2



                     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 June 30, 2005


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
 incorporation or organization)                        Identification No.)

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

                    Issuer's telephone number (520) 955-4748


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

                                  Common Stock

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 June 30, 2005 was 7,275,048.


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


<PAGE>


                        Prologic Management Systems, Inc.

                                      Index

                                                                            Page
                                                                            ----

Part I.     FINANCIAL INFORMATION                                              3

Item 1.     Condensed Financial Statements

            Condensed Balance Sheet at June 30, 2005 (unaudited) and
            March 31, 2005                                                     3

            Condensed Statements of Operations for the Three Months Ended
            June 30, 2005 (unaudited) and June 30, 2004 (unaudited)            4

            Condensed Statements of Cash Flows for the Three Months Ended
            June 30, 2005 (unaudited) and June 30, 2004 (unaudited)            5

            Notes to Condensed Financial Statements                            6

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

Item 3.     Controls and Procedures                                           12


Part II.    OTHER INFORMATION                                                 12

Item 1.     Legal Proceedings                                                 12

Item 2.     Changes in Securities                                             13

Item 3.     Defaults upon Senior Securities                                   13

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

Item 5.     Other Information                                                 13

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



SIGNATURES                                                                    13





                                                                               2

<PAGE>


PART I.  FINANCIAL INFORMATION

ITEM  1.  Condensed Financial Statements

<TABLE>
<CAPTION>
                        PROLOGIC MANAGEMENT SYSTEMS, INC.
                             CONDENSED BALANCE SHEET

                                                                                       June 30,           March 31,
                                                                                         2005               2005
                                                                                    ----------------   ---------------
ASSETS                                                                                (unaudited)
<S>                                                                                 <C>                <C>
Current assets:
   Cash                                                                            $             62   $           341
TOTAL ASSETS                                                                       $             62   $           341
                                                                                    ================   ===============

LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

 Current liabilities:
   Due to Shareholders                                                             $         45,586   $        39,622
   Accounts payable                                                                         174,494           174,753
   Notes payable                                                                            408,846           408,846
   Accrued expenses                                                                         512,443           482,443
   Accrued dividends                                                                        270,388           252,050
                                                                                            -------           -------
Total liabilities                                                                         1,411,757         1,357,714
                                                                                    ----------------   ---------------



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 June 30, 2005 and March 31, 2005                          10,205,073        10,205,073
   Warrants                                                                                 970,766           970,766
   Accumulated deficit                                                                   (13,314,62)      (13,260,300)
                                                                                    ----------------   ---------------

Total stockholders' deficit                                                              (2,138,783)       (2,084,461)
                                                                                    ----------------   ---------------
                                                                                    ----------------   ---------------

TOTAL LIABILITIES, PREFERRED STOCK AND
STOCKHOLDERS' DEFICIT                                                              $             62   $           341
                                                                                    ================   ===============
</TABLE>





            See accompanying notes to condensed financial statements.


                                                                               3

<PAGE>



                        PROLOGIC MANAGEMENT SYSTEMS, INC.
                       CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                     Three Months Ended
                                                                                         June 30,
                                                                              --------------------------------
                                                                                  2005               2004
                                                                              -------------      -------------
                                                                               (unaudited)        (unaudited)

<S>                                                                          <C>                <C>
Revenue:

Operating expenses:
   General and administrative                                                $      35,984      $      60,850

Total operating expenses                                                            35,984             60,850
                                                                              -------------      -------------

                            Operating Loss                                         (35,984)           (60,850)
                                                                              -------------      -------------

Other Income (expense):
   Interest expense                                                                      -                  -
   Other income (expense)                                                                -                  -
                                                                              -------------      -------------

   Total other expense                                                                   -                  -
                                                                              -------------      -------------

                       Loss Before Income Taxes                                    (35,984)           (60,850)
                                                                              -------------      -------------

                    Income Tax (Benefit) Provision                                       -                  -
                                                                              -------------      -------------

                         Loss From Operations                                      (35,984)           (60,850)
                                                                              -------------      -------------

                               Net Loss                                            (35,984)           (60,850)

Preferred stock dividend                                                           (18,338)           (18,338)
                                                                              -------------      -------------

               Net Loss available to Common Stockholders                    $      (54,322)     $     (79,189)
                                                                              =============      =============


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

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

                                                                              =============      =============
</TABLE>


            See accompanying notes to condensed financial statements.



