<Page>

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                 ---------------

                                   FORM 10-K/A

                                (Amendment No. 1)

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended June 30, 2002
                         Commission file number 0-23306

                                PROPHET 21, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified In Its Charter)


              Delaware                                   23-2746447
---------------------------------------     ------------------------------------
  (State or Other Jurisdiction of           (I.R.S. Employer Identification No.)
   Incorporation or Organization)

 19 West College Avenue, Yardley, Pennsylvania                      19067
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                        (Zip Code)


                                 (215) 493-8900
                         (Registrant's Telephone Number,
                              Including Area Code)


          Securities registered pursuant to Section 12(b) of the Act:


                                                      Name of each exchange
  Title of each class                                  on which registered
-----------------------------                   --------------------------------
           None                                               None

          Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 par value
--------------------------------------------------------------------------------

         Indicate by check mark whether the Registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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:
                  -----------                            ----------

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]


                                      -1-
<Page>

         State the aggregate market value of the voting and non-voting common
stock held by non-affiliates of the Registrant: $19,316,588 at August 31, 2002
based on the last sales price on that date.

         Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of August 8, 2002:

<Table>
<Caption>

Class                                                         Number of Shares
-----                                                         ----------------


<S>                                                                <C>
Common Stock, $.01 par value                                       3,856,338
</Table>


Documents incorporated by reference:  None.



                                      -2-
<Page>

********************************************************************************

Items 10, 11, 12 and 13 of Part III of the Annual Report on Form 10-K for the
fiscal year ended June 30, 2002 of Prophet 21, Inc. (the "Company" or the
"Registrant") previously filed with the Securities and Exchange Commission are
hereby amended and restated in their entirety as follows:

********************************************************************************

                                    PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
-------  --------------------------------------------------

DIRECTORS

<Table>
<Caption>

                                                     SERVED AS A                   POSITIONS WITH
   NAME                                AGE          DIRECTOR SINCE                  THE COMPANY
   ----                                ---          --------------                  -----------

<S>                                    <C>               <C>             <C>
   John E. Meggitt, Ph.D.              71                1967            Chairman of the Board and Director

   Charles L. Boyle, III               49                1993            President, Chief Executive
                                                                         Officer and Director

   Dorothy M. Meggitt                  68                1967            Secretary and Director

   David D. Gathman                    54                2001            Director

   Daniel J. Malcolm                   51                2001            Director

   Donald M. Gleklen                   65                2001            Director
</Table>

         Other than Dr. John E. Meggitt and Dorothy M. Meggitt, who are husband
and wife, there are no family relationships among any of the Directors,
executive officers and key employees of the Company.

         The principal occupations and business experience, for at least the
past five years, of each Director and nominee is as follows:

         DR. MEGGITT founded the Company and has served as a Director of the
Company since its inception in 1967. From the Company's inception through August
13, 1996, he was also President and Chief Executive Officer of the Company. In
addition, Dr. Meggitt served as Treasurer of the Company from its inception
through December 1993. Prior to founding the Company, he directed system
programming operations for Electronic Associates, Inc. and, earlier, conducted
computer research for IBM.

         MR. BOYLE joined the Company in 1984 and, effective August 13, 1996,
was elected to the offices of President and Chief Executive Officer. Prior to
serving in his current capacities, Mr. Boyle served as Executive Vice President
from September 1992 to August 1996, Chief Financial Officer from September 1992
to December 1995, Chief Operating Officer from December 1995 to August 1996 and
Treasurer from December 1993 to August 1996. He has been a Director since
December 1993. Prior to joining the Company, Mr. Boyle held various financial
and management positions with Colt Industries, Inc.


                                      -3-
<Page>

         MRS. MEGGITT joined the Company upon its inception in 1967 and has
served as Secretary and a Director since that time. Mrs. Meggitt managed the
Company's human resources and facilities departments from 1967 through 1987.

