seek additional capital or potential acquisitions or merger
candidates that could bring financing or profitable revenues to the combined
companies. However, there can be no assurances that the Company will succeed in
achieving its goals, and its failure to do so in the near term would have a
material adverse effect on its business, prospects, financial condition and
operating results and the Company's ability to continue as a going concern. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classifications of liabilities that might be necessary should the Company be
unable to continue as a going concern.

        The accompanying condensed consolidated financial statements should be
read in conjunction with the Company's most recent audited consolidated
financial statements and notes thereto for the year ended December 31, 2000. The
results of operations for the three month period ended March 31, 2001 are not
necessarily indicative of the results to be expected for the full year.

                                       6
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
       NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont'd)
                                  (Unaudited)

        Certain prior year amounts have been reclassified to conform to the
current period presentation.

Recent Developments and Subsequent Events

          The Company hired an investment banker in April 2001 to seek
additional capital or potential acquisitions or merger candidates that could
bring financing or profitable revenues to the combined companies. The Company
signed a letter of intent on March 27, 2001 to acquire iDVDBox, Inc. One of the
conditions of the letter of intent for completion of the acquisition is that
sufficient financing is obtained to fund the business plans of the combined
companies. The Company believes that the combination of the two companies is
more favorable to attracting capital than either company independently. In April
2001, the Company reduced the number of employees from 53 to 37 as part of its
effort to bring its expense structure in line with the reduced levels of
revenues being achieved.

        The Company embarked upon a plan in early 2000 to transition from being
primarily a data communications products manufacturer to its new focus on
providing engineering services. The Company announced in July 2000 that it no
longer would offer data communications products to the marketplace. In
conjunction with this transition, the Company decided to change the name of the
Company from Boca Research, Inc. to Inprimis, Inc. The Company's data
communications sales were insignificant in the three months ended March 31,
2001. The Company has eliminated its purchase orders for new data communications
products from Boundless Manufacturing Services, Inc. ("Boundless"), the
manufacturing subcontractor utilized by the Company. Procurement of new data
communications products was eliminated as of September 30, 2000 and any sales of
data communication since then have been out of inventory. The Company previously
announced in July 2000 the sale of certain assets to Zoom Telephonics, Inc.
("Zoom"), which provided the Company with a smooth and customer oriented
transition out of the analog modem business. These actions resulted in the
Company determining that the goodwill and tradename/marketing assets related to
the data communications business had been impaired as of June 30, 2000, and the
Company recorded a charge to operations of $2.7 million in the second quarter of
2000. The Company does not currently have goodwill or other intangible assets on
its books. The elimination of new purchase orders to Boundless resulted in the
Company's falling short of the guarantee purchase commitments under the Supply
Agreement (the "Supply Agreement") between the Company and Boundless. This
shortfall was charged to expense in the year ended December 31, 2000. Although
purchases by Zoom from Boundless of the Company's products relating to the
analog business would have mitigated the shortfall (see "Agreement between
Inprimis, Inc. and Zoom Telephonics" and "Commitments and Contingencies"), Zoom
did not make any commitments to manufacture the Company's products at Boundless.
As of March 31, 2001 the shortfall has been satisfied.

                                       7
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
       NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont'd)
                                  (Unaudited)

        The charges to operations relating to impairment of goodwill and
tradename/marketing assets and the shortfall for the guarantee purchase
commitment were recorded under "Asset impairment and other charges" in the
Condensed Consolidated Statements of Operations. These charges occurred in June
2000 and therefore will be reflected in future quarterly filings when the 2001
results are compared to the 2000 results in the periods in which these charges
are reflected. The Company will continue to discharge its warranty obligation on
all products sold. The warranty obligation is included within the caption
"Accrued expenses and other current liabilities" in the condensed consolidated
balance sheets.

Agreement between Inprimis, Inc. and Zoom Telephonics

        As previously reported, on July 28, 2000, the Company concluded a
definitive agreement with Zoom (the "Agreement") pursuant to which Zoom acquired
certain of the Company's assets, including selected trademarks such as Global
Village(TM), rights to Global Village and Boca Research branded products, and
certain Web domain names. Under the Agreement, the Company continues to support
all the products it has already shipped or will ship and remains responsible for
warranty, returns and technical support for these products, although technical
support has been outsourced to Zoom in order to provide customers with a single
point of contact. Zoom, acting as a master distributor, had the right to sell
products from the Company's inventory, utilizing the Global Village and Boca
Research brand names. Zoom has the right to introduce new products within both
product lines. In general, except for minor royalty payments, no payments were
received except that the Company is entitled to be paid a purchase price based
on the sales performance schedule as follows: $500,000 if sales by Zoom of the
Company's existing product lines over an initial 12 month period exceed $12
million; $1.0 million if sales by Zoom of the Company's existing product lines
over the subsequent 12 month period exceed $19 million; and $2.0 million if
sales by Zoom of the Company's existing product lines over the subsequent and
final 12 month period exceed $24 million. The determination of the purchase
price was arrived at by negotiation among the parties. Zoom has not to date
offered any of the Company's previous data communications products; therefore,
it is unlikely that the Company will receive any purchase price payment under
the performance schedule above. If Zoom had manufactured the Company's products
at Boundless, the Company would have received credit against the Company's
minimum guarantee commitment. As of March 31, 2001, Zoom had not made any
commitments to manufacture the Company's products at Boundless and the minimum
requirement is no longer in effect.

