Prima Group International Inc – IPO: ‘S-1/A’ on 7/13/98

As of:  Monday, 7/13/98   ·   Accession #:  950168-98-2298   ·   File #:  333-38059

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Initial Public Offering (IPO):  Pre-Effective Amendment to Registration Statement (General Form)   —   Form S-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Prima Industrie                                       82    508K 
 2: EX-23       Exhibit 23.1                                           1      5K 

S-1/A   —   Prima Industrie
Document Table of Contents

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 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 13, 1998

                                                      REGISTRATION NO. 333-38059
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 6 

TO
FORM S-1

REGISTRATION STATEMENT

UNDER 

THE SECURITIES ACT OF 1933
------------------------
THE PRIMA GROUP INTERNATIONAL, INC. 

(Exact Name Of Registrant As Specified In Its Charter)

                                                                [Download Table]
                                                                            
            DELAWARE                       3541               56-2042959    
  (State or other jurisdiction     (Standard Industrial     (IRS Employer   
of incorporation or organization)  Classification Code   Identification No.)
                                         Number)                            

447 S. SHARON AMITY ROAD, SUITE 250 
CHARLOTTE, NC 28211 
(704) 366-0393
(Address, Telephone No. of principal executive offices) 

JAMES R. CURRIER, SR. 
447 S. SHARON AMITY ROAD, SUITE 250 
CHARLOTTE, NC 28211 
(704) 366-0393
(Name, Address and Telephone No. of Agent for Service)
------------------------
COPIES TO:

C. RICHARD RAYBURN, JR., ESQ.                      KEVIN A. CUDNEY, ESQ.        
W. SCOTT COOPER, ESQ.                        JONATHAN P. FREEDMAN, ESQ. 
RAYBURN, MOON & SMITH, P.A.                        DORSEY & WHITNEY LLP       
227 W. TRADE ST., SUITE 1200                 REPUBLIC PLAZA BLDG., SUITE 4400 
CHARLOTTE, NC 28202                           370 SEVENTEENTH STREET  
(704) 334-0891                             DENVER, CO 80202-5644
                                            (303) 629-3400

------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement
 If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective        
registration statement for the same offering. [ ]                               
  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act   
registration number of the earlier effective registration statement for the same
offering. [ ]                                                                   
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]                                             
     If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of  
1933, check the following box. [ ]                                              

------------------------
CALCULATION OF REGISTRATION FEE 

                                                        [Enlarge/Download Table]

                                                                                     
     TITLE OF EACH CLASS                         PROPOSED MAXIMUM   PROPOSED MAXIMUM 
       OF SECURITIES TO          AMOUNT TO BE     OFFERING PRICE   AGGREGATE OFFERING
        BE REGISTERED           REGISTERED (1)    PER SHARE (2)          PRICE       
Common Stock,                                                                        
  par value $0.01 per share... 2,300,000 shares       $8.50           $19,550,000    


     TITLE OF EACH CLASS          AMOUNT OF                                          
       OF SECURITIES TO          REGISTRATION                                        
        BE REGISTERED            FEE PAID (3)                                        
                                                                                     
Common Stock,                                                                        
  par value $0.01 per share...    $7,938.45                                          

(1) Includes 300,000 shares which the Underwriters have the option to purchase  
to cover over-allotments, if any.                                       
(2) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457.                                               
(3) The Registrant paid $7,938.45 with prior filings of the Registration        
Statement.                                                              

  THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION       
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF  
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME    
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), 
MAY DETERMINE.                                                                  
--------------------------------------------------------------------------------

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A           
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE     
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY    
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES  
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE         
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES 
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR  
TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH      
STATE.                                                                          

 PROSPECTUS (SUBJECT TO COMPLETION, DATED JULY 13, 1998)

2,000,000 SHARES

THE PRIMA GROUP INTERNATIONAL, INC. 
COMMON STOCK

     All of the 2,000,000 shares (the "Shares") of Common Stock, par value $0.01
per share (the "Common Stock"), offered hereby are being sold by The PRIMA Group
International, Inc., a Delaware corporation (the "Company"), the sole assets of 
which consist of 99.98% ownership of Prima Industrie S.p.A. and 60% indirect    
ownership of Prima Electronics S.p.A., each a Societa per Azioni organized under
the laws of the Republic of Italy. It is currently estimated that the Initial   
Public Offering Price will be between $7.50 and $8.50 per share (the "Offering  
Price"). See "Underwriting" for a discussion of the factors to be considered in 
determining the Initial Public Offering Price. The Common Stock has been        
approved for quotation on the NASDAQ National Market under the symbol "TPGI."   

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL
DILUTION. SEE "RISK FACTORS" COMMENCING ON PAGE 6 HEREOF AND "DILUTION."        

  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE          
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED    
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE     
CONTRARY IS A CRIMINAL OFFENSE.                                                 

                                                        [Enlarge/Download Table]

                                                                 UNDERWRITING                 
                                                     PRICE TO   DISCOUNTS AND    PROCEEDS TO  
                                                      PUBLIC   COMMISSIONS (1)  COMPANY (2)(3)
                                                                                              
Per Share...........................................    $             $               $       
Total...............................................    $             $               $       

(1) The Company has agreed to sell to the representatives of the Underwriters   
(the "Representatives") a warrant to purchase 200,000 shares of Common  
    Stock, exercisable at a price per share equal to 120% of the Offering Price.
  In addition, see "Underwriting" for information concerning indemnification
arrangements with the Underwriters and other compensation payable to the
Underwriters.                                                           

(2) Before deducting expenses payable by the Company estimated at $1,100,000 and
a non-accountable expense allowance payable to the Representatives in an
 amount equal to three percent (3%) of the gross proceeds of this Offering
(the "Non-Accountable Expense Allowance"), or approximately $           
($          if the Over-Allotment Option (as herein after defined) is   
exercised in full).                                                     

(3) The Company has granted the Representatives an option, exercisable within 60
    days after the date hereof, to purchase up to 300,000 shares of Common Stock
from the Company, solely to cover over-allotments, if any (the          
    "Over-Allotment Option"). If the Representatives exercise the Over-Allotment
Option in full, the total Price to Public, Underwriting Discounts and   
Commissions and Proceeds to Company will be $      , $      and $      ,
respectively. See "Underwriting."                                       

   The Shares are offered, subject to prior sale, when, as and if delivered to
and accepted by the Underwriters and subject to the approval of certain legal   
matters by counsel for the Underwriters, and certain other conditions. The      
Underwriters reserve the right to withdraw, cancel or modify such offer and to  
reject orders in whole or in part. It is expected that delivery of the Shares   
will be made at the offices of EBI Securities Corporation or through the        
facilities of the Depository Trust Company on or about             , 1998.      

EBI SECURITIES CORPORATION                                                      

MILLENNIUM FINANCIAL GROUP, INC.

                                               JOSEPH CHARLES & ASSOCIATES, INC.

              , 1998

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                                                                [Download Table]
                                                             
                                          CAD/CAM Application
3-D Laser Head                                               

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT 
 TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE   
 OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
PLEASE NOTE THAT, PURSUANT TO REGULATION M, PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, SHORT SALES PRIOR TO THE EFFECTIVE DATE OF
THIS OFFERING ARE PROHIBITED.                                               

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PROSPECTUS SUMMARY

 THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN   
THIS PROSPECTUS. EXCEPT AS OTHERWISE INDICATED, ALL INFORMATION CONTAINED IN    
THIS PROSPECTUS: (I) REFLECTS THE ISSUANCE OF (A) 2,700,000 SHARES OF COMMON    
STOCK TO SUBSTANTIALLY ALL OF THE SHAREHOLDERS OF PRIMA INDUSTRIE S.P.A. ("PRIMA
INDUSTRIE") IN EXCHANGE FOR THEIR STOCK INTERESTS IN PRIMA INDUSTRIE AND (B) 300
SHARES OF COMMON STOCK TO JAMES R. CURRIER, SR. AND GIOVANNI CIAMARONI FOR CASH;
AND (II) ASSUMES NO EXERCISE OF THE OVER-ALLOTMENT OPTION.                      

THE COMPANY 

 The PRIMA Group International, Inc. (the "Company") is an international
provider of software-controlled, robotic, precision laser cutting and welding   
systems (the "Products"). The Company designs, manufactures and sells           
two-dimensional ("2-D") Products that cut and weld shapes on a flat surface, and
three-dimensional ("3-D") Products that trim, punch, slot and weld shaped or    
profiled materials. The Company's Products are used in automotive prototype     
development and the manufacture of consumer durable goods. The Company's        
customers include major European and North American automotive manufacturers    
such as BMW, Fiat, Ford, Chrysler, Mercedes-Benz, Nissan, Peugeot, Renault and  
Volvo. They are also used by Tier One suppliers (suppliers that provide goods   
and services directly to automotive manufacturers) for the manufacture of       
automotive components that are incorporated into the vehicles sold by these     
manufacturers.                                                                  

   Prima Industrie and Prima Electronics are ISO 9001 certified, which means
that they have each obtained certification under an international protocol that 
their respective production processes incorporate quality practices, disciplines
and checks and balances on a fully documented basis. As part of the             
certification process, each company has been examined by a member of the        
International Organization for Standardization to assess compliance with the    
international protocol. The certification provides assurances to customers that 
the required goods or services will fully meet customer expectations. See       
discussion under "Business -- Quality."                                         

   The Company believes that it has a leading position in the market for the
manufacture and sale of 3-D precision laser cutting and welding systems. The    
Company's advantages are based on proprietary processes and technologies for    
automated robotic systems that integrate traditional machine tool equipment with
lasers, laser optics and computer technology. These robotic systems utilize     
electronic process control systems that interface with computer-aided           
engineering/computer-aided design/computer-aided manufacturing ("CAE/CAD/CAM")  
software to convert engineering designs into instructions for machinery         
operations.                                                                     