         MR. GATHMAN was elected to the Board of Directors of the Company in
January 2001. Mr. Gathman is Vice President and Chief Financial Officer of
Targeted Diagnostics & Therapeutics, Inc. (TDT). TDT has developed
molecular-based technologies for the targeted detection, diagnosis and treatment
of colorectal cancer, gastrointestinal cancers and certain infectious diseases.
From February 2001 to May 2002, Mr. Gathman was Senior Vice President and Chief
Financial Officer of the Federal Reserve Bank of Philadelphia. He was
responsible for the internal financial operations, planning and building and
security operations of the Bank. From January 1999 to January 2001, Mr. Gathman
was Chief Financial Officer of Internet Capital Group, Inc. (ICGE). ICGE is an
Internet company actively engaged in business-to-business e-commerce through a
network of partner companies. From April 1994 to December 1998, he was Executive
Vice President and Chief Financial Officer and a member of the Board of
Directors of Integrated Systems Consulting Group, Inc., an information services
consulting firm that provides software applications integration and development
primarily in the pharmaceutical and life sciences industries. From December 1982
through March 1994, Mr. Gathman was Vice President - Finance and Chief Financial
Officer of SunGard Data Systems, Inc., a global leader in integrated IT
solutions for financial services and the pioneer and leading provider of
information availability services.

         MR. MALCOLM was elected to the Board of Directors of the Company in
January 2001. Mr. Malcolm is employed as Chief Marketing Officer and President,
Technology Services Division, Daou Systems, Inc. Prior to that, Mr. Malcolm
served as Senior Vice President of Sales Development for COVAD, a national DSL
broadband service provider, a position he held since COVAD's purchase of
LaserLink.net in March 2000. From April 1999 to March 2000, Mr. Malcolm served
as Vice Chairman and Chief Operating Officer for LaserLink.net, a provider of
broadband Internet access. Before joining LaserLink.net in April 1999, he was
Corporate Vice President of Central and Eastern Customer Operation for Shared
Medical Systems (SMS), where he directed the company's sales and marketing
operations. Mr. Malcolm also served as Executive Vice President and Chief
Operating Officer of American Healthware Systems before it was acquired by SMS.
Prior to American Healthware Systems and SMS, Mr. Malcolm served as President of
Integra, a mental health substance abuse provider. Mr. Malcolm also had
positions in marketing and sales management with IBM for 14 years.

         MR. GLEKLEN was elected to the Board of Directors of the Company in
June 2001. Mr. Gleklen is a strategic business advisor and private investor and
has extensive experience as a senior corporate executive, banker and lawyer. He
is the retired Chairman and Chief Executive Officer of IntelliHealth, Inc., an
internet company providing healthcare content to consumers that was a joint
venture of Aetna US Healthcare and Johns Hopkins Health System. He also
currently serves on the board of directors of


                                      -4-
<Page>

Moyco Technologies, which is a manufacturer of commercial coated abrasives. Mr.
Gleklen holds a B.A. from Cornell University and a law degree from Columbia
University.

EXECUTIVE OFFICERS

         The following table identifies the current executive officers of the
Company:

<Table>
<Caption>

                                                          CAPACITIES IN                 IN CURRENT
   NAME                                  AGE               WHICH SERVED               POSITION SINCE
   ----                                  ---               ------------               --------------

<S>                                       <C>      <C>                                     <C>
   John E. Meggitt, Ph.D.                 71       Chairman of the Board and               1967
                                                   Director

   Charles L. Boyle, III                  49       President, Chief Executive              1996
                                                   Officer and Director

   Thomas M. Giuliani (1)                 45       Chief Financial Officer and             1996
                                                   Treasurer

   Dorothy M. Meggitt                     68       Secretary and Director                  1967


   Doug Levin (2)                         41       Executive Vice President                2001

   Russell K. Mellott (3)                 33       Vice President of  Software             2001
                                                   Development

   William Patton (4)                     43       Vice President of                       2001
                                                   Professional Services
</Table>

(1)      Mr. Giuliani joined the Company in 1989 and currently serves as its
         Chief Financial Officer and Treasurer. Prior to joining the Company,
         Mr. Giuliani held various accounting and financial positions with
         Deloitte & Touche, Commodore International Ltd., Fox Chase Cancer
         Center and Robinson Alarm Company.

(2)      Mr. Levin joined the Company in 1986 and currently serves as its
         Executive Vice President. Prior to joining the Company, Mr. Levin held
         a programming position at Unisys.

