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 December 31, 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 December 31, 2004 was 7,275,048.


Transitional Small Business Disclosure Format:
                                                 Yes      ; No    X
                                                     -----     -------

<PAGE>

<TABLE>
                        Prologic Management Systems, Inc.

                                      Index


                                                                                                 Page
                                                                                                 ----

<S>                                                                                               <C>
Part I.                    FINANCIAL INFORMATION                                                  3

Item 1.   Condensed Consolidated Financial Statements

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

          Condensed Consolidated Statements of Operations for the Three and Nine Months Ended
          December 31, 2004 (unaudited) and December 31, 2003 (unaudited)                         4

          Condensed Consolidated Statements of Cash Flows for the Nine Months Ended
          December 31, 2004 (unaudited) and December 31, 2003 (unaudited)                         5

          Notes to Condensed Consolidated Financial Statements                                    6

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

Item 3.   Controls and Procedures                                                                13

Part II.  OTHER INFORMATION                                                                      13

Item 1.   Legal Proceedings                                                                      13

Item 2.   Changes in Securities                                                                  13

Item 3.   Defaults upon Senior Securities                                                        13

Item 4.   Submission of Matters to a Vote by Security Holders                                    14

Item 5.   Other Information                                                                      14

Item 6.   Exhibits and Reports on Form 8-K                                                       14

SIGNATURES                                                                                       14
</TABLE>
<PAGE>

<TABLE>

PART I.  Financial Information

ITEM  1.  Condensed Consolidated Financial Statements

               PROLOGIC MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<S>                                                                               <C>                 <C>
                                                                                     December 31,        March 31,
                                                                                         2004               2004
                                                                                    ----------------    --------------
ASSETS                                                                                (unaudited)

Current assets:
   Cash                                                                           $             943   $         1,581
   Prepaid expenses                                                                                             8,782
                                                                                    ----------------    --------------



TOTAL ASSETS                                                                      $             943   $        10,363
                                                                                    ----------------    --------------

LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

 Current liabilities:
   Accounts payable                                                               $       1,678,344   $     1,632,612
   Notes payable                                                                          1,131,756         1,131,756
   Sales tax payable                                                                        375,936           375,936
   Accrued expenses                                                                         639,985           559,987
   Accrued dividends                                                                        233,714           178,700
                                                                                            -------           -------

Total liabilities                                                                         4,059,735         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 December 31, 2004 and March 31, 2004
                                                                                         10,205,073        10,205,073
   Warrants                                                                                 970,766           970,766
   Accumulated deficit                                                                  (15,961,719 )     (15,771,555 )
                                                                                    ----------------    --------------

Total stockholders' deficit                                                              (4,785,880 )      (4,595,716 )
                                                                                    ----------------    --------------
                                                                                    ----------------    --------------

Total liabilities, preferred stock and stockholders' deficit
                                                                                  $             943   $        10,363

                                                                                    ================    ==============


     See accompanying notes to condensed consolidated financial statements.

</TABLE>

                                                                               3
<PAGE>



<TABLE>

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


<S>                                                            <C>              <C>              <C>                <C>
                                                              Three Months Ended                  Nine Months Ended
                                                                 December 31,                       December 31,
                                                            2004              2003             2004              2003
                                                        --------------    -------------    --------------    --------------
                                                         (unaudited)       (unaudited)       (unaudited)       (unaudited)
Revenue:

Operating expenses:
    General and administrative                                 39,689           22,325           135,178            92,230
                                                        --------------    -------------    --------------    --------------
Total operating expenses                                       39,689           22,325           135,178            92,230

                   Operating loss                            (39,689)         (22,325)         (135,178)          (92,230)
                                                        --------------    -------------    --------------    --------------

Other income (expense):
    Interest expense                                                -        (117,977)                 -         (374,621)
    Other income (expense)                                          -                -                 -                25
                                                        --------------    -------------    --------------    --------------
Total other income (expense)                                        -        (117,977)                 -         (374,596)

   Loss Before Income Taxes and
     Discontinued Operations                                 (39,689)        (140,302)         (135,178)         (466,826)

    Income Tax (Benefit) Provision                                  -                -                 -                 -

    Loss from Continuing Operations                          (39,689)        (140,302)         (135,178)         (466,826)