Revenue Recognition

                Revenue from engineering services contracts is recognized as the
work is performed. With time-and-material type contracts, revenue is calculated
by multiplying the number of hours worked by the contractually agreed upon rate
per hour. Contracts are either time-and-material or fixed-price in nature. With
fixed-price type contracts, revenue is calculated by applying the percentage of
completion method, which is based on the ratio of total hours incurred to date
to the total estimated hours. Revenue recognition must satisfy several factors
depending on the nature of the contract. These factors include the completion of
certain contractual milestones, which is verified by the customer before revenue
is recognized, and a calculation of the costs incurred and an estimated cost to
complete to determine if costs are in excess of potential revenue. Contracts
generally allow for modification of the number of hours or the stated

                                       8
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
       NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont'd)
                                  (Unaudited)

deliverables via change orders based upon the actual work required to complete a
project and upon agreement between the Company and its customer(s). The Company
records a loss in the current period during which a loss on a project appears
probable. The amount of such loss is the reasonably estimated loss on the
project and is recorded immediately upon determination that the loss is
probable. The Company is doing business with a number of start up companies.
Generally accepted accounting principles require that collectibility must be
reasonably assured before revenue is recognized. The Company evaluates each of
its customers who are in a start up mode and assesses its ability to pay and the
customer's recent history of payments before the Company recognizes revenue for
services performed. Revenue from product licensing is recognized as earned
pursuant to the terms of the related contract, which generally occurs when the
Company ships equipment in conjunction with such license. Amounts received but
unearned as of March 31, 2001 are recorded as deferred revenue at March 31,
2001. All the revenue recorded for the three months ended March 31, 2001 were
from engineering and prototype service contracts.

        The majority of the revenue for the three months ended March 31, 2000
was from product sales. The Company recognizes revenue from product sales upon
shipment, when the title passes. Under specified conditions, certain customers
were allowed to return product for credit. Also, under the terms of some of the
agreements, in the event the Company reduced its selling prices, the customer
received credit for the difference between the original purchase price and the
Company's reduced price for product remaining in the customer's inventory.

Trade Receivables

        Trade receivables are presented net of an allowance for doubtful
accounts of $510,000 and $580,000 as of March 31, 2001 and December 31, 2000,
respectively, and net of the allowance for sales returns and price protection of
$0 and $100,000 as of March 31, 2001 and December 31, 2000, respectively.

Segment information

        The Company operates in only one business segment but has two major
product categories. Sales by major product category are as follows (in
thousands):
<TABLE>
<CAPTION>
                                                                                    Three Months
                                                                                   Ended March 31,
                                                                                   ---------------
                                                                                 2001           2000
                                                                                 ----           ----
<S>                                                                             <C>           <C>
   Data communications, PC peripherals, and others                              $ 0.0         $  4.3
   Engineering Services                                                         $ 0.8         $  0.4
</TABLE>

The Company does not have the information to break down profitability (loss) by
major product types.

                                       9
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
       NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont'd)
                                  (Unaudited)

Comprehensive Income (Loss)

        Comprehensive income includes all changes in equity during a period
except those resulting from investment by owners and distributions to owners.
The Company's comprehensive income (loss) equals its net loss for the three
months ended March 31, 2001 and 2000, and net loss is the only component of
comprehensive income (loss) for such periods.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, trade receivables, accounts
payable, and accrued expenses and other current liabilities approximates fair
value.

Capital Leases

The Company capitalizes leases that meet at least one of the following criteria:
(a) the lease transfers ownership of the property by the end of its lease term;
(b) the lease contains a bargain purchase option; (c) the lease term is equal to
75% or more of the estimated economic life of the leased property or (d) the
present value at the beginning of the lease term of the minimum lease payments
equals or exceeds 90% of the fair value of the leased property. All other leases
are accounted for as operating leases.

Net Loss per Share

           The Company computes net loss per share under Statement of Financial
Accounting Standards ("SFAS") No. 128, " Earnings Per Share", which requires a
dual presentation of basic and diluted earnings per share on the face of the
statement of operations. Basic earnings per share excludes dilution and is
computed by dividing income or loss attributable to common shareholders by the
weighted-average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were converted into common
stock, but such securities or contracts are excluded if their effects would be
anti-dilutive. The Company excluded stock options to purchase 1,817,933 and
1,236,151 common shares from the weighted-average shares outstanding calculation
for the three months ended March 31, 2001 and 2000, respectively, as their
effect was anti-dilutive.

Commitments and Contingencies

       On March 3, 2000, the Company completed the sale of certain of its assets
(the "Purchased Assets") relating to its manufacturing operations at 1377 Clint
Moore Road for the manufacture of products, including modems, to Boundless
Manufacturing Services, Inc. ("Boundless"), a wholly owned subsidiary of
Boundless Corporation, for $1.7 million in cash and notes (the "Boundless
Transaction"). The sale was part of the Company's efforts to improve gross
margins and resulted in a gain of $277,000. In accordance with the terms of the
Asset Purchase Agreement between the Company and Boundless Technologies, Inc.,
which was assigned to Boundless on the closing of the transaction, Boundless
paid the Company $700,000 in cash and Boundless issued to the Company a 6%
promissory note (the "Note") in the principal amount of $1,000,000 to be paid

                                       10
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
       NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont'd)
                                  (Unaudited)

in eight equal installments of $125,000 plus accrued interest commencing on June
1, 2000, and on the first business day of every third month thereafter, until
paid in full. Boundless Technologies, Inc. and Boundless Corporation guarantee
the obligations of Boundless under the Note. As of March 31, 2001 the note
receivable was fully satisfied by offsetting the amount due from Boundless with
the amount due to Boundless under a minimum guarantee commitment. This offset
provision was provided for under the terms of the contract. Additionally,
concurrent with the closing of the Boundless Transaction, the Company entered
into a Supply Agreement with Boundless (the "Supply Agreement") pursuant to
which the Company agreed to outsource the manufacture of certain products to
Boundless for a period of two years.

