PREMIS CORP, 424B1, 1996-09-26

PREMIS CORP
424B1, 1996-09-26
PREPACKAGED SOFTWARE

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<PAGE>
Pursuant File to 424(b)(1)
Registration Number 333-10917
PROSPECTUS

1,750,000 SHARES

[LOGO]

COMMON STOCK

The 1,750,000 shares of Common Stock offered hereby are offered by PREMIS
Corporation ("PREMIS"). The Common Stock is listed on the Nasdaq SmallCap Market
under the trading symbol "PMIS." On September 25, 1996, the last sale price of
the Common Stock as quoted on the Nasdaq SmallCap Market was $5.00 per share.
The Company's Common Stock has been approved for designation as a Nasdaq
National Market security. See "Underwriting" and "Price Range of Common Stock."
------------------------

THE SHARES OF COMMON STOCK OFFERED HEREBY ARE SPECULATIVE
AND INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNT (1) PREMIS (2)
<S> <C> <C> <C>
Per Share...................... $5.00 $0.40 $4.60
Total (3)...................... $8,750,000 $700,000 $8,050,000
</TABLE>

(1) PREMIS has agreed to indemnify the underwriters (the "Underwriters") against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended (the "Act"), and to pay R. J. Steichen & Company, as
representative of the Underwriters (the "Representative") a non-accountable
expense allowance equal to 2 1/4% of the total Price to Public. In addition,
PREMIS has agreed to sell to the Representative for nominal consideration, a
five-year warrant (the "Representative's Warrant") to purchase up to 175,000
shares of Common Stock exercisable at a price per share equal to 120% of the
per share Price to Public. See "Underwriting."
(2) Before deducting expenses of the offering payable by PREMIS estimated at
$400,000 (including the Representative's non-accountable expense allowance
referenced in footnote 1 above). See "Use of Proceeds."
(3) PREMIS has granted to the Underwriters a 45-day option to purchase up to
262,500 additional shares of Common Stock for the purpose of covering
over-allotments. If the Underwriters purchase all of the shares of Common
Stock under the over-allotment option, the total Price to Public, total
Underwriting Discount and Proceeds to PREMIS will be $10,062,500, $805,000
and $9,257,500, respectively. See "Underwriting."

The shares are offered by the Underwriters on a "firm commitment" basis,
subject to prior sale when, as and if delivered and accepted by them, and
subject to the right of the Underwriters to reject any order in whole or in
part. It is expected that delivery of shares of Common Stock will be made in
Minneapolis, Minnesota on or about October 1, 1996.

RJ STEICHEN & COMPANY

THE DATE OF THIS PROSPECTUS IS SEPTEMBER 26, 1996
<PAGE>
PREMIS develops, markets and supports a line of industry-specific information
management software systems designed to assist businesses with management of
their day-to-day operations and long-term strategic planning. PREMIS'
proprietary software products are typically sold in combination with PC
workstation equipment and client/server hardware.

[FLOW CHART OF PREMIS IRIS-TM-/REF OPEN ENTERPRISE-TM- SYSTEM]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY INFORMATION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO THE DETAILED INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. THE ENTIRE
PROSPECTUS, INCLUDING THE INFORMATION SET FORTH UNDER THE CAPTION "RISK
FACTORS", SHOULD BE READ AND CAREFULLY CONSIDERED BY PROSPECTIVE INVESTORS.
UNLESS OTHERWISE INDICATED, ALL FINANCIAL INFORMATION IS PRESENTED IN U.S.
DOLLARS. UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS ASSUMES
THE UNDERWRITERS' OVER-ALLOTMENT OPTION AND REPRESENTATIVE'S WARRANT ARE NOT
EXERCISED. THE INFORMATION IN THIS PROSPECTUS ASSUMES THAT THE ACQUISITION OF
REF RETAIL SYSTEMS CORPORATION ("REF") HAS OCCURRED. REFERENCES TO PREMIS OR REF
REFER TO THE INDIVIDUAL OPERATIONS OF THE RESPECTIVE CORPORATIONS. REFERENCES TO
THE COMPANY REFER TO THE CONSOLIDATED OPERATIONS OF PREMIS AND REF, AS PARENT
AND WHOLLY-OWNED SUBSIDIARY.

The Company develops, markets and supports a line of industry-specific
information management software systems designed to assist businesses with
management of their day-to-day operations and long-term strategic planning. The
Company's proprietary software products are typically sold in combination with
PC workstation equipment and client/server hardware. The Company's turn-key
systems provide an enterprise-wide solution to the information needs of
multi-store specialty retailing businesses, food brokers and food distributors
and include a variety of integrated functions such as:

- point of sale data collection and management review of transactions

- "real time" sales analysis reporting by store, product, customer or
salesperson

- individual store stock positions and enterprise inventory tracking

- purchasing, order tracking and warehouse control

- accounts receivable management and commission receivable accounting

- sales promotion fund management and advertising budget accounting

- electronic data interface for on-line ordering from vendors and customers

- intranet communications connections between stores and main corporate
office

The Company's strategy is to develop leading-edge, industry-specific
software systems to collect business information, analyze the collected data and
provide concise, meaningful reports to individuals within an organization.
PREMIS initially developed software products targeted toward food brokers and
specialty food distribution companies. In 1994, PREMIS entered the specialty
retail market when it acquired the exclusive marketing rights for a software
system which assists with the back office and headquarters management functions
of multi-store specialty retail chains. Since that time, PREMIS has continued to
enhance the applications and functionality of its software products and has
evolved from a provider of single application specialty software into a turn-key
vendor of enterprise-wide, information management systems.

In July 1996, as part of its strategy to provide end-to-end management
information solutions, PREMIS agreed to acquire REF, a Toronto-based provider of
Windows NT-Registered Trademark--based retail management software and systems
which complement PREMIS' existing retail software product. REF's retail software
combines an easy-to-use, point of sale ("POS") transaction processing interface
with sophisticated data analysis and information reporting capabilities. The
Windows NT-Registered Trademark- graphical user interface significantly reduces
the cost of training cashier personnel and shortens the time required to process
a sale. The REF software is designed to accelerate information access and
provide a wide variety of management reports on a "real time" basis to various
levels of an organization. The sophisticated data acquisition and processing
features of the REF product position these systems toward the high end of the
specialty retail market, which broadens the range of product offerings for the
Company's specialty retail systems. Management believes the REF acquisition will
provide the Company with an improved sales capability and contribute a higher
level of technology and functionality for its products.

PREMIS is a Minnesota corporation formed in 1982. Its principal offices are
located at 15301 Highway 55 West, Plymouth, MN 55447. Telephone: (612) 550-1999,
Telefax: (612) 550-2999. Internet address: premis.com.

3
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered......................... 1,750,000 shares
Common Stock To Be Outstanding After This
Offering (1)................................ 4,457,052 shares
Use of Proceeds.............................. PREMIS intends to apply the net proceeds of
this offering to the acquisition of REF, to
expansion of sales and marketing and to
general corporate purposes.
Nasdaq National Market Symbol................ PMIS
</TABLE>

- ------------------------
(1) Does not include (i) 486,250 shares of Common Stock reserved for issuance
under the 1994 Employee Incentive Stock Option Plan (the "Option Plan");
(ii) 516,667 shares of Common Stock reserved for issuance upon exercise of
non-qualified options; or (iii) 600,000 shares issuable upon exercise of
options issued to Edward W. Anderson, President of REF, in connection with
his employment by the Company effective with the REF acquisition. See
"Management" and "Underwriting."

SUMMARY FINANCIAL INFORMATION

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31, THREE MONTHS ENDED JUNE 30,
--------------------------------------------- ----------------------------------
PRO FORMA PRO FORMA
ACTUAL ACTUAL ACTUAL COMBINED ACTUAL ACTUAL COMBINED
1994 1995 1996 1996 (1) 1995 1996 1996 (1)
--------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue........................ $ 892,217 $3,017,568 $5,902,161 $9,098,677 $1,189,754 $1,914,179 $2,962,180
Gross profit................... 544,012 1,602,690 2,865,839 4,628,337 548,094 946,440 1,512,044
Net income..................... 148,931 474,687 827,632 605,128 143,988 332,236 363,383
--------- ---------- ---------- ---------- ---------- ---------- ----------
--------- ---------- ---------- ---------- ---------- ---------- ----------
Net income per share........... $ 0.06 $ 0.18 $ 0.28 $ 0.14 $ 0.05 $ 0.11 $ 0.08
--------- ---------- ---------- ---------- ---------- ---------- ----------
--------- ---------- ---------- ---------- ---------- ---------- ----------
Weighted average common and
common equivalent shares
outstanding................... 2,590,694 2,590,694 2,925,581 4,412,509 2,912,661 2,979,683 4,466,611
--------- ---------- ---------- ---------- ---------- ---------- ----------
--------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1996
-----------------------------
MARCH 31, 1996 PRO FORMA
-------------- COMBINED
ACTUAL ACTUAL AS ADJUSTED(1)(2)
-------------- ---------- -----------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital................................................. $ 1,291,726 $1,624,063 $ 3,695,127
Total assets.................................................... 2,833,040 4,091,438 12,543,632
Long-term debt, less current portion............................ 112,097 835,982 1,116,789
Total liabilities............................................... 1,320,585 2,039,186 2,841,380
Retained earnings............................................... 755,180 1,087,416 1,087,416
Shareholders' equity............................................ 1,512,455 2,052,252 9,702,252
</TABLE>

- ------------------------------
(1) The unaudited pro forma statement of operations is presented as if the
acquisition of REF occurred on April 1, 1995. A $494,566 annual earnings
adjustment of goodwill amortization, a non-cash charge to earnings, is
included in these adjustments. Weighted average common and common equivalent
shares outstanding are adjusted to reflect the shares issued in this
offering in connection with the acquisition of REF. The unaudited pro forma
balance sheet is presented as if the acquisition of REF occurred on June 30,
1996. See the pro forma condensed combined financial information appearing
elsewhere in this Prospectus.

(2) Adjusted to give effect to the sale of 1,750,000 shares offered hereby and
the application of the estimated net proceeds thereof. See the pro forma
condensed combined financial information appearing elsewhere in this
Prospectus.

4
<PAGE>
RISK FACTORS

CERTAIN STATEMENTS CONTAINED IN THIS PROSPECTUS ARE FORWARD-LOOKING
STATEMENTS (AS SUCH TERM IS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995). BECAUSE SUCH STATEMENTS INCLUDE RISKS AND UNCERTAINTIES, ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. IN ADDITION TO CONSIDERING THE OTHER INFORMATION SET
FORTH IN THIS PROSPECTUS, PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
FOLLOWING FACTORS IN EVALUATING AN INVESTMENT IN THE COMPANY.

DEPENDENCE ON KEY CUSTOMERS

Both PREMIS and REF are dependent upon a few major customers whose volume of
purchases each year has been significantly greater than that of other customers.
Sales to the U.S. Postal Service represented 64% and 67% of total revenues for
PREMIS during the fiscal year ended March 31, 1996, and the three months ended
June 30, 1996, respectively. Trade accounts receivable due from the U.S. Postal
Service represented 61% and 71% of total PREMIS trade receivables at March 31,
1996, and June 30, 1996, respectively. REF is also dependent upon a few major
customers, but these major customers tend to change from year to year. Although
the Company has experienced significant growth in its customer base as its sales
volume has increased, it is currently still dependent on continued purchases by
its present customers. Loss of the U.S. Postal Service or any other significant
current customers or an inability to further expand its customer base would
adversely affect the Company. See "Business -- Customers."

HIGHLY COMPETITIVE MARKETS

The markets for the Company's products are highly competitive. Several
companies offer products with certain features competitive with the Company's
products. These competitors and potential competitors include established
companies that have significantly greater financial, technical and marketing
resources than the Company. There can be no assurance that such competitors will
not develop products that are superior to the Company's products or that achieve
greater market acceptance. There is no assurance that the Company will be able
to compete successfully against current and future sources of competition or
that the competitive pressures faced by the Company will not adversely affect
its financial performance.

The Company is dependent to some extent on the market for particular
hardware platforms because customers may base their purchase decisions on a
particular platform. Most of these hardware vendors (such as International
Business Machines Corp., ICL Fujitsu, a division of Fujitsu America, Inc., and
NCR Corp., a subsidiary of AT&T Co.) offer their own proprietary software
systems which directly compete with some of the Company's software products.
Competition between hardware vendors is intense, and many of these vendors have
significantly greater financial and other resources than the Company. As of June
30, 1996, management estimates that in excess of 80% of the Company's software
was installed on NCR hardware, however, the Company believes that its software
products are adaptable to any of the principal PC- or
UNIX-Registered Trademark--based hardware platforms without material commitments
of time and funding. Any significant increase in direct software competition by
these vendors, given their significant resources and market share, or any
inability of the Company to adapt its software for use on a particular hardware
platform, could adversely impact the Company's ability to compete effectively
for customers in certain markets and may have a material adverse effect on the
Company. See "Business -- Competition."

INTEGRATION OF ACQUISITION

A substantial portion of the proceeds of this offering will be used to
acquire REF. The Company's future growth and operating results will depend on
management's ability to integrate REF's products, as well as its software
development and marketing personnel into the Company's current operations.
PREMIS and REF have been operating as separate independent entities, and there
can be no assurance that management will be able to effectively integrate and
manage the combined entity and implement the Company's operating or growth
strategies. Further, there can be no assurance that the Company will be able to
retain the personnel currently employed by PREMIS and REF following the

5
<PAGE>
acquisition or that current sales personnel will be able to effectively sell the
other firm's products. Failure to properly integrate these businesses on a
timely basis or to implement the Company's operating and growth strategy could
have a material adverse impact on the Company's profitability and future
operating results. See "Business -- Acquisition of REF."

DEPENDENCE ON SALES AND MARKETING EFFORTS

The Company's business strategy includes significant expansion of its sales
and marketing efforts, particularly with respect to the REF OpenEnterprise-TM-
system. There can be no assurance that the Company will be able to attract,
train and retain the additional sales and marketing personnel necessary to
expand its business. Further, there can be no assurance that expansion of the
Company's sales and marketing activities will result in increased sales volume.
See "Business -- Marketing and Sales."

PROTECTION OF PROPRIETARY TECHNOLOGY

The Company has no registered copyrights, trademarks or patents. The Company
primarily relies on a combination of trade secrets, confidentiality procedures
and contractual provisions to protect its proprietary technology; however, these
measures afford only limited protection. The Company's success will depend in
part upon its ability to protect its proprietary technology and no assurance can
be given that others will not independently develop or acquire substantially
equivalent technologies, gain access to the Company's proprietary technology or
disclose such technology to third parties. The Company's success may also depend
in part on its ability to operate without infringing the proprietary rights of
others. The Company has not undertaken any independent investigation to
determine whether it is infringing any intellectual property rights of third
parties. There can be no assurance that others have not developed or will not
develop similar products, duplicate any of the Company's products or design
around the Company's products. Failure to adequately protect its proprietary
technology may have an adverse effect on the Company's financial condition and
results of operations. See "Business -- Proprietary Rights."

TECHNOLOGICAL OBSOLESCENCE

The market for the Company's products is characterized by rapid
technological advances, evolving industry standards, changes in end-user
requirements and frequent new product introductions and enhancements. The
introduction of products embodying new technologies and the emergence of new
industry standards could render the Company's existing products and those
currently under development obsolete and unmarketable. The Company's future
success will depend upon its ability to enhance its current products as well as
develop and introduce new products that keep pace with technological
developments and achieve market acceptance. Any failure by the Company to
anticipate or respond adequately to technological developments or end-user
requirements, or any significant delays in product development or introduction,
could result in a loss of competitiveness or revenues. Furthermore, the Company
may not have sufficient financial resources to maintain research and development
capabilities and, consequently, to maintain its technology position. Even though
the Company's products have been designed to incorporate the latest technology,
some of its competitors have greater financial resources and larger research and
development staffs than the Company and accordingly may have greater
capabilities to adapt their products to technological changes. See "Business --
Products and Services" and "Business -- Competition."

DEPENDENCE ON KEY PERSONNEL

The Company believes its future success depends to a significant extent on
the efforts of key management, technical and sales personnel, including F. T.
Biermeier, President and Chief Executive Officer, and Edward W. Anderson, who
will continue as the President of REF, a wholly-owned subsidiary of PREMIS.
PREMIS has no employment agreement with Mr. Biermeier, but maintains and is the
beneficiary of a keyperson life insurance policy on Mr. Biermeier in the amount
of $300,000. The Company intends to enter into a five-year employment agreement
with Mr. Anderson and to obtain keyperson life insurance on Mr. Anderson in the
amount of CDN$2 million. The loss of Mr. Biermeier or Mr. Anderson could have a
material adverse effect on the Company's financial condition and results

6
<PAGE>
of operations. Moreover, there can be no assurance that the Company will be able
to attract and retain any additional qualified personnel necessary for its
business. The Company intends to hire a full-time chief financial officer in the
near future to assume financial duties performed by Mr. Biermeier. Mr.
Biermeier's time is currently spread over a number of executive functions, and
the Company's inability to retain a qualified chief financial officer in the
near term may compromise the effective integration of PREMIS and REF and may
otherwise limit the effectiveness of management. Although REF has generally
required its employees to enter into agreements restricting future competing
employment, PREMIS' employees are not restricted as to future competitive
employment. All employees of the Company are restricted as to use of information
which is confidential and proprietary to the Company. See "Management."

CONTROL BY DIRECTORS AND EXECUTIVE OFFICERS

Following completion of this offering, directors and executive officers of
the Company (including Edward W. Anderson, President of REF) will beneficially
own approximately 45% of the Company's outstanding Common Stock. Accordingly,
these shareholders, individually and as a group, may be able to influence the
outcome of shareholder votes, including votes concerning the election of
directors, the adoption or amendment of provisions in the Company's Articles of
Incorporation and Bylaws and the approval of certain mergers or similar
transactions. Such control by existing shareholders could have the effect of
delaying, deferring or preventing a change in control of the Company. See
"Principal Shareholders."

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

The Company may experience variability in its operating results on a
quarterly basis as a result of many factors, including the product mix between
hardware and software, size and timing of orders, shifts in demand for software
and hardware products, technological changes and industry announcements of new
products and upgrades. If revenues do not meet expectations in any given quarter
and the Company is unable to adjust spending in a timely manner, operating
results may be materially adversely affected.

The Company's systems include both hardware and software components. Profit
margins on sales of software are significantly higher than on hardware.
Operating results can vary significantly from quarter to quarter depending on
the percentage of software as compared to hardware included in the system sold
to the Company's customers. Additionally, the size of orders by certain
customers varies from quarter to quarter. These fluctuations could result in
significant quarterly variations in financial results. As a result of the
potential fluctuations in quarterly operating results, the Company believes that
period-to-period comparisons of its financial results should not be relied upon
as an indication of future performance.

RELIANCE ON KEY SUPPLIERS

The Company acquires some of the components for its systems from other
companies. Management currently estimates that in excess of 80% of the Company's
software is installed on NCR hardware. While the loss of NCR or any other
supplier could cause a short-term disruption in the availability of components,
the Company believes, although no assurance can be given, that alternative
sources could be obtained for such components without materially affecting
system costs or timely delivery. The Company currently has no written agreements
for supply of required components. See "Business -- Marketing and Sales."

ISSUANCE OF ADDITIONAL SHARES

The Company's authorized capital stock includes 10,000,000 shares of Common
Stock, of which 4,457,052 shares of Common Stock will be issued and outstanding
upon completion of this offering. The Company's Board of Directors has
authority, without action or vote of the shareholders, to issue all or part of
the authorized but unissued shares. Any such issuance will dilute the percentage
ownership interest of existing shareholders, including investors in this
offering, and may dilute the book value of the Common Stock. See "Description of
Securities."

7
<PAGE>
EFFECT ON PRICE OF COMMON STOCK FROM FUTURE SALES OF COMMON STOCK

Upon sale of the shares offered hereby, the Company will have outstanding
4,457,052 shares of Common Stock. All of the shares of Common Stock currently
outstanding, all of the 486,250 shares that may be issued under the Option Plan
and 516,667 shares reserved for issuance upon exercise of non-qualified options,
are "freely tradable" under the Act (provided that, pursuant to agreement with
the Underwriters, 2,363,251 shares beneficially held by current officers and
directors and 75,000 shares held by a former affiliate of the Company are
subject to restrictions on sale for a period of 180 days after this offering in
the case of officers and directors, and 90 days after this offering in the case
of the former affiliate). In addition, the 600,000 shares of Common Stock
issuable upon exercise of the option to be granted to Edward W. Anderson may be
registered for resale under the Act, although such shares are not currently
registered. Such shares would then also be "freely tradable." The sale, or
availability for sale, of substantial amounts of Common Stock in the public
market subsequent to this offering could have a material adverse effect on the
market price of the Common Stock and could impair the Company's ability to raise
additional capital through the sale of its equity securities or debt financing.
See "Shares Eligible for Future Sale" and "Underwriting."

