SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                    FORM 1O-Q

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

                  For the Quarterly Period Ended June 30, 2004

                         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 22

<PAGE>

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

This Quarterly Report on Form 10-Q is for the quarterly period ended June 30,
2004. Comtemporaneously with the filing of this Quarterly Report, we are filing
our Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and
our Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2004
and September 30, 2004. This Quarterly Report should be read in conjunction with
our filed Annual Report on Form 10-K for the fiscal year ended December 31, 2004
with the Securities and Exchange Commission.

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

            Item 1.  Financial Statements

                     Consolidated Condensed Balance Sheets as of June 30, 2004 (Unaudited)
                       and December 31, 2003                                                          3
                     Consolidated Condensed Statements of Operations for the three and six
                       months ended June 30, 2004 and 2003 (Unaudited)                                4
                     Consolidated Condensed Statements of Cash Flows for the six months
                       ended June 30, 2004 and 2003 (Unaudited)                                       5
                     Notes to Consolidated Condensed Financial Statements (Unaudited)                 6

            Item 2.  Management's Discussion and Analysis of Financial Condition and Results
                       of Operations                                                                 11

            Item 3.  Quantitative and Qualitative Disclosures About Market Risk                      16

            Item 4.  Controls and Procedures                                                         16

Part II.    Other Information

            Item 1.  Legal Proceedings                                                               17

            Item 6.  Exhibits                                                                        18

Signature                                                                                            19
</TABLE>

                                     2 of 22

<PAGE>

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

                                                      June 30,     December 31,
                                                        2004           2003*
                                                    -----------    ------------
ASSETS                                              (unaudited)
Current assets:
   Cash and cash equivalents                        $       108    $        373
   Cash on deposit with lender                              312             328
   Trade accounts receivable, net                         1,138             912
   Affiliate receivables                                    202               -
   Other receivables                                         83             143
   Inventories (Note 3)                                   1,342           2,072
   Prepaid expenses and other current assets                140             179
                                                    -----------    ------------
      Total current assets                                3,325           4,007
Property and equipment, net                                 105             131
                                                    -----------    ------------
     Total assets                                   $     3,430    $      4,138
                                                    ===========    ============

LIABILITIES  AND STOCKHOLDERS' DEFICIT
Liabilities not subject to compromise
Current liabilities:
   Current portion of long-term debt                $       325    $        837
   Accounts payable                                         817             900
   Accrued salaries                                          69              71
   Accrued legal fees                                       781             756
   Purchase order commitments                               680           1,130
   Accrued payroll and sales tax payable                     30             212
   Accrued warranty                                          46              59
   Other accrued liabilities                                207              81
                                                    -----------    ------------
      Total current liabilities                           2,955           4,046
                                                    -----------    ------------

   Long-term debt, less current maturities                1,449           1,581
   Deferred credits                                         107             181
   Items subject to compromise:
   Manditorily redeemable preferred stock                 1,652           1,652
   Liabilities subject to compromise (Note 4)            12,244          11,555
                                                    -----------    ------------
         Total liabilities                               18,407          19,015
                                                    -----------    ------------

         COMMITMENTS AND CONTINGENCIES (Note 8)

Stockholders' deficit: (Note 5)
   Common stock                                              67              67
   Additional paid-in capital                            35,844          35,844
   Accumulated deficit                                  (50,888)        (50,788)
                                                    -----------    ------------
      Total stockholders'  deficit                      (14,977)        (14,877)
                                                    -----------    ------------
     Total liabilities and stockholders' deficit    $     3,430    $      4,138
                                                    ===========    ============

* Condensed from audited financial statements

      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                     3 of 22

<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     Six Months Ended
                                                                    June 30               June 30
                                                              -------------------   -------------------
                                                                2004       2003       2004       2003
                                                              --------   --------   --------   --------
<S>                                                           <C>        <C>        <C>        <C>
Revenue:
   Product sales                                              $  1,575   $  3,708   $  3,560   $  5,971
   Services                                                        236        300        434        507
                                                              --------   --------   --------   --------
     Total revenue                                               1,811      4,008      3,994      6,478
                                                              --------   --------   --------   --------
Cost of revenue
   Product sales                                                 1,242      2,978      2,647      5,403
   Services                                                        128        227        262        384
                                                              --------   --------   --------   --------
     Total cost of revenue                                       1,370      3,205      2,909      5,787
                                                              --------   --------   --------   --------

