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, 2006


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, 2006 was
7,301,364.


Transitional Small Business Disclosure Format:
                              Yes ____; No __X__

<PAGE>


                        Prologic Management Systems, Inc.

                                      Index


                                                                            Page
                                                                            ----

Part I. FINANCIAL INFORMATION                                                 3

Item 1.  Condensed Financial Statements

         Condensed Balance Sheet at September 30, 2006 (unaudited) and
         March 31, 2006                                                       3

         Condensed Statements of Operations for the Three and Six Months Ended
         September 30, 2006 (unaudited) and September 30, 2005 (unaudited)    4

         Condensed Statements of Cash Flows for the Six Months Ended
         September 30, 2006 (unaudited) and September 30, 2005 (unaudited)    5

         Notes to Condensed Financial Statements                              6

Item 2.  Management's Discussion and Analysis of Results of Operations and
         Financial Condition                                                  7

Item 3.  Controls and Procedures                                             11


Part II. OTHER INFORMATION                                                   12

Item 1.  Legal Proceedings                                                   12

Item 2.  Changes in Securities                                               12

Item 3.  Defaults upon Senior Securities                                     12

Item 4.  Submission of Matters to a Vote by Security Holders                 12

Item 5.  Other Information                                                   12

Item 6.  Exhibits and Reports on Form 8-K                                    12


SIGNATURES                                                                   12


                                                                               2
<PAGE>


PART I.  FINANCIAL INFORMATION

ITEM 1.  Condensed Financial Statements
<TABLE>
<CAPTION>
<S>     <C>                                                               <C>               <C>
                        PROLOGIC MANAGEMENT SYSTEMS, INC.
                             CONDENSED BALANCE SHEET

                                                                            September 30,      March 31,
                                                                                2006             2006
                                                                           --------------   --------------
ASSETS                                                                       (unaudited)

Current assets:
  Cash                                                                     $          12    $          12

TOTAL ASSETS                                                               $          12    $          12
                                                                           ==============   ==============

LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Due to Shareholders                                                      $     125,504    $      95,735
  Accounts payable                                                               196,332          183,695
  Notes payable                                                                  398,846          398,846
  Accrued expenses                                                               662,443          602,443
  Accrued dividends                                                              362,076          325,400
                                                                           --------------   --------------

Total liabilities                                                              1,745,201        1,606,119
                                                                           --------------   --------------


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, 7,301,364
   shares issued and outstanding at September 30, 2006 and March 31, 2006
                                                                              10,205,467       10,205,467
  Warrants                                                                       970,766          970,766
  Accumulated deficit                                                        (13,648,510)     (13,509,428)
                                                                           --------------   --------------

Total stockholders' deficit                                                   (2,472,277)      (2,333,195)
                                                                           --------------   --------------
                                                                           --------------   --------------
TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
                                                                           $          12    $          12

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

            See accompanying notes to condensed financial statements.
</TABLE>
                                                                               3
<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                                <C>           <C>           <C>          <C>
                        PROLOGIC MANAGEMENT SYSTEMS, INC.
                       CONDENSED STATEMENTS OF OPERATIONS

                                                Three Months Ended          Six Months Ended
                                                   September 30,              September 30,
                                               2005          2006          2005         2006
                                           ------------  ------------  -----------  -----------
                                            (unaudited)   (unaudited)  (unaudited)  (unaudited)
Revenue:

Operating expenses:
   General and administrative                   42,502        56,101       78,485      102,405
                                           ------------  ------------  -----------  -----------
 Total operating expenses                       42,502        56,101       78,485      102,405

           Operating loss                      (42,502)      (56,101)     (78,485)    (102,405)
                                           ------------  ------------  -----------  -----------

Other income (expense):
   Interest expense                                  -             -            -            -
   Other income (expense)                            -             -            -            -
                                           ------------  ------------  -----------  -----------
 Total other income (expense)                        -             -            -            -

   Loss Before Income Taxes                    (42,502)      (56,101)     (78,485)    (102,405)

   Income Tax (Benefit) Provision                    -             -            -            -

   Loss from Operations                        (42,502)      (56,101)     (78,485)    (102,405)
                                           ------------  ------------  -----------  -----------

       Net loss                                (42,502)      (56,101)     (78,485)    (102,405)
                                           ============  ============  ===========  ===========


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


Net Loss available to Common Stockholders  $   (60,840)  $   (74,439)  $ (115,161)  $ (139,081)
                                           ============  ============  ===========  ===========


Weighted average number of common shares:
   Basic and diluted                         7,275,048     7,301,361    7,275,048    7,301,361
                                           ============  ============  ===========  ===========

Loss per common share:
   Basic and diluted                       $     (0.01)  $     (0.01)  $    (0.02)  $    (0.02)
                                           ============  ============  ===========  ===========


            See accompanying notes to condensed financial statements.
</TABLE>
                                                                               4
<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                                                             <C>           <C>
                        PROLOGIC MANAGEMENT SYSTEMS, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS

