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

                                   FORM 10-QSB


[X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
       OF 1934 For the quarterly period ended September 30, 2004


Commission file number: 1-13704


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


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

               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

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________.



Number  of  shares  of  common  stock  outstanding  on  September  30,  2004 was
7,275,048.


Transitional Small Business Disclosure Format:
                            Yes _____; No ___X___


<PAGE>



                        Prologic Management Systems, Inc.

                                      Index


                                                                          PAGE

Part I.                    FINANCIAL INFORMATION                              3

Item 1.   Condensed Consolidated Financial Statements

          Condensed Consolidated Balance Sheets at September 30, 2004
          (unaudited) and  March 31, 2004                                     3

          Condensed Consolidated Statements of Operations for the
          Three and Six Months Ended September 30, 2004 (unaudited)
          and September 30, 2003 (unaudited)                                  4

          Condensed Consolidated Statements of Cash Flows for
          the Six Months Ended September 30, 2004 (unaudited)
          and September 30, 2003 (unaudited)                                  5

          Notes to Condensed Consolidated Financial Statements                6

Item 2.   Management's Discussion and Analysis of Results of
          Operations and Financial Condition                                  8

Item 3.   Controls and Procedures                                            12

Part II.  OTHER INFORMATION                                                  12

Item 1.   Legal Proceedings                                                  12

Item 2.   Changes in Securities                                              13

Item 3.   Defaults upon Senior Securities                                    13

Item 4.   Submission of Matters to a Vote by Security Holders                13

Item 5.   Other Information                                                  13

Item 6.   Exhibits and Reports on Form 8-K                                   13

SIGNATURES                                                                   13


                                                                               2
<PAGE>



PART I.  FINANCIAL INFORMATION

ITEM  1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

               PROLOGIC MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                   SEPTEMBER 30,    MARCH 31,
                                                                                        2004          2004
                                                                                    -----------    -----------
ASSETS                                                                              (unaudited)

Current assets:
<S>                                                                                 <C>            <C>
   Cash                                                                             $       943    $     1,581
   Prepaid expenses                                                                                      8,782
                                                                                    -----------    -----------
TOTAL ASSETS                                                                        $       943    $    10,363
                                                                                    ===========    ===========
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
 Current liabilities:
   Accounts payable                                                                 $ 1,668,625    $ 1,632,612
   Notes payable                                                                      1,131,756      1,131,756
   Sales tax payable                                                                    375,936        375,936
   Accrued expenses                                                                     609,985        559,987
   Accrued dividends                                                                    215,376        178,700
                                                                                    -----------    -----------
Total liabilities                                                                     4,001,678      3,878,991
                                                                                    -----------    -----------
Preferred stock:
   Series A cumulative convertible preferred stock, no par value, 16,667 shares
     authorized, 16,667 shares issued and outstanding                                   100,000        100,000
   Series B cumulative convertible preferred stock, no par value, 100,000
     shares authorized, 9,500 shares issued and outstanding                              68,588         68,588
   Series C cumulative convertible preferred stock, no par, 100,000 shares
     authorized, 55,850 shares issued and outstanding                                   558,500        558,500
                                                                                    -----------    -----------
                                                                                        727,088        727,088
                                                                                    -----------    -----------
Stockholders' deficit:
   Common stock, no par value,  50,000,000 shares  authorized,  7,275,048 shares
     issued and outstanding at September 30, 2004 and March 31, 2004
                                                                                     10,205,073     10,205,073
   Warrants                                                                             970,766        970,766
   Accumulated deficit                                                              (15,903,662)   (15,771,555)
                                                                                    -----------    -----------
Total stockholders' deficit                                                          (4,727,823)    (4,595,716)
                                                                                    ===========    ===========
TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
                                                                                    $       943    $    10,363
                                                                                    ===========    ===========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                                                               3
<PAGE>




               PROLOGIC MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED             SIX MONTHS ENDED
                                                       SEPTEMBER 30,                 SEPTEMBER 30,
                                                 2004            2003           2004            2003
                                             ------------    ------------    -----------     -----------
                                             (unaudited)     (unaudited)     (unaudited)     (unaudited)
REVENUE:

OPERATING EXPENSES:
<S>                                            <C>               <C>                <C>             <C>
    General and administrative                    34,581          31,352          95,431          69,905
Total operating expenses                          34,581          31,352          95,431          69,905

                   OPERATING LOSS                (34,581)        (31,352)        (95,431)        (69,905)
                                             -----------     -----------     -----------     -----------
OTHER INCOME (EXPENSE):
    Interest expense                                --          (112,162)           --          (256,644)
    Other income (expense)                          --              --              --                25
                                             -----------     -----------     -----------     -----------
Total other income (expense)                        --          (112,162)           --          (256,619)