       Gross margin                                                441        803      1,085        691

Other costs and expenses (income)
   Selling, general and administrative                             307      1,235        775      1,740
   Research and development                                         43         18         88         50
   Interest expense (excluding contractual interest of $17
     and $14 not recognized in 2004 and 2003, respectively)         37        196         78        470
   Loss on extinguishment of debt                                    -          -          -        289
   Loss on reimbursement of employee services (net of
     reimbursement of $75 and $150)                                 15          -         30          -
   Other costs (income)                                             74        (21)        25       (150)
                                                              --------   --------   --------   --------
                                                                   476      1,428        996      2,399
                                                              --------   --------   --------   --------
Income (loss) before reorganization items                          (35)      (625)        89     (1,708)

Reorganization items (Note 6)                                       76        330        189        666
                                                              --------   --------   --------   --------
Net loss                                                          (111)      (955)      (100)    (2,374)
   Accretion on preferred stock                                      -         25          -         99
                                                              --------   --------   --------   --------
Net loss attributable to common stockholders                  $   (111)  $   (980)  $   (100)  $ (2,473)
                                                              ========   ========   ========   ========

Basic and diluted loss per common share                       $  (0.02)  $  (0.15)  $  (0.01)  $  (0.37)
                                                              ========   ========   ========   ========
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 22

<PAGE>

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

<TABLE>
<CAPTION>
                                                                            Six months ended
                                                                                June 30,
                                                                           -----------------
                                                                             2004      2003
                                                                           -------   -------
<S>                                                                        <C>       <C>
Cash flows from operating activities:
   Income (loss) before reorganization items                                    89    (1,708)
   Adjustments to reconcile income (loss) before reorganization items
      to net cash provided by (used in) operating activities:
     Write-off of debt financing costs                                           -       289
     Depreciation and amortization                                              41       555
     Change in deferred credits                                                (74)     (141)
     Provision (credit) for doubtful accounts                                  (24)       89
     Provision for excess and obsolete inventory                                 -       398
Changes in assets and liabilities:
   Cash on deposit with lender                                                  16      (117)
   Trade accounts receivable                                                  (202)     (428)
   Affiliate receivables                                                      (202)        -
   Other receivables                                                            60        (1)
   Inventories                                                                 730       248
   Other assets                                                                 39       (24)
   Accounts payable and accrued expenses                                        83     2,102
                                                                           -------   -------
Net cash provided by operating activities excluding reorganization items       556     1,262
                                                                           -------   -------
Cash flows from reorganization activities:
   Reorganization items, net                                                  (189)     (666)
   Gain on disposition of property and equipment                               (23)       (6)
   Proceeds from disposition of property                                        23         6
   Increase in liabilities, net                                                 27       440
                                                                           -------   -------
Net cash used in reorganization activities                                    (162)     (226)
                                                                           -------   -------
Cash flows from investing activities:
   Capital expenditures                                                        (14)       (0)
                                                                           -------   -------
Cash flows from financing activities:
   Net proceeds from issuance of debt                                            -     1,572
   Payments on loans payable and capital leases                               (645)   (2,183)
                                                                           -------   -------
Net cash used in financing activities                                         (645)     (611)
                                                                           -------   -------
Net increase (decrease) in cash and cash equivalents                          (265)      425
Cash and cash equivalents at beginning of period                               373         4
                                                                           -------   -------
Cash and cash equivalents at end of period                                 $   108   $   429
                                                                           =======   =======

Cash paid for:
   Interest                                                                $    51   $    58
   Taxes                                                                         -         -
</TABLE>

      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                     5 of 22

<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 six months  ended June 30, 2004 and 2003.  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, 2003. 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
statements.  Further,  a plan of  reorganization  could  materially  change  the
amounts and classifications in the historical consolidated financial statements.

                                     6 of 22

<PAGE>

      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.    Certain Significant 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 $328 and $312 classified as "cash
on deposit with  lender" at December  31, 2003 and June 30, 2004,  respectively,
representing  cash  on-hand  in a  lockbox  account  under  the  control  of the
Company's DIP lender.

