UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE PERIOD ENDED JUNE 30, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD From to .
----------------- ----------------------
Commission File Number 333-88480
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PRIME RESOURCE, INC.
--------------------
(Exact name of registrant as specified in its charter)
Utah 04-3648721
----- -----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1245 East Brickyard Road, Suite 590
Salt Lake City, Utah 84106
----------------------------
(Address of principal executive officers)
(801) 433-2000 (Registrant's
telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
Securities registered pursuant to Section 12(b) of the
Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant has
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock: 2,934,000 shares issued and outstanding as of August 1, 2004, No
Par Value. Authorized - 50,000,000 common voting shares.
INDEX
Prime Resource, Inc.
For The Quarter Ending June 30, 2004
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet - June 30, 2004 (Unaudited).
Consolidated Statements of Operations (Unaudited) - For the three
months ended June 30, 2004 and June 30, 2003; and for the six
months ended June 30, 2004 and June 30, 2003.
Consolidated Statements of Shareholders' Equity as of June 30,
2004 (Unaudited) and December 31, 2003.
Consolidated Statements of Cash Flows (Unaudited) - For the six
months ended June 30, 2004, and for the six months ended June 30,
2003.
Notes to Financial Statements (Unaudited) - June 30, 2004.
Item 2. Management's Discussion and Analysis of Financial Condition or Plan
of Operation.
Controls and Procedures
Part II. Other Information
Item 5. Other Matters
Item 6. Exhibits and Reports on Form 8-K
Signatures
Certifications
Part I - Financial Information
Item 1. Financial Statements
Prime Resources, Inc. and Subsidiaries
Consolidated Balance Sheet (Unaudited)
June 30,
ASSETS 2004
-------------------------
Current assets:
Cash $ 612,659
Accounts receivable 392,772
Proceeds from common 9,333
Trading securities 308,576
Other current assets 1,000
-------------------------
Total current assets 1,324,340
-------------------------
Leasehold improvements and equipment, net of accumulated
depreciation and amortization of $126,246 131,145
Notes receivable 40,000
Deferred tax assets 37,034
Other assets 13,104
-------------------------
Total assets $ 1,545,623
=========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 33,601
Accrued compensation, commissions and benefits 334,637
Notes payable, current portion 44,523
Income taxes payable 9,155
Deferred tax liabilities 30,881
-------------------------
Total Current Liabilities 452,797
Notes payable, net of current portion 11,039
Commitments and contingencies -
STOCKHOLDERS' EQUITY
Common stock, no par value, 50,000,000 authorized
shares; 2,934,000 shares issued and outstanding 907,427
Treasury Stock (77,755)
Retained earnings 252,115
-------------------------
Total stockholders' equity 1,081,787
-------------------------
Total liabilities and stockholders' equity $ 1,545,623
=========================
See accompanying footnotes
F-1
Prime Resources, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
Six Months Ended June 30, Three Months Ended June 30,
2004 2003 2004 2003
------------ ------------- ------------ ------------
Revenues
Commissions $ 2,345,234 $ 1,647,232 $ 1,220,674 $ 827,286
Investment and business advisory fees 324,935 159,199 173,750 72,814
Proceeds from common 7,737 1,068 3,933 808
------------ ------------- ------------ ------------
2,677,906 1,807,499 1,398,357 900,908
Expenses
Commissions 1,510,789 690,474 794,173 443,011
Compensation and benefits 633,667 571,012 313,214 292,248
General and administrative 212,314 265,528 91,984 147,426
Occupancy expense 56,285 57,859 26,967 28,489
Depreciation expense 23,943 23,717 11,953 12,329
Interest expense 1,758 2,327 830 1,305
------------ ------------- ------------- -----------
2,438,756 1,610,917 1,239,121 924,808
------------ ------------- ------------- -----------
Net operating income 239,150 196,582 159,236 (23,900)
------------ ------------- ------------- -----------
Gains and losses
Unrealized gains on trading securities 862 - (1,940) -