    Loss from Discontinued Operations                               -        (173,177)                 -         (523,199)
                                                        --------------    -------------    --------------    --------------


           Net loss                                          (39,689)        (313,479)        (135,178)        (990,025)
                                                        --------------    -------------    --------------    --------------



Preferred stock dividend                                     (18,338)         (18,338)          (55,014)          (36,675)

Net Loss available to Common
    Stockholders                                     $       (58,027)  $     (331,817)  $      (190,192)  $    (1,026,700)
                                                        --------------    -------------    --------------    --------------


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)  $        (0.05)  $         (0.03)  $         (0.14)
                                                        --------------    -------------    --------------    --------------

                          See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                                                               4

<PAGE>


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

<S>                                                                                      <C>            <C>
INCREASE (DECREASE) IN CASH                                                                  Nine Months Ended December
                                                                                               2004              2003
                                                                                           -------------     -------------
                                                                                            (unaudited)       (unaudited)
Cash flows from operating activities:
   Net loss                                                                              $    (135,178) $       (990,025)

   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                                                                      125,758             3,728
                                                                                                -------             -----

   Net cash provided by (used in) continuing operations                                           (638)         (976,897)
                                                                                           -------------     -------------


   Net cash provided by (used in) discontinued operations                                             -           766,696
                                                                                           -------------     -------------



Net cash provided (used in) by operating activities                                               (638)         (210,201)
                                                                                           -------------     -------------


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
   Repayment of debt                                                                                  -           (7,748)
                                                                                           -------------     -------------

Net cash provided by (used in) financing activities                                                   -           397,252
                                                                                           -------------     -------------

Net increase (decrease) in cash                                                                    (638 )         183,881

Cash, beginning of period                                                                         1,581           216,904
                                                                                           -------------     -------------


Cash, end of period                                                                      $          943    $      400,785
                                                                                           =============     =============



Supplemental statement of cash flow information:
   Cash paid during the quarter for interest                                             $            -    $       60,621
   Cash paid during the quarter for taxes                                                             -                 -

Non-cash financing and investing activities:
   Warrants issued for services performed                                                $            -    $        9,400


                        See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                                                               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 December 31, 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 and Dissolution.

         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. Management
         believes that the Company has complied with these terms and conditions
         and has received confirmation from this creditor to that effect.

         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.

         On November 24, 2004, the Company received notice from the Arizona
         Corporation Commission in and for the State of Arizona that the
         corporate charter of BASIS, an Arizona corporation, a wholly owned
         subsidiary of the Company, would be dissolved administratively because
         of a delinquent Annual Report. BASIS is not operating and has not
         conducted any business since February of 2004. BASIS has no assets. As
         a result, the Company does not presently intend to oppose the
         dissolution of BASIS by the Arizona Corporation Commission. As of
         December 31, 2004, the BASIS subsidiary had obligations of
         approximately $3,000,000. The Company will contest any assertion that
         it has liability for the debt obligations of BASIS.

         Prologic Management Systems, the parent corporation, had direct
         obligations of approximately $1,000,000 at December 31, 2004. The
         Company continues to negotiate its obligations with the individual
         creditors. In addition, the Company is reviewing its options for
         reorganization under the United States Bankruptcy Code. Should these
         obligations be settled 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 December 31,
         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.

                                                                               6

<PAGE>

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).

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 December 31, 2004 and December 31, 2003,
         potential common stock, consisting of stock options, warrants and
         convertible preferred stock totaling 1,702,111, 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.

                                                                               7

<PAGE>

         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.

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,

                                                                               8

<PAGE>

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.



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 $4,800,000 deferred income tax
asset at December 31, 2004, related primarily to net operating loss
carryforwards at December 31, 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

    On November 24, 2004, the Company received notice from the Arizona
Corporation Commission in and for the State of Arizona that the corporate
charter of BASIS, an Arizona corporation, a wholly owned subsidiary of the
Company, would be dissolved administratively because of a delinquent Annual
Report. BASIS is not operating and has not conducted any business since February
of 2004. BASIS has no assets. As a result, the Company does not presently intend
to oppose the dissolution of BASIS by the Arizona Corporation Commission. As of
December 31, 2004, the BASIS subsidiary had obligations of approximately
$3,000,000. The Company will contest any assertion that it has liability for the
debt obligations of BASIS.