(3)      Mr. Mellott joined the Company in 1991 and currently serves as its Vice
         President of Software Development.

(4)      Mr. Patton joined the Company in 1985 and currently serves as its Vice
         President of Professional Services.

         Other than Dr. John E. Meggitt and Dorothy M. Meggitt, who are husband
and wife, there are no family relationships among any of the Directors,
executive officers and key employees of the Company.


                                      -5-
<Page>

Executive officers of the Company are elected annually by the Board of Directors
and serve until their successors are duly elected and qualified.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's Directors, officers and
stockholders who beneficially own more than 10% of any class of equity
securities of the Company registered pursuant to Section 12 of the Exchange Act
(collectively, the "Reporting Persons") to file initial statements of beneficial
ownership of securities and statements of changes in beneficial ownership of
securities with respect to the Company's equity securities with the Securities
and Exchange Commission (the "SEC"). All Reporting Persons are required by SEC
regulation to furnish the Company with copies of all reports that such Reporting
Persons file with the SEC pursuant to Section 16(a).

         Based solely on the Company's review of the copies of such forms
received by the Company and upon written representations of the Company's
Reporting Persons received by the Company, the Company believes that there has
been compliance with all Section 16(a) filing requirements applicable to such
Reporting Persons during fiscal 2002.

ITEM 11. EXECUTIVE COMPENSATION.

SUMMARY OF COMPENSATION IN FISCAL 2002, 2001 AND 2000

         The following Summary Compensation Table sets forth information
concerning compensation for services in all capacities awarded to, earned by or
paid to each person who served as the Company's Chief Executive Officer at any
time during fiscal 2002 and each other executive officer of the Company whose
aggregate cash compensation exceeded $100,000 (collectively, the "Named
Executives") during the fiscal years ended June 30, 2002, 2001 and 2000.

<Table>
<Caption>

-----------------------------------------------------------------------------------------------------------------------
                                              SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------------------------------------------------
                                                           Annual Compensation              Long-Term
                                                                                           Compensation
                                                   ------------------------------------- -----------------
                                                                              Other          Awards
                                                                              Annual     ----------------- ------------
                                                                              Compen-       Securities
                                                                              sation        Underlying      All Other
      Name and Principal Position          Year       Salary       Bonus       ($)           Options       Compensation
                  (a)                       (b)       ($)(c)       ($)(d)     (e)(1)         (#)(g)        ($)(i)(2)
----------------------------------------- -------- ------------- ----------- ----------- ----------------- ------------
<S>                                        <C>       <C>          <C>          <C>           <C>             <C>
Charles L. Boyle, III, President and
    Chief Executive Officer................2002      $220,405     $ 31,625     -- --          -- --          $6,747
                                           2001      $230,147     $ 55,000     -- --         25,000          $6,747
                                           2000      $230,198     $ 55,000     -- --         15,000          $9,733

Thomas M. Giuliani, Chief Financial
    Officer and Treasurer..................
                                           2002      $138,964     $ 10,875     -- --          -- --          $3,001
                                           2001      $144,837     $ 18,750     -- --         15,000          $3,031
                                           2000      $143,279     $ 18,750     -- --         10,000          $5,747
</Table>



                                      -6-
<Page>

<Table>
<S>                                        <C>      <C>           <C>           <C>           <C>             <C>
Doug Levin, Vice President.................2002     $172,507      $ 24,750       -- --        -- --          $2,791
                                           2001     $180,428      $ 41,250       -- --       20,000          $2,996
                                           2000     $171,875      $ 41,250       -- --       10,000          $5,534

Russell K. Mellott, Vice President.........2002     $134,281      $  5,850       -- --        7,500          $2,250
                                           2001     $129,524      $ 21,000       -- --        5,000          $1,910
                                           2000     $116,922      $ 12,500       -- --        5,000          $2,959

William Patton, Vice President.............2002     $110,630      $  5,000       -- --        7,500          $1,933
                                           2001     $104,842      $ 24,500       -- --        5,000          $1,643
                                           2000     $ 98,959      $ 10,125       -- --        2,500          $3,158
----------------------------------------- -------- ------------- ----------- ----------- ----------------- ------------
</Table>

(1)      The value of certain personal benefits is not included since the
         aggregate amount of such compensation did not exceed the lesser of
         either $50,000 or 10% of the total annual salary and bonus reported for
         such named executive officer in columns (c) and (d).