Other gains (losses) - (15,024) - (4,696)
------------ ------------- ------------- -----------
Net gains(losses) 862 (15,024) (1,940) (4,696)
------------ ------------- ------------- -----------
Net income (loss) before income taxes (benefits) 240,012 181,558 157,296 (28,596)
Income tax expense (benefit) 82,048 102,652 64,716 18,957
------------ ------------- -------------- ----------
NET INCOME (LOSS) $ 157,964 $ 78,906 $ 92,580 $ (47,553)
============ ============= ============= =========
Weighted average shares outstanding 2,934,000 2,862,155 2,934,000 2,923,626
Basic and fully diluted net income (loss) per share $ 0.05 $ 0.03 $ 0.03 $ (0.02)
See accompanying footnotes
F-2
Prime Resources, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity (Unaudited)
Additional Retained
Common Stock Paid-in Treasury Earnings
Shares Amount Capital Stock (Deficit) Total
----------- -------- ---------- --------- ---------- ------------
Balance at December 31, 2002 2,800,000 $ - $ 197,763 $ - $ (7,700) $ 190,063
Proceeds from common
stock offering 150,000 - 709,664 - 709,664
Treasury stock (16,000) - - (77,755) - (77,755)
Net income - - - - 101,851 101,851
----------- -------- ---------- --------- ---------- ------------
Balance at December 31, 2003 2,934,000 - 907,427 (77,755) 94,151 923,823
Net income - - - - 157,964 157,964
----------- -------- ---------- --------- ---------- ------------
Balance at June 30, 2004 2,934,000 $ - $ 907,427 $ (77,755) $ 252,115 $ 1,081,787
=========== ======== ========== ========= ========== ============
See accompanying footnotes
F-3
Prime Resources, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30,
2004 2003
------------- -------------
Cash Flows From Operating Activities:
Net income $ 157,964 $ 78,906
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Proceeds from common 23,943 23,717
Write-off of notes receivable from related parties - 5,768
Change in deferred taxes 31,880 51,644
Unrealized gains on trading securities (862) -
Changes in assets and liabilities:
Accounts receivable (50,829) (295,494)
Interest receivable (2,000) -
Income tax receivable 33,354 -
Other assets 9,000 (22,399)
Accounts payable 25,277 (54,819)
Income tax payable (15,373) -
Accrued expenses 53,080 105,229
------------- -------------
Net cash provided (used) by operating activities 265,434 (107,448)
Cash Flows From Investing Activities:
Purchase of trading securities (29,914) -
Purchases of equipment (20,121) (5,466)
Proceeds from sales of trading securities 3,376 -
------------- -------------
Net cash used in investing activities (46,659) (5,466)
Cash Flows From Financing Activities:
Payments on notes payable (5,519) -
------------- -------------
Net cash used in financing activities (5,519) -
------------- -------------
Net increase in cash and cash equivalents 213,256 (112,914)
Cash and cash equivalents at beginning of period 399,403 84,735
------------- -------------
Cash and cash equivalents at end of period $ 612,659 $ (28,179)
============= =============
Supplemental Cash Flow Information:
Cash paid for interest $ 92 $ 1,022
Cash paid for taxes $ 58,100 $ -
See accompanying footnotes
F-4
Prime Resources, Inc. and Subsidiaries
Notes to Financial Statements (unaudited)
June 30, 2004 and 2003
1. Presentation
The financial statements as of June 30, 2004 and 2003 and for the three and six
months ended June 30, 2004 and 2003, were prepared by the Company without audit
pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC). Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to such rules and regulations. In the opinion of management, all necessary
adjustments, which consist primarily of normal recurring adjustments, to the
financial statements have been made to present fairly the financial position and
results of operations and cash flows. The results of operations for the
respective periods presented are not necessarily indicative of the results for
the respective complete years. The Company has previously filed with the SEC an
annual reports on Form 10-KSB which included audited financial statements for
the two years ended December 31, 2003. It is suggested that the financial
statements contained in this filing be read in conjunction with the statements
and notes thereto contained in the Company's 10- KSB filing.
