SECURITIES AND EXCHANGE COMMISSION

                                WASHINGTON, D.C.

                                   FORM 1O-QSB

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

                  For the Quarterly Period Ended March 31, 2006

                         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
                                 Farmingdale, 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 |X| No |_|

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 May 12, 2006, the Registrant had approximately 6,705,613 shares of Common
Stock, $.01 par value per share outstanding.


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<PAGE>

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

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

           Item 1.  Financial Statements
                    Condensed Consolidated Balance Sheets as of March 31, 2006 (Unaudited)
                      and December 31, 2005                                                            3
                    Condensed Consolidated Statements of Operations for the three months ended
                      March 31, 2006 and 2005 (Unaudited)                                              4
                    Condensed Consolidated Statements of Cash Flows for the three months
                      ended March 31, 2006 and 2005 (Unaudited)                                        5
                    Notes to Condensed Consolidated Financial Statements (Unaudited)                   6

           Item 2.  Management's Discussion and Analysis of Financial Condition and Results
                      of Operations                                                                   13

           Item 3.  Controls and Procedures                                                           19

Part II.   Other Information

           Item 1.  Legal Proceedings                                                                 20

           Item 6.  Exhibits                                                                          20

Signatures                                                                                            21
</TABLE>


                                    2 of 24
<PAGE>

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

                                                       March 31,    December 31,
                                                         2006           2005*
                                                     ------------   ------------
ASSETS                                                (unaudited)
Current assets:
  Cash and cash equivalents                           $       11     $       14
  Trade accounts receivable, net                             656            657
  Affiliate receivables                                      103             92
  Other receivables                                          131             95
  Inventories (Note 3)                                       890            870
  Cash collateral and escrow accounts                        155            103
  Prepaid expenses and other current assets                   63             43
                                                      ----------     ----------
     Total current assets                                  2,009          1,874
Property and equipment, net (Note 4)                         130            130
                                                      ----------     ----------
    Total assets                                      $    2,139     $    2,004
                                                      ==========     ==========

LIABILITIES  AND STOCKHOLDERS' DEFICIT
Liabilities not subject to compromise
Current liabilities:
  Current portion of long-term debt                   $      355     $       96
  Accounts payable                                            71             50
  Accrued salaries                                            71             73
  Accrued legal fees                                       1,229          1,154
  Purchase order commitments                                  24             50
  Accrued payroll and sales tax payable                       28             28
  Accrued warranty                                            30             30
  Other accrued liabilities                                  217            203
                                                      ----------     ----------
     Total current liabilities                             2,025          1,684

  Long-term debt, less current maturities                    650            650
  Deferred credits                                            99             90
  Items subject to compromise:
  Manditorily redeemable preferred stock                   1,652          1,652
  Liabilities subject to compromise (Note 5)              12,934         12,934
                                                      ----------     ----------
         Total liabilities                                17,360         17,010
                                                      ----------     ----------

         COMMITMENTS AND CONTINGENCIES (Note 9)

Stockholders' deficit: (Note 6)
  Common stock                                                67             67
  Additional paid-in capital                              35,844         35,844
  Accumulated deficit                                    (51,132)       (50,917)
                                                      ----------     ----------
     Total stockholders'  deficit                        (15,221)       (15,006)
                                                      ----------     ----------
    Total liabilities and stockholders' deficit       $    2,139     $    2,004
                                                      ==========     ==========

*     Reclassified. See Note 2.

      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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<PAGE>

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

                                                            Three Months Ended
                                                                 March 31
                                                           --------------------

                                                           --------    --------
                                                             2006        2005
                                                           --------    --------

Revenue:
  Product sales                                            $  1,139    $  1,444
  Services                                                      147         171
                                                           --------    --------
    Total revenue                                             1,286       1,615
                                                           --------    --------
Cost of revenue
  Product sales                                               1,055       1,125
  Services                                                       55          74
                                                           --------    --------
    Total cost of revenue                                     1,110       1,199
                                                           --------    --------