(2)      Includes Company contributions to its 401(k) plan and supplemental life
         insurance and long-term disability premiums paid by the Company on
         behalf of its executive officers.


OPTION GRANTS IN FISCAL 2002

         The following table sets forth information concerning individual grants
of stock options during fiscal 2002 to each of the Named Executives. The Company
has never granted any stock appreciation rights.

<Table>
<Caption>

-----------------------------------------------------------------------------------------------------------------------
                                          OPTION GRANTS IN LAST FISCAL YEAR
-----------------------------------------------------------------------------------------------------------------------
                                                                                                Potential Realizable
                                     Individual Grants                                         Value at Assumed Annual
                                                                                                Rates of Stock Price
                                                                                               Appreciation for Option
                                                                                                     Term(2)
-------------------------------------------------------------------------------------------- --------------------------
                              Number of
                             Securities
                             Underlying      % of Total
                               Options     Options Granted     Exercise or
                               Granted     To Employees in     Base Price      Expiration
           Name                (#)(1)        Fiscal Year         ($/Sh)           Date          5%($)        10%($)
           (a)                   (b)             (c)              (d)             (e)            (f)          (g)
--------------------------- -------------- ----------------- --------------- --------------- ------------ -------------
<S>                            <C>              <C>              <C>            <C>            <C>          <C>
Charles L. Boyle, III....        --               --               --              --            --            --
--------------------------- -------------- ----------------- --------------- --------------- ------------ -------------
Thomas M. Giuliani.......        --               --               --              --            --            --
--------------------------- -------------- ----------------- --------------- --------------- ------------ -------------
Doug Levin...............        --               --               --              --            --            --
--------------------------- -------------- ----------------- --------------- --------------- ------------ -------------
Russell K. Mellott.......       7,500            20.8            9.900          11/20/11       46,695       118,335
--------------------------- -------------- ----------------- --------------- --------------- ------------ -------------
William Patton...........       7,500            20.8            9.900          11/20/11       46,695       118,335
--------------------------- -------------- ----------------- --------------- --------------- ------------ -------------
</Table>

(1)      The options disclosed herein were granted pursuant to the Company's
         1993 Plan and become exercisable to the extent of one-third of the
         options on the first anniversary from the date of


                                      -7-
<Page>

         grant (November 20, 2001) with an additional one-third of the options
         granted becoming exercisable on each of the second and third
         anniversary of the date of grant. The options terminate on the
         expiration date, subject to earlier termination on the optionee's
         death, disability or termination of employment with the Company.
         Options are not assignable or otherwise transferable except by will or
         the laws of descent and distribution.

(2)      Based on a grant date fair market value of $9.900. Potential gains are
         net of exercise price, but before taxes associated with exercise. These
         amounts represent certain assumed rates of appreciation only, in
         accordance with the SEC's rules. Actual gains, if any, on stock option
         exercises are dependent on the future performance of the Common Stock,
         overall market conditions and the option holders continued employment
         through the vesting period. The amounts reflected in this table may not
         necessarily be achieved.


                                      -8-
<Page>

AGGREGATED OPTION EXERCISES IN FISCAL 2002 AND FISCAL YEAR END OPTION VALUES

         The following table sets forth information concerning each exercise of
options during fiscal 2002 by each of the Named Executives and the year-end
number and value of unexercised options held by each of the Named Executives.

<Table>
<Caption>

-------------------------------------------------------------------------------------------------------------------------
                                    AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                                           AND FISCAL YEAR-END OPTION VALUES
-------------------------------------------------------------------------------------------------------------------------
                                                                       Number of Securities      Value of Unexercised
                                                                      Underlying Unexercised    In-The-Money Options at
                                                                         Options at Fiscal              Fiscal
                                                                             Year-End                  Year-End
                                         Shares                                 (#)                     ($)(1)
                                       Acquired on        Value            Exercisable/              Exercisable/
                Name                    Exercise       Realized($)         Unexercisable             Unexercisable
                (a)                      (#)(b)            (c)                  (d)                       (e)
------------------------------------- -------------- ---------------- ------------------------ --------------------------
<S>                                     <C>             <C>               <C>                     <C>
Charles L. Boyle, III...........           --              --             232,333/21,667          $1,153,300/$13,650
Thomas M. Giuliani..............           --              --              62,667/13,333            $274,302/$9,100
Doug Levin......................         35,500         $283,813           66,833/16,667            $273,685/$9,100
Russell K. Mellott..............           --              --              6,000/12,500             $9,100/$20,150
William Patton..................          1,000          $8,110            5,833/11,667             $4,550/$17,875
------------------------------------- -------------- ---------------- ------------------------ --------------------------
</Table>

