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 June 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 July 6, 1999, the Registrant had approximately  4,438,376 shares of Common
Stock, $.01 par value per share outstanding.

                                    1 of 14
<PAGE>



                         PART I - FINANCIAL INFORMATION

Item 1.      Financial Statements

              INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



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

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

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

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



                                    2 of 14
<PAGE>

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

<TABLE>
<CAPTION>
                                                                      June 30,        December 31,
                                                                        1999              1998
            ASSETS                                                 ---------------- -----------------
Current assets:                                                       (unaudited)
<S>                                                                      <C>               <C>
   Cash and cash equivalents.......................................          $ 395             $ 732
   Trade accounts receivable, net..................................         14,625            13,274
   Income tax refunds..............................................          1,350             1,905
   Inventories.....................................................         12,802            12,565
   Deferred income taxes...........................................          2,470             2,470
   Prepaid expenses and other current assets.......................            904               462
                                                                   ---------------- ----------------
      Total current assets.........................................         32,546            31,408
Property and equipment, net........................................         10,292            10,251
Goodwill, net......................................................          6,811             7,350
Other assets.......................................................            490               339
                                                                   ---------------- ----------------
                                                                          $ 50,139          $ 49,348
                                                                   ================ ================

                                      LIABILITIES, REDEEMABLE STOCK AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current portion of long-term debt  (Note 8)......................        $ 1,333           $ 8,000
   Accounts payable.................................................          7,333             6,817
   Accrued expenses.................................................          7,177             7,074
   Deferred revenue.................................................             94               116
                                                                    ---------------- ----------------
      Total current liabilities.....................................         15,937            22,007
                                                                    ---------------- ----------------
Long-term liabilities:
   Long-term debt, less current maturities  (Note 8)................         14,917             5,500
   Deferred income taxes............................................          1,002             1,002
   Other ...........................................................            619               627
                                                                    ---------------- ----------------
      Total long-term liabilities...................................         16,538             7,129
                                                                    ---------------- ----------------
      Total liabilities.............................................         32,475            29,136

Mandatorily redeemable preferred stock of subsidiary................              -             3,555
                                                                    ---------------- ----------------
Stockholders' equity:
   Preferred stock..................................................              -                 -
   Common stock.....................................................             44                44
   Additional paid-in capital.......................................         31,246            30,940
   Accumulated deficit..............................................        (13,626)          (14,327)
                                                                    ---------------- ----------------
      Total stockholders' equity....................................         17,664            16,657
                                                                    ---------------- ----------------
                                                                           $ 50,139          $ 49,348
                                                                    ================ ================
</TABLE>
      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                    3 of 14
<PAGE>

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

<TABLE>
<CAPTION>

                                                             Six Months Ended         Three Months Ended
                                                                 June 30,                  June 30,
                                                         ------------------------- -------------------------
                                                             1999         1998         1999          1998
                                                         ------------ ------------ ------------- -----------
                                                                (unaudited)               (unaudited)
<S>                                                            <C>          <C>           <C>          <C>
Revenue..................................................   $ 41,286     $ 44,794      $ 20,230     $ 21,930
Cost of revenue..........................................     29,599       32,430        14,709       15,827
                                                         ------------ ------------ ------------- -----------
           Gross margin..................................     11,687       12,364         5,521        6,103
                                                         ------------ ------------ ------------- -----------
Operating expenses:
   Sales and marketing...................................      4,393        4,285         2,460        2,251
   General and administrative............................      3,384        3,023         1,725        1,610
   Research and development..............................      2,395        1,638         1,321          770
   Other charges.........................................       (550)        (462)         (609)        (532)
                                                         ------------ ------------ ------------- -----------
      Total operating expenses...........................      9,622        8,484         4,897        4,099
                                                         ------------ ------------ ------------- -----------
           Operating income..............................      2,065        3,880           624        2,004
   Interest expense, net.................................        751        1,347           422          676
   Other nonrecurring expenses...........................        101            -           101            -
                                                         ------------ ------------ ------------- -----------
Income before income taxes...............................      1,213        2,533           101        1,328
Income tax expense.......................................        461          782            39          323
                                                         ------------  ----------- ------------- -----------
Net income...............................................        752        1,751            62        1,005
Dividend on preferred stock of subsidiary................         51          249             -          124
                                                         ------------ ------------ ------------- -----------
Earnings available for common stockholders...............      $ 701      $ 1,502          $ 62        $ 881
                                                         ============ ============ ============= ===========
Weighted average common shares outstanding...............      4,430        5,024         4,431        4,945
                                                         ============ ============ ============= ===========
Basic earnings per common share..........................     $ 0.16       $ 0.30        $ 0.01       $ 0.18
                                                         ============ ============ ============= ===========
Weighted average dilutive shares outstanding.............      4,458        5,077         4,473        5,026
                                                         ============ ============ ============= ===========
Diluted  earnings per common share.......................     $ 0.16       $ 0.30        $ 0.01       $ 0.18
                                                         ============ ============ ============= ===========
</TABLE>