    The Company believes, based upon its own analysis of industry projections,
that, by 2015, an additional 160 automotive assembly plants will be constructed 
outside Europe, the United States and Japan, representing an increase of 80%    
over the current 200 assembly facilities worldwide. These new plants and their  
Tier One suppliers will be equipped with advanced factory automation systems,   
potentially including those provided by the Company, in place of traditional    
manufacturing and assembly technologies. The Company expects vigorous demand for
its Products in developing markets, as well as accelerating demand within Europe
and the United States, as older automotive assembly operations are retrofitted, 
relocated or replaced.                                                          

  The Company, through Prima Electronics S.p.A. ("Prima Electronics"), its
majority-owned subsidiary, designs and manufactures state-of-the-art software   
and hardware-based industrial process controls for the Company's equipment and  
for other industrial equipment manufacturers. Industrial process controls       
function as the "brains" of machinery, directing all aspects of its operation.  
Prima Electronics' primary outside customer is Atlas Copco Airpower NV ("Atlas  
Copco"), one of the world's leading suppliers of power generation and pneumatic 
equipment. In 1997, sales to Atlas Copco represented approximately 63% of the   
total revenues of Prima Electronics. All such sales were made pursuant to a     
supply contract between Prima Electronics and Atlas Copco. The supply contract  
covers the supply of products until December 31, 2001. Prior to December 31,    
2001, the contract may be terminated only by the mutual consent of Prima        
Electronics and Atlas Copco, unless Prima Electronics fails to perform as       
required under the supply contract. After December 31, 2001, either party has   
the right to terminate the contract on 18 months' notice. See "History of the   
Company -- Prima Electronics."                                                  

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  The Company's goal is to exploit its technological superiority to become
the leading international provider of fully integrated, robotic systems for the 
precision cutting and finishing stages of the manufacturing process. The Company
also intends to become a recognized supplier of industrial process controls for 
the machine tool industry. The specific elements of the Company's strategy to   
achieve these objectives are as follows:                                        

(Bullet) Achieve vertical and horizontal integration through strategic
acquisitions and joint ventures;                    

     (Bullet) Enhance the Company's Products for use in higher volume production
environments;                                       

(Bullet) Maintain and expand its current market share in 2-D and 3-D  
Products through aggressive global marketing;       

(Bullet) Market Prima Electronics' industrial process controls through
worldwide distribution channels;                    

   (Bullet) Develop, as a discrete profit center, comprehensive warranty and
              service, training and support, preventive maintenance programs and
upgrades for the Company's Products; and            

 (Bullet) Expand the licensing of its technology for the manufacture and
sale of the Company's 2-D Products outside Europe.  

THIS OFFERING 

                                                        [Enlarge/Download Table]
                                                                                                                            
Common Stock outstanding prior to this Offering....... 2,700,300 shares                                                     
Common Stock offered.................................. 2,000,000 shares                                                     
Common Stock to be outstanding after this Offering.... 4,580,300 shares (1)                                                 
Use of Offering proceeds.............................. Future acquisitions; equity contribution to subsidiary; marketing and
                                                       sales promotion; redemption of shares; research and development;     
                                                       non-competition payments to certain officers; and working capital.   
Nasdaq National Market symbol......................... TPGI                                                                 

---------------                                                                 

(1) Reflects the redemption by the Company of 120,000 Shares of Common Stock to 
be repurchased by the Company with a portion of the proceeds of this    
Offering. See "Use of Proceeds."                                        

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SUMMARY CONSOLIDATED FINANCIAL DATA(1)
(IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        [Enlarge/Download Table]

                                                      THREE MONTHS                                                         
                                                         ENDED                                                             
                                                       MARCH 31,                    YEARS ENDED DECEMBER 31,               
                                                    ----------------   --------------------------------------------------- 
                                                     1998      1997     1997       1996       1995       1994       1993   
                                                    ------    ------   -------    -------    -------    -------    ------- 
                                                                                                                           
CONSOLIDATED STATEMENT OF OPERATIONS DATA:                                                                                 
Total revenues..................................... $9,734    $6,659   $44,186    $42,315    $38,560    $28,396    $28,779 
Operating income (loss)............................    677        (7)    2,181      1,411         75     (3,798)    (1,304)
Gain on sale of assets.............................     11         2       441      1,059         --         --         -- 
Net income (loss) (2)..............................    281      (223)    1,363      1,335     (2,400)    (5,270)      (765)
Pro forma earnings (loss) per share (2)(3).........    .10      (.08)      .50        .49      (1.40)     (2.70)      (.38)
Pro forma weighted average common and common                                                                               
  equivalent shares outstanding (3)................  2,700     2,700     2,700      2,700      1,721      1,954      2,033 

                                                        [Enlarge/Download Table]

                                                                        MARCH 31, 1998       
                                                                   ------------------------  
                                                                                    AS       
                                                                   ACTUAL      ADJUSTED(4)   
                                                                   -------     ------------  
                                                                                             
CONSOLIDATED BALANCE SHEET DATA:                                                             
Cash and cash equivalents......................................... $   927       $  9,383    
Working capital...................................................   6,195         18,651    
Total assets......................................................  35,192         43,372    
Total liabilities.................................................  29,569         25,569    
Stockholders' equity..............................................   5,623         17,803    

---------------                                                                 

(1) This financial data reflects the financial condition and operations of Prima
 Industrie prior to the acquisition by the Company of substantially all of
the issued and outstanding capital stock of Prima Industrie.            

(2) Net income includes gain on sale of equipment of $427,000 (net of tax) in   
   1997 and net gain on sale of subsidiaries of $766,000 (net of tax) in 1996.
  These items are considered by management to be nonrecurring. The effect on
    earnings per share of these amounts (net of tax) is $.16 in 1997 and $.28 in
1996.                                                                   

(3) The historical share and per share amounts have been retroactively restated 
 to reflect the exchange of substantially all of the outstanding shares of
  Prima Industrie for 2,700,000 shares of Common Stock of the Company, which
   occurred on April 23, 1998. See Note 15 to the financial statements at page
F-22.                                                                   

(4) Adjusted to reflect (a) the sale by the Company of 2,000,000 Shares offered 
hereby at an assumed Offering Price of $8.00 per share, after deducting 
underwriting discounts and commissions and estimated offering expenses  
payable by the Company, (b) application of the estimated net proceeds   
therefrom as described herein, and (c) the acquisition by the Company of
substantially all of the issued and outstanding capital stock of Prima  
Industrie. See "Use of Proceeds" and "Capitalization."                  

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RISK FACTORS

    AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK,
INCLUDING RISKS RELATING TO THE COMPANY, THE INDUSTRIES IN WHICH THE COMPANY    
OPERATES AND THE SECURITIES MARKETS IN GENERAL. IN ADDITION TO OTHER INFORMATION
CONTAINED IN THIS PROSPECTUS, THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED   
CAREFULLY IN EVALUATING THE COMPANY AND ITS BUSINESS BEFORE PURCHASING THE      
SHARES OFFERED HEREBY. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT 
INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER        
MATERIALLY FROM THOSE DESCRIBED IN SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT
MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED  
IN THE FOLLOWING RISK FACTORS.                                                  

   DEPENDENCE ON AUTOMOTIVE INDUSTRY. A significant portion of the Company's
revenues are derived from the automotive industry. The automotive industry is   
cyclical and has experienced significant periodic downturns, which often have   
had an adverse effect on the demand for capital goods equipment used in the     
production of automobiles. The Company believes that downturns in the automotive
industry will continue to occur in the future and may result in decreased demand
for the Company's Products. At the same time, however, the automotive industry  
tends to exempt from capital expenditure cutbacks capital goods that increase   
productivity. Furthermore, since the Company sells its Products in both Europe  
and North America, it is unlikely that these markets will experience the effects
of an economic downturn simultaneously, thereby moderating the Company's        
exposure to adverse automotive business cycles. The Company has significant     
sales of its 2-D Products to customers in other business segments outside of the
automotive industry that will further moderate the effects of the adverse       
automotive cycles; however, the benefit from non-automotive business may lessen,
as the Company intends to focus product and technology development activities on
the automotive industry for a substantial portion of its future growth. In      
addition, the Company believes that its ability to reduce expenses in a future  
downturn will be constrained by the need for continual investment in research   
and development and the need to maintain extensive ongoing customer service and 
support capability. Accordingly, any downturn in the automotive industry could  
have a material adverse effect on the Company's business, financial condition   
and results of operations.                                                      

RISKS OF DOING BUSINESS IN ITALY; RISKS OF UNENFORCEABILITY OF CIVIL  
LIABILITIES AGAINST FOREIGN PERSONS. While the Company's corporate headquarters 
are in the United States, the majority of its operations are carried on in or   
near Turin, Italy, and a substantial number of the Company's officers and       
directors reside in Italy and other countries in Europe. Accordingly, the       
operations of the Company will be subject to political, social and economic     
conditions in Italy. Italy has two different economic regions -- the North,     
starting at Rome and extending to the northern borders with France, Switzerland 
and Austria, and the South, extending from Rome southward, and including Sicily 
and Sardinia. Northern Italy is one of Europe's richest regions, while Southern 
Italy is one of its poorest. The Italian government continues to confront the   
problem of providing aid and social welfare programs to the residents of the    
South without increasing the burden on the comparatively wealthy residents of   
the North.                                                                      

Another factor in the North/South regional controversy in Italy is the
phasing-out of special tax relief for manufacturers located in the South, due to
EMU rules on state aid. The institution by the Italian government of tax, labor 
and social security programs that cover Northern and the Southern Italy for the 
most part equally has resulted in higher taxes and an unpredictable regulatory  
environment.                                                                    

