1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the period ended September 30, 1996.
Commission file number: 33-89384-LA
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.)
2030 East Speedway Blvd., Tucson, Arizona 85719
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (520) 320-1000
(Former address: 2731 East Elvira Road, #151, Tucson, Arizona, 85706
Former telephone number: 520-741-1001
Securities registered under Section 12(g) of the Exchange Act:
Common Stock and Warrants to Purchase 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 October 31, 1996 was 3,665,395.
Transitional Small Business Disclosure Format:
Yes ; No X .
--- ---
2
PROLOGIC MANAGEMENT SYSTEMS, INC.
INDEX
Page
----
Item 1 Condensed Consolidated Balance Sheets at 3
September 30, 1996 and March 31, 1996
Condensed Consolidated Statements of Operations 4
for the 3 Months Ended September 30, 1996 and 1995,
& the 6 Months Ended September 30, 1996 and 1995
Condensed Consolidated Statements of Cash Flows 5
for the 6 Months Ended September 30, 1996 and 1995
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of 8
Results of Operations and Financial Condition
Part II Other Information 12
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote by Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Exhibit 11 14
Exhibit 27 15
Signatures 13
3
PROLOGIC MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 MARCH 31, 1996
------------------ --------------
Assets (unaudited)
Current assets
Cash and cash equivalents $ 1,632,643 $ 3,426,981
Trade accounts receivable less allowance for doubtful
accounts of $152,696 at September 30, 1996 and
March 31, 1996 2,915,218 480,914
Inventory 689,572 41,931
Prepaid expenses 129,578 37,639
----------- -----------
Total current assets 5,367,011 3,987,465
Property and equipment, net 424,862 124,642
Software costs, net 495,809 565,812
Goodwill, net 1,612,169 235,806
Other assets 154,060 69,651
----------- -----------
Total assets $ 8,053,911 $ 4,983,376
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities
Line of credit $ 1,893,979 $ 47,367
Current installments of long term debt -- 30,018
Notes payable 109,669 892,710
Notes payable to related parties -- 40,000
Accounts payable 2,010,649 322,469
Accrued expenses 492,702 250,486
Deferred maintenance revenue 143,955 107,361
----------- -----------
Total current liabilities 4,650,954 1,690,411
Long term debt excluding current installments 20,295 187,688
Shareholders' equity
Common stock, no par value. Authorized 10,000,000 shares;
3,328,070 issued at March 31, 1996 and 3,665,395 at
September 30, 1996. 8,012,395 6,595,163
Accumulated deficit (4,629,733) (3,489,886)
----------- -----------
Net shareholders' equity 3,382,662 3,105,277
----------- -----------
Total liabilities and shareholders' equity $ 8,053,911 $ 4,983,376
=========== ===========
See accompanying notes to the condensed consolidated financial statements
4
PROLOGIC MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
---- ---- ---- ----
(unaudited) (unaudited) (unaudited) (unaudited)
Net Sales:
Hardware $2,490,377 $ 28,258 $ 2,887,699 $ 42,072
Licenses 487,610 38,499 553,826 103,520
Services and Other 509,660 75,695 801,335 150,378
---------- ---------- ----------- ----------
3,487,647 142,453 4,242,860 295,970
---------- ---------- ----------- ----------
Cost of Sales 2,647,161 95,096 3,228,250 171,067
---------- ---------- ----------- ----------
Gross Profit 840,586 47,357 1,014,610 124,903
Operating Expenses
Selling and marketing 277,451 133,448 427,099 224,944
General and administrative 846,524 77,402 1,220,029 148,099
Research and development 99,102 52,066 181,513 86,237
---------- ---------- ----------- ----------
Total operating expenses 1,223,077 262,916 1,828,641 459,280
---------- ---------- ----------- ----------
Operating loss (382,591) (215,559) (814,031) (334,377)
Interest expense (38,183) (35,549) (395,595) (50,522)
Other income (expense) 44,508 (20,431) 69,776 (24,640)
---------- ---------- ----------- ----------
Net loss before taxes (376,266) (271,539) (1,139,850) (409,539)
Income Taxes -- -- -- --
---------- ---------- ----------- ----------
Net loss $ (376,266) $ (271,539) $(1,139,850) $ (409,539)
========== ========== =========== ==========
Net loss per common share $ (0.1027) $ (0.1337) $ (0.3110) $ (0.2016)
Shares used in computing
net loss per share 3,665,395 2,031,280 3,665,395 2,031,280
See accompanying notes to condensed consolidated financial statements
5
PROLOGIC MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------ ------------------
Cash flows from operating activities:
Net Loss $(1,139,850) $ (409,539)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 541,520 96,850
Increase (decrease) in cash due to changes
