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 MARCH 31, 2005
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 March 31, 2005, No
Par Value. Authorized - 50,000,000 common voting shares.
1
INDEX
Prime Resource, Inc.
For The Quarter Ending March 31, 2005
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet - March 31, 2005 (Unaudited) .
Consolidated Statements of Operations (Unaudited) - For the three
months ended March 31, 2005, and for the three months ended March 31,
2004; .
Consolidated Statements of Shareholders' Equity (Unaudited) as of
March 31, 2005 and December 31, 2004.
Consolidated Statements of Cash Flows (Unaudited) - For the three
months ended March 31, 2005, and for the three months ended March 31,
2004.
Notes to Condensed Financial Statements (Unaudited) - March 31, 2005
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
Consolidated Balance Sheet (Unaudited)
March 31, 2005
ASSETS
Current assets:
Cash $ 841,524
Accounts receivable 472,147
Interest receivable 12,333
Investments in marketable securities 424,817
---------------------
Total current assets 1,750,821
Property and equipment, net 165,977
Notes receivable 40,000
Deferred tax assets 37,233
Other assets 9,001
---------------------
Total assets $ 2,003,032
=====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 49,340
Income taxes payable 17,827
Accrued compensation, commissions and benefits 461,034
Notes payable, current portion 34,572
Deferred tax liabilities 129,829
---------------------
Total current liabilities 692,602
Notes payable, net of current portion 39,382
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 (79,013)
Retained earnings 442,634
---------------------
Total stockholders' equity 1,271,048
---------------------
Total liabilities and stockholders' equity $ 2,003,032
=====================
3
Prime Resource, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
For the Three Months
Ended March 31,
2005 2004
-------------------- ---------------------
Revenues
Commissions $ 1,450,591 $ 1,124,560
Investment and business advisory fees 149,178 151,186
Interest and dividends 5,306 3,804
-------------------- ---------------------
1,605,075 1,279,550
Expenses
Commissions 1,067,339 716,616
Compensation and benefits 349,103 320,453
General and administrative 122,999 120,329
Occupancy expense 10,023 29,318
Depreciation expense 37,138 11,990
Interest expense 1,319 928
-------------------- ---------------------
1,587,921 1,199,634
-------------------- ---------------------
Net operating income 17,154 79,916
Gains and (losses)
Realized gains on trading securities 1,051 -
Unrealized gains on trading securities 84,710 2,802
-------------------- ---------------------
Net gains and (losses) 85,761 2,802
-------------------- ---------------------
Net income before income taxes (benefits) 102,915 82,718
Income tax expense (benefit) 39,460 17,332
-------------------- ---------------------
NET INCOME $ 63,455 $ 65,386
==================== =====================
Weighted average shares outstanding 2,934,000 2,934,000
Basic and fully diluted net income per share $0.02 $0.02
4
Prime Resource, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity (Unaudited)
Common Treasury Retained
Shares Amount Stock Earnings Total
------------ ---------- ------------- ---------- -----------
Balance at December 31, 2003 2,934,000 $ 907,427 $ (77,755) $ 94,151 $ 923,823
Net income - - - 285,028 285,028
------------ ---------- ------------- ---------- -----------
Balance at December 31, 2004 2,934,000 907,427 (77,755) 379,179 1,208,851
Treasury stock - (1,258) - (1,258)
Net income - - - 63,455 63,455
------------ ---------- ------------- ---------- -----------
Balance at March 31, 2005 2,934,000 $ 907,427 $ (79,013) $ 442,634 $ 1,271,048
============ ========== ============= ========== ===========
5
Prime Resource, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended
March 31, March 31,
2005 2004
------------------- ------------------
Cash Flows From Operating Activities:
Net income $ 63,455 $ 65,386
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 37,138 11,990
Unrealized gains on trading securities (84,710) (2,802)
Realized gains on trading securities (1,051) -
Changes in assets and liabilities:
Accounts receivable (37,933) (28,814)
Income taxes receivable 9,770 -
Interest receivable (1,000) (1,000)
Other assets 4,103 (2,794)
Deferred tax assets - 24,814
