SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                    FORM 10-Q

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

                  For the Quarterly Period Ended March 31, 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 March 31, 2005 (Unaudited)
                        and December 31, 2004                                                           3
                      Consolidated Condensed Statements of Operations for the three months ended
                        March 31, 2005 and 2004 (Unaudited)                                             4
                      Consolidated Condensed Statements of Cash Flows for the three months
                        ended March 31, 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>
                                                           March 31,    December 31,
                                                             2005           2004*
                                                         -----------    ------------
ASSETS                                                   (unaudited)
<S>                                                        <C>            <C>
Current assets:
  Cash and cash equivalents                                $     30       $    124
  Cash on deposit with lender                                    30            271
  Trade accounts receivable, net                              1,034          1,150
  Affiliate receivables                                         103             92
  Other receivables                                             135            117
  Inventories (Note 3)                                        1,164          1,094
  Prepaid expenses and other current assets                     154             59
                                                           --------       --------
     Total current assets                                     2,650          2,907
Property and equipment, net (Note 4)                            102            103
                                                           --------       --------
    Total assets                                           $  2,752       $  3,010
                                                           ========       ========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities not subject to compromise
Current liabilities:
  Current portion of long-term debt                        $    411       $    350
  Accounts payable                                               40             44
  Accrued salaries                                               71             86
  Accrued legal fees                                          1,104          1,029
  Purchase order commitments                                    482            561
  Accrued payroll and sales tax payable                          30             30
  Accrued warranty                                               32             18
  Other accrued liabilities                                     162            157
                                                           --------       --------
     Total current liabilities                                2,332          2,275
                                                           --------       --------

  Long-term debt, less current maturities                       650            953
  Deferred credits                                               66             65
  Items subject to compromise:
  Manditorily redeemable preferred stock                      1,652          1,652
  Liabilities subject to compromise (Note 5)                 12,977         12,970
                                                           --------       --------
         Total liabilities                                   17,677         17,915
                                                           --------       --------

         COMMITMENTS AND CONTINGENCIES (Note 9)

Stockholders' deficit: (Note 6)
  Common stock                                                   67             67
  Additional paid-in capital                                 35,844         35,844
  Accumulated deficit                                       (50,836)       (50,816)
                                                           --------       --------
     Total stockholders'  deficit                           (14,925)       (14,905)
                                                           --------       --------
    Total liabilities and stockholders' deficit            $  2,752       $  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
                                                                    March 31
                                                              ---------------------
                                                              --------     --------
                                                                  2005         2004
                                                              --------     --------
<S>                                                           <C>          <C>
Revenue:
  Product sales                                               $  1,444     $  1,985
  Services                                                         171          198
                                                              --------     --------
    Total revenue                                                1,615        2,183
                                                              --------     --------
Cost of revenue
  Product sales                                                  1,125        1,405
  Services                                                          74          134
                                                              --------     --------
    Total cost of revenue                                        1,199        1,539
                                                              --------     --------

     Gross margin                                                  416          644

Other costs and expenses (income)
  Selling, general and administrative                              246          468
  Research and development                                          56           45
  Interest expense (excluding contractual interest of $16
    and $15 not recognized in 2005 and 2004, respectively)          38           41
  Loss on reimbursement of employee services (net of
    reimbursement of $30 and $75)                                    5           15
  Other income                                                      (5)         (49)
                                                              --------     --------
                                                                   340          520
                                                              --------     --------
Income before reorganization items                                  76          124

Reorganization items (Note 7)                                       96          113
                                                              --------     --------
Net income (loss)                                             $    (20)    $     11
                                                              ========     ========

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

Basic and diluted weighted average shares outstanding            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>
                                                                             Three months ended
                                                                                  March 31,
                                                                            ---------------------

                                                                              2005         2004
                                                                            --------     --------
<S>                                                                             <C>         <C>
Cash flows from operating activities:
  Income before reorganization items                                              76          124
  Adjustments to reconcile income before reorganization items
       to net cash provided by (used in) operating activities:
    Depreciation and amortization                                                  1           32
    Change in deferred credits                                                     2          (42)
    Provision credit for doubtful accounts                                        --          (24)
 Changes in assets and liabilities:
    Cash on deposit with lender                                                  241          167
    Trade accounts receivable                                                    115         (456)
    Affiliate receivables                                                        (11)         (98)
    Other receivables                                                            (18)         (16)
    Inventories                                                                  (70)         498
    Other assets                                                                 (94)         (35)
    Accounts payable and accrued expenses                                        (73)         185
                                                                            --------     --------
Net cash provided by operating activities excluding reorganization items         169          335
                                                                            --------     --------
Cash flows from reorganization activities:
  Reorganization items, net                                                      (96)        (113)
  Gain on disposition of property and equipment                                   --          (23)
  Proceeds from disposition of property                                           --           23
  Increase in liabilities, net                                                    75            4
                                                                            --------     --------
Net cash used in reorganization activities                                       (21)        (109)
                                                                            --------     --------
Cash flows from investing activities:
  Capital expenditures                                                            --          (14)
                                                                            --------     --------
Cash flows from financing activities:
  Net proceeds from issuance of debt                                           1,690           --
  Payments on loans payable and capital leases                                (1,932)        (519)
                                                                            --------     --------
Net cash used in financing activities                                           (242)        (519)
                                                                            --------     --------
Net decrease in cash and cash equivalents                                        (94)        (307)
Cash and cash equivalents at beginning of period                                 124          373
                                                                            --------     --------
Cash and cash equivalents at end of period                                  $     30     $     66
                                                                            ========     ========

