SECURITIES AND EXCHANGE COMMISSION

                                WASHINGTON, D.C.

                                    FORM 1O-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,1999

                         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.)

                                100 Marcus Blvd.

                                  Hauppauge, NY

                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                      11788

                                   (ZIP CODE)

                                 (516) 342-7400

              (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

      ----      -----


As of October 5, 1999,  the  Registrant had  approximately  4,438,376  shares of
Common Stock, $.01 par value per share outstanding.



                                        1
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.      Financial Statements

              INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets as of September 30, 1999 (unaudited) and
     December 31, 1998...................................................      3

Consolidated Statements of Operations (unaudited)
     for the three and nine months ended September 30, 1999 and 1998.....      4

Consolidated Statements of Cash Flows (unaudited)
     for the nine months ended September 30, 1999 and 1998...............      5

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




                                        2
<PAGE>
<TABLE>
<CAPTION>

                     BOUNDLESS CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                          (dollar amounts in thousands)

<S>                                                                                               <C>              <C>
                                                                                                  September 30,     December 31,
                                                                                                       1999             1998
                                                                                                  ---------------  ----------------
Current assets:                                                                                     (unaudited)
   Cash and cash equivalents...................................................................   $            5   $           732
   Trade accounts receivable, net..............................................................           16,489            13,274
   Income tax refunds..........................................................................            1,350             1,905
   Inventories.................................................................................           11,698            12,565
   Deferred income taxes.......................................................................            2,470             2,470
   Prepaid expenses and other current assets...................................................              869               462
                                                                                                  ---------------  ----------------
      Total current assets.....................................................................           32,881            31,408
Property and equipment, net....................................................................           10,309            10,251
Goodwill, net..................................................................................            6,542             7,350
Other assets...................................................................................            1,359               339
                                                                                                  ---------------  ----------------
                                                                                                        $ 51,091          $ 49,348
                                                                                                  ===============  ================
               LIABILITIES, REDEEMABLE STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt  (Note 8).................................................   $        1,426   $         8,000
   Accounts payable............................................................................            6,255             6,817
   Accrued expenses............................................................................            7,905             7,074
   Deferred revenue............................................................................              434               116
                                                                                                  ---------------  ----------------
      Total current liabilities................................................................           16,020            22,007
                                                                                                  ---------------  ----------------
Long-term liabilities:
   Long-term debt, less current maturities  (Note 8)...........................................           14,476             5,500
   Deferred income taxes.......................................................................            1,002             1,002
   Other ......................................................................................              665               627
                                                                                                  ---------------  ----------------
      Total long-term liabilities.............................................................            16,143             7,129
                                                                                                  ---------------  ----------------
      Total liabilities.......................................................................            32,163            29,136

Mandatorily redeemable preferred stock of subsidiary..........................................                 -             3,555
                                                                                                  ---------------  ----------------
Stockholders' equity:
   Preferred stock............................................................................                 -                 -
   Common stock...............................................................................                44                44
   Additional paid-in capital.................................................................            31,267            30,940
   Accumulated deficit........................................................................           (12,383)          (14,327)
                                                                                                  ---------------  ----------------
      Total stockholders' equity..............................................................            18,928            16,657
                                                                                                  ---------------  ----------------
                                                                                                        $ 51,091          $ 49,348
                                                                                                  ===============  ================

</TABLE>




     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                        3


<PAGE>

                     BOUNDLESS CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)