2. Net income per common share
Net income per common share is computed based on the weighted-average number of
common shares and, as appropriate, dilutive common stock equivalents outstanding
during the period. Stock options and warrants are considered to be common stock
equivalents.
Basic net loss per common share is the amount of net loss for the period
available to each share of common stock outstanding during the reporting period.
Diluted net loss per common share is the amount of net loss for the period
available to each share of common stock outstanding during the reporting period
and to each share that would have been outstanding assuming the issuance of
common shares for all dilutive potential common shares outstanding during the
period.
No changes in the computation of diluted earnings per share amounts are
presented since warrants granted would have been anti-dilutive due to the
Company's net reported loss. Such warrants could potentially dilute basic EPS in
the future.
F-5
Item 2. Management's Discussion and Analysis of Financial Condition or Plan of
Operation
Forward-Looking Information
Certain statements in this Section and elsewhere in this report are
forward-looking in nature and relate to trends and events that may affect the
Company's future financial position and operating results. Such statements are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The terms "expect," "anticipate," "intend," and "project"
and similar words or expressions are intended to identify forward-looking
statements. These statements speak only as of the date of this report. The
statements are based on current expectations, are inherently uncertain, are
subject to risks, and should be viewed with caution. Actual results from
experience may differ materially from the forward-looking statements as a result
of many factors, including changes in economic conditions in the markets served
by the company, increasing competition, fluctuations in prices and demand, and
other unanticipated events and conditions. It is not possible to foresee or
identify all such factors. The company makes no commitment to update any
forward-looking statement or to disclose any facts, events, or circumstances
after the date hereof that may affect the accuracy of any forward-looking
statement.
Plan of Operation
Prime Resource, Inc. ("Prime") is a Utah Corporation which was organized and
filed of record on March 29, 2002 as a successor entity to Prime, LLC, (a
limited liability company). Prime is an integrated business entity that conducts
all of its actual business activities through its wholly owned subsidiaries:
Belsen Getty, LLC ("Belsen Getty"), and Fringe Benefit Analysts, LLC ("FBA").
Prime Retirement Services, LLC, ("Prime Retirement") has recently been organized
to potentially assume some of the core businesses or similar services of Prime,
but is not operational or integrated to date. Unless otherwise specifically
described in this report, the reference to Prime shall collectively mean both
Prime and its two operating subsidiaries.
The principal business activity of Prime has been, and will continue to be for
the foreseeable future, providing insurance and related insurance products
principally in the health, life, dental and disability areas, as well as
implementing and managing various employee related benefit programs and plans,
such as 401(k) retirement accounts.
The insurance activities of Prime are primarily conducted through FBA. Belsen
Getty supplies collateral services related primarily to formation and funding of
pension and investment management programs, as well as retirement planning and
general business and financial consulting. Belsen Getty is a licensed investment
advisory firm. Prime Retirement is a potential start-up consulting entity, which
has not commenced operations.
3
The sector breakdown of revenues and profits by the two operating entities for
comparative quarters is generally summarized below:
FBA Analysts:
2nd Quarter 2004 Gross Revenues $ 1,220,674
Net Profits $ 203,253
2nd Quarter 2003 Gross Revenues $ 788,820
Net Profits $ 169,498
Belsen Getty:
2nd Quarter2004 Gross Revenues $ 177,683
Net Profits $ (733)
2nd Quarter 2003 Gross Revenues $ 112,088
Net Profits $ (87,020)
Management intends to attempt to grow the company primarily through the
acquisition of other insurance providers into the FBA entity and developing new
client relationships. Concurrently, Belsen Getty is attempting to expand its
financial and business consulting and pension planning services principally by
creating a more extensive investment advisory role. Prime Retirement is
attempting to research various related business activities, but has not
commenced operations. FBA is also currently negotiating potential marketing
plans to expand its "Advantage Program" whereby it provides plan administration
services along with selling insurance products. Additionally, FBA is allowing
access to the Advantage Program for competitors for a negotiated percentage of
their gross revenues.