   LOSS BEFORE INCOME TAXES AND
     DISCONTINUED OPERATIONS                     (34,581)       (143,514)        (95,431)       (326,524)

    INCOME TAX (BENEFIT) PROVISION                  --              --              --              --

    LOSS FROM CONTINUING OPERATIONS              (34,581)       (143,514)        (95,431)       (326,524)

    LOSS FROM DISCONTINUED OPERATIONS               --          (506,181)           --          (350,021)
                                             -----------     -----------     -----------     -----------
           NET LOSS                              (34,581)       (649,695)        (95,431)       (676,545)
                                             ============    ===========     ===========     ===========

Preferred stock dividend                         (18,338)        (18,338)        (36,676)        (36,676)

NET LOSS AVAILABLE TO COMMON
    STOCKHOLDERS                             $   (52,919)    $  (668,033)    $  (132,107)    $  (713,221)
                                             ============    ===========     ===========     ===========
Weighted average number of common shares:
    Basic and diluted                          7,275,048       7,275,048       7,275,048       7,275,048
                                             ============    ===========     ===========     ===========
Loss per common share:
    Basic and diluted                        $     (0.01)    $     (0.09)    $     (0.02)    $     (0.10)
                                             ============    ===========     ===========     ===========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.

                                                                               4


<PAGE>


               PROLOGIC MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH                                       SIX MONTHS ENDED SEPTEMBER 30,
                                                                        2004         2003
                                                                     -----------  -----------
                                                                     (unaudited)  (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                  <C>           <C>
   Net loss                                                          $ (95,431)    $(676,548)

   Adjustments  to  reconcile  net  loss  to  net  cash  provided
      by  operating
      Activities:
        Issuance of warrants for services                                 --           9,400
        Change in assets and liabilities:
          Prepaid expenses                                               8,782          --
          Accounts payable                                              86,011         8,726
                                                                     ---------     ---------
   Net cash provided by (used in) continuing operations                   (638)     (658,422)
                                                                     ---------     ---------
   Net cash provided by (used in) discontinued operations                 --         227,092
                                                                     ---------     ---------
Net cash provided (used in) by operating activities                       (638)     (431,330)
                                                                     ---------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of equipment                                                  --          (3,170)
                                                                     ---------     ---------
Net cash used in investing activities                                     --          (3,170)
                                                                     ---------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net change in line of credit
                                                                          --         405,000
   Proceeds from debt                                                     --          91,120
                                                                     ---------     ---------
Net cash provided by (used in) financing activities                       --         496,120
                                                                     ---------     ---------
Net increase (decrease) in cash                                           (638)       61,620

Cash, beginning of period                                                1,581       216,904
                                                                     ---------     ---------
Cash, end of period                                                  $     943     $ 278,524
                                                                     =========     =========
SUPPLEMENTAL STATEMENT OF CASH FLOW INFORMATION:
   Cash paid during the quarter for interest                         $    --       $  45,044
   Cash paid during the quarter for taxes                                 --            --

NON-CASH FINANCING AND INVESTING ACTIVITIES:
   Warrants issued for services performed                            $    --       $   9,400

</TABLE>



     See accompanying notes to condensed consolidated financial statements.

                                                                               5

<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.       Basis of Presentation - Interim Periods

         The accompanying  unaudited condensed consolidated financial statements
         include  the  accounts  of  Prologic  Management  Systems,   Inc.  (the
         "Company") and its wholly-owned subsidiary,  BASIS, Inc. ("BASIS"). All
         significant   inter-company   balances  and   transactions   have  been
         eliminated in consolidation.

         The accompanying  unaudited condensed consolidated financial statements
         have been prepared by the Company in accordance with generally accepted
         accounting  principles,  pursuant to the rules and  regulations  of the
         Securities and Exchange Commission.  In the opinion of management,  the
         accompanying  condensed  consolidated  financial statements include all
         adjustments  (of a normal  recurring  nature) which are necessary for a
         fair  presentation  of the results for the interim  periods  presented.
         Certain  information  and  footnote  disclosures  normally  included in
         financial  statements  have been condensed or omitted  pursuant to such
         rules  and   regulations.   Although  the  Company  believes  that  the
         disclosures  are  adequate  to  make  the  information   presented  not
         misleading,  these financial  statements  should be read in conjunction
         with  the  consolidated  financial  statements  and the  notes  thereto
         included  in the  Company's  Report on Form  10-KSB for the fiscal year
         ended March 31, 2004.  The results of  operations  for the  three-month
         periods  ended   September  30,  2004  and  2003  are  not  necessarily
         indicative of the results to be expected for the full fiscal year.