         Under the Supply Agreement, the Company guaranteed that it would
purchase products resulting in proceeds to Boundless exclusive of costs of
materials, of at least $3.8 million during the first year of the term of the
Supply Agreement. To the extent the Company fell short of the cumulative
prorated amount guaranteed in any of the four 90 day periods subsequent to March
3, 2000, the amount of the shortfall would be due within 30 days after the end
of the 90 day period in which the shortfall occurred. As noted under "Recent
Developments and Subsequent Events," the Company eliminated its purchase of data
communications products from Boundless as of September 30, 2000 and charged an
estimated shortfall of $1.9 million to operations in the quarter ended June 30,
2000.

         The calculation of the shortfall in the purchase commitment took into
consideration the Company's final purchase requirements for data communications
products through September 30, 2000, the use of Boundless to fulfill the
Company's obligations for warranty repairs, and other opportunities to satisfy
the purchase requirements that are afforded by the contract with Boundless. The
minimum guarantee commitment expired as of March 3, 2001 and all obligations
under the minimum guarantee commitment have been satisfied. The Supply Agreement
provides that any amounts due under the minimum guarantee commitment can be
offset against the Note Receivable, which the Company did as of March 31, 2001.
There is no minimum purchase obligation during the second year of the Supply
Agreement.

        The Company receives communications from time to time alleging that
certain of the Company's products infringe the patent rights of other third
parties. The Company cannot predict the outcome of any such claim, which may
arise in the future, or the effect of any such claim on the Company's operating
results or financial condition.

        The Company has been named a co-defendant in an action brought in the
United States District Court for the District of Massachusetts, by NEC
Technologies, Inc. ("NEC"). The suit alleges that the Company supplied modem
hardware to NEC, which was combined by NEC with software supplied by another
co-defendant, Ring Zero Systems, Inc. NEC was subsequently sued for patent
infringement by PhoneTel Communications, Inc. ("PhoneTel"), allegedly as a
result of NEC's combination of modem hardware and software supplied by the
vendors in its personal computer products. NEC alleges that the Company and Ring
Zero are obligated to indemnify NEC for NEC's costs of defense and settlement of
the PhoneTel suit, in the amount of $327,000. This action was dismissed without
prejudice on April 25, 2000; however, the reason for the dismissal was entirely

                                       11
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
       NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont'd)
                                  (Unaudited)

procedural, and there has been no resolution of the substantive dispute. The
Company anticipates that NEC will refile this action in an appropriate
jurisdiction in the near future. The Company continues to evaluate the claim,
but cannot predict at this time whether the claim will have a material adverse
effect on the Company's operating results, financial condition, or cash flows.

        The Company and its Boca Global, Inc. subsidiary have been named
co-defendants in an action brought in the District Court of South Dakota, by
Gateway, Inc. ("Gateway"). Global Village, Inc. had contracted to supply its
FaxWorks software to be bundled with Gateway PCs. Gateway's complaint against
the Company and Boca Global, Inc. alleges that either or both of these entities
assumed the liabilities of Global Village, Inc. with respect to the FaxWorks
product. Gateway reportedly will pay between $5 million and $6 million to settle
litigation brought by PhoneTel, for which Gateway has sought indemnification
from the Company, Boca Global, Inc., and an unrelated co-defendant. On January
19, 2001, a motion to dismiss was granted with respect to Inprimis, Inc. Boca
Global, Inc. remains as a defendant. While the Company believes that Boca
Global, Inc. will be able to assert numerous defenses to liability, the Company
is unable to estimate what impact, if any, this claim will have upon the
Company's financial statements, given the preliminary nature of the claim.

        The Company is committed through 2002 for rents under noncancelable
operating leases for use of its offices. The aggregate minimum payments under
such leases for the period April 1, 2001 to December 31, 2001 and for the year
2002 are $292,931 and $231,798, respectively.

Stockholders' Equity

        During the three month period ended March 31, 2001, 14,816 shares were
issued in connection with purchases by employees through the Employee Stock
Purchase Plan. The aggregate proceeds received from these exercises were
$11,813.

Stock Option Plan

During the three month period ended March 31, 2001, the Company granted options
to purchase 31,000 shares at prices ranging from $1.05 to $2.44 to new
employees, and options to purchase 59,834 shares were canceled. The Company
granted 472,500 new options, cancelled 531,946 previously granted options and
re-priced these options on April 25, 2001. The price of the new options and the
re-priced options were $.56. The new options and re-priced options have a 3
month vesting period and have a life of ten years as of April 25, 2001.

Recently Issued Accounting Pronouncements and Interpretations:

        In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 101 "Revenue Recognition" which provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements. Based on management's current analysis of SAB No. 101, management
believes it has met all conditions of SAB No. 101 regarding revenue recognition.

                                       12
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
       NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont'd)
                                  (Unaudited)

        Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No 133 "Accounting for Derivative Instruments and
Hedging Activities" as amended by SFAS No 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities." The Statement
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its fair value. The Statement requires that changes in the
derivatives' fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. The effects of applying SFAS Nos.133 and 138
were not material to the Company's financial statements.