Accounts payable 8,649 49,463
Income taxes payable 17,827 -
Accrued compensation 74,705 35,533
Deferred tax liabilities 16,915 (7,482)
------------------- ------------------
Net cash provided by operating activities 107,868 144,294
Cash Flows From Investing Activities:
Purchase of trading securities (50,606) (27,851)
Purchase of equipment (40,212) (16,437)
Proceeds from sales of trading securities 2,566 3,376
------------------- ------------------
Net cash used in investing activities (88,252) (40,912)
Cash Flows From Financing Activities:
Payments on notes payable (4,238) (3,202)
Purchase of treasury stock (1,258) -
------------------- ------------------
Net cash used in financing activities (5,496) (3,202)
------------------- ------------------
Net increase in cash and cash equivalents 14,120 100,180
Cash and cash equivalents at beginning of period 827,404 399,403
------------------- ------------------
Cash and cash equivalents at end of period $ 841,524 $ 499,583
=================== ==================
Supplemental Cash Flow Information:
Cash paid for interest $ 1,319 $ 928
Cash paid for taxes - -
6
Prime Resource, Inc. and Subsidiaries
Notes to Financial Statements (Unaudited)
March 31, 2005cial Statements (Unaudited)
1. Presentation
The financial statements as of March 31, 2005 and 2004 and for the three months
ended March 31, 2005 and 2004, 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, 2004. 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 the Company currently has no dilutive common stock equivalents.
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. 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. 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 current 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. FBA is
licensed as an insurance agency. 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 registered investment advisory firm.
Prime Retirement is a potential start-up consulting entity which has not
commenced operations.
The sector breakdown of revenues and profits by the two operating entities for
comparative quarters is generally summarized below:
FBA Analysts:
1st Quarter 2005 Gross Revenues $ 1,447,634
Net Profits $ 131,911
1st Quarter 2004 Gross Revenues $ 1,132,060
Net Profits $ 194,764
8
Belsen Getty:
1st Quarter 2005 Gross Revenues $ 235,253
Net Profits $ 22,796
1st Quarter 2004 Gross Revenues $ 145,530
Net Loss $ (56,808)
Historically, management intended to attempt to grow the company primarily
through the acquisition of other insurance providers into the FBA entity and by
developing new client relationships. Concurrently, Belsen Getty attempted 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.
During the first quarter of 2005 it became increasingly clear to management that
there were a paucity of suitable insurance brokerage acquisition opportunities
that would meet the criteria of materially growing the revenue base of the
company. As a result the management has made a conscious decision to shift
emphasis to explore potential merger or acquisition possibilities in unrelated
areas.
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. Its
stated intention was to employ the majority of these funds for acquisitions to
grow its core insurance services and products as generally discussed above.
During the first quarter of 2005, Prime has determined that these funds may be
better employed enhancing current operations by upgrading programs, systems and
equipment with the balance reserved for funding a more broad based pursuit of
merger or acquisition possibilities. No proceeds of the offering are employed to
pay for costs of day-to-day operations.
To the date of this report, the company has expended approximately $ 392,086.33
of the offering proceeds and has approximately $ 354,855.67 remaining which is
more particularly reported under Item 5 of this report pursuant to SEC Rule 463.
The remaining offering proceeds are yet to be employed and are being reserved
for potential acquisitions and other business expansion and marketing concepts.
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, in this regard, can be made or implied at this time.
9
As may be noted from the foregoing financial statements, the company experienced
a profit of $ 285,028 in calendar year 2004. For the first quarter of 2005 the
company realized an after-tax net profit of $ 63,455 compared to $ 65,386 in the
comparable period of 2004.