         The accompanying  consolidated  financial statements have been prepared
         assuming  that  the  Company  will  continue  as a  going  concern.  As
         previously  reported  in its Report on Form  10-KSB for the fiscal year
         ended March 31, 2004, as a result of a foreclosure  action, the Company
         has no  business  operations  and has  negative  working  capital and a
         stockholders'  deficit. These factors raise substantial doubt about the
         Company's  ability  to  continue  as a  going  concern.  The  Company's
         independent auditors qualified their opinion on the Company's March 31,
         2004  financial  statements  by including an  explanatory  paragraph in
         which they expressed  substantial  doubt about the Company's ability to
         continue as a going concern.

2.       Foreclosure Action.

         As  previously  reported in its Report on Form 10-KSB,  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  and that the deficiency  claim should be released
         under the terms and conditions of the foreclosure agreement.

         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.

         The Company continues to negotiate its  obligations with the individual
         creditors.  Management  is  considering  a  liquidation  of  its  BASIS
         subsidiary  through Chapter 7 of the United States Bankruptcy Code. The
         ultimate  settlement of the obligations may result in amounts different
         than the carrying values at September 30, 2004.



3. Creditor Legal Proceedings.

         As previously  reported in its Report on Form 10-KSB for the year ended
         March 31, 2004, the Company is currently engaged with four creditors in
         legal  proceedings.  All of these  actions were filed prior to February
         24, 2004 foreclosure action (SEE PART II, ITEM 1 LEGAL PROCEEDINGS).

                                                                               6
<PAGE>



4.       Earnings Per Share

         FASB Statement of Financial Accounting Standards No. 128, "Earnings Per
         Share" ("SFAS 128")  provides for the  calculation of Basic and Diluted
         earnings per share.  Basic  earnings per share includes no dilution and
         is computed by dividing income available to common  shareholders by the
         weighted  average number of common shares  outstanding  for the period.
         Diluted   earnings  per  share  reflects  the  potential   dilution  of
         securities  that could share in the  earnings  of the  entity.  For the
         three month  periods  ended  September 30, 2004 and September 30, 2003,
         potential  common  stock,  consisting  of stock  options,  warrants and
         convertible   preferred  stock  totaling   1,977,111,   and  2,167,411,
         respectively, are excluded from the computation of diluted earnings per
         share because they are antidilutive.


5.       Stock-Based Compensation

         The Company  accounts  for  employee  stock  options or similar  equity
         instruments  in  accordance  with  Statement  of  Financial  Accounting
         Standards  (SFAS) No. 123,  "Accounting for  Stock-Based  Compensation"
         (SFAS No.  123).  SFAS No.  123  defines a  fair-value-based  method of
         accounting for employee  stock options or similar  equity  instruments.
         This statement  gives entities a choice to recognize  employee  related
         compensation  expense  by  adopting  the new  fair-value  method  or to
         measure  compensation using the intrinsic value method under Accounting
         Principles  Board (APB) Opinion No. 25 "Accounting  for Stock Issued to
         Employees", the former standard. If the former standard for measurement
         is elected, SFAS No. 123 requires  supplemental  disclosure to show the
         effect of using  fair  value  measurement  criteria.  The  Company  has
         elected to account for its stock-based compensation plans under APB No.
         25.


6.       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 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.

         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 has evaluated
         the provisions of SFAS No. 150. The redeemable preferred stock does not
         meet the criteria for  classification as liabilities in accordance with
         SFAS No. 150.  Therefore,  all of preferred  stock that was  previously
         presented  between  liabilities and equity on the balance sheet remains
         presented as such.

         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.

                                                                               7
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

Statements  contained in this  Quarterly  Report on Form  10-QSB,  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 Report on Form 10-QSB. 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 prior fiscal year,
see the  Consolidated  Financial  Statements  of the Company  and Notes  thereto
contain in the Annual  Report on Form 10-KSB for the fiscal year ended March 31,
2004. 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  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.