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                    4 of 14
<PAGE>
                     BOUNDLESS CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (dollar amounts in thousands)
                        For the Six Months Ended June 30,

                                   (unaudited)

<TABLE>
<CAPTION>

                                                                               1999           1998
                                                                          -------------- -------------
<S>                                                                             <C>            <C>
Cash flows from operating activities:
   Net income.............................................................        $ 752        $ 1,751
   Adjustments to reconcile net income to net cash provided by
      operating activities:
      Depreciation and amortization.......................................        1,084          1,624
      Loss from disposal of assets........................................            8             35
      Deferred revenues...................................................          (22)            66
      Provision for doubtful accounts.....................................          206            412
      Provision for excess and obsolete inventory.........................        1,133            578
      Options and warrants issued for services............................          251              -
   Changes in assets and liabilities:
      Trade accounts receivable...........................................       (1,557)           (17)
      Income tax refunds..................................................          555              -
      Inventories.........................................................       (1,370)        (1,497)
      Other assets........................................................         (351)           159
      Accounts payable and accrued expenses...............................          611         (1,098)
                                                                          -------------- -------------
Net cash provided by operating activities.................................        1,300          2,013
                                                                          -------------- -------------
Cash flows from investing activities:
   Capital expenditures...................................................         (502)          (425)
                                                                          -------------- -------------
Cash flows from financing activities:
   Payment of mandatorily redeemable preferred stock......................       (3,555)             -
   Purchase of treasury stock.............................................            -         (3,000)
   Net change in loans payable............................................            -           (900)
   Payment of long term notes.............................................       (8,000)             -
   Proceeds from issuance of long-term debt...............................       10,365              -
   Proceeds from exercise of employee stock options.......................           55              -
                                                                          -------------- -------------
Net cash used in financing activities.....................................       (1,135)        (3,900)
                                                                          -------------- -------------
Net decrease in cash and cash equivalents.................................         (337)        (2,312)
Cash and cash equivalents at beginning of period..........................          732          2,929
                                                                          -------------- -------------
Cash and cash equivalents at end of period................................        $ 395          $ 617
                                                                          ============== =============
Non-cash transactions:
   Dividend on preferred stock of subsidiary..............................          $ -          $ 124
   Options, warrants and common stock issued for services.................          251              -
Cash paid for:
   Interest...............................................................          804            347
   Taxes..................................................................            9            125
</TABLE>

     SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                    5 of 14
<PAGE>

                     BOUNDLESS CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL 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 six-month  period ended June 30, 1999 are not necessarily  indicative of the
results that may be expected for the year ended  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 ending  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. The Company is a party to a royalty agreement
with a  partnership  (the "GAI  Partnership")  formed by  Boundless  and General
Automation,  Inc.  ("GAI")  and  managed by GAI.  The GAI  Partnership  designs,
integrates, sells and supports multi-user computer systems that can manage large
volumes of data running  Boundless'  and GAI's  versions of a data-based  system
licensed from Pick Systems.

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:

<TABLE>
<CAPTION>
                                                                            June 30,            December 31,
                                                                              1999                   1998
                                                                      --------------------- ----------------------
<S>                                                                            <C>                    <C>
Raw materials and purchased components................................             $ 10,057               $ 10,264
Finished goods........................................................                2,330                  1,915
Demonstration equipment...............................................                   41                     71
Service parts.........................................................                  374                    315
                                                                       --------------------- ----------------------
Total inventories ....................................................             $ 12,802               $ 12,565
                                                                       ===================== ======================
</TABLE>

                                    6 of 14
<PAGE>

4.  Equity

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

<TABLE>
<CAPTION>
                                                                            June 30,            December 31,
                                                                              1999                   1998
                                                                      --------------------- ----------------------
<S>                                                                            <C>                  <C>
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 shares issued
   at June 30, 1999 and December 31,1998, respectively................                  44                     44
Additional paid-in capital............................................              31,246                 30,940
Accumulated deficit...................................................             (13,626)               (14,327)
                                                                      --------------------- ----------------------
   Total stockholders' equity.........................................            $ 17,664               $ 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 second quarter ended June 30,
1999 and 1998,  sales to two major OEMs as a percentage  of total  revenues were
21% and 22%, 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 second quarter
ended June 30, 1999 and 1998 are:

<TABLE>
<CAPTION>
                                                                            June 30,              June 30,
                                                                              1999                   1998
                                                                      --------------------- ----------------------
<S>                                                                            <C>                   <C>
Net sales to unaffiliated customers:
United States.........................................................            $ 12,779               $ 14,968
United Kingdom........................................................               3,125                  2,666
Other European countries..............................................               3,108                  3,191
Other foreign areas...................................................               1,218                  1,105
                                                                      --------------------- ----------------------
Total sales ..........................................................            $ 20,230               $ 21,930
                                                                      ===================== ======================
</TABLE>