                                       13
<PAGE>

Item 2.
                        INPRIMIS, INC. AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        This report on Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
23E of the Securities Act of 1934, as amended. These statements relate to future
events or future financial performance. Any statements contained in this report
that are not statements of historical fact may be deemed forward-looking
statements. In some cases, forward-looking statements can be identified by
terminology such as "may," "will," "should," "expect," "plan," "anticipate,"
"intend", "believe," "estimate," "predict," "potential" or "continue," or the
negative of such terms or other comparable terminology. These statements are
only predictions. Actual events or results may differ materially.

        Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance or achievements. Moreover, neither the
Company, nor any other entity, assumes responsibility for the accuracy and
completeness of the forward-looking statements. The Company is under no
obligation to update any of the forward-looking statements after the filing of
this Form 10-Q to conform such statements to actual results or to changes in the
Company's expectations.

        The following discussion should be read in conjunction with the
Company's condensed consolidated financial statements, related notes and the
other financial information appearing elsewhere in this Form 10-Q. Readers are
also urged to carefully review and consider the various disclosures made by the
Company, which attempt to advise interested parties of the factors which affect
the Company's business, including without limitation, the disclosures made under
the caption "Certain Factors That May Affect Future Performance."

                                       14
<PAGE>

        As an aid to reviewing the Company's results of operations for the three
months ended March 31, 2001 and 2000, the following table sets forth the
financial information as a percentage of net sales and the percentage change
from the comparable period in 2000.
<TABLE>
<CAPTION>
                                                                                    Three Months
                                                                                  Ended March 31,
                                                                                 -------------------          Percent
                                                                                 2001           2000          Change
                                                                                 ----           ----          ------
<S>                                                                             <C>            <C>            <C>
Net sales.....................................................                   100.0%         100.0%          (82.5)%
Cost of goods sold............................................                  (242.5)          91.5           (53.7)
                                                                                 -----          -----
     Gross profit (loss)......................................                  (142.5)           8.5               *
Operating expenses............................................
     Research and development.................................                    15.8           15.4           (82.2)
     Selling, general and administrative......................                   119.0           69.3           (70.0)
                                                                                 -----          -----
     Total operating expenses.................................                   134.8           84.7           (72.2)
                                                                                 -----          -----
Loss from operations..........................................                  (277.3)         (76.2)            36.4
Non-operating income, net.....................................                    10.8           24.8            (92.5)
                                                                                 -----          -----
Loss before income tax benefit................................                  (266.5)         (51.4)             9.4
Income tax benefit............................................                      --             --               --
                                                                                 -----          -----
Net loss......................................................                  (266.5)%        (51.4)%            9.4
                                                                                 =====          =====
</TABLE>
* Not applicable


Results of Operations

     Net Sales. The Company's net sales decreased 82.5% to $0.8 million in the
three months ended March 31, 2001 from $4.7 million for the three months ended
March 31, 2000. Sales for the three- month period ended March 31, 2001 versus
the comparable period in 2000 are shown by product category as follows:

                                                              Three Months
                                                             Ended March 31,
                                                             ---------------
                                                            2001          2000
                                                            ----          ----
               Product Categories
               ------------------
Data Communications......................                     --          $3.4
Custom Manufacturing.....................                     --           0.1
I/O, IDE, & Multiport....................                     --           0.7
Internet Access Device, Thin Client......                     --           0.1
Engineering Services.....................                    0.8           0.4
                                                            ----          ----
                                                            $0.8          $4.7
                                                            ====          ====

       The sales decrease was primarily attributable to data communications
products, which the Company is no longer offering to the marketplace.

       Engineering services revenue for the three months ended March 31 2001,
consisted primarily of $0.6 million for contract engineering and $0.2 million
from prototype and product sales arising from engineering contracts. The product

                                       15
<PAGE>

sales which are included as engineering services are shown in the statement of
operations under product sales. These product sales are not comparable to the
data communication product sales in the previous year. The engineering services
for the three months ended March 31, 2000 consisted of $0.2 million for contract
engineering and $0.2 million in royalties from licensing the Company's Internet
appliance reference design. These are included under engineering service sales
in the statement of operations. The Company did not earn any royalties from its
Internet appliance reference design for the three months ended March 31, 2001.

       International sales were insignificant for the three months ended March
31, 2001 compared to $0.6 million for the three months ended March 31, 2000.

       Gross Profit (Loss) The Company recorded a negative gross profit of $1.2
million, for the three months ended March 31, 2001 as compared to gross profit
of $0.4 million for the three months ended March 31, 2000. The Company's
negative gross profit for the three months ended March 31, 2001 was the result
of engineering costs being charged to projects that exceeded recognized revenue
for the project. This situation can be caused by a number of factors such as
under pricing of the project, inefficiency of the engineers, and difficulties
encountered in the project. The Company has recently decreased its engineering
staff to partially rectify the situation where the workload has diminished. The
majority of sales for the three months ended March 31, 2000 were data
communications products as noted in the table above.