<TABLE>
<S>                                               <C>                      <C>
                                                     Nine Months Ended        Three Months Ended
                                                        September 30,            September 30,
                                                  -----------------------  ------------------------
                                                     1999        1998         1999         1998
                                                  ----------  -----------  -----------  -----------
                                                       (unaudited)               (unaudited)
Revenue.......................................... $  61,256    $  68,349    $  19,970    $  23,555
Cost of revenue..................................    43,610       49,184       14,011       16,754
                                                  ----------  -----------  -----------  -----------
           Gross margin..........................    17,646       19,165        5,959        6,801
                                                  ----------  -----------  -----------  -----------
Operating expenses:
   Sales and marketing...........................     7,303        6,013        2,910        1,728
   General and administrative....................     4,859        4,634        1,475        1,612
   Research and development......................     3,884        2,597        1,489          959
   Other charges (credits).......................    (2,832)        (111)      (2,282)         350
                                                  ----------  -----------  -----------  -----------
      Total operating expenses...................    13,214       13,133        3,592        4,649
                                                  ----------  -----------  -----------  -----------
           Operating income......................     4,432        6,032        2,367        2,152
   Interest expense, net.........................     1,110        2,045          359          698
   Other nonrecurring expenses...................       101            -            -            -
                                                  ----------  -----------  -----------  -----------
Income before income taxes.......................     3,221        3,987        2,008        1,454
Income tax expense...............................     1,226        1,411          765          629
                                                  ----------  -----------  -----------  -----------
Net income.......................................     1,995        2,576        1,243          825
Dividend on preferred stock of subsidiary........        51          373            -          124
                                                  ----------  -----------  -----------  -----------
Earnings available for common stockholders.......  $  1,944    $   2,203    $   1,243    $     701
                                                  ==========  ===========  ===========  ===========
Weighted average common shares outstanding.......     4,432        4,941        4,438        4,539
                                                  ==========  ===========  ===========  ===========
Basic earnings per common share..................  $   0.44    $    0.45       $ 0.28       $ 0.15
                                                  ==========  ===========  ===========  ===========
Weighted average dilutive shares outstanding.....     4,456        4,986        4,461        4,539
                                                  ==========  ===========  ===========  ===========
Diluted  earnings per common share...............  $   0.44    $    0.44       $ 0.28       $ 0.15
                                                  ==========  ===========  ===========  ===========
</TABLE>



     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                        4
<PAGE>

<TABLE>
<CAPTION>


                     BOUNDLESS CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (dollar amounts in thousands)
                     For the Nine Months Ended September 30,

                                  (unaudited)

<S>                                                                   <C>          <C>
                                                                          1999        1998
                                                                      -----------  -----------
Cash flows from operating activities:
   Net income.......................  ...............................  $   1,995    $   2,576
   Adjustments to reconcile net income to net cash provided by
      operating activities:
      Depreciation and amortization..................................      1,597        2,460
      Loss from disposal of assets...................................         22           40
      Deferred revenues..............................................        318           53
      Provision for doubtful accounts................................        313          203
      Provision for excess and obsolete inventory....................      1,462          874
      Options and warrants issued for services.......................        272          300
   Changes in assets and liabilities:
      Trade accounts receivable......................................     (3,528)         217
      Income tax refunds.............................................        555            -
      Inventories....................................................       (595)         152
      Other assets...................................................     (1,206)         (35)
      Accounts payable and accrued expenses..........................        307       (1,717)
                                                                       ----------  -----------
Net cash provided by operating activities............................      1,512        5,123
                                                                       ----------  -----------
Cash flows from investing activities:
   Capital expenditures..............................................       (753)        (560)
                                                                       ----------  -----------
Cash flows from financing activities:
   Payment of mandatorily redeemable preferred stock.................     (3,555)           -
   Purchase of treasury stock........................................          -       (3,000)
   Net change in loans payable.......................................      2,065       (2,400)
   Payment of preferred stock dividend...............................        (51)           -
   Proceeds from exercise of employee stock options..................         55            -
                                                                       ----------  -----------
Net cash used in financing activities................................     (1,486)      (5,400)
                                                                       ----------  -----------
Net decrease in cash and cash equivalents............................       (727)        (837)
Cash and cash equivalents at beginning of period.....................        732        2,929
                                                                       ----------  -----------
Cash and cash equivalents at end of period...........................   $      5    $   2,092
                                                                       ==========  ===========
Non-cash transactions:
   Dividend on preferred stock of subsidiary.........................   $      -    $     124
   Options, warrants and common stock issued for services............        272            -
Cash paid for:
   Interest..........................................................      1,035          347
   Taxes.............................................................        370          125

</TABLE>



     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                        5
<PAGE>

                     BOUNDLESS CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANICAL STATEMENTS
                         (dollar amounts in thousands)
                                  (unaudited)

1.   Condensed Consolidated Financial Statements

BASIS OF PRESENTATION
---------------------

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Regulation S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the  opinion  of  management,  all  adjustments  (consisting  of only  normal
occurring  accruals)  considered  necessary  for a fair  presentation  have been
included.  Certain prior period amounts in these financial  statements have been
reclassified to conform to current period  presentation.  Operating  results for
the nine-month period ended September 30, 1999 are not necessarily indicative of
the results  that may be expected for the year ending  December  31,  1999.  For
further information refer to the consolidated financial statements and footnotes
thereto in the Company's  Annual Report on Form 10-K for the year ended December
31, 1998.

