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 March 31, 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 23

<PAGE>

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

This Quarterly Report on Form 10-Q is for the quarterly period ended March 31,
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 June 30, 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 March 31, 2004 (Unaudited)
                        and December 31, 2003                                                         3
                      Consolidated Condensed Statements of Operations for the three months ended
                        March 31, 2004 and 2003 (Unaudited)                                           4
                      Consolidated Condensed Statements of Cash Flows for the three months
                        ended March 31, 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                                                              18

            Item 6.   Exhibits                                                                       19

Signature                                                                                            20
</TABLE>

                                     2 of 23

<PAGE>

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

<TABLE>
<CAPTION>
                                                               March 31,     December 31,
                                                                 2004           2003*
                                                              -----------    ------------
<S>                                                           <C>            <C>
ASSETS                                                        (unaudited)
Current assets:
   Cash and cash equivalents                                  $        66    $        373
   Cash on deposit with lender                                        161             328
   Trade accounts receivable, net                                   1,392             912
   Affiliate receivables                                               98               -
   Other receivables                                                  159             143
   Inventories (Note 3)                                             1,574           2,072
   Prepaid expenses and other current assets                          214             179
                                                              -----------    ------------
      Total current assets                                          3,664           4,007
Property and equipment, net                                           113             131
                                                              -----------    ------------
     Total assets                                             $     3,777    $      4,138
                                                              ===========    ============

LIABILITIES  AND STOCKHOLDERS' DEFICIT
Liabilities not subject to compromise
Current liabilities:
   Current portion of long-term debt                          $       311    $        837
   Accounts payable                                                   837             900
   Accrued salaries                                                    82              71
   Accrued legal fees                                                 759             756
   Purchase order commitments                                         816           1,130
   Accrued payroll and sales tax payable                               29             212
   Accrued warranty                                                    41              59
   Other accrued liabilities                                          147              81
                                                              -----------    ------------
      Total current liabilities                                     3,022           4,046
                                                              -----------    ------------

   Long-term debt, less current maturities                          1,588           1,581
   Deferred credits                                                   139             181
   Items subject to compromise:
   Manditorily redeemable preferred stock                           1,652           1,652
   Liabilities subject to compromise (Note 4)                      12,242          11,555
                                                              -----------    ------------
         Total liabilities                                         18,643          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                                            (50,777)        (50,788)
                                                              -----------    ------------
      Total stockholders' deficit                                 (14,866)        (14,877)
                                                              -----------    ------------
     Total liabilities and stockholders' deficit              $     3,777    $      4,138
                                                              ===========    ============
</TABLE>

*     Condensed from audited financial statements

      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                     3 of 23

<PAGE>

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

<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                                       March 31
                                                              ---------------------------
                                                              -----------    ------------
                                                                  2004           2003
                                                              -----------    ------------
<S>                                                           <C>            <C>
Revenue:
   Product sales                                              $     1,985    $      2,263
   Services                                                           198             207
                                                              -----------    ------------
      Total revenue                                                 2,183           2,470
                                                              -----------    ------------
Cost of revenue
   Product sales                                                    1,405           2,425
   Services                                                           134             157
                                                              -----------    ------------
      Total cost of revenue                                         1,539           2,582
                                                              -----------    ------------

      Gross margin (loss)                                             644            (112)

Other costs and expenses (income)
   Selling, general and administrative                                468             505
   Research and development                                            45              32
   Interest expense (excluding contractual interest of $15
     and $5 not recognized in 2004 and 2003, respectively)             41             274
   Loss on extinguishment of debt                                       -             289
   Loss on reimbursement of employee services (net of
     reimbursement of $75)                                             15               -
   Other income                                                       (49)           (129)
                                                              -----------    ------------
                                                                      520             971
                                                              -----------    ------------
Income (loss) before reorganization items                             124          (1,083)

Reorganization items (Note 6)                                         113             336
                                                              -----------    ------------
Net income (loss)                                                      11          (1,419)
   Accretion on preferred stock                                         -              74
                                                              -----------    ------------
Net income (loss) attributable to common stockholders         $        11    $     (1,493)
                                                              ===========    ============