    Prologic Management Systems, the parent corporation, had direct obligations
of approximately $1,000,000 at December 31, 2004. The Company continues to
negotiate its obligations with the individual creditors. In addition, the
Company is reviewing its options for reorganization under the United States
Bankruptcy Code. Should these obligations be settled 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
December 31, 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 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 and has received
confirmation from this creditor to that effect.

                                                                               9

<PAGE>


RESULTS OF OPERATIONS

Three Months Ended December 31, 2004 and 2003

         General and Administrative. General and administrative expenses for the
third quarter ended December 31, 2004 were $39,689, as compared to $22,325 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 December
31, 2004 was $39,689, as compared to an operating loss of $22,325 for the same
period of the previous year.

         Interest Expense and Other Income. The interest expense and other
income was $117,977 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 December 31, 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 December 31, 2004 was $39,689, as compared to
$140,302 for the same period of the prior fiscal year.

         Income (Loss) from Discontinued Operations. The operating loss from
discontinued operations was $173,177 for the same period of the prior fiscal
year.

         Income Taxes. The Company had no income tax expense for the first three
quarters of fiscal 2005 and 2004. As of December 31, 2004, the Company had
Federal net operating loss carry forwards of approximately $12,250,000. 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 quarter ended December 31, 2004 was $39,689,
or a loss of approximately $0.01 per share, compared to a loss of $313,479, or a
loss of approximately $0.05 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.


Nine Months Ended December 31, 2004 and 2003
--------------------------------------------

         General and Administrative. General and administrative expenses for the
first nine months of fiscal 2005 were $135,178, as compared to $92,230 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 nine months of
fiscal 2005 was $135,178, as compared to an operating loss of $92,230 for the
same period of the previous year.

         Interest Expense and Other Income. The interest expense and other
income was $374,596 for the same period of the previous year. Due to the
insolvency of the Company, no interest expense was accrued for the first nine
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 nine months of fiscal 2005 was $135,178, as compared to
$466,826 for the same period of the prior fiscal year.

         Income (Loss) from Discontinued Operations. The operating loss from
discontinued operations was $523,199 for the same period of the prior fiscal
year.

         Income Taxes. The Company had no income tax expense for the first three
quarters of fiscal 2005 and 2004. As of December 31, 2004, the Company had
Federal net operating loss carry forwards of approximately $12,250,000. The
utilization of net operating loss carry forwards will be limited pursuant to the
applicable provisions of the Internal Revenue Code and Treasury regulations.

                                                                              10

<PAGE>


Net Loss. Net loss for the first nine months of fiscal 2005 was $135,178, or a
loss of approximately $0.03 per share, compared to a loss of $990,025, or a loss
of approximately $0.14 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 December 31, 2004 the Company had a working capital deficit of
approximately $4,059,000 versus a deficit of approximately $3,869,000 at March
31, 2004. As a result of the working capital deficit at March 31, 2004 (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 December 31, 2004 was
$943.
         Cash used by continuing operations for the nine months ended December
31, 2004 was $638 compared to cash used by continuing operations of $976,897 in
the same period of the previous year. Cash provided by discontinued operations
for the nine months ended December 31, 2003 was $766,696. Total net cash used in
operating activities for the nine months ended December 31, 2004 was $638
compared to cash used by operating activities of $210,201 in the same period of
the previous year. Cash provided by financing activities for the nine months
ended December 31, 2003 was $397,252.

         During the nine months ended December 31, 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.

         At December 31, 2004, the Company had current debt obligations, or debt
that will become due within twelve months, of $4,059,000. 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 of debt to equity; effect a corporate
dissolution and/or abandonment of corporate entities; and any other means to
eliminate the debt to allow the Company to attract additional capital. See Note
2 to the Financial Statements "Foreclosure Action and Dissolution". 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.

                                                                              11

<PAGE>

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.

         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
three fiscal quarters ended December 31, 2004, shareholders have provided
approximately $125,000 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 December 31, 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.

                                                                              12

<PAGE>

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.

         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.

                                                                              13

<PAGE>

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: February 10, 2005          By:     /s/  James M. Heim
                                                ------------------------------
                                                       James M. Heim
                                                       Chief Executive Officer