POSSIBLE NEED FOR ADDITIONAL CAPITAL OR FINANCING

The Company believes that the net proceeds of this offering, together with
cash flow from operations, will be sufficient to meet its capital requirements
for at least the next 12 months. However, the Company's cash needs may vary
significantly from its forecasts if it is unable to generate anticipated cash
flow or if growth occurs faster than anticipated. No assurance can be given that
the Company's projections regarding its cash needs will prove accurate, that the
Company will not require additional financing prior to or subsequent to such
time, that the Company will be able to secure required additional financing when
needed or at all, or that such financing, if obtained, will be on terms
favorable or acceptable to the Company. If the Company is unable to obtain
additional financing when needed, it could be required to curtail its planned
expansion. The Company's inability to obtain additional financing could have a
material adverse effect on operating results, and any future financings may
result in dilution to holders of the Common Stock. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

CANADIAN SUBSIDIARY

The Company will be subject to certain risks inherent in foreign operations,
including management of a large subsidiary in Canada, general economic
conditions in Canada, political risks, the overlap of different tax structures
and changes in Canadian and U.S. laws and regulations governing foreign
operations. Moreover, fluctuations in the exchange rates between the United
States dollar and the Canadian dollar could have a negative impact on the
Company's consolidated operating results. In addition, the Company's operations,
properties and employees in Canada will be subject to Canadian law, which could
result in additional administrative and compliance costs for the Company. There
can be no assurance that these factors will not adversely affect the Company's
operating results. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,750,000 shares
offered hereby are estimated to be approximately $7.6 million after deducting
underwriting discounts and commissions and estimated offering expenses ($8.8
million, if the Underwriters' over-allotment option is exercised in full).
PREMIS intends to use approximately $6.5 million of the net proceeds for the
acquisition of REF. The remaining net proceeds, including net proceeds from any
exercise of the Underwriters' over-allotment option, will be used for expansion
of sales and marketing efforts, research and development and general corporate
purposes including working capital. Pending such uses, the net proceeds from the
offering will be invested in short-term, interest-bearing investment grade
securities or commercial paper, or in money market funds composed of the
foregoing.

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<PAGE>
PRICE RANGE OF COMMON STOCK

Since September 11, 1996, PREMIS' Common Stock has been listed on the Nasdaq
SmallCap Market under the symbol "PMIS." The range of the high and low sales
prices for the Common Stock, for the period from September 11, 1996 through
September 25, 1996 has been $5.00 to $5.75. The last reported sale price of the
Common Stock on the Nasdaq SmallCap Market on September 25, 1996 was $5.00 per
share. The Company's Common Stock has been approved for designation as a Nasdaq
National Market security.

The following table sets forth the quarterly high and low closing bid prices
in the over-the-counter market for PREMIS' Common Stock, as reported by the
National Association of Securities Dealers' OTC Bulletin Board for the fiscal
years ended March 31, 1995 and 1996 and for the subsequent interim quarters,
through September 10, 1996, and as reported by the Nasdaq SmallCap Market from
September 11 through September 25, 1996. Such quotations represent interdealer
prices, without retail markup, markdown or commission, and do not necessarily
represent actual transactions.

<TABLE>
<CAPTION>
CLOSING BID PRICE
--------------------
LOW HIGH
--------- ---------
<S> <C> <C>
FISCAL YEAR ENDED MARCH 31, 1995
First Quarter.............................................................................. * *
Second Quarter............................................................................. * *
Third Quarter.............................................................................. * *
Fourth Quarter............................................................................. $ .25 $ .25

FISCAL YEAR ENDED MARCH 31, 1996
First Quarter.............................................................................. .25 .875
Second Quarter............................................................................. .75 1.875
Third Quarter.............................................................................. 1.125 2.25
Fourth Quarter............................................................................. 1.50 2.50

FISCAL YEAR ENDED MARCH 31, 1997
First Quarter.............................................................................. 2.125 4.50
Second Quarter (through September 10, 1996)................................................ 3.00 5.125
Second Quarter (September 11-25, 1996)..................................................... 5.00 5.50
</TABLE>

- ------------------------
* No quoted prices are available for this period

As of August 30, 1996, PREMIS' Common Stock was held of record by 98
holders. Registered ownership includes nominees who may hold securities on
behalf of multiple beneficial owners.

DIVIDEND POLICY

PREMIS has never declared or paid dividends on its Common Stock, and the
Board of Directors presently intends to retain all earnings, if any, for use in
the Company's business for the foreseeable future. Any future determination as
to declaration and payment of dividends will be made at the discretion of the
Board of Directors, subject to covenants in any loan documents restricting the
payment of dividends.

9
<PAGE>
CAPITALIZATION

The following table sets forth, as of June 30, 1996, the (i) capitalization
of PREMIS and (ii) pro forma capitalization of the Company to reflect the
completion of the REF acquisition, as adjusted to give effect to the sale of
1,750,000 shares in this offering and application of the estimated net proceeds
thereof. See the pro forma condensed combined financial information appearing
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1996
-----------------------------
PRO FORMA
COMBINED
ACTUAL AS ADJUSTED
------------- --------------
<S> <C> <C>
Long-term debt, less current portion............................................... $ 835,982 $ 1,116,789
Shareholders' equity:..............................................................
Common Stock, $.01 par value, 10,000,000 shares authorized, 2,701,527 shares
issued, and 4,451,527 shares issued, as adjusted (1)............................ 27,015 44,515
Additional paid-in capital....................................................... 937,821 8,570,321
Retained earnings................................................................ 1,087,416 1,087,416
------------- --------------
Total shareholders' equity....................................................... 2,052,252 9,702,252
------------- --------------
Total capitalization............................................................... $ 2,888,234 $ 10,819,041
------------- --------------
------------- --------------
</TABLE>

- ------------------------
(1) Does not include (i) 486,250 shares of Common Stock reserved for issuance
under the Option Plan; (ii) 516,667 shares of Common Stock reserved for
issuance pursuant to exercise of non-qualified stock options; or (iii)
600,000 shares issuable upon exercise of options issued to Edward W.
Anderson, President of REF, in connection with his employment by the Company
effective with the REF acquisition. See "Management" and "Underwriting."

10
<PAGE>
SELECTED FINANCIAL DATA

PREMIS CORPORATION

The selected financial data presented below as of and for the years ended
March 31, 1994, 1995 and 1996, is derived from the financial statements of
PREMIS, which financial statements have been audited by Price Waterhouse LLP.
The selected financial data presented below as of and for the three months ended
June 30, 1995 and 1996, is derived from the unaudited financial statements of
PREMIS and, in the opinion of PREMIS' management, present fairly the results of
operations and the financial condition of PREMIS as of and for the three months
ended June 30, 1995 and 1996. The selected financial data should be read in
conjunction with the financial statements and notes thereto included elsewhere
in this Prospectus and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
----------------------------------
YEARS ENDED MARCH 31, (UNAUDITED)
------------------------------------------------ ----------------------
PRO FORMA PRO FORMA
ACTUAL ACTUAL ACTUAL COMBINED ACTUAL ACTUAL COMBINED
1994 1995 1996 1996 (1) 1995 1996 1996 (1)
---------- ---------- ---------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
System sales................ $ 666,364 $2,425,882 $4,923,132 $7,648,388 $ 982,449 $1,570,791 $2,538,264
Maintenance fees and other
services................... 225,853 591,686 979,029 1,450,289 207,305 343,388 423,916
Total revenue........... 892,217 3,017,568 5,902,161 9,098,677 1,189,754 1,914,179 2,962,180
Cost of sales............... 348,205 1,414,878 3,036,322 4,470,340 641,660 967,739 1,450,136
Gross profit................ 544,012 1,602,690 2,865,839 4,628,337 548,094 946,440 1,512,044
Operating expenses.......... 442,081 1,100,485 1,507,065 3,596,474 301,651 397,224 932,040
Net income.................. 148,931 474,687 827,632 605,128 143,988 332,236 363,383
---------- ---------- ---------- ------------ ---------- ---------- ----------
---------- ---------- ---------- ------------ ---------- ---------- ----------
Net income per share........ $ 0.06 $ 0.18 $ 0.28 $ 0.14 $ 0.05 $ 0.11 $ 0.08
---------- ---------- ---------- ------------ ---------- ---------- ----------
---------- ---------- ---------- ------------ ---------- ---------- ----------
Weighted average common and
common equivalent shares
outstanding................ 2,590,694 2,590,694 2,925,581 4,412,509 2,912,661 2,979,683 4,466,611
---------- ---------- ---------- ------------ ---------- ---------- ----------
---------- ---------- ---------- ------------ ---------- ---------- ----------
</TABLE>

<TABLE>
<CAPTION>
JUNE 30,
----------------------------------------
MARCH 31, (UNAUDITED)
--------------------------------- ---------------------- PRO FORMA
COMBINED
ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL AS ADJUSTED
1994 1995 1996 1995 1996 1996 (1)(2)
--------- ---------- ---------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital...................... $ 99,104 $ 533,427 $1,291,726 $ 673,658 $1,624,063 $ 3,695,127
Total assets......................... 351,431 1,559,621 2,833,040 1,690,691 4,091,438 12,543,632
Long-term debt, less current
portion............................. 3,272 226,084 112,097 226,084 835,982 1,116,789
Total liabilities.................... 144,108 877,611 1,320,585 864,693 2,039,186 2,841,380
Retained earnings (deficit).......... (547,139) (72,452) 755,180 71,536 1,087,416 1,087,416
Shareholders' equity................. 207,323 682,010 1,512,455 825,998 2,052,252 9,702,252
</TABLE>

11
<PAGE>
REF RETAIL SYSTEMS CORPORATION

The selected financial data presented below as of and for the years ended
March 31, 1995 and 1996, is derived from the financial statements of REF, which
have been audited by Price Waterhouse LLP. The selected financial data presented
below as of and for the year ended March 31, 1994 and as of and for the three
months ended June 30, 1995 and 1996, is derived from the unaudited financial
statements of REF and, in the opinion of REF's management, present fairly the
results of operations and the financial condition of REF as of and for the year
ended March 31, 1994 and as of and for the three months ended June 30, 1995 and
1996. The selected financial data should be read in conjunction with the
financial statements and notes thereto included elsewhere in this Prospectus and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31, THREE MONTHS ENDED
----------------------------------- JUNE 30, (UNAUDITED)
1994 ----------------------
(UNAUDITED) 1995 1996 1995 1996
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
System sales.................................... $2,281,367 $2,676,945 $2,725,256 $ 384,604 $ 967,473
Maintenance fees and other services............. 247,745 410,155 471,260 107,648 80,528
Total revenue............................... 2,529,112 3,087,100 3,196,516 492,252 1,048,001
Cost of sales................................... 1,045,742 1,140,348 1,434,018 313,613 482,397
Gross profit.................................... 1,483,370 1,946,752 1,762,498 178,639 565,604
Operating expenses.............................. 757,233 1,199,555 1,726,537 312,514 440,093
Net income...................................... 564,543 543,201 186,461 (87,147) 135,992
----------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ----------
</TABLE>

<TABLE>
<CAPTION>
MARCH 31,
----------------------------------- JUNE 30, (UNAUDITED)
1994 ----------------------
(UNAUDITED) 1995 1996 1995 1996
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital................................. $ 901,338 $1,177,995 $ 911,219 $ 937,304 $ 921,064
Total assets.................................... 1,289,363 1,830,930 2,239,765 1,516,886 2,356,534
Long-term debt, less current portion............ 22,991 211,606 280,807
Total liabilities............................... 294,242 469,396 816,604 372,598 802,194
Retained earnings............................... 645,936 1,168,884 1,335,524 1,081,737 1,471,516
Shareholders' equity............................ 995,121 1,361,534 1,423,161 1,144,289 1,554,340
</TABLE>

12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

HISTORICAL RESULTS OF PREMIS OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31, THREE MONTHS ENDED JUNE
30,
------------------------ ------------------------
1995 1996 1995 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Total revenue......................................................... 100.0% 100.0% 100.0% 100.0%
Cost of sales......................................................... 46.9% 51.4% 53.9% 50.6%
Gross profit.......................................................... 53.1% 48.6% 46.1% 49.4%
Operating expenses.................................................... 36.5% 25.5% 25.4% 20.8%
Net income............................................................ 15.7% 14.0% 12.1% 17.4%
</TABLE>

FISCAL YEARS ENDED MARCH 31, 1995 AND 1996

REVENUE. Revenue increased 96% to $5,902,161 for the fiscal year ended
March 31, 1996 compared with $3,017,568 for the fiscal year ended March 31,
1995, due primarily to increases in food distribution systems sold, sales for
IRIS-TM- products to existing customers and new installations for the U.S.
Postal Service "Store of the Future." Additionally, in fiscal 1995 and 1996,
software maintenance revenue rose proportionally to new installations of
IRIS-TM- customers.

GROSS PROFIT. Gross profit increased 79% to $2,865,839 for the fiscal year
ended March 31, 1996 compared with $1,602,690 for the fiscal year ended March
31, 1995. The gross profit margin was 53% in 1995 and 49% in 1996, primarily
reflecting changes in the sales mix of hardware and software sales. In 1994,
PREMIS became a remarketer for certain hardware products of International
Business Machines Corp. ("IBM") and NCR Corp. ("NCR"). The shift of PREMIS'
sales mix from primarily software systems toward increased hardware systems has
reduced gross margins over the last three years due to the lower margin
contribution of hardware compared to software sales.

OPERATING EXPENSES. Operating expenses increased 37% to $1,507,065 for the
fiscal year ended March 31, 1996 compared with $1,100,485 for the fiscal year
ended March 31, 1995. However, as a percentage of revenue, operating expenses
have improved from 37% of revenues in 1995 to 26% of revenue in 1996. This
improvement is principally due to the lower selling expense associated with
hardware sales as a percentage of revenue compared to software sales. Research
and development expenditures, which are included in operating expenses,
decreased 17% to $303,000 for the fiscal year ended March 31, 1996 compared to
$368,161 for the fiscal year ended March 31, 1995. As a percentage of revenue,
research and development expenses were 5% in 1996 and 12% in 1995. The decrease
is due to a reduction of programming time spent on product enhancements and
changes due to an increased use of object-oriented development techniques.

NET INCOME. Net income increased 74% to $827,632 for the fiscal year ended
March 31, 1996 compared to $474,687 for the fiscal year ended March 31, 1995.
Income was fully taxed in fiscal 1996 while the realization of previously
unrecognized net operating loss carryforwards offset income tax liability in
both of the prior years.

THREE MONTHS ENDED JUNE 30, 1995 AND 1996

REVENUE. Revenue increased 61% to $1,914,179 for the three months ended
June 30, 1996 compared with $1,189,754 for the three months ended June 30, 1995.
This increase resulted principally from increased penetration of IRIS-TM-
products to existing customers combined with growth in new installations for the
U.S. Postal Service "Store of the Future." Customer purchases of annual software
maintenance contracts continued to increase consistent with sales.

GROSS PROFIT. Gross profit increased 73% to $946,440 for the three months
ended June 30, 1996 compared with $548,094 for the three months ended June 30,
1995. The gross profit margin increased to 49% in 1996 from 46% in 1995, which
is attributable to a higher percentage of software sales compared to the similar
period last year.

OPERATING EXPENSES. For the three months ended June 30, 1996, operating
expenses increased 32% to $397,224, compared with $301,651 for the three months
ended June 30, 1995. As a percentage

13
<PAGE>
of revenue, operating expenses were 25% and 21% for the three month periods
ended June 30, 1995 and 1996, respectively. Research and development
expenditures, which are included in operating expenses, increased 15% to $94,650
for the three months ending June 30, 1996 compared to $82,466 for the three
months ended June 30, 1995. As a percentage of revenue, research and development
expenditures were 5% for the three months ended June 30, 1996, compared to 7%
for the same period in 1995. This decrease is principally due to increased
productivity from object-oriented development techniques, which reduce the
amount of time required to program software changes and enhancements.

NET INCOME. Net income increased 131% to $332,236 for the three months
ended June 30, 1996 compared to $143,988 for the three months ended June 30,
1995. Income was fully taxed in both fiscal 1995 and 1996.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 1996, PREMIS had current assets of $2,500,214 versus
$1,184,954 a year earlier, and $2,827,267 at June 30, 1996. Current liabilities
at March 31, 1996 were $1,208,488, versus $651,527 a year earlier, and
$1,203,204 at June 30, 1996, with a majority of the difference represented by
accrued income taxes and the current portion of capitalized lease obligations.
Shareholders' equity at March 31, 1996 was $1,512,455 versus $682,010 at March
31, 1995 and $2,052,252 at June 30, 1996. Long-term obligations decreased from
$226,084 in 1995 to $112,097 in 1996 and increased to $835,982 at June 30, 1996,
representing an increase in capitalized lease obligations in the three month
period.

Except for a capitalized office lease agreement, PREMIS has no material
commitment for capital expenditures. Working capital was $1,291,726 on March 31,
1996 versus $533,427 at March 31, 1995. Working capital increased to $1,624,063
at June 30, 1996. Management believes working capital is sufficient to fund
current operations and planned growth through internal sources for the next
twelve months. Inflation has had no significant impact on the results of
operations of PREMIS.

HISTORICAL RESULTS OF REF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS ENDED
MARCH 31, JUNE 30,
------------------------ ------------------------
1995 1996 1995 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Total revenue......................................................... 100.0% 100.0% 100.0% 100.0%
Cost of sales......................................................... 36.9% 44.9% 63.7% 46.0%
Gross profit.......................................................... 63.1% 55.1% 36.3% 54.0%
Operating expenses.................................................... 38.9% 54.0% 63.5% 42.0%
Net income............................................................ 17.6% 5.8% (17.7)% 13.0%
</TABLE>

FISCAL YEARS ENDED MARCH 31, 1995 AND 1996

REVENUE. Revenue increased 4% to $3,196,516 for the year ended March 31,
1996 compared with $3,087,100 for the fiscal year ended March 31, 1995. The
increased sales were the result of contracts for custom POS software to larger
retail chains and improved revenue from annual software maintenance fees. The
slowing rate of sales increases reflects a year in which REF made expenditures
in anticipation of revenue in future years. These expenditures in custom
systems, governmental entity systems and REF OpenEnterprise-TM-, although they
did not produce significant revenue in fiscal 1996, required a commitment of
substantial resources in engineering, sales, marketing and administration. The
Company expects that these investments will result in significant revenue in
future years. For example, sales in 1995 to the U.S. Navy Commissary ("NEXCOM")
are attributable in large part to development expenditures in earlier years.

GROSS PROFIT. Gross profit decreased 9% to $1,762,498 for the fiscal year
ended March 31, 1996 compared to $1,946,752 for the fiscal year ended March 31,
1995. Percentage gross profit was 63% in 1995 and 55% in 1996. A large sale of
POS systems to NEXCOM increased the gross margin in 1995, while projects which
had higher direct costs combined to decrease the gross margin in 1996.

OPERATING EXPENSES. Operating expenses increased 44% to $1,726,537 for the
year ended March 13, 1996 compared with $1,199,555 for the fiscal year ended
March 31, 1995. Operating expenses, as a percentage of revenue, increased to 54%
for fiscal year 1996 from 39% for fiscal year

14
<PAGE>
1995 due to an increase in large custom design projects and expenses related to
the planned introduction of REF OpenEnterprise-TM-. Management believes that a
large proportion of the development costs expensed in 1996 should produce
revenue in future years, similar to the substantial sales to NEXCOM in 1995,
which resulted from development expenses incurred in earlier years.
Historically, products have been developed on a project basis for specific
clients, with development expenses charged to the particular projects. In fiscal
1996, research and development expenditures were directed toward the new REF
OpenEnterprise-TM- products. As of March 31, 1996, $473,038 of identifiable
research and development costs have been capitalized.

NET INCOME. Net income decreased 66% to $186,461 for the year ended March
31, 1996 compared to $543,201 for the year ended March 31, 1995. Certain
expenses related to REF OpenEnterprise-TM-, custom development for a large
customer and development for a governmental entity, for which sales could not be
recorded in fiscal 1996, caused a decrease in net income as a percentage of
sales from 18% in 1995 to 6% in 1996.

THREE MONTHS ENDED JUNE 30, 1995 AND 1996

REVENUE. Revenue increased 113% to $1,048,001, for the three months ended
June 30, 1996 compared with $492,252 for the three months ended June 30, 1995.
Revenue from new customers and time and material funds received for POS
prototype development of government entity software were included in the 1996
quarter.

GROSS PROFIT. Gross profit increased 217% to $565,604 for the three months
ended June 30, 1996 compared to $178,639 for the same period in 1995. Percentage
gross profit was 36% in 1995 and 54% in 1996, principally due to a reduction in
direct costs related to non-revenue producing development projects in the same
quarter of 1995.

OPERATING EXPENSES. Operating expenses increased 41% to $440,093 for the
three months ended June 30, 1996 compared with $312,514 for the same period in
1995. Operating expenses, as a percentage of revenue, improved to 42% for the
three months ending June 30, 1996 from 64% for the three months ended June 30,
1995 due to increased productivity through use of enhanced programming
techniques, plus expense controls, combined with higher revenue in the 1996
period. Research and development expenditures in the three months ended June 30,
1995 and 1996 were directed toward REF OpenEnterprise-TM- and have been
capitalized. As of June 30, 1996, total net capitalized software was $602,393.