7.     Comprehensive Income

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

                                    7 of 14
<PAGE>

8.  Debt

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

<TABLE>
<CAPTION>
                                                                                         June 30,            December 31,
                                                                                           1999                   1998
                                                                                   --------------------- ----------------------
<S>                                                                                         <C>                    <C>
Note payable to  Independence  Community Bank bearing  interest at 7.75% payable
  monthly, balloon payment due on or before July 1, 2009,
  collateralized by land and building                                                           $ 6,750                    $ -
Note payable to NCR, bearing interest at  8% payable
  quarterly, principal due on or before June 15, 1999,
  collateralized by land and building                                                                                    8,000
Term loan                                                                                         4,000
Revolving loan                                                                                    5,500                  5,500
                                                                                   --------------------- ----------------------
                                                                                                 16,250                 13,500
Less current maturities on long-term debt                                                         1,333                  8,000
                                                                                   --------------------- ----------------------
                                                                                               $ 14,917                $ 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 Six Month Period Ending June 30,1999
------------------------------------------------------
General  - During  the  quarter  ended  June  30,  1999  the  Company  completed
negotiations  and closed on agreements  for the renewal of its revolving line of
credit and replacement financing for an existing note payable. The terms of both
new  financings are generally more favorable than those they replace and provide
a  better  balance  between  the  Company's  short  and  long-term   assets  and
liabilities. (See "Liquidity and Capital Resources")

During the most  recent  quarter  the  Company  also  continued  its  efforts to
diversify and minimize the risks  associated with the declining  General Display
Terminals  market.  In concert with  Boundless'  internal  development  efforts,
during April 1999  Boundless  became a founding board member of the ASP Industry
Consortium. This group is chartered to educate the marketplace, sponsor research
and promote open standards and guidelines  for the  development of  intelligent,
Internet-ready   devices  ("Internet   Appliances").   Internet  Appliances  are
low-cost,  easy-to-use,  consumer-focused devices designed to bring the features
and benefits of the Internet to consumers.

Revenue - Revenue for the quarter ended June 30, 1999 was $20,230 as compared to
$21,930 for the quarter  ended June 30,  1998.  Revenue for the six months ended
June 30 was $41,286 for 1999 versus $44,794 for 1998.

Sales of the Company's General Display Terminals declined 10% to $16,408 for the
quarter  ended June 30, 1999 from  $18,282 for the quarter  ended June 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.

                                    8 of 14
<PAGE>

Sales of the Company's WBT hardware, marketed under the trade names Viewpoint(R)
TC and Capio,  and WBT  software,  marketed  under the trade  name  Viewpoint(R)
Administrator,  increased 30% to $3,146 from $2,417 for the quarters  ended June
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 $536 for the
quarter ended June 30, 1999, down from $590 for the quarter ended June 30, 1998.
For the six months  ended June 30,  1999,  repairs  and spare  parts  sales were
$1,037 versus $1,305 for the comparable period in 1998.

IBM and Digital were the most significant  customers for the Company's products,
accounting  for 16% and 5% of revenue  respectively,  for the quarter ended June
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 six months  ended June 30,  1999
were $5,521  (27% of revenue)  and  $11,687  (28% of revenue)  respectively,  as
compared  to gross  margins  of $6,103  (28% of  revenue)  and  $12,364  (28% of
revenue) for the comparable  periods in 1998. Gross margin in the second quarter
of 1999  includes  a  write-down  to market  reserve of $824  against  inventory
obsolescence  risk associated with Boundless'  first  generation WBT.  Excluding
this  reserve,  gross margin for the quarter ended June 30, 1999 would have been
31%.  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 June 30,  1999,  operating
expenses  were $4,897  (25% of  revenue),  compared  to expenses  for the second
quarter of 1998 of $4,099 (19% of  revenue).  For the six months  ended June 30,
1999,  operating  expenses were $9,622 (23% of revenue)  compared to expenses in
the comparable period in 1998 of $8,484 (19% of revenue).

Sales and  Marketing  Expenses - Sales and  marketing  expenses  increased 9% to
$2,460 (12% of revenue) for the quarter  ended June 30, 1999 from $2,251 (10% of
revenue) for the quarter ended June 30, 1998.  Expenses for the first six months
were $4,393 in 1999 versus $4,285 in 1998. The increase in the second 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.