Basic and diluted income (loss) per common share              $      0.00    $      (0.22)
                                                              ===========    ============

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

      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                     4 of 23

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

                                                                                2004       2003
                                                                              -------    --------
<S>                                                                           <C>        <C>
Cash flows from operating activities:
   Income (loss) before reorganization items                                      124      (1,083)
   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                                                32         368
      Change in deferred credits                                                  (42)        (99)
      Provision (credit) for doubtful accounts                                    (24)         10
      Provision for excess and obsolete inventory                                   -         398
   Changes in assets and liabilities:
      Cash on deposit with lender                                                 167         (66)
      Trade accounts receivable                                                  (456)        965
      Affiliate receivables                                                       (98)          -
      Other receivables                                                           (16)         (5)
      Inventories                                                                 498         228
      Other assets                                                                (35)        (72)
      Accounts payable and accrued expenses                                       185       1,180
                                                                              -------    --------
Net cash provided by operating activities excluding reorganization items          335       2,113
                                                                              -------    --------
Cash flows from reorganization activities:
   Reorganization items, net                                                     (113)       (336)
   Gain on disposition of property and equipment                                  (23)          -
   Proceeds from disposition of property                                           23           -
   Increase in liabilities, net                                                     4           -
                                                                              -------    --------
Net cash used in reorganization activities                                       (109)       (336)
                                                                              -------    --------
Cash flows from investing activities:
   Capital expenditures                                                           (14)          -
                                                                              -------    --------
Cash flows from financing activities:
   Net proceeds from issuance of debt                                               -         162
   Payments on loans payable and capital leases                                  (519)     (1,573)
                                                                              -------    --------
Net cash used in financing activities                                            (519)     (1,411)
                                                                              -------    --------
Net increase (decrease) in cash and cash equivalents                             (307)        366
Cash and cash equivalents at beginning of period                                  373           4
                                                                              -------    --------
Cash and cash equivalents at end of period                                    $    66    $    370
                                                                              =======    ========

Cash paid for:
   Interest                                                                   $    27    $     26
   Taxes                                                                            -           -
</TABLE>

      SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                     5 of 23

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

      1. Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code

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

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

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

Financial Statement Presentation.

The  unaudited  condensed   consolidated  interim  financial   statements,   and
accompanying  notes included herein,  have been prepared by the Company pursuant
to the rules and regulations of the Securities and Exchange  Commission  ("SEC")
and reflect all adjustments which are of a normal recurring nature and which, in
the opinion of  management,  are necessary for the fair statement of the results
of the three  months  ended March 31,  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

                                     6 of 23

<PAGE>

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

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

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

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

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

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

      o     The ability of the Company to achieve profitability.

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

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

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

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

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

      There is no  assurance  that the Company will be  successful  in obtaining
confirmation of their Plan of Reorganization.  If it is not,  liquidation of the
Company's  assets  would most  likely  ensue.  If the  Company  does emerge from
Chapter  11,  there  is no  assurance  that  the  Company's  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 $161 classified as "cash
on deposit with  lender" at December 31, 2003 and March 31, 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 23

<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 first  quarter  of 2004
purchases  from  Ansen  Corporation,  Radiance  Electronics,  and Video  Display
Corporation  accounted  for 40%,  25%, and 13%,  respectively,  of the Company's
total purchases of material.

The  balance due Ansen was  approximately  $816 and $1,130 at March 31, 2004 and
December 31, 2003, respectively; and such balance is included in "Purchase order
commitments" on the balance sheets.

Advertising

Advertising costs are expensed as incurred.  Advertising expense was $0 for each
of the three months ended March 31, 2004 and 2003.

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 period ending March 31,
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.

                                     8 of 23

<PAGE>

Boundless is currently  evaluating the effect that the adoption of SFAS 151 will
have on its consolidated  results of operations and financial condition but does
not expect SFAS 151 to have a material impact.

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment" ("SFAS 123R"), which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation"  ("SFAS 123") and supersedes APB Opinion No. 25,  "Accounting  for
Stock  Issued to  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 effected through a credit to the statement of operations.