A substantial number of the directors and executive officers of Prima 
Industrie and Prima Electronics, as well as those of the Company, reside outside
the United States (principally in the Republic of Italy). All or a substantial  
portion of the assets of the Company and of these persons are located outside   
the United States. As a result, it may not be possible for investors to effect  
service of process within the United States upon such persons or to enforce     
against them judgments obtained in United States courts predicated upon the     
civil liability provisions of the Federal securities laws of the United States. 
The Company has been advised by its Italian counsel, Chiomenti Studio Legale,   
that (a) enforceability in Italy, in actions for enforcement of final judgments 
of United States courts, of civil liabilities predicated upon the Federal       
securities laws of the United States is subject, among other things, to the     
Italian courts' determination that enforcement would not violate Italian public 
policy and (b) in original actions in Italy to enforce such liabilities, an     
Italian court would examine the merits of the claims in accordance with Italian 
procedure and applicable conflict of laws rules and would not necessarily apply 
United States substantive laws.                                                 

Prima Industrie and Prima Electronics are each an Italian Societa per 
Azioni (an "S.p.A."). The S.p.A. is the form of organization closest to a U.S.  
corporation; however, under Italian law, if an S.p.A. has a single shareholder, 
then the single shareholder will, in the case of the insolvency of the S.p.A.,  
be liable for all of the debts of the S.p.A. incurred during the time when it   
was the single shareholder. At present, there are at least two independent      
shareholders of Prima Industrie and Prima Electronics. However, there is some   
uncertainty under Italian law as to this issue, and there can be no assurance   
that the current structure will allow the Company to avoid liability for the    
debts of Prima Industrie in the event that Prima                                

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Industrie becomes insolvent. Moreover, if the Company were to acquire all of the
share capital of Prima Industrie, it would be possible that the assets of the   
Company would be subject to the liabilities of Prima Industrie arising after the
date of this Prospectus in the event of the insolvency of Prima Industrie. See  
"History of the Company."                                                       

  DEPENDENCE UPON THE CONTINUATION OF CHANGING TRENDS IN THE MANUFACTURING
INDUSTRY. Historically, manufacturers have utilized tool and die technology both
to stamp the shape of a component and to cut and finish its details. The use of 
precision laser cutting and welding systems as a replacement for tool and die   
technology in the precision cutting and finishing stages of manufacturing has   
been limited to prototype development and relatively low volume production runs 
because these systems do not process components as quickly as do tool and die   
systems. The Company believes that certain trends in the manufacturing industry 
are causing an increasing emphasis on lower volume production runs and a        
decreasing emphasis on processing speed for precision cutting and finishing. A  
key component of the Company's strategy is to take advantage of the continued   
and expanded use of precision laser cutting and welding systems as a result of  
these trends. There can be no assurance, however, that these trends will        
continue or, indeed, that they will not reverse course. The deceleration or     
reversal of any of these trends could have a material adverse effect on the     
Company's growth strategy, and, therefore, its business, financial condition and
results of operations. See "Business -- Strategy" and " -- the Automotive       
Fabrication Process."                                                           

    HISTORIC LACK OF PROFITABILITY. Prior to 1996, Prima Industrie experienced
several years of net operating losses. These losses were financed by capital    
infusions and loans. A substantial part of Prima Industrie's profits in 1996 are
attributable to gains resulting from the sale of Sapri S.p.A., a subsidiary of  
Prima Industrie, rather than from ongoing operations. While Prima Industrie has 
changed its business plan to focus on precision laser cutting and welding       
systems and experienced increased profitability in 1997 and in the first quarter
of 1998, there can be no assurance that this business plan will continue to     
produce profitable results. See "History of the Company," "Management's         
Discussion and Analysis of Financial Condition and Results of Operation" and    
"Business -- Strategy."                                                         

RISK RELATING TO FUTURE ACQUISITIONS. The Company will pursue future  
acquisitions in order to enable it to achieve horizontal and vertical           
integration through the acquisition of critical material supplies, to expand    
into new geographic markets, to add new customers, and to provide new products, 
manufacturing and service capabilities. Integration of any future acquisitions  
will place a strain upon the Company's financial and managerial resources. The  
full benefits of any future acquisitions will require: (i) the integration of   
administrative, finance, purchasing, engineering, sales and marketing           
organizations; (ii) the coordination of production efforts; and (iii) the       
implementation of appropriate operational, financial and management systems and 
controls. There can be no assurance that the Company will be able to integrate  
these operations successfully. If the Company fails to integrate successfully   
any future acquisitions, the Company's business could be adversely affected.    
Moreover, while the Company will continue to explore acquisitions of businesses 
and assets that it believes are compatible with its business strategy, and is   
evaluating possible acquisition opportunities, as of the date of this           
Prospectus, the Company has no agreements, commitments, understandings or       
arrangements with respect to any potential acquisition. Consequently, there can 
be no assurance that the Company will be able to reach agreements with any      
attractive acquisition candidates and there is no basis for investors in the    
Offering to evaluate the specific merits or risks of any potential acquisitions 
that the Company may undertake following the consummation of the Offering.      
Moreover, under Delaware law, various forms of business combinations can be     
effected without shareholder approval and, accordingly, investors in the        
Offering will, in all likelihood, neither receive nor otherwise have the        
opportunity to evaluate any financial or other information which may be made    
available to the Company in the future in connection with any acquisition and   
must rely entirely upon the ability of management in selecting, structuring and 
consummating acquisitions that are consistent with the Company's business       
objectives. Although the Company will endeavor to evaluate the risks inherent in
a particular acquisition, there can be no assurance that the Company will       
properly ascertain or assess all significant risk factors prior to consummating 
any acquisition. See "Business -- Strategy."                                    

  Future acquisitions may involve additional issuances of shares of Common
Stock or preferred stock to the owners of the acquired businesses and may       
involve the incurrence of substantial debt financing. The issuance of additional
shares may adversely affect the market price of the Common Stock. Debt financing
may require the Company to pay significant amounts as interest and principal    
payments, thus reducing the resources available to expand its existing          
businesses. See "Business -- Strategy."                                         

  RISKS ASSOCIATED WITH LICENSING. The Company's strategy for expansion of
its market for 2-D Products is to license its technology to other entities for  
the manufacture and distribution of those Products in geographic regions in     
which the Company has not achieved market penetration. See                      
"Business -- Strategy." Since a license will grant to the licensee exclusive    
rights in a specified territory outside of Europe, the success of the Company's 
strategy will depend on the ability of the Company's management to select       
licensees that will aggressively promote the products made under such licenses. 
While the                                                                       

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Company expects to enter into license agreements that give the Company certain  
termination rights if the licensee is not performing as required, the ability of
the Company to enforce those rights will depend upon the laws and the judicial  
system of the territory in which the licensee is resident.                      

   The Company has entered into licenses with Strippit, Inc. ("Strippit") to
manufacture and market the Company's 2-D Products in North America and with     
Beijing Machinery and Electricity Institute to market certain of the Company's  
2-D Products in China (the "China License"). Strippit is a wholly owned         
subsidiary of Idex Corporation. Idex Corporation has announced that it is       
offering to sell Strippit and has commenced a process to solicit bids for the   
acquisition of Strippit. The purchase of Strippit by an entity with interests   
adverse to those of the Company could have a material adverse effect on the     
Company's licensing activities in North America. Accordingly, the Company is    
monitoring the auction process. See "Business -- Licensing." The implementation 
of the China License has been delayed, because it must be approved by the       
government of the People's Republic of China. There can be no assurance that the
requisite approval will be forthcoming for consummation of the China License and
for the payments required thereunder. Delays in the approval of the China       
License, and the payment of royalties required to be made thereunder, could     
adversely affect the Company's financial performance in 1998.                   

  COMPETITION. To remain competitive, the Company believes that it will be
required to manufacture and deliver products to customers on a timely basis with
high quality and that it will also be required to maintain a high level of      
capital commitment to research and development and to sales and marketing. There
can be no assurance that the Company will have sufficient resources to continue 
to make the investments necessary to maintain its competitive position. In      
addition, there can be no assurance that the Company's larger competitors in the
2-D market place, which have substantially greater financial resources than the 
Company, will not attempt to enter the 3-D marketplace. The chances of          
competitors with a larger capital base entering the 3-D market will increase if 
the 3-D market expands at the rate that the Company expects. See "Business --   
Competition."                                                                   

    Currency devaluation resulting from economic conditions in Asia may result
in a competitive advantage to certain competitors located in Asia, especially   
Japan. This devaluation may cause those competitors' products to be             
significantly less expensive than the products manufactured by the Company. The 
Company is unable to estimate the effect that currency devaluation may have on  
the Company's competitive position.                                             

CURRENCY RISKS. The Company's profitability has been affected by the  
changes in the relative values of the Italian Lira ("Lit"), the German Deutsche 
Mark ("DM") and the U.S. Dollar ("Dollar"). The Company purchases various       
components of its Products, including most of its lasers, in DM denominated     
transactions. It also has had significant delays in collecting its accounts     
receivable. These factors exacerbate the effects that result from the           
traditional volatility of the Lit. The planned conversion under the EMU to a    
single currency in January of 1999 will affect the Company's profitability as   
the conversion occurs, but the effect cannot be predicted. As the Company       
attempts to increase total revenues by new or increased sales in North and South
America and Asia, currency risks will continue to affect its profitability,     
although management expects that these non-European transactions will be        
denominated in Dollars. For as long as the Lit remains volatile against the     
Dollar and other important trading currencies, the Company will attempt to      
minimize exposure to exchange rate fluctuations by purchasing goods and services
in currencies with more favorable exchange rates. Management will continue to   
monitor the Company's exposure to currency fluctuations and use forward currency
purchases to minimize the effect of these fluctuations; however, exchange rate  
fluctuations may have a material adverse effect on the Company's business,      
financial condition and results of operations. In the future, the Company may be
required to sell its products in other currencies, making the management of     
currency fluctuations more difficult and exposing the Company to greater risks  
in this regard. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."                  