2.   Background

Boundless  Corporation  (the  "Company")  is engaged,  through  its  subsidiary,
Boundless  Technologies,  Inc.  ("Boundless"),  in designing  and  manufacturing
computer  terminals  for business  use.  The  Company's  general  strategy is to
provide access to corporate computing environments,  including mainframes, LANs,
WANs,  intranets and the Internet.  Boundless  principally  designs,  assembles,
sells  and  supports  (i)  General  Display  Terminals,   (ii)  Windows(R)-based
Terminals  ("WBTs"),  sometimes  referred to as "thin clients",  and (iii) other
terminal   products  that  are  used  in  multi-user,   personal   computer  and
mini-computer-based environments.

3.    Inventories

Inventories  are stated at the lower of cost or market.  Cost is determined on a
first-in first-out basis. The major components of inventories are as follows:

                                                 September 30,    December 31,
                                                     1999            1998
                                                ---------------  --------------

Raw materials and purchased components.......... $       9,730    $     10,264
Finished goods..................................         1,545           1,915
Demonstration equipment.........................            54              71
Service parts...................................           369             315
                                                ---------------  --------------
Total inventories............................... $      11,698    $     12,565
                                                ---------------  --------------


4.  Equity

At September 30, 1999 and December 31, 1998  stockholders'  equity  consisted of
the following:



                                        6
<PAGE>

<TABLE>
<S>                                                        <C>              <C>
                                                            September 30,    December 31,
                                                                 1999            1998
                                                           ---------------  --------------

Preferred stock, $0.01 par value, 1,000,000 shares
   authorized, none issued ................................ $           -    $          -
Common stock, $0.01 par value, 25,000,000 shares
   authorized, 4,438,376 and 4,428,609 issued at
   September 30, 1999 and December 31, 1998, respectively..            44              44
Additional paid-in capital ................................        31,267          30,940
Accumulated deficit .......................................       (12,383)        (14,327)
                                                           ---------------  --------------
   Total stockholders' equity ............................. $      18,928    $     16,657
                                                           ---------------  --------------
</TABLE>

5.  Major Customers

The  Company  markets  its  terminal   products   through   original   equipment
manufacturers  ("OEMs") and reseller  distribution  channels.  Customers can buy
Boundless'  products  from an  international  network of  value-added  resellers
(VARs) and regional  distributors.  Through its sales force,  the Company  sells
directly  to  large  VARs and  regional  distributors  and  also  sells to major
national and international  distributors.  For the third quarter ended September
30, 1999 and 1998,  sales to two major OEMs as a  percentage  of total  revenues
were 23% and 28%, respectively.

6.  Business Segments

The Company's  manufacturing is conducted at its New York facility and its sales
force operates from six geographically  dispersed locations in the United States
and European offices in the Netherlands and United Kingdom.

Operating  segments are  identified as  components of an enterprise  about which
separate  financial  information  is available  for  evaluation  by its decision
making group.  To date,  the Company has viewed its  operations  and manages its
business in principally  one segment,  hardware sales of computer  terminals and
associated  services.  As a result, the financial  information  disclosed herein
represents all of the material  information  related to the Company's  principal
operating segment.

Pertinent  financial  data by major  geographic  segments for the quarters ended
September 30, 1999 and 1998 are:


<TABLE>
<S>                                                        <C>              <C>
                                                            September 30,    December 31,
                                                                 1999            1998
                                                           ---------------  --------------

Net sales to unaffiliated customers:
United States.............................................. $      13,495    $     15,763
United Kingdom.............................................         2,121           2,476
Other European countries...................................         3,481           4,550
Other foreign areas........................................           873             766
                                                           ---------------  --------------
Total sales ............................................... $      19,970    $     23,555
                                                           ---------------  --------------
</TABLE>

7.       Comprehensive Income

The Company has no material items of other comprehensive  income.  Comprehensive
income for the periods  ended  September 30, 1999 and 1998 was equal to reported
net income.