       On March 3, 2000, the Company completed the sale of certain of its assets
(the "Purchased Assets") relating to its manufacturing operations at 1377 Clint
Moore Road for the manufacture of products, including modems, to Boundless, a
wholly owned subsidiary of Boundless Corporation, for $1,700,000 in cash and
notes (the "Boundless Transaction"). The sale was part of the Company's efforts
to improve gross margins and resulted in a gain of $277,000. In accordance with
the terms of the Asset Purchase Agreement between the Company and Boundless
Technologies, Inc., which was assigned to Boundless on the closing of the
transaction, Boundless paid the Company $700,000 in cash and Boundless issued to
the Company a 6% promissory note (the "Note") in the principal amount of
$1,000,000 to be paid in eight equal installments of $125,000 plus accrued
interest commencing on June 1, 2000, and on the first business day of every
third month thereafter, until paid in full. The obligations of Boundless under
the Note are guaranteed by Boundless Technologies, Inc. and Boundless
Corporation. As of March 31, 2001 the note receivable was fully satisfied by
offsetting the amount due from Boundless with the amount due to Boundless under
a minimum guarantee commitment. This offset provision was provided for under the
terms of the contract. Additionally, concurrent with the closing of the
Boundless Transaction, the Company has entered into a Supply Agreement with
Boundless (the "Supply Agreement") pursuant to which the Company agreed to
outsource the manufacture of certain products to Boundless for a period of two
years.

         Under the Supply Agreement, the Company guarantees that it will
purchase products resulting in proceeds to Boundless exclusive of costs of
materials, of at least $3.8 million during the first year of the term of the
Supply Agreement. To the extent the Company fell short of the cumulative
prorated amount guaranteed in any of the four 90 day periods subsequent to

                                       16
<PAGE>

March 3, 2000, the amount of the shortfall would be due within 30 days after the
end of the 90 day period in which the shortfall occurred. The Company eliminated
its purchase of data communications products from Boundless as of September 30,
2000 and estimated that there would be a shortfall in meeting its contractual
purchase commitment of $1.9 million. This amount was charged to operations in
the second quarter ended June 30, 2000 and will be reflected in the comparison
of 2001 operating results to the 2000 operating results in subsequent quarterly
reports.

       Research and Development Expenses. Research and development expenses
decreased to $128,000 in the three months ended March 31, 2001 from $718,000 in
the three months ended March 31, 2000. Research and development expenses
decreased because the majority of the engineering department is now allocated to
cost of sales, where in the products business it was categorized as research and
development. The portion of the engineering department allocated to research and
development in the current year is for those projects that the Company is
internally funding and for which there is no customer contract.

       Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased to $1.0 million in the three months ended
March 31, 2001 from $3.2 million in the three months ended March 31, 2000.
Selling, general and administrative expenses as a percentage of net sales
increased to 119.0% in the three months ended March 31, 2001 from 69.3% in the
three months ended March 31, 2000. The increase as a percentage of sales
occurred even though absolute dollar amount decreased because sales decreased by
82.5%, while expenses decreased by 70.0%. Selling, general and administrative
expenses decreased in the three months ended March 31, 2001 versus the
comparable period in 2000 primarily as the result of the Company's efforts to
reduce expenses as it transitions from a products company to a service company.

         Selling, general and administrative expenses as a percentage of net
sales will continue to fluctuate and will be influenced by the level of sales.
Selling, general and administrative expenses are likely to be different for a
service business than for a products business. The Company is adjusting this
expense to support the anticipated sales level of the new business. Certain
selling, general and administrative expenses have a fixed nature, thus a
reduction in net sales may result in an increase in selling, general and
administrative expenses as a percentage of net sales.

        Asset Impairment and Other Charges. As discussed above, the Company
previously announced the sale of certain assets to Zoom during 2000, which sale
was intended to provide the Company with a smooth and customer oriented
transition out of the analog modem business. These actions resulted in the
Company determining that the goodwill and tradename/marketing assets related to
the data communications business had been impaired as of June 30, 2000, and the
Company recording a charge to operations of $2.7 million in the second quarter
of 2000. The elimination of new purchase orders to Boundless resulted in the
Company's falling short of the guarantee purchase commitments under the Supply
Agreement with Boundless. The Company estimated this shortfall to be $1.9
million and this amount was charged to operations during the second quarter of
2000. As of March 31, 2001, the Company's estimated shortfall has been reduced
by payments to Boundless and by the offset of the note receivable from
Boundless. In the Company's future quarterly filings during 2001, as we compare

                                       17
<PAGE>

to the previous year's results, the asset impairment and other charges will be
reflected in the 2000 results. As of March 31, 2001 Zoom had not made any
commitments to manufacture the Company's products at Boundless. Also, the
minimum guarantee commitment had expired with Boundless and there are no future
obligations.


LIQUIDITY AND CAPITAL RESOURCES

        During the period from December 31, 2000, through March 31, 2001, the
Company's working capital decreased by $1.9 million. This decrease was primarily
the result of a $2.7 million decrease in cash, $0.6 million decrease in accounts
receivable and a decrease in prepaid expenses in the amount of $0.4 million,
offset by a decrease in accrued expenses, accounts payable and other current
liabilities of $1.8 million. The Company's operations used cash of $2.7 million
for the three months ended March 31, 2001.

        The Company had a two-year collateralized revolving line of credit
agreement, which originally expired on November 9, 2000, and permitted
borrowings of the lesser of $5 million or 60% of qualified accounts receivable
and 20% of eligible inventory. During March 2000, the Company's total credit
limit under the loan agreement was reduced from $5 million to $2.5 million. The
line of credit was terminated early on October 6, 2000, and the Company does not
currently intend to replace it. During fiscal 2000, the Company did not have any
borrowings under the revolving line of credit.