 RISKS RELATING TO EXPANSION OF FOREIGN OPERATIONS. The Company's growth
strategy involves an aggressive expansion of its business in Europe, the        
Americas and the Pacific Rim. There can be no assurance that the Company will be
able to manage this expansion effectively or that the Company's investment in   
these activities will enable it to compete successfully in these markets or to  
meet the service and support needs of its customers. Additionally, a significant
portion of the Company's sales and operations could be subject to certain       
additional risks as a result of continued expansion into foreign markets,       
including tariffs and other barriers, difficulties in staffing and managing     
foreign subsidiary and branch operations, currency exchange risks and exchange  
controls, potentially adverse tax consequences and the possibility of difficulty
in collecting its accounts receivable. Further, while the Company is presently  
in full compliance with export controls, these rules could change in the future 
and make it more expensive, difficult or impossible for the Company to export   
its products to various countries. There can be no assurance that any of these  
factors will not have a material adverse effect on the Company's business,      
financial condition and results of operations. See "Business."                  

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  DEPENDENCE ON KEY SUPPLIERS. Certain of the components and subassemblies
included in the Company's products are obtained from a limited group of         
suppliers. In particular, there are few alternative sources for certain laser   
and optical components used in the Company's Products. In addition, the Company 
is increasingly outsourcing the manufacture of subassemblies. In the fourth     
quarter of 1997, the Company sold, through an agreement with a leasing company, 
certain machine tools and equipment to Macromeccanica S.p.A. ("Macromeccanica") 
and the Company has entered into a supply agreement with Macromeccanica for it  
to provide certain subassemblies to the Company. See "Management's Discussion   
and Analysis of Financial Condition and Results of Operations -- Overview." If  
the Company is unable to obtain a sufficient quantity of components or          
subassemblies, or if such items do not meet the Company's quality standards,    
delays or reductions in product shipments could occur, which would have a       
material adverse effect on the Company's business, financial condition and      
results of operations. See "Business -- Manufacturing."                         

 GOVERNMENTAL REGULATION. The Company's products are subject to numerous
foreign government standards and regulations that are regularly being amended.  
Although the Company endeavors to meet foreign technical and regulatory         
standards, there can be no assurance that the Company's products will continue  
to comply with foreign government standards and regulations, or changes thereto,
or that it will be cost-effective for the Company to redesign its products to   
comply with such standards and regulations. Although Prima Industrie and Prima  
Electronics have each received ISO 9001 certification, the inability of the     
Company to design or redesign products to comply with foreign standards would   
have a material adverse effect on the Company's business, financial condition   
and results of operations. See "Business -- Manufacturing" and " -- Quality."   

RAPID TECHNOLOGICAL CHANGE; ACCEPTANCE OF NEW PRODUCT INTRODUCTIONS.  
Precision laser cutting and welding equipment and processes are subject to rapid
technological change. The Company believes that its future success will depend  
in part upon its ability to continue to enhance its products and to develop and 
manufacture new products with improved capabilities. In order to enhance and    
improve its products and develop new products, among other things, the Company  
must work closely with its customers to integrate its laser cutting and welding 
equipment into its customer's production systems. There can be no assurance that
future technologies will not render the Company's Products obsolete or that the 
Company will be able to develop and introduce new Products or enhancements to   
its existing products and processes in a timely manner that satisfy customer    
needs or achieve market acceptance. The failure to do so could materially       
adversely affect the Company's business, financial condition and results of     
operations. See "Business -- Research and Development."                         

RISKS ASSOCIATED WITH PROFIT MARGINS ON NEW PRODUCTS. The Company has 
historically experienced low profit margins with the introduction of new        
Products and for a substantial period thereafter. The inability of the Company  
to improve profit margins for new Products will adversely affect the Company's  
profitability. See "Management's Discussion and Analysis of Financial Condition 
and Results of Operations -- Results of Operations."                            

 RISKS ASSOCIATED WITH RAPID AND SUBSTANTIAL MANUFACTURING EXPANSION. To
meet current and anticipated demand for its Products, the Company must          
substantially increase the rate by which it manufactures and tests its Products 
by the end of 1999. Additionally, the Company may underestimate the costs       
required to increase its manufacturing capacity, which may materially adversely 
affect the Company's business, financial condition and results of operations. In
addition to increasing manufacturing and assembly capacity at its facilities in 
Turin, Italy, the Company plans to commence assembly operations in North America
within two years. However, there can be no assurance that the Company will be   
successful and commence assembly operations on schedule. The failure of the     
Company to commence assembly operations on schedule could have a material       
adverse effect on the Company's business, financial condition and results of    
operations. See "Business -- Manufacturing."                                    

     LIKELY FLUCTUATIONS IN QUARTERLY OPERATING RESULTS. The Company's quarterly
operating results have fluctuated in the past and are likely to fluctuate       
significantly in the future, depending upon a variety of factors. Such factors  
may include: the demand for precision laser cutting and welding systems in      
general and, in particular, for the Company's Products; the timing and size of  
orders from the Company's base of customers; the ability of the Company to      
manufacture, test and deliver its Products in a timely and cost-effective       
manner; the timing of new product announcements and releases by the Company and 
its competitors; the entry of new competitors into the market for precision     
laser cutting and welding equipment; the ability of the Company to manage its   
costs as it begins to supply its Products in larger volumes; and the Company's  
ability to manage effectively its exposure to foreign currency exchange rate    
fluctuations.                                                                   

The Company derives substantial portions of its quarterly and annual  
revenues from the sales of its Products, and these revenues are subject to      
historical seasonality. The Company's fourth quarter is typically its strongest 
revenue quarter. By contrast, in the first and third quarters of each fiscal    
year, the Company historically has experienced lower revenues as a result of    
extended European holidays during Christmas and New Year's and the traditional  
European month-long summer                                                      

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holiday, typically taken in August. In addition, the timing of the recognition  
of revenue from an order for one or a small number of systems can have a        
significant impact on the Company's total revenues and operating results for a  
particular period. In addition, the Company's operating results for a particular
period could be adversely affected by the cancellation, re-scheduling or delay  
of orders for a small number of systems, or even one system. The Company's      
expense levels are based, in large part, on the Company's expectations as to    
future revenues and are, therefore, relatively fixed in the short term. If      
revenues fall below expectations, net income will be disproportionately and     
adversely affected. The impact of these and other factors on the Company's      
revenues and operating results in any future period cannot be forecast with any 
degree of certainty. See "Business -- Backlog." Due to the foregoing factors, as
well as other unanticipated factors, it is likely that, in some future quarter, 
the Company's operating results will be below the expectations of public market 
analysts or investors. In such event, the price of the Common Stock will be     
materially adversely affected. See "Management's Discussion and Analysis of     
Financial Condition and Results of Operations."                                 

NEED TO MANAGE GROWTH. The Company intends to expand its operations   
substantially following the completion of this Offering. This expansion may     
place a significant strain on the Company's management, financial and other     
resources. Managing the growth of the Company's business, if such growth occurs,
will require the Company to continue to improve and expand its management,      
operational and financial systems, procedures and controls, including accounting
and other internal management systems, and its quality control, delivery and    
field service and customer support capabilities. There can be no assurance that 
the Company will be able to successfully expand its operations, effect timely   
deliveries of its Products or maintain the product quality and reliability      
required by its customers. The Company has experienced, and may continue to     
experience, delays in deliveries to customers as a result of its inability to   
increase its manufacturing capacity fast enough to meet demand. Any failure to  
manage the Company's growth, if such growth occurs, would materially adversely  
affect the Company's business, financial condition and results of operations.   

     NEED TO EXPAND FIELD SERVICE AND SUPPORT ORGANIZATION. The Company believes
that the need to provide fast and responsive service to the automotive industry 
and automotive equipment suppliers is critical to the Company's success.        
Therefore, the Company believes it is essential to establish, through its own   
personnel or through third-party personnel, a rapid response capability to      
service its Products throughout the world. There can be no assurance that the   
Company will be able to attract qualified personnel to establish these          
operations successfully or that the costs of such operations will not be        
excessive. A failure to implement this plan effectively could have a material   
adverse effect on the Company's business, financial condition and results of    
operations. See "Business -- Strategy."                                         

    AVAILABILITY OF FUTURE FINANCING. The Company requires substantial working
capital to fund its business, particularly to finance inventories, accounts     
receivable and capital expenditures. The Company believes that the net proceeds 
of this Offering, together with anticipated cash provided by operations and     
available lines of credit, will be adequate to meet its cash needs for at least 
the next 12 months. The Company's future capital requirements will depend on    
many factors, including the rate of the Company's manufacturing expansion, the  
timing and extent of spending to support product development efforts and        
expansion of sales and marketing and field service and support, the timing of   
introductions of new products and enhancements to existing Products, and market 
acceptance of the Company's Products. The Company expects that it may need to   
raise additional equity or debt financing in the future. There can be no        
assurance that additional equity or debt financing, if required, will be        
available on acceptable terms or at all. See "Management's Discussion and       
Analysis of Financial Condition and Results of Operations -- Liquidity and      
Capital Resources."                                                             

     UNCERTAINTY REGARDING PROTECTION OF PROPRIETARY TECHNOLOGY AND PATENTS. The
Company relies upon patent and other intellectual property protection, including
trademark, copyright and, more recently, trade secret protection. The Company   
owns 11 United States, European and Japanese patents covering certain aspects of
technology associated with laser cutting and welding. These patents expire on   
dates beginning in November 2002 and ending in January 2014. The Company has    
chosen to maintain patent protection primarily in its core lines of business.   
There can be no assurance that any issued patents will provide the Company with 
competitive advantages or that such patents will not be challenged by third     
parties, or that the patents of others will not have an adverse effect on the   
Company's ability to do business. Additionally, because foreign patents may     
afford less protection under foreign law than is available under United States  
patent law, there can be no assurance that any foreign patents issued to the    
Company will adequately protect the Company's proprietary information.          
Furthermore, there can be no assurance that others will not independently       
develop similar products, duplicate the Company's products or, if patents are   
issued to the Company, design products that duplicate the uses of the Company's 
Products without violating its patents.                                         

     Others may have filed, and in the future may file, patent applications that
are similar or identical to those of the Company. No assurance can be given that
any such patent application will not have priority over patent applications     
filed by the                                                                    

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Company. Determining priority for such inventions could result in substantial   
cost to the Company, and there can be no assurance as to the outcome of any such
proceeding.                                                                     

  Within the past few years, the Company also has begun to rely upon trade
secret protection, including employee and third-party confidentiality           
agreements. Despite these efforts, there can be no assurance that others will   
not independently develop substantially equivalent proprietary information and  
techniques or otherwise gain access to the Company's trade secrets and          
technology or that the Company can meaningfully protect its trade secrets.      

