U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[X] ANNUAL  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
    1934 For the fiscal year ended March 31, 2004.

Commission file number: 33-89384-LA

                        PROLOGIC MANAGEMENT SYSTEMS, INC.
                 (Name of small business issuer in its charter)




             Arizona                                     86-0498857
--------------------------------                    -------------------
(State or other jurisdiction                         (I.R.S. Employer
of incorporation or organization)                   Identification No.)




4633 E. Broadway Blvd., #110, Tucson, Arizona              85711
---------------------------------------------           ----------
(Address of principal executive offices)                (Zip Code)




                    Issuer's telephone number (520) 955-4748.


Securities registered under Section 12(g) of the Exchange Act:

               Common Stock and Warrants to Purchase Common Stock

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act  during the past 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 [ ].

Check if disclosure of delinquent filers pursuant to Item 405 of Regulations S-B
is not contained in this form, and no disclosure will be contained,  to the best
of the registrant's  knowledge,  in definitive  proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

Issuer's revenue for its most recent fiscal year: $14,103,523.

As of May 30, 2004,  the  aggregate  market value of 5,503,993  shares of voting
stock  held by  non-affiliates  of the  issuer  (calculated  using the  reported
closing sale price of the common stock on the OTC Bulletin  Board) was $220,160.
This  calculation  does not reflect a  determination  that  certain  persons are
affiliates of the registrant for any other purposes.

Number of shares of common stock outstanding on March 31, 2004 was 7,275,048.

Transitional Small Business Disclosure Format: Yes [ ]; No [X].

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None

<PAGE>

                                     PART I

RECENT DEVELOPMENTS

FORECLOSURE ACTION.

     As  previously  reported in its Report on Form 10-QSB for the quarter ended
December  31, 2003 and in its Form 10-KSB for the year end March 31,  2003,  the
Company's  ability to continue in  operations  during the last several years has
depended  upon the  continuing  receipt of financial  accommodations  from a key
lender,  MRA  Systems,  Inc.  d/b/a GE Access.  In  November  2003,  this lender
notified the Company that it was in default on a $610,000  note that was due and
payable on September 26, 2003, and on a $5,000,000 note due and payable in April
2004.  The  Company's  obligations  to this  lender  were  secured  by  security
interests  covering  all or  substantially  all of the  Company's  assets.  (SEE
LIQUIDITY AND CAPITAL RESOURCES).

         On February  2, 2004,  the  Company  and its wholly  owned  subsidiary,
Basis,  Inc.,  each filed a voluntary  petition  under Chapter 11 of the Federal
Bankruptcy Code in the United States  Bankruptcy Court District of Arizona.  The
Company filed a Form 8-K with the SEC on February 2, 2004 disclosing the Chapter
11 filings.

         As  previously  reported in its Report on Form 10-QSB,  on February 13,
2004, in the United States  Bankruptcy Court In And For The District of Arizona,
(Cases  No.  4-04-00393  -TUC-EWH  and  04-00394-TUC-EWH)  debtors  Basis,  Inc.
("Basis") and Prologic Management Systems, Inc. ("Prologic") (collectively,  the
"Debtors"),  and secured creditor MRA Systems, Inc. d/b/a GE Access ("GE Access)
jointly moved and agreed to the dismissal of the jointly administered Chapter 11
cases in a Joint Motion To: (1) Terminate the automatic  stay to allow GE Access
to Immediately Notice Its Foreclosure Sale Pursuant to Applicable Non-Bankruptcy
Law; and (2) Dismiss Chapter 11 Cases. The Judge approved the motion  dismissing
the Chapter 11 case(s) thus allowing GE Access to foreclose on all of the assets
of the Debtors.

         On February 24, 2004, GE Access  foreclosed  on and took  possession of
all of the assets of Prologic Management Systems,  Inc. and the Company's BASIS,
Inc. subsidiary, resulting in a consolidated balance sheet on February 29, 2004,
showing zero tangible assets.  As part of the foreclosure  agreement,  GE Access
agreed to waive its  deficiency  claim  against the  Company  subject to certain
terms and conditions  placed on the Company.  This included  compliance with the
conditions of the  foreclosure  and  representations  by the Company as to asset
disclosure.  As of the  date of  this  report,  the  Company  believes  it is in
compliance with these terms and conditions.

         As of March  31,  2004,  Prologic  will  have  remaining  approximately
$3,880,000 of liabilities and obligations to third parties.  Further, as part of
the foreclosure  agreement all employees were terminated  effective February 24,
2004.   (SEE  LIQUIDITY  AND  CAPITAL   RESOURCES  AND  FOOTNOTES  TO  FINANCIAL
STATEMENTS).

         As of the date of this  filing,  the Company has no  operations  and no
sources of revenue.  The Company does not have any current agreements or plan to
replace the assets or business units taken under the foreclosure action.  Please
note that the financial information contained herein is historical and should be
not taken as any indication of any future performance.


CHANGES IN CONTROL OF REGISTRANT.

     As previously reported in its Report on Form 8-K filed on April 1, 2004, in
March 17 and 19, 2004,  three of Prologic's Board members resigned and three new
members were appointed.  The resigning Board members  included Bruce  Carlsmith,
Herbert F. Day and Richard E. Metz. The newly  appointed Board members are James
M.  Heim,  John W.  Schauweker  and James S.  Nichols.  The  Company's  Board of
Directors has reduced the number of Directors to five.


                                                                               2
<PAGE>

         On March 19, 2004, James M. Heim,  Director,  was elected President and
Treasurer and Martin A. Diamond  was elected Vice President and Secretary.  The
Company's Board of Directors eliminated all other officer positions.

         On April 7, 2004,  Mr. Hubert and Mr.  Olynick  resigned their Director
positions with the Company and its BASIS, Inc.  subsidiary.  The Company's Board
of Directors has not filled the vacancies as of the date of this filing.

SETTLEMENT AGREEMENT: PACE INVESTMENT CO., INC., ET AL. V. PROLOGIC MANAGEMENT
SYSTEMS, INC., CV 20003999 (PREVIOUSLY REPORTED IN THE COMPANY'S REPORTS ON
10-QSB).

         In  the  first  quarter  of  fiscal  2004,  the  parties  negotiated  a
settlement  agreement whereby the Company would issue the plaintiffs 2.63 shares
of Prologic common stock for each dollar ($1.00) of money originally invested by
the plaintiffs,  reduced by the number of common shares that have been issued to
each current  preferred  stockholder as dividends on the preferred stock.  Under
the proposed settlement, the total number of shares of common stock to be issued
to the plaintiffs would have been 1,197,634 shares.

         In January of 2004,  the parties  reached an  agreement  to dismiss the
case and expect to conclude their settlement  without the aid of the courts.  On
January 20, 2004 the case was  dismissed  without  prejudice.  As of the date of
this filing, the parties have not completed a settlement.

CREDITOR LEGAL PROCEEDINGS.

     As  previously  reported in its Report on Form 10-QSB for the quarter ended
December 31, 2003, the Company is currently engaged with four creditors in legal
proceedings.  All of these  actions  were filed prior to the  February  24, 2004
foreclosure action. (SEE ITEM 3 LEGAL PROCEEDINGS).

ACQUISITION OF ASSETS FROM SOLID SYSTEMS, INC.

         As  previously  reported  in its Report on Form  10-QSB for the quarter
ended  June 30,  2002,  on June 15,  2002,  the  Company  closed an  acquisition
effective  May 31,  2002  whereby  the  Company  acquired,  in a non-cash  asset
purchase,  four (4) offices and associated  personnel and equipment,  from Solid
Systems,  Inc.,  an  information  technology  service  provider  (SEE  NOTE 3 TO
CONSOLIDATED  FINANCIAL  STATEMENTS).  The offices are located in Dallas, Austin
and Houston, Texas, and New Orleans,  Louisiana.  The Company, from June 1, 2002
through  February 24, 2004,  continued the systems  integration  and maintenance
business  under  the name of  Solid  Systems,  operating  as a  division  of the
Company's  BASIS,  Inc.  subsidiary.  These  assets  were  taken  as part of the
foreclosure action discussed above.

                                                                               3

<PAGE>



ITEM 1. BUSINESS

GENERAL

         Prologic  Management  Systems,  Inc.  (the  "Company")  is  an  Arizona
corporation  founded in 1984.  During the fiscal year,  the  Company,  operating
through its wholly owned subsidiary,  BASIS, Inc.,  provided  commercial systems
integration and professional  services firm,  specializing in high-availability,
fully integrated  systems,  providing systems integration  services,  networking
services, security and database software for the commercial market.

         Prior to the  foreclosure  action  in  February  of 2004,  the  Company
provided systems integration services, technology products and related services.
The majority of the Company's  revenues were generated from systems  integration
and related product sales. The Company had established sales and/or  integration
offices in Tucson, Arizona (BASIS), Emeryville,  California (BASIS), Scottsdale,
Arizona  (BASIS),  Portland,  Oregon (BASIS),  Houston,  Texas (Solid  Systems),
Austin, Texas (Solid Systems),  Dallas, Texas (Solid Systems),  and New Orleans,
Louisiana (Solid Systems) to offer proximity to its customer and vendor base.

         As a result of this  foreclosure,  the Company  ceased to have business
operations.  Management is reviewing options regarding the solvency and creditor
issues facing the Company as well as looking at potential business opportunities
that may be appropriate for the Company's long-term growth strategy.