                                                                               4


<PAGE>


                        PROLOGIC MANAGEMENT SYSTEMS, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH                                                                  Three Months Ended June 30,
                                                                                               2005              2004
                                                                                           -------------     -------------
<S>                                                                                       <C>               <C>
(unaudited) (unaudited) Cash flows from operating activities:
   Net loss
                                                                                          $     (35,984)    $     (60,850)

   Adjustments  to  reconcile  net  loss  to  net  cash  provided  by  operating
      Activities:
        Change in assets and liabilities:
          Prepaid expenses                                                                            -             2,465
          Accrued Expenses                                                                       35,705            57,350

  Net cash provided (used in) by operating activities                                              (279)           (1,036)
                                                                                           -------------     -------------


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)           (1,036)
Cash, beginning of period                                                                           341             1,581
                                                                                           -------------     -------------
Cash, end of period                                                                       $          62     $         545
                                                                                           =============     =============



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                                                                                   $           -     $           -
</TABLE>


            See accompanying notes to condensed financial statements.


                                                                               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.  Through  March  24,  2005,  the
         consolidated  financial  statements of the Company include the accounts
         of Prologic and its subsidiary, BASIS. Effective, March 24, 2005, BASIS
         was  dissolved  and there were no remaining  assets or  liabilities  to
         consolidate  at March 31, 2005.  The results of the operations of BASIS
         are  included  in the  consolidated  financial  statements  through the
         dissolution  date of March 24, 2005. 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,  2005.  The results of
         operations for the three-month periods ended June 30, 2005 and 2004 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, 2005,  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,  2005
         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.  Discontinued Operations.

         As previously  reported it its Report on Form 10-KSB, in the year ended
         March 31,  2004,  the Company  divested of its only  operating  segment
         through a foreclosure  action with its primary creditor.  Following the
         foreclosure, in the year ended March 31, 2005, the corporate charter of
         this  operating  unit  was  dissolved.  Substantially  all  assets  and
         liabilities  of the  discontinued  operations  were  removed  form  the
         balance sheet as of March 31, 2005.

         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.



3.  Creditor Legal Proceedings.

         As previously  reported in its Report on Form 10-KSB for the year ended
         March 31, 2005, 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 June 30, 2005 and June 30, 2004,  potential
         common stock,  consisting of stock  options,  warrants and  convertible
         preferred stock totaling 1,486,666,  and 1,977,111,  respectively,  are
         excluded  from the  computation  of diluted  earnings per share because
         they are antidilutive.


                                                                               6

<PAGE>


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 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.  The  Company  anticipates  conversion  of all its
         redeemable  preferred  stock into common stock by the end of the second
         quarter of fiscal 2005.

         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.

         In  December  2002,  the FASB  issued  SFAS  No.  148,  Accounting  for
         Stock-Based  Compensation - Transition and Disclosure - an amendment of
         FASB  Statement No. 123.  SFAS No. 148 amends SFAS No. 123,  Accounting
         for  Stock-Based  Compensation,   to  provide  alternative  methods  of
         transition  for a voluntary  change to the fair  value-based  method of
         accounting for stock-based employee compensation. In addition, SFAS No.
         148  amends  the  disclosure  requirements  of SFAS No.  123 to require
         prominent  disclosures in both interim and annual financial  statements
         about the method of accounting for  stock-based  employee  compensation
         and the effect of the method used on reported results.  SFAS No. 148 is
         effective for financial statements issued for fiscal years ending after
         December 15, 2002. The adoption of SFAS No. 148 did not have a material
         effect on its financial position or results of operations.

         In December  2004 the FASB issued a revised  Statement 123 (SFAS 123R),
         "Accounting for Stock-Based  Compensation" requiring public entities to
         measure the cost of employee services received in exchange for an award
         of equity  instruments based on grant date fair value. The cost will be
         recognized  over the period  during  which an  employee  is required to
         provide  service  in  exchange  for the award --  usually  the  vesting
         period.  The Company is evaluating the impact of this new pronouncement
         and  does  not  expect  the  effect  of  implementation   will  have  a
         significant impact on the Company's financial statements.

