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, 2005

                         Commission File Number 0-17977

                              BOUNDLESS CORPORATION

             (Exact name of registrant as specified in its charter)

                                    Delaware
         (State or other Jurisdiction of Incorporation or Organization)

                                   13-3469637
                      (I.R.S. Employer Identification No.)

                            50 Engineers Lane Unit 2
                                  Hauppauge, NY

                    (Address of principal executive offices)

                                      11735
                                   (Zip Code)

                                 (631) 962-1500
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes | | No |X|

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2)

                                 Yes | | No |X|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)

                                 Yes | | No |X|

As of February 28, 2006, the Registrant had approximately 6,705,613 shares of
Common Stock, $.01 par value per share outstanding.

                                    1 of 24

<PAGE>

                     BOUNDLESS CORPORATION AND SUBSIDIARIES
                       (Debtor and Debtors-in-Possession)
                                      INDEX


<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                          No.
                                                                                                          ---
<S>        <C>                                                                                            <C>
Part I.    Financial Information

           Item 1.     Financial Statements
                       Consolidated Condensed Balance Sheets as of June 30, 2005 (Unaudited)
                         and December 31, 2004                                                             3
                       Consolidated Condensed Statements of Operations for the three and six months
                         ended June 30, 2005 and 2004 (Unaudited)                                          4
                       Consolidated Condensed Statements of Cash Flows for the six months
                         ended June 30, 2005 and 2004 (Unaudited)                                          5
                       Notes to Consolidated Condensed Financial Statements (Unaudited)                    6

           Item 2.     Management's Discussion and Analysis of Financial Condition and Results
                         of Operations                                                                    12

           Item 3.     Quantitative and Qualitative Disclosures About Market Risk                         17

           Item 4.     Controls and Procedures                                                            18

Part II.   Other Information

           Item 1.     Legal Proceedings                                                                  19

           Item 6.     Exhibits                                                                           20

Signature                                                                                                 21
</TABLE>

                                    2 of 24

<PAGE>

                     BOUNDLESS CORPORATION AND SUBSIDIARIES
                       (DEBTOR AND DEBTORS-IN-POSSESSION)
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)


<TABLE>
<CAPTION>
                                                                             September 30,  December 31,
                                                                                 2005           2004*
                                                                             -------------  -------------
ASSETS                                                                        (unaudited)
<S>                                                                           <C>            <C>
Current assets:
  Cash and cash equivalents                                                   $        62    $       124
  Cash on deposit with lender                                                          --            271
  Trade accounts receivable, net                                                      814          1,150
  Affiliate receivables                                                                85             92
  Other receivables                                                                   117            117
  Inventories (Note 3)                                                                760          1,094
  Prepaid expenses and other current assets                                           270             59
                                                                              -----------    -----------
     Total current assets                                                           2,108          2,907
Property and equipment, net (Note 4)                                                  128            103
                                                                              -----------    -----------
    Total assets                                                              $     2,236    $     3,010
                                                                              ===========    ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT Liabilities not subject to compromise
Current liabilities:
  Current portion of long-term debt                                           $       229    $       350
  Accounts payable                                                                     12             44
  Accrued salaries                                                                     73             86
  Accrued legal fees                                                                1,254          1,029
  Purchase order commitments                                                          129            561
  Accrued payroll and sales tax payable                                                28             30
  Accrued warranty                                                                     30             18
  Other accrued liabilities (Note 5)                                                  192            157
                                                                              -----------    -----------
     Total current liabilities                                                      1,947          2,275
                                                                              -----------    -----------

  Long-term debt, less current maturities (Note 6)                                    650            953
  Deferred credits                                                                     87             65
  Items subject to compromise:
  Manditorily redeemable preferred stock (Notes 7 & 8)                              1,652          1,652
  Liabilities subject to compromise (Note 8)                                       12,976         12,970
                                                                              -----------    -----------
         Total liabilities                                                         17,312         17,915
                                                                              -----------    -----------

         COMMITMENTS AND CONTINGENCIES (Note 13)

Stockholders' deficit: (Note 9)
  Common stock                                                                         67             67
  Additional paid-in capital                                                       35,844         35,844
  Accumulated deficit                                                             (50,987)       (50,816)
                                                                              -----------    -----------
     Total stockholders'  deficit                                                 (15,076)       (14,905)
                                                                              -----------    -----------
    Total liabilities and stockholders' deficit                               $     2,236    $     3,010
                                                                              ===========    ===========
</TABLE>

*     Condensed from audited financial statements


      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                    3 of 24

<PAGE>

                     BOUNDLESS CORPORATION AND SUBSIDIARIES
                       (DEBTOR AND DEBTORS-IN-POSSESSION)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                              Three Months Ended      Nine Months Ended
                                                                 September 30            September 30
                                                             --------------------    --------------------
                                                               2005        2004        2005        2004
                                                             --------    --------    --------    --------
<S>                                                          <C>         <C>         <C>         <C>
Revenue:
  Product sales                                              $  1,308    $  1,203    $  4,102    $  4,763
  Services                                                        103         209         460         643
                                                             --------    --------    --------    --------
    Total revenue                                               1,411       1,412       4,562       5,406
                                                             --------    --------    --------    --------
Cost of revenue
  Product sales                                                   992         985       3,254       3,632
  Services                                                         63          92         192         354
                                                             --------    --------    --------    --------
    Total cost of revenue                                       1,055       1,077       3,446       3,986
                                                             --------    --------    --------    --------

     Gross margin                                                 356         335       1,116       1,420

Other costs and expenses (income)
  Selling, general and administrative                             234         247         690       1,022
  Research and development                                         50          19         152         107
  Interest expense (excluding contractual interest of $17
    and $16 not recognized in 2005 and 2004, respectively)         44          21         136          99
  Loss on reimbursement of employee services (net of
    reimbursement of $0 and $75)                                   --          15           9          45
  Other costs (income)                                              7         (40)        (14)        (15)
                                                             --------    --------    --------    --------
                                                                  335         262         973       1,258
                                                             --------    --------    --------    --------
Income before reorganization items                                 21          73         143         162

Reorganization items (Note 10)                                    122          86         314         275
                                                             --------    --------    --------    --------
Net loss                                                     $   (101)   $    (13)   $   (171)   $   (113)
                                                             ========    ========    ========    ========

Basic and diluted loss per common share                      $  (0.02)   $     --    $  (0.03)   $  (0.02)
                                                             ========    ========    ========    ========

Basic and diluted weighted average shares outstanding           6,706       6,706       6,706       6,706
                                                             ========    ========    ========    ========
</TABLE>

      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                    4 of 24

<PAGE>

                     BOUNDLESS CORPORATION AND SUBSIDIARIES
                       (DEBTOR AND DEBTORS-IN-POSSESSION)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)


<TABLE>
<CAPTION>
                                                                            Nine months ended
                                                                              September 30,
                                                                           --------------------