         The Company's  corporate  office is located at 4633 E. Broadway  Blvd.,
Suite 110, Tucson, Arizona 85711 and its telephone number is (520) 955-4748. The
Company had sales and services offices in California, Oregon, Arizona, Texas and
Louisiana. The assets located at these operating offices were taken by GE Access
under the foreclosure  action. The Company will not be operating any business in
the near term.

         All of the information provided herein regarding the operations and the
financial  performance  of the Company are provided for historical and financial
reporting purposes. The operations and the respective performance for the fiscal
year ending March 31, 2004, as well as prior fiscal years, will provide no basis
for any future activities.


EMPLOYEES

         As of March 31,  2004,  the Company  had no  employees.  Subsequent  to
March 31, the Company has entered into an  employment  agreement  with Mr. Heim.
The  agreement  is at will and may be  terminated  by either  party upon 15 days
notice. Mr. Heim will be serving as President and Chief Executive Officer.  (SEE
RECENT DEVELOPMENTS - CHANGE IN CONTROL OF REGISTRANT).


                                                                               4
<PAGE>


ITEM 2. PROPERTIES

         The  Company's  administrative  and  accounting  records are located in
Tucson,  Arizona in a storage facility  consisting of  approximately  300 square
feet under a month-to-month lease.

         If the Company were to require additional or alternate space within the
next twelve  months,  the Company  believes  that space  sufficient  to meet its
requirements will be available on commercially reasonable terms.


ITEM 3. LEGAL PROCEEDINGS

         As  previously  reported,  on August 1,  2000,  certain  holders of the
Company's  Series B Convertible  Preferred  Stock filed an action in the Arizona
Superior  Court,  Pima County (PACE  INVESTMENT  CO.,  INC.,  ET AL. V. PROLOGIC
MANAGEMENT SYSTEMS, INC., CV 20003999). The Company filed a counterclaim against
the  Plaintiffs,  petitioning  the court to,  amongst other  things,  affirm the
Company's position and deny the Plaintiffs' claims.  During the fiscal year, the
parties  agreed to dismiss all claims without  prejudice.  The parties intend to
resolve the dispute without the aide of the courts.  (SEE RECENT DEVELOPMENTS --
PACE INVESTMENT CO., INC., ET AL. V. PROLOGIC MANAGEMENT SYSTEMS, INC.).

         HOLUALOA  BUTTERFIELD  INDUSTRIAL LLC V. PROLOGIC  MANAGEMENT  SYSTEMS,
INC.,  C20035918,  Superior Court for the State of Arizona in and for the County
of Pima,  filed  October 23,  2003.  A complaint  was filed by Holualoa  against
Prologic to collect  approximately  $194,000  allegedly owed by Prologic for the
lease of office space in Tucson, Arizona. The plaintiff requested from the court
an Entry of Default and it was  granted on March 11, 2004 for a total  amount of
$196,028, which includes costs and legal fees of $5,898.

         JONATHAN NEIL & ASSOCIATES, INC. V. BASIS, INC., RG03-120611,  Superior
Court, State of California,  Alameda County,  filed October 7, 2003. A complaint
was filed by Jonathan Neil & Associates  against Basis to collect  approximately
$265,000  owed by Basis to Pioneer  Standard  Electronics,  Inc.  On December 8,
2003, the plaintiff  requested  from the court an Entry of Default.  An Entry of
Default was granted on January  12,  2004 for a total  amount of $373,919  which
includes interest of $83,332, plus costs and legal fees of $25,312.

         AVNET COMPUTER MARKETING GROUP V. PROLOGIC  MANAGEMENT  SYSTEMS,  INC.,
C20032814,  Superior  Court for the State of  Arizona  in and for the  County of
Pima,  filed May 19, 2003. A complaint  was filed by Avnet  against  Prologic to
collect approximately $150,000 owed by Prologic to Avnet. Prologic does not deny
this debt and has agreed to a stipulated judgment for the full debt owed in this
matter.  An Entry of Default was granted on January 13, 2004 for a total  amount
of $150,522, which includes costs and legal fees of $212.

         NEXTERA  BUSINESS   PERFORMANCE  GROUP,  INC.  V.  PROLOGIC  MANAGEMENT
SYSTEMS, INC., MICV2003-05209-H,  Superior Court, Commonwealth of Massachusetts,
Middlesex  County,  filed  December 23,  2003. A complaint  was filed by Nextera
against  Prologic to collect  approximately  $80,000 owed by Prologic  under the
terms of a promissory note. On April 14, 2004, the plaintiff  requested from the
court an Entry of Default. An Entry of Default was granted on May 28, 2004 for a
total amount of $85,340, which includes interest of $17,340.

         The Company acknowledges the possibility that creditors, vendors and/or
former  employees in the future may file additional  lawsuits as a result of the
foreclosure and the cessation of business operations.

     The obligatiosn for the judgements have all been accrued at March 31, 2004.

                                                                               5

<PAGE>



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SHAREHOLDERS

         No matters  were  submitted  to a vote of security  holders  during the
quarter ended March 31, 2004.


                                                                               6
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company  completed its initial public offering on March 15, 1996 at
a price of $5.00 per share of Common Stock and $0.125 per Warrant  (each warrant
entitling the holder to purchase one share of common stock at an exercise  price
of $6.00). The Company's common stock warrants expired unexercised in the fiscal
year ended March 31, 1999. The Company's  securities  were delisted from trading
on the NASDAQ  Small Cap Market and the Boston  Stock  Exchange in August  1998,
following  which  trading of the  Company's  common  stock has  continued  to be
conducted on the non-NASDAQ  over-the-counter  ("OTC") market,  under the symbol
PRLO.  Trading of the Company's common stock in the OTC market has been sporadic
and generally at very low reported  daily  volumes.  Until the  Company's  stock
began trading on the OTC Bulletin Board, there had been no active market for the
Company's common stock since it was delisted from the NASDAQ Small Cap Market in
August 1998.

         The  table  below  represents  the  high  and  low bid  prices  for the
Company's common stock, as reported by the National  Quotation  Bureau,  for the
quarters  ended June 30, 2002  through  March 31,  2004.  The  quotations  shown
represent inter-dealer prices without adjustment for retail mark-ups, mark downs
or commissions, and may not necessarily reflect actual transactions.

                                                Common Stock
         QUARTER ENDED                     HIGH              LOW
         --------------------              -----             -----
         June 30, 2002                     $0.14             $0.06
         September 30, 2002                $0.42             $0.14
         December 31, 2002                 $0.28             $0.15
         March 31, 2003                    $0.31             $0.11
         June 30, 2003                     $0.30             $0.11
         September 30, 2003                $0.20             $0.12
         December 31, 2003                 $0.30             $0.04
         March 31, 2004                    $0.05             $0.01

         As of March 31,  2004,  there  were 197  shareholders  of record of the
Company's common stock. The Company has neither declared nor paid cash dividends
on its common stock in the past,  and  currently  intends to retain any earnings
for use in the business and does not anticipate paying any cash dividends on its
common stock in the foreseeable  future.  During the fiscal year ended March 31,
2004,  no  dividends  were paid to holders of the  Company's  Series B Preferred
Stock and Series C Preferred Stock. In the prior fiscal year, dividends totaling
260,457 shares of common stock valued, in the aggregate, at $59,904 were paid to
holders of the Company's Series B Preferred Stock and Series C Preferred Stock.



                                                                               7
<PAGE>


RECENT SALES OF UNREGISTERED SECURITIES


     FISCAL YEAR ENDED MARCH 31, 2004

1. None.


     FISCAL YEAR ENDED MARCH 31, 2003

1.            During the fiscal year ended March 31,  2003,  the Company  issued
              dividends  totaling  260,457  shares of common stock to holders of
              the  Company's  Series  B  and  Series  C  Preferred  Stock  in  a
              transaction exempt from registration.



                                                                               8
<PAGE>



ITEM 6. MANAGEMENT'S DISCUSSION & ANALYSIS OR PLAN OF OPERATIONS


GENERAL

         Statements  contained in this Annual  Report on Form 10-KSB,  which are
not purely historical,  are  "forward-looking  statements" within the meaning of
Section 27A of the Securities  Act of 1933, as amended,  Section 21E of the U.S.
Securities Exchange Act of 1934, as amended and the Securities Litigation Reform
Act of 1995,  including  but not limited to  statements  regarding the Company's
expectations,  hopes,  beliefs,  intentions or strategies  regarding the future.
Action results could differ materially from the projected in any forward-looking
statements as a result of a number of factors, including those detailed in "Risk
Factors"  below  and  elsewhere  in  this  Annual  Report  on Form  10-KSB.  The
forward-looking  statements are made of the date hereof, and the Company assumes
no obligation to update the forward-looking statements, or to update the reasons
why  actual  results  could  differ  materially  from  those  projected  in  the
forward-looking statements.


INTRODUCTION

         Prior to the  foreclosure  action  in  February  of 2004,  the  Company
provided systems integration services, technology products and related services.
The majority of the Company's  revenues were generated from systems  integration
and related product sales. However, as a result of this foreclosure, the Company
ceased to have business operations.  For additional  information on the combined
operating results of the Company and its subsidiary for the fiscal year, see the
Consolidated  Financial  Statements  of  the  Company  and  Notes  thereto.  The
discussion  should be read in conjunction  with and is qualified in its entirety
by the Consolidated Financial Statements of the Company and Notes thereto.