Cash paid for:
  Interest                                                                  $     29     $     27
  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  months  ended March 31,  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

                                     6 of 24

<PAGE>

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 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 and $30 classified as "cash on
deposit  with  lender" at December  31, 2004 and March 31,  2005,  respectively,
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 March 31, 2005,
purchases  from  Radiance  Electronics,  Ansen  Corporation,  and Video  Display
Corporation  accounted for  approximately  38%, 19%, and 11%,  respectively,  of
total  purchases.  During  the  first  quarter  of  2004  purchases  from  Ansen
Corporation,  Radiance Electronics,  and Video Display Corporation accounted for
40%, 25%, and 13%, respectively, of the Company's total purchases of material.

The  balance  due Ansen was  approximately  $482 and $561 at March 31,  2005 and
December 31, 2004, respectively; and such balance is included in "Purchase order
commitments" on the balance sheets.

Net Income (Loss) Per Common Share

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  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

                                    8 of 24

<PAGE>

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. However, the Company's Plan
of  Reorganization,  if approved by the Bankruptcy Court,  contemplates that all
existing  equity  securities of the Company,  including  options and warrants to
purchase the Company's common stock,  will be cancelled as of the effective date
of the Company's reorganization.

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  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

                                    9 of 24

<PAGE>

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 with costs 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.

                                               March 31,      December 31,
                                             -------------    -------------
                                                  2005             2004
                                             -------------    -------------
Raw materials and purchased components       $       1,526    $       1,584
Finished goods                                         143              126
Manufacturing inventory reserves                      (826)            (935)
Service parts                                          321              319
                                             -------------    -------------
                                             $       1,164    $       1,094
                                             =============    =============

      4. Property and equipment

Property and equipment consists of the following:

                                                    March 31,      December 31,
                                                  ------------------------------
                                                       2005             2004
                                                  -------------    -------------
Buildings and improvements                        $          14    $          14
Machinery and equipment                                   6,505            6,505
                                                  -------------    -------------
                                                          6,519            6,519
Less accumulated depreciation and amortization            6,417            6,416
                                                  -------------    -------------
                                                  $         102    $         103
                                                  =============    =============

Depreciation  expense for the quarter  ending March 31, 2005, was $1 as compared
to $32 during the quarter ended March 31, 2004. The Company recorded repairs and
maintenance  expenses  of $1 and $0 for the  quarters  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 March 31, 2005 and December 31, 2004, the Company had liabilities and other
items subject to compromise of approximately $14,629 and $14,622 which consisted
of the following:

<TABLE>
<CAPTION>
                                                         March 31,      December 31,
                                                       -------------    -------------
                                                            2005             2004
                                                       -------------    -------------
<S>                                                    <C>              <C>
Liabilities:
Accounts payable                                       $      10,955    $      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
                                                       -------------    -------------
                                                              12,977           12,970
Other:
Manditorily redeemable preferred stock                         1,652            1,652
                                                       -------------    -------------
                                                       $      14,629    $      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 March 31, 2005 and December 31, 2004 stockholders' deficit consisted of the
following:

<TABLE>
<CAPTION>
                                                         March 31,      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                                          (50,836)         (50,816)
Accumulated other comprehensive loss                              --               --
                                                       -------------    -------------
     Total stockholders' deficit                       $     (14,925)   $     (14,905)
                                                       =============    =============
</TABLE>

      7. Reorganization Expenses

Reorganization expenses were as follows:

                                                     Three months ended
                                                         March 31,
                                               ------------------------------
                                                    2005             2004
                                               -------------    -------------
Professional fees                              $          75    $           4
United States District Court fees                          6                9
Facility relocation expenses                              10              123
Other expenses                                             5               --
Gain on the disposition of equipment                      --              (23)
                                               -------------    -------------
                                               $          96    $         113
                                               =============    =============


                                    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. The Company had one
customer  representing  24% of revenues during the first quarter ended March 31,
2005; and five other customers  representing  individually  between 5% and 7% of
revenues for the same period.  For the quarter ended March 31, 2004, the Company
had one customer  representing 34% of revenue and two customers  representing 8%
and 9%, respectively of 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
Matters.