8.  Debt

Long term debt at  September  30, 1999 and  December  31, 1998  consisted of the
following:



                                        7
<PAGE>

<TABLE>
<S>                                                                        <C>              <C>
                                                                            September 30,    December 31,
                                                                                 1999            1998
                                                                           ---------------  --------------

Note payable to Independence Community Bank bearing interest at
  7.75% payable monthly, balloon payment due on or before July 1, 2009
  collaterlaized by land and building                                       $       6,735    $          -
Note payable to NCR, bearing interest at 8% payable
  quarterly, principal due on or before July 15, 1999,
  collaterlaized by land and building                                                               8,000
Term loan                                                                           3,667
Revolving loan                                                                      5,500           5,500
                                                                           ---------------  --------------
                                                                                   15,902          13,500
Less current maturities on long-term debt                                           1,426           8,000
                                                                           ---------------  --------------
                                                                            $      14,476    $      5,500
                                                                           ---------------  --------------
</TABLE>


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

RESULTS OF OPERATIONS

The numbers and  percentages  contained in this Item 2 are  approximate.  Dollar
amounts are stated in thousands.

For the Three and Nine Month Period Ending September 30, 1999
-------------------------------------------------------------

General - During the quarter  ended  September 30, 1999 the Company made several
important  announcements  including  the signing of an agreement to engineer and
manufacture  text  terminals  for  Hewlett-Packard   Company;  the  creation  of
Boundless  Manufacturing  Services,  Inc.,  a new  subsidiary  that will  pursue
opportunities within the electronic manufacturing services marketplace;  and the
introduction  of Viewpoint  Administrator  2.1 software,  a management  software
utility specially designed to reduce administrative costs.

During  the  quarter  ended  September  30,  1999  the  Company  also  completed
negotiations  and  signed  agreements  settling  outstanding  balances  due from
General Automation,  Inc. in connection with a royalty agreement associated with
the GAI Partnership.  In return for a combination of cash, restricted equity and
debt securities the Company settled its claims to past due balances,  waived its
rights to future royalties and sold its partnership interest.

Revenue - Revenue  for the  quarter  ended  September  30,  1999 was  $19,970 as
compared to $23,555 for the quarter ended  September  30, 1998.  Revenue for the
nine months ended September 30 was $61,256 for 1999 versus $68,349 for 1998.

Sales of the Company's General Display Terminals declined 22% to $15,572 for the
quarter ended  September  30, 1999 from $20,076 for the quarter ended  September
30, 1998. Demand for General Display Terminals continues to decline as competing
technologies, including WBTs, are gaining market share. For these reasons, sales
of  General  Display  Terminals  for 1999 are not  expected  to reach the levels
achieved in 1998.

Sales of the Company's WBT hardware and software, marketed under the trade names
Viewpoint(R)  TC and  Capio and WBT  software,  marketed  under  the trade  name
Viewpoint(R) Administrator, increased 40% to $3,326 from $2,382 for the quarters
ended  September 30, 1999 and 1998,  respectively.  The Company is targeting the
approximately 35 million users of General Display Terminals and Network Graphics
Displays many of whom are currently  transitioning or intending to transition to
graphical applications that include Windows, the Intranet and Java. In addition,
the Company is targeting the task-oriented users of older, less capable PCs that
are unable to run the latest  Windows  applications,  including  those  users in
business and education. The Company believes its unique ability to customize its
Viewpoint  TC  products  to meet  specific  end-customer  needs  will  give it a
sustainable competitive advantage.  Historically, this ability has been of great
value to the Company's  terminal  customers  and the Company  believes that this
strategy will be equally advantageous in the corporate thin client marketplace.

Net revenue from the Company's repairs and spare parts business was $602 for the
quarter ended  September 30, 1999, up from $546 for the quarter ended  September
30, 1998. For the nine months ended September 30, 1999,  repairs and spare parts


                                        8
<PAGE>

sales were $1,640 versus $1,852 for the comparable period in 1998.

IBM and Digital were the most significant  customers for the Company's products,
accounting  for 14%  and 8% of  revenue  respectively,  for  the  quarter  ended
September  30,  1999.  The  loss  of  IBM or  Digital  as a  customer,  and as a
distribution  channel for the Company's products,  would have a material adverse
effect on the Company's results of operations and liquidity.

Gross Margin - Gross margin for the three and nine months  ended  September  30,
1999 were $5,959 (30% of revenue) and $17,646 (29% of revenue) respectively,  as
compared  to gross  margins  of $6,801  (29% of  revenue)  and  $19,165  (28% of
revenue) for the comparable  periods in 1998.  Gross margin in the third quarter
of 1999  includes  a  write-down  to market  reserve of $358  against  inventory
obsolescence  risk associated with Boundless'  first  generation WBT.  Excluding
this reserve,  gross margin for the quarter ended  September 30, 1999 would have
been 32%.  While the Company  intends to develop  marketing  programs to recover
this reserve or minimize  future  risks,  there can be no assurance  the Company
will be successful in its efforts.