         The  Company's  securities  were  delisted  from both the NASDAQ  Stock
Market and the Boston Stock Exchange in August 1998. Delisting resulted from the
Company's  failure to maintain the minimum net tangible asset requirement of the
NASDAQ Stock  Market.  Trading of the  Company's  securities  may continue to be
conducted  on  the  OTC   Electronic   Bulletin   Board  or  in  the  non-NASDAQ
over-the-counter  market. As a result, a holder of the Company's  securities may
find it more difficult to dispose of, or to obtain accurate quotations as to the
market value of, the Company's securities.  In addition,  purchases and sales of
the Company's  securities may be subject to Rule 15g-9 (the "Rule")  promulgated
by the Securities and Exchange  Commission (the "SEC"). The Rule imposes various
sales practice  requirements on broker-dealers  who sell securities  governed by
the Rule to persons other than  established  customers and accredited  investors
(generally  institutions with assets in excess of $5 million or individuals with
a net worth in excess of $1  million  or annual  income  exceeding  $200,000  or
$300,000 jointly with their spouse).  For transactions  covered by the Rule, the
broker-dealer  must make a special  suitability  determination for the purchaser
and have received the purchaser's  written  consent to the transaction  prior to
sale.  Consequently,  the Rule may have an  adverse  effect  on the  ability  of
broker-dealers to sell the Company's securities and may affect the salability of
the Company's securities in the secondary market.

         The SEC has also adopted rules that regulate broker-dealer practices in
connection  with  transactions  in "penny  stocks."  Penny stocks  generally are
equity securities with a price less than $5.00 per share,  other than securities
registered  on certain  national  securities  exchanges  or quoted on the NASDAQ
system. With the Company's securities delisted from the NASDAQ Small Cap Market,
they may come within the definition of penny stocks because the trading price of
the Company's common stock is currently below the $5.00 per share threshold. The
penny stock rules require a  broker-dealer,  prior to a  transaction  in a penny
stock not exempt from the rules, to deliver a standardized  document prepared by
the SEC that provides information about penny stocks and the nature and level of
risks in the



                                                                               9
<PAGE>

penny stock  market.  The  broker-dealer  must also  provide the  customer  with
current bid and offer  quotations for the penny stock,  the  compensation of the
broker-dealer  and its  salesperson  in the  transaction,  and  monthly  account
statements  showing the market value of each penny stock held in the  customer's
account.  The bid and offer  quotations,  and the  broker-dealer and salesperson
compensation  information  must be given to the customer  prior to effecting the
transaction.  These disclosure  requirements may have the effect of reducing the
level of trading  activity  in the  secondary  market  for a stock that  becomes
subject to the penny stock rules.


PLAN OF OPERATIONS

         In light of the foreclosure  action,  the management focus is on trying
to  restructure  the debt on the balance  sheet with the intent of  converting a
significant  amount  of  the  debt  to  equity.  If  this  can  be  accomplished
effectively and in a reasonable  period of time,  management would then consider
the  acquisition  or merger  with one or more  companies,  which would be a good
candidate  for the  public  entity.  Currently,  the board  intends to work with
existing  shareholders  in order to achieve these goals.  However,  it is likely
that in conjunction  with any such suitable  acquisition or merger,  the Company
would likely need to raise capital to provide the necessary  working capital for
the consolidated  entity. The Company has no commitments at this time from third
parties for any such financing and/or any acquisitions or mergers.



RISK FACTORS


         An investment in the Company should be considered speculative, and to a
high  degree of risk.  In  addition to the other  information  contained  in the
Annual Report on Form 10-KSB,  prospective  investors should carefully  consider
the following risk and speculation factors:

UNPROVEN PLAN OF  OPERATIONS.  As a consequence  of the change of control of the
Registrant  in March of 2004 and the  foreclosure  on the  business  assets  and
operations,  all efforts that were previously initiated in an attempt to develop
a viable systems integration business have been abandoned at this time. In place
thereof,  the Company has adopted as a new plan of  operations  the  strategy of
reorganizing the Company's  creditors and then attracting capital based on a new
business  operation.  To date, the Company has no agreements or plans to acquire
any new  business  operations.  In the near term,  the  Company is  focusing  on
continued  timely SEC  reporting  and working  with  creditors.  There can be no
assurance  that the  intended  business  and  operations  of the Company will be
successful.  Any future success that the Company might enjoy will depend on many
factors  including  factors  which may be beyond the control of the Company,  or
which  cannot be predicted at this time.  The Company may  encounter  unforeseen
difficulties or delays in the  implementation  of its plan of operations.  There
can be no assurance  that such  difficulties  or delays will not have a material
adverse effect upon the financial  condition,  business prospects and operations
of the Company and the value of an  investment  in the Company.  The value of an
investment in the Company can also be adversely affected by a number of external
factors,  such as conditions  prevailing in the  securities  markets  and/or the
economy  generally.  Consequently,  an  investment  in  the  Company  is  highly
speculative  and no  assurance  can be given that  purchasers  of the  Company's
securities  will realize any return on their  investment or that purchasers will
not lose their entire investment.

ISSUANCE  OF  ADDITIONAL  SECURITIES.  The  Company  may be  required  to  issue
additional  shares of Common  Stock to raise  capital  and/or  satisfy  existing
creditors.  The Company may need to issue  additional  shares of Common Stock in
connection  with a  prospective  acquisition,  in lieu  of  wages  and  services
provided to the Company,  upon exercise of stock option  grants,  or for another
corporate purpose.


                                                                              10
<PAGE>


Issuance of  additional  shares of Common  Stock would result in dilution of the
percentage  interest in the Company's Common Stock of all stockholders  ratably,
and  might  result in  dilution  in the book  value of a share of the  Company's
Common  Stock,  depending  on the price and other terms on which the  additional
shares are issued.



LACK OF OPERATING CAPITAL. The Company does not have adequate working capital to
execute it's current  short term  operating  plans and is dependent on receiving
capital and/or assistance from several of the Company's stockholders.  Continued
support  from the  shareholders  is  critical  to the  effective  reorganization
efforts of the Company  and without  this  support,  it is doubtful  the Company
would be able to execute its short-term plans.


RESULTS OF OPERATIONS

         GENERAL AND  ADMINISTRATIVE.  General and administrative  expenses were
$111,282 for the fiscal year ended March 31,  2004,  as compared to $184,174 for
the same period of the prior  fiscal  year.  The  decrease in these  expenses is
attributable to the foreclosure and  discontinuance  of operations in the fiscal
fourth  quarter.  The Company  expects  general and  administrative  expenses to
increase if it is successful in reorganizing the creditors,  raising capital and
executing  a new  business  plan or  completing  an  acquisition.  (SEE  PLAN OF
OPERATIONS).

         OPERATING  INCOME  (LOSS).  Operating  loss was $111,282 for the fiscal
year ended March 31, 2004, as compared to a loss of $184,174 for the same period
of the prior fiscal year. The decrease in the operating loss is  attributable to
the foreclosure and discontinuance of operations in the fiscal fourth quarter.

         INTEREST EXPENSE AND OTHER EXPENSE (INCOME). Interest expense and other
expense  (income)  for the fiscal  year ended March 31,  2004 was  $544,597,  as
compared to  $604,687  for the same period of the prior  fiscal  year,  composed
primarily  of interest  incurred on the  approximately  $10.25  million in notes
payable and advances payable to GE Access and other short term obligations.  The
decrease is primarily  due to the  foreclosure  action on the notes by GE Access
and the Company's inability to service the financial obligations of the Company.

         INCOME  (LOSS)  FROM  CONTINUING  OPERATIONS.  The loss from  continued
operations for the fiscal year ended March 31, 2004 was $655,879, as compared to
$788,861 for the same period of the prior fiscal year. The loss from  continuing
operations  is  composed  primarily  of interest  incurred on the  approximately
$10.25  million in notes  payable  and  advances  payable to GE Access and other
short-term obligations.

         INCOME (LOSS) FROM  DISCONTINUED  OPERATIONS.  The operating  loss from
discontinued operations was $1,031,134 for the fiscal year ended March 31, 2004,
as compared  to a loss of  $2,345,294  for the same  period of the prior  fiscal
year. The gain from the disposal of assets in discontinued business segments was
$8,705,832  for the  fiscal  year  ended  March 31,  2004.  The total  gain from
discontinued operations was $7,674,698 for the fiscal year ended March 31, 2004,
as compared  to a loss of  $2,345,294  for the same  period of the prior  fiscal
year.

         INCOME  TAXES.  The  Company  had no income tax  expense for the fiscal
years  ended  March 31,  2004 and 2003.  As of March 31,  2004,  the Company had
federal net operating loss carryforwards of approximately  $12,108,000 (SEE NOTE
5 TO THE CONSOLIDATED  FINANCIAL STATEMENTS FOR A FURTHER DISCUSSION OF THE LOSS
CARRYFORWARDS).  The  utilization  of net operating  loss  carryforwards  may be
significantly  limited as determined  pursuant to  applicable  provisions of the
Internal Revenue Code and U.S. Treasury regulations thereunder.


                                                                              11
<PAGE>


         NET INCOME (LOSS).  The Company had net income of $7,018,818,  or $0.95
per share,  for the fiscal year ended March 31, 2004,  as compared to a net loss
of $3,134,155, or $0.44 per share, for the same period of the prior fiscal year.
The income was a result of the one-time gain on the foreclosure by GE Access and
the related release of debt by GE Access.


