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, 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
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
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 126-2 of the Exchange Act). ____Yes [X] 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 November 1, 2004, No
Par Value. Authorized - 50,000,000 common voting shares.
3
INDEX
Prime Resource, Inc.
For The Quarter Ending September 30, 2004
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 2004 (Unaudited) and
December 31, 2003.
Consolidated Statements of Operations (Unaudited) - For the three
months ended September 30, 2004 and for the three months ended
September 30, 2003; and for the comparable nine month periods
ending September 30, 2004 and September 30, 2003.
Consolidated Statements of Shareholders' Equity (Unaudited) as of
September 30,2004 and December 31, 2003.
Consolidated Statements of Cash Flows (Unaudited) - For the nine
months ended September 30, 2004, and for the nine months ended
September 30, 2003.
Condensed Notes to Financial Statements (Unaudited) - September
30, 2004.
Item 2. Management's Discussion and Analysis of Financial Condition or Plan
of Operation.
Item 3. 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
Financial statements are the following "F-1 through F-5" as follows.
3
Prime Resources, Inc. and Subsidiaries
Consolidated Balance Sheet (Unaudited)
September 30,
ASSETS 2004
--------------------------
Current assets:
Cash $ 597,596
Accounts receivable 440,198
Accrued interest receivable 10,333
Trading securities 384,383
Other current assets 1,000
--------------------------
Total current assets 1,433,510
--------------------------
Leasehold improvements and equipment, net of accumulated
depreciation and amortization of $137,104 156,967
Notes receivable 40,000
Deferred tax assets 37,034
Other assets 13,104
--------------------------
Total assets $ 1,680,615
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 44,490
Accrued compensation, commissions and benefits 337,748
Notes payable, current portion 48,111
Income taxes payable 49,273
Deferred tax liabilities 35,387
--------------------------
Total Current Liabilities 515,009
Notes payable, net of current portion 34,182
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 301,752
--------------------------
Total stockholders' equity 1,131,424
--------------------------
Total liabilities and stockholders' equity $ 1,680,615
==========================
See Accompanying Notes to Financial Statements.
F-1
Prime Resources, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
Nine Months Ended September 30, Three Months Ended September 30,
2004 2003 2004 2003
------------- ------------ ------------- -------------
Revenues
Commissions $ 3,557,284 $ 2,383,759 $ 1,212,050 $ 736,527
Investment and business advisory fees 480,249 235,816 155,314 76,617
Interest and dividends 11,687 6,065 3,951 4,997
------------- ------------ ------------- -------------
4,049,220 2,625,640 1,371,315 818,141
Expenses
Commissions 2,299,183 1,196,759 788,398 506,285
Compensation and benefits 951,358 826,636 317,692 255,624
General and administrative 305,836 399,278 101,354 133,750
Occupancy expense 98,970 85,616 34,855 27,757
Depreciation expense 36,711 50,311 12,768 26,594
Interest expense 2,719 4,617 961 2,290
------------- ------------ ------------- -------------
3,694,777 2,563,217 1,256,028 952,300
------------- ------------ ------------- -------------
Net operating income 354,443 62,423 115,287 (134,159)
------------- ------------ ------------- -------------
Gains and losses
Unrealized gains on trading securities 1,368 - 505 -
Other gains (losses) 3,402 27,359 3,402 42,383
------------- ------------ ------------- -------------
Net gains(losses) 4,770 27,359 3,907 42,383
------------- ------------ ------------- -------------
Net income (loss) before income tax expense (benefit) 359,213 89,782 119,194 (91,776)
Income tax expense (benefit) 151,612 62,140 69,564 (40,512)
------------- ------------ ------------- -------------
NET INCOME (LOSS) $ 207,601 $ 27,642 $ 49,630 $ (51,264)
============= ============ ============= =============
Weighted average shares outstanding 2,934,000 2,891,758 2,934,000 2,950,000
Basic and fully diluted net income (loss) per share $ 0.07 0.01 0.02 (0.02)
See Accompanying Notes to Financial Statements.
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 - - - - 207,601 207,601
------------ ------------ ------------ ------------ ------------- ------------
Balance at September 30, 2004 2,934,000 $ - $ 907,427 $ (77,755) $ 301,752 $ 1,131,424
============ ============ ============ ============ ============= ============
See Accompanying Notes to Financial Statements.
F-3
Prime Resources, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30,
2004 2003
------------ ------------
Cash Flows From Operating Activities:
Net income $ 207,601 $ 27,642
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation 36,711 50,311
Write-off of notes receivable from related parties - 5,768
Change in deferred taxes 36,386 51,644
Unrealized gains on trading securities (1,368) -
Offering Costs - 40,336
Changes in assets and liabilities:
Accounts receivable (98,255) (152,156)
Interest receivable (3,000) -
Income tax receivable 33,354 -
Other assets 9,000 (25,050)
Accounts payable 36,166 (47,662)
Income tax payable 24,745 -
Accrued expenses 56,191 (18,664)
------------ ------------
Net cash provided (used) by operating activities 337,531 (67,831)
Cash Flows From Investing Activities:
Purchase of trading securities (105,215) -
Purchases of equipment (27,889) (17,438)
Proceeds from sales of trading securities 3,376 -
------------ ------------
Net cash used in investing activities (129,728) (17,438)
Cash Flows From Financing Activities:
Net proceeds from issuance of common stock - 709,664
Payments on notes payable (9,610) (2,931)
------------ ------------
Net cash provided (used) by financing activities (9,610) 706,733
------------ ------------
Net increase in cash and cash equivalents 198,193 621,464
Cash and cash equivalents at beginning of period 399,403 84,735
------------ ------------
Cash and cash equivalents at end of period $ 597,596 $ 706,199
============ ============
Supplemental Cash Flow Information:
Cash paid for interest $ 2,719 $ 2,327
Cash paid for taxes $ 83,000 $ -
Non Cash Activities:
Purchase of fixed assets with long term note payable $ 30,822 $ -
See Accompanying Notes to Financial Statements.
