WORKING DRAFT FOR THIRD QUARTER 2003
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 September 30, 2003
-------------------
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
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)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by the
court. Yes No Not Applicable
--------------
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: 2,950,000 shares issued and outstanding as of November 10, 2003,
No Par Value. Authorized - 50,000,000 common voting shares.
INDEX
Prime Resource, Inc.
For The Quarter Ending September 30, 2003
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet - September 30, 2003 (Unaudited)
Consolidated Statements of Operations (Unaudited) -
For the nine months and three months ended September
30, 2003 and 2002
Consolidated Statements of Members' and Stockholders'
Equity (Unaudited) - January 1, 2002 to September 30,
2003
Consolidated Statements of Cash Flows (Unaudited) -
For the nine months ended September 30, 2003 and 2002
Notes to Consolidated Financial Statements (Unaudited)
- September 30, 2003
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
2
Part I - Financial Information
Item 1. Financial Statements
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
CONSOLIDATED BALANCE SHEET (Unaudited)
September 30, 2003
Assets
Current Assets:
Cash and cash equivalents $ 706,199
Accounts receivable 292,783
---------------
Total current assets 998,982
Fixed Assets:
Furniture and fixtures 123,963
Office equipment 26,278
Computer equipment 46,209
Software 15,289
Vehicles 86,847
---------------
Total fixed assets 298,586
Less accumulated depreciation (167,596)
---------------
Net fixed assets 130,990
Advances and notes receivable from related parties 117,368
Other assets 38,154
---------------
Total assets $ 1,285,494
===============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 24,690
Accrued expenses 149,241
Current portion of notes payable, related parties 81,216
---------------
Total current liabilities 255,147
Deferred income taxes 25,138
Notes payable to related party, less current portion 37,504
Common stock, no par value; authorized 50,000,000 shares;
issued and outstanding 2,950,000 shares 750,000
Additional paid-in capital 197,763
Retained earnings 19,942
---------------
967,705
Total liabilities and stockholders' equity $ 1,285,494
===============
See notes to financial statements.
3
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Nine months ended Three months ended
September 30, September 30,
2003 2002 2003 2002
----------------- ---------------- ----------------- -----------------
Net Revenues
Commissions $ 2,383,759 $ 1,313,407 $ 736,527 $ 449,182
Investment and business
advisory fees 235,816 400,172 76,617 147,430
----------------- --------------- ----------------- ----------------
Total net revenues 2,619,575 1,713,579 813,144 596,612
Operating Expenses
Commissions 1,196,759 452,330 506,285 168,491
Compensation and benefits 826,636 1,008,483 255,624 320,414
General and administrative 399,278 244,977 133,750 81,949
Occupancy and equipment 85,616 85,739 27,757 33,534
Depreciation and amortization 50,311 33,757 26,594 10,585
----------------- --------------- ----------------- ----------------
Total operating expenses 2,558,600 1,825,286 950,010 614,973
----------------- --------------- ----------------- ----------------
Income (loss) from operations 60,975 (111,707) (136,866) (18,361)
Interest and dividend income 6,065 8,316 4,997 918
Interest expense (4,617) (1,793) (2,290) (47)
Other income (expense) 27,359 - 42,383 -
----------------- -------------- ----------------- ---------------
Total other income (expense) 28,807 6,523 45,090 871
Net income (loss) before income taxes 89,782 (105,184) (91,776) (17,490)
----------------- --------------- ------------------ -----------------
Income tax expense (benefit) 62,140 14,221 (40,512) (5,580)
----------------- --------------- ------------------ -----------------
Net income (loss) $ 27,642 $ (119,405) $ (51,264) $ (11,910)
================= ================ ================== =================
Earnings per weighted average
shares outstanding $ 0.01 (0.07) (0.02) (0.00)
Weighted shares outstanding to
calculate earnings per share 2,891,758 1,835,897 2,950,000 2,800,000
See notes to financial statements.
