Prescient Applied Intelligence Reports Second Quarter Results

Business Wire, August 11, 2006

WEST CHESTER, Pa. -- Prescient Applied Intelligence, Inc. (OTCBB:PPID), a leading provider of supply chain and advanced commerce solutions for retailers and suppliers, today reported results for the second quarter ended June 30, 2006.

For the second quarter, the Company reported a net loss of $0.5 million, or $0.01 per share that includes compensation expense of $0.1 million as a result of the Company's adoption of SFAS No. 123R (accounting for stock-based employee compensation) in the first quarter of 2006. This compares to a net loss of $0.2 million, or $0.01 per share for the prior year quarter.

For the second quarter, total revenue was $2,379,000 down 4% from $2,472,000 in the prior year quarter. As compared to the prior year quarter, there was a 4% increase in subscription revenue to $1,384,000 and a 9% increase in maintenance revenue to $382,000, which was offset by a 24% decrease in license revenue to $217,000 and a 22% decrease in consulting services revenue to $395,000. The decrease in services revenue is related to one large implementation completed in the comparable period last year.

"Attitudes toward licensed software have shifted, and companies are looking at more cost-effective models," said Jane Hoffer, President and CEO, Prescient. "To address the accelerating changes in the market, Prescient will continue its expansion of subscription-based services, with an aggressive push to convert its supply chain business from license to subscription. These efforts are in addition to the numerous cost cutting measures taken since the end of the second quarter, which are anticipated to result in improved bottom-line performance in later periods."

Cash used in operations was $0.1 million during the second quarter as compared to $1.0 million used in the prior year quarter. Cash and cash equivalents were $587,260 as of June 30, 2006, down from $716,345 as of December 31, 2005.

Highlights for the second quarter include:

Existing client expansion:

In a scan based trading (SBT) expansion, a national grocery retailer who has been conducting SBT with Prescient since 2002 in two of its divisions, began an SBT expansion across five of its remaining 14 divisions.

A Northeast grocery retailer expanded its Prescient supply chain footprint in a second quarter deal that included: a move from limited use to an enterprise agreement; an upgrade to Prescient 7.0; and a hosting agreement to support its technology expansion.

Integration of Advanced Commerce and Supply Chain

During the second quarter, Prescient released Store Level Replenishment (SLR), an on demand solution designed for Prescient scan based trading (SBT) suppliers who deliver product directly to the store. This offering uses the data gathered at the point of sale as the data stream to feed its supply chain planning software. SLR integrates Prescient's advanced commerce and supply chain solutions, and helps Prescient's direct store delivery clients optimize store-level replenishment execution with the ultimate goal of having product on the shelf when it needs to be.

"By using scan sales data to drive forecasting and replenishment execution, retailers and suppliers are better able to reduce out of stocks and meet consumer demand," said Hoffer. "Prescient's Store Level Replenishment offering supports our vision of the retail supply chain - the Consumer ZOOM Demand Network(TM) -- by providing solutions that put the consumer at the center of the retail transaction."

About Prescient Applied Intelligence:

Prescient, founded in 1985 (OTCBB:PPID), is a leading provider of supply chain and advanced commerce solutions for retailers and suppliers. Prescient's solutions capture information at the point of sale, provide greater visibility into real-time demand and turn data into actionable information across the entire supply chain. As a result, the Company's products and services enable trading partners to compete effectively, increase profitability and excel in today's retail business climate. Household brand names like Ahold, AutoZone, Coors, Domino's Pizza, Rite Aid, Sara Lee, Schwan's and Wyeth rely on Prescient. For more information, go to www.prescient.com.

Forward-Looking Statement:

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "if", "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they relate to Prescient Applied Intelligence, Inc. are intended to identify such forward-looking statements. Prescient may from time to time update these publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see "Risk Factors" in Prescient's report on Form 10-KSB filed with the Securities and Exchange Commission and its other filings under the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.