NET INCOME. Net income increased $223,139 to $135,992 for the three months
ended June 30, 1996 compared to a loss of $87,147 in the same quarter in 1995.
Higher sales, cost controls and a reduction in expenditures for products
expected to produce revenue in future quarters all contributed to an improved
net income performance during the 1996 quarter.

LIQUIDITY AND CAPITAL RESOURCES

Working capital decreased $266,776 from March 31, 1995 to March 31, 1996 and
increased $9,845 in the three months ended June 30, 1996. REF financed its
increased sales from internally generated cash for the year ending March 31,
1996 and the first quarter ended June 30, 1996. Net cash provided from operating
activities increased $175,316 for the year ended March 31, 1996. Net cash
provided from operating activities decreased by $315,654 for the first quarter
ended June 30, 1996, primarily due to a decrease in the costs and estimated
earnings in excess of billings. Current assets decreased to $1,395,567 at March
31, 1996 and further to $1,382,525 at June 30, 1996, due to decreases in cash
and accounts receivable. Current liabilities increased to $484,348 on March 31,
1996 from $450,101 on March 31, 1995, primarily due to increases in notes
payable and deferred rent partially offset by a decrease in accrued income
taxes. Current liabilities as of June 30, 1996 were $461,460.

15
<PAGE>
PRO FORMA RESULTS OF OPERATIONS

Management believes that the pro forma financial statements included
elsewhere in this Prospectus and the following selected financial information
and discussion are informative and should be considered carefully by prospective
investors, given the significance of the acquisition of REF.

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, 1996
----------------------------------------
PREMIS REF PRO FORMA
ACTUAL ACTUAL COMBINED (1)
------------ ------------ ------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
System sales...................................................... $ 4,923,132 $ 2,725,256 $7,648,388
Maintenance fees and other services............................... 979,029 471,260 1,450,289
------------ ------------ ------------
Total revenue................................................. 5,902,161 3,196,516 9,098,677
Cost of sales..................................................... 3,036,322 1,434,018 4,470,340
Gross profit...................................................... 2,865,839 1,762,498 4,628,337
Earnings before income taxes, depreciation and amortization....... 1,456,615 320,183 1,908,492
Net income........................................................ 827,362 186,461 605,128
------------ ------------ ------------
------------ ------------ ------------
Net income per share.............................................. $ 0.28 N/A $ 0.14
------------ ------------ ------------
------------ ------------ ------------
Weighted average common and common equivalent shares
outstanding...................................................... 2,925,581 N/A 4,412,509
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, 1996
-----------------------------------------
PREMIS REF PRO FORMA
ACTUAL ACTUAL COMBINED (1)
------------ ------------ -------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
System sales...................................................... $ 1,570,791 $ 967,473 $ 2,538,264
Maintenance fees and other services............................... 343,388 80,528 423,916
------------ ------------ -------------
Total revenue................................................. 1,914,179 1,048,001 2,962,180
Cost of sales..................................................... 967,739 482,397 1,450,136
Gross profit...................................................... 946,440 565,604 1,512,044
Earnings before income taxes, depreciation and amortization....... 571,352 178,384 779,394
Net income........................................................ 332,236 135,992 363,383
------------ ------------ -------------
------------ ------------ -------------
Net income per share.............................................. $ 0.11 N/A $ 0.08
------------ ------------ -------------
------------ ------------ -------------
Weighted average common and common equivalent shares
outstanding...................................................... 2,979,683 N/A 4,466,611
------------ ------------ -------------
------------ ------------ -------------
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1996
---------------------------------------------
PRO FORMA
COMBINED
PREMIS REF AS ADJUSTED
ACTUAL ACTUAL (1)(2)
------------ ------------ -----------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital................................................... $ 1,624,063 $ 921,064 $ 3,695,127
Total assets...................................................... 4,091,438 2,356,534 12,543,632
Long-term debt, less current portion.............................. 835,982 280,807 1,116,789
Total liabilities................................................. 2,039,186 802,194 2,841,380
Retained earnings................................................. 1,087,416 1,471,516 1,087,416
Shareholders' equity.............................................. 2,052,252 1,554,340 9,702,252
</TABLE>

- --------------------------
(1) The unaudited pro forma statement of operations is presented as if the
acquisition of REF occurred on April 1, 1995. A $494,566 annual earnings
adjustment of goodwill amortization, a non-cash charge to earnings, is
included in these adjustments. Weighted average common and common equivalent
shares outstanding are adjusted to reflect the shares issued in this
offering in connection with the acquisition of REF. The unaudited pro forma
balance sheet is presented as if the acquisition of REF occurred on June 30,
1996. See the pro forma condensed combined financial information appearing
elsewhere in this Prospectus.

16
<PAGE>
PRO FORMA RESULTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1996 AND FOR
THE THREE MONTHS ENDED JUNE 30, 1996

The combined pro forma statements, as adjusted to reflect the issuance of
1,750,000 shares in this offering and the consolidation of REF, assume that the
offering and acquisition were effective April 1, 1995. These statements indicate
revenues of $9,098,677 and $2,962,180 for the year ended March 31, 1996 and the
three months ended June 30, 1996, respectively, and earnings before taxes,
depreciation and amortization of $1,908,492 and $779,394 for the year ended
March 31, 1996 and the three months ended June 30, 1996, respectively. The
acquisition of REF resulted in the recording of goodwill of $4,945,660, which
was determined based on the excess acquisition cost over the estimated fair
market value of identifiable assets. Goodwill represents the base of substantial
existing REF customers and the excellent product reputation of REF. This excess
amount is being amortized on a straight line basis over a period of ten years.

Assuming that its current projections and forecasts of future business are
achieved, management believes that the business expansion anticipated as a
result of the REF acquisition will offset the adverse effect on earnings of the
annual amortization of goodwill, which is a noncash charge against earnings.
Moreover, earnings per share in the fiscal year ending March 31, 1997 will be
computed using a weighted average number of shares outstanding including the
1,750,000 shares issued in this offering for the period from date of closing of
this offering to March 31, 1997. In contrast, the pro forma presentation assumes
that an additional 1,486,928 shares (the number of shares required to be issued
at the Price to Public of $5.00 per share to provide the net proceeds to be paid
in connection with the acquisition of REF) are issued and outstanding for the
entire twelve month pro forma period. Thus, actual earnings per share in fiscal
1997 may be greater than earnings per share in the pro forma presentation merely
as a result of the smaller weighted average number of shares actually
outstanding in the 1997 period.

RECENTLY ISSUED ACCOUNTING STANDARD

PREMIS accounts for stock options and other equity instruments in accordance
with APB Opinion No. 25, "Accounting for Stock Issued to Employees." Effective
in fiscal 1997, the Company will account for stock options in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting of
Stock Based Compensation." SFAS No. 123 establishes accounting standards for
organizations that have stock based employee compensation plans. Generally, the
statement defines a fair value based method of accounting for these plans which
requires the measurement of compensation costs at the grant date and recognition
of such costs over the service period, which is usually the vesting period. The
Company will continue to value its options under APB Opinion No. 25 and will
comply with the disclosure requirements of SFAS No. 123.

17
<PAGE>
BUSINESS

- point of sale data collection and management review of transactions

- "real time" sales analysis reporting by store, product, customer or
salesperson

- individual store stock positions and enterprise inventory tracking

- purchasing, order tracking and warehouse control

- accounts receivable management and commission receivable accounting

- sales promotion fund management and advertising budget accounting

- electronic data interface for on-line ordering from vendors and customers

- intranet communications connections between stores and main corporate
office

The Company's strategy is to develop leading-edge, industry-specific
software systems to collect business information, analyze the collected data and
provide concise, meaningful reports to individuals within an organization.
PREMIS initially developed software products targeted toward food brokers and
specialty food distribution companies. In 1994, PREMIS entered the specialty
retail market when it acquired the exclusive marketing rights for a software
system which assists with the back office and headquarters management functions
of multi-store specialty retail chains. Since that time, PREMIS has continued to
enhance the applications and improve the functionality of its software products
and has evolved from a provider of single application specialty software into a
turn-key vendor of enterprise-wide information management systems.

In July 1996, as part of its strategy to provide end-to-end management
information solutions, PREMIS agreed to acquire REF, a Toronto-based provider of
Windows NT-Registered Trademark--based retail management software and systems
which complement PREMIS' existing retail software product. REF's retail software
combines an easy-to-use POS transaction processing interface with sophisticated
data analysis and information reporting capabilities. The Windows
NT-Registered Trademark- graphical user interface significantly reduces the cost
of training cashier personnel and shortens the time required to process a sale.
The REF software is designed to accelerate information access and provide a wide
variety of management reports on a "real time" basis to various levels of an
organization. The sophisticated data acquisition and processing features of the
REF product position the Company's systems toward the high end of the specialty
retail market, which broadens the range of product offerings for the Company's
specialty retail systems. Management believes the REF acquisition will provide
the Company with an improved sales capability and contribute a higher level of
technology and functionality for its products.

INDUSTRY OVERVIEW

Over the past two decades, many businesses have significantly increased
their use of software products and computer systems to automate tasks and
improve the efficiency of their day-to-day operations and long-term strategic
planning. Historically, most businesses purchased software tools specifically
designed to address a particular task or function of their operations. Most of
these software tools were engineered by different software companies and,
consequently, each tool had difficulty communicating data it gathered to the
other systems. The need for fast and reliable data transfer between various
business functions created a demand for software and hardware solutions which
integrated the independent business functions of an organization.

18
<PAGE>
In response, firms like the Company have expanded the functionality of their
software products to integrate a wide variety of independent tasks within a
particular business. These software systems allow data from one business
function to be available to any other function, thereby creating an
enterprise-wide information management system. Company-wide portability provides
critical information to a wide variety of personnel within an organization to
more effectively and efficiently manage day-to-day activities as well as
long-term strategic objectives.

MULTI-STORE SPECIALTY RETAIL CHAIN MARKET

The multi-store specialty retail chain market is comprised of approximately
14,000 chain headquarters controlling roughly 250,000 stores. This market
includes apparel and accessory stores, gift and novelty stores and sporting
goods stores. Although the number of specialty retail stores has not shown
consistent growth, there are always individual store chains which are expanding
and new chains which are emerging. PREMIS has found that as specialty retail
chains expand, even those that historically developed their own information
management systems migrate toward outside vendors because they lack technical
expertise necessary to support rapidly evolving and changing information
management technologies. Although specialty retailers historically have
computerized POS data, many have not integrated their POS software with their
"back office" or headquarters systems. This lack of integration of the back
office and headquarters systems has prevented effective interface between POS
and management data. Specialty retailers are increasingly seeking the full
integration of these individual store and headquarters management functions to
maximize the availability of data on an enterprise-wide basis. Management
believes that the Company's products are marketable to any size multi-store
specialty retail chain.

FOOD DISTRIBUTION MARKET

Management believes that food brokers and distributors have historically
computerized certain data, such as commissions, accounts receivable and
inventory control, with separate software systems for each function. These
functions have operated independently, but food brokers and distributors now
seek to integrate these functions within one complete operating system.
Management believes that approximately 4,000 food brokers and specialty food
distributors nationwide are viable market opportunities for the Company.

STRATEGY

The Company's long-term objective is to rapidly grow the Company and achieve
and maintain a leadership position as a provider of enterprise-wide information
management systems in a variety of market niches. The Company's business
strategy for attainment of its objective is to:

- provide innovative leading edge systems

- expand marketing and sales efforts to penetrate its selected markets to
capitalize on first to market product advantages

- pursue strategic acquisitions of complementary products and service
capabilities

PROVIDE LEADING EDGE SYSTEMS. The Company intends to leverage REF's
extensive technical expertise in software development and advanced programming
techniques with PREMIS' marketing, training and hardware integration to offer
both standardized and customized fully-integrated, enterprise-wide solutions to
its customers.

EXPAND MARKETING AND SALES EFFORTS. By expanding its product offerings to
include fully functional software systems for retail distributors of all types
of goods, the Company plans to broaden its customer base to include a wide
variety of commercial enterprises. The Company intends to utilize the existing
PREMIS sales and marketing organization to reach the Company's expanded markets
with the full line of PREMIS and REF products and services, as well as
cross-marketing PREMIS and REF products to their respective existing customers.
Marketing and sales efforts will be augmented with strategic alliances and
reseller relationships, such as the current relationships of the Company with
NCR and Microsoft Corporation ("Microsoft"). See "Business -- Marketing and
Sales."

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<PAGE>
PURSUE STRATEGIC ACQUISITIONS. A significant part of the net proceeds of
this offering will be used to acquire REF. This acquisition will provide the
Company with the ability to offer comprehensive enterprise-wide management
solutions to a broad range of multi-store retail distributors. The Company
intends to explore and evaluate other opportunities for acquisition of
complementary products and services as such opportunities present themselves,
but none have been identified to date.

ACQUISITION OF REF

On July 9, 1996, PREMIS entered into an agreement for acquisition of all of
the outstanding equity stock of REF, in consideration of $6.5 million, to be
paid concurrently with the closing of this offering. As described elsewhere
herein, Mr. Edward W. Anderson will continue as the President of REF and will
become an employee of the Company. Mr. Robert E. Ferguson, the founder and Chief
Financial Officer of REF, will not continue with the Company and has entered
into a five-year agreement not to compete, except in the area of golf course
retail management systems.

REF develops and markets software for the specialty retail distribution
marketplace, specializing in software customized for POS terminals. REF has in
excess of ten years' experience developing custom POS applications for some of
North America's largest specialty retailers and has used its experience to
develop a fully functional Windows NT-Registered Trademark--based POS package.
Until recently, REF's products, like those of PREMIS, addressed only part of the
multi-store chain retailer's needs. However, REF has recently launched a
complete integrated system known as REF OpenEnterprise-TM-. PREMIS believes that
no competitive counterpart to the REF OpenEnterprise-TM- system currently exists
and that it will take at least two years for competitors to develop the minimum
requirements of such a product. To date, the major competitors of PREMIS and REF
have focused either on POS software or back office and headquarters software.

Both companies have designed systems using leading edge client/server
technology; REF has completed the additional development required for a complete
software solution for retailers, while PREMIS has completed only prototype
development of its complete solutions products. Management believes that a
system with ease of use, complete information access and flexibility of
client/server and Windows NT-Registered Trademark-, will be actively sought by
buyers as the standard for effective management of specialty retail distribution
and that the first company that introduces such a product will have the
opportunity to set the standard and establish a strong foothold. In the opinion
of management, a system which combines the products of REF and the products and
services of PREMIS fulfills more of the requirements of specialty retailers than
any competing system.

Historically, PREMIS' specialty retail customers were primarily smaller
store chains which did not require customization of its standard software
products or sophisticated POS capabilities. Conversely, REF's specialty retail
customers were primarily larger store chains which required customization of
various software functions and desired detailed POS data collection. Also, the
products of PREMIS currently address only the hardgoods specialty retail market
(products sold by the unit without regard to size, color, or style, such as
greeting cards or screws). Many competitors of PREMIS also focus either on the
hardgoods or the softgoods specialty retail market (products sold with regard to
size, color and style, such as apparel and accessories). The products of the
Company address all aspects of specialty retail distribution and the needs of
both hardgoods and softgoods specialty retailers, which broadly increases the
market opportunity for the Company. Thus, the Company expects that REF's
products and target customers will complement, rather than overlap, PREMIS'
products and target customers.

PREMIS and REF combined offer substantial synergies in product offerings,
market reach and operations, including the following:

- EXPANDED MARKETS. The Company will offer a complete end-to-end management
information solution to multi-store specialty retailers both in hardgoods
and softgoods markets, as well as addressing the existing PREMIS food
distribution markets. The Company's geographic scope will also expand.

20
<PAGE>
- FULL RANGE OF PRODUCTS. The products and services provided by the Company
will offer a complete integrated enterprise-wide management solution, from
POS to back room controls, for the multi-store specialty retailer.

- INTERNATIONAL APPLICATION. The graphical user interface and Windows
NT-Registered Trademark- features of the Company's products accommodate
multiple language and currency environments and are easily adaptable to
settings in which the language is other than English and the currency is
other than U.S. Dollars, or in which multiple languages or currencies are
used.

- OPPORTUNITY FOR IMPROVED PROFITABILITY. The Company's expanded product
line will be targeted to large customers whose needs support products
priced at the high end of the range. In addition, the Company expects that
improved profitability will result from its ability to provide product
components, such as POS software, which PREMIS must now purchase from
third party suppliers.

- SYNERGIES IN STAFFING. Currently, PREMIS considers sales and marketing,
systems integration and systems maintenance and support as particular
strengths of its personnel. REF, on the other hand, views its staff's
forte as technology and advanced programming skills. Accordingly, the
companies believe that the current staffing of their respective
organizations, complement and enhance each other and should not require
significant downsizing.

- CROSS-MARKETING TO CUSTOMERS. The Company believes that significant
opportunities exist for marketing the respective strengths of PREMIS and
REF (I.E., POS software and customization in the case of REF and
integration and support in the case of PREMIS) to the existing customer
base of the other.

Further, management believes that, in addition to product and service
synergies described above, the combination of PREMIS and REF offers broadened
access to particular significant customers and markets currently served by one
or both of them, for example:

- Both PREMIS and REF have extensive experience with the U.S. Postal Service
and have on-going involvement in Postal Service projects. See "Business --
Customers."

- REF has been working with the Canadian Postal System on a prototype system
for domestic use in Canada. PREMIS believes that a substantial market
opportunity is presented for international postal systems utilizing REF's
POS software and PREMIS' skills in integration, installation and training.

- The Company believes that growing acceptance of the Internet will provide
a significant opportunity for retailers to offer products via computer
terminal in thousands of homes, rendering the Internet the retail store of
choice. Retail stores on the Internet will have the same needs for POS
software, backroom systems and headquarters management. The products of
PREMIS and REF are uniquely suited for use with the Internet because their
design characteristics allow portions of a traditional POS transaction to
be processed at separate locations.

- To date, PREMIS has invested several years in a demand forecasting system
based on neural network technology. This technology is easier to use and
more accurate than traditional methods because it considers more variable
inputs with minimal complexity in processing. This product, which has been
developed in client/server architecture with a Windows interface, offers
the retailer reduced inventory investment, reduced out-of-stocks and
higher customer satisfaction.

PRODUCTS AND SERVICES

The Company's products, while targeted to selected vertical markets, are
broad in their functionality and flexibility and are scaleable from small to
large business organizations. The Company strives to provide an enterprise-wide
solution to the information needs of businesses in its vertical markets. These
solutions include registering data at the point of transaction, assembling data
at the point of processing, analyzing and summarizing data using business
specific rules, warehousing data and

21
<PAGE>
converting data into meaningful information through flexible inquiry and
reporting. The concepts and technology, while currently adapted to specific
types of businesses, can be adapted to many vertical markets.

PREMIS was founded with a focus on the food distribution marketplace, with
particular emphasis on food brokers and specialty distributors. In 1994, PREMIS
added multi-store specialty retail chains to its target vertical markets by
purchasing exclusive marketing rights to IRIS-TM-. REF also provides software
products to multi-store specialty retail chains, but, because of their design
and use, REF's products do not directly compete with the products of PREMIS.

The Company's systems consist of standardized and optional applications
software offered to its target markets. These software products are often
combined with computer hardware purchased by the Company from various suppliers
providing equipment using the UNIX-Registered Trademark- and Windows
NT-Registered Trademark- operating systems. For multi-store specialty retail
chains, the Company's current principal products are the IRIS-TM- and REF
OpenEnterprise-TM- systems; for food distribution, the Company's principal
products are the ADVANTAGE-TM- and RETAIN-TM- systems. The Company also provides
extensive project management, education, end-user training and on-site support
to help manage the implementation process for new customers, as well as help
desk services for existing customers, dealers and field employees with critical
and exhaustive software support needs.

MULTI-STORE SPECIALTY RETAIL CHAIN MARKET

Software marketed by the Company provides the aggressive multi-store chain
specialty retailer with information management and control within the store, in
the back office and at headquarters. IRIS-TM- (an acronym for "Integrated Retail
Information System") provides integrated POS and inventory management for small
to mid-sized hardgoods retailers with multiple sales outlets in the specialty
store segment of the market. IRIS-TM- provides head office control over
multi-store inventory, purchasing, pricing, warehousing and sales, as well as
providing advanced data communications and executive reporting. IRIS-TM- is
designed to be combined with third party POS software and hardware to supply a
complete solution for a hardgoods specialty retailer. Information flows from
various terminal locations, such as individual stores and warehouses, to the
main system; information flows back to users at terminal sites or to vendors
(via integrated fax or electronic data interchange).

Among its key functions, IRIS-TM-:

- provides control of purchasing, receiving, inventory and POS

- operates in a variety of hardgoods specialty retail environments

- tracks an entire inventory cycle for each store

- utilizes fully-integrated modules

- allows multiple users and tasks to simultaneously access the same files

IRIS-TM- runs on a UNIX-Registered Trademark- operating system, which
provides complete multi-user and multi-tasking functionality. Multiple
permission levels provide complete data security.