in operating assets and liabilities:
Trade accounts receivable (2,434,302) (11,150)
Accounts payable and accrued expenses 1,930,398 100,315
Prepaid expenses (91,938) (27,799)
Deposits (84,407) (163,717)
Other assets and liabilities (2,038,175) 68,752
----------- ----------
Total adjustments (2,176,904) 63,251
----------- ----------
Net cash used in operating activities (3,316,754) (346,288)
Cash flows from investing activities:
Capitalized software development costs -- 145,127
Issuance of Note Receivable -- (34,000)
Purchase of Property, Plant, and Equipment (650,888) (35,934)
Purchase of Software - in-house (70,088) (4,206)
Investment in GRSI -- (290,000)
----------- ----------
Net cash used in investing activities (720,976) (219,013)
Cash flows from financing activities:
Issuance of notes payable and debt 1,816,594 1,280,597
Repayment of debt (950,434) (520,652)
Net decrease in related party debt (40,000) --
Issuance of common stock 1,417,232 (67,639)
----------- ----------
Net cash provided by financing activities 2,243,392 692,306
----------- ----------
Net increase (decrease) in cash and cash equivalents (1,794,338) 127,006
Cash and cash equivalents, beginning of period 3,426,981 66,744
----------- ----------
Cash and cash equivalents, end of period $ 1,632,643 $ 193,750
=========== ==========
See accompanying notes to condensed consolidated financial statements
6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Interim Periods
The accompanying condensed consolidated financial statements include the
accounts of Prologic Management Systems, Inc. (the "Company") and its
wholly-owned subsidiaries, Great River Systems, Inc. ("GRSI") and Basis
Inc. ("BASIS"). All significant intercompany balances and transactions
have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements
have been prepared by the Company in accordance with generally accepted
accounting principals, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, the
accompanying condensed consolidated financial statements include all
adjustments (of 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, it is
suggested that these financial statements be read in conjunction with
the consolidated financial statements and the notes thereto included in
the Company's 1996 Report on Form 10-KSB. The results of operations for
the three and six months ended September 30, 1996 are not necessarily
indicative of the results to be expected for the full year.
2. Acquisition
In August 1996, the Company completed the acquisition of BASIS, Inc. a
regional systems integration firm located in Emeryville, California for
$500,000 cash and 337,349 shares of common stock of the company valued
at $1,400,000. In addition, the Company will issue to BASIS
shareholders, an additional amount of common stock valued up to
$1,600,000 if certain post-merger earn-out targets in the agreement are
met during the Company's fiscal periods ending June 30, 1997 and 1998.
3. Line of Credit
The Company maintains a $1,000,000 line of credit with Norwest Bank,
which is subject to renewal in August 1997. The interest rate on
borrowings under the agreement is the "prime" rate of interest as
established by the bank. The line of credit is secured by the company's
money market accounts. The credit agreement contains, among the other
things, restrictive financial covenants. As of September 30, 1996, the
company had borrowings totaling $943,880.
In addition the Company's subsidiary, Basis Inc. maintains a $4,000,000
line of credit with Deutsche Financial Services ("DFS") secured by
substantially all of the assets of Basis and guaranteed by the Company.
The credit agreement contains, among other things, restrictive financial
covenants. The interest rate is at prime plus 1%. As of September 30,
1996, the Company had borrowings on this line of credit of $950,099.
4. Goodwill
Goodwill arose from the acquisition of GRSI and Basis and represents the
excess of the purchase price over the estimated fair value of the net
assets of the entities acquired. Goodwill is being amortized on a
straight-line basis over the period of expected benefit of seven years.
The Company assess the recoverability of this intangible asset by
determining whether the amortization of this intangible asset by
determining whether the amortization of the goodwill balance over its
remaining life can be recovered through the discontinued future
operating cash flows of the acquired operation. The amount of goodwill
impairment, if any, is measured based on projected cash flows using a
discount rate reflecting the Company's average cost of funds. The
assessment of the recoverability of goodwill will be impacted if
estimated future operating cash flows are not achieved. Accumulated
amortization totaled $70,932 at September 30, 1996.