The company completed an initial public offering of its shares on June 16, 2003,
in which it raised $750,000 in gross proceeds and $709,664 in net proceeds. It
intends to employ the majority of these funds for acquisitions to grow its core
insurance services and products as generally discussed above. A more detailed
description of the anticipated use of proceeds is contained in the prospectus
for the completed public offering. Any person wishing to obtain a copy of that
prospectus material, including the use of proceeds outline, may obtain a copy
online at the Securities and Exchange Commission ("SEC") public website at
www.sec.gov\edgar. Alternatively, a copy of the prospectus will be made
available to any shareholder, or other interested party, upon request to the
company at its principal address at 1245 East Brickyard Road, Suite 590, Salt
Lake City, UT 84106.
To date, the company has expended approximately $192,480 of offering proceeds
and has approximately $517,184 remaining, which is reported under Item 5 of this
report pursuant to
4
SEC Rule 463. Most of the offering proceeds are yet to be employed for acquiring
other insurance providers in an effort to grow our business.
The company's long term growth and potential to realize profits is substantially
dependent upon the ability of management of the company to successfully employ
the proceeds of the public offering in a manner which will generate additional
revenues and potential net income to Prime. No assurance or warranty of the
success of Prime can be made or implied at this time.
As may be noted, the company experienced an after tax net profit of $101,851 in
calendar year 2003. For the first six months of 2004, the company realized an
after tax net profit of $157,964 compared to $78,906 in the comparable period of
2003.
In the current quarter ended June 30, 2004, we had net profits of $92,580 on
gross revenues of $1,398,357. The comparable revenues for the second quarter of
2003 were $900,908. We attribute this revenue growth primarily to the increased
marketing of our services and products to new clients and the expanded operation
of our "Advantage Program". Also, Prime has increased its client base and
commissions. Profit increases were limited because Prime also had a substantial
increase in commission expenses and employee costs. Each person reviewing this
report should understand that the company has not had historical profits and
that the year ending 2003 evidenced the first annual profit realized by the
company since inception. The failure of the company to have historical profits
should be considered as a potential risk factor to any person acquiring
securities of the company in that it does not have a proven or sustained profit
history.
Prime, including all subsidiaries, has 20 full-time employees, 1 part-time
employee and 44 affiliated insurance or other agents.
As of June 30, 2004, the outstanding current liabilities of the company were
$452,797, which is a slight increase of $15,217 over the first quarter of 2003.
Current liabilities increased slightly due to greater agent commissions. The
company has accumulated retained earnings from its inception as a corporate
entity to June 30, 2004, of $252,115.
Products and Markets
As generally described above, the revenue sources to Prime are primarily divided
into two categories - The first being the sale of a broad line of insurance
products and services through FBA with a primary emphasis on group health,
disability, dental and life policies - The second being the related investment
and planning services of Belsen Getty.
The insurance activities of Prime are primarily offered within the eleven
western United States. Prime acts as a general agent through FBA for various
companies in supplying the insurance policies and services. However, four
companies account, collectively, for almost all of the policies provided by
Prime. These four principal suppliers of policies to Prime are Altius Insurance,
(previously Pacific Health Care); United Health Care; Intermountain Health Care
and
5
Regence Blue Cross. Commissions for the placement of these products range from
approximately 2-20%.
The company currently has, as of June 30, 2004, approximately 642 customers who
are receiving ongoing insurance coverage and related services from FBA. FBA also
has what it believes to be a unique program related to its insurance activities
in which it acts as a plan developer and facilitator for various insurance
programs such as COBRA, HIPAA and State continuation plans and other insurance
related plans that require ongoing filing and consulting/management services.