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<PAGE>
[FLOW CHART OF PREMIS IRIS-TM-/REF OPEN ENTERPRISE-TM- SYSTEM]

REF OpenEnterprise-TM- and its related components provides a complete
enterprise-wide automation solution for all specialty retail distributors,
including softgoods retailers, and eliminates the need to purchase and integrate
software components from a number of different vendors. The REF
OpenEnterprise-TM- system features SQL/ODBC (a formatted, standardized method
for accessing information) relational databases, a Windows
NT-Registered Trademark- graphical user interface ("GUI") and compliance with
the Windows NT-Registered Trademark- operating system. All REF
OpenEnterprise-TM- products have been designed as client/ server solutions using
the processing power of a main server and a PC workstation client.

REF OpenEnterprise-TM- includes:

- REF OpenOffice-TM-, which automates head office functions and provides
easy access to mission critical information for the entire retail
organization;

- REF OpenStore-TM-, which automates the entire POS function consistent with
the "open system" concept; and

23
<PAGE>

- REF OpenCom-TM-, which provides a means of communication between
headquarters and individual stores, by extending the head office LAN to
the POS workstation in individual stores, with real-time on-line
communications as well as periodic summaries.

Each of the system's component parts may operate independently or in
conjunction with other components; typically, a customer that purchases both REF
OpenOffice-TM- and REF OpenStore-TM- will also purchase REF OpenCom-TM- because
REF OpenCom-TM- provides the intra-enterprise communication system.

REF OpenOffice-TM-, a component of REF OpenEnterprise-TM-, was developed for
two primary platforms, Windows NT-Registered Trademark- and
UNIX-Registered Trademark-. Typically, REF OpenOffice-TM- operates on a
Microsoft SQL Server. With minor modification, REF OpenOffice-TM- can be ported
to any open relational database built for client/server architecture using an
industry standard SQL such as Oracle-Registered Trademark- or
Informix-Registered Trademark-.

The primary components of REF OpenOffice-TM- are modular in design to
provide maximum benefits with a minimum investment in computing hardware. The
user has the option of designing a solution with modules of its choice.
Additional software may be added at any time with no disruption to the existing
system. The Base System is the core of the REF OpenOffice-TM- retail management
system and is required for all other modules. The Base System is comprised of
various structures which create organizational, merchandise and time hierarchies
of data which are meaningful to the user.

The Base System structures are designed for ease of use and maximum
flexibility. The user may, at any time, change, add or delete levels within
structures and may move data within either structure with a simple click of a
mouse and "drag and drop" to the new or changed level. All existing data is
reassigned and all summary tables are re-summarized automatically. For example,
if some stores in one region are realigned to another region, the click of a
mouse can immediately move the data to the new region structure, without
additional programming or loss of data.

The specific modules available with REF OpenOffice-TM- include Store,
Vendor, Item/SKU (stock keeping unit), Sales Audit, Polling Audit, Processing
Audit, Store Audit, Cash Audit, Electronic Journal, Sales Analysis,
Merchandising, Customer Profiling, Gross Margin Analysis, Cash Audit, Employee
Auditing, Store Ordering, Perpetual Inventory, Inventory Management and Cash
Management.

REF OpenStore-TM- is an advanced POS software system which automates the
entire POS function consistent with the "open system" concept. REF OpenStore-TM-
can operate on a wide variety of POS hardware and PC's combined with cash
drawers and can be easily integrated with other PC-based office systems.
Particular attention has been given to the GUI, which can be combined with
keyboard entry, touch screen or the NCR Dynakey cash register terminal display.
Data tables that are maintained in REF OpenStore-TM- have companion tables that
are maintained in REF OpenOffice-TM- and vice versa, resulting in quick,
seamless transmission. Some of the features of REF OpenStore-TM- are its ability
to:

- manage multiple sales transactions types

- monitor extensive Item/SKU level price management, including special
promotions

- support multiple currencies and languages

- support local, county, special, national and other taxation

- manage multiple tender types, such as cash, check, debit cards, credit
cards, etc.

- configure cash drawer compulsion by tender type and control

- enter data by manual keystroke, scanning or special search screens

- monitor balancing and floating counts for cash paid in, paid out and petty
cash

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<PAGE>
- generate reports by department sales, associate sales, tender totals,
returns/exchanges, voids, store productivity, sales discounts, store
summary, layaway status and aging reports

- compile extensive store summary reporting, including sales and gross
profit generated, net sales by sales type and layaway sales

- create "customer profiling" for tracking customer demographics,
preferences and purchase history

- manage inventory control at the store level

- connect directly with credit authorization service

- fully support peripheral interfaces such as scanners, scales, customer
keypads and check validation

REF OpenCom-TM- provides a means of communication between a retailer's
headquarters and its individual stores through a variety of different
communication standards and protocols. While competitive software modules offer
either real-time on-line communications or nightly polling of store systems by
the host, REF OpenCom-TM- incorporates both. Using this system, communications
between stores, districts, regions or headquarters can be as frequent or as
selective as desired. Updates can go to the central, regional or district hosts
independently or simultaneously. Transactions can be instantaneous or summarized
and periodic, depending on the communications network. Public networks such as
the Internet can be used as well as private networks or dialup polling. This
flexibility recognizes the need for faster headquarters information on product
marketing, sales force utilization, shopping patterns and other marketing and
product information and prepares the system to meet all of the possible
communications demands of the modern retailer. REF OpenCom-TM- features:

- a file-based inventory locator server

- standard E-mail messaging enhancements

- multiple service providers for electronic funds transfer

- REF OpenCom-TM- network traffic and monitor extension

- industry standard Windows NT-Registered Trademark- client interfaced to
REF OpenCom-TM-

- support for System Network Architecture services to mainframes

- TCP/IP standard support ISDN interface to communications providers

- SQL server integration for access to enterprise data

- system-wide alert messaging and logging facilities

The REF OpenEnterprise-TM- components described above also serve as the
foundation for custom development projects for large multi-store retailers.
Purchases of custom designed systems generally involve contracts ranging from
$500,000 to $1,500,000. The Company anticipates that large retailers will
continue to purchase custom designed systems with the unique solutions and
flexibility required for their special needs. To date, the Company has
successfully installed custom designed products for the following multi-store
clients: Lerner New York Inc. and Lane Bryant, Inc. (divisions of The Limited,
Inc.), The Gymboree Corp., Kirkland's Inc., NEXCOM, Music World and Bi-Way
Stores Ltd. In addition, a custom design project is currently in process with
Strouds, Inc.

FOOD DISTRIBUTION MARKET

The Company's ADVANTAGE-TM- and RETAIN-TM- systems are designed to assist
food brokers and distributors with day-to-day business management and analysis
of information concerning the retail distribution of products. Information flows
from individual brokers, distributors, or offices to the main system;
information flows back to the user sites, as well as store sites served by the
food broker or distributor (via electronic data interchange or fax).

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<PAGE>
[FLOW CHART OF PREMIS ADVANTAGE-TM-/RETAIN SYSTEM]

Among its key features, ADVANTAGE-TM- offers:

- electronic data interchange ("EDI") and systematic order control

- budgeting and quota management

- multiple security levels and commission accounting control

- integrated fax capability, allowing a document to be faxed directly from
ADVANTAGE-TM- without the need to print a paper copy and send the paper
copy by dedicated fax equipment

- extensive reporting and forms management

- reclamation management, which permits grocers to obtain manufacturer's
credits for return of damaged, spoiled or out-dated products

- portable Windows NT-Registered Trademark--based systems for sales staff

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<PAGE>
ADVANTAGE-TM- employs a client/server relational database, variable
overlapping Windows NT-Registered Trademark- presentation and pop-up or
pull-down menus. Its EDI communication capabilities permit various sales order
information to be transmitted between the broker and its retail store customers
and the manufacturers for whom the broker acts as agent, such as confirmation,
promotions, price changes and invoices. ADVANTAGE-TM- controls orders and
commissions and reports on various sales-related issues. ADVANTAGE-TM- provides
data security with five levels of clearance, and data collected with
ADVANTAGE-TM- can be exported to the users of word processing, spreadsheet,
accounting and graphics programs. Reports produced with ADVANTAGE-TM- include:
(i) Order Reports -- which specify orders placed on specified dates; (ii) Sales
Recaps -- which provide information on sales and commissions for each order,
sorted first by principal (I.E., the product manufacturer) and then by retail
store under each principal; (iii) an Order Register -- which provides a complete
log of all orders with item detail; (iv) Order Status Reports -- which check the
status of orders when customers call; (v) Principal Order Histories -- which
provide item sales for year-to-date; (vi) Item Tracking -- which provides
information on how a particular item is selling; (vii) Ranking Reports -- which
provide information on principals, customers, items and salespersons by
performance or purchases; and (viii) Commission Listings -- which disclose
payment or nonpayment of commissions. Enhanced reports are also available for
more in-depth analysis. ADVANTAGE-TM- is fully integrated with other food
distributors software modules from the Company.

RETAIN-TM- is a system for managing the distribution of vendors' products in
retail stores. The maintenance of shelf space allocations for a manufacturer's
products requires constant supervision of merchandisers at the store level. The
RETAIN-TM- System supports all activities for the merchandisers and reports on
the status of items from the regional level right down to the store shelf.

RETAIN-TM- utilizes pen-based computers operating Windows
NT-Registered Trademark- to gather data in retail stores. The clipboard sized
pen-based computer uses a stylus and a touch-sensitive screen to record store
information. Onscreen pop-up store lists allow the user to select the store
being visited. Sales merchandisers select from a product list to identify the
item with a pen touch to indicate the action taken, such as conformance to shelf
standards, number of facings, out of stock items, resets and displays built.
Store data can be transmitted in a single three-minute phone call at the end of
the day. Once the data arrives at the central computer, the RETAIN-TM- software
identifies changes in retail distribution since the last survey. It spots new
products, changes in facings and items that are no longer in distribution. The
system provides complete reporting on distribution by salesperson, territory,
manufacturer, distributor, sales team, or product line. The system also produces
reports on salesperson performance, such as stores covered, work hours, travel
versus store time and travel patterns.

MULTIPLE MARKET PRODUCTS

Two of the Company's add-on features can be used in both food distribution
and retail distribution. The Company's uniform communication standard ("UCS")
EDI system allows trading partners to send and receive a full range of UCS
computer-to-computer data transmissions with and from their customers and
manufacturers. It permits high-speed paperless communication of purchase orders
and related adjustments, invoices and related adjustments, order
acknowledgments, credit/debit memos, price changes, promotion announcements,
administrative messages, marketing fund transactions, product activity, shipment
notices and purchase confirmations. The Company's other add-on feature is an
integrated capability to fax orders and reports directly from the system. This
feature allows a user to display a report and re-direct the report to be faxed
to a remote location without first printing, then manually faxing the report
with dedicated fax equipment.

FULFILLMENT AND HELP DESK SERVICES

The Company provides extensive project management, education, end-user
training and on-site support to help manage the implementation process for new
customers. In general, customers view these services as important discriminating
factors in a purchase decision.

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<PAGE>
Fulfillment services are conducted from the Company's headquarters in
Minneapolis, Minnesota, and, following the REF acquisition, also from the
Canadian Division offices in Toronto, Canada. Each office conducts fulfillment
services for its respective country and is staffed accordingly. The fulfillment
services organization:

- assists sales representatives with retail industry expertise, to better
address customers' industry-specific needs

- manages the business relationship between the Company and the customer

- designs custom programming specifications

- develops installation plans to achieve customer schedules

- provides education and training for customer staff

- provides physical product installation and setup

- provides regular status reporting and transition to Help Desk for support
on an on-going basis

Fulfillment services have become an increasingly important source of revenue
as the Company's installed base of customers has grown. Currently, approximately
25% of the initial software purchase price charged to the Company's customers is
dedicated to installation and custom modifications, if required. In addition,
the Company charges an annual fee equivalent to 15% of the initial software
purchase price for maintenance and software support services.

Customers who purchase maintenance agreements receive Help Desk telephone
support and product upgrades once the system has been installed. The Help Desk
provides critical and extensive software support to its customers, dealers and
field employees by telephone. The Help Desk is highly automated, with computer
assisted tracking of each client call, high speed text search for similar
problems, on-line manuals, interactive diagnostics and expert systems for
guidance through special and third party supplier problems. Senior product
specialists take referral of difficult problems which cannot be easily resolved
by Help Desk personnel. The Company recently purchased a sophisticated software
system which will facilitate this two-tiered approach. The Help Desk operates 16
hours a day, Monday through Friday, plus 10 hours a day on Saturday and Sunday,
for retail customers with extended support agreements.

MARKETING AND SALES

The Company believes that a comprehensive understanding of the business
issues which are prevalent in a customer's particular market is a key component
to successful marketing. To this end, PREMIS has compiled industry-specific
databases, which are continually updated by the sales staff and fulfillment
services staff based on changing market conditions. These databases also
contribute to educating personnel in the marketing department and in research
and development to ensure that customer issues, features and requirements are
addressed and incorporated in future product releases. In addition, the Company
seeks to provide comprehensive uninterrupted service by utilizing a team for
each customer throughout the customer's relationship with the Company,
consisting of personnel from sales and marketing, systems integration and
support and maintenance. The Company intends to serve the ongoing needs of
smaller multi-store retailers through distributor relationships.

The Company's sales techniques involve traditional methods, including
development of prospects through telemarketing, direct mail, seminars and
advertising; development and distribution of marketing literature, such as
brochures, product technical overviews, newsletters and direct marketing
letters; direct selling efforts through sales meetings with prospective
customers; and order fulfillment, including planning, training, installation and
long-term customer support. Following the acquisition of REF, the Company
anticipates that its marketing and sales will continue to be based

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principally in the United States and that all marketing and sales efforts will
be coordinated from the U.S. office. A limited number of sales and marketing
personnel will be located in Canada to handle accounts which are better served
from that location.

The Company estimates that hardware components comprise approximately 50% to
60% of the cost of a management information system. The Company primarily sells
its software systems together with hardware components, which are purchased by
the Company from a variety of equipment vendors. In certain markets, the Company
also sells its software directly to equipment vendors for resale by the vendors
to their end-user customers. The Company has developed strategic alliances with
key hardware vendors of open systems, including NCR which is the primary vendor
in this market. To date, PREMIS and NCR have cooperated in a strategic alliance
partner program which provides customers with turn-key solutions including NCR
hardware and maintenance services and PREMIS software. However, since PREMIS is
also an NCR remarketer, it can provide hardware as well. The Company is working
to expand its hardware offerings and may enter into reseller relationships with
other hardware suppliers. REF has also been a marketing affiliate of NCR and
receives a commission on the hardware portion of a sale in which NCR hardware is
teamed with REF software.

In addition, REF OpenEnterprise-TM- products may be marketed with certain
Microsoft products. This has resulted in marketing seminars presented jointly by
the Company and Microsoft.

CUSTOMERS

The following table presents a sampling of current customers that are
representative of the types of businesses served by the Company, each of whom
has purchased products or services from PREMIS or REF during the last fiscal
year.

<TABLE>
<S> <C>
RETAIL CUSTOMERS FOOD DISTRIBUTION CUSTOMERS
U.S. Postal Service Delicious Cookies
Paper Warehouse, Inc. Stark & Co., Inc.
Truck Stops of America Bonacker & Leigh Inc.
Marriott International, Inc. Johnson-Lieber Inc.
Springs Industries, Inc. Bromar Inc.
Lane Bryant, Inc. (a division of
The Limited, Inc.)
</TABLE>

The Company believes that the U.S. Postal Service will continue to be a
significant customer. On August 13, 1996, a contract was awarded by the U.S.
Postal Service to NCR and IBM as hardware vendors for a project known as POS
One. The U.S. Postal Service intends to upgrade and open new retail stores in
various post office locations. NCR's portion of the POS One contract involves
installation of new POS software equipment for 9,100 retail work stations.
Following discussions with NCR and the U.S. Postal Service, management believes
that this contract potentially represents approximately $4.0 million in revenues
to the Company over the next eighteen months.

Over the last three years, PREMIS has installed 200 systems for the U.S.
Postal Service's "Store of the Future" prototypes, which are new or remodeled
postal stores where products are displayed for customer viewing and cash
registers are positioned at an island in the display area. "Store of the Future"
is a separate project from POS One. However, the longer term POS One project for
replacement registers will include those stores developed in the "Store of the
Future" program. PREMIS has also installed the Postal Service headquarters
system which controls inventory and reports on sales for the "Store of the
Future" sites. Because of this strong positioning and PREMIS' proven skills with
installation, training and help desk, it has established a reputation for high
quality with the Postal Service and with vendors like NCR and IBM. PREMIS is in
discussion with both IBM and NCR about utilizing PREMIS as the installation
vendor for the longer term POS One replacement systems and believes that as a
result, the Company may also participate as an installer and integrator in the
next generation Postal Service system.

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<PAGE>
COMPETITION

The Company develops and markets proprietary, industry-specific information
management software products which are typically sold in combination with PC
workstation equipment and client/ server hardware. Due to the fact that the
hardware component of a system is such a substantial portion of the total cost,
most of the Company's customers select a hardware platform prior to their
decision to purchase a software package. Consequently, the software package
alternatives available to the customer will be limited to those products that
run on the selected hardware platform. The Company competes directly with other
information systems software vendors and system integrators that market similar
software. The Company competes indirectly with certain hardware vendors that
offer their own proprietary management information system software.

Competition in the Company's markets is based principally upon
functionality, quality of service and support, type of hardware (I.E., the
compatibility and availability of desired hardware and software components and
the ease of integration with the customer's existing system) and price. The
Company believes that its current and anticipated levels of product
functionality and service and support are generally perceived as comparable or
superior to those of its competitors. Although the Company's products may be
priced higher than other products marketed for the same purpose, the Company
believes that the Company is able to justify such higher prices to customers
based on the high value provided by its advanced technological design, its
integration capability, "complete solution" functionality, comprehensive support
and maintenance services and in-depth knowledge of its customers' industry
requirements.

In the Company's view, its strongest competitors in the specialty retail
distribution market are those that have the ability to design, develop and
install a turn-key management information system. In general, these competitors
are highly knowledgeable about the specialty retailer's business and about the
capabilities of their own products. PREMIS believes that its primary direct
competitors in the specialty retail market are STS Systems, Inc., Retail Store
Systems, Inc., Post Software, Inc., CRS Business Computers, Inc., JDA Software,
Inc. and Retail Interact, Inc., as well as other smaller vendors. PREMIS
considers its direct competitors in the food distribution market to be
Information Access Inc., Success Systems, Inc. and Becton Schantz Co., which
each design and market software similar to PREMIS' food distribution systems.
The Company also has several indirect competitors in hardware vendors such as
IBM, ICL Fujitsu, (a division of Fujitsu America Inc.) and NCR, that offer,
along with their hardware, software systems that compete with the Company's
software products.

TECHNOLOGY AND PRODUCT DEVELOPMENT

The Company utilizes state-of-the-art technologies to gather relevant
information from a business transaction, transport that data to a central
database, manipulate and analyze the data and provide concise and comprehensive
reports to the appropriate people within an organization to assist them with
their day-to-day decisions and long-term strategic planning. The Company's
software products are written in C and object-oriented C++ source code languages
which enable a programmer to develop a user-friendly GUI and to program tasks
more efficiently for increased speed. The Company utilizes several relational
database technologies, such as Sybase-Registered Trademark- and
Oracle-Registered Trademark-, for its software to reduce the information
processing time required to sort data and to allow multiple users to
simultaneously access the same information. These software products can port to
either a PC platform or a variety of UNIX-Registered Trademark- platforms, such
as the IBM RISC/6000 or an NCR enterprise server.

The predominant trend in consumer software is toward a GUI, user-friendly,
menu driven interface. A GUI interface requires the use of object-oriented
programming languages and programming techniques. PREMIS has been using the
object-oriented programming language C++ since 1991, and REF has been
programming with C++ since 1994. The Company believes that most of its
competitors currently do not have GUI products or the ability to utilize this
advanced programming technique.

The Company's products utilize client/server architecture and relational
databases. While relational database products have been available since the
early 1980s, they were not considered practical

30
<PAGE>
for enterprise-wide applications until the widespread implementation of
enterprise servers in the early 1990s. In a client/server environment, a
relational database can be addressed by the server, which then sends and
receives data over a local area network to simultaneous multiple users (I.E.,
clients). As server processor technology speeds have increased and the cost of
servers has decreased, the market for network systems and products has expanded.
A business which comprises many separate locations, such as a retail chain
store, presents a natural application of client/server and relational database
technologies. The Company's management believes that client/server architecture
is the dominant networking technology for the foreseeable future and that the
Company is uniquely positioned to capitalize on this trend.

The Company believes that to maintain its leading market position it must
continue to enhance its current products and develop new software and
technologies to quickly respond to market opportunities. The Company is focusing
its product development efforts on enhancing the breadth and depth of its
current products while developing key new add-on features. PREMIS currently
employs six software programmers and will be acquiring a staff of approximately
50 experienced software programmers from REF. Research and development
expenditures by PREMIS for fiscal 1995 and 1996, were $368,161 and $303,000
respectively. REF has also invested substantial resources in product
development, particularly for its REF OpenEnterprise-TM- system. As of June 30,
1996, REF carried approximately $602,000 of capitalized software development
costs in accordance with SFAS 86. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

PROPRIETARY RIGHTS

PREMIS does not own any patents or any registered copyrights or trademarks;
PREMIS claims trademark protection of the names and marks "ADVANTAGE-TM-" and
"RETAIN-TM-," but does not consider such marks to be material to its operations.
REF does not own any patents or any registered copyrights or trademarks.
However, REF claims trademark protection of the names and marks "REF
OpenEnterprise-TM-," "REF OpenOffice-TM-," "REF OpenCom-TM-" and "REF
OpenStore-TM-." This Prospectus also contains trademarks of other companies.