INCREASE (DECREASE) IN CASH                                                 Six Months Ended
                                                                              September 30,
                                                                            2006          2005
                                                                        -----------   -----------
                                                                        (unaudited)   (unaudited)
Cash flows from operating activities:
  Net loss
                                                                        $ (102,405)   $  (78,485)

  Adjustments to reconcile net loss to net cash provided by operating
    Activities:
      Change in assets and liabilities:
       Accounts payable and accrued expenses                               102,405        78,206

  Net cash provided (used in) by operating activities                            -          (279)
                                                                        -----------   -----------


Cash flows from investing activities:
  Purchase of equipment                                                          -             -
                                                                        -----------   -----------

Net cash used in investing activities                                            -             -
                                                                        -----------   -----------

Cash flows from financing activities:
  Repayment of debt                                                              -             -
                                                                        -----------   -----------

Net cash provided by (used in) financing activities                              -             -
                                                                        -----------   -----------

Net increase (decrease) in cash                                                  -          (279)

Cash, beginning of period                                                       12           341
                                                                        -----------   -----------
Cash, end of period                                                     $       12    $       62
                                                                        ===========   ===========


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

Non-cash financing and investing activities:
  None                                                                  $        -    $        -


            See accompanying notes to condensed financial statements.
</TABLE>
                                                                               5
<PAGE>


NOTES TO CONDENSED FINANCIAL STATEMENTS


1.   Basis of Presentation - Interim Periods

     The  accompanying   unaudited  condensed  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  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, 2006. The results of operations for the three-month periods
     ended  September  30, 2006 and 2005 are not  necessarily  indicative of the
     results to be expected for the full fiscal year.

     The accompanying  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, 2006, 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, 2006 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.   Nature of Business and Summary of Operations.

     Prologic Management Systems, Inc. (the "Company") is an Arizona corporation
     founded in 1984. The Company and its former  subsidiary,  BASIS, Inc., were
     subject to foreclosure action in February of 2004. Prior to the foreclosure
     action,  the Company  provided  systems  integration  services,  technology
     products and related services. As a result of this foreclosure, the Company
     ceased to have any operating business or sources of revenue.

     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.

     Management is reviewing  options regarding the solvency and creditor issues
     facing the Company, as well as looking at potential business  opportunities
     that may be appropriate for the Company's long-term growth strategy.

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

3.   Creditor Negotiations.

     As of  September  30, 2006,  the Company had  approximately  $1,745,000  of
     liabilities  and  obligations  to third parties.  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  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, 2006, represents  management's estimate of the
     obligation  amounts  considering  the original  liability and other factors
     such  as   potential   methods  of  settling   the   obligation   based  on
     communications with the creditors. (See Liquidity and Capital Resources).


                                                                               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, 2006 and September 30, 2005,  potential  common stock,
     consisting  of stock  options,  warrants and  convertible  preferred  stock
     totaling  995,446,  and  1,486,666,  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(R),  "Accounting  for  Stock-Based  Compensation"  (SFAS No.
     123). SFAS No. 123(R) defines a  fair-value-based  method of accounting for
     employee  stock options or similar equity  instruments.  There was no stock
     based compensation for the periods presented.


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 operating
results  of the  Company  for the  prior  fiscal  years,  see  the  Consolidated
Financial  Statements  of the  Company and Notes  thereto  contain in the Annual
Report on Form  10-KSB for the fiscal  years  ended March 31, 2005 and March 31,
2006. 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.

                                                                               7
<PAGE>


     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.


CRITICAL ACCOUNTING POLICIES

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and all highly liquid investments
with maturity of three months or less when purchased.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted  in the United  States of  America  requires  the  Company's
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements,  and the reported  amounts of revenue and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

Fair Value of Financial Instruments

The estimated  fair value of financial  instruments  has been  determined by the
Company  using  available  market   information  and  valuation   methodologies.
Considerable  judgment is required in estimating fair values.  Accordingly,  the
estimates  may not be  indicative  of the amounts the Company could realize in a
current market exchange.

The carrying amount of accounts  payable and accrued  expenses  approximate fair
value due to the short maturity of these instruments. The terms of notes payable
and other  long-term  obligations  approximate  the terms in the  marketplace at
which  they  could be  replaced.  Therefore,  the fair  value  approximates  the
carrying value of these financial instruments.

Income Taxes

The  Company  accounts  for  income  taxes  utilizing  the asset  and  liability
approach,  which requires the recognition of deferred tax assets and liabilities
for the expected future tax  consequences of temporary  differences  between the
basis of  assets  and  liabilities  for  financial  reporting  purposes  and tax
purposes.  Deferred tax assets and  liabilities  are measured  using enacted tax
rates expected to apply to taxable income in the years in which those  temporary
differences  are expected to be recovered or settled.  A valuation  allowance is
provided when management  cannot determine  whether or not it is likely that the
net deferred tax asset will be realized.