                                    9 of 14
<PAGE>

General  and  Administrative  Expenses  - General  and  administrative  expenses
increased to $1,725 (9% of  revenue),  from $1,610 (7% of revenue) for the three
months ended June 30, 1999 and 1998,  respectively.  Expenses for the  six-month
period were $3,384 in 1999 versus $3,023 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
second quarter  increased 72% to $1,321 in 1999 from $770 in 1998.  Expenses for
the six-month period ended June 30, 1999 were $2,395,  compared to $1,638 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 - During the second quarter of 1999 the Company  released  Digital
warranty  reserves  amounting  to $636  due to the  expiration  of the  warranty
period. The same situation occurred in the second quarter of 1998 with a reserve
release  in the amount of $325.  Future  releases  of this  nature are no longer
anticipated.

Interest Expense - Interest expense for the quarter ended June 30, 1999 was $422
compared to $676 for the comparable period in 1998. Interest expense for the six
months were $751 in 1999 versus $1,347 in 1998.  This decrease was 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 second
quarter of 1999 but at a lower level than in previous years.

Other  Nonrecurring  Charges -  Nonrecurring  charges of $101 in both the second
quarter and six months of 1999 relate to final settlement of expenses, in excess
of accrued  liabilities,  for  operations  which were  discontinued  in 1996. No
future charges of this kind are anticipated.

Income Tax Expense - Income tax expense for the quarter  ended June 30, 1999 was
$39 (38% of income  before tax)  compared to $323 (24% of income before tax) for
the comparable period in 1998. For the six months ended 1999 and 1998 income tax
expense was $461 and $782 respectively.

Net Income - For the quarter ended June 30, 1999,  net income was $62,  compared
to $1,005 (5% of revenue) for the comparable  period in 1998. Net income for the
six months  ended June 30 was $752 (2% of revenue) and $1,751 (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.

                                    10 of 14
<PAGE>
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 June 30, 1999,  the Company had working  capital of $16,609 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 June 30, 1999, the Company had tangible
net worth of $10,382  and total  liabilities  of  $32,475.  The  Company's  cash
requirements  at June 30, 1999 included  repayment of a revolving loan of $5,500
plus  interest,  a term loan in the amount of $4,000  plus  interest  payable in
twelve quarterly installments beginning June 1999 and a ten-year promissory note
in the amount of $6,750  consisting of monthly  principal and interest  payments
through July 1, 2009.

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 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.

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 six months ended June 30, 1999
was $1,300,  due principally to net income of $752, an income tax refund of $555
and non-cash expenses  (principally  depreciation) of $2,660. These increases in
cash were  partially  offset by an  increase  in  inventories  of $1,370  and an
increase in trade receivables of $1,557.  Net cash used in investing  activities
was  comprised  of  capital  expenditures  of $502.  Net cash used in  financing
activities  included  $3,606  to retire  the  Company's  mandatorily  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.

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<PAGE>
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,  Year 2000 compliance of the Company's internal systems and
devices  is  scheduled  to be  substantially  complete  by  July of  1999,  with
continued 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.

                                    12 of 14
<PAGE>
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.

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 June 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 June 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 5.      Other Information

Effective  May 26, 1999,  the common stock of the Company was listed for trading
on the American  Stock  Exchange  ("AMEX")  under the ticker symbol "BND".  As a
primary  market,  the AMEX  listing  automatically  gives the  Company  Blue Sky
exemptions in all 50 states. Additionally,  an AMEX listing also qualifies stock
trading above $5.00 per share for purchase on margin.


Item 6.      Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit 10(a):  Restatement,  Extension,  Assumption and Modification Agreement,
dated June 24, 1999,  between  Boundless  Technologies,  Inc.  and  Independence
Community Bank.

Exhibit 10(b):  Restated  Business  Installment  Promissory Note, dated June 24,
1999, from Boundless Technologies, Inc. to Independence Community Bank.

Exhibit 10(c):  Restated Mortgage and Security  Agreement,  dated June 24, 1999,
between Boundless Technologies, Inc. and Independence Community Bank.

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

Exhibit 27: Financial Data Schedule.

(b) Reports on Form 8-K

None.

                                    13 of 14
<PAGE>



                                   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:  August 12, 1999







Boundless Corporation



By: /s/Joseph Gardner
----------------------------------------
Joseph Gardner
Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)








                                    14 of 14
<PAGE>
                           INDEX OF ATTACHED EXHIBITS
                        BOUNDLESS CORPORATION FORM 10-Q


Exhibit 10(a):  Restatement,  Extension,  Assumption and Modification Agreement,
dated June 24, 1999,  between  Boundless  Technologies,  Inc.  and  Independence
Community Bank.

Exhibit 10(b):  Restated  Business  Installment  Promissory Note, dated June 24,
1999, from Boundless Technologies, Inc. to Independence Community Bank.

Exhibit 10(c):  Restated Mortgage and Security  Agreement,  dated June 24, 1999,
between Boundless Technologies, Inc. and Independence Community Bank.

Exhibit 27: Financial Data Schedule.