PREMIS primarily relies on a combination of trade secret laws and
confidentiality agreements to protect its proprietary technology. REF currently
has non-competition and confidentiality agreements with all of its employees,
including Mr. Robert E. Ferguson who will not continue as an employee of the
Company.

IRIS-TM- is marketed by PREMIS pursuant to the terms of a software license
and distribution agreement (the "IRIS-TM- License") dated April 15, 1994, with
Commercial Systems Corporation, pursuant to which the Company is granted an
exclusive worldwide right to license and sublicense and to develop, copy,
distribute, remarket and maintain IRIS-TM- for a term ending March 31, 1999, in
consideration of an initial one time payment, which was made in 1994, plus a
fixed monthly royalty in the amount of $8,342 for five years and a percentage
royalty in the amount of 4% of Net Cash Receipts (as defined in the IRIS-TM-
License) of sales of IRIS-TM-. Further, PREMIS has the option to purchase
IRIS-TM- for a cash payment of $25,000, exercisable at any time during the
IRIS-TM- License, to be effective at the expiration of the five year term, and
to renew the IRIS-TM- License on a yearly basis with payment of a percentage
royalty in the total amount of at least $10,000 per year. All derivative
upgrades, enhancements, new releases, new versions and other improvements made
by PREMIS, and all copyrights, trademark rights, trade secret rights and patent
rights, as well as all marketing and all other materials developed by PREMIS
with respect to IRIS-TM-, are the sole and exclusive property of PREMIS.

EMPLOYEES

PREMIS had 36 employees as of June 30, 1996. Although employees function as
an integral team, their primary assignments are as follows: six in software
development, fourteen in client services, eight in administration and two in
finance. Additionally, PREMIS currently employs six employees who fulfill
marketing and sales functions. With the acquisition of REF, the Company expects
to increase its marketing and sales department to eight employees.

31
<PAGE>
REF had 59 employees as of March 31, 1996, whose primary assignments are as
follows: forty-six in software development, three in client services, eight in
administration and management and two in marketing and sales.

None of the employees of PREMIS or REF is covered by a collective bargaining
agreement, and management considers relations with employees to be excellent.

FACILITIES

PREMIS currently leases office space in Plymouth, Minnesota, consisting of
14,371 square feet located in a professional office building at 15301 Highway 55
West on a 36-month minimum lease expiring April 30, 1998. Future minimum rentals
under this lease are $85,392 for the fiscal year ending March 31, 1997. PREMIS
intends to terminate its occupancy of its current lease in October 1996 and is
actively seeking to sublet these facilities. PREMIS intends to relocate its
executive offices and other operations to a building nearby pursuant to a lease,
effective September 1, 1996, with a limited liability partnership controlled by
two officers and directors of PREMIS. The new lease provides approximately
21,956 square feet of space at a minimum monthly base rent of $13,477. PREMIS
has prepaid $105,000 in rent, which reduces the minimum monthly base rent by
$2,816 for the first 44 months of the lease (an aggregate credit of $105,000
plus 9% interest per annum). The new lease has an initial ten year term, ending
August 31, 2006, with two successive two-year options for renewal. The Company
believes that this new facility will be adequate to meet its domestic needs for
the foreseeable future. See "Certain Transactions."

REF currently leases facilities in Markham, Ontario (near Toronto) for use
as its corporate offices. The lease provides 20,005 square feet at a minimum
monthly rent of CDN$11,083 pursuant to a ten-year term expiring in December
2005, with one option for renewal for an additional five-year term. The minimum
monthly rent on this lease increases to CDN$16,671 in year three, to CDN$17,922
in year six, and to CDN$20,005 in year eight of the lease term. The Company
believes that corporate offices will be retained following the acquisition and
will be adequate for its needs in Canada for the foreseeable future.

LEGAL PROCEEDINGS

Neither PREMIS nor REF is currently a party to any legal proceedings.

32
<PAGE>
MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The directors, executive officers and key employees of the Company, are as
follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------- --- ------------------------------------------
<S> <C> <C>
F. T. Biermeier 56 President, Chief Executive Officer,
Treasurer and Director

Mary Ann Calhoun 37 Vice President, Secretary and Director

Gerald F. Schmidt 56 Director

S. Albert D. Hanser 59 Director

Edward W. Anderson 45 President of REF

Michael A. Dahlstrom 39 National Sales Manager
</TABLE>

- ------------------------

F. T. BIERMEIER has been a Director of PREMIS since its inception in April
1982. Since May of 1988, he has been President and Chief Executive Officer. From
June 1986 to May 1988, he was Chairman and Chief Executive Officer. From April
1982 to June 1986, he was President and Secretary. He also functions as PREMIS'
Treasurer. From 1980 to 1983, he operated an independent management consulting
firm F.T. Biermeier & Associates, Inc. From July of 1986 to January 1988, Mr.
Biermeier was President and Chief Executive Officer of Intran Corporation, a
supplier of imaging software to publishing organizations, and devoted part-time
efforts to PREMIS. Mr. Biermeier and Ms. Calhoun are husband and wife.

MARY ANN CALHOUN has been a Director and Vice President of PREMIS since June
of 1986. From 1983 to 1986, she held positions of Customer Support
Representative, Manager Customer Support and Director of Software Development
and Customer Support of PREMIS. From 1980 to 1983, she held positions for the
United States Senate in the office of Senator David Durenberger, including
Assistant to the Press Secretary and Manager of Information Systems. Ms. Calhoun
is married to Mr. Biermeier, the President of PREMIS.

GERALD F. SCHMIDT has been a Director of PREMIS since January of 1996. Since
1989, Mr. Schmidt has been President and CEO of Cordova Capital Inc., a venture
capital firm located in Atlanta, Georgia. Cordova Capital is the General Partner
in two growth funds with $52 million dollars under management. From 1984 to
1988, he was Senior Vice President and partner in O'Neill Development Inc., a
commercial real estate development firm in Atlanta, Georgia. From 1966 to 1984,
he held various positions in sales and marketing management and was Vice
President and General Manager of two divisions of Jostens Corporation in
Minneapolis, Minnesota.

S. ALBERT D. HANSER was elected as a Director of PREMIS in September 1996.
Mr. Hanser has been a member of the Board of Directors of Astrocom Corporation
("Astrocom") and has served as Chairman of the Board of Astrocom since March
1992. In December 1992, Mr. Hanser became President and Chief Executive Officer
of Astrocom. Since 1989, he has served as Chairman of Hanrow Financial Group,
Ltd., a merchant banking firm. Mr. Hanser is also currently a member of the
Boards of Directors of Hawkins Chemical, Inc. and E-Z Gard Industries, Inc.

EDWARD W. ANDERSON has served as the President of REF for the past eight
years and will continue in that role following the acquisition of REF by PREMIS,
and pursuant to the terms of his employment agreement, will become a Director of
the Company. Mr. Anderson has 20 years experience working within Canada's high
technology community. Early in his career, Mr. Anderson was employed by a start
up venture formed by faculty and graduates from the Computer Communications
Group within the Department of Electrical Engineering at the University of
Toronto. This company pioneered the first application of packet switching in
North America. Mr. Anderson has also been

33
<PAGE>
involved in the development of large scale, high performance on-line transaction
processing systems implemented by a number of financial institutions, insurance
companies and universities internationally. During his career, Mr. Anderson has
also established and managed the technology marketing function with one of
Canada's most successful high technology companies. Moreover, Mr. Anderson has
been involved with operations and technology systems at two of North America's
largest retailers.

MICHAEL A. DAHLSTROM currently serves as PREMIS' National Sales Manager and
will serve a key role in the Company's expanded sales and marketing efforts,
including integration of the REF products and education of the expanded sales
force. Mr. Dahlstrom joined PREMIS in February 1996, following approximately
nine months with Great Plains Software ("GPS"), as value-added retail manager.
Prior to his association with GPS, Mr. Dahlstrom spent approximately three years
as Systems Manager at Precision Business Systems, Inc., preceded by several
years as an account executive with Memorex Telex Corporation.

All directors of the Company hold office until the next regular meeting of
the shareholders or until their successors are elected and qualify. All officers
hold office until their successor is appointed by the Board. There are no
arrangements or understandings between any of the directors or officers or any
other person pursuant to which any person was or may be elected as a director or
selected as an officer of the Company, other than the agreement with Edward W.
Anderson, discussed below.

During fiscal 1996, Gerald F. Schmidt, the sole nonemployee director during
fiscal 1996, was paid $500 for each meeting attended. In addition, Mr. Schmidt
was granted a 5-year non-qualified stock option, exercisable on and after April
1, 1996, to purchase 5,000 shares of Common Stock of the Company at $1.75 per
share, which was the fair market value of the Common Stock as of the grant date.

EXECUTIVE COMPENSATION AND EMPLOYMENT AGREEMENTS

The following table discloses compensation received by PREMIS' Chief
Executive Officer, the only executive officer whose aggregate cash compensation
exceeded $100,000 (the "Named Executive Officer").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
----------------------------------------- COMPENSATION
OTHER ANNUAL -------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1) OPTIONS
- ----------------------------------------------- --------- ----------- --------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
F. T. Biermeier................................ 1996 $ 110,000 $ 27,000 $ 5,690 --
Chief Executive Officer 1995 95,000 22,000 1,544 300,000
and President 1994 86,000 7,000 -- --
</TABLE>

- ------------------------
(1) Represents PREMIS' contributions to the Employee Retirement 401(k) Plan.

PREMIS currently has no employment agreement with Mr. Biermeier or any other
executive officer.

Effective upon the closing of this offering and the acquisition of REF, the
Company will enter into an employment agreement with Mr. Edward W. Anderson, the
current President of REF (the "Employment Agreement") pursuant to which he will
continue to serve as President of REF for period of five years, subject to
earlier termination by either the Company or Mr. Anderson, and renewal
thereafter by agreement of the parties. If the Company terminates the Employment
Agreement without cause, it must pay Mr. Anderson an amount equal to the greater
of the base salary that would have been payable for the balance of the initial
term (or extended term if the Employment Agreement has been renewed) or for two
years. Mr. Anderson's base salary is initially set at CDN$150,000, with annual
adjustments to reflect the percentage salary increases granted to Mr. Biermeier
as Chief Executive Officer of the Company. The Employment Agreement also
provides that Mr. Anderson shall be paid a "sign on" bonus, in an amount
expected to be CDN$42,000. A Change of Control of the

34
<PAGE>
Company, as defined in the Employment Agreement, is deemed a termination by the
Company without cause. The Company agrees to maintain a CDN$2 million keyperson
life insurance policy on Mr. Anderson and upon his death, to use the proceeds
thereof to repurchase shares of the Company owned by Mr. Anderson at a price per
share equal to the average bid price of the Company's Common Stock over the
30-day period immediately preceding his death, with any excess insurance
proceeds paid to his estate.

The Employment Agreement also provides that Mr. Anderson shall be elected as
a director of both PREMIS and REF during the entire term of the Employment
Agreement and any renewals and extensions thereof. The Company agrees that it
shall take all actions necessary and shall exert its influence to cause the
election of Mr. Anderson as a director; Mr. Biermeier, as a principal
shareholder of the Company, agrees to vote his shares for the continued election
of Mr. Anderson as a director and shall cause any member of his immediate family
and any firm or corporation under his control to whom he may transfer any shares
of his stock of the Company to join in this covenant. The non-election of Mr.
Anderson at any time as a director of PREMIS or REF, or his removal as a
director of PREMIS or REF, shall constitute a termination of the Employment
Agreement by the Company without cause.

STOCK OPTIONS

The PREMIS 1994 Employee Incentive Stock Option Plan (the "Option Plan"),
was adopted to provide incentives to selected employees of PREMIS. The Board of
Directors is authorized to grant options under the Option Plan for purchase of
up to 486,250 shares of Common Stock at exercise prices not less than the fair
market value of the Common Stock as of the grant date. As of September 1, 1996,
there were outstanding options to purchase an aggregate of 144,000 shares of
Common Stock pursuant to the Option Plan, at an average exercise price of $.56
per share. One fourth of the options granted become exercisable one (1) year
from the date of the grant with an additional twenty-five percent becoming
exercisable each succeeding year. The closing bid price of the Common Stock is
treated as the market value on the applicable date.

In addition to the Option Plan, the Board has authorized grant of
non-qualified stock options for up to 516,667 shares of Common Stock to
employees (including officers) and non-employee directors. As of September 1,
1996, non-qualified options to purchase 335,000 shares were outstanding. Such
options are exercisable at an average exercise price of $.31 per share and, in
each case, the exercise price is equal to the fair market value of the Common
Stock as of the grant date.

Upon execution of his Employment Agreement, Edward W. Anderson shall be
granted a non-qualified option to purchase 600,000 shares of the Company's
Common Stock on and after the date which is six months following the date of
issuance until December 31, 2006, at a price equal to the Price to Public. Such
option is not a part of the Option Plan or the shares reserved by the Board for
non-qualified options, discussed above. The option terminates and is no longer
be exercisable (i) 90 days after voluntary termination of employment by Mr.
Anderson, or (ii) if he is involuntarily terminated for any reason other than
death, on the earlier of the expiration of his employment as contemplated in the
Employment Agreement or December 31, 2006 (provided that the option shall remain
exercisable for at least 90 days following such involuntary termination). If Mr.
Anderson dies while employed by PREMIS, the option may be exercised within one
year after his death or until expiration of the option term, whichever shall
first occur. The exercisability of the option is accelerated in the event of (i)
the merger of PREMIS with any other corporation in which PREMIS is not the
survivor, (ii) sale of PREMIS or all or substantially all of its assets to
another person, or (iii) purchase of more than 50% of PREMIS' outstanding Common
Stock by any other person. In connection with the grant of the option, PREMIS
agrees that during the six months after the date of the REF acquisition, it
shall not increase its authorized capital stock and that during the initial five
year term of the Employment Agreement or any renewals thereof, Mr. Anderson
shall be afforded the same anti-dilution protection, if any, which may be
afforded to Mr. Biermeier, to any member of Mr. Biermeier's immediate family, or
any firm or corporation under his control.

35
<PAGE>
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE

The following table contains information concerning exercises of stock
options during the last fiscal year and the value of options previously granted
under the Option Plan which were held by the Named Executive Officer at the end
of the fiscal year ended March 31, 1996. There were no grants of stock options
under the Option Plan or otherwise to the Named Executive Officer during the
fiscal year ended March 31, 1996.

<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
OPTION EXERCISES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
---------------------------- AT FY-END AT FY-END (1)
SHARES ACQUIRED VALUE ------------------- --------------------
NAME ON EXERCISE REALIZED EXERCISABLE EXERCISABLE
- ---------------------------------------- --------------- ----------- ------------------- --------------------
<S> <C> <C> <C> <C>
F. T. Biermeier......................... None None 300,000 $ 930,000
</TABLE>

- ------------------------
(1) Value is calculated based on the difference between the option exercise
price and the closing price for the Common Stock on March 29, 1996, as
quoted on the National Association of Securities Dealers' OTC Bulletin
Board, multiplied by the number of shares underlying the option.

RETIREMENT PLAN

During fiscal year 1995, PREMIS established a retirement savings plan which
qualifies under Internal Revenue Code Section 401(k) ("401(k) Plan"). All
employees with at least 90 days of employment are eligible to participate in the
401(k) Plan. The Company's contributions to the 401(k) Plan are based on 15% of
employee contributions which are subject to salary limitations. PREMIS
contributions to the 401(k) Plan were approximately $5,000 during fiscal 1996.
In fiscal 1996, PREMIS also paid a one time discretionary profit sharing bonus
of $16,000.

CERTAIN TRANSACTIONS

Effective September 1, 1996, the Company has entered into a lease for
executive offices in a building owned by a limited liability partnership which
is controlled by F. T. Biermeier, the Company's President and Chief Executive
Officer, a member of the Board of Directors, and a principal shareholder of the
Company, and his spouse, Mary Ann Calhoun, another officer and director of the
Company. The Company believes that, notwithstanding the absence of arms length
negotiation, this lease was entered into on terms which are commercially
reasonable and comparable to the terms of leases for other properties which
would have been available to the Company. In addition, PREMIS has guaranteed the
mortgage loan obligation of the limited liability partnership with respect to
this property in the principal amount of $945,000. Currently, this loan carries
interest at 2.75% over the rate on five year U.S. Treasury notes. See "Business
- -- Facilities."

36
<PAGE>
PRINCIPAL SHAREHOLDERS

The following table sets forth certain information with respect to
beneficial ownership of the Common Stock, and as adjusted to reflect the sale of
shares offered hereby (i) by each person who is known by the Company to
beneficially own more than five percent (5%) of the Common Stock, (ii) by each
director, (iii) by the Named Executive Officer and (iv) all executive officers
and directors as a group.

<TABLE>
<CAPTION>
SHARES PERCENT PERCENT
BENEFICIALLY BEFORE AFTER
NAME OWNED (1) OFFERING OFFERING
- ----------------------------------------------------------------------- ----------------- ------------ ------------
<S> <C> <C> <C>
F. T. Biermeier (2).................................................... 1,819,751 60.5% 38.3%

Mary Ann Calhoun (3)................................................... 12,500 * *

Gerald F. Schmidt (3).................................................. 5,000 * *

S. Albert D. Hanser.................................................... 1,000 * *

All Directors and Executive Officers as a group
(4 persons) (4)....................................................... 1,838,251 60.8% 38.5%
</TABLE>

- ------------------------
* Less than 1%.

(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire them as of the date of the Prospectus, or
within 60 days of such date, are treated as outstanding when determining the
percent of the class owned by such individual and when determining the
percent owned by the group. For purposes of calculating the percent of class
owned after this offering, it was assumed that the officers, directors and
principal shareholders will not be purchasing Shares in this offering.
Unless otherwise indicated, each person named or included in the group has
sole voting and investment power with respect to the shares of Common Stock
set forth opposite the shareholder's name.

(2) Includes 75,000 shares held of record by Sandra J. Biermeier and 300,000
shares of Common Stock which may be acquired pursuant to exercise of a
non-qualified stock option.

(3) Represents shares that may be acquired pursuant to exercise of options.

(4) Does not include 600,000 shares which may be acquired by Edward W. Anderson
upon exercise of an option to be issued simultaneously with the closing of
this offering and the acquisition of REF. Such option is not exercisable
until six months after the date of issuance.

The business address of Mr. Biermeier and Ms. Calhoun is the address of
PREMIS Corporation, 15301 Highway 55 West, Plymouth, MN 55447; the business
address of Mr. Schmidt is Cordova Capital, Inc. 3350 Cumberland Circle, Suite
970, Atlanta, GA 30339; and the business address of Mr. Hanser is Astrocom
Corporation, 2700 Summer Street N.E., Mpls, MN 55413.

37
<PAGE>
DESCRIPTION OF SECURITIES

GENERAL

The Company's authorized capital stock consists of 10,000,000 shares of
Common Stock, $.01 par value per share. As of the date of this Prospectus, there
are 2,707,052 shares of Common Stock outstanding.

COMMON STOCK

There are no preemptive, subscription, conversion or redemption rights
pertaining to the Common Stock. The absence of preemptive rights could result in
a dilution of the interest of existing shareholders if additional shares of
Common Stock are issued. Holders of the Common Stock are entitled to receive
such dividends as may be declared by the Board of Directors out of assets
legally available therefor and to share ratably in the assets of PREMIS
available upon liquidation.

Each share of Common Stock is entitled to one vote for all purposes and
cumulative voting is not permitted in the election of directors. Accordingly,
the holders of more than 50% of all of the outstanding shares of Common Stock
can elect all of the directors. Significant corporate transactions such as
amendments to the Articles of Incorporation, mergers, sales of assets and
dissolution or liquidation require approval by the affirmative vote of the
majority of the outstanding shares of Common Stock. Other matters to be voted
upon by the holders of Common Stock normally require affirmative vote of a
majority of the shares present at the particular shareholders meeting.

WAIVER OF DIRECTOR LIABILITY AND INDEMNIFICATION

The Company's Articles of Incorporation limit personal liability for breach
of the fiduciary duty of its directors, to the fullest extent provided by the
Minnesota Business Corporation Act. Such Articles eliminate the personal
liability of directors for damages occasioned by breach of fiduciary duty,
except for liability based on breach of the director's duty of loyalty to the
Company, liability for acts or omissions not made in good faith, liability for
acts or omissions involving intentional misconduct, liability based on payments
of improper dividends, liability based on violations of state securities laws
and liability for acts occurring prior to the date such provision was added. Any
amendment to or repeal of such Articles' provision shall not adversely affect
any right or protection of a director of the Company for or with respect to any
acts or omissions of such director occurring prior to such amendment or repeal.

In addition, the Minnesota Business Corporation Act and the Company's Bylaws
provide that officers and directors of the Company have the right to
indemnification from PREMIS for liability arising out of certain actions to the
fullest extent permissible by law. This indemnification may be available for
liabilities arising in connection with this offering. Insofar as indemnification
for liabilities arising under the Securities Act of 1933, as amended (the "Act")
may be permitted to directors, officers or persons controlling the Company
pursuant to such indemnification provisions, the Company has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.