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.

                                     7 of 22

<PAGE>

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.  During the  second  quarter of 2004
purchases  from  Radiance  Electronics,  Ansen  Corporation,  and Video  Display
Corporation  accounted  for 23%,  20%, and 12%,  respectively,  of the Company's
total purchases of material.

The  balance  due Ansen was  approximately  $680 at June 30,  2004 and $1,130 at
December 31, 2003; 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 $2 and $0 for the three and six months ended June 30, 2004 and 2003,
respectively.

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.  There  were no  dilutive  instruments  for the three and six month
period ending June 30, 2004 or 2003.

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.

Stock Based Compensation

The Company  accounts  for stock  options and  warrants  issued to  employees in
accordance  with APB 25 "Accounting  for Stock Issued to Employees." The Company
follows SFAS No. 123  "Accounting  for Stock Based  Compensation"  for financial
statement   disclosure  purposes  and  issuances  of  options  and  warrants  to
non-employees for services rendered.

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

                                     8 of 22

<PAGE>

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.

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.

      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 affected through a credit to the statement of operations.

                                                        June 30,    December 31,
                                                        ---------   ------------
                                                          2004          2003
                                                        ---------   ------------
Raw materials and purchased components                  $   1,951   $     2,843
Finished goods                                                117           135
Manufacturing inventory reserves                           (1,066)       (1,242)
Service parts                                                 340           336
                                                        ---------   -----------
                                                        $   1,342   $     2,072
                                                        =========   ===========

      4.    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.

As a result of the bankruptcy  proceedings,  certain  accounts payable have been
re-characterized as liabilities subject to compromise in 2004. In addition, as a
result  of  other  bankruptcy  proceedings  certain  capital  lease  obligations
previously  reported in long-term debt are now  re-characterized  as liabilities
subject to compromise.

                                     9 of 22

<PAGE>

At June 30, 2004 and December 31, 2003, the Company had liabilities and other
items subject to compromise of approximately $13,896 and $13,207 which consisted
of the following:

                                                         June 30,   December 31,
                                                        ---------   ------------
                                                           2004         2003
                                                        ---------   ------------
Liabilities:
Accounts payable                                        $  10,222   $     9,971
Convertible notes payable, principally related to
  prior separation agreements                                 965           965
Accrued salaries                                              397           397
Accrued warranty                                              222           222
Capital lease obligations                                     438             -
                                                        ---------   -----------
                                                           12,244        11,555

Other:
Manditorily redeemable preferred stock                      1,652         1,652
                                                        ---------   -----------
                                                        $  13,896   $    13,207
                                                        =========   ===========

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.

      5.    Stockholders' Deficit

At June 30, 2004 and December 31, 2003  stockholders'  deficit  consisted of the
following:

                                                         June 30,   December 31,
                                                        ------------------------
                                                          2004          2003
                                                        ---------   ------------
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                                       (50,888)      (50,788)
                                                        ---------   -----------
     Total stockholders' deficit                        $ (14,977)  $   (14,877)
                                                        =========   ===========

      6.    Reorganization Expenses

Reorganization expenses were as follows:

                                                            Six months ended
                                                                 June 30,
                                                        ------------------------
                                                           2004         2003
                                                        ---------   ------------
Professional fees                                       $      28   $       634
United States District Court fees                              16            17
Facility relocation expenses                                  168            21
Gain on the disposition of building and equipment             (23)           (6)
                                                        ---------   -----------
                                                        $     189   $       666
                                                        =========   ===========

      7.    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

                                    10 of 22

<PAGE>

resellers (VARs) and regional distributors. Through its sales force, the Company
sells directly to large VARs and regional  distributors  and also sells to major
national and  international  distributors.  For the quarter ended June 30, 2004,
the Company had two customers  representing 12% and 10%,  respectively  revenue.
For the quarter ended June 30, 2003 one customer contributed 39% of revenues.

      8.    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.

Three and six months ended June 30, 2004 and 2003

On March 12, 2003, the Company filed for protection under Chapter 11 of the U.S.
Bankruptcy Code. Prior to the filing, the Company's inability to obtain material
for production  adversely  impacted customer demand and the Company's ability to
satisfy existing customer orders.