     Gross margin                                               176         416

Other costs and expenses (income)
  Selling, general and administrative                           237         246
  Research and development                                       58          56
  Interest expense (excluding contractual interest of $18
    and $16 not recognized in 2006 and 2005, respectively)       49          38
  Loss on reimbursement of employee services (net of
    reimbursement of $30)                                        --           5
  Other income                                                  (36)         (5)
                                                           --------    --------
                                                                308         340
                                                           --------    --------
Income (loss) before reorganization items                      (132)         76

Reorganization items (Note 7)                                    83          96
                                                           --------    --------
Net loss                                                   $   (215)   $    (20)
                                                           ========    ========

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

Basic and diluted weighted average shares outstanding         6,706       6,706
                                                           ========    ========

      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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<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,
                                                                  ---------------------

                                                                  --------     --------
                                                                    2006         2005*
                                                                  --------     --------
<S>                                                               <C>          <C>
Cash flows from operating activities:
  Income (loss) before reorganization items                           (132)          76
  Adjustments to reconcile income before reorganization items
       to net cash provided by (used in) operating activities:
    Depreciation and amortization                                        3            1
    Change in deferred credits                                           9            2
    Credit for excess and obsolete inventory                           (33)          --
 Changes in assets and liabilities:
    Cash on deposit with lender                                         --          241
    Trade accounts receivable                                            1          115
    Affiliate receivables                                              (11)         (11)
    Other receivables                                                  (36)         (18)
    Inventories                                                         13          (70)
    Cash collateral and escrow accounts                                (52)         (99)
    Prepaid expense and other current assets                           (20)           5
    Accounts payable and accrued expenses                                7          (73)
                                                                  --------     --------
Net cash provided by (used in) operating activities excluding
    reorganization items                                              (251)         169
                                                                  --------     --------
Cash flows from reorganization activities:
  Reorganization items, net                                            (83)         (96)
  Increase in liabilities, net                                          75           75
                                                                  --------     --------
Net cash used in reorganization activities                              (8)         (21)
                                                                  --------     --------
Cash flows from investing activities:
  Capital expenditures                                                  (3)          --
                                                                  --------     --------
Cash flows from financing activities:
  Net borrowings under new DIP/AR financing                            259          411
  Repayments of prior DIP debt                                          --         (653)
                                                                  --------     --------
Net cash provided by (used in ) financing activities                   259         (242)
                                                                  --------     --------
Net decrease in cash and cash equivalents                               (3)         (94)
Cash and cash equivalents at beginning of period                        14          124
                                                                  --------     --------
Cash and cash equivalents at end of period                        $     11     $     30
                                                                  ========     ========

Cash paid for:
  Interest                                                        $     35     $     29
</TABLE>

*     Reclassified. See Note 2.

      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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<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 (the "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.

On May 9, 2006,  a  confirmation  hearing  was held in the  Bankruptcy  Court to
determine,  amongst  other issues,  the  feasibility  of the  Company's  Plan of
Reorganization.  At that hearing the Bankruptcy  Court  determined the Company's
Plan of Reorganization was feasible and instructed legal counsel for the Company
to prepare  and  submit for the  Bankruptcy  Court's  approval  an order to that
affect.  The Effective  Date- the date upon which the Company exits  bankruptcy-
will be ten days following the Bankruptcy Court's approval of the order.

As soon as  practicable  after the  Effective  Date,  the Company shall take all
steps necessary to arrange for the  cancellation of each class of their existing
common stock and preferred stock. Holders of existing common and preferred stock
on the record date shall have his, her or its stock cancelled, and shall receive
nothing on account thereof from the Company.

On the  Effective  Date,  the Company  shall be  authorized to issue one hundred
(100,000,000) million shares of common stock ("Boundless Common Stock") of which
four million shares shall be issued to the claimants as set forth in the Plan.

All assets of the Company,  if any, not owned by  Boundless  Technologies,  Inc.
("Technologies")   shall  be  transferred  to  Technologies   and  any  and  all
liabilities  of  the  Company,   including  guarantees,   shall  be  assumed  by
Technologies  or  canceled.  On  the  Effective  Date,  Boundless  Manufacturing
Services, Inc. and Boundless Acquisition Corp. shall be dissolved.