In a continuing effort to maintain and improve margins in an industry  otherwise
characterized  by  commodity   pricing,   management  has  focused  on  quality,
flexibility,   and  product  cost  reductions.  From  time-to-time  margins  are
adversely  affected  by  industry  shortages  of  key  components.  The  Company
emphasizes  product cost reductions in its research and  development  activities
and frequently reviews its supplier relationships with the view to obtaining the
best component prices available.

Total Operating  Expenses - For the quarter ended September 30, 1999,  operating
expenses  were $3,592  (18% of  revenue),  compared  to  expenses  for the third
quarter of 1998 of $4,649 (20% of revenue).  For the nine months ended September
30, 1999,  operating expenses were $13,214 (22% of revenue) compared to expenses
in the comparable period in 1998 of $13,133 (19% of revenue).

Sales and Marketing Expenses -   Sales and marketing  expenses  increased 68% to
$2,910 (15% of revenue) for the quarter ended September 30, 1999 from $1,728 (7%
of revenue) for the quarter  ended  September  30, 1998.  Expenses for the first
nine months were $7,303 in 1999 versus $6,013 in 1998. The increase in the third
quarter of 1999 is mainly the result of increased sales activities and personnel
targeting Boundless' OEM and WBT markets.

The  Company  promotes  its  products  using  media  advertising,  direct  mail,
telemarketing,  public relations and cooperative channel marketing programs. The
Company's installed base of over five million units of General Display Terminals
is the  primary  target  market  for its new  line of  Viewpoint  TC  WBTs.  The
Company's plan to reach this market is based on direct mail,  telemarketing  and
advertising  and an aggressive  public  relations  campaign,  including  several
domestic and  international  press tours.  The Company will also  participate in
several key trade shows during the remainder of 1999.

General  and  Administrative  Expenses  - General  and  administrative  expenses
decreased to $1,475 (7% of  revenue),  from $1,612 (7% of revenue) for the three
months  ended  September  30,  1999 and  1998,  respectively.  Expenses  for the
nine-month  period were $4,859 in 1999 versus $4,634 in 1998.  The  year-to-year
increase is mainly due to accruals  related to employee  bonus  programs  and to
expensing the estimated  value of common stock options  granted to Board members
for services provided to the Company.

Research and Development  Expenses - Research and  development  expenses for the
third quarter  increased  55% to $1,489 in 1999 from $959 in 1998.  Expenses for
the nine-month  period ended September 30, 1999 were $3,884,  compared to $2,597
in the  comparable  period in 1998.  The  increase  is  related  to  development
expenses  associated  with  the  Company's  WBT  product  family.  Research  and
development  expenses  are  expected  to  exceed  1998  spending  levels  due to
investment in software  development  for the Company's  WBTs as well as spending
associated with advanced development for Internet Appliances.

Other Charges (Credits) - During the third quarter of 1999 the Company reached a
settlement with General Automation,  Inc. for outstanding  royalties due under a
royalty agreement associated with the GAI Partnership. Since this receivable was
written off in 1997, recovery in the amount of $2,324 was reported as income.

Interest Expense - Interest expense for the quarter ended September 30, 1999 was
$359 compared to $698 for the comparable  period in 1998.  Interest  expense for
the nine months were $1,110 in 1999 versus  $2,045 in 1998.  This  decrease  was


                                        9
<PAGE>

mainly due to capitalized debt financing costs that were fully amortized in 1998
as non-cash interest expense.  Replacement debt financing costs were incurred in
the third quarter of 1999 but at a lower level than in previous years.

Income Tax Expense - Income tax expense for the quarter ended September 30, 1999
was $765 compared to $629 for the comparable period in 1998. For the nine months
ended 1999 and 1998 income tax expense was $1,226 and $1,411 respectively.

Net Income - For the quarter ended September 30, 1999, net income was $1,243 (6%
of revenue), compared to $825 (4% of revenue) for the comparable period in 1998.
Net income for the nine months ended September 30 was $1,995 (3% of revenue) and
$2,576(4% of revenue) in 1999 and 1998, respectively.

Impact of Inflation - The Company has not been  adversely  affected by inflation
because technological advances and competition within the microcomputer industry
have  generally  caused prices of products  sold by the Company to decline.  The
Company has flexibility in its pricing and could, if necessary, pass along price
changes to most of its customers.