Revenue - Revenue for the quarter ended June 30, 2004, was $1,811 as compared to
$4,008 for the quarter  ended June 30,  2003.  Revenue for the six months  ended
June 30, 2004 was $3,994 versus $6,478 for 2003.

Sales of the General  Display  Terminals  declined 55% to $1,575 for the quarter
ended June 30, 2004 from $3,640 for the quarter ended June 30, 2003. Results for
the second  quarter of 2003 include  substantial  conversion of backlog  arising
from the  interruption of  manufacturing  activities  immediately  following the
Company's  filing for  bankruptcy  on March 12, 2003. On a  year-to-date  basis,
revenue  for General  Display  Terminals  declined  36% to $3,560 from $5,603 in
2003.

Electronic  manufacturing services revenues for the quarter ended June 30, 2004,
were $64,  excluding  intercompany  revenue,  as compared to $68 for the quarter
ended June 30,  2003.  As a result of the  bankruptcy  filing and the  Company's
decision to close the Boca Raton  manufacturing  facility  in June of 2002,  the
Company's EMS customers had sought alternative suppliers.  The Company completed
contractual  production  for its one remaining EMS customer from its  Hauppauge,
New York facility during the second quarter of 2003.

Net revenue from the Company's  repairs and spare parts business for the quarter
ended June 30, 2004 was $173 as compared to $300 for the quarter  ended June 30,
2003.  Year-to-date repairs and spare parts revenue was $352 in 2004 versus $507
in 2003.

Agilysis and 1st Solutions  contributed 12.3% and 9.8%,  respectively,  of total
revenues during the second quarter of 2004.  Hewlett Packard  contributed 39% of
the Company's total

                                    11 of 22

<PAGE>

revenue in the quarter ended June 30, 2003.

Gross  Margin - Gross  margin for the three months ended June 30, 2004 were $441
(24% of  revenue),  as compared to gross margin of $803 (20% of revenue) for the
comparable period in 2003. The decline in gross margin is directly  attributable
to the decline in revenue.  Gross  margin for the six months ended June 30, 2004
were $1,085  (27% of  revenue)  as  compared  to $691 (11% of  revenue)  for the
comparable period in 2003.

Total  Operating  Expenses - For the  quarter  ended  June 30,  2004,  operating
expenses, excluding interest expense and reorganization expenses, were $350 (19%
of revenue),  compared to expenses for the second quarter of 2003 of $1,253 (31%
of revenue).  For the six months ended June 30, 2004,  operating  expenses  were
$863 (22% of revenue)  compared to expenses in the comparable  period in 2003 of
$1,790 (28% of revenue).

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 ended June 30, 2004, the Company charged UCSI $75 and incurred estimated
expenses of $90,  resulting in a loss on reimbursement  of employee  services of
$15.  For the six  months  ended June 30,  2004,  the loss on  reimbursement  of
employee services was $30.

During  the second  quarter  ended  June 30,  2004,  the  Company  recorded  net
reorganization  expenses of $76,  including  $30 for  professional  fees and $46
associated with the Company's relocation of its manufacturing  facility. For the
second  quarter  of  2003  reorganization   expenses  were  approximately  $330,
primarily for legal fees associated with the Company's  bankruptcy  filing. On a
year-to-date  basis  reorganization  expenses were $189 for the six months ended
June 2004 compared to $666 for the comparable period in 2003.

Other Charges  (Income) - The Company recorded charges of $74 during the quarter
ended June 30, 2004  compared  to income of $21 for the  quarter  ended June 30,
2003.  Charges in the second quarter of 2004 include  accruals of  approximately
$58 associated  with the lease  obligations of the Company's depot repair center
in Illinois which the Company had decided to close.  At that time, the Company's
lease  on  the  facility  had  18  months  remaining  until  expiration.   On  a
year-to-date  basis,  other charges were $25 in 2004 compared to other income of
$150 in 2003.

Interest  Expense - Interest expense for the quarter ended June 30, 2004 was $37
compared to $196 for the  comparable  period in 2003.  Mortgage  interest on the
Company's  former  manufacturing   facility,  sold  in  December  of  2003,  was
approximately $112 for the quarter ended June 30, 2003. On a year-to-date basis,
interest expense was $78 in 2004 compared to $470 in 2003.