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.

Revenue - Revenue for the quarter ended March 31, 2005 was $1,615 as compared to
$2,183 for the quarter ended March 31, 2004.

Sales of the Company's  General  Display  Terminals  were $1,444 for the quarter
ended March 31, 2005  compared to $1,985 for the quarter  ended March 31,  2004.
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's purchases during the first quarter of 2004 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
quarter of 2004,  purchases from Hewlett Packard amounted to approximately  $748
as compared to purchases of approximately $143 for the first quarter of 2005.

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 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 $4 for the quarter ended March 31,
2005, as compared to $18 in the comparable quarter 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

                                    12 of 24

<PAGE>

payable due to him plus  accrued  interest of $103.  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 March 31,  2005 was $166 as  compared to $179 for the quarter  ended March
31,  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.
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  first  quarter  of  2005,  Ingram  Micro  contributed  24% of total
revenues.  Hewlett-Packard  contributed  34% of  the  Company's  revenue  in the
quarter ended March 31, 2004.

Gross  Margin - The Company  recorded  gross  margin for the three  months ended
March 31,  2005 of $416  (25.7% of  revenue)  compared  to gross  margin of $644
(29.5% of revenue)  for the first  quarter of 2004.  The decrease in total gross
margin as a  percentage  of  revenue is  attributable  to the  reduction  in the
Company's   revenue   without  a   corresponding   reduction  in  the  Company's
manufacturing overhead expenses, which expenses include fixed costs such as rent
for the  manufacturing  facility.  Manufacturing  overhead expenses in the first
quarter of 2005 were $259,  or 16% of revenue,  as  compared to $263,  or 12% of
revenue, for the first quarter of 2004.

Total  Operating  Expenses - For the  quarter  ended March 31,  2005,  operating
expenses, excluding interest expense and reorganization expenses associated with
the  Company's  bankruptcy  filing,  decreased  41% to $302  (19%  of  revenue),
compared to expenses for the first quarter of 2004 of $513 (23% of revenue).

The decrease in total  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.

Loss on reimbursement  of employee  services - Beginning in the first quarter of
2004 the Company agreed to provide UCSI resources,  primarily Company employees,
to allow UCSI to pursue programs critical to their continued  development of the
thin client market.  UCSI is wholly-owned by Mr. Oscar Smith.  Mr. Smith is also
the majority owner of Vision Technologies,  Inc., the entity which will own 100%
of the Company upon  confirmation  of the Company's  plan of  reorganization.  A
monthly  charge to UCSI was agreed to based upon the  Company's  estimate of the
percentage  of time its  employees  would be devoted to UCSI  projects.  For the
quarter  ending  March 31,  2005,  the  Company  charged  UCSI $30 and  incurred
expenses  of $35,  resulting  in a loss on  reimbursement  of $5.  For the first
quarter of 2004 the Company charged UCSI $75 and incurred  estimated expenses of
$90, resulting in a loss on reimbursement of employee services of $15.

Other income - Other income for the quarter ended March 31, 2005 was $5 compared
to income of $49 for the period ended March 31, 2004.  Other income  recorded in
2004 includes $12 relating to return of premiums against the Company's  workers'
compensation  insurance due to a reduction in the Company's  experience  rating.
For the first quarter of 2004 the Company reversed bad debt reserves against its
receivables  in an amount of  approximately  $24.  No  reserve  or  accrual  was
recorded  during the first  quarter of 2005.  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

                                    13 of 24

<PAGE>

experience, as well as management's judgment, in its assessment.

Interest Expense - Interest expense for the quarter ended March 31, 2005 was $38
compared  to $41 for the  comparable  period  in 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 March 31,
2004, the balance owed Valtec was approximately  $1,249, 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 March 31,  2005,  the  balance  due EGC was $411,  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 first quarter of 2005 the Company recorded
reorganization  expenses  of $96,  primarily  for  legal  fees  incurred  in the
bankruptcy.  For the quarter ended March 31, 2004,  reorganization expenses were
$113, which amount included  approximately  $123 related to expenses  associated
with the Company's relocating its manufacturing  operations to Farmingdale,  New
York. In addition, the Company recognized $23 from the sale of excess assets.

Income Tax  Expense/Credit  - For the first quarter of 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 the quarter  ended March 31,  2005,
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 Income (Loss) - For the quarter ended March 31, 2005, the Company recorded a
net loss of $20,  compared to net income of $11 for the quarter  ended March 31,
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 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
March 31,  2005,  the  Company had a tangible  net worth  deficit of $14,925 and
total  liabilities  of  $17,677.  The  Company  had a working  capital  deficit,
inclusive of liabilities and other items subject to compromise, of approximately
$14,311 as of March 31, 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.