LIQUIDITY AND CAPITAL RESOURCES

(SEE RECENT DEVELOPMENTS - FORECLOSURE ACTION)

         Historically  the  Company  has  been  unable  to  generate  sufficient
internal cash flows to support  operations,  and has been dependent upon outside
capital sources to supplement cash flow. New equity investments, lines of credit
and other  borrowings,  and credit  granted by its  suppliers  have  enabled the
Company to sustain  operations  over the past several years. In August 1998, the
Company failed to meet the "continued  listing  criteria"  established by NASDAQ
and the Company's  securities were delisted from the NASDA Small Cap Market. The
subsequent  lack  of  shareholder  liquidity  in the  Company's  securities  has
materially adversely affected the Company's ability to attract equity capital.

         The Company's ability to continue in operations during the last several
years has depended upon the continuing receipt of financial  accommodations from
a key lender, MRA Systems, Inc. d/b/a GE Access. These financial  accommodations
are discussed in the paragraphs  below.  In November 2003,  this lender notified
the Company  that it was in default on a $610,000  note that was due and payable
on September 26, 2003,  and on a $5,000,000  note due and payable in April 2004.
The Company's  obligations  to this lender were secured by all or  substantially
all of the Company's  assets. On February 24, 2004, the lender foreclosed on the
debt and took possession of all of the Company's assets on.

         At March 31,  2004,  the  Company  had a  working  capital  deficit  of
approximately  $3,869,000 versus a deficit of approximately  $4,401,000 at March
31,  2003.  The cash  balance at March 31, 2004 was  $1,581.  As a result of the
foreclosure  action and the working capital  deficit,  the Company is evaluating
the  alternatives  of  reorganizing  the  creditors on a voluntary  basis and/or
having to place  the  Company  and/or  its  subsidiary  BASIS,  Inc.,  under the
protection of the Federal Bankruptcy Code.

         As a  result  of the  foreclosure  and  other  factors,  the  Company's
independent  certified public accountants have expressed substantial doubt about
the Company's ability to continue as a going concern.

     Cash used by continuing operations for the fiscal year ended March 31, 2004
was  approximately  $417,000  compared to cash used by continuing  operations of
$672,000 in fiscal 2003. Cash provided by discontinued operations for the fiscal
year ended March 31,  2004 was  approximately  $96,000  compared to cash used by
operations  of  $634,000  in  fiscal  2003.  Total  net cash  used in  operating
activities for the fiscal year ended March 31, 2004 was  approximately  $321,000
compared to cash used by operating  activities of $1,306,000 in fiscal 2003. The
decrease  in cash used for  fiscal  2004 was  primarily  due to  improvement  of
business  operations  following the integration of Solid Systems in BASIS,  Inc.
which occurred in the prior fiscal year.  Cash used in investing  activities was
approximately   $3,000  for  the  fiscal   year  ended  March  31,  2004  versus
approximately  $116,000 for the fiscal year ended March 31,  2003.  The decrease
was primary due to the reduction in the  purchases of equipment  relating to the
Solid Systems asset  acquisition from the prior year. Cash provided by financing
activities for the fiscal year ended March 31, 2004 was approximately  $109,000,
compared to cash provided by financing  activities of  approximately  $1,558,000
for the fiscal year ended March 31, 2003. The decrease  resulted  primarily from
increased restriction in funding sources and by the foreclosure action in fiscal
2004.



                                                                              12
<PAGE>

         During fiscal year 2000,  the Company  authorized a class of securities
designated Series C 10% Cumulative  Convertible  Preferred Stock,  consisting of
100,000  shares with a Stated Value of $10.00 per share,  a dividend rate of 10%
and an Applicable  Conversion  Value of $2.25. On December 30, 1999, the Company
authorized the sale of 75,000 shares of the Series C Preferred, including 37,500
shares to a related  party and 37,500  shares to an entity in which  officers of
the Company had a majority interest,  for an aggregate of $750,000,  pursuant to
two subscription agreements.  Of the $750,000 in proceeds,  $220,780 represented
conversion of current debt from a related party,  and $529,220 was subscribed to
in cash.  Including the conversion of debt,  and $337,720 in cash payments,  the
Company  has  received  $558,500,  representing  55,850  shares of the  Series C
Preferred  stock.  Due to the ongoing  legal  proceedings  with  several of the
Series B Shareholders,  the Company  indefinitely  extended the due date for the
remaining  $191,500.  During fiscal year 2004, in conjunction  with the proposed
Pace  settlement,  the Company  has  canceled  the  subscription  for  remaining
$191,500.  (SEE RECENT  DEVELOPMENTS  - SETTLEMENT  AGREEMENT:  PACE  INVESTMENT
COMPANY).

         On March 26,  2003,  the Company  entered  into an  agreement  with MRA
Systems,  Inc.  d/b/a GE  Access,  in the  form of a line of  credit  for  total
advances not to exceed  $610,000 and with an interest rate of eight percent (8%)
per  annum,  which  shall be  payable  in  arrears on the 10th day of each month
commencing  April 10, 2003. All  outstanding  principal and accrued,  but unpaid
interest,  if not paid  earlier,  was due on September  26,  2003.  The note was
secured by all of the Company's assets. In November of 2003, the lender notified
the Company that it was in default on this note. In February of 2004, the lender
foreclosed on the note and took  possession of all of the assets of the Company.
The balance of this promissory note at the date of the foreclosure was $610,000.
(SEE RECENT DEVELOPMENTS - FORECLOSURE ACTION.

         During fiscal 2002, the Company entered into a financing agreement with
MRA Systems,  Inc. d/b/a GE Access.  This agreement provided the Company with an
immediate  partial  advance on all sales and requires the Company to immediately
assign the related  receivables  to the lender.  Upon  collection of the related
receivables,  the lender pays the remaining balance, if any, to the Company. The
receivables  are assigned with  recourse and advances  over 90 days  outstanding
bear  interest  at a rate of 10% per  annum.  In  February  of 2004,  the lender
foreclosed  on these  obligations  and  took  possession  of all of the  pledged
receivable  assets of the Company.  At the date of the foreclosure,  the Company
had  $1,120,798  of  receivables  pledged  under  this  agreement.  (SEE  RECENT
DEVELOPMENTS - FORECLOSURE ACTION).

         In  December  2000,  the  Company  signed a $5  million  note  with MRA
Systems,  Inc.  d/b/a GE  Access,  converting  approximately  $5  million of its
accounts  payable,  with 10%  interest and an initial due date of April 2, 2002.
The note was secured by a pledge to the note holder of substantially  all of the
Company's  assets.  In August 2002,  the Company  renegotiated  the terms of the
note. The modified note included  interest of 6% and was due in April 2004, with
the  option of the maker to extend the  maturity  date to April  2005.  The note
required the Company to make monthly payments of 40% of its available  operating
profits each month. The note further required that the Company direct 50% of any
future  sums  received  by,  committed  to, or  invested  in the  Company  as an
additional equity capital  infusion,  towards repayment of the unpaid balance of
the note. In August 2002, the Company further amended the note to include weekly
payments of $1,000. In November of 2003, the lender notified the Company that it
was in default on this note. In February of 2004,  the lender  foreclosed on the
note and took  possession  of all of the assets of the  Company.  The balance of
this  promissory  note  at the  date  of the  foreclosure  was  $6,336,686  with
approximately  $970,948 accrued interest (SEE RECENT  DEVELOPMENTS - FORECLOSURE
ACTION).



                                                                              13
<PAGE>


         At the date of the  foreclosure,  the Company was liable for a total of
approximately  $11,414,253 under these obligations and additional payables to GE
Access.  As part of the  foreclosure  agreement,  GE Access  agreed to waive its
deficiency  claim against the Company  subject to certain  terms and  conditions
placed on the Company.  The  foreclosure  agreement  provided  that based on the
Company's  compliance with the terms of the Court Order Dismissing the Company's
Chapter 11  Bankruptcy  Cases.  This order allowed GE Access to foreclose on the
assets of the  Company.  GE Access  has  agreed  to waive its  deficient  claims
against the Company,  based on the  Company's  compliance  with the terms of the
court order and foreclosure  agreement.  The terms included  compliance with the
court order and subsequent  foreclosure action as well as  representations  made
regarding the status and existence of any and all assets.  The release  provides
that if the  representations  as to assets are accurate and true, then GE Access
will waive its deficiency  claim. The release becomes final and unconditional on
October 1, 2004.  As of the date of this report,  the Company  believes it is in
compliance  with  these  terms  and  conditions.  (SEE  FOOTNOTES  TO  FINANCIAL
STATEMENTS).

         During  fiscal 2001,  the Company  signed a settlement  agreement  with
Sunburst  Acquisitions IV, Inc. The settlement  agreement  resulted in 1,959,972
shares  of  the  Company's  common  stock  being  returned  to the  Company  and
cancelled,  and $100,000 in settlement  expense cost reimbursement to be paid to
Sunburst,  of  which  $25,000  was  paid in cash  and the  Company  executed  a
short-term  promissory note for the remaining  $75,000,  bearing interest at 10%
per annum.  As of March 31,  2004,  the  principal  balance of this note remains
$75,000.

         During fiscal 2000,  the Company and one of its primary  vendors agreed
to convert  $1,212,000  of the  Company's  trade  payables  to the vendor into a
promissory  note.  The  promissory  note includes  interest at 11%. At March 31,
2004, the principal balance was approximately $723,000.