                                                                             2005        2004
                                                                           --------    --------
<S>                                                                          <C>         <C>
Cash flows from operating activities:
  Income  before reorganization items                                           143         162
  Adjustments to reconcile income before reorganization items
       to net cash provided by (used in) operating activities:
    Depreciation and amortization                                                 2          42
    Change in deferred credits                                                   22         (98)
    Provision (credit) for doubtful accounts                                     30         (24)
Changes in assets and liabilities:
  Cash on deposit with lender                                                   271         (60)
  Trade accounts receivable                                                     306        (304)
  Affiliate receivables                                                           7        (134)
  Other receivables                                                              (1)         60
  Inventories                                                                   334       1,004
  Other assets                                                                 (211)         62
  Accounts payable and accrued expenses                                        (424)        (76)
                                                                           --------    --------
Net cash provided by operating activities excluding reorganization items        479         634
                                                                           --------    --------
Cash flows from reorganization activities:
  Reorganization items, net                                                    (314)       (275)
  Gain on disposition of property and equipment                                  --         (23)
  Proceeds from disposition of property                                          --          23
  Increase in liabilities, net                                                  225         100
                                                                           --------    --------
Net cash used in reorganization activities                                      (89)       (175)
                                                                           --------    --------
Cash flows from investing activities:
  Capital expenditures                                                          (27)        (14)
                                                                           --------    --------
Net cash used in investing activities                                           (27)        (14)
                                                                           --------    --------
Cash flows from financing activities:
  Net proceeds from issuance of debt                                          4,732
  Payments on loans payable and capital leases                               (5,157)       (755)
                                                                           --------    --------
Net cash used in financing activities                                          (425)       (755)
                                                                           --------    --------
Net increase (decrease) in cash and cash equivalents                            (62)       (310)
Cash and cash equivalents at beginning of period                                124         373
                                                                           --------    --------
Cash and cash equivalents at end of period                                 $     62    $     63
                                                                           ========    ========

Cash paid for:
  Interest                                                                 $     95    $     72
  Taxes                                                                          --          --
</TABLE>


      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                    5 of 24

<PAGE>

                     BOUNDLESS CORPORATION AND SUBSIDIARIES
                       (DEBTOR AND DEBTORS-IN-POSSESSION)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (in thousands)
                                   (unaudited)


            1. Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code

The Company voluntarily petitioned for relief under Chapter 11 of the United
States Bankruptcy Code on March 12, 2003, (the "Petition Date") in the United
States Bankruptcy Court for the Eastern District of New York, Central Islip

The Debtor continues to operate its business as "debtor-in-possession" under the
jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and
applicable court orders. In general, as debtors-in-possession, the Debtor is
authorized under Chapter 11 to continue to operate as an ongoing business, but
may not engage in transactions outside the ordinary course of business without
the prior approval of the Bankruptcy Court.

In order to successfully exit Chapter 11, the Company will need to propose, and
obtain confirmation by the Bankruptcy Court of, a plan of reorganization that
satisfies the requirements of the Bankruptcy Code.

Financial Statement Presentation.

The  unaudited  condensed   consolidated  interim  financial   statements,   and
accompanying  notes included herein,  have been prepared by the Company pursuant
to the rules and regulations of the Securities and Exchange  Commission  ("SEC")
and reflect all adjustments which are of a normal recurring nature and which, in
the opinion of  management,  are necessary for the fair statement of the results
of the  three  and nine  months  ended  September  30,  2005 and  2004.  Certain
information and footnote  disclosures have been condensed or omitted pursuant to
such  regulations.   The  results  for  the  current  interim  periods  are  not
necessarily  indicative  of the  results for the full year.  These  consolidated
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial statements and the notes thereto in the Company's latest annual report
filed  with the SEC on Form  10-K for the year  ended  December  31,  2004.  The
accompanying  financial  statements  include the accounts of the Company and its
subsidiaries on a consolidated basis. All significant inter-company accounts and
transactions have been eliminated.

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance with American Institute of Certified Public Accountants' Statement of
Position 90-7 ("SOP 90-7"),  "Financial  Reporting by Entities in Reorganization
Under the Bankruptcy  Code," and on a going-concern  basis,  which  contemplates
continuity of operations,  realization of assets and satisfaction of liabilities
in the ordinary course of business.

SOP 90-7 requires that the financial  statements  for periods  subsequent to the
Chapter 11 filing petition distinguish transactions and events that are directly
associated  with  the  reorganization  from  the  operations  of  the  business.
Accordingly,  revenues,  expenses (including  professional fees), realized gains
and  losses,   and  provisions   for  losses   directly   associated   with  the
reorganization and restructuring of the business are reported  separately in the
financial statements.  The Consolidated Balance Sheet distinguishes pre-petition
liabilities and other items subject to compromise  from both those  pre-petition
liabilities   that  are  not  subject  to  compromise  and  from   post-petition
liabilities.  Liabilities  and other items subject to compromise are reported at
the  amounts  expected  to be  allowed,  even if they may be settled  for lesser
amounts.

In addition, as a result of the Chapter 11 filing, the realization of assets and
satisfaction  of  liabilities,  without  substantial  adjustments  or changes in
ownership,  are  subject  to  uncertainty.  Given  this  uncertainty,  there  is
substantial  doubt about the Company's  ability to continue as a going  concern.
While operating as  debtors-in-possession  under the protection of Chapter 11 of
the Bankruptcy Code and subject to approval of the Bankruptcy Court or otherwise
as permitted in the ordinary course of business,  the Debtors,  or some of them,
may sell or otherwise dispose of assets and liquidate or settle  liabilities for
some amounts other than those reflected in the consolidated financial

                                    6 of 24

<PAGE>

statements.  Further,  a plan of  reorganization  could  materially  change  the
amounts and classifications in the historical consolidated financial statements.

      The  primary  issues  management  will  focus  on  immediately   following
confirmation of the Company's Plan of Reorganization include:

      o     Working with its secured lender on a  restructuring  of the terms of
            the DIP debt which it holds,  thereby reducing the Company's cost of
            borrowing.

      o     Initiating  negotiations with suppliers to secure trade financing of
            working  capital  of  approximately  $1-2  million  under  terms and
            conditions  to be agreed upon.  There can be no assurance  that such
            financing will materialize.

      o     The continual  negotiation of material contracts for the sale of its
            manufacturing  services to customers which management  believes will
            provide  additional  liquidity  for  operations.  There  can  be  no
            assurances that these contracts will materialize.

      o     The ability of the Company to generate cash from  operations  and to
            maintain adequate cash on hand; and

      o     The ability of the Company to achieve profitability.

      The Company believes that positive  operating cash flows and profitability
will not come from the general  purpose text terminal  marketplace.  The Company
has been and will  continue  to focus on the current  business  from the current
customers in order to provide a reliable cash flow with which to execute  growth
plans. The paths to growth that the Company has developed include:

      1.    Repositioning the Company's business from a text terminal company to
a Point-of-Service/Point-of-Sale  ("POS") technology company, and build upon the
Company's  historical  success in POS to  establish  a strong  link  between the
Company's and POS' applications. A key activity in support of the POS initiative
includes leveraging the Company's existing technology platforms

      2.    Gaining  access to a more  modern and  growing  market  through  new
product  offerings  including Web  terminals  and terminals  utilizing the Linux
operating  system which provide high security,  high levels of productivity  and
high reliability.