These services have previously been described as the "Advantage Program". FBA
believes it has been successful in growing its business through supplying the
advantage services at no additional cost to the insurance client. The company
also believes it has been successful in maintaining a profit, while providing
these services without additional cost to the client, by obtaining discounts
from service providers who provide these ongoing management services.
Belsen Getty supplies investment advisory and pension management services to
various clients of Prime. Some, but not all, of these clients are referred by
FBA incident to completion of insurance funded products sold to various
individuals and entities which then require pension fund management. The
compensation for these valuable services are derived on a fee basis. The fees
range from 25 basis points to 125 basis points per year depending upon the size
of the portfolio or program managed. There are no commissions paid on investment
products and the assets are held by third party custodians, such as various
brokerage firms. It is anticipated that the Belsen Getty portion of the business
will grow concurrently with the growth of the FBA business, but for the
foreseeable future will generate revenues substantially less than the FBA
component of the business. As of June 30, 2004, FBA has approximately 642
customers and Belsen Getty has 459 clients. The definition of clients utilized
in this report and in the future has been changed from # of specific accounts to
# of actual clients that may have multiple accounts. Management feels that the
new definition of Client more accurately measures the organic growth of the
Belsen Getty division than simply tracking accounts.
Liquidity and Sources of Capital
As previously noted, the parent entity, Prime Resource, Inc., completed a public
offering as of April 16, 2003 resulting in net proceeds to the company of
$709,664. It is believed and anticipated that these proceeds will be sufficient
to implement the general growth plan of the company, as generally described
above, and which includes acquisition of other insurance brokers, as well as the
recruitment and training of insurance agents with existing books of business,
clients, and established insurance markets. No warranty or assurance of the
success of this proposed plan of operation can be made, but it is believed that
there is sufficient existing capital in the company to implement this plan from
the proceeds of the offering. Prime is presently in a position where it believes
that its general revenues can sustain other business operations, including
salaries, rent, utilities and other overhead costs, without the employment of
offering proceeds for those general operating purposes.
The company has no present plans for any additional offering of its securities
or other capital formation activities for the foreseeable future.
6
Further, the company does not significantly rely on lines of credit or other
bank loans for its present operations and has total outstanding debt
obligations, as of June 30, 2004, of approximately $55,562, while maintaining a
net worth of approximately $1,081,787. It is not contemplated that any
significant offering proceeds will be used to develop Prime Retirement, LLC.
Controls and Procedures
(a) Prime maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
prescribed by the Securities and Exchange Commission. Based upon their
evaluation of those controls and procedures performed within 90 days of the
filing date of this report, the chief executive officer and the principal
financial officer of the Company concluded that the Company's disclosure
controls and procedures were adequate for its present activities. The Company
knows of no fraudulent activities within the Company or any material accounting
irregularities. The Company does not have an independent audit committee and
does not believe it is required to have any audit committee at this time.
(b) Changes in internal controls. The Company made no significant
changes in its internal controls since completing its public offering. The
company has recently obtained a listing of its stock on the National Association
of Securities Dealers ("NASD") sponsored Electronic Bulletin Board, but does not
view such listing as requiring a change in its accounting or auditing practices
at the present time.
(c) The company is aware of the general standards and requirements of
the recent Sarbanes-Oxley Act of 2002 and has implemented procedures and rules
to comply, so far as applicable, such as a prohibition on company loans to
management and affiliates. The company does not have any audit committee as it
does not believe the act requires a separate committee for companies that are
reporting companies, but not registered under the Securities and Exchange Act of
1934 [15(d) companies] and whose shares trade only on the Electronic Bulletin
Board.