4
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
CONSOLIDATED STATEMENTS OF MEMBERS' AND STOCKHOLDERS' EQUITY (Unaudited)
January 1, 2002 to September 30, 2003
Members' Common Stock Paid-in Retained
Equity Shares Amount Capital Deficit
-------------- ----------- ----------- ----------- ------------
Balance, January 1, 2002 $ 220,338 - $ - $ - $ -
Net loss through date of
incorporation (April 4, 2002) (135,575) - - - -
Member contribution 113,000 - - - -
Reorganization from LLC to
corporation (April 4, 2002) (197,763) 2,800,000 - 197,763 -
Net loss from April 4, 2002
through December 31, 2002 __-__ __-__ __-__ __-__ (7,700)
-------------- ----------- ----------- ----------- ------------
Balance, December 31, 2002 - 2,800,000 - 197,763 (7,700)
Shares issued in IPO - 150,000 750,000 - -
Net income -__ __-__ __-__ __-__ 27,642
-------------- ----------- ----------- ----------- -----------
Balance, September 30, 2003 $ -__ 2,950,000 $ 750,000 $ 197,763 $ 19,942
============== ========== ============ ============ ============
See notes to financial statements.
5
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, 2003 and 2002
2003 2002
----------------- ------------------
OPERATING ACTIVITIES
Net Income (loss) $ 27,642 $ (119,405)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 50,311 33,694
Noncash compensation - 115,805
Loss on disposal of assets - 297
Interest expense on borrowings from member - 1,735
Interest income on loans to related parties - (6,217)
Offering costs 40,336 -
Write-off of notes receivable from related parties 5,768 -
Change in deferred taxes 51,644 3,821
Changes in operating assets and liabilities
Accounts receivable (152,156) (44,704)
Other assets (25,050) (4,588)
Accounts payable (47,662) 70,358
Accrued expenses (18,664) (76,086)
---------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES (67,831) (25,290)
INVESTING ACTIVITIES
Purchase of property and equipment (17,438) (54,123)
Loans to related parties - (5,500)
Principal payments on related party notes receivable - 146,647
Proceeds from sale of investment - 51,140
---------------- ---------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (17,438) 138,164
FINANCING ACTIVITIES
Bank borrowings - 50,000
Proceeds from notes payable to related parties - 53,647
Payments on notes payable to related parties (2,931) -
Stock issuance 709,664 -
Member buy-out - (100,000)
---------------- ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 706,733 3,647
INCREASE (DECREASE) IN CASH 621,464 116,521
Cash and cash equivalents, beginning of period 84,735 32,102
--------------- ---------------
Cash and cash equivalents, end of period $ 706,199 $ 148,623
=============== ===============
Additional required disclosures:
Interest paid in cash $ 2,327 $ -
See notes to financial statements.
6
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended September 30, 2003 and 2002
(1) INTERIM FINANCIAL STATEMENT POLICIES AND DISCLOSURES
The unaudited, consolidated, condensed financial statements of Prime Resource,
Inc. and Subsidiaries (the Company) included herein have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally required in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.
These consolidated, condensed financial statements reflect all adjustments that,
in the opinion of management, are necessary to present a fair statement of the
results of operations for the interim periods presented. All of the adjustments
that have been made in these consolidated, condensed financial statements are of
a normal recurring nature.
It is suggested that these condensed financial statements be read in conjunction
with the financial statements and the notes thereto included in the Company's
latest Annual Report.
(2) INITIAL PUBLIC OFFERING
The Company commenced an initial public offering of its shares on April 16,
2003, when its registration became effective. The Company raised $750,000
through the sale of 150,000 shares.
7
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"), Fringe Benefit Analysts, LLC ("Fringe") and
Prime Retirement Services, LLC, ("Prime Retirement"). Unless otherwise
specifically described in this report, the reference to Prime shall collectively
mean both Prime and its three operating subsidiaries.
The principal business activity of Prime has been, and will continue to be,
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 Fringe. Belsen
Getty supplies collateral services related primarily to formation and funding of
pension and investment management programs, and retirement planning and general
business consulting.
Management intends to attempt to grow the company primarily through the
acquisition of other insurance providers into the Fringe Benefit entity.
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 and aggressive marketing. Prime Retirement is
attempting to focus upon retirement plan formation and management and related
software development.
8
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 these funds for acquisitions to grow its core insurance
services and products as generally discussed above. A more detailed description
of the 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") 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 only a minimal portion of offering proceeds
which is reported under Item 5 of this report pursuant to SEC Rule 463. It is
intended that most of the offering proceeds will be used 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 recent 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. The proceeds of the
offering have just recently been received and have not been significantly
employed in any manner. See Part II, Item 5.5.
As may be noted from the foregoing financial statements, the company experienced
a net loss of $119,405 for the nine months ended September 30, 2002. In the
first three quarters of 2003 the company realized a small net profit of $27,642
primarily due to increased insurance revenues; and, to a lesser extent,
increases in revenues for the financial advisory and consulting services of
Belsen Getty.
In the current quarter we had net loss of $51,264 on gross revenues of $736,527.