      3.    Enter the Radio Frequency  Identification ("RFID") market place with
a high  value-to-cost  offering.  Position the company as a RFID provider to POS
integrators and OEMs. RFID  Controllers - read/write RFID modules for both 13.56
MHz and 900 MHz- will be embedded into the Company's technology platforms.

      4.    Applying  its  robust  Build-to-Order  ("BTO")  processes  to growth
products and markets.

      There is no  assurance  that the Company will be  successful  in obtaining
confirmation of their Plan of Reorganization.  If it is not,  liquidation of the
Company's  assets  would most  likely  ensue.  If the  Company  does emerge from
Chapter 11, there is no assurance  that our  operations  will be profitable  and
cash  flow  positive;  in the  alternative,  the  scope of  operations  could be
severely  curtailed  or  discontinued   entirely.   The  accompanying  financial
statements do not include any adjustments  that might result from the outcome of
these uncertainties.

      2.    Summary of Certain Accounting Policies

These consolidated  financial  statements should be read in conjunction with the
consolidated  financial statements and notes thereto for the year ended December
31, 2004 included in the Company's  Annual Report on Form 10-K.  The  accounting
policies used in preparing these consolidated  financial statements are the same
as those described in the December 31, 2004 consolidated financial statements.

Cash and Cash Equivalents

All highly liquid investments with maturities at purchase of three months or
less are considered cash equivalents. We had $271 classified as "cash on deposit
with lender" at December 31, 2004, representing cash on-hand in a lockbox
account under the control of the Company's DIP lender.

                                    7 of 24

<PAGE>

Minority Interest

In the absence of a commitment by minority shareholders to fund losses in excess
of their equity, such losses have been attributed to the Company.

Revenue Recognition

The Company  recognizes revenue from product sales upon shipment to the customer
or passage of title and assumption of risk. The Company monitors product returns
generally,  which are for stock rotation with the coinciding  replacement order,
and records  provisions  for estimated  future  returns and  potential  warranty
liability at the time revenue is recorded.  Service  revenue is recognized  when
service is  performed  and  billable.  Revenue  from  maintenance  and  extended
warranty  agreements  is deferred  and  recognized  ratably over the term of the
agreement.

Supplier Concentration

The Company  purchases  subassemblies  and components for its products from more
than 40 domestic and Far East  suppliers.  For the quarter  ended  September 30,
2005,   purchases  from  Radiance  Electronics  and  Video  Display  Corporation
accounted  for  approximately  38% and 12%,  respectively,  of total  purchases.
During the third quarter of 2004 purchases from Radiance  Electronics  and Ansen
Corporation  accounted for 35% and 24%,  respectively,  of the  Company's  total
purchases of material.

The balance due Ansen was approximately  $129 and $561 at September 30, 2005 and
December 31, 2004, respectively; and such balance is included in "Purchase order
commitments" on the balance sheets.

Advertising

Advertising  costs are expensed as incurred.  The amount  charged to advertising
expense was $0 and $2 for the three and nine months  ended  September  30, 2004.
The Company did not incur advertising expense for the first nine months of 2005.

Net Loss Per Common Share

Net  loss  attributable  to  common  stockholders   includes  the  accretion  of
mandatorily redeemable preferred stock.

SFAS No. 128,  "Earnings Per Share," requires a reconciliation  of the numerator
and  denominator  of the basic net income  (loss) per share  computation  to the
numerator  and   denominator   of  the  diluted  net  income  (loss)  per  share
computation.

Pervasiveness of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

New Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151,  "Inventory  Costs--An Amendment
of ARB No. 43, Chapter 4" ("SFAS 151").  SFAS 151 amends the guidance in ARB No.
43,  Chapter 4,  "Inventory  Pricing,"  to clarify the  accounting  for abnormal
amounts of idle facility expense,  freight,  handling costs, and wasted material
(spoilage).  Among other  provisions,  the new rule  requires that items such as
idle facility expense,  excessive spoilage, double freight, and rehandling costs
be  recognized  as  current-period  charges  regardless of whether they meet the
criterion  of "so  abnormal"  as stated in ARB No.  43.  Additionally,  SFAS 151
requires  that the  allocation  of fixed  production  overheads  to the costs of
conversion be based on the normal  capacity of the production  facilities.  SFAS
151 is effective for fiscal years  beginning after June 15, 2005 and is required
to be adopted by  Boundless in the first  quarter of fiscal  2006,  beginning on
January 1, 2006.  Boundless is currently evaluating the effect that the adoption
of SFAS 151 will have on its

                                    8 of 24

<PAGE>

consolidated  results of operations and financial  condition but does not expect
SFAS 151 to have a material impact.

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment" ("SFAS 123R"), which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation"  ("SFAS 123") and supersedes APB Opinion No. 25,  "Accounting  for
Stock  Issued to  Employees."  SFAS 123R  requires all  share-based  payments to
employees,  including grants of employee stock options,  to be recognized in the
financial  statements  based  on  their  fair  values.  As  amended  by  an  SEC
pronouncement,  SFAS 123R is effective  with the first annual  period after June
15, 2005, with early adoption encouraged.  The pro forma disclosures  previously
permitted  under  SFAS  123,  no  longer  will be an  alternative  to  financial
statement  recognition.  We are required to adopt SFAS 123R in the first quarter
of fiscal 2006,  beginning  January 1, 2006.  Under SFAS 123R, we must determine
the appropriate  fair value model to be used for valuing  share-based  payments,
the amortization  method for compensation  cost and the transition  method to be
used at  date of  adoption.  The  transition  methods  include  prospective  and
retroactive adoption options.  Under the retroactive options,  prior periods may
be  restated  either  as of the  beginning  of the year of  adoption  or for all
periods presented.  The prospective method requires that compensation expense be
recorded for all unvested stock options and restricted stock at the beginning of
the first quarter of adoption of SFAS 123R, while the retroactive  methods would
record compensation  expense for all unvested stock options and restricted stock
beginning with the first period restated.  We are evaluating the requirements of
SFAS 123R and we expect that the  adoption of SFAS 123R will not have a material
impact on the  Company's  consolidated  results of  operations  and earnings per
share.  We have not yet  determined  the  method of  adoption  or the  effect of
adopting SFAS 123R, and we have not determined  whether the adoption will result
in amounts that are similar to the current pro forma disclosures under SFAS 123.

In  December  2004,  the FASB issued SFAS No.  153,  "Exchanges  of  Nonmonetary
Assets--An   Amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions"  ("SFAS 153").  SFAS 153  eliminates the exception from fair value
measurement for nonmonetary  exchanges of similar productive assets in paragraph
21(b) of APB Opinion No. 29,  "Accounting  for  Nonmonetary  Transactions,"  and
replaces  it  with an  exception  for  exchanges  that  do not  have  commercial
substance.  SFAS  153  specifies  that a  nonmonetary  exchange  has  commercial
substance  if the  future  cash  flows of the  entity  are  expected  to  change
significantly as a result of the exchange.  SFAS 153 is effective for the fiscal
periods beginning after June 15, 2005 and is required to be adopted by Boundless
in the third  quarter of fiscal 2005,  beginning  on July 1, 2005.  Boundless is
currently  evaluating  the effect that the adoption of SFAS 153 will have on its
consolidated  results of operations and financial  condition but does not expect
it to have a material impact.