On the  Effective  Date,  the  Company  shall  issue,  or cause to be issued for
Vision's  benefit,  and  in  its  name,  shares  of  Technologies  common  stock
sufficient to provide Vision with 100% of the  Technologies  common stock issued
and outstanding,  or to be issued and outstanding,  under the Plan and 2,040,000
shares of  Boundless  Common  Stock which will  provide  Vision with 51% of such
shares to be issued and outstanding  under the Plan. The Boundless  Common Stock
shall be  issued  in  accordance  with ss.  1145 of the  Bankruptcy  Code.  Such
issuance of the  Technologies  common stock and Boundless  Common Stock shall be
deemed  to be in full  satisfaction  of the  Vision  claim of $650  and  current
accrued interest thereon of $166.

The Plan  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 March 31, 2006. Subject to adjustment, described below,
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.


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<PAGE>

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.

On the  Effective  Date,  each holder of Claims  shall also receive its pro rata
share of  1,960,000  shares of  Boundless  Common  Stock,  which shares shall be
issued in accordance with ss. 1145 of the Bankruptcy Code.

Subsequent to the Effective  Date,  the Boundless  contemplates  acquiring  (the
"Acquisition")  an interest in an operating  company  which  desires to become a
public  company.  In  effecting  this  subsequent  transaction  under  the Plan,
Boundless  will issue  Boundless  Common  Stock to acquire its  interests in the
operating company. As a result these stock issuances, the Boundless Common Stock
issued to Vision and holders of Claims will represent  approximately  10% of the
outstanding  common stock of Boundless  after the Acquisition is consummated and
the  owners  of  the  operating  company  will  own  approximately  90%  of  the
outstanding common stock of Boundless after the transaction. The consummation of
this  transaction  will be undertaken in compliance  with the Securities Laws of
the United  States  and all other  jurisdictions,  if any,  which  require  such
compliance.  In this regard,  Boundless will file a Form 8-K with the Securities
and Exchange Commission with respect to this transaction.

The amount of cash  payable to holders  of  Claims,  described  above,  shall be
subject  to  reduction  pro  rata,  in an  amount  equal  to 75% of the  average
aggregate  closing prices of the Boundless Common Stock traded on the electronic
bulletin board during the twenty  trading day period  beginning 60 calendar days
after the shares are listed on any of the following:  (i) the Nasdaq  Electronic
Bulletin Board, (ii) Nasdaq'a Small Cap or National Market or (iii) any exchange
(collectively,  a "Trading  Market").  For this  purpose,  if such shares do not
trade on a particular  trading day, the closing price for that day that shall be
used in  determining  the  average  closing  price of such  shares  shall be the
closing price for the shares on the last day it did trade.  No holder of a Claim
shall be required to return any cash  distributions  to Technologies as a result
of the adjustments  provided herein  notwithstanding  the value of the Boundless
Common Stock.  Holders of Claims will be notified promptly after any such shares
are listed on a Trading Market and of any adjustments hereunder.

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,  2006 and 2005.  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, 2005. 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


                                    7 of 24
<PAGE>

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.

      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.

      As we 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.


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<PAGE>

      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, 2005 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, 2005 consolidated  financial  statements.
Certain prior year amounts, specifically the presentation of prepaid expense and
other current  assets,  have been  reclassified to conform to the current year's
presentation.  These  reclassifications had no effect on the Company's income or
loss before reorganization items, net loss, or related per share amounts for any
period  presented.  In  addition,  $200 of debt due Vision  Technologies,  Inc.,
previously classified as current portion of long-term debt at December 31, 2005,
has been  reclassified  as long-term debt due to the application of Statement of
Financial  Accounting  Standard-6   "Classification  of  Short-term  Obligations
Expected to be Refinanced."