Income Tax  Expense - For the second  quarter of 2004 and 2003,  the Company did
not record an income tax credit against the recorded losses before income taxes.
The Company  recorded no income tax benefit for the quarter  ended June 30, 2004
and 2003,  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 June 30, 2004, the Company  recorded a net loss
of $111, compared to a net loss of $955 for the quarter ended June 30, 2003. The
year-to-date loss in 2004 was $100 compared to $2,374 in 2003.

                                    12 of 22

<PAGE>

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,  2003,  the Company had a
tangible net worth deficit of $14,877 and total  liabilities  of $19,015.  As of
June 30, 2004, the Company had a tangible net worth deficit of $14,977 and total
liabilities of $18,407. The Company had a working capital deficit,  inclusive of
liabilities and other items subject to compromise,  of approximately  $13,526 as
of June 30, 2004,  compared to working capital deficit of $13,246 as of December
31,  2003.  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 was $709, with accrued  interest,
at June 30, 2004.

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 as of 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 June  30,  2004,  the  Company  had  accrued  approximately  $781  for  legal
assistance

                                    13 of 22

<PAGE>

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 Valtec 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 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 six months ended June 30,
2004 was $556, principally related to net income before reorganization  expenses
of $89,  reductions in inventories  and cash on deposit with lenders of $730 and
$16,  respectively,  increases in accounts  payable and accrued expenses of $83,
reductions  in  other  receivables  of $60,  and  reductions  in  other  assets,
principally   prepaid  expenses,   of  $39.  In  addition,   non-cash  expenses,
principally  depreciation and  amortization  were $41. This amount was offset by
increases in receivables,  including trade receivables and affiliate receivables
of $404,  decreases in deferred credits of $74, and non-cash credits of $24. Net
cash provided by operating  activities during the six months ended June 30, 2003
was $1,262,  principally  related to increases  in accounts  payable and accrued
expenses of $2,102,  decreases in  inventories  of $248 and non-cash  charges of
$398 for inventory  reserves,  $555 of depreciation and  amortization,  bad debt
expense of $89 and $289 relating to the write-off of debt financing costs. These
amounts  were  offset by a net loss  before  reorganization  expenses of $1,708,
increases in trade  receivables of $428,  decreases in deferred revenue of $141,
increases in cash on deposit with lenders of $117, and increases in other assets
of $24.

For the first  six  months  of 2004 and  2003,  net cash used in  reorganization
activities was $162 and $226, respectively.  During the first six months of 2004
the Company  incurred  expenses of $168 in connection with the relocation of its
manufacturing  facility and $44 in professional fees. These expenses were offset
by increases in  liabilities  of $27 and proceeds from the sale of excess assets
of $23.  During the first six months of 2003  professional  fees,  primarily for
legal expenses were $651.  This amount was offset by increases in liabilities of
$440.

Net cash used in  investing  activities  for the six months ended June 30, 2004,
consisted of equipment purchases of $14.

During the first six months of 2004,  net cash used in financing  activities was
$645,  consisting of net payments to Valtec under the  respective  DIP financing
agreements.  Net  payments  to CIT and Valtec  amounted  to $611  during the six
months ended June 30, 2003.

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

                                    14 of 22

<PAGE>

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  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.

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<PAGE>

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 managed this risk through utilization of interest rate
swap agreements in amounts not exceeding the principal amount of its outstanding
obligations.  Statement of Financial  Accounting  Standards No. 133, "Accounting
for  Derivative  Instruments  and Hedging  Activities"  (SFAS 133)  requires the
Company  to  recognize  all  derivatives  on the  balance  sheet at fair  value.
Derivatives  that are not hedges must be adjusted to fair value through  income.
If the derivative is a hedge,  depending on the nature of the hedge,  changes in
the fair value of derivatives are either offset against the change in fair value
of assets,  liabilities or firm  commitments  through  earnings or recognized in
other comprehensive income until the hedged item is recognized in earnings.  The
ineffective  portion  of  a  hedging   derivative's  change  in  fair  value  is
immediately recognized in earnings.

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 December 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  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  June  30,  2004.  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.

                                    16 of 22

<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. Section 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.
Section 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").

                                    17 of 22

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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

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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 3, 2006

Boundless Corporation

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

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