                                            March 31,   December 31,
                                            ---------   ------------
                                              2004          2003
                                            ---------   ------------
Raw materials and purchased components      $   2,155   $      2,843
Finished goods                                    150            135
Manufacturing investory reserves               (1,070)        (1,242)
Service parts                                     339            336
                                            ---------   ------------
                                            $   1,574   $      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.

                                     9 of 23

<PAGE>

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.

At March 31, 2004 and December 31, 2003, the Company had  liabilities  and other
items subject to compromise of approximately $13,894 and $13,207 which consisted
of the following:

                                                        March 31,  December 31,
                                                       ----------  ------------
                                                          2004         2003
                                                       ----------  ------------
Liabilities:
Accounts payable                                       $   10,220  $      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             -
                                                       ----------  ------------
                                                           12,242        11,555
Other:
Manditorily redeemable preferred stock                      1,652         1,652
                                                       ----------  ------------
                                                       $   13,894  $     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 March 31, 2004 and December 31, 2003  stockholders'  deficit consisted of the
following:

                                                        March 31,  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                                       (50,777)      (50,788)
                                                       ----------  ------------
      Total stockholders' deficit                      $  (14,866) $    (14,877)
                                                       ==========  ============


                                    10 of 23

<PAGE>

      6.    Reorganization Expenses

Reorganization expenses were as follows:
                                                          Three months ended
                                                              March 31,
                                                       ------------------------
                                                          2004         2003
                                                       ----------  ------------
Professional fees                                      $        4  $        317
United States District Court fees                               9             8
Facility relocation expenses                                  123            11
Gain on the disposition of building and equipment             (23)            -
                                                       ----------  ------------
                                                       $      113  $        336
                                                       ==========  ============

      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  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 March 31, 2004, the Company had one customer  representing  34% of revenue
and two customers representing 8% and 9%, respectively 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.

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 March 31, 2004 was $2,183 as compared to
$2,470 for the quarter ended March 31, 2003.

Sales of the Company's  General  Display  Terminals  were $1,985 for the quarter
ended March 31, 2004  compared to $1,963 for the quarter  ended March 31,  2003.
The first  quarter of 2003 was adversely  impacted by the  Company's  bankruptcy
filing.  Stabilization of the Company's  operations in the periods subsequent to
the filing allowed the Company to record revenues of General  Display  Terminals
during  the first  quarter  of 2004  similar  to  recorded  revenue in the first
quarter of 2003 despite the industry decline in demand for this product.

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Net revenue from EMS  activities,  primarily  logistics  services sold to Unique
Co-operative  Solutions,  Inc.  ("UCSI"),  were $18. UCSI is wholly owned by Mr.
Oscar Smith, who also is the majority shareholder of Vision Technologies,  Inc.,
the entity which will own 100% of the Company upon confirmation of the Company's
plan of reorganization. Mr. Smith also owns approximately 15% of the outstanding
common  stock of the Company.  EMS revenue for the quarter  ended March 31, 2003
was $300.  The revenue  decline is wholly  attributable  to the working  capital
constraints  faced by the Company  beginning in the second  quarter of 2002.

Net revenue from the Company's  repairs and spare parts business for the quarter
ended March 31,  2004 was $179 as  compared to $207 for the quarter  ended March
31, 2003.

Hewlett-Packard  contributed  34% of the Company's  revenue in the quarter ended
March 31,  2004,  and 26% of recorded  revenues  for the first  quarter of 2003.
During 2003 Hewlett Packard  informed the Company of its decision to discontinue
the sale of the Company's  products.  Sales to Hewlett  Packard during the first
quarter of 2004 represented purchases for its immediate needs as well as product
purchases  it  anticipated  needing  for  the  transition  of its  customers  to
alternative products.

Gross  Margin - The Company  recorded  gross  margin for the three  months ended
March 31,  2004 of $644 (29.5% of  revenue)  compared to a gross  margin loss of
$112 for the first quarter of 2003. The increase in gross margin is attributable
to the reduction in fixed overhead  associated with the Company's  manufacturing
facility in  Hauppauge,  New York,  which the Company sold in December  2003. In
addition,  General Display  Terminals,  which contribute  higher gross margin as
compared to the Company's other sources of revenue,  provided  approximately 91%
of revenue in the first  quarter of 2004 compared to 79% of revenue in the first
quarter of 2003.