Cash and Cash Equivalents

All highly  liquid  investments  with  maturities at purchase of three months or
less are considered cash equivalents. Cash and cash equivalents excludes amounts
held by the Company's DIP lender as collateral  against debt  outstanding  under
the  Company's  DIP  financing  agreement as well as cash held in escrow for the
benefit of the professionals assisting the Company in its bankruptcy case. These
cash  amounts,  which  totaled  $155 and $103 at March 31, 2006 and December 31,
2005,  respectively,  are included in cash collateral and escrow accounts on the
Company's consolidated balance sheets.

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, 2006,
purchases from Radiance Electronics and Video Display Corporation  accounted for
approximately 53% and 9%, respectively,  of total purchases of material.  During
the  first  quarter  of  2005   purchases  from  Radiance   Electronics,   Ansen
Corporation, and Video Display Corporation accounted for approximately 38%, 19%,
and 11%, respectively, of the Company's total purchases of material.

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


                                    9 of 24
<PAGE>

during the reporting period. Actual results could differ from those estimates.

New Accounting Pronouncements

In March 2005, the Financial Accounting Standards Board (the "FASB") issued FASB
Interpretation  (FIN) No.  47,  "Accounting  for  Conditional  Asset  Retirement
Obligations,  an interpretation of FASB Statement No. 143". FIN No. 47 clarifies
that conditional asset retirement obligations meet the definition of liabilities
and should be  recognized  when  incurred if their fair values can be reasonably
estimated.  The Interpretation is effective no later than December 31, 2005. The
cumulative effect of initially applying the Interpretation will be recognized as
a change in accounting  principle.  The Company does not believe that FIN No. 47
will have a material effect on its consolidated financial statements.

In June  2005,  the FASB  issued  FASB  Staff  Position  (FSP)  No.  FAS  143-1,
"Accounting for Electronic  Equipment Waste Obligations," that provides guidance
on how commercial  users and producers of electronic  equipment should recognize
and measure asset retirement  obligations associated with the European Directive
2002/96/EC on Waste Electrical and Electronic  Equipment (the  "Directive").  In
the second quarter of 2005, the company  adopted FSP FAS 143-1 in those European
Union (EU) member countries that transposed the Directive into  country-specific
laws. In the third quarter of 2005, the company adopted FSP FAS 143-1 in several
additional EU-member countries that enacted country-specific laws in the current
reporting  period.  The  adoption of the FSP in the second and third  quarter of
2005 did not have a  material  effect on the  company's  consolidated  financial
statements.  As of the end of the current quarter, the majority of the EU-member
countries have transposed the Directive into  country-specific  laws. The effect
of applying FSP FAS 143-1 in the  remaining  countries in future  periods is not
expected  to have a  material  effect on the  Company's  consolidated  financial
statements.

In the third quarter of 2005,  the company  adopted SFAS No. 153,  "Exchanges of
Nonmonetary  Assets,  an amendment of APB Opinion No. 29." SFAS No. 153 requires
that  exchanges of productive  assets be accounted for at fair value unless fair
value  cannot be  reasonably  determined  or the  transaction  lacks  commercial
substance.  The  adoption of SFAS No. 153 did not have a material  effect on the
Company's consolidated financial statements.

In June 2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3." SFAS
No. 154 will become  effective for accounting  changes and corrections of errors
made in fiscal year 2006.  The  adoption of this  statement  is not  expected to
effect the company's consolidated financial statements.

In March  2006,  the FASB  issued SFAS No. 156,  "Accounting  for  Servicing  of
Financial  Assets--an  amendment  of FASB  Statement  No.  140,"  that  provides
guidance on accounting for separately  recognized servicing assets and servicing
liabilities.  In  accordance  with the  provisions  of SFAS No. 156,  separately
recognized servicing assets and servicing liabilities must be initially measured
at fair value, if practicable.  Subsequent to initial  recognition,  the Company
may use either the amortization  method or the fair value measurement  method to
account for servicing assets and servicing  liabilities within the scope of this
Statement. The Company will adopt SFAS No. 156 in fiscal year 2007. The adoption
of this  Statement  is not expected to have a material  effect on the  Company's
Consolidated Financial Statements.