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5. PROPERTY AND EQUIPMENT
Property and equipment are comprised of the following:
September 30, March 31,
1996 1995
------------- ---------
Furniture and Fixtures $159,771 $ 39,968
Computer equipment and
software 833,363 232,190
------------- ---------
933,134 272,158
Less accumulated
depreciation 568,272 174,516
------------- ---------
Net property
and equipment $424,862 $124,642
============= =========
6. SOFTWARE COSTS
A summary of capitalized software follows:
September 30, March 31,
1996 1995
------------- ----------
Existing products and
enhancements $487,376 $487,376
Purchased software 387,386 387,386
------------- ---------
874,762 874,762
Less accumulated
amortization 378,953 308,950
------------- ---------
Net software costs $495,809 $565,812
============= =========
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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the Consolidated
Financial Statements included elsewhere herein. Except for the historical
information contained herein, the matters discussed in this Report are
forward-looking statements that involve a number of risks and uncertainties.
There are certain important factors and risks, including the rapid change in
hardware and software technology, market conditions, the anticipation of growth
of certain market segments and the positioning of the Company's products and
services in those segments, seasonality in the buying cycles of certain of the
Company's customers, the timing of product announcements, the release of new or
enhanced products, the introduction of competitive products and services by
existing or new competitors, and the significant risk associated with the
acquisition of new products, product rights technologies, businesses, the
management growth, the Company's ability to 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 its reports
on Form 10-KSB and Form 10QSB, that could cause results to differ materially
from those anticipated by the statements made herein.
INTRODUCTION
The Company provides applications software for the commercial market which it
licenses for use to manufacturers and for use in the wholesale distribution
industry. The Company's products are not directed to the retail consumer
market. Additionally, the Company provides systems integration and network
services. These services include consulting, maintenance, training and the
installation and sale of third party computer hardware on which to implement
the Company's software products. Although no assurances can be given, the
Company anticipates that its revenues generated from the sale of third party
hardware will continue to increase as a percentage of total revenues in future
periods, primarily as a result of the acquisitions described below. The Company
hopes that increased sales of third party hardware will help produce additional
software license and software service-related revenues.
ACQUISITION OF BASIS INC.
August 1, 1996, the Company completed its acquisition of BASIS, Inc. Pursuant
to the acquisition agreement, BASIS was merged into and became a wholly-owned
subsidiary of the Company. BASIS is a systems integration company located in
the San Francisco area, with additional offices in Portland, Oregon. Prior to
August 1996, BASIS was a privately held company.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
- ----------------------------------------------
NET SALES. Net sales for the second quarter were approximately $3,488,000
versus the net sales for the same period one year ago of $142,000, an increase
of approximately $3,346,000. The increase was due to increases in hardware sales
and sales of services, including maintenance, system integration services and
third party software sales. With the increase in total revenue came a change in
the sales mix as sales of hardware increased as a percent of total sales while
sales of software and services decreased as a percentage of total sales. The
major increase was due to the continued impact of the Company's acquisition
strategy with hardware and integration service sales from GRSI (acquired in
September 1995) and BASIS (acquired in August 1996) reflecting the most
significant impact when compared to second quarter 1995 revenues.
COST OF SALES. Cost of sales increased from approximately $95,000, or 66.8% of
sales, to approximately $2,647,000, or 75.9% of sales, due to the increased
total sales as well as the change in sales mix. The change, as a percent of
total sales, reflects the lower margin that is earned on the sale of third party
hardware compared to the margin earned on the sale of proprietary software. The
Company's strategy is to increase the sale of high margin proprietary software
products by creating distribution channels through the acquisition of system
integration firms. Although no assurances can be given, the Company expects to
begin to see increases in its software sales from its
9
operating subsidiaries late in the third quarter. The Company does not expect
these increases to have a material effect on the operating results of the
Company in the short term.
Selling and Marketing. Selling and marketing expenses increased by
approximately $145,000 from the second quarter of the previous fiscal year.
Selling and marketing expenses were approximately $277,000, or 8.0% of net
sales, for the quarter just ended and were approximately $133,000, or 93.7% of
net sales, for the second quarter last year. The increase is due to increases
in staff and additional advertising and product promotion including attendance
at manufacturing trade shows. The Company plans to continue to increase selling
and marketing staff and product promotion expenses as part of its growth
strategy.
General and Administrative. General and administrative expenses increased from
approximately $77,000 during the second quarter one year ago to approximately
$847,000 for the second quarter of the current year. As a percent of net sales
general and administrative expense decreased from 54.3% for the second quarter
last year to 24.3% this year. The increased amount is due to the addition of
BASIS and the amortization of goodwill relating to the acquisition of GRSI and
BASIS, the expenses associated with moving the general office to its new
location in Tucson as well as additional expenses indirectly related to the
acquisition of GRSI and BASIS. The Company is currently implementing a plan to
consolidate and centralize many of the administrative activities at the Tucson
location and will work to reduce general and administrative expenses relating
to its present operations during the fourth quarter.