                                                                               8
<PAGE>


CRITICAL ACCOUNTING ESTIMATES AND POLICIES

DEFERRED INCOME TAX ASSETS

    Management  evaluates the  probability  of the  utilization  of the deferred
income tax assets.  The Company has estimated a $4,780,000  deferred  income tax
asset  at  September  30,  2004,   related   primarily  to  net  operating  loss
carryforwards  at September  30, 2004.  Management  determined  that because the
Company has  divested of all of its revenue  generating  operations,  there is a
significant uncertainty relative to the Company's prospective to generate future
taxable income. Therefore, it was not appropriate to recognize a deferred income
tax asset  related to the net  operating  loss  carryforward.  The full deferred
income  tax asset is  offset by an equal  valuation  allowance.  If the  Company
begins to generate  taxable  income,  Management may determine that some, if not
all of the deferred income tax asset may be recognized. Recognition of the asset
could  increase  after tax income in the future.  Management is required to make
judgments and estimates  related to the timing and  utilization of net operating
loss carryforwards,  utilization of other deferred income tax assets, applicable
tax rates and feasible tax planning strategies.

CARRYING VALUE OF OBLIGATIONS

    Management is  contemplating a liquidation of its BASIS  subsidiary  through
Chapter  7 of the  United  States  Bankruptcy  Code.  The BASIS  subsidiary  has
obligations  of  approximately  $3,000,000  at September  30,  2004.  Should the
settled these obligations in a liquidation or otherwise, the ultimate settlement
amounts could vary significantly from the carrying value of the obligations. The
carrying value of the obligations at September 30, 2004, represent  management's
estimate of the  obligation  amounts  considering  the  original  liability  and
considers  other  factors such as potential  methods of settling the  obligation
based on  communications  with the  creditors.  The  Company  wrote off  certain
obligations  to the  primary  creditor  in the year ended  March 31,  2004.  The
creditor has agreed to waive its deficiency claim against the Company subject to
certain terms and  conditions  placed on the Company.  This includes  compliance
with the conditions of the foreclosure and  representations by the Company as to
asset disclosure.  Management  believes that the Company has complied with these
terms and  conditions.  The Company  does not have  knowledge  of an amount of a
potential  deficiency  claim.  However,  on the  basis of the net book  value of
assets and  liabilities at the time of the disclosure,  the deficiency  could be
$6,000,000.


RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

         GENERAL AND ADMINISTRATIVE. General and administrative expenses for the
second quarter ended September 30, 2004 were $34,581, as compared to $31,352 for
the same  period  of the  previous  year.  The  increase  in these  expenses  is
attributable  to the  expenses  related to the  reorganization  efforts  for the
Company.

         OPERATING INCOME (LOSS). Operating loss for the quarter ended September
30, 2004 was $34,581,  as compared to an operating  loss of $31,352 for the same
period of the previous year.

         INTEREST  EXPENSE  AND OTHER  INCOME.  The  interest  expense and other
income  was  $112,162  for the same  period  of the  previous  year.  Due to the
insolvency  of the  Company,  no  interest  expense  was accrued for the current
quarter  ended  September  30,  2004.  Expenses  for the prior year is  composed
primarily of interest incurred on the approximately $10 million in notes payable
and advances payable and other short-term obligations.

         INCOME  (LOSS)  FROM  CONTINUING  OPERATIONS.  The loss from  continued
operations for the quarter ended September 30, 2004 was $34,581,  as compared to
$143,514 for the same period of the prior fiscal year.

         INCOME (LOSS) FROM  DISCONTINUED  OPERATIONS.  The operating  loss from
discontinued  operations  was  $506,181  for the same period of the prior fiscal
year.

         INCOME  TAXES.  The Company had no income tax expense for the first and
second  quarters of fiscal 2005 and 2004. As of September 30, 2004,  the Company
had Federal net operating loss carry forwards of approximately $12,210,000.  The
utilization of net operating loss carry forwards will be limited pursuant to the
applicable provisions of the Internal Revenue Code and Treasury regulations.


                                                                               9
<PAGE>


         NET  LOSS.  Net loss  for the  quarter  ended  September  30,  2004 was
$34,581,  or a loss of  approximately  $0.01 per  share,  compared  to a loss of
$649,695, or a loss of approximately $0.09 per share, for the same period of the
previous  year. The increase in net loss was due to the  foreclosure  action and
the resultant loss of income from Discontinued Operations.


SIX MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

         GENERAL AND ADMINISTRATIVE. General and administrative expenses for the
first six months of fiscal  2005 were  $95,431,  as  compared to $69,905 for the
same period of the previous year. The increase in these expenses is attributable
to the expenses related to the reorganization efforts for the Company.

         OPERATING  INCOME  (LOSS).  Operating  loss for the first six months of
fiscal 2005 was  $95,431,  as compared to an  operating  loss of $69,905 for the
same period of the previous year.

         INTEREST  EXPENSE  AND OTHER  INCOME.  The  interest  expense and other
income  was  $256,619  for the same  period  of the  previous  year.  Due to the
insolvency  of the  Company,  no interest  expense was accrued for the first six
months of fiscal  2005.  Expenses  for the prior year is composed  primarily  of
interest incurred on the approximately $10 million in notes payable and advances
payable and other short-term obligations.