STATE LAW PROVISIONS WITH POTENTIAL ANTI-TAKEOVER EFFECT

Certain provisions of Minnesota law described below could have an
anti-takeover effect. These provisions are intended to provide management
flexibility, to enhance the likelihood of continuity and stability in the
composition of the Company's Board of Directors and in the policies formulated
by the Board and to discourage an unsolicited takeover of the Company, if the
Board determines that such a takeover is not in the best interests of the
Company and its shareholders. However, these provisions could have the effect of
discouraging certain attempts to acquire the Company which could deprive the
Company's shareholders of opportunities to sell their shares of Common Stock at
prices higher than prevailing market prices.

Section 302A.671 of the Minnesota Statutes applies, with certain exceptions,
to any acquisition of voting stock of the Company (from a person other than the
Company, and other than in connection with certain mergers and exchanges to
which the Company is a party) resulting in the beneficial

38
<PAGE>
ownership of 20% or more of the voting stock then outstanding. Section 302A.671
requires approval of any such acquisition by a majority vote of the shareholders
of the Company prior to its consummation. In general, shares acquired in the
absence of such approval are denied voting rights and are redeemable at their
then-fair market value by the Company within 30 days after the acquiring person
has failed to give a timely information statement to the Company or the date the
shareholders voted not to grant voting rights to the acquiring person's shares.

Section 302A.673 of the Minnesota Statutes generally prohibits any business
combination by the Company, or any subsidiary of the Company, with any
shareholder that purchases 10% or more of the Company's voting shares (an
"interested shareholder") within four years following such interested
shareholder's share acquisition date, unless the business combination is
approved by a committee of all of the disinterested members of the Board of
Directors of the Company before the interested shareholder's share acquisition
date.

TRANSFER AGENT AND REGISTRAR

Corporate Stock Transfer, Denver, Colorado, is the transfer agent and
registrar for the Common Stock.

39
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have outstanding
4,452,057 shares of Common Stock (4,719,552 in the event that the Underwriters'
over-allotment option is exercised in full), which does not include (i) 486,250
shares reserved for issuance under the Option Plan, 144,000 of which are subject
to options outstanding as of September 1, 1996, (ii) 516,667 shares of Common
Stock issuable upon exercise of non-qualified options granted from time to time
as currently authorized by resolutions of the Board of Directors, 335,000 of
which are subject to options currently outstanding, (iii) 175,000 shares of
Common Stock issuable upon exercise of the Representative's Warrant, or (iv)
600,000 shares issuable upon exercise of options to be issued to Edward W.
Anderson, President of REF, which cannot be exercised for 180 days following
this offering.

All of the shares to be issued in this offering will be freely tradable and
available for future sale. In addition, all of the 2,707,052 shares of Common
Stock currently outstanding, all of the 486,250 shares that may be issued under
the Option Plan, and the 516,667 shares issuable upon exercise of authorized
non-qualified options, have been registered under the Act and are freely
tradable, provided that, pursuant to agreement with the Underwriters, 2,363,251
shares beneficially held by current officers and directors and 75,000 shares
held by a former affiliate of the Company are subject to restrictions on sale,
for a period of 180 days after this offering in the case of officers and
directors, and 90 days after this offering in the case of the former affiliate.
In addition, the 600,000 shares of Common Stock issuable upon exercise of the
option to be granted to Edward W. Anderson may be registered for resale under
the Act, although such shares are not currently registered. Such shares would
then be "freely tradable." Moreover, provided the Company meets the reporting
requirements of Rule 144 under the Act, a person (or persons whose sales are
aggregated) who beneficially owns unregistered securities last acquired
privately from the Company, or an affiliate of the Company at least two years
previously and affiliates of the Company who beneficially own shares last
acquired (whether or not such shares were acquired privately) from the Company
or an affiliate of the Company at least two years previously, is entitled to
sell within any three-month period a number of shares that does not exceed the
greater of 1% of the then outstanding shares of the Company's Common Stock or
the average weekly trading volume in the Company's Common Stock during the four
calendar weeks preceding such sale. Sales under Rule 144 are also subject to
certain manner-of-sale provisions, notice requirements and the availability of
current public information about the Company. A person who has not been an
affiliate of the Company at any time during the three months preceding a sale
and who beneficially owns shares last acquired from the Company or an affiliate
of the Company at least three years previously is entitled to sell all such
shares under Rule 144 without regard to any of the limitations of the Rule. In
addition, Rule 144A under the Act, as currently in effect, in general, permits
unlimited resales of certain restricted securities of any issuer provided that
the purchaser is an institution that owns and invests on a discretionary basis
at least $100 million in securities or is a registered broker-dealer that owns
and invests $10 million in securities. Rule 144A allows the existing
shareholders of the Company to sell their shares to such institutions and
registered broker-dealers without regard to any volume or other restrictions.
Unlike under Rule 144, restricted securities sold under Rule 144A to
nonaffiliates do not lose their status as restricted securities.

The Company cannot predict the effect, if any, that sales of securities or
the availability of such securities for sale could have on the market price, if
any, prevailing from time to time. Nevertheless, sales of substantial amounts of
the Company's securities could adversely affect prevailing market prices of the
Company's securities and the Company's ability to raise additional capital by
occurring at a time when it would be beneficial for the Company to sell
securities.

40
<PAGE>
UNDERWRITING

The Underwriters named below (the "Underwriters"), for which R. J. Steichen
& Company is acting as representative (the "Representative") have severally
agreed, subject to the terms and conditions set forth in the Underwriting
Agreement by and between PREMIS and the Underwriters, to purchase from PREMIS,
and PREMIS has agreed to sell to the Underwriters, the respective number of
shares of Common Stock set forth opposite each Underwriter's name below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ------------------------------------------------------------------------------------------- -----------
<S> <C>
R. J. Steichen & Company................................................................... 1,610,000
John G. Kinnard and Company, Incorporated.................................................. 40,000
Smith, Moore & Company..................................................................... 40,000
Tuschner & Co., Inc........................................................................ 20,000
Miller, Johnson & Kuehn, Incorporated...................................................... 20,000
Frederick & Company, Inc................................................................... 20,000
-----------
Total.................................................................................... 1,750,000
-----------
-----------
</TABLE>

The nature of the Underwriters' obligations under the Underwriting Agreement
is such that all shares of the Common Stock offered hereby, excluding shares
covered by the over-allotment option granted to the Underwriters (discussed
below), must be purchased if any are purchased.

PREMIS has been advised by the Representative that the Underwriters propose
initially to offer the Shares directly to the public at the price set forth on
the cover page of this Prospectus and to certain dealers at such public offering
price less a concession not to exceed $0.24 per share. The Underwriters may
allow, and such dealers may allow, a discount not to exceed $0.05 per share in
sales to certain other dealers. After the public offering, the public offering
price and concessions and discounts may be changed by the Representative.

PREMIS has granted to the Underwriters an over-allotment option, exercisable
not later than 45 days after the date of this Prospectus, to purchase up to an
additional 262,500 shares of Common Stock at the Price to Public set forth on
the cover page of this Prospectus, less the underwriting discounts and
commissions. To the extent that the Underwriters exercise the over-allotment
option, the Underwriters will have a firm commitment to purchase such shares and
PREMIS will be obligated pursuant to sell such shares to the Underwriters. The
Underwriters may exercise the over-allotment option only for the purposes of
covering over-allotments, if any, made in connection with the distribution of
the shares to the public.

In the Underwriting Agreement, PREMIS and the Underwriters have agreed to
indemnify each other against certain liabilities under the Act, or to contribute
to payments which the Underwriters may be required to make in respect thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling PREMIS pursuant to such
indemnification provisions, PREMIS has been advised that in the opinion of the
Securities and Exchange Commission (the "Commission") such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.

PREMIS has agreed to pay the Representative a non-accountable expense
allowance equal to 2 1/4% of the gross proceeds of sale of the shares, including
shares sold upon exercise of the over-allotment option.

The Company and certain of its executive officers and directors have agreed
not to sell or otherwise dispose of any of their 2,363,251 shares of Common
Stock for a period of 180 days from the date of this Prospectus, and a former
affiliate of the Company has agreed not to sell or otherwise dispose of her
75,000 shares of Common Stock for a period of 90 days from the date of this
Prospectus, except with the prior written consent of the Representative.

41
<PAGE>
Upon closing of this offering, PREMIS has agreed to sell the
Representative's Warrant to the Representative for nominal consideration, which
will entitle the Representative to purchase 175,000 shares of Common Stock of
PREMIS at a price per share equal to 120% of the Price to Public, commencing one
year from the date of this Prospectus until four years after such date. The
Representative's Warrant will also provide certain anti-dilution rights,
registration rights and net issuance exercise rights to the Representative.
Until the first anniversary of the date of this Prospectus, the Representative's
Warrant may not be sold, transferred, assigned or hypothecated, except to
officers or directors of the Representative.

The offering price for the Common Stock will be determined by negotiations
among PREMIS and the Representative, based largely upon the market price for the
Common Stock at the time of the offering.

The foregoing is a summary of the material provisions of the Underwriting
Agreement and the Representative's Warrant. Copies of such documents have been
filed as exhibits to the Registration Statement of which this Prospectus is a
part.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for PREMIS by Moss & Barnett, A Professional Association, Minneapolis,
Minnesota 55402. Fredrikson & Byron, P.A., Minneapolis, Minnesota 55402 has
acted as counsel to the Representative in connection with certain legal matters
relating to this offering.

EXPERTS

The financial statements of PREMIS as of March 31, 1995 and 1996, and for
each of the three years in the period ended March 31, 1996, and the financial
statements of REF as of March 31, 1996, and for each of the two years in the
period ended March 31, 1996, included in this Prospectus, have been so included
in reliance on the reports of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.

AVAILABLE INFORMATION

PREMIS is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission") relating to its business, financial position,
results of operations and other matters. Such reports and other information can
be inspected and copied at the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and its Regional
Offices at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material also can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission also maintains a Web site that
contains reports, proxy and information statements and other materials that are
filed through the Commission's Electronic Data Gathering, Analysis and Retrieval
system. This Web site can be accessed at http://www.sec.gov.

PREMIS has filed with the Commission in Washington, D.C., a Registration
Statement on Form S-2 under the Securities Act of 1933, as amended (the "Act")
with respect to the securities offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus omits certain information
contained in the Registration Statement. For further information with respect to
PREMIS and the securities offered hereby, reference is hereby made to the
Registration Statement and the exhibits and schedules thereto. Statements made
in this Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each such instance reference is made to the copy of
such contract or other document filed as an exhibit to such Registration
Statement, or to such other document, each such statement being qualified in all
respects by such reference. The

42
<PAGE>
Registration Statement, including the exhibits and schedules thereto, may be
inspected at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from such office upon payment of the prescribed fees.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents heretofore filed by PREMIS with the Commission (File
No. 0-12196) pursuant to the Exchange Act are incorporated by reference in this
Prospectus:

(1) Annual Report on Form 10-KSB for the fiscal year ended March 31, 1996;
and

(2) Quarterly Report on Form 10-QSB for the quarter ended June 30, 1996.

All documents filed by PREMIS pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing such documents.
Any statement contained herein, or in a document incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus. Copies of the
documents incorporated herein by reference (excluding exhibits unless such
exhibits are specifically incorporated by reference into such documents) may be
obtained upon written or oral request without charge by persons to whom this
Prospectus is delivered. Requests should be made to F. T. Biermeier, Chief
Executive Officer, PREMIS Corporation, 15301 Highway 55 West, Plymouth, MN
55447, 612-550-1999.

43
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PREMIS CORPORATION

Report of Independent Accountants......................................... F-2

Balance Sheet as of March 31, 1995 and 1996 (audited) and June 30, 1996
(unaudited).............................................................. F-3

Statement of Operations for the year ended March 31, 1994, 1995 and 1996
(audited) and the three months ended June 30, 1995 and 1996
(unaudited).............................................................. F-4

Statement of Shareholders' Equity for the years ended March 31, 1994, 1995
and 1996 (audited) and the three months ended June 30, 1996
(unaudited).............................................................. F-5

Statement of Cash Flows for the years ended March 31, 1994, 1995 and 1996
(audited) and the three months ended June 30, 1995 and 1996
(unaudited).............................................................. F-6

Notes to the Financial Statements......................................... F-7

REF RETAIL SYSTEMS CORPORATION

Report of Independent Accountants......................................... F-12

Consolidated Balance Sheet as of March 31, 1995 and 1996 (audited) and
June 30, 1996 (unaudited)................................................ F-13

Consolidated Statement of Operations for the Years ended March 31, 1995
and 1996 (audited) and the three months ended June 30, 1995 and 1996
(unaudited).............................................................. F-14

Consolidated Statement of Shareholders' Equity for the years ended March
31, 1995 and 1996 (audited) and the three months ended June 30, 1996
(unaudited).............................................................. F-15

Consolidated Statement of Cash Flows for the years ended March 31, 1995
and 1996 (audited) and the three months ended June 30, 1995 and 1996
(unaudited).............................................................. F-16

Notes to the Consolidated Financial Statements............................ F-17

PREMIS CORPORATION PRO FORMA COMBINED

Introduction to Pro Forma Financial Information........................... F-22

Pro Forma Combined Balance Sheet as of June 30, 1996 (unaudited).......... F-23

Pro Forma Combined Statement of Operations for the year ended March 31,
1996 (unaudited)......................................................... F-24

Pro Forma Combined Statement of Operations for the three months ended June
30, 1996 (unaudited)..................................................... F-25

Notes to Pro Forma Financial Statements................................... F-26
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and
Board of Directors of
PREMIS Corporation

In our opinion, the accompanying balance sheet and the related statements of
operations, of shareholders' equity and of cash flows present fairly, in all
material respects, the financial position of PREMIS Corporation at March 31,
1995 and 1996, and the results of its operations and its cash flows for each of
the three years in the period ended March 31, 1996 in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

Price Waterhouse LLP
Minneapolis, Minnesota
May 10, 1996

F-2
<PAGE>
PREMIS CORPORATION
BALANCE SHEET
ASSETS

<TABLE>
<CAPTION>
MARCH 31,
---------------------- JUNE 30,
1995 1996 1996
---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents............................. $ 426,959 $ 968,083 $ 368,366
Trade accounts receivable, net of allowance for
doubtful accounts of $35,000, $82,420 and $54,420,
respectively......................................... 541,240 1,204,874 2,077,471
Inventory............................................. 165,555 282,720 217,794
Prepaid expenses...................................... 1,200 11,537 130,636
Deferred taxes........................................ 50,000 33,000 33,000
---------- ---------- ----------
Total current assets................................ 1,184,954 2,500,214 2,827,267
---------- ---------- ----------

Property and equipment:
Capitalized leased property........................... 950,000
Furniture and equipment............................... 197,135 225,437 225,437
Leasehold improvements................................ 12,229 31,773 31,773
Less accumulated depreciation and amortization........ (160,613) (173,685) (179,460)
---------- ---------- ----------
48,751 83,525 1,027,750
---------- ---------- ----------
Software distribution rights, net of accumulated
amortization of $77,994, $158,776 and $179,656,
respectively........................................... 325,916 249,301 236,421
---------- ---------- ----------
Total assets........................................ $1,559,621 $2,833,040 $4,091,438
---------- ---------- ----------
---------- ---------- ----------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Trade accounts payable................................ $ 177,339 $ 137,964 $ 361,853
Other accrued liabilities............................. 145,028 228,524 172,069
Accrued income taxes.................................. 510,000 131,211
Unearned income....................................... 170,529 187,211 139,098
Customer deposits..................................... 58,010 41,861 94,603
Notes payable -- banks................................ 23,513 17,746 13,579
Note payable.......................................... 77,108 85,182 64,676
Current portion of capital lease obligation........... 226,115
---------- ---------- ----------
Total current liabilities........................... 651,527 1,208,488 1,203,204
---------- ---------- ----------

Long-term liabilities:
Notes payable -- banks................................ 38,526 9,721 9,721
Note payable.......................................... 187,558 102,376 102,376
Capital lease obligation.............................. 723,885
---------- ---------- ----------
Total long-term liabilities......................... 226,084 112,097 835,982
---------- ---------- ----------

Shareholders' equity:
Common stock, 4,000,000 shares authorized, 2,590,694,
2,609,444 and 2,701,527 shares issued and
outstanding, $.01 par value.......................... 25,906 26,094 27,015
Additional paid-in capital............................ 728,556 731,181 937,821
Retained earnings..................................... (72,452) 755,180 1,087,416
---------- ---------- ----------
Total shareholders' equity.......................... 682,010 1,512,455 2,052,252
---------- ---------- ----------
Total liabilities and shareholders' equity.......... $1,559,621 $2,833,040 $4,091,438
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

See accompanying notes to the financial statements.

F-3
<PAGE>
PREMIS CORPORATION
STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31, JUNE 30,
----------------------------------------- ----------------------------
1994 1995 1996 1995 1996
----------- ------------- ------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenue:
System sales..................................... $ 666,364 $ 2,425,882 $ 4,923,132 $ 982,449 $ 1,570,791
Supplies sales................................... 16,233 15,282 33,184 2,239 13,395
Maintenance fees and other revenue............... 209,620 576,404 945,845 205,066 329,993
----------- ------------- ------------- ------------- -------------
Total revenue.................................. 892,217 3,017,568 5,902,161 1,189,754 1,914,179
----------- ------------- ------------- ------------- -------------

Cost of sales:
Systems.......................................... 166,062 1,079,191 2,510,219 550,444 817,788
Supplies......................................... 9,143 11,035 28,852 3,711 8,481
Support.......................................... 173,000 324,652 497,251 87,505 141,470
----------- ------------- ------------- ------------- -------------
Total cost of sales............................ 348,205 1,414,878 3,036,322 641,660 967,739
----------- ------------- ------------- ------------- -------------
Gross profit....................................... 544,012 1,602,690 2,865,839 548,094 946,440
Selling, general, and administrative expenses...... 294,581 732,324 1,204,065 219,185 302,574
Research and development expenses.................. 147,500 368,161 303,000 82,466 94,650
----------- ------------- ------------- ------------- -------------
Income from operations............................. 101,931 502,205 1,358,774 246,443 549,216
Interest expense, net.............................. 27,518 4,142 6,463 4,519
Other income (expense)............................. (3,000)
----------- ------------- ------------- ------------- -------------
Income before cumulative effect of a charge on
accounting principles and income taxes............ 98,931
Cumulative effect of change in accounting
principle......................................... 50,000
----------- ------------- ------------- ------------- -------------
Income before income taxes......................... 148,931 474,687 1,354,632 239,980 544,697
Income tax expense................................. 527,000 95,992 212,461
----------- ------------- ------------- ------------- -------------
Net income......................................... $ 148,931 $ 474,687 $ 827,632 $ 143,988 $ 332,236
----------- ------------- ------------- ------------- -------------
----------- ------------- ------------- ------------- -------------
Net income per share............................... $ 0.06 $ 0.18 $ 0.28 $ 0.05 $ 0.11
----------- ------------- ------------- ------------- -------------
----------- ------------- ------------- ------------- -------------
Weighted average number of common stock
equivalents....................................... 2,590,694 2,590,694 2,925,581 2,912,661 2,979,683
----------- ------------- ------------- ------------- -------------
----------- ------------- ------------- ------------- -------------
</TABLE>

See accompanying notes to the financial statements.

F-4
<PAGE>
PREMIS CORPORATION
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1996 AND 1995 AND FOR THE
THREE MONTHS ENDED JUNE 30, 1996

<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL DEFICIT/
PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
----------- --------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1993.......................... 2,590,694 $ 25,906 $ 728,556 $ (696,070) $ 58,392
Net income......................................... 148,931 148,931
----------- --------- ----------- ------------- -------------
Balance at March 31, 1994.......................... 2,590,694 25,906 728,556 (547,139) 207,323
Net income......................................... 474,687 474,687
----------- --------- ----------- ------------- -------------
Balance at March 31, 1995.......................... 2,590,694 25,906 728,556 (72,452) 682,010
Stock options exercised............................ 18,750 188 2,625 2,813
Net income......................................... 827,632 827,632
----------- --------- ----------- ------------- -------------
Balance at March 31, 1996.......................... 2,609,444 26,094 731,181 755,180 1,512,455
Stock options exercised............................ 92,083 921 206,640 207,561
Net income......................................... 332,236 332,236
----------- --------- ----------- ------------- -------------
Balance at June 30, 1996 (unaudited)............... 2,701,527 $ 27,015 $ 937,821 $ 1,087,416 $ 2,052,252
----------- --------- ----------- ------------- -------------
----------- --------- ----------- ------------- -------------
</TABLE>

See accompanying notes to the financial statements.