In March  2005,  the FASB  issued  FIN 47,  "Accounting  for  Conditional  Asset
Retirement Obligations, an interpretation of FASB Statement No. 143" ("FIN 47"),
which  requires  an entity to  recognize  a  liability  for the fair  value of a
conditional  asset  retirement  obligation when incurred if the liability's fair
value can be reasonably  estimated.  FIN 47 is effective for fiscal years ending
after  December 15, 2005 and is required to be adopted by Boundless in the first
quarter of fiscal 2006.  Boundless is currently  evaluating  the effect that the
adoption  of FIN 47 will have on its  consolidated  results  of  operations  and
financial condition but does not expect it to have a material impact.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections" ("SFAS 154") which replaces Accounting Principles Board Opinion No.
20 "Accounting Changes" and SFAS No. 3, "Reporting Accounting Changes in Interim
Financial  Statements--An  Amendment  of APB Opinion No. 28." SFAS 154  provides
guidance on the  accounting  for and reporting of  accounting  changes and error
corrections. It establishes retrospective application, or the latest practicable
date, as the required method for reporting a change in accounting  principle and
the reporting of a correction of an error.  SFAS 154 is effective for accounting
changes and  corrections of errors made in fiscal years beginning after December
15,  2005 and is  required to be adopted by  Boundless  in the first  quarter of
fiscal 2006.  Boundless is currently  evaluating the effect that the adoption of
SFAS 154 will have on its  consolidated  results  of  operations  and  financial
condition but does not expect it to have a material impact.

In June  2005,  the  FASB  issued  FSP FAS  143-1,  "Accounting  for  Electronic
Equipment  Waste  Obligations"  ("FSP 143-1"),  which  provides  guidance on the
accounting  for  certain

                                    9 of 24

<PAGE>

obligations  associated  with the Directive on Waste  Electrical  and Electronic
Equipment  (the  "Directive"),  which was adopted by the European  Union ("EU").
Under the Directive,  the waste management  obligation for historical  equipment
(products  put on the market on or prior to August 13,  2005)  remains  with the
commercial  user until the  equipment is  replaced.  FSP 143-1 is required to be
applied to the later of the first reporting  period ending after June 8, 2005 or
the date of the  Directive's  adoption  into  law by the  applicable  EU  member
countries  in which  we have  significant  operations.  Boundless  is  currently
evaluating  the  effect  that  the  adoption  of  FSP  143-1  will  have  on its
consolidated  results of operations and financial  condition.  Such effects will
depend on the respective laws adopted by the EU member countries.

      3.    Inventories

Inventories  are stated at the lower of cost or market.  Cost is determined on a
first-in first-out basis. On a quarterly basis the Company reviews quantities on
hand and on order and  records a  provision  for excess and  obsolete  inventory
based on forecasted  demand.  Should this analysis  indicate that the demand for
product has increased from previous estimates,  a decrease in the reserves would
be effected through a credit to the statement of operations.

The major components of inventories are as follows:

                                             September 30,    December 31,
                                             -------------    -------------
                                                  2005             2004
                                             -------------    -------------
Raw materials and purchased components       $       1,054    $       1,584
Finished goods                                         164              126
Manufacturing inventory reserves                      (775)            (935)
Service parts                                          317              319
                                             -------------    -------------
                                             $         760    $       1,094
                                             =============    =============

      4.    Property and equipment

Property and equipment consisted of the following:

                                                  September 30,    December 31,
                                                  ------------------------------
                                                       2005             2004
                                                  -------------    -------------
Buildings and improvements                        $          17    $          14
Machinery and equipment                                   6,529            6,505
                                                  -------------    -------------
                                                          6,546            6,519
Less accumulated depreciation and amortization            6,418            6,416
                                                  -------------    -------------
                                                  $         128    $         103
                                                  =============    =============

Depreciation  expense for the nine months ending September 30, 2005 and 2004 was
$2 and $42, respectively.  The Company recorded repairs and maintenance expenses
of $2 and $3 for the nine months ended March 31, 2005 and 2004.

The Company  discontinued  recording  depreciation  expense on its machinery and
equipment  in the  first  quarter  of 2005 as those  assets  had  reached  their
estimated salvage value.

      5.    Liabilities and Other Items Subject to Compromise

Liabilities and other items subject to compromise refers to liabilities incurred
and the issuance of preferred stock prior to the  commencement of the Chapter 11
Cases.  These amounts  represent  the  Company's  estimate of known or potential
pre-petition claims to be resolved in connection with the Chapter 11 Cases. Such
claims  remain  subject  to future  adjustments.  Adjustments  may  result  from
negotiations, actions of the Bankruptcy Court, the determination as to the value
of any  collateral  securing  claims,  proofs  of claim or other  events.  It is
anticipated  that such  adjustments  may be  material.  Payment  terms for these
amounts will be established in connection with the Chapter 11 Cases.

                                    10 of 24

<PAGE>

At September  30, 2005 and December 31, 2004,  the Company had  liabilities  and
other items  subject to compromise  of  approximately  $14,628 and $14,622 which
consisted of the following:

<TABLE>
<CAPTION>
                                                       September 30,    December 31,
                                                       -------------    -------------
                                                            2005             2004
                                                       -------------    -------------
<S>                                                    <C>              <C>
Liabilities:
Accounts payable                                       $      10,954    $      10,948
Convertible notes payable, principally related to
  prior separation agreements                                    965              965
Accrued salaries                                                 397              397
Accrued warranty                                                 222              222
Capital lease obligations                                        438              438
                                                       -------------    -------------
                                                              12,976           12,970
Other:
Manditorily redeemable preferred stock                         1,652            1,652
                                                       -------------    -------------
                                                       $      14,628    $      14,622
                                                       =============    =============
</TABLE>

The mandatorily  redeemable preferred stock is convertible into shares of common
stock  of the  Company  at a  conversion  price  of $3 per  share.  The  Plan of
Reorganization  contemplates that all equity  instruments of the Company will be
cancelled on the Effective  Date. As a result,  the  conversion of the preferred
stock to  shares of common  stock is  doubtful  and  therefore  the  mandatorily
preferred stock is included with other items subject to compromise.