----------
(1)      Based on a closing price of $11.98 per share of Common Stock as listed
on the Nasdaq National Market at June 30, 2002.

COMPENSATION OF DIRECTORS

         Non-employee Directors receive an annual fee of $5,000 for services on
the Board of Directors or any committee thereof plus $1,000 and reimbursement of
their expenses for each meeting attended. The Company may from time to time, and
at the discretion of the Board of Directors, grant stock options to Directors
for their service on the Board of Directors. During fiscal 2002, no non-employee
director owners were granted options to purchase shares of the Company's Common
Stock.

EMPLOYMENT ARRANGEMENTS AND TERMINATION OF EMPLOYMENT

         Each of Dr. Meggitt, Mr. Boyle and Mr. Giuliani are employed by the
Company as employees at will. In fiscal 2002, Messrs. Boyle, Giuliani, Levin,
Mellott, Patton earned bonuses of $189,750, $65,250, $148,500, $16,800 and
$27,600 respectively. Such bonuses were paid to such executive officers
subsequent to June 30, 2002.

         In addition to the requirement of each of Dr. Meggitt and Mr. Boyle to
maintain the confidentiality of Company information and assign inventions to the
Company, each of such executive officers has agreed that during the term of his
respective employment and thereafter for the greater of two years or the period
of time for which such executive officer is being compensated under such
employment, such person will not compete with the Company by engaging in any
capacity in any business which is competitive with the business of the Company.

         The Company has executed indemnification agreements with each of its
executive officers and Directors pursuant to which the Company has agreed to
indemnify such parties to the full extent permitted


                                      -9-
<Page>

by law, subject to certain exceptions, if such party becomes subject to an
action because such party is a Director, officer, employee, agent or fiduciary
of the Company.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The Compensation Committee is comprised of John E. Meggitt, Ph.D.,
Charles L. Boyle, III, David D. Gathman, Daniel J. Malcolm and Donald M.
Gleklen. Messrs. Gathman, Malcolm, and Gleklen have not served as either an
officer or employee of the Company or any of its subsidiaries at any time. There
are no, and during fiscal year 2002 there were no, Compensation Committee
Interlocks.

         The Company's headquarters in Yardley, Pennsylvania are leased to the
Company by John E. Meggitt, Ph.D., the Chairman of the Board, and Dorothy M.
Meggitt, his wife and Secretary of the Company. Dr. and Mrs. Meggitt also are
Directors and majority stockholders of the Company. See "Security Ownership of
Certain Beneficial Owners and Management." On July 1, 1998, the Company and Dr.
and Mrs. Meggitt entered into a five-year lease for the Yardley facilities.
Under such lease arrangement, the Company made rental payments to Dr. and Mrs.
Meggitt totaling $475,200 during the year ended June 30, 2002. In addition, the
Company paid $62,929 during the year ended June 30, 2002 for property taxes due
on such property. The Company believes that the terms of the lease are at least
as favorable to the Company as the terms that may have been available from
unrelated third parties. In addition, the Company has determined that any future
transactions between the Company and its officers, Directors, principal
stockholders and their affiliates shall be on terms no less favorable to the
Company than could be obtained from unrelated third parties.

         In fiscal 2002, the Company paid $83,660 in salary to Peter Meggitt,
the son of Dr. and Mrs. Meggitt. Mr. Meggitt serves as a systems programmer for
the Company.

PERFORMANCE GRAPH

         The following graph compares the cumulative total shareholder return on
the Company's Common Stock with the cumulative total return on the Nasdaq
Composite Index and the Nasdaq Computer Index for the period beginning on June
30, 1997. In prior years, the Company used the S&P Computer Index
(capitalization weighted) rather than the Nasdaq Computer Index. The
substitution was made necessary because the S&P Computer Index (capitalization
weighted) is no longer available.