        The Company incurred substantial operating losses in 1997, 1998, 1999,
2000, and in the first three months of 2001 and it is likely that cash flow from
operations will be negative in the foreseeable future. An unfavorable outcome of
the legal contingencies (see " committment and contingency") would also have an
adverse effect on the Company's cash flow. Such conditions raise substantial
doubt that the Company will be able to continue as a going concern for a
reasonable period of time. However, management has taken steps to bring the
Company's expense structure in line with the reduced revenue levels being
achieved. In April 2001, the Company reduced the number of employees from 53 to
37. The Company will continue to use its best efforts to reduce costs to match
forecasted revenues. The Company believes that since the engineering service
business does not require large amounts of working capital, which were required
in the products business, and since the Company has no debt, the alignment of
sales and expenses is the key to cash flow and preserving the limited cash
resources. As is customary in the engineering service business, the Company will
pursue advance payment on engineering service contracts to further reduce the
working capital requirements for carrying accounts receivables. In the near term
the Company believes it must achieve the aforementioned financial goals in order
for it to continue to operate. However, there can be no assurances that the
Company will succeed in achieving these short term goals, and its failure to do
so will have a material adverse affect on its business, prospects, financial
condition, and operating results and the Company's ability to continue as a
going concern.

        The Company regularly evaluates acquisitions of businesses, technologies
or products complementary to the Company's business. In the event that the
Company pursues one or more acquisitions, the Company's limited cash balances
may be utilized to finance such acquisitions and additional sources of liquidity
such as debt or equity financing will in all likelihood be required for such

                                       18
<PAGE>

acquisitions or to meet working capital needs. There can be no assurance that
additional capital beyond the amounts forecasted by the Company will not be
required or that any such required capital will be available on terms acceptable
to the Company, if at all, at such time or times as required by the Company. As
previously reported, the Company has signed a letter of intent to acquire
iDVDBox, Inc. One of the conditions of the letter of intent for completion of
the acquisition is the requirement that capital is raised to fund the business
plans of the combined companies. In April 2001, the Company hired an investment
banker to seek additional capital or potential acquisitions or merger candidates
that could bring financing or profitable revenues to the combined companies. The
Company believes that the combination of the two companies is more favorable for
attracting capital than each company seeking capital independently.

Certain Factors That May Affect Future Performance

         In addition to the other information in this Form 10-Q, readers should
consider carefully the following factors that may affect the future performance
of the Company.

Transition of the Company; Unproven Business Plan and Limited Experience

         The Company embarked upon a plan in early 2000 to transition from being
primarily a data communication products manufacturer to its new focus on
providing engineering services. Currently, the Company has very limited
experience providing these services, and there can be no assurances that the
Company will succeed in implementing its as-yet unproven business plan. Risks
associated with this transition include:

         a.   the existence of a limited number of network operators and
              information appliance manufacturers that have deployed products
              and services using the Company's technology;
         b.   potential delays in deploying high-speed networks and
              internet-enhanced services and applications by the Company's
              customers;
         c.   an unproven business model, which depends on revenues from
              engineering services and royalty fees paid by information
              appliance manufacturers and network operators;
         d.   potential inability of the Company to expand its engineering and
              design staff, increase its sales or marketing activities, and
              invest in its technological infrastructure; and
         e.   the Company's limited liquidity and capital resources.

Uncertainty in Development of an Evolving Industry

         The market for intelligent computing devices is emerging and the
potential size of this market and the timing of its development are not known.
As a result, the profitability of the Company is uncertain and anticipated
revenues may not materialize. The Company is dependent upon the broad acceptance
by business and consumers of a wide variety of intelligent computing devices,
which depend on many factors, including:

         a.   the development of content and applications for intelligent
              computing devices;

                                       19
<PAGE>

         b.   the willingness of large numbers of businesses and consumers to
              use devices such as handheld and palm-size PCs and handheld
              industrial data collectors to perform functions currently carried
              out manually or by traditional PCs, including inputting and
              sharing data, communicating among users and connecting to the
              Internet; and
         c.   the evolution of industry standards that facilitate the
              distribution of content over the Internet to these devices via
              wired and wireless telecommunications systems, satellite, or
              cable.

         There can be no assurances that the Company will succeed in achieving
its goals, and its failure to do so in the near term will have a material
adverse effect on its business, prospects, financial condition and operating
results and the Company's ability to continue as a going concern.

Software Development and Services Market; Low Barriers to Entry

         The market for software development and services is becoming
increasingly competitive. Increased competition may result in price reductions,
lower gross margins, and loss of market share, which would harm the Company's
planned business. The Company faces competition from:

         a.   current and potential customers' internal research and development
              departments that may seek to develop their own proprietary
              solutions;
         b.   large professional engineering services firms that may enter the
              market;
         c.   established intelligent computing device software and tools
              manufacturers; and
         d.   small and medium-sized engineering service companies.

         As the Company assists other companies in developing new products,
particularly products focused on specific industries, they may begin competing
with companies in sectors that have not been identified above. It is also
possible that new competitors will enter the market or that existing competitors
will form alliances that may enable them to rapidly increase their market share.
The barriers to entering the market as software developer or hardware design
consultant for intelligent computing devices are low. New market entrants may
have lower overhead than the Company and therefore be able to offer advantageous
pricing. The Company expects that competition will increase as other established
and emerging companies enter the intelligent computing device market and as new
products and technologies are introduced.