                                                                               8
<PAGE>


RESULTS OF OPERATIONS


Three Months Ended September 30, 2006 and 2005
----------------------------------------------

     General and  Administrative.  General and  administrative  expenses for the
quarter  ended  September  30, 2006 were  $56,101 as compared to $42,502 for the
same period of the previous year. The increase in these expenses is attributable
to the  increased  efforts  related to the  reorganization  of creditors and the
efforts to secure an operating business for the Company.

     Operating Income (loss). Operating loss for the quarter ended September 30,
2006 was  $56,101,  as  compared  to an  operating  loss of $42,502 for the same
period of the previous year.

     Interest Expense and Other Income. Due to the insolvency of the Company, no
interest expense was accrued for the current quarter ended September 30, 2006 or
for the same period of the previous year.

     Income  (Loss)  from  Continuing   Operations.   The  loss  from  continued
operations for the quarter ended September 30, 2006  was$56,101,  as compared to
$42,502 for the same period of the prior fiscal year.

     Income Taxes.  The Company had no income tax expense for the first quarters
of fiscal 2006 and 2005. As of September  30, 2006,  the Company had Federal net
operating loss carry forwards of  approximately  $9,070,000.  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 September 30, 2006 was $56,101, or
a loss of  approximately  $0.01 per share,  compared to a loss of $42,502,  or a
loss of approximately $0.01 per share, for the same period of the previous year.
The increase in net loss was  attributable  to the increased  efforts related to
the  reorganization of creditors and the efforts to secure an operating business
for the Company.


Six Months Ended September 30, 2006 and 2005
--------------------------------------------

     General and Administrative. General and administrative expenses for the six
months ended  September 30, 2006 were  $102,405,  as compared to $78,485 for the
same period of the previous year. The increase in these expenses is attributable
to the  increased  efforts  related to the  reorganization  of creditors and the
efforts to secure an operating business for the Company.

     Operating Income (loss).  Operating loss for the six months ended September
30, 2006 was $102,405,  as compared to an operating loss of $78,485 for the same
period of the previous year.

     Interest Expense and Other Income. Due to the insolvency of the Company, no
interest  expense was accrued for the six months ended September 30, 2006 or for
the same period of the previous year.

     Income  (Loss)  from  Continuing   Operations.   The  loss  from  continued
operations for the six months ended September 30, 2006 was $102,405, as compared
to $78,485 for the same period of the prior fiscal year.

     Income  Taxes.  The  Company  had no income tax  expense  for the first six
months of fiscal  2006 and 2005.  As of  September  30,  2006,  the  Company had
Federal net  operating  loss carry  forwards of  approximately  $9,070,000.  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 six  months  ended  September  30,  2006 was
$102,405,  or a loss of  approximately  $0.02 per share,  compared  to a loss of
$78,485,  or a loss of approximately $0.02 per share, for the same period of the
previous year. The increase in these expenses is  attributable  to the increased
efforts related to the  reorganization of creditors and the efforts to secure an
operating business for the Company.

                                                                               9
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

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

     At  September  30,  2006,  the  Company  had a working  capital  deficit of
approximately  $2,472,000 versus a deficit of approximately  $2,333,000 at March
31,  2006.  The cash  balance at  September  30, 2006 was $12. As a result,  the
Company is  evaluating  the  alternatives  of  reorganizing  the  creditors on a
voluntary  basis and/or having to place the Company under the  protection of the
Federal Bankruptcy Code.

     As a result of the working capital deficit at March 31, 2006 (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.

     No cash was used by  operations  for the quarter  ended  September 30, 2006
compared to cash used by  operations  of $279 in the same period of the previous
year. No cash was used in investing  activities  in the quarter ended  September
30,  2005 or the quarter  ended  September  30,  2006.  No cash was  provided by
financing  activities  for the quarter  ended  September 30, 2005 or the quarter
ended September 30, 2006.

     During quarter ended  September 30, 2006, the Company  purchased no capital
equipment or software.

     At September 30, 2006,  the Company had current debt  obligations,  or debt
that will become due within twelve months, of $1,745,000.  Of these obligations,
approximately  $362,000 were accrued dividends and the remaining  $1,383,000 are
related to other  obligations.  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,  2006,
prospective   investors  should  carefully   consider  the  following  risk  and
speculation factors:

     Unproven Plan of  Operations.  As a consequence  of the  foreclosure on the
business  assets and  operations  in  February of 2004,  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 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.

                                                                              10
<PAGE>


     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.


"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  September  30,  2005.  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.

                                                                              11
<PAGE>


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

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

Item 2.  Changes in Securities

         None.

Item 3.  Defaults upon Senior Securities

         See  Item  1  Legal  Proceedings  and  Notes  to  Condensed   Financial
Statements  in the  Company's  Report on Form  10-KSB for the fiscal  year ended
March 31, 2006.

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)

         B. Reports:

            No reports on Form 8-K were filed during the quarter ended September
30, 2006.


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 13, 2006                  By: /s/ James M. Heim
                                                   -----------------------------
                                                       James M. Heim
                                                       Chief Executive Officer


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