      6.    Stockholders' Deficit

At September 30, 2005 and December 31, 2004  stockholders'  deficit consisted of
the following:

<TABLE>
<CAPTION>
                                                       September 30,    December 31,
                                                       ------------------------------
                                                           2005             2004
                                                       -------------    -------------
<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,6,705,613 shares issued and outstanding              67               67
Additional paid-in capital                                    35,844           35,844
Accumulated deficit                                          (50,987)         (50,816)
Accumulated other comprehensive loss                              --               --
                                                       -------------    -------------
     Total stockholders' deficit                       $     (15,076)   $     (14,905)
                                                       =============    =============
</TABLE>

      7.    Reorganization Expenses

Reorganization expenses were as follows:

                                                     Nine months ended
                                                        September 30,
                                               ------------------------------
                                                    2005             2004
                                               -------------    -------------
Professional fees                              $         225    $         103
United States District Court fees                         22               19
Facility relocation expenses                              33              176
Other expenses                                            34               --
Gain on the disposition of equipment                      --              (23)
                                               -------------    -------------
                                               $         314    $         275
                                               =============    =============


                                    11 of 24

<PAGE>

      8.    Major Customers

The Company markets its terminal products through OEMs and reseller distribution
channels. Customers can buy the Company's 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.  Ingram Micro and
1st Solutions contributed  approximately 22% and 14%, respectively,  of revenues
for the three months ended September 30, 2005. Ingram Micro also contributed 22%
of revenues for the nine months ended  September 30, 2005. For the quarter ended
September 30, 2004, Ingram Micro and Jetstar provided 20% and 11%, respectively,
of total Company revenues.

      9.    Litigation and Contingencies

The Company is subject to lawsuits and claims that arose in the normal course of
business.  Management is of the opinion that all such matters are without merit,
or are of such kind,  or involve such  amounts,  as would not have a significant
effect on the  financial  position,  results of  operations or cash flows of the
Company if disposed unfavorably.

See "Part II- Other Information, Item 1. Legal Proceedings" for a description of
outstanding lawsuits and claims.

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.

Three and Nine Months Ended September 30, 2005 and 2004.

Revenue - Revenue  for the  quarter  ended  September  30,  2005  was  $1,411 as
compared to $1,412 for the quarter ended September 30, 2004. For the nine months
ended September 30, 2005, the Company  recorded revenue of $4,562 versus revenue
of $5,406 for the nine months ended September 30, 2004.

Sales of the  Company's  General  Display  Terminals  were  $1,304  and  $4,092,
respectively,  for the three and nine months ended  September  30, 2005.  During
2004, General Display Terminal revenue was $1,203 and $4,763, respectively,  for
the three and nine months ended September 30. The decline in  year-to-date  2005
revenue is  attributable  to decreased  sales to Hewlett  Packard.  During 2003,
Hewlett Packard  announced the  discontinuation  of sales of its General Display
Terminal,  sourced from the Company,  in favor of technologically  newer desktop
terminal devices. As a result of this transition, Hewlett Packard purchased $982
during the first three quarters of 2004;  which amount  included the acquisition
of product quantities  sufficient to meet its then current needs, as well as its
near-term  projected needs during the product  transition  period. For the first
three quarters of 2005, purchases from Hewlett Packard amounted to approximately
$348.

Text revenue includes sales of the Company's  general-purpose display terminals.
The  Company's  product  family  falls into two general  classes:  ANSI or ASCII
display terminals.  The general purpose segment of the Text market, whether ANSI
or ASCII,  is primarily  characterized  as a  "replacement  sale"  market.  Text
terminal  customer  purchasing  criteria  are based on  quality,  customization,
compatibility  with  other  terminals,  price  and,  as a result of the  markets
replacement characterization,  lead-times.  Historically, the Company

                                    12 of 24

<PAGE>

has been a leader in these categories.

The Company  anticipates sales of its General Display Terminals will continue to
decline  as  customers   transition  to  newer   technologies   with   graphical
capabilities.

Net revenue from EMS  activities,  primarily  logistics  services sold to Unique
Co-operative  Solutions,  Inc. ("UCSI"), were $13 for the nine months ended June
30, 2005, as compared to $114 in the comparable  period of 2004.  UCSI is wholly
owned  by Mr.  Oscar  Smith,  who also is the  majority  shareholder  of  Vision
Technologies,  Inc. ("Vision").  The Company's Plan of Reorganization,  assuming
approval by the Bankruptcy Court,  contemplates that Vision will own 100% of the
Company,  and will receive this ownership in settlement of the $650 note payable
due to him plus accrued interest of $134. Mr. Smith currently owns approximately
15% of the outstanding common stock of the Company.

Net revenue from the Company's  repairs and spare parts business for the quarter
ended  September  30, 2005 was $101 as  compared  to $177 for the quarter  ended
September  30, 2004.  This revenue  includes the sale of spare parts,  repair of
product  outside of the warranty  period,  and the sale of  multi-year  warranty
contracts.   Year-to-date  revenue  in  2005  was  $447  versus  $529  in  2004.
Historically,  customer  service  revenue  has been driven from the sales of the
Company's text terminal products.

The Company's engineering efforts have focused on cost reduction and reliability
improvements.  These  efforts  have  decreased  the average  failure rate of the
Company's  text  terminals  and  extended  the  average  useful life of the text
terminal.  These  improvements  have reduced the  Company's  ability to generate
revenue from spare parts sales and repair activities. In addition, a substantial
market has evolved around the sale of used equipment, as customers trade in text
terminals when they switch to  alternative  technologies,  thereby  reducing the
Company's opportunity to sell new equipment.

During  the third  quarter  of 2005,  Ingram  Micro  contributed  22%,  and 1st.
Solutions  contributed  14%,  of  total  revenues.   Ingram  Micro  and  Jetstar
contributed  20% and 11%,  respectively,  of total revenue for the quarter ended
September 30, 2004.

Gross  Margin - The Company  recorded  gross  margin for the three  months ended
September  30,  2005 of $356 (25% of revenue)  compared to gross  margin of $335
(24% of revenue) for the third quarter of 2004. On a year-to-date  basis,  gross
margin decline by $304, or 21%, from $1,420 in 2004 to $1,116 in 2005.

Total Operating  Expenses - For the quarter ended September 30, 2005,  operating
expenses, excluding interest expense and reorganization expenses associated with
the  Company's  bankruptcy  filing,  were $284  (20% of  revenue),  compared  to
expenses for the third  quarter of 2004 of $266 (19% of  revenue).  Year-to-date
operating expenses decreased $287, or 25%, from $1,129 in 2004 to $842 in 2005.

The decrease in year-to-date  operating  expenses is attributable to layoffs and
other expense  control  activities  implemented by the Company in order to align
its expense  structure with its revenue.  These layoffs included the elimination
of senior  management,  including the Company's chief executive  officer,  and a
restructuring of the Company's sales group.

The  Company  reviews  its  account  receivable  balances  monthly to assess its
estimate of the  collectability  of such accounts.  The Company  utilizes ratios
based on its historical  experience,  as well as management's  judgment,  in its
assessment. For the third quarter of 2005 the Company recorded bad debt reserves
against its receivables in an amount of approximately $20. No reserve or accrual
was recorded during the third quarter of 2004.