In February 2006, the FASB issued SFAS No. 155,  "Accounting  for Certain Hybrid
Financial  Instruments--an  amendment  of FASB  Statements  No. 133 and 140," to
permit  fair  value  remeasurement  for any  hybrid  financial  instrument  that
contains an embedded  derivative  that  otherwise  would require  bifurcation in
accordance  with the  provisions  of SFAS No. 133,  "Accounting  for  Derivative
Instruments  and Hedging  Activities."  The  Company  will adopt SFAS No. 155 in
fiscal year 2007.  The  adoption  of this  Statement  is not  expected to have a
material effect on the Company's Consolidated Financial Statements.

In  April  2006,  the  FASB  issued  FASB  Staff  Position  (FSP)  FIN  46(R)-6,
"Determining  the  Variability to Be Considered in Applying FASB  Interpretation
No. 46(R)",  that will become effective beginning third quarter of 2006. FSP FIN
No.  46(R)-6  clarifies  that  the  variability  to be  considered  in  applying
Interpretation 46(R) shall be based on an analysis of the design of the variable
interest  entity.  The  adoption of this FSP is not  expected to have a material
effect on the Company's Consolidated Financial Statements.


                                    10 of 24
<PAGE>

      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,
                                                      ----------    ------------
                                                         2006           2005
                                                      ----------    ------------
Raw materials and purchased components                $    956        $  1,004
Finished goods                                             156             169
Manufacturing inventory reserves                          (535)           (618)
Service parts                                              313             315
                                                      --------        --------
                                                      $    890        $    870
                                                      ========        ========

      4. Property and equipment

Property and equipment consists of the following:

                                                       March 31,    December 31,
                                                      ----------    ------------
                                                         2006           2005
                                                      ----------    ------------
Buildings and improvements                             $     17       $     17
Machinery and equipment                                   6,534          6,531
                                                       --------       --------
                                                          6,551          6,548
Less accumulated depreciation and amortization            6,421          6,418
                                                       --------       --------
                                                       $    130       $    130
                                                       ========       ========

Appropriate  assets are not depreciated  below their  respective  salvage value.
Depreciation expense for the quarters ending March 31, 2006 and 2005, was $3 and
$1. The Company recorded  repairs and maintenance  expenses of $0 and $1 for the
quarters ended March 31, 2006 and 2005.

      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.
Payment terms for these  amounts have been  established  in connection  with the
confirmation of the Chapter 11 reorganization plan.

At March 31, 2006 and December 31, 2005, the Company had  liabilities  and other
items  subject to  compromise of  approximately  $14,586 which  consisted of the
following:


                                    11 of 24
<PAGE>

                                                        March 31,   December 31,
                                                       ----------   ------------
                                                          2006          2005
                                                       ----------   ------------
Liabilities:
Accounts payable                                       $   10,912    $   10,912
Convertible notes payable, principally related to
  prior separation agreements                                 965           965
Accrued salaries                                              397           397
Accrued warranty                                              222           222
Capital lease obligations                                     438           438
                                                       ----------    ----------
                                                           12,934        12,934
Other:
Manditorily redeemable preferred stock                      1,652         1,652
                                                       ----------    ----------
                                                       $   14,586    $   14,586
                                                       ==========    ==========

Pursuant to the confirmed  plan, the mandatorily  redeemable  preferred stock is
cancelled.

      6. Stockholders' Deficit

At March 31, 2006 and December 31, 2005  stockholders'  deficit consisted of the
following:

                                                        March 31,   December 31,
                                                       -------------------------
                                                          2006          2005
                                                       ----------   ------------
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                                       (51,132)      (50,917)
Accumulated other comprehensive loss                           --            --
                                                       ----------    ----------
     Total stockholders' deficit                       $  (15,221)   $  (15,006)
                                                       ==========    ==========

Pursuant to the confirmed  plan,  all existing  shares of capital are cancelled.
(See Note 1.)