         INCOME  (LOSS)  FROM  CONTINUING  OPERATIONS.  The loss from  continued
operations  for the first six months of fiscal 2005 was $95,431,  as compared to
$326,524 for the same period of the prior fiscal year.

         INCOME (LOSS) FROM  DISCONTINUED  OPERATIONS.  The operating  loss from
discontinued  operations  was  $350,021  for the same period of the prior fiscal
year.

         INCOME  TAXES.  The Company had no income tax expense for the first and
second  quarters of fiscal 2005 and 2004. As of September 30, 2004,  the Company
had Federal net operating loss carry forwards of approximately $12,210,000.  The
utilization of net operating loss carry forwards will be limited pursuant to the
applicable provisions of the Internal Revenue Code and Treasury regulations.

NET LOSS.  Net loss for the first six months of fiscal  2005 was  $95,431,  or a
loss of approximately $0.02 per share, compared to a loss of $676,545, or a loss
of approximately  $0.10 per share, for the same period of the previous year. The
increase in net loss was due to the foreclosure action and the resultant loss of
income from Discontinued Operations.


LIQUIDITY AND CAPITAL RESOURCES

         At  September  30, 2004 the Company  had a working  capital  deficit of
approximately  $4,001,000 versus a deficit of approximately  $3,869,000 at March
31,  2004.  As a result of the  working  capital  deficit at March 31, 2003 (the
Company's  fiscal  year  end),  the  Company's   independent   certified  public
accountants  have  expressed  substantial  doubt about the Company's  ability to
continue as a going  concern.  The total cash balance at September  30, 2004 was
$943.
         Cash used by continuing  operations for the six months ended  September
30, 2004 was $638 compared to cash used by continuing  operations of $658,422 in
the same period of the previous year. Cash provided by  discontinued  operations
for the six months ended September 30, 2003 was $227,092. Total net cash used in
operating  activities  for the six  months  ended  September  30,  2004 was $638
compared to cash used by operating  activities of $431,330 in the same period of
the previous  year.  Cash  provided by financing  activities  for the six months
ended September 30, 2003 was $496,120.

         During the six months ended  September 30, 2003, the Company  purchased
$3,170 of capital equipment or software.

         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  had failed to meet the  "continued  listing  criteria"  established  by
NASDAQ and the  Company's  securities  were  delisted  from the NASDAQ 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.  Additionally,  the lack of capital resources has precluded the Company
from  effectively  executing its strategic  business  plan. The ability to raise
capital and maintain  credit  sources is critical to the continued  viability of
the Company.


                                                                              10
<PAGE>


         At September  30, 2004,  the Company had current debt  obligations,  or
debt  that will  become  due  within  twelve  months,  of  $4,001,000.  Of these
obligations,  approximately  $1,000,000 are specific obligations of Prologic and
the  remaining  $3,000,000  are related to the  Company's  operating  subsidiary
BASIS,  Inc. and its former 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;  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.


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  for the  fiscal  year  ended  March  31,  2004,
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. 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.


                                                                              11
<PAGE>


         LACK OF OPERATING  CAPITAL.  The Company does not have adequate working
capital to execute it's current short term  operating  plans and is dependant 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.  During the first two
fiscal   quarters  ended   September  30,  2004,   shareholders   have  provided
approximately $90,000 in services and payments made on behalf of the Company.


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

         Management's discussion and analysis should be read in conjunction with
the  Consolidated  Financial  Statements  contained  elsewhere in this quarterly
report on Form  10-QSB  for the  quarter  ended  June 30,  2004.  Except for the
historical information contained herein, the matters discussed in this report on
Form 10-QSB 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.


ITEM 3.  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.


PART II.  OTHER INFORMATION

ITEM 1.  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 prior fiscal year, the parties agreed to dismiss all
         claims  without  prejudice.  The parties  intend to resolve the dispute
         without the aide of the courts.

         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.


                                                                              12
<PAGE>


         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.

ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         See Notes to Condensed  Consolidated Financial Statements - Foreclosure
         Action.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE BY SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

A. Exhibits filed herewith:

31.1     Certification of Chief Executive Officer pursuant to Item 601(b)(31) of
         Regulation S-B. (Filed herewith)

32.1     Certification of Chief Executive Officer pursuant to item 601(b)(32) of
         Regulation S-B. (Filed herewith)



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: November 10, 2004        By:     /S/  JAMES M. HEIM
                                              --------------------------------
                                                            James M. Heim
                                                   Chief Executive Officer

                                                                              13