         In fiscal 1997, the Company borrowed  $100,000 with an interest rate of
8% and a scheduled  maturity date of June 30, 1997.  Subsequently,  the maturity
date was  extended  with a revised  interest  rate of 2% per month  plus  10,000
shares per month of  restricted  common stock.  During fiscal 2000,  the Company
issued  120,000  shares of common stock as interest  towards the note.  In March
2000, the Company  renegotiated  the terms of the note and eliminated the common
stock interest  component.  The replacement note is unsecured,  in the amount of
$164,500,  which includes interest and expenses  previously  accrued,  and bears
interest at 3% per month.  As of March 31, 2004,  the remaining  balance of this
note, including principal and interest, was $54,190.

         During  fiscal  1998  and  1997,  the  Company  borrowed   $365,000  in
short-term   notes   collateralized   by  its  computer   equipment  and  office
furnishings.  Subsequently,  $170,000 of these notes was  exchanged  for 288,000
shares of common stock and $65,000 in principal was repaid. The interest rate on
the notes is 2% per month.  As of March 31, 2004, the remaining  balance of this
note, including principal and interest, was $224,000.

         At March 31,  2004,  the Company owed  approximately  $375,936 in prior
sales tax. The Company has notified the  appropriate  authorities  regarding the
foreclosure action and the Company's inability to service this obligation.

         During fiscal 2004, the Company  purchased $3,170 in capital  equipment
and software.  These assets were part of the GE Access foreclosure  action. (SEE
RECENT DEVELOPMENTS - FORECLOSURE ACTION).

     At March 31, 2004, the Company had current debt  obligations,  or debt that
will become due within  twelve  months,  of  $3,879,000.  Of these  obligations,
approximately  $900,000 are specific  obligations  of Prologic and the remaining
$3,000,000 are related to the Company's operating subsidiary BASIS, Inc. and its
operating  division  Solid  Systems.  The Company will not be able to service or
repay any of this debt. As a result,  the Company will need to  renegotiate  the
terms of these obligations including  potentially;  conversion to equity and any
other means to  eliminate  the debt to allow the  Company to attract  additional
capital. The Company continues to review its strategic  alternatives,  including
raising  capital  through  debt or  equity  financing  in  conjunction  with the
conversion of the existing debt.


                                                                              14
<PAGE>



ACQUISITION OF ASSETS FROM SOLID SYSTEMS, INC.

         As  previously  reported  in its Report on Form  10-QSB for the quarter
ended June 30, 2002,  on June 15,  2002,  the Company  completed an  acquisition
effective  May 31,  2002  whereby  the  Company  acquired,  in a non-cash  asset
purchase,  four (4) offices and associated  personnel and equipment,  from Solid
Systems,  Inc., an  information  technology  service  provider.  The offices are
located in Dallas, Austin and Houston,  Texas, and New Orleans,  Louisiana.  The
Company,  from June 1, 2002 through  February 24,  2004,  continued  the systems
integration and maintenance business under the name of Solid Systems,  operating
as a division of the Company's BASIS, Inc. subsidiary. These assets were part of
the GE  Access  foreclosure  action.  (SEE  RECENT  DEVELOPMENTS  -  FORECLOSURE
ACTION).


CRITICAL ACCOUNTING ESTIMATES

The preparation of our financial statements in conformity with accounting
principles gernally accepted in the United States of America requires our
management to make certain 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. As such, in accordance with
the use of accounting principles generally accepted in the United States of
America, our actual realized results may differ from management's initial
estimates as reported. A summary of our significant accounting policies are
detailed in the notes to the financial statements which are an integral
component of tihs filing.

DEFERRED INCOME TAX ASSETS. Management evaluates the probability of the
utilization of the deferred income tax asset related to the net operating loss
carryforwards. The Company has estimated a $4,513,000 deferred income tax asset
related to the net operating loss carryforwards at March 31, 2004. Management
determined that because of the uncertainty of the Company to generate taxable
income and that the generation of taxable income in the shor term is uncertain,
it was appropriate to provide a valuation allowance for the total deferred
income tax asset.

LIABILITIES ASSOCIATED WITH THE WINDING UP OF OPERATIONS. As noted above, the
Company entered into a foreclosure action with its primary creditor. As a
result, substantially all of the Company's assets were transferred to the
creditor. HOwever, the Company has other creditors and commitments for which
it presently has no ability to repay. The Company is attempting to negotiate
repayment terms that may include conversion of debt to equity. The Company
accrued approximately $200,000 at March 31, 2004 for lease settlements.
Obligations may ultimately be settled at amounts different than the carrying
amounts at March 31, 2004. However, Management believes that such settlements
will not exceed amounts at March 31, 2004.


IMPAIRMENT OF LONG LIVED ASSETS.  In assessing the  recoverability of long lived
assets,  including goodwill, we must make assumptions regarding estimated future
cash flows and other  factors  to  determine  the fair  value of the  respective
assets. If these estimates or their related assumptions change in the future, we
may be required to record  impairment  charges for these  assets not  previously
recorded.  In the fiscal  year ended March 31,  2004,  in  conjunction  with the
foreclosure action, the Company wrote-off the remaining book value of all of the
assets taken  thereunder.  In the prior  fiscal year ended March 31,  2003,  the
Company determined its goodwill was impaired and wrote-off the entire balance of
$408,942.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In  December  2002,  the FASB  issued  SFAS No.  148,  "ACCOUNTING  FOR
STOCK-BASED  COMPENSATION - TRANSITION AND DISCLOSURE - AN AMENDMENT TO SFAS NO.
123." SFAS No. 148 provides  alternative  methods of transition  for a voluntary
change to the fair value based method on  accounting  for  stock-based  employee
compensation.  The Company  currently  does not intend to adopt SFAS No. 123 for
stock-based   employee   compensation   and  accordingly  does  not  expect  the
implementation  of SFAS  No.  148 to have a  material  effect  on the  Company's
consolidated financial position or results of operations.


                                                                              15
<PAGE>


         In June 2003 the FASB issued Statement No. 150, "ACCOUNTING FOR CERTAIN
FINANCIAL  INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY" SFAS
No. 150 requires certain instruments,  including mandatorily  redeemable shares,
to be  classified  as  liabilities,  not as  part  of  shareholders'  equity  or
redeemable  equity.  For instruments that are entered into or modified after May
31, 2003, SFAS No. 150 is effective immediately upon entering the transaction or
modifying the terms.  For other  instruments  covered by Statement 150 that were
entered  into  before June 1, 2003,  Statement  150 is  effective  for the first
interim  period  beginning  after June 15, 2003.  The Company is evaluating  the
provisions  of SFAS No.  150.  The  Company  anticipates  conversion  of all its
redeemable preferred stock into common stock by the end of the second quarter of
fiscal  2004 and,  accordingly,  does not expect SFAS No. 150 to have a material
effect  on  the  Company's   consolidated   financial  position  or  results  of
operations.

         In November 2002, the FASB issued  interpretation No. 45,  "GUARANTOR'S
ACCOUNTING  AND  DISCLOSURE  REQUIREMENTS  FOR  GUARANTEES.  INCLUDING  INDIRECT
GUARANTEES  OF  INDEBTEDNESS  OF OTHERS,"  which  disclosures  are effective for
financial  statements  for periods  ending after  December  15, 2002.  While the
Company has various  guarantees  included in contracts  in the normal  course of
business,  primarily in the form of  indemnities,  these  guarantees  would only
result in immaterial increases in future costs, but do not represent significant
commitments or contingent liabilities of the indebtedness of others.

          In January 2003, the FASB issued interpretation No. 46, "CONSOLIDATION
OF VARIABLE  INTEREST  ENTITIES"  (FIN 46) which requires the  consolidation  of
variable interest  entities,  as defined.  FIN 46 is applicable  immediately for
variable  interest entities created after January 1, 2003. For variable interest
entities  created  prior  to  January  1,  2003,  the  provisions  of FIN 46 are
applicable no later than July 1, 2003.  The Company does not  currently  believe
that any material entities will be consolidated as a result of FIN 46.


"SAFE HARBOR"  STATEMENT UNDER THE PRIVATE  SECURITIES  LITIGATION REFORM ACT OF
1995

         Management's discussion and analysis should be read in conjunction with
the audited Consolidated Financial Statements contained elsewhere in this annual
report on Form 10-KSB for the fiscal year ended March 31,  2004.  Except for the
historical information contained herein, the matters discussed in this report on
Form 10-KSB are  forward-looking  statements  that involve a number of risks and
uncertainties.  There are numerous  important  factors and risks,  including the
rapid change in market conditions,  the anticipation of growth of certain market
segments,  the  volatility  inherent in the capital and financial  markets,  the
Company's  ability to manage  acquisitions and attract and retain highly skilled
technical,  managerial  and sales and marketing  personnel,  and the other risks
detailed from time to time in the Company's  SEC reports,  including  reports on
Form 10-KSB and Form 10-QSB,  that could cause results to differ materially from
those anticipated by the forward-looking statements made herein.

         Therefore,  historical  results and percentage  relationships  will not
necessarily be indicative of the operating results of any future period. This is
especially  important given the recent  foreclosure action and the fact that the
Company has no operations  and no sources of revenue.  The Company does not have
any current plans or  agreements  to replace the assets or business  units taken
under  the  foreclosure  action.  Please  note  that the  financial  information
contained  herein is historical and should be not taken as any indication of any
future performance.