      7. Reorganization Expenses

Reorganization expenses were as follows:

                                                           Three months ended
                                                                March 31,
                                                        ------------------------
                                                           2006          2005
                                                        ----------    ----------
Professional fees                                       $       75    $       75
United States District Court fees                                8             6
Facility relocation expenses                                    --            10
Other expenses                                                  --             5
                                                        ----------    ----------
                                                        $       83    $       96
                                                        ==========    ==========

      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.  1st  Solutions,
Ingram Micro and Ultimate  Technology  Corporation  contributed 15%, 11% and 9%,
respectively, of total revenue for the quarter


                                    12 of 24
<PAGE>

ended March 31, 2006. 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.

      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, 2006 was $1,286 as compared to
$1,615 for the quarter ended March 31, 2005.

Sales of the Company's  General  Display  Terminals  were $1,136 for the quarter
ended March 31, 2006 compared to $1,444 for the quarter ended March 31, 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 $50 for the quarter ended March 31,
2006, as compared to $4 in the comparable  quarter of 2005. 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 provides that Vision will
own 100% of the Company,  and will receive this  ownership in  settlement of the
$650 note  payable due to him plus accrued  interest of $166.  Pre-confirmation,
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, 2006 was $97 as compared to $166 for the quarter ended March 31,
2005. 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


                                    13 of 24
<PAGE>

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 2006, 1st Solutions and Ingram Micro contributed 15%
and 11%,  respectively,  of total  revenue.  During  the first  quarter of 2005,
Ingram Micro contributed 24% of total revenues.

Gross  Margin - The Company  recorded  gross  margin for the three  months ended
March 31,  2006 of $176  (13.7% of  revenue)  compared  to gross  margin of $416
(25.7% of revenue)  for the first  quarter of 2005.  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 2006 were $258,  or 20% of revenue,  as  compared to $259,  or 16% of
revenue, for the first quarter of 2005.

Increasing  energy prices have adversely  affected the Company's  reported gross
margin for the first  quarter  of 2006  compared  to the first  quarter of 2005.
Certain  petroleum-based   components  utilized  in  the  manufacturing  of  the
Company's products have increased in cost to the Company.  Additionally,  rising
fuel prices have resulted in increases to the cost of in-bound  freight expense.
The  Company  estimates  that these cost  increases  have  resulted in a 4 point
reduction in reported gross margin as a percent of revenue in 2006 versus 2005.

Total  Operating  Expenses - For the  quarter  ended March 31,  2006,  operating
expenses, excluding interest expense and reorganization expenses associated with
the Company's bankruptcy filing, decreased 3% to $295 (23% of revenue), compared
to expenses for the first quarter of 2005 of $302 (19% 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  ending  March 31,  2005,  the  Company  charged  UCSI $30 and  incurred
expenses of $35,  resulting in a loss on  reimbursement  of $5. The agreement to
provide services to UCSI terminated in the second quarter of 2005.

Other  income - Other  income  for the  quarter  ended  March  31,  2006 was $36
compared  to income of $5 for the period  ended  March 31,  2005.  Other  income
recorded in 2006 includes $33 relating to a reduction in reserves for excess and
obsolete  inventory.  The Company follows policies to establish reserves against
its trade  receivables and inventory,  and periodically  reviews the adequacy of
these reserves.  The Company utilizes ratios based on its historical experience,
as well as management's judgment, in its assessment.

Interest Expense - Interest expense for the quarter ended March 31, 2006 was $49
compared to $38 for the comparable  period in 2005. In January 2005, the Company
replaced  its then  existing  DIP  financing  with  DIP  financing  provided  by
Entrepreneur  Growth  Capital,  LLC  ("EGC").  At March 31,  2006 and 2005,  the
balance due EGC was $355 and $411, respectively, 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.  Interest
expense  incurred  on the  Vision  debt was $14 and $15,  respectively,  for the
quarters ended March 31, 2005 and 2006.

Reorganization  Expenses - During the first quarter of 2006 the Company recorded
reorganization  expenses  of $83,  primarily  for  legal  fees  incurred  in the
bankruptcy. For


                                    14 of 24
<PAGE>

the quarter ended March 31, 2005, reorganization expenses were $96, which amount
included approximately $75 for legal fees and $10 related to expenses associated
with the Company's relocating its manufacturing  operations to Farmingdale,  New
York.