                                                                               7

<PAGE>


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

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


INTRODUCTION

         Prior to the  foreclosure  action  in  February  of 2004,  the  Company
provided systems integration services, technology products and related services.
The majority of the Company's  revenues were generated from systems  integration
and related product sales. However, as a result of this foreclosure, the Company
ceased to have business operations.  For additional  information on the combined
operating  results of the Company and its  subsidiary for the prior fiscal year,
see the  Consolidated  Financial  Statements  of the Company  and Notes  thereto
contain in the Annual  Report on Form 10-KSB for the fiscal year ended March 31,
2005. The discussion  should be read in conjunction with and is qualified in its
entirety  by the  Consolidated  Financial  Statements  of the  Company and Notes
thereto.

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

         The SEC has also adopted rules that regulate broker-dealer practices in
connection  with  transactions  in "penny  stocks."  Penny stocks  generally are
equity securities with a price less than $5.00 per share,  other than securities
registered  on certain  national  securities  exchanges  or quoted on the NASDAQ
system. With the Company's securities delisted from the NASDAQ Small Cap Market,
they may come within the definition of penny stocks because the trading price of
the Company's common stock is currently below the $5.00 per share threshold. The
penny stock rules require a  broker-dealer,  prior to a  transaction  in a penny
stock not exempt from the rules, to deliver a standardized  document prepared by
the SEC that provides information about penny stocks and the nature and level of
risks in the  penny  stock  market.  The  broker-dealer  must also  provide  the
customer  with  current  bid and  offer  quotations  for the  penny  stock,  the
compensation of the  broker-dealer  and its salesperson in the transaction,  and
monthly account  statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations,  and the broker-dealer and
salesperson  compensation  information  must be given to the  customer  prior to
effecting the transaction.  These disclosure requirements may have the effect of
reducing the level of trading  activity in the secondary market for a stock that
becomes subject to the penny stock rules.

                                                                               8

<PAGE>


CRITICAL ACCOUNTING POLICIES

Principles of Consolidation

Through March 24, 2005,  the  consolidated  financial  statements of the Company
include the accounts of Prologic and its subsidiary, BASIS. Effective, March 24,
2005,  BASIS was dissolved and there were no remaining  assets or liabilities to
consolidate  at March 31,  2005.  The  results  of the  operations  of BASIS are
included in the consolidated  financial  statements through the dissolution date
of March 24, 2005. All significant  intercompany  accounts and transactions have
been eliminated in consolidation  consolidated  financial statements include the
accounts of Prologic and its subsidiary,  BASIS.  All  significant  intercompany
accounts and transactions have been eliminated in consolidation.

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.


RESULTS OF OPERATIONS

         General and Administrative. General and administrative expenses for the
quarter  ended June 30,  2005 were  $35,984 as  compared to $60,850 for the same
period of the previous year. The decrease in these expenses is  attributable  to
the reduction in efforts related to the accounting and audit expenses related to
the foreclosure that occurred in the prior year.

         Operating Income (loss).  Operating loss for the quarter ended June 30,
2005 was  $35,984,  as  compared  to an  operating  loss of $60,850 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 June 30,
2005 or for the same period of the previous year.

                                                                               9

<PAGE>


         Income  (Loss)  from  Continuing  Operations.  The loss from  continued
operations  for the  quarter  ended June 30,  2005 was  $35,984,  as compared to
$60,850 for the same period of the prior fiscal year.

         Income  Taxes.  The  Company  had no income tax  expense  for the first
quarters of fiscal 2005 and 2004.  As of June 30, 2005,  the Company had Federal
net operating loss carry forwards of approximately  $8,870,000.  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 June 30, 2005 was $35,984,  or
a loss of approximately  $0.005 per share,  compared to a loss of $60,850,  or a
loss of approximately $0.01 per share, for the same period of the previous year.
The decrease in net loss was attributable to the reduction in efforts related to
the accounting and audit expenses  related to the  foreclosure  that occurred in
the prior year.