Loss on  Reimbursement of Employee  Services-  Beginning in the first quarter of
2004 and through May 2005, the Company  allocated  personnel and other personnel
related  expenses to UCSI, via monthly  charges,  at an agreed  monthly  amount;
which amount  represented  an estimate of UCSI's  utilization  of the  Company's
personnel for UCSI's projects and programs.  This arrangement  terminated in May
2005.  The  difference  between the estimated  utilization  of resources and the
monthly charge is recorded as a loss on reimbursement of

                                    13 of 24

<PAGE>

employee  services.  For the third  quarter ended  September  30, 2004,  monthly
charges  amounted to $75,  resulting in a loss on  reimbursement of $15. For the
nine  months  ended  September  30, 2005 and 2004 the loss on  reimbursement  of
employee services was $9 and $45, respectively.

Other costs/income - Other costs for the quarter ended September 30, 2005 was $7
compared to other income of $40 for the period ended  September 30, 2004.  Other
income in the third  quarter of 2004 is  composed  of the  partial  reversal  of
previously accrued expenses,  originally in the amount of approximately $58, and
recorded  during the second  quarter of 2004 in  connection  with the  Company's
decision to shut down its depot repair  center in Illinois.  For the nine months
ended  September  30,  2005,  other  income was $14.  For the nine months  ended
September 30, 2004, other income was $15.

Interest  Expense  -  Interest  expense  for the  three  and nine  months  ended
September 30, 2005, was $44 and $136, respectively. Interest expense was $21 for
the quarter ended September 30, 2004 and $99 for the nine months ended September
30, 2004. In connection  with the  bankruptcy  filing,  during the quarter ended
March 31, 2003, the Company obtained debtor-in-possession ("DIP") financing with
Valtec  Capital,  LLC.  At  September  30,  2004,  the  balance  owed Valtec was
approximately  $1,013,  and carried an interest rate of 8% per annum. In January
2005,  the Company  replaced the Valtec Capital DIP financing with DIP financing
provided by Entrepreneur Growth Capital, LLC ("EGC"). At September 30, 2005, the
balance due EGC was $229,  and  carried an interest  rate of the prime rate plus
6%. In addition,  in June 2003 the  Bankruptcy  Court  authorized the Company to
secure  $650 of junior  secured  DIP  financing  from  Vision.  The  Vision  DIP
financing carries interest at 8% per annum.

Reorganization  Expenses-  During the third quarter of 2005 the Company recorded
reorganization  expenses  of $122,  primarily  for legal  fees  incurred  in the
bankruptcy.  For the quarter ended September 30, 2004,  reorganization  expenses
were $86. For the nine months ended September 30, 2005,  reorganization expenses
were  $314,  compared  to $275  for the  comparable  period  in  2004.  The 2004
year-to-date  amount includes  approximately $176 related to expenses associated
with the Company's relocating its manufacturing  operations to Farmingdale,  New
York, and a credit of $23 from the sale of excess assets.

Income Tax  Expense/Credit - For the quarters  ended September 30, 2005 and 2004
the Company did not record  income tax  expense or credit  against the  recorded
results.  The Company recorded no income tax benefit for these quarters based on
the Company's  estimate of its annual  effective income tax rate to be zero. For
annual reporting  purposes,  the Company has provided a 100% valuation allowance
for its net deferred tax assets.

Net Loss - For the quarter ended September 30, 2005, the Company  recorded a net
loss of $101, compared to a net loss of $13 for the quarter ended June 30, 2004.
On a year-to-date basis the net loss was $171 in 2005 compared to $113 in 2004.

LIQUIDITY AND CAPITAL RESOURCES

The matters  described in "Liquidity and Capital  Resources," to the extent that
they relate to future events or expectations,  may be significantly  affected by
the Chapter 11 process.  Those  proceedings  involve,  or may result in, various
restrictions on the Company's activities,  limitations on financing, the need to
obtain  Bankruptcy Court and Creditors'  Committee  approval for various matters
and  uncertainty  as to  relationships  with vendors,  suppliers,  customers and
others with whom we may conduct or seek to conduct business.

Generally,  under the Bankruptcy  Code, most of a debtor's  liabilities  must be
satisfied in full before the debtor's  stockholders can receive any distribution
on account of such  shares.  The  rights  and  claims of various  creditors  and
security  holders will be determined by the  confirmed  plan of  reorganization.
Further,  it is also  likely  that  pre-petition  unsecured  claims  against the
Company  will  be  substantially  impaired  in  connection  with  the  Company's
reorganization.  At this time we can make no prediction  concerning  how each of
these claims will be valued in the bankruptcy  proceedings.  We believe that the
Company's  presently  outstanding equity securities will have no value and it is
expected that those securities will be canceled under any plan of reorganization
that we propose. For this reason, we urge that caution be exercised with respect
to existing and future claims or

                                    14 of 24

<PAGE>

investments in any Boundless security.

The Company is highly  leveraged.  As of December  31,  2004,  the Company had a
tangible net worth deficit of $14,905 and total  liabilities  of $17,915.  As of
September 30, 2005,  the Company had a tangible net worth deficit of $15,076 and
total  liabilities  of  $17,312.  The  Company  had a working  capital  deficit,
inclusive of liabilities and other items subject to compromise, of approximately
$14,467 as of September 30, 2005, compared to working capital deficit of $13,990
as of December 31, 2004. 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.

On the  Effective  Date,  the  Company  shall  issue,  or cause to be issued for
Vision's  benefit,  and in its name, shares of Boundless Common Stock sufficient
to  provide  Vision  with  100%  of  the  Boundless   Common  Stock  issued  and
outstanding,  or to be issued  and  outstanding,  under  the Plan  (the  "Vision
Shares").  Such  issuance  of the  Vision  Shares  shall be deemed to be in full
satisfaction  of the Vision Claim,  which claim  amounted to $784,  inclusive of
accrued interest, at September 30, 2005.

The Company's Plan of  Reorganization  contemplates an annual payment of cash to
holders of allowed  unsecured  claims (the "Claims").  The Company believes that
these Claims aggregate  approximately  $14,586 at December 31, 2005.  Holders of
Claims shall receive their Pro Rata share of cash payments in an amount equal to
2% of annual  revenues up to and  including  $7  million,  on each of the first,
second and third  anniversary  dates of the Effective Date; and cash payments in
an amount equal to 4% of annual  revenues  exceeding $7 million,  on each of the
first, second and third anniversary dates of the Effective Date.

Payments of Claims  shall be escrowed on a monthly  basis,  and the Company must
forward  monthly  sales  reports  and  confirmation  of the escrow to  Committee
Counsel.  Each of the annual payments to be distributed to holders of the Claims
shall be:  (i) not less than  $150 on each of the first and  second  anniversary
dates;  and (ii) not less than $200 on the third  anniversary  dates.  The total
amount to be  distributed  to holders of the Claims  shall be not less than $500
(the "Minimum Distribution").

If the Company merges with another entity or is acquired by another entity prior
to the payments of all amounts due and owing  pursuant to the payment plan,  the
remaining entity must assume the Company's  obligations contained herein. Annual
revenues shall include only those revenues generated from sales of the Company's
product line existing prior to any merger or acquisition.