Income Tax  Expense/Credit  - For the first quarter of 2006 and 2005 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,  2006,
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, 2006, the Company recorded a
net loss of $215,  compared to a net loss of $20 for the quarter ended March 31,
2005.

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 terms of the Plan of Reorganization (the "Plan").

As soon as  practicable  after the  Effective  Date,  the Company shall take all
steps necessary to arrange for the  cancellation of each class of their existing
common stock and preferred stock. Holders of existing common and preferred stock
on the record date shall have his, her or its stock cancelled, and shall receive
nothing on account thereof from the Company.

On the  Effective  Date,  the Company  shall be  authorized to issue one hundred
(100,000,000) million shares of common stock ("Boundless Common Stock") of which
four million shares shall be issued to the claimants as set forth in the Plan.

All  assets  of the  Company,  if  any,  not  owned  by  Technologies  shall  be
transferred  to  Technologies  and  any  and  all  liabilities  of the  Company,
including  guarantees,  shall be assumed by  Technologies  or  canceled.  On the
Effective Date, Boundless Manufacturing Services, Inc. and Boundless Acquisition
Corp. shall be dissolved.

On the  Effective  Date,  the  Company  shall  issue,  or cause to be issued for
Vision's  benefit,  and  in  its  name,  shares  of  Technologies  common  stock
sufficient to provide Vision with 100% of the  Technologies  common stock issued
and outstanding,  or to be issued and outstanding,  under the Plan and 2,040,000
shares of  Boundless  Common  Stock which will  provide  Vision with 51% of such
shares to be issued and outstanding  under the Plan. The Boundless  Common Stock
shall be  issued  in  accordance  with ss.  1145 of the  Bankruptcy  Code.  Such
issuance of the  Technologies  common stock and Boundless  Common Stock shall be
deemed  to be in full  satisfaction  of the  Vision  claim of $650  and  current
accrued interest thereon of $166.

The Plan  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 March 31, 2006. Subject to adjustment, described below,
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").


                                    15 of 24
<PAGE>

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.

On the  Effective  Date,  each holder of Claims  shall also receive its pro rata
share of  1,960,000  shares of  Boundless  Common  Stock,  which shares shall be
issued in accordance with ss. 1145 of the Bankruptcy Code.

At March 31,  2006,  the  Company  had  accrued  approximately  $1,229 for legal
assistance  throughout the bankruptcy period. As of March 31, 2006,  outstanding
professional fees,  inclusive of legal fees, are estimated to approximate $1,430
as of the Effective Date. Upon application for payment  pursuant to ss.ss.  330,
331 and 503(a) of the Bankruptcy Code and approval by the Bankruptcy  Court, any
and all professional fees not paid on or before the Effective Date shall be paid
by the Company on such terms as the parties shall agree.  Interest  shall accrue
on any unpaid  professional fees from the Effective Date at a rate of eight (8%)
percent per annum.

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

Subsequent to the Effective  Date,  the Boundless  contemplates  acquiring  (the
"Acquisition")  an interest in an operating  company  which  desires to become a
public  company.  In  effecting  this  subsequent  transaction  under  the Plan,
Boundless  will issue  Boundless  Common  Stock to acquire its  interests in the
operating company. As a result these stock issuances, the Boundless Common Stock
issued to Vision and holders of Claims will represent  approximately  10% of the
outstanding  common stock of Boundless  after the Acquisition is consummated and
the  owners  of  the  operating  company  will  own  approximately  90%  of  the
outstanding common stock of Boundless after the transaction. The consummation of
this  transaction  will be undertaken in compliance  with the Securities Laws of
the United  States  and all other  jurisdictions,  if any,  which  require  such
compliance.  In this regard,  Boundless will file a Form 8-K with the Securities
and Exchange Commission with respect to this transaction.