DEPENDENCE ON KEY PERSONNEL. The Company is highly dependent on the   
services of a number of key employees in various areas, including engineering,  
research and development, sales and marketing and manufacturing. The Company has
in the past experienced difficulty in hiring personnel, including experts in    
laser technology. The Company believes that, to a large extent, its future      
success will depend upon the continued service of its engineering, research and 
development, sales and marketing and manufacturing personnel and on its ability 
to attract and retain highly skilled personnel in each of these areas as the    
Company expands its operations. The Company does not intend to obtain key man   
life insurance on its executive officers. The Company has entered into          
employment agreements with certain of its key executives, but there is no       
assurance that the Company will be able to retain other key employees. The      
failure of the Company to hire and retain such personnel or recruit replacement 
personnel could have a material adverse effect on the Company's business,       
financial condition and results of operation. See "Business -- Employees," and  
"Management -- Employment Agreements."                                          

   RISK OF PRODUCT LIABILITY CLAIMS AND PRODUCT RECALLS. The Company faces a
significant risk of exposure to product liability claims in the event that the  
use of its Products results in personal injury or death, and there can be no    
assurance that the Company will not experience material product liability losses
in the future. The Company maintains insurance against product liability claims 
in the amount of $1.0 million per occurrence and $1.5 million in the aggregate, 
which it believes is sufficient in light of historical loss experience and      
industry custom. There can be no assurance, however, that such coverage will    
continue to be available on terms acceptable to the Company or that such        
coverage will be adequate for liabilities actually incurred. In addition, in the
event that any of the Company's products prove to be defective, the Company may 
be required to recall or redesign such products. A successful claim brought     
against the Company in excess of available insurance coverage, or any claim or  
product recall, especially one that results in significant adverse publicity    
against the Company, could have a material adverse effect on the Company's      
business, financial condition and results of operations.                        

YEAR 2000 AND EMU COMPLIANCE ISSUES. In 1998, the Company intends to  
replace the information technology systems at Prima Industrie and Prima         
Electronics. The Company has allocated $565,000 of the net proceeds of this     
Offering for hardware, software, installation, and training expenditures for new
information technology systems. The Enterprise Resource Planning software       
programs that the Company intends to purchase are designed to be Year 2000 and  
EMU compliant. The failure by the Company to implement this software and to     
convert its existing data for use with this software will adversely affect the  
Company's business, financial condition and results of operations and may cause 
the reported financial condition to not be indicative of future operating       
results or financial condition.                                                 

     The Company's Products utilize Microsoft WindowsT and Windows NTT software.
Accordingly, any Year 2000 and EMU compliance issues relating to use of the     
Company's Products should be resolved by improvements made by Microsoft         
Corporation to these software programs. To the extent that customers fail to    
upgrade these software programs as necessary, or that Microsoft Corporation     
fails to make necessary improvements, the Company may be subject to warranty    
claims with respect to its Products. The Company does not anticipate significant
exposure with respect to such claims.                                           

   RISKS OF HOLDING COMPANY STRUCTURE. The Company presently conducts all of
its operations through Prima Industrie and its subsidiaries, including Prima    
Electronics. Accordingly, the primary internal source of the Company's cash is  
dividends and other distributions from its subsidiaries, as well as             
inter-company advances. The ability of Prima Industrie and its subsidiaries to  
make distributions to the Company is subject to their having sufficient funds   
legally available for payment thereof which are not needed to fund operations,  
obligations or other business plans. The laws of the Republic of Italy provide  
generally that dividends may be declared out of yearly profits, subject to      
maintenance of registered capital and required reserves and after the recovery  
of accumulated losses. As a stockholder of Prima Industrie, the Company's claims
as such will generally rank junior to all other creditors of and claimants      
against Prima Industrie.                                                        

     SHARES ELIGIBLE FOR FUTURE SALE. Sales of a substantial number of shares of
Common Stock in the public market following this Offering could adversely affect
the market price for the Company's Common Stock. Upon completion of this        
Offering, the 2,000,000 Shares sold in this Offering will be freely tradeable   
without restriction or further registration under the Securities Act of 1933, as
amended (the "Securities Act"), by persons other than "affiliates" of the       
Company. The remaining                                                          

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2,580,300 shares of Common Stock to be outstanding following the Offering will  
be "restricted securities" within the meaning of Rule 144 promulgated under the 
Securities Act ("Rule 144") and may not be sold in the absence of registration  
under the Securities Act unless an exemption from registration is available,    
including the exemption provided by Rule 144. In addition, all of the holders of
such shares have executed lock-up agreements pursuant to which they have each   
agreed not to sell or otherwise dispose of any of such shares for a period of   
two years after the date of this Prospectus without the prior written consent of
both EBI Securities Corporation and the Company; provided, that EBI Securities  
Corporation will waive the restrictions contained in such agreements, on a pro  
rata basis to all parties subject to such agreements, if the Company undertakes 
a public offering or private placement of Common Stock and the underwriter or   
placement agent for such public offering or private placement agrees that the   
shares of Common Stock for which such restrictions are waived will be sold as   
part of the orderly distribution of securities to be sold in such public        
offering or private placement. Following the expiration of such lock-up         
agreements, such shares will become available for resale in the public market,  
subject to the volume limitations, holding periods and other restrictions of    
Rule 144. See "Shares Eligible for Future Sale."                                

  NO PRIOR MARKET; POSSIBLE LOW VOLUME AND HIGH VOLATILITY OF STOCK PRICE.
Prior to this Offering, there has been no public market for the Common Stock,   
and there can be no assurance that an active public market will develop or be   
sustained after this Offering. The Offering Price has been determined by        
negotiations among the Company and the representatives of the Underwriters and  
does not necessarily reflect the market price of the Common Stock after this    
Offering. The trading price of the Common Stock could be subject to wide        
fluctuations in response to quarterly variations in operating results,          
announcements of technological innovations or new products by the Company or its
competitors, as well as other events or factors, such as the issuance of shares 
of Common Stock to consummate an acquisition. Moreover, certain Italian         
financial institutions have expressed an interest in purchasing Shares to be    
sold in the Offering. The concentration of ownership resulting from such sales  
to Italian financial institutions may substantially decrease the trading volume 
of the Common Stock and, therefore, increase the volatility of its trading      
price. In addition, the equity markets have from time to time experienced       
extreme price and volume fluctuations which have particularly affected the      
market price of many high technology companies and which often have been        
unrelated to the operating performance of these companies. These broad market   
fluctuations may adversely affect the market price of the Company's Common      
Stock. See "Underwriting."                                                      

   DILUTION. Purchasers of the Shares offered by this Prospectus will suffer
immediate and substantial dilution of 53.4% of their investment in the Shares   
from the Offering Price (assuming an Offering Price of $8.00 per share). See    
"Dilution."                                                                     

 AVAILABILITY OF PREFERRED STOCK FOR ISSUANCE. The Board of Directors is
authorized to issue, without stockholder approval, up to 1,000,000 shares of    
preferred stock with voting, conversion and other rights and preferences that   
may be superior to those of the Common Stock and that could adversely affect the
voting power or other rights of the holders of Common Stock. The issuance of    
Preferred Stock or of rights to purchase the Company's preferred stock could be 
used to discourage an unsolicited acquisition proposal. See "Description of     
Capital Stock -- Preferred Stock."                                              

 RISKS ASSOCIATED WITH THE REPRESENTATIVES' INFLUENCE ON THE MARKET. The
Representatives may from time to time following the completion of this Offering 
act as market-makers and otherwise effect transactions in the Common Stock. The 
Representatives are not legally obligated by law or by contract to continue such
trading, which may be discontinued at any time. Any such cessation could have a 
material effect upon the price and liquidity of the Common stock. The           
Representatives are subject to the supervision of various governmental and self 
regulatory organizations, as well as certain capital requirements. Such         
regulatory authorities periodically investigate and audit the activities of     
broker-dealers, such as the Representatives. In the event the Representatives   
are required to curtail or cease operations as a result of administrative       
actions instituted by the regulatory authorities or because of lack of capital, 
the price and liquidity of the Common Stock may be materially adversely affected
by the reduced participation or complete absence of the Representatives from the
market.                                                                         

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USE OF PROCEEDS 

The net proceeds to the Company from the sale of the 2,000,000 Shares 
offered hereby are estimated to be $13,140,000 ($15,276,000 if the              
Over-Allotment Option is exercised in full), assuming an Offering Price of $8.00
per share and after deducting estimated underwriting discounts and commissions  
and estimated offering expenses payable by the Company. The Company anticipates 
that the net proceeds will be used in the following manner.                     