Total  Operating  Expenses - For the  quarter  ended March 31,  2004,  operating
expenses, excluding interest expense and reorganization expenses associated with
the Company's bankruptcy filing, decreased 5% to $513 (23% of revenue), compared
to  expenses  for the  first  quarter  of 2003 of $537  (22% of  revenue).  This
decrease  is  attributable  primarily  to  layoffs  and  other  expense  control
activities  which the Company had begun  implementing to align sales,  marketing
and administrative expenses with the revenue decline.

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
first  quarter  of 2004 the  Company  charged  UCSI $75 and  incurred  estimated
expenses of $90,  resulting in a loss on reimbursement  of employee  services of
$15.

Loss on extinguishment of debt- In connection with the bankruptcy filing, during
the quarter  ended March 31,  2003,  the Company  obtained  debtor-in-possession
financing  with  Valtec  Capital,  LLC and  wrote off $289 of  capitalized  debt
financing  costs  associated  with the  asset-based  lending  agreement with the
Company's prior lender.

During  the  first  quarter  of 2004 the  Company  recorded  net  reorganization
expenses of $113; which amount included  approximately  $123 related to expenses
associated  with  the  Company's  relocating  its  manufacturing  operations  to
Farmingdale,  New York. In addition, the Company recognized $23 from the sale of
excess  assets.  Reorganization  expenses,  primarily for legal fees,  were $336
during the quarter ended March 31, 2003.

Other  income - Other  income  for the  quarter  ended  March  31,  2004 was $49
compared to $129 for the period  ended March 31, 2003.  Income  recorded in 2004
includes  $12  relating to return of premiums  against  the  Company's  workers'
compensation  insurance due to a reduction in the Company's  experience  rating.
The  Company  reviews  its  account  receivable  balances  monthly to assess its
estimate of the collectability of such accounts.

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The Company  utilizes  ratios  based  on  its  historical  experience,  as  well
as management's  judgment,  in its  assessment.  For the first  quarter of 2004
the Company recorded a reduction in the reserve against its receivables in an
amount of approximately $24.

Interest Expense - Interest expense for the quarter ended March 31, 2004 was $41
compared  to $274 for the  comparable  period in 2003.  The  decline in interest
expense is attributable to the elimination of mortgage interest on the Company's
former  manufacturing  facility,  sold in December of 2003, and the rejection of
certain  capital  leases as a result of the  bankruptcy  filing.  Pursuant  to a
Financing  Agreement  dated June 27,  2002,  the Company  entered  into a credit
facility with the CIT Group/Business  Credit,  Inc. ("CIT"). By assignment dated
February 21, 2003,  CIT assigned all of its right,  title and interest in and to
the CIT Credit Facility to Valtec Capital Corporation ("Valtec").  Prior to this
assignment, the Company had been amortizing the capitalized debt financing costs
associated  with the CIT  agreement to interest  expense.  For the first quarter
ended March 31, 2003, the amortized capitalized debt financing costs were $42.

Income Tax Expense - For the first  quarter of 2004 and 2003 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,  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 Income (Loss) - For the quarter ended March 31, 2004,  the Company  recorded
net income of $11,  compared to net loss of $1,419 for the  quarter  ended March
31, 2003.