At September 30, 2005,  the Company had accrued  approximately  $1,254 for legal
assistance throughout the bankruptcy period. As of December,  2005,  outstanding
professional fees,  inclusive of legal fees, are estimated to approximate $1,430
as of the Effective Date. Upon application for payment pursuant to Sections 330,
331 and 503(a) of the Bankruptcy Code and approval by the Bankruptcy  Court, any
and all professional fees not paid on or before the Effective Date shall be paid
by the Company on such terms as the parties shall agree.  Interest  shall accrue
on any unpaid  professional fees from the Effective Date at a rate of eight (8%)
percent per annum.

Since it is anticipated that  professional fees shall not be paid in full on the
Effective  Date,  the  Professionals  (other than  auditors)  shall be granted a
security  interest  upon all of the  Company's  assets,  junior to the  security
interest  thereon of EGC, but pari passu with the Vision security  interest,  if
any. When the Professionals  shall have been paid in full, the security interest
in their favor shall be cancelled and be of no further force and effect.

The Company's liquidity is affected by many factors,  some of which are based on
the normal  ongoing  operations of our  businesses  and some of which arise from
uncertainties  related to global  economies.  In the event there is a decline in
the Company's  sales and earnings  and/or a decrease in  availability  under the
credit  line,  the  Company's  cash flow  would be

                                    15 of 24

<PAGE>

further adversely affected.  Accordingly, the Company may not have the necessary
cash to fund all of its obligations.

Net cash provided by operating activities during the nine months ended September
30,  2005 was $479,  principally  related  to net income  before  reorganization
expenses of $143 and reductions in trade accounts  receivable and inventories of
$306 and $334, respectively. In addition, cash on deposit with the Company's DIP
lender  declined  by $271  and  deferred  revenues  increased  by $22.  Non-cash
expenses  incurred  during the first nine months of 2005,  principally  bad debt
expense,  were $32. These amounts were offset by reductions in accounts  payable
and accrued  expenses of $424 and  increases in other assets,  principally  cash
collateral  and  prepaid  expenses,  of $211.  Net cash  provided  by  operating
activities during the nine months ended September 30, 2004 was $634, principally
related to net income  before  reorganization  expenses of $162,  reductions  in
inventories of $1,004, and reductions in other receivables and pre-paid expenses
of $60 and  $62,  respectively.  In  addition,  the  Company  recorded  non-cash
depreciation  expenses  of $42.  This  amount was offset by  increases  in trade
accounts receivable of $304, increases in receivables from affiliates of $134, a
reduction in the balance of deferred  revenues of $98,  and non-cash  credits of
$24  relating to the  reversal of  previously  accrued  reserves  against  trade
accounts  receivable.   Additionally,  accounts  payable  and  accrued  expenses
declined by $76.

For the nine months ended  September 30, 2005,  net cash used in  reorganization
activities was $89 composed  primarily of professional fees of $225, fees of the
U.S. Trustee  administering the bankruptcy case of $22, and facility  relocation
expenses of $33. These expenses were offset by increases in accrued  liabilities
of $225 for legal expenses.  Net cash used in reorganization  activities for the
nine months ended  September  30, 2004 was $175,  which amount  included $176 of
expenses  primarily  related to the Company's  relocation  of its  manufacturing
facility,  offset by increases in accrued  liabilities of $100,  principally for
legal expenses,  and cash proceeds of $23 from the sale of excess  machinery and
equipment.

Net cash used in investing  activities  for the nine months ended  September 30,
2005 and 2004, consisted of equipment purchases of $27 and $14, respectively.

During the first  three  quarters of 2005 and 2004,  net cash used in  financing
activities  was $425 and $755,  respectively,  consisting of net payments to EGC
and Valtec under the respective DIP financing agreements.

FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE

This Form 10-Q contains various "forward-looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.   Forward-looking  statements
represent the Company's expectations and beliefs concerning future events, based
on information  available to us on the date of the filing of this Form 10-Q, and
are  subject to  various  risks and  uncertainties.  We  disclaim  any intent or
obligation to update or revise any of the forward-looking statements, whether in
response to new information,  unforeseen events or changed  circumstances except
as required to comply with the disclosure requirements of the federal securities
laws.

      Forward looking  statements  necessarily  involve known and unknown risks,
uncertainties  and other  factors that may cause the actual  results,  levels of
activity,  performance,  or  achievements  to be materially  different  from any
future results,  levels of activity,  performance,  or achievement  expressed or
implied by such  forward-looking  statements.  Readers are  cautioned  to review
carefully the discussion  concerning  these and other risks which can materially
affect  the  Company's  business,  operations,  financial  condition  and future
prospects.

      In some cases, you can identify forward-looking  statements by terminology
such as "may," "will,"  "should,"  "could,"  "intend,"  "expect,"  "anticipate,"
"assume",    "hope",   "plan,"   "believe,"   "seek,"   "estimate,"   "predict,"
"approximate,"   "potential,"  "continue",   or  the  negative  of  such  terms.
Statements including these words and variations of such words, and other similar
expressions, are forward-looking statements.  Although the Company believes that
the  expectations  reflected in the  forward-looking  statements  are reasonable
based upon its knowledge of its business,  the Company cannot absolutely predict
or

                                    16 of 24

<PAGE>

guarantee its future results, levels of activity,  performance, or achievements.
Moreover,  neither the Company nor any other person assumes  responsibility  for
the accuracy and completeness of such statements.

      The Company notes that a variety of factors could cause its actual results
and  experience  to differ  materially  from the  anticipated  results  or other
expectations  expressed  in  its  forward-looking   statements.  The  risks  and
uncertainties  that may  affect the  operations,  performance,  development  and
results of its business include, but are not limited to, the following:  changes
in spending  patterns;  changes in overall  economic  conditions;  the impact of
competition  and  pricing;   the  financial   condition  of  the  suppliers  and
manufacturers  from whom the  Company  sources its  merchandise;  changes in tax
laws;  the Company's  ability to hire,  train and retain a consistent  supply of
reliable  and  effective  participants  in  its  marketing  operations;  general
economic,  business and social  conditions  in the United  States;  the costs of
complying  with  changes in  applicable  labor laws or  requirements,  including
without limitation with respect to health care; changes in the costs of interest
rates,  insurance,  shipping  and  postage,  energy,  fuel  and  other  business
utilities;  the risk of  non-payment  by, and/or  insolvency  or bankruptcy  of,
customers  and others owing  indebtedness  to the  Company;  actions that may be
taken by creditors with respect to the Company's obligations that are subject to
default  proceedings;  threats or acts of terrorism  or war;  and strikes,  work
stoppages or slow downs by unions  affecting  businesses which have an impact on
the Company's ability to conduct its own business operations.