As of January 31, 2005,  we entered into an  agreement  with our secured  lender
Valtec  Capital,  LLC,  as  assignee  of Valtec  Capital  Corporation,  a Nevada
corporation (the "Prior Lender") to terminate our  debtor-in-possession  ("DIP")
financing and to release their liens on our personal property. At the same time,
we entered into another secured DIP

                                    14 of 24

<PAGE>

financing agreement (the "EGC Agreement") with Entrepreneur Growth Capital,  LLC
("EGC")  pursuant  to  which  EGC  was  granted  a lien  on all of our  personal
property.  As used herein,  "we", "us" or "our" refers to Boundless  Corporation
and its subsidiaries collectively,  or each such entity individually,  as may be
appropriate in accordance  with the  transaction  documents filed as exhibits to
this report.

In general,  the EGC  Agreement  permits us to borrow up to 80% of our  eligible
accounts  receivable.  Under the EGC Agreement,  the annual  interest rate is 6%
above the prime rate  announced by  Citibank,  N.A. and we are required to pay a
monthly  service fee equal to three quarters of one percent  (0.75%) of the face
value of invoices  assigned to EGC for the  preceding  month.  The EGC Agreement
requires  us to pay  minimum  monthly  interest of $7,500 even though our actual
borrowings  may  result in a lesser  interest  charge.  We are  responsible  for
certain  fees  and fees for  early  termination  of the  facility.  The  maximum
availability under the EGC Agreement is $1,000,000 and the term is one year.

In return for  termination  of the prior DIP financing we also agreed to pay the
Prior  Lenders a total of  $100,000  for legal  fees they  incurred  during  our
bankruptcy period.  This amount is payable to the Prior Lenders on the date that
our Plan of Reorganization becomes effective.

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 was $753,  including  accrued
interest, at March 31, 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 March 31,  2005,  the  Company  had  accrued  approximately  $1,104 for legal
assistance   throughout  the  bankruptcy   period.  As  of  December  31,  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

                                    15 of 24

<PAGE>

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 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 three months ended March
31,  2005 was $169,  principally  related  to net income  before  reorganization
expenses of $76,  and  reductions  in cash on deposit  with  lenders of $241 and
trade  accounts  receivable of $115.  Net cash provided by operating  activities
during the first  quarter  of 2005 was  reduced by  increases  in other  assets,
principally cash collateral, of $94, increases in inventory of $70 and increases
in affiliate and other  receivables  of $29. In addition,  accounts  payable and
accrued  expenses  decreased by $73. Net cash  provided by operating  activities
during the three  months ended March 31, 2004 was $335,  principally  related to
net income before reorganization  expenses of $124, reductions in inventories of
$498, increases in accounts payable and accrued expenses of $185,  reductions in
cash on  deposit  with  lenders  of $167,  and  non-cash  expenses,  principally
depreciation  and amortization of $32. These amounts were offset by increases in
trade accounts  receivable of $456,  increases in affiliate  receivables of $98,
decreases in deferred revenues of $42, and non-cash credits of $24.

For the first quarter of 2005,  net cash used in  reorganization  activities was
$21 as  compared  to $109 in the first  quarter  of 2004.  Net cash used in 2005
includes $75 for legal fees incurred during the bankruptcy  period, $10 incurred
for facility relocation expenses and $6 of expenses associated with fees paid to
the U.S. Trustee  administering  the bankruptcy case. These expenses were offset
by  increases  in  liabilities  of $75.  During the first  quarter of 2004,  the
Company  incurred  $123  of  expenses  associated  with  the  relocation  of the
Company's  manufacturing  facility,  offset  by cash  proceeds  of $23  from the
disposition of excess assets.

Net cash used in investing activities for the three months ended March 31, 2004,
consisted of equipment purchases of $14.

During  the  first  quarters  of 2005  and  2004,  net  cash  used in  financing
activities  was $242 and $519,  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

                                    16 of 24

<PAGE>

words, and other similar expressions,  are forward-looking statements.  Although
the Company  believes  that the  expectations  reflected in the  forward-looking
statements are reasonable based upon its knowledge of its business,  the Company
cannot absolutely  predict or guarantee its future results,  levels of activity,
performance, or achievements. Moreover, neither the Company nor any other person
assumes responsibility for the accuracy and completeness of such statements.

      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 March  31,  2005 the  Company's  investments  consisted  of cash  balances
maintained in its corporate account with the JPMorganChase Bank.

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

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<PAGE>

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  March  31,  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.  ss. 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.  Section 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").

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<PAGE>

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  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

(b) Reports on Form 8-K

On February 2, 2005, we filed a current report on Form 8-K disclosing we entered
into a  secured  post-petition  financing  agreement  with  Entrepreneur  Growth
Capital,  LLC  ("EGC")  pursuant  to which EGC was  granted a lien on all of the
Company's personal property

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<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: 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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