7
Part II - Other Information
Item 5. Other Matters
(1) Public Offering & Use of Proceeds. As generally noted above, Prime
completed its initial public offering of 150,000 shares to 17 new shareholders
as of June 16, 2003. Pursuant to SEC Rule 463, the use or employment of the
proceeds are periodically disclosed as part of this report. We have elected to
set-out such information in a tabular format:
1. Offering Effective Date
4/16/2003
2. Offering Closed $750,000 $709,664
6/16/2003 Gross Proceeds Net Proceeds
3. Costs of offering including $40,336 N/A
legal, accounting, filing fees,
consulting and miscellaneous
(No commissions were paid)
4. No direct payments were made to any 0 0
officer, director or affiliated
person. The offering was a self-
underwriting with no commissions.
Of the net proceeds, the following principal
expenditures have been made during this
Quarter:
(i) Software/computer upgrades $ 0
(ii) Database work $ 0
(iii) Legal-NASD listing $ 0
(iv) Working Capital $ 25,000
(v) Office equipment $ 1,031
(vi) Marketing $ 4,829
(vii) New Employees $ 3,807
(viii) New Marketing Coordinator $ 7,813
---------
$ 42,480
=========
Prior Offering Proceeds Expenditures $ 150,000
(Previously Reported)
Remaining Net Proceeds $ 517,184
8
(2) Auditors. Child and Sullivan of Kaysville, Utah will continue,
subject to Board discretion, as the Company's new independent auditors. The
auditors were appointed in August, 2003. The company has no differences of
opinion with its prior or current auditors.
(3) Trading. The company trades on the Electronic Bulletin Board under
the symbol "PRRO". The Electronic Bulletin Board is essentially an informal
trading mechanism managed by the National Association of Securities Dealers, but
does not constitute a regular NASDAQ exchange or listing. It is, essentially, an
electronic intra-dealer quotation system for small public companies not meeting
the requirements for regular NASDAQ listing. During the last quarter the trading
range of the company's stock was as follows:
High Low
2nd Quarter, 2004 $6.00 $5.50
(4) Annual Meeting. The company held its annual meeting on June 5, 2004
wherein the nominated directors were re-elected and the choice of independent
auditors was ratified by majority shareholder vote. Next years meeting will be
held at approximately the same time of the calendar year.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Certification under Section 302 of the Sarbanes-Oxley Act of 2002
99.1 Certification under Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. SECTION 1350)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the reporting period.
(c) Other Exhibits-None
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: August 16, 2004 By: /s/ Terry M. Deru
Mr. Terry M. Deru
President, Director
Date: August 16, 2004 By: /s/ Andrew W. Limpert
Mr. Andrew W. Limpert
Director, Treasurer/CFO
10
CERTIFICATION-302
I, Terry M. Deru, President and Director of Prime Resource, Inc certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Prime
Resource, Inc;
(2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;
(4) The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date'); and
(c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls; and
(6) The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
DATE: August 16, 2004
/s/ Terry M. Deru
----------------------------------
Mr. Terry M. Deru President
11
CERTIFICATION-302
I, Andrew W. Limpert, Chief Financial Officer and Director of Prime Resource,
Inc certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Prime
Resource, Inc;
(2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;
(4) The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date'); and
(c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls; and
(6) The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
DATE: August 16, 2004
/s/ Andrew W. Limpert
----------------------------------
Mr. Andrew W. Limpert Chief
Financial Officer
12
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Prime Resource, Inc. (the "Company")
on Form 10-QSB for the period ending June 30, 2003, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), we, Mr. Terry Deru,
President and Chief Executive Officer and Mr. Andrew Limpert, Chief Financial
Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to the bet of our knowledge
and belief:
(1) The Report fully complies with the requirements of section 13 (a)
or 15 (d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
Date: August 16, 2004 /s/ Terry M. Deru
Mr. Terry M. Deru
President, Director
Date: August 16_, 2004 /s/ Andrew W. Limpert
Mr. Andrew W. Limpert
CFO, Director
---------------------------------------
A signed original of this written statement required by Section 906 or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form with the electronic version of this written statement has
been provided to the Company and will be retained by the Company and furnished
to the Securities and Exchange Commission or its staff upon request.
13