                                                        [Enlarge/Download Table]

                                                                                                       EXERCISE OF         
                                                                                                  OVER-ALLOTMENT OPTION    
                                                                                               ----------------------------
                          APPLICATION OF                           APPROXIMATE  PERCENTAGE OF  APPROXIMATE    PERCENTAGE OF
                           NET PROCEEDS                              AMOUNT     NET PROCEEDS     AMOUNT       NET PROCEEDS 
                         ---------------                           -----------  -------------  -----------    -------------
                                                                                                                           
Future Acquisitions (1)........................................... $ 5,000,000        38.1%    $ 5,000,000          32.7%  
Equity Contribution to Subsidiary (2).............................   4,000,000        30.4%      4,000,000          26.2%  
Marketing and Sales Promotion (3).................................   1,000,000         7.6%      1,000,000           6.6%  
Redemption of Shares (4)..........................................     960,000         7.3%        960,000           6.3%  
Research and Development (5)......................................     500,000         3.8%        500,000           3.3%  
Non-competition payments to Officers (6)..........................     480,000         3.7%        480,000           3.1%  
Working Capital (7)...............................................   1,200,000         9.1%      3,336,000          21.8%  
                                                                   -----------  -------------  -----------    -------------
     TOTAL........................................................ $13,140,000       100.0%    $15,276,000         100.0%  
                                                                   -----------  -------------  -----------    -------------
                                                                   -----------  -------------  -----------    -------------

---------------                                                                 

(1) The Company will target acquisitions in the following areas and industry    
    sectors: (i) the highly fragmented Italian multi-axis machine tool industry,
   where the Company can achieve added critical mass and economies of scale in
 production, research and development, and sales and marketing activities,
(ii) the worldwide sheet metal fabricating industry, particularly those 
sectors that are highly compatible with production laser systems, (iii) 
   worldwide system integrators for metal fabricators, particularly those with
experience integrating complex laser system solutions with other metal  
fabricating activities and factory control systems, and (iv) laser      
manufacturers, to avoid dependence on third party laser suppliers. The  
Company has no agreements for any acquisitions as of the date of this   
Prospectus.                                                             

(2) The Company will make a capital contribution to Prima Industrie in order to 
  pay down outstanding indebtedness of Prima Industrie under lines of credit
 with Italian financial institutions. Prima Industrie will retire a demand
  bank line-of-credit with an interest rate of prime plus 0.5%. At March 31,
  1998, this line-of-credit had an outstanding balance of $2.05 million. The
balance of these funds will be used to reduce an annually renewable bank
 line-of-credit with an original principal amount of $10.163 million. This
second line-of-credit has an interest of prime plus 0.5% for advances on
    accounts receivable and prime for advances on customer orders collateralized
  by accounts receivable. At March 31, 1998, the outstanding balance of this
 second line-of-credit was $8.135 million. As of March 31, 1998, the prime
interest rate for these loans was 9%.                                   

(3) Expenditures will be made for marketing and sales promotion in the periods  
  from 1998 through the year 2000, including the presentation of exhibits at
    major machine tool exhibitions throughout the world, extensive marketing and
 promotional efforts to introduce new products and key account promotions.

(4) In connection with the reduction of certain compensation to Messrs.         
Ciamaroni and Currier under their employment agreements, the Company has
    been substituted with respect to certain obligations to Miojusti Investments
   BV ("Miojusti"). These obligations were incurred upon the acquisition of an
 aggregate 120,000 shares of the Company's Common Stock from Miojusti. The
    Company will pay Miojusti an amount based upon the Offering Price ($960,000,
assuming an Offering Price of $8.00 per share) in satisfaction of such  
   obligations and redeem the 120,000 shares of the Common Stock. See "Certain
Transactions."                                                          

(5) Expenditures will be made to fund research and development activities       
through the year 2000 to introduce the "Laser-On-Line" product family of
precision cutting and welding products and systems. These product       
developments are intended to transform existing 3-D Products from       
"prototyping" equipment to a more robust production oriented family of  
precision cutting and welding products and technology. See              
"Business -- Strategy." The Company has entered into a joint development
  agreement with Prima Industrie to complete these developments. Pursuant to
  the joint development agreement, the Company will have exclusive rights to
 these developments outside of Italy. The Company will provide funding for
these R&D projects in amounts of approximately $250,000 during the 1998 
fiscal year and $250,000 during the 1999 fiscal year.                   

(6) An aggregate of $480,000 will be paid to Messrs. Currier and Ciamaroni under
their employment agreements as a noncompetition payment. See            
"Management -- Employment Agreements."                                  

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(7) The balance of the net offering proceeds will be utilized for general       
corporate requirements, including financing working capital needs of the
    Company's subsidiary operations. Approximately $565,000 will be used in 1998
   to fund the replacement of the information technology systems used by Prima
 Industrie, Prima Electronics and their affiliates to prepare for the Year
2000 and the conversion to a single European currency under the EMU.    

    Pending such uses, the net proceeds to the Company from this Offering will
be invested in short-term, investment grade, interest-bearing securities.       

   The foregoing represents the Company's best estimate of the allocation of
the net proceeds of this Offering based upon the Company's currently            
contemplated operations and business plans, as well as current economic and     
industry conditions, and is subject to reapportionment among the categories     
listed above in response to, among other things, changes in the Company's plans,
unanticipated future revenues and expenditures and unanticipated industry       
conditions. The amount and timing of expenditures will vary depending on a      
number of factors, including, without limitation, the results of operations and 
changing industry conditions.                                                   

DIVIDEND POLICY 

To date, Prima Industrie, Prima Electronics and the Company have not  
declared or paid any cash dividends on their capital stock. The Company         
currently intends to retain any future earnings to finance the growth and       
development of its business and, therefore, does not anticipate paying any cash 
dividends in the foreseeable future.                                            

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CAPITALIZATION

The following table sets forth, as of March 31, 1998, (i) the actual  
short-term obligations and capitalization of the Company on a consolidated      
basis, and (ii) the pro forma short-term obligations and capitalization of the  
Company, after giving effect to the receipt by the Company of the estimated net 
proceeds from the sale of the 2,000,000 shares of Common Stock offered hereby at
an assumed Offering Price of $8.00 per share and after deducting estimated      
underwriting discounts and commissions and estimated offering expenses payable  
by the Company and the application of the net proceeds thereof.                 

                                                        [Enlarge/Download Table]

                                                                                                           MARCH 31, 1998       
                                                                                                     ---------------------------
                                                                                                     ACTUAL(1)    AS ADJUSTED(2)
                                                                                                     ---------    --------------
                                                                                                                                
                                                                                                           (IN THOUSANDS)       
Short-term obligations(3)..........................................................................   $ 10,793          6,793   
Long-term debt.....................................................................................        409            409   
Stockholders' equity (deficit): Preferred Stock, $0.01 par value: actual and pro forma -- 1,000,000                             
  shares authorized, no shares issued or outstanding...............................................         --             --   
Common Stock: actual $0.01 par value, 14,000,000 shares authorized, 2,700,300 shares issued and                                 
  outstanding; pro forma -- $0.01 par value, 14,000,000 shares authorized, 4,580,300 shares issued                              
  and outstanding..................................................................................         27             46   
Additional paid-in capital.........................................................................     13,775         25,946   
Accumulated deficit................................................................................     (7,417)        (7,427)  
Cumulative foreign currency translation adjustments................................................       (762)          (762)  
                                                                                                     ---------    --------------
Total stockholders' equity.........................................................................      5,623         17,803   
                                                                                                     ---------    --------------
Total capitalization...............................................................................   $ 16,825       $ 25,005   
                                                                                                     ---------    --------------
                                                                                                     ---------    --------------

---------------                                                                 

(1) This financial data reflects the financial condition and operations of Prima
 Industrie prior to the acquisition by the Company of substantially all of
the issued and outstanding capital stock of Prima Industrie.            

(2) Adjusted to reflect (a) the sale by the Company of 2,000,000 Shares offered 
hereby at an assumed Offering Price of $8.00 per share, after deducting 
underwriting discounts and commissions and estimated offering expenses  
payable by the Company, (b) application of the estimated net proceeds   
therefrom as described herein, and (c) the acquisition by the Company of
substantially all of the issued and outstanding capital stock of Prima  
Industrie. See "Use of Proceeds."                                       

(3) Short-term obligations consist of short-term indebtedness for borrowed money
and the current portion of capital lease obligations.                   