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 the  Company's  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 the  Company  can  make no  prediction
concerning   how  each  of  these  claims  will  be  valued  in  the  bankruptcy
proceedings.   The  Company  believes  that  the  presently  outstanding  equity
securities  will have no value and it is expected that those  securities will be
canceled under any plan of reorganization  that the Company  proposes.  For this
reason, the Company urges 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
March 31,  2004,  the  Company had a tangible  net worth  deficit of $14,866 and
total  liabilities  of  $18,643.  The  Company  had a working  capital  deficit,
inclusive of liabilities and other items subject to compromise, of approximately
$13,252 as of March 31, 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

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<PAGE>

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 $695, with accrued interest, at March 31, 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 March  31,  2004,  the  Company  had  accrued  approximately  $759 for  legal
assistance   throughout  the  bankruptcy   period.  As  of  December  31,  2005,
outstanding  professional  fees,  inclusive  of legal  fees,  are  estimated  to
approximate  $1,430 as of the  Effective  Date.  Upon  application  for  payment
pursuant to Sections 330, 331 and 503(a) of the Bankruptcy  Code and approval by
the Bankruptcy  Court, any and all  professional  fees not paid on or before the
Effective  Date shall be paid by the Company on such terms as the parties  shall
agree.  Interest shall accrue on any unpaid professional fees from the Effective
Date at a rate of eight (8%) percent per annum.

Since it is anticipated that  professional fees shall not be paid in full on the
Effective  Date,  the  Professionals  (other than  auditors)  shall be granted a
security  interest  upon all of the  Company's  assets,  junior to the  security
interest thereon of 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 the Company's  businesses  and some of which
arise from  uncertainties  related to global economies.  In the event there is a
decline in the Company's  sales and earnings  and/or a decrease in  availability
under the credit  line,  the  Company's  cash flow  would be  further  adversely
affected.  Accordingly,  the Company may not have the necessary cash to fund all
of its obligations.

Net cash  provided by operating  activities  during the three months ended March
31,  2004 was $335,  principally  related  to net income  before  reorganization
expenses of $124,  reductions in inventories and cash on deposit with lenders of
$498 and $167,  respectively,  and  increases  in  accounts  payable and accrued
expenses of $185. In addition,  non-cash expenses,  principally depreciation and
amortization  were $32.  This  amount was offset by  increases  in  receivables,
including trade  receivables,  affiliate  receivables  and other  receivables of
$570,  decreases in deferred  credits of $42,  and non-cash  credits of $24. Net
cash  provided by operating  activities  during the three months ended March 31,
2003 was  $2,113,  principally  related to  increases  in  accounts  payable and
accrued  expenses  of  $1,180,   decreases  in  trade  accounts  receivable  and
inventories  of $965  and  $228,

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respectively,   non-cash  charges  of  $398  for  inventory  reserves,  $368  of
depreciation  and  amortization,  and $289 for the  write-off of debt  financing
costs. These amounts were offset by a net loss before reorganization expenses of
$1,083,  decreases in deferred revenue of $99, increases in cash on deposit with
lenders of $66, and increases in prepaid expenses of $72.

For the  first  quarter  of 2004  and  2003,  net  cash  used in  reorganization
activities was $113 and $336, respectively. During the first quarter of 2004 the
Company  incurred  expenses of $123 in  connection  with the  relocation  of its
manufacturing  facility and $13 in professional fees. These items were offset by
cash proceeds from the sale of assets of $23 and increases in liabilities of $4.
During the first quarter of 2003 professional fees, primarily for legal expenses
were $325 and relocation expenses were $11.

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

During the first  quarter of 2004,  net cash used in  financing  activities  was
$519,  consisting of net payments to Valtec under the  respective  DIP financing
agreement.  During the first  quarter of 2003,  DIP  payments  to Valtec and net
payments to CIT, the Company's lender prior to Valtec, were $1411.

FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE

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

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

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

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laws or requirements,  including without limitation with respect to health care;
changes in the costs of interest rates, insurance, shipping and postage, energy,
fuel and other business utilities; the risk of non-payment by, and/or insolvency
or  bankruptcy  of,  customers  and others  owing  indebtedness  to the Company;
actions that may be taken by creditors with respect to the Company's obligations
that are subject to default  proceedings;  threats or acts of  terrorism or war;
and strikes,  work stoppages or slow downs by unions affecting  businesses which
have an impact on the Company's ability to conduct its own business operations.

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company's  exposure to market risk for changes in interest  rates is related
primarily  to  the  Company's  revolving  credit  facility  and  long-term  debt
obligations.  The Company 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  March  31,  2004.  Based  on  that
evaluation, the Company's management, including the

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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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                           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

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