                                                                              16
<PAGE>



CONTROLS AND PROCEDURES

         Within the 90 days prior to the filing of this report,  the Company has
carried out an evaluation,  under the supervision and with the  participation of
our chief executive officer ("CEO") and chief financial officer ("CFO"),  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures as defined in Rule 15d-14(c) under the Securities and Exchange Act of
1934.  Based on this  evaluation,  our CEO and CFO concluded that our disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  in our  reports  that we file with or submit  to the  Securities  and
Exchange  Commission  ("SEC") is recorded,  processed,  summarized  and reported
within the time periods specified in the SEC's rules and forms.

         In addition, we reviewed our internal controls,  and there have been no
significant  changes in our  internal  controls or in other  factors  that could
significantly  affect  those  controls  subsequent  to  the  date  of  the  last
evaluation.



                                                                              17
<PAGE>


ITEM 7. FINANCIAL STATEMENTS

         The  financial  statements  attached  to this  Report on Form 10-KSB as
pages F-2 to F-22 are incorporated herein by reference.


ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURES

         On June 1,  2004,  the  Company  filed a Report on Form 8-K,  reporting
under Item 4, Changes in Registrant's  Certifying  Accountant,  the dismissal of
the Company's  independent  accountants,  BDO Siedman,  LLP and the selection of
Epstein,  Weber & Conover,  PLC as  independent  accountants  for the  Company's
fiscal  year  ended  March  31,  2004.  There  were no  disagreements  with the
accountants on any accounting and financial disclosures.



                                                                              18
<PAGE>


                                    PART III.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT

         Information,  as of March 31, 2004,  concerning the names,  ages, terms
and  positions  with the members of the  Company's  Board of  Directors  and its
executive officers and their respective  business experience is set forth below.
Each  director has served  continuously  with the Company  since his election as
indicated below.



<TABLE>
<CAPTION>
NAME                                AGE     POSITION                                    TERM OF OFFICE
-----------------------------      -----    -----------------------------------         ---------------
<S>                                <C>      <C>                                       <C>
James M. Heim (1) (2)               52      Chief Executive Officer and Director        2004 - Present
John W. Schauweker(1) (2)           43      Director                                    2004 - Present
James S. Nichols (2)                46      Director                                    2004 - Present
John W. Olynick (3) (4)             56      Director                                    2001 - Present
Edwin G. Hubert  (3) (4)            62      Director                                    2001 - Present
</TABLE>

(1)      Member of Audit Committee.

(2)      Appointed  to serve  as  Directors  on  March  19,  2004.  (SEE  RECENT
         DEVELOPMENTS -- CHANGE IN CONTROL OF REGISTRANTS).

(3)      On February 24, 2004,  the employment of Mr. Olynick and Mr. Hubert was
         terminated.  During the fiscal  year,  Mr.  Olynick had served as Chief
         Executive Officer and Mr. Hubert as Chief Financial Officer.

(4)      On April 7, 2004, Mr. Olynick and Mr. Hubert resigned as Directors.


         JAMES M. HEIM, CHIEF EXECUTIVE OFFICER AND DIRECTOR. Mr. Heim, 52, is a
co-founder  of  Prologic  and had  served as a  Director  from 1984 to 2003.  In
addition,  Mr. Heim served as Prologic's  President from 1984 to 1999 and as its
Chief  Financial  Officer  from  1984 to  1995.  Mr.  Heim  has over 20 years of
business management experience and was responsible for capital raising,  mergers
and acquisitions,  and other corporate  activities.  Mr. Heim holds both a Juris
Doctor  degree and a B.S.  in Business  Administration  from the  University  of
Arizona.  In March of this year,  Mr.  Heim was  appointed  to the board and was
elected to serve as the Company's  President and Chief Executive  Officer.  (SEE
RECENT DEVELOPMENTS -- CHANGE IN CONTROL OF REGISTRANTS).

         JOHN W. SCHAUWEKER,  DIRECTOR. Mr. Schauweker,  43, who has served as a
director since March of 2004 has worked in public accounting and in a variety of
executive  roles within the  information  technology and financial field for the
past 20 years.  Mr.  Schauweker  brings a depth of turn  around  experience  and
merger and  acquisition  experience  to the Board.  Mr.  Schauweker is a CPA and
currently is the General  Partner for the venture fund Argus  Partners,  LP. Mr.
Schauweker  received a B.S. in Finance from the  University  of Houston at Clear
Lake with  Honors  and is a member  of the Texas  Society  of  Certified  Public
Accountants.

         JAMES S.  NICHOLS,  DIRECTOR.  Mr.  Nichols,  46,  who has  served as a
Director since 2004 is a Senior Systems  Engineering  Executive with over twenty
two years of experience in multiple areas of computer engineering and management
including sales, support and service, business development,  market area design,
financial  planning,  re-engineering  and team leadership with such companies as
Texas  Instruments,  Vector  Companies  USA and Solid  Systems.  Mr.  Nichols is
currently  the  Director of  Operations  for  Prospect  Information  Network,  a
software   development  and  data  processing   company  centric  to  non-profit
organizations.  Mr. Nichols received his B.S. in Mechanical Engineering from the
University of Wyoming.



                                       19
<PAGE>


         JOHN W. OLYNICK,  DIRECTOR.  Mr. Olynick,  55, has served as a Director
since 2001.  Mr.  Olynick,  who joined  Prologic in  September  1999,  served as
Prologic's  President from January 2002 to February of 2004 and Chief  Executive
Officer  from April of 2003 to  February  of 2004.  Mr.  Olynick has had over 25
years of national sales,  business development and management  experience in the
technology  industry.  Mr. Olynick  attended the New York  University  School of
Engineering and Harvard Business School  Professional  Development  Program.  On
April 7, 2004, Mr. Olynick resigned as a Director.

         EDWIN G. HUBERT,  DIRECTOR.  Mr.  Hubert,  62, has served as a Director
since 2001.  Mr. Hubert,  who joined the company in 2002,  had Chief  Operations
Officer  and  Secretary  from  May of 2002 to  February  of  2004  and as  Chief
Financial  Officer from April of 2003 to February of 2004.  Mr. Hubert is both a
licensed CPA and an attorney. His business experience includes senior management
positions with computer companies, consulting companies and manufacturing firms.
Mr. Hubert has a BA and MBA from the University of Michigan and his J.D.  degree
from the  University  of Arizona.  On April 7, 2004,  Mr.  Hubert  resigned as a
Director.



ITEM 10. EXECUTIVE COMPENSATION

         Information  below sets forth certain  information  regarding  business
experience  and  compensation  paid or awarded by the Company  during the fiscal
year ended  March 31,  2004 to the  following  Executive  Officers:  Mr. John W.
Olynick,  the Company's Chief Executive  Officer,  and Mr. Edwin G. Hubert,  the
Company's  Chief  Operations  Officer.  In March of 2004,  Mr. James M. Heim was
elected as President. No other officer made more than $100,000 in Fiscal 2004.

SUMMARY COMPENSATION TABLE


<TABLE>
<CAPTION>
                                            ANNUAL COMPENSATION            LONG-TERM AND OTHER COMPENSATION
NAME AND OTHER PRINCIPAL                 --------------------------     --------------------------------------
POSITION                         YEAR       SALARY          BONUS       STOCK OPTIONS/SARS(#)       ALL OTHER
--------------------------      -----    -----------      ---------     --------------------      ------------
<S>                             <C>      <C>               <C>                  <C>                <C>
John W. Olynick (1)             2004     $ 176,596(5)      $  7,772             0                  $ 67,500(2)
Chief Executive Officer         2003     $ 170,588         $      0             0                  $  3,500(3)
                                2002     $ 187,500         $ 27,189             0                  $  8,400(4)


Edwin G. Hubert (1)             2004     $ 116,189         $      0             0                  $ 52,500(5)
Chief Financial Officer         2003     $  30,000         $      0             0                  $ 72,500(6)


James M. Heim(7),               2004     $  20,651         $      0             0                  $ 37,500(8)
President                       2003     $ 122,375         $      0       250,000 (9)              $  2,700(10)
                                2002     $ 112,500         $      0             0                  $  2,700(10)
</TABLE>


(1)  On April 28, 2003, Mr. John W. Olynick was elected Chief Executive  Officer
     and Mr.  Edwin  G.  Hubert  was  elected  Chief  Financial  Officer  of the
     Corporation.  On February 24, 2004,  the  employment of Mr. Olynick and Mr.
     Hubert was  terminated.  On March 19, 2004, the Board of Directors  elected
     officers  to replace  Mr.  Olynick and Mr.  Hubert.  On April 7, 2004,  Mr.
     Olynick and Mr. Hubert resigned as Directors.


                                                                              20
<PAGE>

(2)      During the fiscal year ended March 31,  2004,  Mr.  Olynick  received a
         $67,500  payment  as  approved  by GE  Access in  conjunction  with the
         foreclosure.

(3)      During the fiscal year ended March 31, 2003,  Mr.  Olynick  received an
         $3,500 car allowance.

(4)      During the fiscal year ended March 31, 2002,  Mr.  Olynick  received an
         $8,400 car allowance.

(5)      During the fiscal  year ended March 31,  2004,  Mr.  Hubert  received a
         $52,500  payment  as  approved  by GE  Access in  conjunction  with the
         foreclosure.