Research and Development. Research and development was approximately $99,000,
or 2.8% of net sales in the current period versus approximately $52,000, or
36.5%, for the same period one year ago. The change was a result of expensing
all development work during the quarter.
Interest and Other Income. During the present quarter the Company incurred
approximately $38,000 in interest expense which was offset by interest income
and other miscellaneous items of approximately $45,000 which netted
approximately $7,000 in income. For the quarter of the previous fiscal year the
Company had interest expense of approximately $36,000 and approximately $20,000
of other expenses, which were associated with the write-off of discounts on
warrants offered to investors in the Company's bridge loan.
Income Taxes. The Company had no income tax expense for the second quarter of
fiscal 1997 and 1996. As of March 31, 1996 the Company had Federal net
operating loss carryforwards of approximately $3,260,000. The utilization of
net operating loss carryforwards will be limited as determined pursuant to
applicable provisions of the Internal Revenue Code and Treasury regulations.
Net Loss. The net loss for the quarter ended September 30, 1996 was
approximately $376,000 compared to a loss of approximately $272,000 for the
same period of the prior year. The net loss for the period is attributable to
the loss of margin and the increase in operating expenses in selling and
marketing, general and administrative and development expenses as the Company
continued to implement its strategic growth plan.
SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Net Sales. Net sales for the six months ended September 30, 1996 were
approximately $4,243,000 versus the net sales for the same period one year ago
of approximately $296,000 an increase of approximately $3,947,000. The increase
was due to increases in hardware sales and sales of services, including
maintenance, system integration services and third party software sales. With
the increase in total revenues came a change in the sales mix as sales of
hardware increased as a percent of total sales from 14% to 68% of total sales
and sales of software and services decreased from 85% to 32% of total sales.
The increase in total sales was due to the impact of the Company's acquisition
strategy with hardware and integration service sales from Great River Systems,
Inc. and BASIS, Inc. driving the change.
Cost of Sales. Cost of sales increased from approximately $171,000, or 57.8% of
sales, to approximately $3,228,250, or 76.1% of sales, due to the increased
total sales as well as the change in sales mix. The change, as a percent of
total sales, reflects the lower margin that is earned on the sale of third
party hardware compared to the
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margin earned on the sale of proprietary software. The Company's strategy is to
increase the sale of high margin proprietary software products by creating
distribution channels through the acquisition of system integration firms. The
Company expects to begin to see increases in its software sales from its
operating subsidiaries in the fourth quarter.
Selling and Marketing. Selling and marketing expenses increased by approximately
$202,000 from the six month period ended September 30, 1995. Selling and
marketing expenses were approximately $427,000, or 10.1% of net sales, for the
six month period just ended and were approximately $225,000, or 76.0% of net
sales, for the same period last year. The increase is due to increases in staff
and additional advertising and product promotion including attendance at
manufacturing trade shows. The Company plans to continue to increase selling
and marketing staff and product promotion expenses as part of its growth
strategy.
General and Administrative. General and administrative expenses increased from
approximately $148,000 during the six month period last year to approximately
$1,220,000 for the six months ended September 30, 1996. As a percent of sales
general and administrative expense decreased from 50% last year to 28.8% this
year. The increased amount is due to the addition of the subsidiaries and the
amortization of goodwill as well as increases related to additional reporting
requirements brought on by the recent initial public offering, expenses
associated with the move to a bigger office space as well as additional
expenses indirectly related to the Company's acquisition strategy. The Company
is currently implementing a plan to consolidate and centralize many of the
administrative activities and believes it will begin to reduce general and
administrative expenses during the fourth quarter.
Research and Development. Research and development was approximately $182,000,
or 4.3% of net sales for the six months ended September 30, 1996 versus
approximately $86,000, or 29.1%, for the same period one year ago. The increase
was a result of expensing all development work during the quarter.
Interest and Other Income. During the six month period, the Company incurred
approximately $396,000 in interest expense which was offset by interest income
and other miscellaneous items of approximately $70,000. For the same period of
the previous fiscal year the Company had interest expenses of approximately
$51,000 and approximately $25,000 of other expenses, which were associated with
the write-off of discounts on warrants offered to investors in the Company's
bridge loan.
Income Taxes. The Company had no income tax expense for the second quarter of
fiscal 1997 and 1996. As of March 31, 1996 the Company had Federal net
operating loss carryforwards of approximately $3,260,000. The utilization of net
operating loss carryforwards will be limited as determined pursuant to
applicable provisions of the Internal Revenue Code and Treasury regulations.