The amount of cash  payable to holders  of  Claims,  described  above,  shall be
subject  to  reduction  pro  rata,  in an  amount  equal  to 75% of the  average
aggregate  closing prices of the Boundless Common Stock traded on the electronic
bulletin board during the twenty  trading day period  beginning 60 calendar days
after the shares are listed on any of the following:  (i) the Nasdaq  Electronic
Bulletin Board, (ii) Nasdaq'a Small Cap or National Market or (iii) any exchange
(collectively,  a "Trading  Market").  For this  purpose,  if such shares do not
trade on a particular  trading day, the closing price for that day that shall be
used in  determining  the  average  closing  price of such  shares  shall be the
closing price for the shares on the last day it did trade.  No holder of a Claim
shall be required to return any cash  distributions  to Technologies as a result
of the adjustments  provided herein  notwithstanding  the value of the Boundless
Common Stock.  Holders of Claims will be notified promptly after any such shares
are listed on a Trading Market and of any adjustments hereunder.

The Company is highly  leveraged.  As of December  31,  2005,  the Company had a
tangible net worth deficit of $15,006 and total  liabilities  of $17,010.  As of
March 31,  2006,  the  Company had a tangible  net worth  deficit of $15,221 and
total  liabilities  of  $17,360.  The  Company  had a working  capital  deficit,
inclusive of liabilities and other items subject to compromise, of approximately
$14,602 as of March 31, 2006,  compared to working capital deficit of $14,396 as
of December  31,  2005.  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


                                    16 of 24
<PAGE>

Lender") to terminate our debtor-in-possession  ("DIP") financing and to release
their liens on our personal property. In return for termination of the prior DIP
financing we also agreed to pay the Prior Lenders a total of $100 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.

At the same time, we entered into another  secured DIP 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. The original term of the
EGC Agreement was one year;  however, on January 31, 2006, the EGC Agreement was
extended for an additional six months.

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 $5 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 and the term is six months. After
emergence from Chapter 11 the Company will seek to renegotiate the terms of this
financing.

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.

The Company's total cash and cash equivalents decreased  approximately $3 to $11
at  March  31,  2006  from  $14 at the  end of  fiscal  2005.  The  loss  before
reorganization  items of $132, net of non-cash effects of $21,  absorbed $153 of
the $251 in cash used in operating  activities during the first quarter of 2006.
Changes in current assets and  liabilities  also  contributed to the decrease in
cash from  operating  activities  by $98 as follows:  increases in affiliate and
other  receivables of $47,  increases in cash  collateral and escrow accounts of
$52,  principally  for legal fees,  and increases in prepaid  expenses and other
current assets, principally for audit fees, of $20. These decreases in cash used
in  operations  were  offset by an  increase  in  accounts  payable  and accrued
expenses of $7 and a decrease in inventories of $13.

Net cash used in reorganization activities for the first quarter of 2006 was $8,
composed of $75 related to legal expenses and $8 in expenses associated with the
U.S.  Trustee  administering  the bankruptcy case. These expenses were offset by
increases in accrued liabilities, principally for legal expenses of $75.

Net cash used in investing activities for the three months ended March 31, 2006,
consisted of $3 for the purchase of machinery and equipment.

Net cash  provided  by  financing  activities  amounted to $259 during the first
quarter of 2006,  which amount included  repayments of the Company's DIP debt in
the amount of $1281,  offset by net borrowings under the Company's DIP financing
agreement in the amount of $1,540.

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.

For the first quarter of 2005,  net cash used in  reorganization  activities was
$21.  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.

For the quarter ended March 31, 2005, net cash used in financing  activities was
$242,


                                    17 of 24
<PAGE>

consisting of net payments to EGC and Valtec under the  respective DIP financing
agreements.

FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE

This Form  10-QSB  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-QSB, and are subject to various risks and uncertainties. We disclaim any
intent or obligation to update or revise any of the forward-looking  statements,
whether  in  response  to  new   information,   unforeseen   events  or  changed
circumstances  except as required to comply with the disclosure  requirements of
the federal securities laws.

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

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


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<PAGE>

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. 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,  2006.  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.

Additional  information  regarding  legal  matters may be found in the Company's
Annual Report on Form 10-K for the year ended December 31, 2005.

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

None


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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: May 19, 2006

Boundless Corporation


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


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