                                      -10-
<Page>

[GRAPHIC]


<Table>
<Caption>
------------------------------------ ------------ ----------- ------------ ------------ ----------- -----------
                                      06/30/97     06/30/98    06/30/99     06/30/00     06/30/01    6/30/02
------------------------------------ ------------ ----------- ------------ ------------ ----------- -----------
<S>                                  <C>          <C>         <C>           <C>         <C>         <C>
Prophet 21, Inc.                     $ 100.00     $ 272.09    $ 134.88      $ 269.77    $ 115.72    $  222.88
------------------------------------ ------------ ----------- ------------ ------------ ----------- -----------
Nasdaq Composite Index               $ 100.00     $ 131.39    $ 186.27      $ 275.03    $ 146.88    $  101.47
------------------------------------ ------------ ----------- ------------ ------------ ----------- -----------
Nasdaq Computer Index                $ 100.00     $ 323.49    $ 236.69      $ 400.19    $ 185.14    $  116.43
------------------------------------ ------------ ----------- ------------ ------------ ----------- -----------
</Table>

(1)      Graph assumes $100.00 invested on June 30, 1997 in the Company's Common
         Stock, the Nasdaq Composite Index and the Nasdaq Computer Index.

(2)      Total return assumes reinvestment of dividends.

(3)      Fiscal year ending June 30.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

         The Compensation Committee has furnished the following report:

         The Company's executive compensation policy is designed to attract and
retain highly qualified individuals for its executive positions and to provide
incentives for such executives to achieve maximum Company performance by
aligning the executives' interest with that of shareholders by basing a portion
of compensation on corporate performance.

         The Compensation Committee generally determines base salary levels for
executive officers of the Company, who are not subject to an employment
agreement, at or about the start of the fiscal year and


                                      -11-
<Page>

determines actual bonuses after the end of the fiscal year based upon Company
and individual performance. Each of Dr. Meggitt, Mr. Boyle, Mr. Giuliani, Mr.
Levin, Mr. Mellott and Mr. Patton are employed by the Company as employees at
will.

         The Company's executive officer compensation program is comprised of
base salary, conditional cash bonuses, stock options granted at the discretion
of the Option Committee and various other benefits, including stock purchase
rights, medical insurance and a 401(k) Plan which are generally available to all
employees of the Company.

         Salaries, whether established pursuant to contract or otherwise, are
established in accordance with industry standards through review of publicly
available information concerning the compensation of officers of comparable
companies. Consideration is also given to relative responsibility, seniority,
individual experience and performance. Salaries for each of Dr. Meggitt, Mr.
Boyle, Mr. Giuliani, Mr. Levin, Mr. Mellott and Mr. Patton are determined by the
Board of Directors. Salary increases for other executives are generally made
based on increases in the industry for similar companies with similar
performance profiles and/or attainment of certain division or Company goals.

         The stock option and stock purchase programs are designed to relate
executives' long-term interests to stockholders' long-term interests. Stock
options and stock purchase rights will be awarded on the basis of individual
performance and/or the achievement of internal strategic objectives.

         Based on review of available information, the Committee believes that
the Chief Executive Officer's total annual compensation is reasonable and
appropriate given the size, complexity and historical performance of the
Company's business, the Company's position as compared to its peers in the
industry, and the specific challenges faced by the Company during the year, such
as changes in the market for computer products and manufacturers' product lines,
as well as variations in prices and distribution channels, and other industry
factors. No specific weight was assigned to any of the criteria relative to the
Chief Executive Officer's compensation.

         Compensation Committee Members
         (as currently constituted)

         John E. Meggitt, Ph.D.
         Charles L. Boyle, III
         David D. Gathman
         Daniel J. Malcolm
         Donald M. Gleklen

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

         There are, as of October 23, 2002, 152 holders of record of the
Company's Common Stock. The following table sets forth certain information, as
of October 15, 2002, with respect to holdings of the Company's Common Stock by
(i) each person known by the Company to beneficially own more than 5% of the
total number of shares of Common Stock outstanding as of such date, (ii) each of
the Company's Directors (which includes all nominees), (iii) each of the
Company's Named Executives, and (iv) all Directors and executive officers as a
group. This information is based


                                      -12-
<Page>

upon information furnished to the Company by each such person and/or based upon
public filings with the Securities and Exchange Commission. Unless otherwise
indicated, the address for the individuals below is that of the Company.