F-5
<PAGE>
PREMIS CORPORATION
STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31, JUNE 30,
--------------------------------------- --------------------------
1994 1995 1996 1995 1996
----------- ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income............................................. $ 148,931 $ 474,687 $ 827,632 $ 143,988 $ 332,236
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization........................ 16,099 91,080 101,983 24,748 26,655
Changes in assets and liabilities:
Trade accounts receivable.......................... (62,109) (438,917) (663,634) (118,354) (872,597)
Inventory.......................................... (6,432) (147,095) (117,165) 49,704 64,926
Prepaid expenses................................... 2,053 (1,200) (10,337) (19,449) (119,099)
Deferred taxes..................................... (50,000) 17,000 64,000 81,250
Trade accounts payable............................. (6,389) 156,546 (39,375) (83,522) 223,889
Accrued liabilities................................ 569 124,721 596,434 (4,532) (435,244)
Unearned income.................................... 6,165 139,786 16,682 (13,876) (48,113)
Customer deposits.................................. 27,666 21,728 (16,149) 93,970 52,742
Gain from disposal of fixed assets................. (1,716)
----------- ------------ ------------ ------------ ------------
Net cash provided by operating activities........ 76,553 419,620 713,071 136,677 (693,355)
----------- ------------ ------------ ------------ ------------

Cash flows from investing activities:
Purchase of property and equipment..................... (45,537) (7,632) (72,325) (28,505)
Sale of property and equipment......................... 9,000 16,350
Purchase of software distribution rights............... (139,242) (4,167) (8,000)
----------- ------------ ------------ ------------ ------------
Net cash (used) by investing activities.......... (45,537) (137,874) (60,142) (28,505) (8,000)
----------- ------------ ------------ ------------ ------------

Cash flows from financing activities:
Exercising of common stock options..................... 2,813 126,311
Repayment of debt (net)................................ 32,652 29,387 (111,680) (18,028) (24,673)
Capital lease obligations.............................. (3,492) (3,331) (2,938) (930)
----------- ------------ ------------ ------------ ------------
Net cash provided (used) by financing
activities...................................... 29,160 26,056 (111,805) (18,958) 101,638
----------- ------------ ------------ ------------ ------------
Net increase in cash..................................... 60,176 307,802 541,124 89,214 (599,717)
Cash and cash equivalents at beginning of year........... 58,981 119,157 426,959 426,959 968,083
----------- ------------ ------------ ------------ ------------
Cash and cash equivalents at end of year................. $ 119,157 $ 426,959 $ 968,083 $ 516,173 $ 368,366
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------

Non-cash transaction:
Capital lease obligation............................... $ 950,000
</TABLE>

See accompanying notes to the financial statements.

F-6
<PAGE>
PREMIS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 -- ORGANIZATION
PREMIS Corporation (the "Company") is in the business of developing and
selling turnkey computer software systems.

NOTE 2 -- ACCOUNTING POLICIES

CASH EQUIVALENTS

Marketable securities with original maturity of three months or less are
included in cash equivalents.

INVENTORY

Inventory is stated at the lower of cost (first-in, first-out) or market.
Inventory consists of computer equipment held for resale. No reserves have been
provided as historical write-downs have been insignificant.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and depreciated for financial
statement purposes on a straight-line basis over the estimated useful life of
the assets of three to five years for furniture and equipment and the life of
the lease for leased property and improvements. Depreciation expense for the
years ended March 31, 1994, 1995 and 1996 was $16,099, $26,838 and $21,201,
respectively.

SOFTWARE DISTRIBUTION RIGHTS

The Company has acquired certain software marketing licenses and
distribution rights. The costs are capitalized and amortized using the
straight-line method over the term of the agreements which range from three to
five years.

RESEARCH AND DEVELOPMENT COSTS

Expenditures for research and software development costs are expensed as
incurred. Such costs are required to be expensed until the point technological
feasibility and proven marketability of the product are established. Costs
otherwise capitalizable after technological feasibility is achieved have also
been expensed because they have been insignificant. No costs have been
capitalized due to post-technological feasibility costs being immaterial to both
total assets and pre-tax results.

REVENUE RECOGNITION

System sales include software and certain computer equipment. Revenue is
recognized after completion of installation. Customers are provided with a
warranty period which provides customer support for a period of three months. No
reserve has been provided as warranty costs have been insignificant. After the
warranty period, support is only provided if a maintenance contract is in place.
Maintenance fees are deferred when billed and are recognized ratably over the
contract period.

NET INCOME PER SHARE OF COMMON STOCK

Net earnings per share was computed by dividing net income by the weighted
average number of shares of common stock and dilutive common stock equivalents
using the treasury method.

INCOME TAXES

The Company accounts for income taxes under the liability method of
accounting. Deferred tax assets are determined based on the difference between
the financial statement and tax basis of assets and liabilities using currently
enacted tax rates.

F-7
<PAGE>
PREMIS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

NOTE 2 -- ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
short-term trade receivables and payables for which current carrying amounts
approximate fair market value. Additionally, interest rates on outstanding debt
are at rates which approximate market rates for debt with similar terms and
average maturities.

CASH FLOW DISCLOSURE

For the years ended March 31, 1995 and 1996, the Company made cash payments
for interest of $30,095 and $27,960, respectively.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires 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.

UNAUDITED INTERIM FINANCIAL STATEMENTS

In the opinion of management, PREMIS Corporation has made all adjustments
consisting primarily of normal recurring accruals necesssary for a fair
presentation of the financial condition of the Company as of June 30, 1996 and
the results of operations and cash flows for the three month periods ended June
30, 1996 and 1995, as presented in the accompanying unaudited financial
statements.

NOTE 3 -- LEASE COMMITMENTS
The Company leases equipment and its facilities under various operating
leases. Future minimum payments under noncancelable leases are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR ENDING
MARCH 31,
- ---------------------------------------------------------------------------------
<S> <C>
1997............................................................................. $ 94,080
1998............................................................................. 88,137
1999............................................................................. 7,116
-----------
$ 189,333
-----------
-----------
</TABLE>

Rental expense under operating leases was $29,794, $47,787 and $114,803 for
the years ended March 31, 1994, 1995 and 1996, respectively.

NOTE 4 -- EMPLOYEE STOCK OPTION PLAN
The PREMIS Corporation 1994 Employee Stock Option Plan (the "Plan") was
adopted to provide incentives to selected eligible officers and key employees of
the Company. As adopted, the Plan authorized qualified options for up to 500,000
shares of common stock. In addition, the Board of Directors has reserved 600,000
shares of common stock for non-qualified stock options. The Company accounts for
stock options and other equity instruments in accordance with APB Opinion No.
25, "Accounting for Stock Issued to Employees." Effective in fiscal 1997, the
Company will account for stock options in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting of Stock Based Compensation."
SFAS No. 123 establishes accounting standards for organizations that have stock
based employee compensation plans. Generally, the statement defines a fair value
based method of accounting for these plans which requires the measurement of
compensation costs at the grant date and recognition of such costs over the
service period, which is usually the vesting period. The Company will continue
to value its options under APB Opinion No. 25 and will

F-8
<PAGE>
PREMIS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

NOTE 4 -- EMPLOYEE STOCK OPTION PLAN (CONTINUED)
comply with the disclosure requirements of SFAS No. 123. The Company determines
option prices at the time any option is granted and the price shall not be less
than the fair market value of the stock at the date of grant.

Activity under the Company's stock option plans is presented below:

<TABLE>
<CAPTION>
EMPLOYEE STOCK OPTIONS NON-QUALIFIED OPTIONS
--------------------------- --------------------------
PRICE RANGE PRICE RANGE
PER SHARE OPTIONS PER SHARE OPTIONS
--------------- ---------- --------------- ---------
<S> <C> <C> <C> <C>
Balance at March 31, 1993.......... $.05 100,000

Granted............................ $.15 110,000
----------
Balance at March 31, 1994.......... $.05-$.15 210,000 --

Granted............................ $.15 290,000 $.17 300,000
Cancelled.......................... $.05-$.15 (210,000)
---------- ---------
Balance at March 31, 1995.......... $.15 290,000 $.17 300,000

Granted............................ $1.125 55,000 $1.50-$1.75 255,000
Exercised.......................... $0.15 (18,750)
Cancelled.......................... $0.15-$1.125 (169,500)
---------- ---------
Balance at March 31, 1996.......... $.15-$1.125 156,750 $.17-$1.75 555,000
---------- ---------
---------- ---------
Options exercisable at March 31,
1996.............................. 27,500 300,000
---------- ---------
---------- ---------
</TABLE>

The outstanding non-qualified options for 300,000 shares are held by an
officer-shareholder. All outstanding options expire five years from the date of
grant.

NOTE 5 -- NOTES PAYABLE
The Company's notes payable to banks at March 31, 1996 are secured by
automobiles, computer equipment and accounts receivable and consist of the
following:

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Note payable - bank, monthly payments of $439 through May, 1996,
interest at 6.9%.................................................... $ 16,403
Note payable - bank, monthly payments of $299 through December, 1995,
interest at 9%...................................................... 2,580
Note payable - bank, monthly payments of $1,388 through October 20,
1997, variable interest at 10.25%................................... 43,056 $ 27,467
---------- ----------
62,039 27,467
Less current portion................................................. (23,513) (17,746)
---------- ----------
$ 38,526 $ 9,721
---------- ----------
---------- ----------
</TABLE>

F-9
<PAGE>
PREMIS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

NOTE 5 -- NOTES PAYABLE (CONTINUED)
The Company also has a note payable at March 31, 1995 and 1996 (see Note 7)
for the purchase of a software license and distribution rights as follows:

<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
Note payable, monthly payments of $8,342 through April, 1999........ $ 264,666 $ 187,558
Less current portion................................................ (77,108) (85,182)
----------- -----------
$ 187,558 $ 102,376
----------- -----------
----------- -----------
</TABLE>

NOTE 6 -- INCOME TAXES
Income tax expense is comprised of the following at March 31, 1996:

<TABLE>
<S> <C>
Current income taxes:
Federal........................................................ $ 400,000
State.......................................................... 110,000
---------
Total current income taxes................................... 510,000
Deferred income taxes............................................ 17,000
---------
Income tax expense............................................... $ 527,000
---------
---------
</TABLE>

At April 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). The effect of
this change in accounting principle as of April 1, 1993 was the recognition of a
deferred tax asset of $50,000. This amount is net of a valuation allowance as
recorded in accordance with SFAS 109.

A reconciliation of the expected federal statutory rate for the years ended
March 31, 1994, 1995 and 1996 is as follows:

<TABLE>
<CAPTION>
1994 1995 1996
---------- ------------ -----------
<S> <C> <C> <C>
Expected tax provision at statutory rate.............. $ 33,600 $ 161,400 $ 462,000
State income tax provision, net of federal tax
effect............................................... 5,900 28,480 81,000
Reduction of valuation allowance...................... (26,000) (112,000)
Effect of graduated income tax rates.................. (9,900) (59,000)
Other................................................. (3,600) (18,880) (16,000)
---------- ------------ -----------
Total............................................. $ 0 $ 0 $ 527,000
---------- ------------ -----------
---------- ------------ -----------
</TABLE>

No tax provision was recorded in the fiscal years ended March 31, 1994 and
1995 due to the utilization of net operating loss (NOL) carryforwards. The
deferred tax provisions of approximately $26,000 and $112,000 for the years
ended March 31, 1994 and 1995 are negated by reductions in the valuation
allowances as previously established in accordance with SFAS 109.

F-10
<PAGE>
PREMIS CORPORATION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

NOTE 6 -- INCOME TAXES (CONTINUED)
Deferred tax assets (liabilities) are comprised of the following at March
31:

<TABLE>
<CAPTION>
1994 1995 1996
------------ --------- ---------
<S> <C> <C> <C>
Allowance for doubtful accounts.......................... $ 4,500 $ 14,000 $ 33,000
Net operating loss carryforwards......................... 154,500 24,000
Business credit carryforwards............................ 12,000 12,000
Valuation allowance...................................... (124,000)
Other.................................................... 3,000
------------ --------- ---------
Net deferred tax asset............................... $ 50,000 $ 50,000 $ 33,000
------------ --------- ---------
------------ --------- ---------
</TABLE>

NOTE 7 -- PURCHASE OF SOFTWARE LICENSE AND DISTRIBUTION RIGHTS
During fiscal year 1995, PREMIS purchased a software license and
distribution rights for a period of 5 years for $403,910 ($75,000, plus 48 fixed
monthly royalty payments). In addition to the purchase price, the Company must
make contingent royalty payments based on a percentage of the net cash receipts
from related sales. The Company capitalized the purchase price as software
distribution rights and is amortizing the amount over the term of the agreement.
Amortization of $77,994 and $80,782 is included in cost of sales for the years
ended March 31, 1995 and 1996, respectively.

NOTE 8 -- EMPLOYEE BENEFITS
During fiscal year 1995, the Company established a retirement savings plan
which qualifies under the Internal Revenue Code Section 401(k). All employees
with at least 90 days of employment are eligible to participate in the Plan. The
Company's contributions to the Plan are based on 15% of employee contributions
which are subject to salary limitations. Company contributions to the Plan were
approximately $5,000 during 1996. In fiscal 1996, the Company also paid a one
time discretionary profit sharing bonus of $16,000.

NOTE 9 -- SIGNIFICANT CUSTOMERS
Sales to one customer represented 39% and 64% of total revenues during 1995
and 1996, respectively. Additionally, this customer represented 55% and 61% of
trade accounts receivable at March 31, 1995 and 1996, respectively.

NOTE 10 -- SUBSEQUENT EVENT (UNAUDITED)
On June 30, 1996, the Company signed a lease agreement to be effective
September 1, 1996 which was recorded as a capital lease. The Company's executive
offices and operations will occupy this facility, which is owned by a limited
liability partnership controlled by two officers and directors of the Company.
The lease has an initial ten year term with monthly base rent of $13,477 and two
successive two year options for renewals. PREMIS has guaranteed the mortgage
loan obligation of the limited liability partnership with respect to this
property in the principal amount of $945,000. This loan carries interest at
2.75% over the rate on five year treasury notes.

PREMIS has entered into a Stock Purchase Agreement dated July 9, 1996 with
the shareholders of REF Retail Systems Corporation ("REF") for purchase of all
of the issued and outstanding equity securities of REF for $6.5 million payable
in cash upon closing.

F-11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and
Board of Directors of
REF Retail Systems Corporation

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of shareholders' equity and of cash flows
present fairly, in all material respects, the financial position of REF Retail
Systems Corporation and its subsidiary at March 31, 1995 and 1996, and the
results of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

Price Waterhouse LLP
Minneapolis, Minnesota
August 7, 1996

F-12
<PAGE>
REF RETAIL SYSTEMS CORPORATION
CONSOLIDATED BALANCE SHEET
ASSETS

<TABLE>
<CAPTION>
MARCH 31,
------------------------ JUNE 30,
1995 1996 1996
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents..................................... $ 523,399 $ 197,327 $ 107,101
Trade accounts receivable, less allowance for doubtful
accounts of $63,306 and $16,420, respectively................ 301,444 596,279 587,123
Inventory..................................................... 96,852 78,118
Prepaid expenses.............................................. 52,721 22,499 23,589
Cost and estimated earnings in excess of billings............. 747,140 423,915 529,703
Other current assets.......................................... 3,392 58,695 56,890
----------- ----------- -----------
Total current assets........................................ 1,628,096 1,395,567 1,382,524
----------- ----------- -----------
Property and equipment:
Furniture and equipment....................................... 467,622 787,424 817,359
Leasehold improvements........................................ 5,521
Less accumulated depreciation and amortization................ (270,309) (416,264) (445,742)
----------- ----------- -----------
202,834 371,160 371,617
----------- ----------- -----------
Capitalized software development................................ 473,038 602,393
----------- ----------- -----------
Total assets................................................ $ 1,830,930 $ 2,239,765 $ 2,356,534
----------- ----------- -----------
----------- ----------- -----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable........................................ $ 20,422 $ 37,129 $ 54,002
Other accrued liabilities..................................... 107,442 128,507 82,050
Accrued income taxes.......................................... 137,507 67,083 159,473
Unearned income............................................... 90,745 77,800 104,066
Customer deposits............................................. 65,680 82,008 12,016
Notes payable -- banks........................................ 25,718
Notes payable................................................. 41,064
Note payable -- shareholder................................... 28,305 63 62
Deferred rent................................................. 24,976 49,791
----------- ----------- -----------
Total current liabilities................................... 450,101 484,348 461,460
----------- ----------- -----------
Long-term liabilities:
Deferred income taxes......................................... 19,295 120,650 59,927
Notes payable -- banks........................................ 98,823 137,274
Notes payable................................................. 112,783 143,533
----------- ----------- -----------
Total long-term liabilities................................. 19,295 332,256 340,734
----------- ----------- -----------
Shareholders' equity:
Preferred Class A stock: no par value; unlimited shares
authorized; 20,000 shares outstanding at March 31, 1995...... 162,417
Class B Special stock: no par value; unlimited shares
authorized; 925,000 shares outstanding at both dates......... 36,379 35,700 35,700
Common stock: no par value; unlimited shares authorized; 2,000
shares outstanding at both dates............................. 1 1 1
Retained earnings............................................. 1,168,884 1,335,524 1,471,516
Cumulative translation adjustment............................. (6,147) 51,936 47,123
----------- ----------- -----------
Total shareholders' equity.................................. 1,361,534 1,423,161 1,554,340
----------- ----------- -----------
Total liabilities and shareholders' equity.................. $ 1,830,930 $ 2,239,765 $ 2,356,534
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

See accompanying notes to the consolidated financial statements.

F-13
<PAGE>
REF RETAIL SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED MARCH 31, ENDED JUNE 30,
---------------------------- ---------------------------
1995 1996 1995 1996
------------- ------------- ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue:
System sales......................................... $ 2,676,945 $ 2,725,256 $ 384,604 $ 967,473
Maintenance fees and other service revenue........... 410,155 471,260 107,648 80,528
------------- ------------- ------------ -------------
Total revenue...................................... 3,087,100 3,196,516 492,252 1,048,001
------------- ------------- ------------ -------------
Cost of sales.......................................... 1,140,348 1,434,018 313,613 482,397
------------- ------------- ------------ -------------
Gross profit........................................... 1,946,752 1,762,498 178,639 565,604
Selling, general, and administrative expenses.......... 1,199,555 1,726,537 312,514 440,093
------------- ------------- ------------ -------------
Income (loss) from operations.......................... 747,197 35,961 (133,875) 125,511
Interest expense....................................... (3,026) (5,475) (175) (4,209)
Other income........................................... 45,500 148,000 -- --
------------- ------------- ------------ -------------
Income (loss) before income taxes...................... 789,671 178,486 (134,050) 121,302
Income tax expense (benefit)........................... 246,470 (7,975) (46,903) (14,690)
------------- ------------- ------------ -------------
Net income (loss)...................................... $ 543,201 $ 186,461 $ (87,147) $ 135,992
------------- ------------- ------------ -------------
------------- ------------- ------------ -------------
</TABLE>

See accompanying notes to the consolidated financial statements.

F-14
<PAGE>
REF RETAIL SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
CLASS A PREFERRED CLASS B SPECIAL COMMON CUMULATIVE
-------------------- -------------------- -------------------------- TRANSLATION RETAINED
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ADJUSTMENT EARNINGS
--------- --------- --------- --------- ----------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1994....... 40,000 $ 324,834 925,000 $ 36,379 2,000 $ 1 $ (12,029) $ 645,936
Net income.................... 543,201
Preferred dividends........... (20,253)
Effect of currency translation
adjustment................... (10,282)
Redeem preferred shares....... (20,000) (162,417) 16,164
--
--------- --------- --------- --------- ----- ----------- ----------
Balance at March 31, 1995....... 20,000 162,417 925,000 36,379 2,000 1 (6,147) 1,168,884
Net income.................... 186,461
Dividends on preferred
stock........................ (10,324)
Redeem Class B special
shares....................... (18,500) (679) (9,497)
Redeem Class A preferred
shares....................... (20,000) (162,417) 15,746
Currency translation
adjustment................... 42,337
--
--------- --------- --------- --------- ----- ----------- ----------
Balance at March 31, 1996....... 0 0 906,500 35,700 2,000 1 51,936 1,335,524
Net income (unaudited)........ 135,992
Currency translation
adjustment (unaudited)....... (4,813)
--
--------- --------- --------- --------- ----- ----------- ----------
Balance at June 30, 1996
(unaudited).................... 0 $ 0 906,500 $ 35,700 2,000 $ 1 $ 47,123 $1,471,516
--
--
--------- --------- --------- --------- ----- ----------- ----------
--------- --------- --------- --------- ----- ----------- ----------

TOTAL
----------
<S> <C>
Balance at March 31, 1994....... $ 995,121
Net income.................... 543,201
Preferred dividends........... (20,253)
Effect of currency translation
adjustment................... (10,282)
Redeem preferred shares....... (146,253)

----------
Balance at March 31, 1995....... 1,361,534
Net income.................... 186,461
Dividends on preferred
stock........................ (10,324)
Redeem Class B special
shares....................... (10,176)
Redeem Class A preferred
shares....................... (146,671)
Currency translation
adjustment................... 42,337

----------
Balance at March 31, 1996....... 1,423,161
Net income (unaudited)........ 135,992
Currency translation
adjustment (unaudited)....... (4,813)

----------
Balance at June 30, 1996
(unaudited).................... $1,554,340

----------
----------
</TABLE>

See accompanying notes to the consolidated financial statements.