Net Loss. The net loss for the six months ended September 30, 1996 was
approximately $1,140,000 compared to a loss of approximately $410,000 for the
same period of the prior year. The net loss for the period is attributable to
the loss of margin and the increase in operating expenses in selling and
marketing, general and administrative and development expense as the Company
continued to implement its strategic growth plan. In addition, the interest
expense of $396,000, mainly attributable to the repayment of bridge notes and
the discounts associated with the notes, significantly impacted the loss.
The Company believes that, as it continues to execute its business plan
during fiscal 1997, sales will grow through acquisitions. However, the
Company believes that, as a result of the acquisition activitiy, increases
in operation expenses associated with the development and integration of the
acquired companies could, in the near term, exceed increases in revenues,
having an adverse impact on operating results.
LIQUIDITY AND CAPITAL RESOURCES
Cash, and cash equivalents totaled $1,633,000 at September 30, 1996 compared to
$3,427,000 at March 31, 1996. The decrease in cash was primarily due to the
funds used by operations to begin the Company's growth and acquisition
strategy. During the month of April 1996 the Company paid off all remaining
bridge notes, which carried an interest rate of 14%, with funds from the
Company's line of credit with its bank which was borrowed at the banks prime
rate. In addition, during the period, the Company repaid loans to related
parties of $40,000 and issued warrants for the purchase of 157,500 shares of
common stock to its underwriter per the Underwriting Agreement. The Company
also finalized the acquisition of Basis issuing $1,400,000 in common stock and
issuing notes payable of $500,000, most of which was paid during September and
October 1996. During the period, the
11
Company purchased approximately $721,000 in capital equipment, which included
approximately $551,000 in capital assets obtained in the acquisition of BASIS.
Based on the Company's operating plan, management believes that the anticipated
cash flow from operations and the use of its line of credit will be sufficient
to meet the Company's anticipated short term cash needs. In the future, the
Company may require additional financing to achieve its current as well as
future plans for expansion. No assurance can be given of the Company's ability
to obtain such financing on favorable terms, if at all. If the Company is
unable to obtain additional financing, its ability to meet its current and
future plans for expansion could be materially adversely affected.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This Form 10QSB may contain forward-looking statements which are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act
on 1995. Such forward-looking statements involve risks and uncertainties,
including, but not limited to, the impact of competitive products and pricing,
product demand and market acceptance risks, the presence of competitors with
greater financial resources, product development and commercialization risks,
costs associated with the integration and administration of acquired
operations, capacity and supply constraints or difficulties, and the results of
financing efforts. Further information regarding these and other risks is
described from time to time in the Company's filings with the Securities and
Exchange Commission, including the Company's 1996 Form 10KSB.
12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of the date of this filing, neither the Company nor its subsidiary is a
party to any legal proceedings, the adverse outcome of which, in management's
opinion, would have a material effect on Prologic operations or financial
position.
ITEM 2. CHANGE IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE BY SECURITY HOLDERS
The annual shareholders meeting was held on September 18, 1996 in Tucson,
Arizona. The following directors were elected at the meeting for a one year
term:
Name For Against Withheld
---- --- ------- --------
James M. Heim 1,881,892 5,519
Richard E. Metz 1,881,892 5,519
Herbert F. Day 1,881,892 5,519
Luke V. McCarthy 1,881,892 5,519
Craig W. Rauchle 1,881,892 5,519
The shareholders appointed the audit firm of KPMG Peat Marwick LLP as the
Company's auditors for the fiscal year ending March 31, 1997.
For Against Withheld
--- ------- --------
1,880,792 3,119 3,500
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 10QSB
A. Exhibit:
Exhibit Number Document Page
-------------- -------- ----
11 Schedule of Computation of Net Loss Per Share
27 Financial Data Schedule
B. Reports on Form 8K:
During the second quarter of fiscal 1996, the Company filed the following:
Current Report on Form 8K dated August 15, 1996 reporting under Item 2,
the Company's acquisition of BASIS, Inc.
13
In Accordance with Section 13 or 15 (d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
PROLOGIC MANAGEMENT SYSTEMS, INC.
Dated: November 15, 1996 By: /s/ James M. Heim
------------------------------
James M. Heim
President and Chief Executive Officer
By: /s/ William E. Wallin
------------------------------
William E. Wallin
Vice President, Treasurer and
Chief Financial Officer (Principal
Financial and Accounting Officer)