      Forward-looking  statements  that the Company  makes,  or that are made by
others on its behalf with its  knowledge  and express  permission,  are based on
knowledge of the Company's  business and the  environment  in which it operates,
but because of the factors listed above, actual results may differ from those in
the  forward-looking  statements.   Consequently,  these  cautionary  statements
qualify all of the forward looking  statements  made herein.  The Company cannot
assure the reader that the  results or  developments  anticipated  by it will be
realized or, even if substantially  realized, that those results or developments
will result in the  expected  consequences  for it or affect it, its business or
operations  in the way the Company  expects.  Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of their
dates,  or  on  any  subsequent  written  and  oral  forward-looking  statements
attributable to the Company or persons acting on its behalf, which are expressly
qualified in their entirety by these cautionary statements. The Company does not
undertake   any   obligation   to  release   publicly  any   revisions  to  such
forward-looking  statements to reflect  events or  circumstances  after the date
hereof or thereof or to reflect the occurrence of  unanticipated  events,  other
than as  required  to comply  with the  disclosure  requirements  of the federal
securities laws.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company's  exposure to market risk for changes in interest  rates is related
primarily  to  the  Company's  revolving  credit  facility  and  long-term  debt
obligations.

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, 2005 the Company's investments consisted of cash balances
maintained in its corporate account with the JPMorganChase Bank.


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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.

Item 4. Controls and Procedures

An evaluation was carried out under the supervision  and with the  participation
of the Company's  management,  including the Chief Executive Officer ("CEO") and
Chief  Financial  Officer  ("CFO"),   of  the  effectiveness  of  the  Company's
disclosure  controls  and  procedures  as of September  30, 2005.  Based on that
evaluation,  the Company's management,  including the CEO and CFO, has concluded
that the Company's disclosure controls and procedures are effective.  During the
period  covered by this report,  there was no change in the  Company's  internal
control over financial reporting that has materially affected,  or is reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.

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<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Matters

In re: Boundless Corporation, et. al.

As discussed  above,  on the  Petition  Date,  the  Company,  and its wholly and
majority owned subsidiaries filed voluntary  petitions for reorganization  under
Chapter 11 of the Bankruptcy Code in the Bankruptcy  Court. The Chapter 11 Cases
are being jointly  administered under the caption "In re Boundless  Corporation,
et al., Case No.  03-81558-478."  As  debtors-in-possession,  we are  authorized
under  Chapter 11 to  continue  to operate as an ongoing  business,  but may not
engage in transactions outside the ordinary course of business without the prior
approval of the Bankruptcy Court. As of the Petition Date, virtually all pending
litigation (including some of the actions described below) is stayed, and absent
further order of the Bankruptcy Court, no party,  subject to certain exceptions,
may take any  action,  again  subject  to  certain  exceptions,  to  recover  on
pre-petition  claims  against  us.  In  addition,  we  may  reject  pre-petition
executory  contracts and unexpired lease  obligations,  and parties  affected by
these rejections may file claims with the Bankruptcy  Court. At this time, it is
not  possible  to predict the outcome of the Chapter 11 process or its effect on
the Company's business.

An action was commenced by Kareem Mangaroo,  employed by Boundless  Technologies
between  February 1994 and April 1999 as a material  handler  ("Plaintiff"),  on
February 5, 2001, against Boundless  Technologies,  Boundless  Corporation,  and
four  employees of the Company  (Joseph  Gardner,  its CFO,  Michelle  Flaherty,
formerly manager of Human Resources, Thomas Iavarone, director of Logistics, and
Anthony San  Martin,  manager of  Shipping),  seeking  damages for the  unlawful
termination of Plaintiff's  employment in violation of Plaintiff's  rights under
Title VII of the Civil  Rights Act of 1964,  as  amended;  the Equal  Protection
Clause and Due  Process  Clause,  pursuant to the Civil  Rights Act of 1886,  as
amended, 42 U.S.C. ss. 1981; and for damages as a result of the conspiratory
actions of  defendants  to deprive  Plaintiff  of his equal  protection  and due
process  rights  pursuant  to 42  U.S.C.  Section  1985  and  for  violation  of
Plaintiff's rights under the Employee  Retirement Income Security Act 29 U.S. C.
ss. 1001.  Plaintiff  further  alleges  claims under State law for breach of
contract.  The verified complaint was filed in the United States District Court,
Eastern  District of New York.  Plaintiff seeks (i)  compensatory  damages of $1
million from each of Boundless  Technologies  and four  employees of the company
(jointly  and  severally),  (ii)  punitive  damages of $2  million  from each of
Boundless Technologies,  the Company, and four employees of the Company (jointly
and severally),  (iii) $1 million against  Boundless  Technologies for breach of
contract, and (iv) the value of forfeited options, attorney's fees, costs of the
action and other relief as the court deems necessary.

On February 17, 2003, the defendants'  motion for summary  judgment was granted.
On March 21, 2003,  Plaintiff served Notice of Appeal to the United States Court
of Appeals for the Second  Circuit in opposition to the granting of  defendants'
motion for summary  judgment.  On October 15, 2003,  the United  States Court of
Appeal for the Second Circuit granted the defendants'  motion to Stay the appeal
in accordance  with 11 U.S.C.  ss. 362,  which Stay is still in effect.  The
Company  intends to  vigorously  defend this suit since it believes  that it has
meritorious defenses to the action.

An action was  commenced by Donald W. Lytle  ("Plaintiff")  on February 8, 2001,
against Boundless Technologies, Inc., GN Netcom, Inc., Portal Connect, Inc., and
Wholesale Audio Video, Inc. in the Iowa District Court,  Johnson County; Law No.
LACV061503  alleging  negligence and products  defects  resulting in injuries to
Plaintiff's hearing as a result of the use of one model of the Company's General
Display Terminals.  Plaintiff was suing for unspecified  damages. On January 17,
2003, Plaintiff filed a Dismissal with Prejudice  dismissing  Plaintiff's claims
against Boundless Technologies, Inc.

In November 2002,  Comdial  Corporation  filed a demand for arbitration with the
American Arbitration  Association against Boundless Manufacturing Services, Inc.
("Boundless").  Among other things, Comdial contends that Boundless breached its
contractual  obligations to Comdial by failing to meet Comdial's  orders for the
delivery of products manufactured by Boundless. The Comdial demand seeks damages
in excess of $6.0  million.  On February  6, 2003,  Boundless  responded  to the
demand  by  denying   substantially   all  of  Comdial's  claims  and  asserting
counterclaims totaling approximately $8.2 million,  including approximately $0.8
million in past due invoiced  amounts.  On March 13, 2003,  Boundless  announced
that it has filed for protection pursuant to Ch. 11 of the U.S. Bankruptcy Code,
causing a stay in the arbitration  matter.  It is not known at this time whether
this filing will have any long-term  impact on the  arbitration,  or whether the
arbitration  will  eventually  proceed.  No  amounts  have been  accrued  in the
Company's  financial  statements for any losses. In May 2005 Comdial Corporation
filed  for  protection  under  Ch.  11 of the U.S.  Bankruptcy

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Code.  Since the Company's  claims  against  Comdial  accrued prior to Comdial's
filing for  bankruptcy,  any  damages  awarded to the  Company  will  constitute
pre-petition claims against Comdial.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit 31.1:  Certification of Acting Chief Executive  Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

Exhibit 31.2: Certification of Chief Financial Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

Exhibit 32:  Certification of Acting Chief Executive Officer and Chief Financial
Officer  pursuant to 18 U.S.C.  1350, as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

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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: March 6, 2006

Boundless Corporation

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

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