F-15
<PAGE>
REF RETAIL SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31, JUNE 30,
-------------------------- --------------------------
1995 1996 1995 1996
------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)............................................. $ 543,201 $ 186,461 $ (87,147) $ 135,992
Adjustments to reconcile net income to net cash provided
(used) by operating activities:
Depreciation and amortization............................... 62,757 141,697 22,083 57,822
Changes in assets and liabilities:
Trade accounts receivable................................. 14,771 (245,371) (9,553) 7,244
Inventory................................................. (95,448) (2,788) 18,452
Prepaid expenses.......................................... 21,620 8,554 (187,430) 451
Costs and earnings in excess of billings.................. (751,247) 340,205 754,391 (107,329)
Income tax receivable..................................... 144,091 50,262
Deferred taxes............................................ (13,078) 89,176 (60,432)
Trade accounts payable.................................... 4,847 15,873 (881) 17,021
Accrued liabilities....................................... 121,165 (102,095) (42,250) 46,637
Unearned income........................................... 31,792 (15,389) 10,666 26,560
Customer deposits......................................... 57,490 14,186 (43,923) (69,840)
Deferred rent............................................. 24,614 24,936
------------ ------------ ------------ ------------
Net cash provided by operating activities............... 237,409 412,725 413,168 97,514
------------ ------------ ------------ ------------

Cash flows from investing activities:
Purchase of property and equipment............................ (118,094) (272,860) (41,740) (38,300)
Capitalized software development.............................. (351,636) (152,270)
Investment in subsidiary...................................... (205,176)
------------ ------------ ------------ ------------
Net cash (used) by investing activities................. (118,094) (829,672) (41,740) (190,570)
------------ ------------ ------------ ------------

Cash flows from financing activities:
Payment of dividend........................................... (20,253) (10,324) (10,102)
Repayment of note payable to shareholder...................... (22,865) (28,715) (28,580)
Repayment of notes payable.................................... 274,351 3,323
Redemption of Common Shares................................... (10,178)
Redemption of preference shares............................... (146,253) (146,671) (144,316)
------------ ------------ ------------ ------------
Net cash provided (used) by financing activities........ (189,371) 78,463 (182,998) 3,323
------------ ------------ ------------ ------------

Effect of exchange rate changes on cash......................... (3,487) 12,412 12,105 (493)
------------ ------------ ------------ ------------

Net increase in cash and cash equivalents....................... (73,543) (326,072) 200,535 (90,226)
Cash and cash equivalents at beginning of period................ 596,942 523,399 523,399 197,327
------------ ------------ ------------ ------------
Cash and cash equivalents at end of period...................... $ 523,399 $ 197,327 $ 723,934 $ 107,101
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>

See accompanying notes to the consolidated financial statements.

F-16
<PAGE>
REF RETAIL SYSTEMS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- ORGANIZATION
REF Retail Systems Corporation (the "Company") is a Canadian business that
develops and markets point-of-sale application software to the retail
distribution marketplace. In August, 1995, the Company acquired 100% of the
outstanding common shares of Softworks Group, Inc. ("Softworks"). The operations
of Softworks have been incorporated into the Company on the date of acquisition.

NOTE 2 -- ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and investments in Canadian
treasuries with an original maturity of three months or less. Investments are
valued at cost, which approximates market.

BASIS OF PRESENTATION

The consolidated financial statements are presented in U.S. dollars and are
presented in accordance with accounting principles generally accepted in the
United States.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary. All significant intercompany accounts are
eliminated in consolidation.

INVENTORY

Inventory is stated at the lower of cost (first-in, first-out) or market.
Inventory consists primarily of software licenses held for resale. No reserves
have been provided, since historical writedowns have been insignificant.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and depreciated for financial
statement purposes on a declining-balance basis over the estimated useful lives
of the assets, which is three to five years for furniture and equipment.

RESEARCH AND DEVELOPMENT COSTS

Costs incurred to establish the technological feasibility of computer
software to be marketed are expensed as research and development costs in the
period incurred. Costs incurred subsequent to the establishment of technological
feasibility and before the software is released to the general public are
capitalized as software development costs. Such costs are amortized to cost of
revenues at the greater of straight-line amortization over three years or the
proportion of the current period's product revenues to total expected product
revenues. Recording of amortization of software development cost began in May,
1996 when certain modules of the software were released to the general public.

REVENUE RECOGNITION

Revenues derived from system installation contracts are recognized over the
period the Company satisfies its obligations using the percentage-of-completion
method. Progress on the contracts is measured by the percentage of cost incurred
to date to the total estimated cost for each contract. Management considers cost
to be the best available measure of progress on these contracts. Changes in
conditions and estimated earnings may result in revisions of estimated costs and
earnings during the course of the contract and are reflected in the accounting
period in which the facts which require the revision become known. In the normal
course of business, the Company may also be subject to a risk of loss by
incurring costs to complete a contract in excess of the fixed bid price.

Customers are provided with a warranty which provides customer support for a
90-day period. No reserve has been provided, since warranty costs have been
insignificant. After the 90-day warranty period, support is provided only if a
maintenance contract is in place. Revenues derived from system maintenance
contracts are deferred and recognized ratably over the contract period.

F-17
<PAGE>
REF RETAIL SYSTEMS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2 -- ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

FAIR VALUE OF FINANCIAL INSTRUMENTS

USE OF ESTIMATES

CASH FLOW DISCLOSURE

For the years ended March 31, 1995 and 1996, the Company made cash payments
for interest of $3,026 and $5,475, respectively.

UNAUDITED INTERIM FINANCIAL STATEMENTS

In the opinion of management, REF Retail Systems Corporation has made all
adjustments consisting primarily of normal recurring accruals, necessary for a
fair presentation of the financial condition of the Company as of June 30, 1996
and the results of operations and cash flows for the three month periods ended
June 30, 1996 and 1995, as presented in the accompanying unaudited financial
statements.

NOTE 3 -- COSTS, ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS IN
PROGRESS
Costs, estimated earnings and billings on uncompleted contracts are
summarized as follows:

<TABLE>
<CAPTION>
MARCH 31,
----------------------------
1995 1996
------------- -------------
<S> <C> <C>
Costs incurred on uncompleted contracts......................... $ 400,426 $ 762,849
Estimated earnings.............................................. 926,240 549,819
------------- -------------
1,326,666 1,312,668
Billings to date................................................ 579,526 888,753
------------- -------------
Costs and estimated earnings in excess of billings.............. $ 747,140 $ 423,915
------------- -------------
------------- -------------
</TABLE>

This amount is included in current assets as all contracts in progress are
expected to be completed within one year.

Billings in excess of costs and estimated earnings of $65,080 and $82,008
are reported as customer deposits at March 31, 1995 and 1996, respectively.

F-18
<PAGE>
REF RETAIL SYSTEMS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4 -- BUSINESS COMBINATIONS
In August, 1995, the Company acquired all of the outstanding shares of
Softworks for $207,539 (CDN$283,000) in a transaction accounted for as a
purchase. For financial statement purposes, the assets acquired and liabilities
assumed were recorded at their respective fair market values as follows:

<TABLE>
<S> <C>
Tangible assets acquired......................................... $ 148,890
Software development costs....................................... 115,862
Total liabilities assumed........................................ (57,213)
---------
Purchase price................................................. $ 207,539
---------
---------
</TABLE>

The software development costs relate to specific products which were
determined to be technologically feasible at the date of acquisition and will be
amortized in accordance with the polices disclosed in Note 2.

NOTE 5 -- LEASE COMMITMENTS
The Company leases equipment and its facilities under various operating
leases. Future minimum payments under noncancelable leases are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR ENDING
MARCH 31,
- -------------------------------------------------------------------------------
<S> <C>
1997........................................................................... $ 78,863
1998........................................................................... 147,582
1999........................................................................... 173,229
2000........................................................................... 147,186
2001........................................................................... 149,946
Thereafter..................................................................... 806,782
-------------
$ 1,503,588
-------------
-------------
</TABLE>

Rental expense under operating leases was $84,090 and $139,235 for the years
ended March 31, 1995 and 1996, respectively.

NOTE 6 -- NOTES PAYABLE
The Company's notes payable to banks at March 31, 1996 are Small Business
Development Loans, are secured by assets of the Company and consist of the
following:

<TABLE>
<S> <C>
Note payable -- bank, monthly payments $1,759 through December,
2000, interest at 2% above prime (8.75% at March 31, 1996)...... $ 54,273
Note payable -- bank, monthly payments $2,201 through February,
2001, interest at 2% above prime (8.75% at March 31, 1996)...... 70,268
---------
124,541
Less current portion............................................. 25,718
---------
$ 98,823
---------
---------
</TABLE>

F-19
<PAGE>
REF RETAIL SYSTEMS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6 -- NOTES PAYABLE (CONTINUED)
The Company has notes payable at March 31, 1996 for the purchase of a
software license and distribution rights and the purchase of inventory as
follows:

<TABLE>
<S> <C>
Note payable related to acquisition of Softworks, monthly
payments of $1,533 through August, 2000, secured by assets of
the Company, interest at 7%..................................... $ 81,231
Inventory note payable, monthly payments of $2,384 through
February, 1999, interest at 9.7%p............................... 72,616
---------
153,847
Less current portion............................................. 41,064
---------
$ 112,783
---------
---------
</TABLE>

The Company also has an interest bearing note payable to an officer with a
balance of $28,305 and $63 at March 31, 1995 and 1996, respectively. The note
carries an interest rate of 7.42% and is payable in monthly installments of
$1,471.

NOTE 7 -- INCOME TAXES
Income tax expense is comprised of the following at March 31:

<TABLE>
<CAPTION>
1995 1996
----------- ------------
<S> <C> <C>
Current income taxes:
Federal.......................................................... $ 160,740 $ (100,914)
Provincial....................................................... 105,200 (8,416)
----------- ------------
Total current income taxes..................................... 265,940 (109,330)
Deferred income taxes expense (benefit)............................ (19,470) 101,355
----------- ------------
Income taxes expense (benefit)..................................... $ 246,470 $ (7,975)
----------- ------------
----------- ------------
</TABLE>

A reconciliation of the expected Canadian federal income taxes for the years
ended March 31, 1995 and 1996 is as follows:

<TABLE>
<CAPTION>
1995 1996
----------- ----------
<S> <C> <C>
Expected tax provision at 29%........................................ $ 229,000 $ 53,349
Provincial income tax provision, net of federal tax effect........... 114,500 25,880
Small business tax rate benefit...................................... (71,000) (16,000)
Net benefit from research and development credits.................... (28,800) (68,000)
Other................................................................ 2,770 (3,204)
----------- ----------
Total income taxes expense (benefit)............................... $ 246,470 $ (7,975)
----------- ----------
----------- ----------
</TABLE>

Deferred tax (assets) liabilities are comprised of the following at March
31:

<TABLE>
<CAPTION>
1995 1996
--------- -----------
<S> <C> <C>
Capitalized software development..................................... $ 90,400
Research and development credit...................................... $ 15,205 34,552
Deferred revenue..................................................... (8,772)
Depreciation......................................................... 4,090 4,470
--------- -----------
Net deferred income tax liabilities................................ $ 19,295 $ 120,650
--------- -----------
--------- -----------
</TABLE>

F-20
<PAGE>
REF RETAIL SYSTEMS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 8 -- EMPLOYEE BENEFITS
During fiscal year 1996, the Company established a defined contribution
employee retirement plan. All employees with at least one year of employment are
eligible to participate. The Company's contributions to the plan range from 1%
to 2% of the employee's compensation depending upon length of service. The
Company's contribution for the year ended March 31, 1996 was $15,504.

NOTE 9 -- SIGNIFICANT CUSTOMERS
Sales to one customer represented 42% and 40% of total revenues during 1995
and 1996, respectively. This customer represented 14% of trade accounts
receivable at March 31, 1996. In addition, two different customers represented
10% and 13% of 1995 revenues and two separate customers represented 10% and 11%
of 1996 revenues.

NOTE 10 -- OTHER INCOME
Other income in 1996 represents proceeds from the settlement of a law suit
brought against former employees.

F-21
<PAGE>
PREMIS CORPORATION
PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)

The following unaudited pro forma financial statements give effect to the
acquisition by PREMIS Corporation (PREMIS) of REF Retail Systems Corporation
(REF) in a transaction to be accounted for as a purchase. The unaudited pro
forma balance sheet is based on the individual balance sheets of PREMIS and REF
appearing elsewhere in this Prospectus and has been prepared to reflect the
acquisition by PREMIS of REF as of June 30, 1996. The unaudited pro forma
statement of income is based on the individual statements of income of PREMIS
and REF appearing elsewhere in this Prospectus, and combines the results of
operations of PREMIS and REF for the year ended March 31, 1996 and for the three
months ended June 30, 1996 as if the acquisition occurred on April 1, 1995.
These unaudited pro forma financial statements should be read in connection with
the historical financial statements and notes thereto of PREMIS and REF included
elsewhere in this Prospectus. The accompanying unaudited pro forma financial
statements do not necessarily reflect the financial position or results of
operations of the Company had the Company acquired REF as of June 30, 1996 (for
purposes of the Pro Forma Combined Balance Sheet) or as of April 1, 1995 (for
purposes of the Pro Forma Combined Statement of Operations for the year ended
March 31, 1996 or for the three months ended June 30, 1996).

F-22
<PAGE>
PREMIS CORPORATION
PRO FORMA COMBINED BALANCE SHEET
YEAR ENDED JUNE 30, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
PREMIS REF PRO FORMA PRO FORMA
ACTUAL ACTUAL ADJUSTMENTS COMBINED
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents.......... $ 368,366 $ 107,101 $ 1,150,000(e) $ 1,625,467
Trade accounts receivable.......... 2,077,471 587,123 2,664,594
Inventory.......................... 217,794 78,118 295,912
Prepaid expenses and other current
assets............................ 163,636 80,479 244,115
Costs and estimated earnings in
excess of billings................ 529,703 529,703
---------- ---------- ------------
Total current assets............. 2,827,267 1,382,524 5,359,791

Property and equipment, net........ 1,027,750 371,617 1,399,367
Goodwill........................... 4,945,660(b) 4,945,660
Capitalized software development... 236,421 602,393 838,814
---------- ---------- ------------
Total assets..................... $4,091,438 $2,356,534 $ 12,543,632
---------- ---------- ------------
---------- ---------- ------------

LIABILITIES AND SHAREHOLDERS' EQUITY:
Trade accounts payable............. $ 361,853 $ 54,002 $ 415,855
Other accrued liabilities.......... 172,069 82,050 254,119
Accrued income taxes............... 131,211 159,473 290,684
Unearned income.................... 139,098 104,066 243,164
Customer deposits.................. 94,603 12,016 106,619
Notes payable...................... 78,255 62 78,317
Deferred rent...................... 49,791 49,791
Current portion of capital lease
obligation........................ 226,115 226,115
---------- ---------- ------------
Total current liabilities........ 1,203,204 461,460 1,664,664

Deferred income taxes.............. 59,927 59,927
Notes payable...................... 112,097 280,807 392,904
Capital lease obligations.......... 723,885 723,885
---------- ---------- ------------
Total long-term liabilities...... 835,982 340,734 1,176,716

Class B Special stock.............. 35,700 (35,700)(c)
Common stock....................... 27,015 1 (1)(c) 44,515
17,500(e)
Additional paid-in capital......... 937,821 7,632,500(e) 8,570,321
Retained earnings.................. 1,087,416 1,471,516 (1,471,516)(c) 1,087,416
Cumulative translation
adjustment........................ 47,123 (47,123)(c)
---------- ---------- ------------
2,052,252 1,554,340 9,702,252
---------- ---------- ------------
Total liabilities and shareholders'
equity $4,091,438 $2,356,534 $ 12,543,632
---------- ---------- ------------
---------- ---------- ------------
</TABLE>

F-23
<PAGE>
PREMIS CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
PREMIS REF RETAIL PRO FORMA PRO FORMA
ACTUAL ACTUAL ADJUSTMENTS COMBINED
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue
Systems sales.................... $4,923,132 $2,725,256 $ 7,648,388
Maintenance fees, supplies and
other income.................... 979,029 471,260 1,450,289
---------- ---------- -----------
Total Revenue.................. 5,902,161 3,196,516 9,098,677
Cost of sales...................... 3,036,322 1,434,018 4,470,340
---------- ---------- -----------
Gross profit....................... 2,865,839 1,762,498 4,628,337
Selling, general and
administrative.................... 1,204,065 1,726,537 $ (131,694)(a) 3,293,474
494,566(b)
Research and development........... 303,000 303,000
---------- ---------- ----------- -----------
Income from operations........... 1,358,774 35,961 (362,872) 1,031,863
Interest expense................... (4,142) (5,475) (9,617)
Other income....................... 148,000 148,000
---------- ---------- -----------
Income before income taxes....... 1,354,632 178,486 1,170,246
Income tax expense (benefit)....... 527,000 (7,975) 46,093(a) 565,118
---------- ---------- -----------
Net income......................... 827,632 186,461 605,128
---------- ---------- -----------
---------- ---------- -----------

Net income per share............... $ 0.28 $ 0.14
---------- -----------
---------- -----------
Weighted average common and common
equivalent shares outstanding..... 2,925,581 1,486,928(d) 4,412,509
---------- -----------
---------- -----------
</TABLE>

F-24
<PAGE>
PREMIS CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
PREMIS REF RETAIL PRO FORMA PRO FORMA
ACTUAL ACTUAL ADJUSTMENTS COMBINED
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue
Systems sales............... $1,570,791 $ 967,473 $ 2,538,264
Maintenance fees, supplies
and other income........... 343,388 80,528 423,916
---------- ---------- -----------
Total revenue................. 1,914,179 1,048,001 2,962,180
Cost of sales................. 967,739 482,397 1,450,136
---------- ---------- -----------
Gross profit.................. 946,440 565,604 1,512,044
Selling, general and
administrative............... 302,574 440,093 (28,919)(a) 837,390
123,642(b)
Research and development...... 94,650 94,650
---------- ---------- ----------- -----------
Income from operations...... 549,216 125,511 (94,723) 580,004
Interest expense.............. (4,519) (4,209) (8,728)
---------- ---------- -----------
Income before income
taxes...................... 544,697 121,302 571,276
Income tax expense
(benefit).................... 212,461 (14,690) 10,122(a) 207,893
---------- ---------- -----------
Net income.................... 332,236 135,992 363,383
---------- ---------- -----------
---------- ---------- -----------
Net income per share.......... $ 0.11 $ 0.08
---------- -----------
---------- -----------
Weighted average common and
common equivalent shares
outstanding.................. 2,979,683 1,486,928(d) 4,466,611
---------- -----------
---------- -----------
</TABLE>

F-25
<PAGE>
PREMIS CORPORATION
NOTES TO PRO FORMA INFORMATION
(UNAUDITED)

REF ACQUISITION ADJUSTMENTS

(a) Adjustment to reflect the decrease in salary, benefits and auto expenses for
an officer of REF Retail Systems Corporation (REF) whose employment
terminates with the acquisition by PREMIS Corporation (PREMIS) and the
income tax effect of this adjustment.

(b) The purchase price of REF exceeds the fair value of the assets acquired. As
a result, PREMIS will record goodwill of approximately $4.9 million with
annual amortization of $494,566. The Company amortizes goodwill over a
period of 10 years. The recoverability of the unamortized goodwill will be
assessed on an ongoing basis by comparing anticipated undiscounted future
cash flows from operations to net book value.

(d) Adjusted to reflect net offering proceeds of $6,500,000 needed to fund the
acquisition of REF through the issuance of 1,486,928 common shares based on
a public offering price of $5.00 per share ($4.37 per share net of offering
costs). The weighted average common and common equivalent shares outstanding
have been adjusted to reflect the number of shares issued in the offering to
provide cash to be paid in connection with the acquisition of REF.

(e) Adjustment to give effect to the sale of 1,750,000 shares offered hereby at
a public offering price of $5.00 per share ($4.37 per share net of offering
costs) and the application of the net proceeds therefrom, including the
purchase of REF's stock.

F-26

<PAGE>

[PICTURE OF STORE FRONT] [PICTURE OF STORE FRONT]

[PICTURE OF STORE FRONT]

[PICTURE OF STORE FRONT] [PICTURE OF STORE FRONT]

<PAGE>
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- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY PREMIS, REF OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PREMIS OR REF SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 5
Use of Proceeds........................................................... 8
Price Range of Common Stock............................................... 9
Dividend Policy........................................................... 9
Capitalization............................................................ 10
Selected Financial Data................................................... 11
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 13
Business.................................................................. 18
Management................................................................ 33
Certain Transactions...................................................... 36
Principal Shareholders.................................................... 37
Description of Securities................................................. 38
Shares Eligible for Future Sale........................................... 40
Underwriting.............................................................. 41
Legal Matters............................................................. 42
Experts................................................................... 42
Available Information..................................................... 42
Incorporation of Certain Documents by Reference........................... 43
Index to Financial Statements............................................. F-1
Financial Statements...................................................... F-2
</TABLE>

1,750,000 SHARES

[LOGO]

COMMON STOCK

---------------------

PROSPECTUS

---------------------

RJ STEICHEN & COMPANY

SEPTEMBER 26, 1996

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