F-4
Prime Resources, Inc. and Subsidiaries
Notes to Financial Statements (unaudited)
September 30, 2004 and 2003
1. Presentation
The financial statements as of September 30, 2004 and 2003 and for the three and
nine months ended September 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
10KSB filing.
2. Net income per common share
Net income (loss) 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 income per common share is the amount of net income (loss) for the
period available to each share of common stock outstanding during the reporting
period. Diluted net income (loss) per 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 common stock equivalents outstanding
during the period.
No changes in the computation of diluted earnings per share amounts are
presented since the Company currently has no dilutive common stock equivalents.
F-5
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. Forward Looking
Statements are defined within the meaning of Section 27-A of the Securities Act
of 1933 and Section 21-E of the Securities Act of 1934. 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. Forward looking 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 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.
4
The sector breakdown of revenues and profits by the two operating entities for
comparative quarters is generally summarized below:
FBA Analysts:
3rd Quarter 2004 Gross Revenues $1,210,000
Net Profits $ 174,785
3rd Quarter 2003 Gross Revenues $ 723,845
Net Profits $ 17,168
Belsen Getty:
3rd Quarter 2004 Gross Revenues $ 155,879
Net Loss $ (10,276)
3rd Quarter 2003 Gross Revenues $ 107,284
Net Loss $ (61,919)
Management intends to attempt to grow the company through the acquisition of
other insurance providers into the FBA entity, as well as 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. 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.
5
6
To date, the company has expended approximately $243,667 of the offering
proceeds and has approximately $465,997 remaining, which is reported under Item
5 of this report pursuant to 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 continue to realize profits is
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
ultimate success of Prime can be made or implied at this time.
As may be noted from the foregoing financial statements, the company experienced
a profit of $101,851 in calendar year 2003. For the second quarter of 2004 the
company realized an after tax net profit of $92,580 compared to a net loss of
$(47,553) in the comparable period of 2003.
In the current quarter we had net profits of $49,630 on gross revenues of
$1,371,315. The comparable revenues and net loss for the third quarter of 2003
were $818,141 and $(51,264), respectively. 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 only since
2003 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 a long history of 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 twenty (20) full-time employees, two (2)
part-time employees and forty-four (44) affiliated insurance or other agents.
As of September 30, 2004, the outstanding liabilities of the company were
$549,191, which is an increase of $256,540 over the third quarter of 2003.
Liabilities increased due mostly to greater agent commissions payable. The
company has accumulated retained earnings from its inception as a corporate
entity to September 30, 2004 of $301,752.
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;
United Health Care; Intermountain Health Care and Regence Blue Cross.
Commissions for the placement of these products range from approximately 2-20%.
6
The company currently has, as of September 30, 2004, approximately 637 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 but at different rates with the growth of the FBA
business; and for the foreseeable future, will generate revenues substantially
less than the FBA component of the business. As of September 30, 2004, FBA has
approximately 637 customers and Belsen Getty has 416 clients.
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.
The utilization of these offering proceeds has not occurred as rapidly as
initially contemplated due primarily to a paucity of suitable acquisition
candidates. Accordingly, the company has expended more proceeds in acquiring
capital assets, paying for client services and marketing costs than was
initially intended. No warranty or assurance of the success of this proposed
plan of operation can be made, but it is believed that there will remain
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.
7
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, 2004, of approximately $82,293, while
maintaining a net worth of approximately $1,131,424. It is not contemplated that
any significant offering proceeds will be used to develop Prime Retirement LLC.
Item 3. 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 and 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, as of the 1st quarter of 2004, 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 are not
otherwise registered under the Securities and Exchange Act of 1934
[15(d) companies] and whose shares trade only on the Electronic
Bulletin Board.
8
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 the following tabular format:
1. Offering Effective Date
4/16/2003
2. Offering Closed Gross Proceeds Net Proceeds
6/16/2003 $750,000 $709,664
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 $4,371
(ii) Database work & website costs $5,688
(iii) Legal- primarily NASD listing $0
(iv) Working Capital $10,713
(v) Office equipment $3,546
(vi) Marketing $13,810
(vii) New Employees $4,833
(viii) New Marketing Coordinator $8,226
$51,187
Prior Offering Proceeds Expenditures $192,480
(Previously Reported)
Remaining Net Proceeds $465,997
9
(2) Auditors. Child, Sullivan & Co. 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 third quarter of 2004
the trading range of the company's stock was as follows:
High Low
$6.90 $5.50
(4) Annual Meeting. The company held its annual meeting of shareholders
on June, 4, 2004. Wherein the nominated directors were re-elected and the choice
of independent auditors was ratified by majority shareholder vote. Next year's
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
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 15, 2004 By: /s/ Terry M. Deru
Mr. Terry M. Deru
President, Director
Date: November 15, 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: November 15, 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: November 15, 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 September 30, 2004, 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 15, 2004 /s/ Terry M. Deru
Mr. Terry M. Deru
President, Director
Date: November 15, 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