(6)      During the fiscal  year  ended  March 31,  2003,  Mr.  Hubert  received
         $72,500 in payments for services.

(7)      On April 22,  2003,  Mr.  James M. Heim  resigned his Officer and Board
         positions with Prologic  Management  Systems,  Inc. and its BASIS, Inc.
         subsidiary.  In March of 2004,  Mr. Heim was  appointed to the Board of
         Directors and was elected as President.

(8)      During the fiscal  year  ended  March 31,  2004,  Mr.  Heim  received a
         $37,500  severance  payment  as  approved  by the  Company's  Board  of
         Directors.

(9)      During the fiscal year ended March 31, 2003,  a total of 250,000  stock
         options were granted to Mr. Heim pursuant to his  Employment  Agreement
         with the Company as its Chief Executive Officer.

(10)     Premiums paid for Key Man Insurance on Mr. Heim.



OPTION EXERCISES AND HOLDINGS

The following table sets forth  information  concerning each exercise of a stock
option  during  the  fiscal  year  ended  March  31,  2004 by each of the  Named
Executive Officers and the number and value of unexercised  options at March 31,
2004.


<TABLE>
<CAPTION>
                                                                                        VALUE OF UNEXERCISED
                  NUMBER OF                          NUMBER OF SHARES UNDERLYING        IN-THE-MONEY OPTIONS
                  SHARES                             UNEXERCISED OPTIONS AT 03/31/03    AT 03/31/04
NAME              ON EXERCISE       VALUE REALIZED   EXERCISABLE/UNEXERCISABLE          EXERCISABLE/UNEXERCISABLE
----------------  -----------       --------------   --------------------------------   -------------------------
<S>               <C>               <C>              <C>                                <C>
James M. Heim     0                 $0               250,000 / 0                        $0 / $0

John W. Olynick   0                 $0               250,000 / 0                        $0 / $0

Edwin G. Hubert   0                 $0               12.500 / 0                         $0 / $0
</TABLE>


No Director or executive  officer  exercised any options  during the fiscal year
ended March 31, 2004.



                                                                              21
<PAGE>


OPTION EXERCISES

During the fiscal year, none of the executive officers identified in the Summary
Compensation Table exercised any stock options,  and, as of March 31, 2004, none
held any in-the-money options.


BOARD COMPENSATION

The Company  compensates its outside  directors for attendance at board meetings
at the rate of $500 per meeting and $150 per hour for  committee  participation.
Additionally,  directors  receive 10,000  options to purchase  common stock at a
price not less than 100% of the  current  market  price per share at the time of
grant,  exercisable  upon  completion  of their  elected  term.  The options are
exercisable at the price determined by the board at the time of grant and expire
5 years  from the date of  issuance.  Subsequent  to March 31,  2003,  the Board
authorized  the  issuance of stock  options to its outside  Board  Directors  as
compensation for service from 2001 to 2003.  Directors who are also employees of
the Company receive no additional  compensation  for serving as a Director.  The
Company  reimburses  its  Directors  for travel and  out-of-pocket  expenses  in
connection with their attendance at meetings of the Board of Directors.


                                                                              22
<PAGE>


ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

PRINCIPAL SHAREHOLDERS AND SHAREHOLDERS OF MANAGEMENT

The following table sets forth information, as of March 31, 2004, concerning the
Common  Stock  beneficially  owned by (i) each  director of the Company (ii) the
Company's Chief Executive Officer and its other executive  officers,  (iii) each
person known to the Company to own beneficially  more than 5% of the outstanding
Common Stock, and (iv) all of the Company's  directors and executive officers as
a group.

Except as  otherwise  noted,  the  named  individual  beneficial  owner has sole
investment and voting power.


<TABLE>
<CAPTION>
                                                                                   SHARES
                                                          TITLE OF CLASS         BENEFICIALLY          PERCENT
NAME OF BENEFICIAL OWNER                                     OF STOCK             OWNED (1)            OF CLASS
----------------------------------------                  ----------------      --------------         ---------
<S>                                                       <C>                   <C>                    <C>
James M. Heim & Marlene Heim (2)                              Common              1,791,725              24.63%
John W. Olynick (3)                                           Common               280,000                3.85%
Edwin G. Hubert (4)                                           Common                27,500                *
Martin A. Diamond (5)                                         Common               184,330                2.23%
John R. Jordon and Billie S. Jordan (6)                       Common               441,300                6.07%
HFG Properties Ltd. (7)                                       Common               909,349               12.50%
All Directors and Executive
      Officers as a group (4 persons) (8)                     Common              2,283,555              31.39%
</TABLE>

*      Less than 1%

(1)      The inclusion  herein of any shares of common stock does not constitute
         an admission of beneficial  ownership of such shares,  but are included
         in  accordance  with rules of the  Securities  and Exchange  Commission
         ("SEC").  The  shareholdings  include,  pursuant  to  rules of the SEC,
         shares of  common  stock  subject  to  options  or  warrants  which are
         presently  exercisable or which may become  exercisable  within 60 days
         following March 31, 2004 ("exercisable options").

(2)      Comprised of a total of 1,541,725  shares and 250,000 shares subject to
         exercisable  options.   This  includes  909,349  shares  owned  by  HFG
         Properties Ltd., an Arizona limited  partnership of which Mr. Heim is a
         general  partner,  and 48,936  shares  owned by Sonoita  Resources,  an
         Arizona limited liability company of which Mr. Heim is a member.  James
         M. Heim and Marlene Heim directly own an aggregate of 583,440 shares of
         common stock. Mr. Heim is an Executive Officer and Director.

(3)      Comprised of 30,000 shares and 250,000  shares  subject to  exercisable
         options. As of March 31, 2004, Mr. Olynick was a Director.

(4)      Comprised of 15,000  shares and 12,500  shares  subject to  exercisable
         options. As of March 31, 2004, Mr. Hubert was a Director.

(5)      Comprised of 184,330 shares. Mr. Diamond is an Executive Officer.

(6)      Comprised of 441,300 shares.

(7)      HFG  Properties  Ltd. is an Arizona  limited  partnership  of which Mr.
         James M. Heim is a general partner.

(8)      Comprised of 1,771,055 shares and 512,500 shares subject to exercisable
         options.



                                                                              23
<PAGE>

EQUITY COMPENSATION PLAN INFORMATION
<TABLE>
<CAPTION>

                                                                                      Number of securities remaining
                              Number of  securities to      Weighted      average     available for future issuance
                              be issued upon  exercise      exercise   price   of     under equity compensation
                              of outstanding  options,      outstanding  options,     plans (excluding securities
                              warrants and rights           warrants and rights       reflected in column (a))

Plan Category                          (a)                           (b)                            (c)
-------------------------     -------------------------     --------------------      -------------------------------
<S>                            <C>                          <C>                       <C>
Equity compensation
plans approved by                        1,015,100                         $0.52                            2,484,900
security holders

Equity compensation
plans not approved by
security holders                           826,666 (1)                     $0.73                                   --
                              -------------------------     --------------------      -------------------------------

                    TOTAL                                                                                   2,484,900
                                         1,841,766
</TABLE>

(1)  includes  warrants  issued as  consideration  for  consulting  and advisory
     services,  as well as warrants issued as  consideration  in connection with
     the  renegotiation of a note. The range of exercise prices for the warrants
     is $0.75 to $2.00 per  share of common  stock,  and bear  expiration  dates
     ranging from May 2003 through March 2007.



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On December 30, 1999, the Company  authorized the sale of 75,000 shares
of the Series C Preferred  Stock,  including  37,500  shares to HFG  Properties,
Ltd., an Arizona limited partnership of which Mr. Heim is a general partner, and
37,500 shares to Sonoita  Resources,  an Arizona  limited  liability  company of
which Mr. Heim and Mr. Metz are members, for an aggregate of $750,000,  pursuant
to two  subscription  agreements.  In conjunction  with a dispute  involving the
Series B Preferred  Stock and the Pace  Investment  Co.,  the Board of Directors
indefinitely suspended one of the subscription  agreements,  which had an amount
outstanding  of  $191,500.  During the fiscal year ending  March 31,  2004,  the
outstanding  subscription agreement in the amount of $191,500 was canceled based
on the Pace settlement.  (SEE RECENT DEVELOPMENTS -- SETTLEMENT AGREEMENT:  PACE
INVESTMENT  CO.  INC.).Total  amount of shares of the Series C  Preferred  Stock
issued after the cancellation of the remaining subscription agreement was 55,850
shares for an aggregate consideration of $558,500.

         In  connection  with the  resignation  of Mr. James M. Heim in April of
2003, and at Mr. Heim's request, as part of the Company's  separation  agreement
with Mr. Heim the Company agreed to transfer to Mr. Heim ownership rights to all
of the Company's proprietary software products, which have comprised 1.2% in the
fiscal year ended March 31, 2003,  and less than 1.6% of the Company's  revenues
in each of the previous 3 fiscal years.  Under the terms of the  agreement,  the
Company  provided Mr. Heim with  $38,646 in funds the Company had received  from
clients for unfulfilled support contracts in return for Mr. Heim's assumption of
these obligations.  The total amount of support  obligations  outstanding at the
time of the transfer was approximately $41,646.