<Table>
<Caption>

   Name and Address                                               Amount and Nature                    Percent
   of Beneficial Owner(1)                                      of Beneficial Ownership(1)              of Class(2)
   -------------------                                         -----------------------                 --------
<S>                                                            <C>                                       <C>
   (i)    Certain Beneficial Owners:
          John E. Meggitt, Ph.D. and
          Dorothy M. Meggitt                                   1,995,770(3)                              51.2
   (ii)   Directors (which includes all nominees)
            and Named Executives:
          Charles L. Boyle, III                                  254,629 (4)                              6.1
          Thomas M. Giuliani                                      74,013 (5)                              1.9
          Doug Levin                                              76,833 (6)                              1.9
          Russell Mellott                                         11,883 (7)                               *
          William K. Patton                                       11,233 (8)                               *
          David D. Gathman                                         1,667 (9)                               *
          Daniel J. Malcolm                                        1,667 (10)                              *
          Donald M. Gleklen                                        1,667 (11)                              *
   (iii)  All current Directors and executive
            officers as a group (10 persons) (12)              2,428,855 (3)(4)(5)(6)                    61.8
                                                                         (7)(8)(9)(10)
                                                                         (11)(12)
</Table>

----------
*        Less than one percent.

(1)      Except as set forth in the footnotes to this table and subject to
         applicable community property law, the persons named in the table have
         sole voting and investment power with respect to all shares of Common
         Stock shown as beneficially owned by such stockholder.

(2)      Applicable percentage of ownership is based on 3,901,689 shares of
         Common Stock outstanding on October 15, 2002, plus any presently
         exercisable stock options held by such holder, and options which will
         become exercisable within 60 days after October 15, 2002.

(3)      John E. Meggitt, Ph.D., Chairman of the Board and Director, and Dorothy
         M. Meggitt, Secretary and Director, are husband and wife. Includes
         1,697,732 shares of Common Stock held by Dr. Meggitt and 298,038shares
         of Common Stock held by Mrs. Meggitt. Does not include shares of Common
         Stock owned of record by Dr. and Mrs. Meggitt's adult children (and
         their spouses) and grandchildren, as to which shares Dr. and Mrs.
         Meggitt disclaim beneficial ownership.

(4)      Represents 8,962 shares of Common Stock owned of record and 245,667
         shares of Common Stock subject to options which were exercisable as of
         October 15, 2002 or which will become exercisable within 60 days after
         such date. Excludes 8,333 shares underlying options which become
         exercisable over time after such period.

(5)      Represents 3,013 shares of Common Stock owned of record and 71,000
         shares of Common Stock subject to options which were exercisable as of
         October 15, 2002 or which will become exercisable within 60 days after
         such date. Excludes 5,000 shares underlying options which become
         exercisable over time after such period.


                                      -13-
<Page>

(6)      Represents 76,833 shares of Common Stock subject to options which were
         exercisable as of October 15, 2002 or which will become exercisable
         within 60 days after such date. Excludes 6,667 shares underlying
         options which become exercisable over time after such period.

(7)      Represents 50 shares of Common Stock owned of record and 11,833 shares
         of Common Stock subject to options which were exercisable as of October
         15, 2002 or which will become exercisable within 60 days after such
         date. Excludes 6,667 shares underlying options which become exercisable
         over time after such period.

(8)      Represents 400 shares of Common Stock owned of record and 10,833 shares
         of Common Stock subject to options which were exercisable as of October
         15, 2002 or which will become exercisable within 60 days after such
         date. Excludes 6,667 shares underlying options which become exercisable
         over time after such period.

(9)      Represents 1,667 shares of Common Stock subject to options which were
         exercisable as of October 15, 2002 or which will become exercisable
         within 60 days after such date. Excludes 3,333 shares underlying
         options which become exercisable over time after such period.