LIQUIDITY AND CAPITAL RESOURCES

The discussion  below regarding  liquidity and capital  resources should be read
together with the information  included in the Notes to  Consolidated  Financial
Statements.

As of September 30, 1999, the Company had working capital of $16,861 as compared
to $9,401 at December  31,  1998.  Historically,  the Company has relied on cash
flow from  operations,  bank borrowings and sales of its common stock to finance
its working capital, capital expenditures and acquisitions.

The Company is highly  leveraged.  As of  September  30,  1999,  the Company had
tangible net worth of $11,865 and total  liabilities  of $32,163.  The Company's
cash  requirements at September 30, 1999 included  repayment of a revolving loan
of $5,500  plus  interest,  a term loan in the  amount of $3,667  plus  interest
payable  in twelve  quarterly  installments  beginning  June 1999 and a ten-year
promissory  note in the amount of $6,735 which requires  monthly  principal  and
interest payments through July 1, 2009.

On April 14, 1999,  Boundless  and Chase  Manhattan  Bank  ("Chase"),  acting as
agent,  signed an agreement  for a new,  three-year,  $15,000  revolving  credit
agreement. Terms of the new revolving credit agreement are substantially similar
to terms of the  expired  agreement,  allowing  for loans and letters of credit,
based upon the  availability of collateral,  generally a percentage of inventory
and  accounts  receivable  as  specified in the  agreement.  The revised  credit
agreement  also  provides  for a $4,000  term loan,  payable in equal  quarterly
installments  plus  accrued  interest  beginning  June 1999,  over a  three-year
period.

Borrowing under the revolving loan is based on a borrowing base formula of up to
80% of eligible receivables, plus 50% of delineated eligible inventory, plus 30%
of  non-delineated  eligible  inventory.  Up to  $5,000 is  available  under the
revolving loan for letters of credit. As a result of the borrowing base formula,
the credit  available to the Company could be adversely  restricted in the event
of further  declines in the  Company's  sales and increases in orders may not be
able to be financed under the Company's revolving credit line.

On June 24, 1999,  Boundless  entered into an agreement with a commercial lender
to refinance  an $8,000 note  originally  scheduled to mature in June 1999.  The
loan is secured by a mortgage on the  Boundless  facility  located in Hauppauge,
NY. The loan,  which is in the  principal  amount of $6,750 and  carries a fixed
interest rate of 7.75%,  is being amortized over a 25-year period with a balloon
payment due on July 1, 2009.  The monthly  payments  are  approximately  $50. To
induce  the  lender to make the loan,  the  Company  executed  and  delivered  a
guaranty of Boundless' obligations to the lender.

Net cash provided by operating  activities  for the nine months ended  September
30,  1999 was $1,512,  due  principally  to net income of $1,995,  an income tax
refund of $555 and non-cash expenses (principally  depreciation) of $3,984 These
increases in cash were partially  offset by an increase in trade  receivables of
$3,528 driven primarily from the settlement of obligations  outstanding  under a
royalty  agreement  associated  with  the  GAI  Partnership.  Net  cash  used in
investing  activities  was comprised of capital  expenditures  of $753. Net cash
used in financing activities included $3,606 to retire the Company's mandatorily


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redeemable  preferred stock and pay its remaining dividend which was funded from
a $4,000  term loan with  Chase.  In  addition,  $8,000  was used to pay off the
existing  note  payable  with NCR.  A $6,750  mortgage  loan  from  Independence
Community  Bank was used to pay off NCR, with the balance of the funding  coming
from the Company's revolving loan with Chase.

FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE

This Form 10-Q contains  forward-looking  statements  and  information  that are
based on  management's  beliefs as well as assumptions  made by and  information
currently  available  to  management.  When  used in this  document,  the  words
"anticipate,"  "believe,"  "estimate,"  "expect," and, depending on the context,
"will,"  and  similar  expressions  are  intended  to  identify  forward-looking
statements.  Such statements reflect the Company's current views with respect to
future events and are subject to certain risks,  uncertainties  and assumptions,
including the specific risk factors described in the Company's Form 10-K for the
year ended December 31, 1998. Should one or more of these risks or uncertainties
materialize,  or should underlying  assumptions prove incorrect,  actual results
may vary materially from those anticipated, believed, estimated or expected. The
Company  does  not  intend  to  update  these  forward-looking   statements  and
information.