LIQUIDITY AND CAPITAL RESOURCES

         At  June  30,  2005  the  Company  had a  working  capital  deficit  of
approximately  $2,120,000 versus a deficit of approximately  $2,084,000 at March
31,  2005.  As a result of the  working  capital  deficit at March 31, 2005 (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 June 30, 2005 was $62
         .
         Cash used by continuing  operations for the quarter ended June 30, 2005
was approximately $280 compared to cash used by continuing  operations of $1,000
in the same period of the previous year.

         During  the three  months  ended June 30,  2005,  the  Company  did not
purchase any 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 June 30,  2005,  the Company had current debt  obligations,  or debt
that will become due within twelve months,  of $1,411,757.  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.


                                                                              10

<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 foreclosure on the
business  assets  and  operations  in March  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.

         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.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


         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.  The
Company anticipates conversion of all its redeemable preferred stock into common
stock by the end of the second quarter of fiscal 2005.

         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.


                                                                              11

<PAGE>


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


"SAFE HARBOR"  Statement under the Private  Securities  Litigation Reform Act of
 1995

         Management's discussion and analysis should be read in conjunction with
the  Consolidated  Financial  Statements  contained  elsewhere in this quarterly
report on Form  10-QSB  for the  quarter  ended  June 30,  2004.  Except for the
historical information contained herein, the matters discussed in this report on
Form 10-QSB are  forward-looking  statements  that involve a number of risks and
uncertainties.  There are numerous  important  factors and risks,  including the
rapid change in market conditions,  the anticipation of growth of certain market
segments,  the  volatility  inherent in the capital and financial  markets,  the
Company's  ability to manage  acquisitions and attract and retain highly skilled
technical,  managerial  and sales and marketing  personnel,  and the other risks
detailed from time to time in the Company's  SEC reports,  including  reports on
Form 10-KSB and Form 10-QSB,  that could cause results to differ materially from
those anticipated by the forward-looking statements made herein.

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


ITEM 3.  CONTROLS AND PROCEDURES

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

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



PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

          As  previously  reported,  on August 1, 2000,  certain  holders of the
          Company's Series B Convertible  Preferred Stock filed an action in the
          Arizona Superior Court, Pima County (Pace Investment Co., Inc., et al.
          v. Prologic Management Systems, Inc., CV 20003999).  The Company filed
          a  counterclaim  against  the  Plaintiffs,  petitioning  the court to,
          amongst  other  things,  affirm the  Company's  position  and deny the
          Plaintiffs'  claims.  The parties have  dismissed  all claims  without
          prejudice  and intend to resolve the  dispute  without the aide of the
          courts.

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


                                                                              12

<PAGE>


          Avnet Computer Marketing Group v. Prologic Management  systems,  Inc.,
          C20032814,  Superior  Court  for the State of  Arizona  in and for the
          County of Pima,  filed May 19,  2003.  A complaint  was filed by Avnet
          against Prologic to collect approximately $150,000 owed by Prologic to
          Avnet. Prologic does not deny this debt and has agreed to a stipulated
          judgment  for the full debt owed in this  matter.  An Entry of Default
          was granted on January 13, 2004 for a total amount of $150,522,  which
          includes costs and legal fees of $212.

          Nextera  Business  Performance  Group,  Inc.  v.  Prologic  Management
          Systems,  Inc.,  MICV2003-05209-H,  Superior  Court,  Commonwealth  of
          Massachusetts,  Middlesex County, filed December 23, 2003. A complaint
          was filed by Nextera against Prologic to collect approximately $80,000
          owed by Prologic  under the terms of a promissory  note.  On April 14,
          2004, the plaintiff  requested from the court an Entry of Default.  An
          Entry of Default  was  granted on May 28,  2004 for a total  amount of
          $85,340, which includes interest of $17,340.

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


Item 2.  Changes in Securities

         None.

Item 3.  Defaults upon Senior Securities

         See Item 1 Legal Proceedings and Notes to Condensed Financial
         Statements.

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 June 30, 2005.



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: August 21, 2005          By:  /s/ James M. Heim
                                            ------------------------------------
                                                 James M. Heim
                                                 Chief Executive Officer

                                                                              13