We attribute this growth primarily to aggressive marketing of our services and
products to new clients. Each person reviewing this report should understand
that the company has not had historical profits and that the first three
quarters of 2003 evidence the first 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.
At present, the outstanding current liabilities of the company are presently
$255,147 as of September 30, 2003. The company has retained earnings from its
inception as a corporate entity to September 30, 2003 of $19,942.
9
Products and Markets
As generally described above, the revenue sources to Prime are primarily divided
into three categories. The first being the sale of a broad line of insurance
products and services through Fringe with a primary emphasis on group health,
disability and life policies. The insurance activities of Prime are primarily
offered within eleven western United States. Prime acts as a general agent
through Fringe for various companies in supplying the insurance policies and
services. However, four companies account, collectively, for most of the
policies provided. These four principal suppliers of policies to Prime are
Altius Insurance, (previously Pacific Health Care); United Health Care;
Intermountain Health Care and Regence Blue Cross. Commissions for the placement
of these products range from approximately 2-20%. Fringe also has what it
believes to be a unique program related to its insurance activities in which it
consolidates services and reduces costs of administrative functions for various
insurance, pension, and regulatory programs such as COBRA, HIPAA and State
continuation plans and other insurance related plans that require ongoing filing
and consulting/management services. Fringe believes it has been successful in
growing its business through supplying these services, at no additional cost to
the insurance policy client. The company believes it has been successful in
maintaining a profit while providing these services without additional cost by
obtaining discounts from its service providers and earning additional
commissions on insurance products. This program is generally called the
"Advantage Program".
Belsen Getty supplies investment advisory and pension management services to
various clients of Prime. Most, but not all, of these clients are referred by
Fringe 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 is derived on a fee basis. The fees
range from 40 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 Fringe business, but for the
foreseeable future will generate revenues substantially less than the Fringe
component of the business. At present, Fringe Benefit has approximately 1,979
customers and Belsen Getty has 353 as of September 30, 2003.
Prime Retirement intends to engage in the early stage development or acquisition
of software to assist in retirement plan formation and marketing. It is hoped
this software can be employed by Prime Retirement and independently marketed,
but no results of its feasibility or marketability are presently available.
10
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 primarily acquisition of other insurance companies or
insurance lines of business, as well as the recruitment and training of
insurance agents with existing books of business and clients. 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.
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 September 30, 2003, of approximately $118,720. 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 of 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.
(b) Changes in internal controls. The Company made no significant
changes in its internal controls since completing its public
offering. The company is presently seeking 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. The Company is
presently experiencing unanticipated delays in obtaining this
listing which is presently preventing its shares from trading
publicly.
11
(c) Should the company subsequently seek a listing on an exchange
or any established NASD listing, such as the NASDAQ small cap
markets, it is aware that other accounting/auditing standards
may be required.
(d) 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.
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
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.
5. Of the net proceeds, the following principal expenditures have been made
to the date of this Report:
(i) Software development $ 1,400
(ii) Client relations $ 7,500
(iii) Equipment $ 8,000
(iv) Service personnel $ 8,275
(v) General & administrative expense $ 9,275
---------
Total $ 34,900
=========
12
(2) Auditors. Child, Sullivan & Company 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 presently does not have any active trading
market and, as of the date of this report, is engaged in attempting to complete,
through a Salt Lake City brokerage firm, a filing for NASD listing on the
Electronic Bulletin Board. 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, but is
essentially an electronic intra-dealer quotation system for small public
companies not meeting the requirements for regular NASDAQ listing. The company
cannot presently give any warranty or assurance that it will be successful in
completing such listing, but is presently actively engaged through a designated
broker/dealer in attempting to obtain this listing and will, subsequently,
report the completion of any listing requirements as an 8-K filing.
13
18
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.
14
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: November 12, 2003 By: /s/ Terry M. Deru
---------------------
Mr. Terry M. Deru
President, Director
Date: November 12, 2003 By: /s/ Andrew W. Limpert
------------------------
Mr. Andrew W. Limpert
Director, Treasurer/CFO
15
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: November 12, 2003
/s/ Terry M. Deru
----------------------------------
Mr. Terry M. Deru President
16
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: November 12, 2003
/s/ Andrew W. Limpert
----------------------------------
Mr. Andrew W. Limpert Chief
Financial Officer
17
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 September 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 best 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: November 12, 2003 /s/ Terry M. Deru
Mr. Terry M. Deru
President, Director
Date: November 12, 2003 /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.
18