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DILUTION

   The pro forma combined net tangible book value of the Company as of March
31, 1998 was $4,645,000, or approximately $1.72 per share. After giving effect  
to the sale by the Company of 2,000,000 Shares in this Offering at an assumed   
Offering Price of $8.00 per share and after deducting estimated underwriting    
discounts and commissions and estimated offering expenses payable by the        
Company, the pro forma net tangible book value of the Company at March 31, 1998 
would be $17,101,000, or $3.73 per share. This represents an immediate increase 
in pro forma combined net tangible book value of $2.01 per share to existing    
stockholders and an immediate dilution in pro forma net tangible book value of  
$4.27 per share to new investors purchasing Shares in this Offering. The        
following table illustrates the per share dilution:                             

                                                        [Enlarge/Download Table]
                                                                                                                          
Assumed Offering Price per Share.............................................................................        $8.00
Pro forma combined net tangible book value per Share before this Offering.................................... $1.72       
Increase in pro forma combined net tangible book value per Share attributable to existing stockholders in                 
  this Offering.............................................................................................. $2.01       
Pro forma net tangible book value per share after this Offering..............................................        $3.73
                                                                                                                     -----
Dilution per share to new investors in this Offering.........................................................        $4.27
                                                                                                                     -----
                                                                                                                     -----

     The following table summarizes on a pro forma basis, as of the date of this
Prospectus, the difference between the existing stockholders and the purchasers 
of Shares in this Offering with respect to the number of shares purchased from  
the Company, the total consideration paid and the average price per share paid, 
and the sale of 2,000,000 Shares at an Offering Price of $8.00 per share (before
deducting estimated underwriting discounts and commissions and estimated        
offering expenses payable by the Company):                                      

                                                        [Enlarge/Download Table]

                                                                                  SHARES PURCHASED     TOTAL CONSIDERATION  
                                                                                --------------------  ----------------------
                                                                                 NUMBER      PERCENT    AMOUNT       PERCENT
                                                                                ---------    -------  -----------    -------
                                                                                                                            
Existing stockholders(1)....................................................... 2,580,300      56.3%  $ 6,764,000      29.7%
New investors.................................................................. 2,000,000      43.7%   16,000,000      70.3%
                                                                                ---------    -------  -----------    -------
     Total..................................................................... 4,580,300     100.0%  $22,764,000     100.0%
                                                                                ---------    -------  -----------    -------
                                                                                ---------    -------  -----------    -------

---------------                                                                 

(1) The amount shown takes into account (a) the issuance of 300 shares for      
   $3,000 to James R. Currier, Sr. and Giovanni Ciamaroni; (b) the exchange by
the Prima Industrie shareholders of substantially all of the outstanding
 capital stock of Prima Industrie in return for 2,700,000 shares of Common
Stock; and (c) the redemption of 120,000 shares of Common Stock by the  
Company. See "Certain Transactions."                                    

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SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in  
conjunction with Prima Industrie's consolidated financial statements and notes  
thereto and with Management's Discussion and Analysis of Financial Condition and
Results of Operations, which are included elsewhere in this Prospectus. On April
23, 1998, the Company acquired substantially all of the outstanding shares of   
Prima Industrie. The acquisition of Prima Industrie will be accounted for as a  
recapitalization of Prima Industrie, with no goodwill or other intangibles      
recorded. The consolidated statement of operations data for the year ended      
December 31, 1993 and the consolidated balance sheet data at December 31, 1993  
are derived from consolidated financial statements of Prima Industrie not       
included in this Prospectus, which have not been audited by Hein + Associates   
LLP. The data for 1993 has been revised by the Company to reflect the           
requirements of U.S. generally accepted accounting principles. The consolidated 
statement of operations data for the three months ended March 31, 1998 and 1997 
and the consolidated balance sheet data as of March 31, 1998 and March 31, 1997 
is derived from the Company's unaudited financial statements. These historical  
results are not necessarily indicative of the results to be expected in the     
future.                                                                         

                                                        [Enlarge/Download Table]

                                                  THREE MONTHS ENDED                                                        
                                                      MARCH 31,                      YEARS ENDED DECEMBER 31,               
                                                  ------------------    --------------------------------------------------- 
                                                   1998       1997       1997       1996       1995       1994       1993   
                                                  -------    -------    -------    -------    -------    -------    ------- 
                                                                                                                            
                                                                  (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)                 
CONSOLIDATED STATEMENT OF OPERATIONS DATA:(1)                                                                               
Revenues:                                                                                                                   
  Net sales...................................... $ 9,671    $ 6,629    $43,560    $41,108    $37,356    $27,774    $27,814 
  Other operating revenue........................      63         30        626      1,207      1,204        622        965 
  Total revenues.................................   9,734      6,659     44,186     42,315     38,560     28,396     28,779 
Cost of goods sold...............................   7,476      5,164     35,157     34,357     32,565     27,373     24,302 
Gross profit.....................................   2,258      1,495      9,029      7,958      5,995      1,023      4,477 
Research and development costs...................     331        329      1,335      1,329        670        656        705 
Selling, general and administrative costs........   1,250      1,173      5,513      5,218      5,250      4,165      5,076 
Total costs and expenses.........................   9,057      6,666     42,005     40,904     38,485     32,194     30,083 
Operating income.................................     677         (7)     2,181      1,411         75     (3,798)    (1,304)
Gain on sale of assets...........................      11          2        441      1,059         --         --         -- 
Other income (expense)...........................    (130)       (52)      (623)      (733)    (2,302)    (1,637)       524 
Income (loss) before income taxes and minority                                                                              
  interest.......................................     558        (57)     1,999      1,737     (2,227)    (5,435)      (780)
Current income taxes.............................    (201)      (103)      (444)      (189)       (43)        (4)           
Minority interest................................     (76)       (63)      (192)      (213)      (130)       169         15 
Net income (loss) (2)............................ $   281    $  (223)   $ 1,363    $ 1,335    $(2,400)   $(5,270)   $  (765)
Comprehensive income (loss)...................... $   245    $  (630)   $   634    $ 1,513    $(2,649)   $(5,085)   $(1,536)
Pro forma earnings (loss) per share (2)(3)(4).... $  0.10    $ (0.08)   $  0.50    $  0.49    $ (1.40)   $ (2.70)   $ (0.38)
Pro forma weighted average common and common                                                                                
  equivalent shares outstanding (3)..............   2,700      2,700      2,700      2,700      1,721      1,954      2,033 

CONSOLIDATED BALANCE SHEET DATA: (1)                                                                                        
Cash and cash equivalents........................ $   927    $   345    $ 1,330    $   585    $   804    $   620    $ 2,518 
Working capital..................................   6,195      5,678      6,332      6,320      3,574       (687)     2,365 
Total assets.....................................  35,192     33,631     33,909     36,352     35,268     31,080     34,240 
Total liabilities................................  29,569     29,517     28,531     31,608     32,037     33,796     31,871 
Stockholders' equity.............................   5,623      4,114      5,378      4,744      3,231     (2,716)     2,369 

---------------                                                                 

(1) This financial data reflects the financial condition and operations of Prima
 Industrie prior to the acquisition by the Company of substantially all of
the issued and outstanding capital stock of Prima Industrie.            

(2) Net income includes gain on sale of equipment of $427,000 (net of tax) in   
   1997 and net gain on sale of subsidiaries of $766,000 (net of tax) in 1996.
  These items are considered by management to be nonrecurring. The effect on
    earnings per share of these amounts (net of tax) is $.16 in 1997 and $.28 in
1996.                                                                   

(3) The historical share and per share amounts have been retroactively restated 
 to reflect the exchange of substantially all of the outstanding shares of
  Prima Industrie for 2,700,000 shares of Common Stock of the Company, which
   occurred on April 23, 1998. See Note 15 to the financial statements at page
F-22.                                                                   

(4) No cash dividends have been declared by the Company or Prima Industrie.     

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PRIMA GROUP INTERNATIONAL, INC. 

PRO FORMA COMBINED FINANCIAL INFORMATION

 On April 23, 1998, The Prima Group International, Inc. (PRIMA) acquired
substantially all of the outstanding shares of Prima Industrie S.p.A. (Prima    
Industrie) in exchange for 2,700,000 shares of PRIMA.                           

     For accounting purposes, the acquisition of Industrie will be accounted for
as a recapitalization of Prima Industrie, with no goodwill or other intangibles 
recorded, as PRIMA had no operations prior to the acquisition and the           
shareholders of Prima Industrie will have effective control of the combined     
entity.                                                                         

   The accompanying unaudited pro forma balance sheet combines the March 31,
1998 balance sheets of Prima Industrie and PRIMA as if the transaction had      
occurred on that date.                                                          

   The accompanying unaudited pro forma statements of operations combine the
operations of Prima Industrie and PRIMA for the year ended December 31, 1997 and
the three months ended March 31, 1998 as if the transaction had occurred as of  
the beginning of the periods presented.                                         

     These statements are not necessarily indicative of future operations or the
actual results that would have occurred had the transaction been consummated at 
the beginning of the periods indicated.                                         

 The unaudited pro forma combined financial statements should be read in
conjunction with the historical financial statements and notes thereto, included
elsewhere in this Prospectus.                                                   

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THE PRIMA GROUP INTERNATIONAL, INC. 

PRO FORMA COMBINED BALANCE SHEET

MARCH 31, 1998
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                                                        PRIMA      PRO FORMA      PRO FORMA  
                                                                              PRIMA   INDUSTRIE   ADJUSTMENTS    COMBINED (A)
                                                                              -----   ---------   -----------    ------------
                                                                                                                             