(10)     Represents 1,667 shares of Common Stock subject to options which were
         exercisable as of October 15, 2002 or which will become exercisable
         within 60 days after such date. Excludes 3,333 shares underlying
         options which become exercisable over time after such period.

(11)     Represents 1,667 shares of Common Stock subject to options which were
         exercisable as of October 15, 2002 or which will become exercisable
         within 60 days after such date. Excludes 3,333 shares underlying
         options which become exercisable over time after such period.

(12)     Includes an aggregate of 421,167 shares of Common Stock underlying
         options granted to Directors and Executive Officers listed in the table
         which are exercisable as of October 15, 2002 or which will become
         exercisable within 60 days after such date. Excludes 43,333 shares
         underlying options granted to Directors and Executive Officers which
         become exercisable over time after such period.


EQUITY COMPENSATION PLAN INFORMATION

         The following table provides information regarding our compensation
plans under which our equity securities are authorized for issuance. The
information provided is as of June 30, 2002.

<Table>
<Caption>
                                                                                            Number of securities
                                                                                           remaining available for
                                                                                            future issuance under
                                    Number of securities           Weighted-average        equity compensation plans
                                 to be issued upon exercise        Exercise price of         (excluding securities
                                   of outstanding options,       outstanding options,      reflected in column 2 of
        Plan category                warrants and rights          warrants and rights            this table).
        -------------            --------------------------      --------------------      -------------------------
<S>                                        <C>                           <C>                        <C>
Equity Compensation Plans
Approved by Security Holders....           717,152                       $8.85                      157,334

Equity Compensation Plans Not
Approved by Security Holders....             --                           --                          --
     Total......................           717,152                       $8.85                      157,334
</Table>

                                      -14-

<Page>

ITEM 14. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The Company has executed indemnification agreements with each of its
Directors and executive officers pursuant to which the Company has agreed to
indemnify such parties to the full extent permitted by law, subject to certain
exceptions, if such party becomes subject to an action because such party is a
Director, officer, employee, agent or fiduciary of the Company.

----------
Transactions involving Dr. and Mrs. Meggitt are reported in "Executive
Compensation -- Compensation Committee Interlocks and Insider Participation."



                                      -15-
<Page>



CERTIFICATION*

I, Charles L. Boyle, III, certify that:

         1. I have reviewed this Amendment No. 1 to the annual report on Form
10-K of Prophet 21, Inc. (the "registrant");

         2. Based on my knowledge, this Amendment No. 1 does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by the
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this Amendment No. 1, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in the annual report.

Date: October 28, 2002                 /s/ CHARLES L. BOYLE, III
                                       -----------------------------------------
                                           Charles L. Boyle, III
                                           Chief Executive Officer and President

-------------
* Pursuant to the transition provisions of Release No. 34-46427 (Aug. 28, 2002),
the portions of this certification required by paragraphs (b)(4), (b)(5) and
(b)(6) of Exchange Act Rule 13a-14 are inapplicable to this annual report.
Accordingly, the portions have been omitted from this certification.

CERTIFICATION*

I, Thomas M. Giuliani, certify that:

         1. I have reviewed this Amendment No. 1 to the annual report on Form
10-K of Prophet 21, Inc. (the "registrant");

         2. Based on my knowledge, this Amendment No. 1 does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by the
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this Amendment No. 1, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in the annual report.

Date: October 28, 2002             /s/ THOMAS M. GIULIANI
                                   ---------------------------------------------
                                       Thomas M. Giuliani
                                       Chief Financial Officer and Treasurer

-------------
* Pursuant to the transition provisions of Release No. 34-46427 (Aug. 28, 2002),
the portions of this certification required by paragraphs (b)(4), (b)(5) and
(b)(6) of Exchange Act Rule 13a-14 are inapplicable to this annual report.
Accordingly, the portions have been omitted from this certification.


                                      -16-
<Page>



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to
Form 10-K report to be signed on its behalf by the undersigned, thereunto duly
authorized this 28th day of October, 2002.


                                         PROPHET 21, INC.



                                         By: /s/ Charles Boyle
                                            ------------------------------------
                                             Charles L. Boyle, III, President
                                                 and Chief Executive Officer






                                      -17-