                                       20
<PAGE>

Rapid Pace of Technological Change; Effect On New and Existing Products and
Services

         The markets for the Company's products and services are characterized
by rapidly changing technology, evolving industry standards, and short product
life cycles. The Company's success depends upon its ability to enhance its
existing products and services and to introduce new products and services with
features that meet changing end-user requirements. The Information Technology
("IT") sector in which the Company offers outsourcing and other services is
characterized by rapidly changing technology with continuous improvements in
both computer hardware and software and rapid obsolescence of current systems.
The Company's success will depend in part on its ability to develop solutions
that keep pace with continuing changes in information technology, evolving
industry standards and changing client preferences. Additionally, there can be
no assurance that the Company will be successful in identifying new markets, in
developing and marketing new products and services, or in enhancing its existing
products and services, either internally or through strategic relationships with
third parties. The Company's business would be adversely affected if the Company
were to incur delays in developing new, or enhancing existing, products and
services, due to delays in obtaining any required regulatory approvals for its
products or if any such new products or enhancements did not gain market
acceptance. In addition, there can be no assurance that products or technologies
developed by others will not render the Company's products or technologies
noncompetitive or obsolete.

Potential Significant Fluctuations in Quarterly Results; Effect on Company Stock
Price

         The Company's quarterly operating results have varied significantly,
and continue to vary significantly, depending on a number of factors, some of
which could adversely affect the Company's operating results and the trading
price of the Company's Common Stock in the future. These factors include the
level of demand for the Company's products and services, competition,
competitive pricing pressures, and the timing of engineering contracts and
completion of the contracts per the specified terms. There can be no assurance
that the Company will be able to achieve growth in revenue or return to
profitability on a quarterly or annual basis. The Company's expense levels are
based, in part, on its expectations as to future revenue. If sales and revenue
levels are below expectations, operating results will continue to be adversely
affected, which will likely have an adverse effect on the trading price of the
Company's Common Stock.

Effect of Potential Acquisitions on Operations, Products, Services, and
Personnel

         The Company may from time to time determine to pursue the acquisition
of other companies, assets, technologies, or product lines that would complement
or expand its existing business. Certain of these acquisitions may involve
businesses in which the Company lacks experience. Acquisitions involve a number
of risks that could adversely affect the Company's operating results, including
the diversion of management's attention, the assimilation of the operations,
products and personnel of the acquired companies, the amortization of acquired
intangible assets and the potential loss of key employees of the acquired
companies. There can be no assurance that the Company will be able to identify
businesses that would complement or expand its existing business or such
acquisitions; finance any such acquisitions; manage one or more acquisitions
successfully; or integrate the operations, products, or personnel gained through

                                       21
<PAGE>

such acquisition without a material adverse impact on the Company's business,
financial condition, and results of operations, particularly in the quarters
immediately following such acquisitions.

Effects of Increasing Competition

         The Company has entered into new markets, including the Internet TV
appliance industry, and has encountered competition from a number of
well-established companies, most of which have greater financial, technical,
product development, manufacturing and marketing resources and experience than
that of the Company. Further, the markets for the Company's products and
services are increasingly competitive, resulting in increasing pricing
pressures. The Company believes that its ability to compete depends on a number
of factors, including price, quality and reliability, availability, credit
terms, name recognition, delivery time, and post-sale service and support. There
can be no assurance that the Company will be able to continue to compete
successfully with respect to these factors. A variety of companies currently
offer products and services that compete directly with the Company's products
and services. These competitors could introduce additional products and services
that are superior to the Company's, or that achieve greater market acceptance.
The introduction of lower priced competitive products and services or
significant price reductions by the Company's competitors would result in price
reductions in the Company's products and services that could have a material
adverse effect on the Company's operating results.

Proprietary Rights; Dependence on Software Licenses

         The Company receives from time to time, and may receive in the future,
communications from third parties asserting intellectual property rights
relating to the Company's products (which include services) and technologies.
There can be no assurance that in the future the Company will be able to obtain
licenses of any intellectual property rights owned by third parties with respect
to the Company's products or that any such licenses can be obtained on terms
favorable to the Company. If the Company is unable to obtain licenses of
protected technology, it could be prohibited from developing and marketing
products incorporating that technology. The Company could also incur substantial
costs in redesigning its products or in defending any legal action taken against
it. Should the Company be found to infringe the proprietary rights of others,
the Company could be required to pay damages to the infringed party, which could
have a material adverse effect on the Company's operating results. In certain of
its products, the Company includes software licensed from third parties. The
Company's operating results could be adversely affected by a number of factors
relating to this third party software, including lack of market acceptance,
failure by the licensors to promote or support the software, delays in shipment
of the Company's products as a result of delays in the introduction of licensed
software or errors in the licensed software, or excess customer support costs or
product returns experienced by the Company due to errors in the licensed
software. Moreover, any impairment or termination of the Company's relationship
with any licensors of third party software could have a material adverse effect
on the Company's operating results.

                                       22
<PAGE>

Volatility of Stock Price

         The price of the Company's Common Stock historically has been volatile
due to fluctuations in operating results and other factors relating to the
Company's operations, the market's changing expectations for the Company's
growth, overall equity market conditions relating to the market for technology
stocks generally, and other factors unrelated to the Company's operations,
including announcements by or relating to the Company's competitors. Such
fluctuations are expected to continue. In addition, stock markets have
experienced more price volatility in recent years. This volatility has had a
substantial effect on the market prices of securities issued by many technology
companies, often for reasons unrelated to the operating performance of the
specific companies.