In the current quarter we had net profits of $ 63,455 on gross revenues of $
1,605,075. The comparable revenues for the first quarter of 2004 were $
1,124,560 revenues and $ 65,386 profits. We attribute this revenue growth
primarily to the increased marketing of our services and products to new clients
and the expanded agent recruiting due to our "Advantage Program". Also, Prime
has increased its client base and commissions. Profit changes were small 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
had historical profits since 2003. The failure of the company to have a long
history of profits and determination to seek other business activities should be
considered as potential risk factors 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 19 full-time employees, 1 part-time
employee and 51 affiliated commission based insurance or other agents.
As of March 31, 2005, the outstanding current liabilities of the company were $
692,602 which is an increase of $ 106,753 over the year end of 2004. Liabilities
increased due to greater agent commissions, deferred tax liabilities and the
current portion of notes payable. The company has accumulated retained earnings
from its inception as a corporate entity to March 31, 2005 of $ 442,634.
Products and Markets
As generally described above, the revenue sources to Prime are primarily divided
into two categories. FBA offers of a broad line of insurance products and
services with a primary emphasis on group health, disability, dental and life
policies. Belsen Getty offers related investment and planning services.
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%.
The company currently has, as of March 31, 2005, approximately 505 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 human resource
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
10
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 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 March 31, 2005,
FBA has approximately 505 customers and Belsen Getty has 520 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 was believed and anticipated that these proceeds would be
sufficient to implement the general growth plan of the company, as generally
described above, and which included 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.
Since the first quarter of 2005 the company has decided to use the net proceeds
on an as needed basis only to enhance existing business equipment or procedures
and as may become necessary to pursue and analyze subsequent business
opportunities. As of March 31, 2005 there remained $ 354,855.67 of net proceeds.
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 March 31, 2005, of approximately $73,954, while maintaining
a net worth of approximately $ 1,271,048. It is not contemplated that any
significant offering proceeds will be used to develop Prime Retirement LLC.
Risk Factors
There is a significant new risk factor to shareholders as the company
transitions from attempting to expand its core insurance/consulting services to
potential merger and acquisition efforts with unknown entities. Any such future
reorganization would most likely result in a change of management, business, and
the relative share ownership of current shareholders.
Item 3. Controls and Procedures
(a) Prime maintains controls and procedures designed to ensure that
information
11
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 as of the first 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 not registered under the Securities and Exchange Act of
1934 [15(d) companies] and whose shares trade only on the Electronic Bulletin
Board.
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
N/A
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.
Of the net proceeds, the following principal
expenditures have been made during this
Quarter:
12
(i) Software/computer upgrades $ 2,196.92
(ii) Database work & website costs $ 5,235.78
(iii) Legal-primarily NASD listing $
(iv) Working Capital $ 7,303.98
(v) Office equipment $ 2,562.11
(vi) Marketing $ 1,316.51
(vii) New Employees $
(viii) New Marketing Coordinator $
(ix) Client gifts and costs $
-----------
$ 18,615.30
===========
Prior Offering Proceeds Expenditures $ 336,193
(Previously Reported)
Remaining Net Proceeds $ 354,855
(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 first quarter of 2005
the trading range of the company's stock was as follows:
Trading Range
High $6.20 Low $5.00
(4) Annual Meeting. The company held its annual meeting of shareholders
on June 5 th, 2004, wherein the nominated directors were re-elected and the
choice of independent auditors was ratified by majority shareholder vote. No
meeting date in 2005 has presently been set.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
31.1 and 31.2 Certifications under Section 302 of the Sarbanes-Oxley
Act of 2002
13
32.1 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: May 16, 2005 By: /s/ Terry M. Deru
Mr. Terry M. Deru
President, Director
Date: May 16, 2005 By: /s/ Andrew W. Limpert
Mr. Andrew W. Limpert
Director, Treasurer/CFO
14
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: May 16, 2005
/s/ Terry M. Deru
----------------------------------
Mr. Terry M. Deru President
15
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: May 16, 2005
/s/ Andrew W. Limpert
----------------------------------
Mr. Andrew W. Limpert Chief
Financial Officer
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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 March 31, 2005, 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: May 16, 2005 /s/ Terry M. Deru
Mr. Terry M. Deru
President, Director
Date: May 16, 2005 /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.
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