Exhibit 99.1 



                              PEGASYSTEMS INC. 
                                                                   Schedule II 
                      Valuation and Qualifying Accounts 



                                                Additions 
                                                  Charged 
                                   Balance at       to 
                                    beginning      costs                  Balance at 
                                       of           and                     end of 
Description                          period      expenses  Deductions       period 
- -------------------------------     ----------    --------    ---------   ---------- 
                                                              
Year ended December 31, 1995 
  Allowance for doubtful 
  accounts                          $      0     $793,310     $359,423(a)  433,887 
Year ended December 31, 1994 
  Allowance for doubtful 
  accounts                           340,041            0      340,041(a)        0 
Year ended December 31, 1993 
  Allowance for doubtful 
  accounts                            18,087      325,862        3,908(a)  340,041 


(a) Deductions are related to accounts receivable write-offs