                                                                              24
<PAGE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section  16(a) of the  Securities  Exchange  Act of 1934,  requires the
Company's officers and directors, and persons who beneficially own more than ten
percent  of a  registered  class of the  Company's  equity  securities,  to file
reports of ownership and change in ownership  with the  Securities  and Exchange
Commission.  Such  reports  are  filed on Form 3,  Form 4, and Form 5 under  the
Exchange Act. Officers,  directors and greater than ten-percent shareholders are
required by Exchange Act  regulations  to furnish the Company with copies of all
Section 16(a) forms they file.

         Based solely on its review of the copies of such forms  received by it,
or written representations from certain reporting persons that no Forms 3, 4, or
5 were  required for those  persons,  the Company  believes  that all  officers,
directors,  and greater than  ten-percent  beneficial  owners  complied with the
applicable Section 16(a) filing requirements.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

A. Documents filed as part of this report:

         1. Financial  Statements.  The following financial  statements filed as
part of this report are listed on pages F-2 to F-22 and herein by reference:

<TABLE>
<CAPTION>
         FINANCIAL STATEMENTS                                                          PAGE
         --------------------                                                          -----

<S>                                                                                    <C>
         Report of Independent Public Accountants (March 31, 2004)                      F-3
         Report of Independent Public Accountants (March 31, 2003)                      F-4

         Consolidated Financial Statements
                  Consolidated Balance Sheets                                           F-5
                  Consolidated Statements of Operations                                 F-6
                  Consolidated Statements of Changes in Stockholders' Equity (Deficit)  F-7
                  Consolidated Statements of Cash Flows                                 F-8

         Notes to Consolidated Financial Statements                                     F-9


         2. Exhibit:

         EXHIBIT NUMBER             DOCUMENT                                            PAGE
         --------------             --------                                            ----
         3.1                        Articles of Incorporation by the Company*
         3.1.1                      Specimen of Series A 8% Cumulative Convertible
                                    Preferred Stock******
         3.1.2                      Specimen of Series B 10% Cumulative Convertible
                                    Preferred Stock*******
         3.1.3                      Specimen of Series C 10% Cumulative Convertible
                                    Preferred Stock*****
         3.2                        Bylaws of the Company*
</TABLE>

                                                                              25
<PAGE>

         2. Exhibit:
<TABLE>
<CAPTION>

         EXHIBIT NUMBER             DOCUMENT                                            PAGE
         --------------             --------                                            ----
<S>                                 <C>                                                 <C>
         4.2                        Specimen of Common Stock Certificate*
         9.3                        Materials Relating to the Purchase by Registrant
                                    of Certain Assets from
                                    Solid Systems, Inc.**********
         10.15                      1994 Stock Option Plan, Form of Incentive Agreement*
         10.16                      Employment Agreement of James M. Heim*********
         10.17                      Employment Agreement of John W. Olynick********
         10.20                      Form of Stock Purchase Agreement, Promissory
                                    Note and Escrow Agreement for July 31, 1994
                                    Issuance of Common Stock*
         21                         Subsidiaries***
         99.1                       Certification Pursuant to 18 U.S.C.
                                    SECTION 1350 of James M. Heim,
                                    Chief Executive Officer
</TABLE>

*              Incorporated by reference to the corresponding  exhibit number in
               the  Company's  Registration  Statement on Form SB-2  (Commission
               file no. 33-89384-LA).

**             Incorporated by reference to the corresponding  exhibit number in
               the Company's Form 8-K filed on August 23, 1996.

***            Incorporated by reference to the corresponding  exhibit number in
               the Company's Form 10-KSB filed on July 14, 1999.

****           Incorporated by reference to the corresponding  exhibit number in
               the Company's Form 8-K filed on August 19, 1999.

*****          Incorporated  by reference to exhibit number 3.1 in the Company's
               Form 10-QSB filed on February 22, 2000.


******         Incorporated  by  reference  to  exhibit  number  3.1(a)  in  the
               Company's Form 10-KSB filed on July 14, 2000.

*******        Incorporated  by  reference  to  exhibit  number  3.1(b)  in  the
               Company's Form 10-KSB filed on July 14, 2000.

********       Incorporated by reference to the corresponding  exhibit number on
               the Company's Form 10-QSB filed on February 11, 2003.

*********      Incorporated by reference to the corresponding  exhibit number on
               the Company's Form 10-QSB filed on February 11, 2003.

**********     Incorporated by reference to the  corresponding exhibit number on
               the Company's Form 10-QSB filed on August 19, 2002.

B. Report on Form 8-K.

         On February 3, 2004, the Company filed a Report on Form 8-K,  reporting
under Item 1. Bankruptcy or Receivership, the Company and its' subsidiary BASIS,
Inc. each filed a Voluntary  Petition under Chapter 11 of the Federal Bankruptcy
Code. As previously reported it its Report on Form 10-QSB, on February 13, 2004,
in the United States Bankruptcy Court In And For The District of Arizona, (Cases
No. 4-04-00393 -TUC-EWH and 04-00394-TUC-EWH)  debtors Basis, Inc. ("Basis") and
Prologic Management Systems,  Inc. ("Prologic")  (collectively,  the "Debtors"),
and secured  creditor MRA  Systems,  Inc.  d/b/a GE Access ("GE Access)  jointly
moved and agreed to the dismissal of the jointly  administered  Chapter 11 cases
in a Joint Motion To: (1)  Terminate  the  automatic  stay to allow GE Access to
Immediately  Notice Its Foreclosure  Sale Pursuant to Applicable  Non-Bankruptcy
Law; and (2) Dismiss Chapter 11 Cases. The Judge approved the motion  dismissing
the Chapter 11 case(s) thus allowing GE Access to foreclose on all of the assets
of the Debtors.



                                                                              26
<PAGE>


         On April 1, 2004,  the  Company  filed a Report on Form 8-K,  reporting
under Item 1. Changes in Control of Registrant,  the March  resignation of three
board members and the  appointment  of three new board  members.  The board then
elected James M. Heim as President  and Treasurer and elected  Martin A. Diamond
as Vice President and Secretary of the Company.

         On June 1,  2004,  the  Company  filed a Report on Form 8-K,  reporting
under Item 4. Changes in Registrant's  Certifying  Accountant,  the dismissal of
the Company's  independent  accountants,  BDO Siedman,  LLP and the selection of
Epstein,  Weber & Conover,  PLC as  independent  accountants  for the  Company's
fiscal year ending March 31, 2004.


                                                                              27
<PAGE>

               In  accordance  with Section 13 or 15(d) of the Exchange Act, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                   PROLOGIC MANAGEMENT SYSTEMS, INC.

DATED: JULY 14, 2004               By: /s/ JAMES M. HEIM
                                       -----------------------------------------
                                           JAMES M. HEIM
                                           President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS,  that each person whose signature  appears below
constitutes and appoint JAMES M. HEIM, as his true and lawful  attorneys-in-fact
and agents, with full power of substitution and re-substitution,  for him and in
his  name,  place  and  stead,  in any and all  capacities,  to sign any and all
amendments  to this annual  report on Form 10-KSB and any  documents  related to
this report and filed  pursuant to the  Securities and Exchange Act of 1934, and
to file the same, with all exhibits  thereto,  and other documents in connection
therewith,  with the  Securities  and Exchange  Commission,  granting  unto said
attorneys-in-fact  and agents,  full power and  authority to do and perform each
and  every  act and  thing  requisite  and  necessary  to be done in  connection
therewith  as  fully  to all  intents  and  purposes  as he might or could do in
person,  hereby  ratifying and  confirming all that said  attorneys-in-fact  and
agents,  or their  substitute or substitutes may lawfully do or cause to be done
by virtue hereof.

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


<TABLE>
<CAPTION>
SIGNATURE                           CAPACITY                                    DATE
------------------------------      -------------------------------             ---------------------
<S>                                 <C>                                         <C>
/s/  JAMES M. HEIM                  James M. Heim                               July 14, 2004
                                    Chief Executive Officer
                                    President and Director

/s/ JOHN W. SCHAUWEKER              John W. Schauweker,                         July 14, 2004
                                    Director

/s/  JAMES S. NICHOLS               James S. Nichols,                           July 14, 2004
                                    Director
</TABLE>


                                                                              28
<PAGE>





                                  CERTIFICATION

I, James M. Heim, certify that:

     1.   I have  reviewed  this  annual  report  on  Form  10-KSB  of  Prologic
          Management Systems, Inc.;

     2.   Based on my knowledge,  this annual report does not contain any untrue
          statement of material fact or omit to state a material fact  necessary
          to make the statements made, in light of the circumstances under which
          such  statements were made, not misleading with respect to the periods
          covered by this annual report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this  annual  report,  fairly  present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this annual report;

     4.   The registrant's  certifying officers are responsible for establishing
          and  maintaining  disclosure  controls and  procedures  (as defined in
          Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period  in which the
               annual report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this annual report (the "Evaluation Date"); and

          c)   presented  in  this  annual  report  our  conclusions  about  the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant's certifying officers have disclosed, based on our most
          recent  evaluation,   to  the  registrant's  auditors  and  the  audit
          committee of registrant's board of directors:

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

         6.       The  registrant's  certifying  officers have indicated in this
                  annual report whether or not there were significant changes in
                  internal controls or in other factors that could significantly
                  affect  internal  controls  subsequent to the date of our most
                  recent  evaluation,  including  any  corrective  actions  with
                  regard to significant deficiencies and material weaknesses.


         Date: July 14, 2004

                                         /s/ JAMES M. HEIM
                                         -------------------------------------
                                         James M. Heim.
                                         President and Chief Executive Officer



                                       29