YEAR 2000 COMPLIANCE

         Computers,  software and other equipment utilizing microprocessors that
use only two digits to  identify a year in a date field may be unable to process
accurately  certain  date-based  information  referencing the year 2000. This is
commonly  referred to as the "Year 2000 issue." The Company is  addressing  this
issue on several different  fronts.  With respect to products the Company offers
for sale, either to OEMs or through  distribution,  the Company has verified the
products  are Year 2000  compliant.  The Company has  assigned a team to monitor
Year 2000  compliance.  This team is charged with ensuring Year 2000  compliance
for all hardware and software products through its purchasing  process,  as well
as  assessing  Year 2000  readiness  and risk to the Company with respect to the
compliance of its critical  vendors and  suppliers.  Finally,  the Company has a
team assigned to coordinate  the Year 2000 program for its internal  systems and
devices. At present, the audit of Year 2000 compliance of the Company's internal
systems and devices has been substantially  completed. The Company has performed
testing,  and will continue  testing of compliance  throughout  1999.  The total
costs  related  to the  Company's  Year 2000  program  are not  estimated  to be
material to the Company's  financial position or results of operations,  and are
charged  to expense  as  incurred.  The total  cost  estimate  does not  include
potential  costs related to any customer or other claims or the cost of internal
software and hardware replaced in the normal course of business.  The total cost
estimate is based on the current  assessment of the Company's  Year 2000 program
and is subject to change as it  progresses.  Based on  current  information  and
assessment,  the  Company  does not believe  that the Year 2000 issue  discussed
above as it relates to products  sold to  customers  or the  Company's  internal
systems will be material to its  financial  position or results of operations or
that  its  business  will  be  adversely   affected  in  any  material  respect.
Nevertheless,  achieving Year 2000 compliance is dependent on many factors, some
of which are not  completely  within the  Company's  control.  Should either the
Company's internal systems or one or more critical vendors or suppliers fail due
to Year 2000 issues,  the Company's business and its results of operations could
be adversely affected.

NEW ACCOUNTING STANDARD

SFAS No.133,  "Accounting  for Derivative  Instruments  and Hedging  Activities"
establishes  accounting and reporting  standards for derivative  instruments and
hedging  activities.  SFAS  No.  133  requires  that an  entity  recognizes  all
derivatives  as either  assets or  liabilities  in the  statement  of  financial
position and measure those  instruments at fair value. SFAS No. 133 is effective
for all fiscal  quarters of fiscal  years  beginning  after June 15,  1999.  The
Company is assessing  the impact that the adoption of SFAS No. 133 will have, if
any, on its consolidated financial statements.



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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The  Company's  exposure to market risk for changes in interest  rates,  relates
primarily  to  the  Company's  revolving  credit  facility  and  long-term  debt
obligations.  The Company manages this risk through utilization of interest rate
swap agreements in amounts not exceeding the principal amount of its outstanding
obligations.  At September 30, 1999, two interest rate swap  agreements,  in the
principal amount of $4,000 and $3,667, respectively, were outstanding.

The Company  places its  investments  with high credit  quality  issuers and, by
policy,  is averse to principal loss and ensures the safety and  preservation of
its invested funds by limiting default risk, market risk and reinvestment  risk.
As of September 30, 1999 the Company's  investments  consisted of the investment
of excess cash balances in overnight  time deposits  offered by Chase  Manhattan
Bank in London.

         All sales arrangements with international  customers are denominated in
U.S.  dollars.  These  customers  are  permitted to elect  payment of their next
month's orders in local currency based on an exchange rate provided one month in
advance from the  Company.  The Company  does not use foreign  currency  forward
exchange  contracts or purchased  currency  options to hedge local currency cash
flows or for trading purposes. Foreign currency transaction gains or losses have
not been material to the Company's results of operations.

                           PART II - OTHER INFORMATION

Item 6.      Exhibits and Reports on Form 8-K

(a)  Exhibits

Exhibit 11:  Statement  Concerning  Computation  of Per Share Earnings is hereby
incorporated by reference to "Condensed  Consolidated  Statements of Operations"
in the Form 10-Q.

Exhibit 27:   Financial Data Schedule

(b)        Reports on Form 8-K  -  None



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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 12, 1999



Boundless Corporation

By: /s/Joseph Gardner

----------------------------------------
Joseph Gardner
Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)


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