  Status of Company Common Stock Listing on Nasdaq National Market

         Stocks traded on the Nasdaq National Market must meet certain listing
requirements, including requirements with respect to a company's net tangible
assets and the trading price of its stock. The Company does not currently meet
such listing requirements, and if the value of the Company's net tangible assets
remains below $4 million or if the trading price of its Common Stock remains
below $1.00, the Company's Common Stock will no longer be eligible for trading
on the Nasdaq National Market.

Dependence on Key Personnel

         The Company is highly dependent on its executive officers and other key
personnel, certain of whom could be difficult to replace. If certain of these
people were to leave the Company, operating results could be adversely affected.
The future growth and success of the Company also depends in part on its ability
to attract and retain skilled employees. In light of the Company's overall
financial condition, it may be difficult to implement compensation packages
sufficient to attract and retain such skilled employees. All four of the
Company's executive officers have formal employment contracts.

Potential Liquidity and Capital Resource Difficulties

         The Company has incurred substantial operating losses in 1997, 1998,
1999, and 2000. Although cash and cash equivalents were $2.7 million as of March
31, 2001, the Company's net cash used in operating activities was $2.7 million
for the three months then ended. Furthermore, it is likely that the Company's
operations will continue to consume cash in the foreseeable future. An
unfavorable outcome of the legal contingencies would also have an adverse affect
on the Company's cash flow. Such conditions give rise to substantial doubt that
the Company will be able to continue as a going concern.

         The Company entered into a Supply Agreement with Boundless pursuant to
which it agreed to outsource the manufacture of certain products to Boundless
for a period of two years and guaranteed certain minimum dollar proceeds to
Boundless (the "Guarantee"). As previously reported by the Company, the Company
has eliminated its purchase of data communications products from Boundless,

                                       23
<PAGE>

resulting in the Company being contractually obligated pursuant to the
Guarantee. As of March 31, 2001, the Company's estimated shortfall has been
reduced by payments and the offset of the note receivable from Boundless. This
shortfall, therefore, will no longer require a cash payment in the future.

         Management has taken steps to bring the Company's expense structure in
line with the reduced revenue levels being achieved. In April 2001, the Company
reduced the number of employees from 53 to 37. The Company will continue to use
its best efforts to reduce costs to match forecasted revenues. The Company
believes that since the engineering service business does not require large
amounts of working capital, which were required in the products business, and
since the Company has no debt, the alignment of sales and expenses is the key to
cash flow and preserving the limited cash resources. As is customary in the
engineering service business, the Company will pursue advance payment on
engineering service contracts to further reduce the working capital requirements
for carrying accounts receivables. In the near term the Company believes it must
achieve the aforementioned financial goals in order to continue to operate.

         Management believes that it will be necessary for the Company to return
to profitable operations in the near future in order for existing cash balances
and cash generated from operations to be sufficient to meet the Company's short
term liquidity and capital needs. Should the Company require additional capital,
there can be no assurance that any such required capital will be available on
terms acceptable to the Company, if at all, at such time or times as required by
the Company. On October 6, 2000, the Company terminated its collateralized line
of credit, which was originally scheduled to expire on November 9, 2000; and the
Company does not currently intend to replace it. The Company cannot guarantee
that it will succeed in achieving its goals, and its failure to do so in the
near term will have a material adverse effect on its business, prospects,
financial condition, operating results, and the Company's ability to continue as
a going concern.

                                       24
<PAGE>

PART II.
                        INPRIMIS, INC. AND SUBSIDIARIES
                                OTHER INFORMATION

Item 1. Legal Proceedings

        The information required by this Item is disclosed in the "Commitments
and Contingencies" Note to the Company's Condensed Consolidated Financial
Statements contained in Part I hereof.

Items 2-3.

        Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

        None

Item 5. Other Information

        On September 29, 2000, the Company announced that the Board of Directors
had elected Eduard Will as the Company's new Chief Executive Officer, effective
November 1, 2000. Mr. Will's start date was postponed until such time as he
received all required immigration documentation necessary to allow him to serve
as Chief Executive Officer of the Company. These documents were received on
April 12, 2001 at which time his employment with the Company started.

Item 6.    Exhibits and Reports on Form 8-K

     (a)   Exhibits:

           Exhibit 11   Statement re computation of per share earnings (loss)

           All information required by Exhibit 11 is presented within the
            Condensed Consolidated Statements of Operations and the Notes to
            the Condensed Consolidated Financial Statements under "Net loss
            per Share" in accordance with the provisions of SFAS No. 128.

     (b)   Reports on Form 8-K

                On March 26, 2001 the Company filed a Form 8-K reporting the
entering into a Memorandum of Understanding relating to a potential acquisition
of iDVDBox, Inc. for 6.6 million shares of Inprimis, Inc. common stock. The
proposed acquisition is subject to a number of conditions, including
negotiations of a definitive agreement, the satisfactory completion of due
diligence, supplemental financing, obtaining fairness opinions and shareholder
approval.

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<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES

                                   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 of the
undersigned thereunto duly authorized.

                                               INPRIMIS, INC.

Dated:  May 15, 2001                      By:  /s/ Eduard Will
                                               ---------------
                                               Eduard Will
                                               Chief Executive Officer
                                               (Principal Executive Officer)


Dated:  May 15, 2001                      By:  /s/ R. Michael Brewer
                                               ---------------------
                                               R. Michael Brewer
                                               Senior Vice President of Finance
                                               and Chief Financial Officer
                                               (Principal Financial and
                                               Accounting Officer)


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