                                   ASSETS                                                                                    
CURRENT ASSETS:                                                                                                              
  Cash and cash equivalents.................................................. $  3     $    927      $             $    930  
  Trade accounts receivable, net of allowance of $364........................   --       18,631                      18,631  
  Other accounts receivable..................................................   --        2,707                       2,707  
  Inventories................................................................   --        9,899                       9,899  
  Other......................................................................   --          117                         117  
                                                                              -----   ---------   -----------    ------------
     Total current assets....................................................    3       32,281                      32,284  
PROPERTY, PLANT AND EQUIPMENT, NET...........................................   --        1,505                       1,505  
DEFERRED OFFERING COSTS......................................................  756           --                         756  
PATENTS AND OTHER INTANGIBLE ASSETS, NET.....................................   --          128                         128  
INVESTMENTS AND OTHER ASSETS.................................................   --          610                         610  
ADVANCES TO AFFILIATE........................................................   --          668       (668)(b)           --  
                                                                              -----   ---------   -----------    ------------
TOTAL ASSETS................................................................. $759     $ 35,192      $(668)        $ 35,283  
                                                                              -----   ---------   -----------    ------------
                                                                              -----   ---------   -----------    ------------
                    LIABILITIES AND STOCKHOLDERS' EQUITY                                                                     
CURRENT LIABILITIES:                                                                                                         
  Current portion of notes payable and long-term debt........................ $ --     $ 10,793      $             $ 10,793  
  Accounts payable...........................................................  175       11,122         10(d)        11,307  
  Customer deposits..........................................................   --          804                         804  
  Other accrued expenses and liabilities.....................................   --        2,757                       2,757  
  Deferred income............................................................   --           93                          93  
  Income taxes payable.......................................................   --          517                         517  
  Advances from affiliate....................................................  668           --       (668)(b)           --  
                                                                              -----   ---------   -----------    ------------
     Total current liabilities...............................................  843       26,086       (658)          26,271  
LONG-TERM DEBT...............................................................   --          409                         409  
EMPLOYEE TERMINATION ACCRUAL.................................................   --        2,443                       2,443  
MINORITY INTEREST............................................................   --          631                         631  
STOCKHOLDERS' EQUITY:                                                                                                        
  Common stock...............................................................   --           27                          27  
  Additional paid-in capital.................................................    3       13,775        (84)(a)       13,694  
  Foreign currency translation adjustments...................................   --         (762)                       (762) 
  Common stock subscriptions receivable......................................   (3 )         --                          (3) 
  Accumulated deficit........................................................  (84 )     (7,417)        74(a)(d)     (7,427) 
                                                                              -----   ---------   -----------    ------------
     Total stockholders' equity..............................................  (84 )      5,623        (10)           5,529  
                                                                              -----   ---------   -----------    ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................... $759     $ 35,192      $(668)        $ 35,283  
                                                                              -----   ---------   -----------    ------------
                                                                              -----   ---------   -----------    ------------

See accompanying notes. 

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THE PRIMA GROUP INTERNATIONAL, INC. 

PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE DATA) 
(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                                                   PRIMA      PRO FORMA    PRO FORMA  
                                                                       PRIMA     INDUSTRIE   ADJUSTMENTS  COMBINED (A)
                                                                      --------   ---------   -----------  ------------
                                                                                                                      
REVENUES:                                                                                                             
  Net sales.......................................................... $     --    $ 43,560      $           $ 43,560  
  Other operating revenue............................................       --         626                       626  
                                                                      --------   ---------   -----------  ------------
     Total revenues..................................................       --      44,186                    44,186  
COSTS AND EXPENSES:                                                                                                   
  Cost of goods sold.................................................       --      35,157                    35,157  
  Research and development costs.....................................       --       1,335                     1,335  
  Selling, general and administrative costs..........................       42       5,513        673(c)       6,228  
                                                                      --------   ---------   -----------  ------------
     Total costs and expenses........................................       42      42,005        673         42,720  
                                                                      --------   ---------   -----------  ------------
OPERATING INCOME.....................................................      (42)      2,181       (673)         1,466  
OTHER INCOME (EXPENSE):                                                                                               
  Interest and other income..........................................       --         393                       393  
  Gain on sale of assets.............................................       --         441                       441  
  Gain (loss) on foreign exchange....................................       --         151                       151  
  Interest expense...................................................       --      (1,167)                   (1,167) 
                                                                      --------   ---------   -----------  ------------
                                                                            --        (182)                     (182) 
                                                                      --------   ---------   -----------  ------------
INCOME (LOSS) BEFORE INCOME TAXES....................................      (42)      1,999       (673)         1,284  
CURRENT INCOME TAXES.................................................       --        (444)                     (444) 
MINORITY INTEREST....................................................       --        (192)                     (192) 
                                                                      --------   ---------   -----------  ------------
NET INCOME (LOSS).................................................... $    (42)   $  1,363      $(673)      $    648  
                                                                      --------   ---------   -----------  ------------
                                                                      --------   ---------   -----------  ------------
PRO FORMA NET INCOME (LOSS) PER SHARE................................ $(140.00)   $    .50                  $    .24  
                                                                      --------   ---------                ------------
                                                                      --------   ---------                ------------
PRO FORMA WEIGHTED AVERAGE COMMON SHARES OUTSTANDING.................      300   2,700,000                 2,700,300  
                                                                      --------   ---------                ------------
                                                                      --------   ---------                ------------

See accompanying notes. 

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THE PRIMA GROUP INTERNATIONAL, INC. 

PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 1998 
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE DATA) 
(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                                                   PRIMA      PRO FORMA    PRO FORMA  
                                                                       PRIMA     INDUSTRIE   ADJUSTMENTS    COMBINED  
                                                                      --------   ---------   -----------  ------------
                                                                                                                      
REVENUES:                                                                                                             
  Net sales.......................................................... $     --    $  9,671      $           $  9,671  
  Other operating revenue............................................       --          63                        63  
                                                                      --------   ---------   -----------  ------------
     Total revenues..................................................       --       9,734                     9,734  
COSTS AND EXPENSES:                                                                                                   
  Cost of goods sold.................................................       --       7,476                     7,476  
  Research and development costs.....................................       --         331                       331  
  Selling, general and administrative costs..........................       42       1,250        140(c)       1,432  
                                                                      --------   ---------   -----------  ------------
     Total costs and expenses........................................       42       9,057        140          9,239  
                                                                      --------   ---------   -----------  ------------
OPERATING INCOME.....................................................      (42)        677       (140)           495  
OTHER INCOME (EXPENSE):                                                                                               
  Interest and other income..........................................       --         244                       244  
  Gain on sale of assets.............................................       --          11                        11  
  Gain (loss) on foreign exchange....................................       --          21                        21  
  Interest expense...................................................       --        (395)                     (395) 
                                                                      --------   ---------   -----------  ------------
                                                                            --        (119)                     (119) 
                                                                      --------   ---------   -----------  ------------
INCOME (LOSS) BEFORE INCOME TAXES....................................      (42)        558       (140)           376  
CURRENT INCOME TAXES.................................................       --        (201)                     (201) 
MINORITY INTEREST....................................................       --         (76)                      (76) 
                                                                      --------   ---------   -----------  ------------
NET INCOME (LOSS).................................................... $    (42)   $    281      $(140)      $     99  
                                                                      --------   ---------   -----------  ------------
                                                                      --------   ---------   -----------  ------------
PRO FORMA NET INCOME (LOSS) PER SHARE................................ $(140.00)   $    .10                  $    .04  
                                                                      --------   ---------                ------------
                                                                      --------   ---------                ------------
PRO FORMA WEIGHTED AVERAGE COMMON SHARES OUTSTANDING.................      300   2,700,000                 2,700,300  
                                                                      --------   ---------                ------------
                                                                      --------   ---------                ------------

See accompanying notes. 

NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION 

(a) To reflect the exchange of 2,700,000 shares of PRIMA common stock for       
    substantially 100% of the outstanding shares of Prima Industrie. No entry is
   required as this transaction will be accounted for as a recapitalization of
Prima Industrie, and the equity section of the historical financial     
statements has been recast to reflect the recapitalization.             

(b) To eliminate intercompany balances.                                         

(c) To reflect additional compensation expense pursuant to employment agreements
with the officers of PRIMA.                                             

(d) To accrue costs of the acquisition of $10,000.                              

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS 

    The following discussion contains trend analysis and other forward-looking
statements that involve risks and uncertainties. In April, 1998, the Company    
acquired substantially all of the outstanding capital stock of Prima Industrie  
by the exchange of shares of the Company's Common Stock for shares of Prima     
Industrie. Factors that might cause such a difference include, but are not      
limited to, those discussed below and elsewhere in this Prospectus, particularly
under "Risk Factors." The following discussions of historical results of        
operations, liquidity and capital resources reflect the consolidated condition  
of Prima Industrie and its subsidiaries and not the Company. The Company's      
actual results may differ materially from those described in such               
forward-looking statements.                                                     

OVERVIEW                                                                        

   Prima Industrie was established in 1977 as a design and engineering firm.
In 1978, Prima Electronics was established to manufacture industrial process    
controls. Prima Industrie developed its first 3-D Products in 1979 and          
introduced the Platino 2-D Product based upon the same technology in 1997. These
Products have evolved into the major focus of the Company's business.           
Approximately 30% of the sales of Prima Industrie are within Italy, and the     
majority of the remaining sales are to customers in other countries in Europe.  

     During 1998, Company management is concentrating on increasing the sales of
its 3-D Products, which have greater gross margins than its 2-D Products, and on
improving profit margins for sales of its new Platino 2-D Product. Further,     
primarily because of the fixed nature of the Company's overhead costs, these    
increases in sales will result in proportionately greater increases in net      
income. Additionally, the Company expects margins to improve if assembly        
operations are commenced outside of Italy, as a result of lower direct labor    
costs. The Company has entered into a license agreement with Strippit, a        
Delaware corporation and a subsidiary of Idex Corporation, for the manufacture  
and sale of products using the technology for the Platino 2-D Product. The      
Company has also executed a license agreement with Beijing Machinery and        
Electricity Institute in China for the Company's 2-D Laserwork Product. The     
implementation of this license agreement has been delayed, because it must be   
approved by the government of the People's Republic of China. There can be no   
assurance that the requisite approval will be forthcoming for consummation of   
the China License and the payments required thereunder. Delays in the approval  
of the China License, and in the payment of royalties required to be made       
thereunder, could adversely affect the Company's financial performance in 1998. 

 Company management will focus on improving the cash flow from contracts
with European customers to the extent that competitive and European business    
practices permit. As a result of this Offering, management expects that the cash
provided by the capital investment in Prima Industrie by the Company and        
improving cash flows will decrease the Company's dependence on its Working      
Capital Facility ("WCF"), thereby reducing interest expenses. See "Use of       
Proceeds."                                                                      

     The Company expects research and development ("R&D") and marketing expenses
to remain relatively constant during the 1998 Fiscal Year.                      

   During the 1998 fiscal year, the Company expects to update its management
and control systems by purchasing new hardware and software products. Several   
Enterprise Resource Planning Software products are commercially available that  
can closely approximate the Company's requirements without significant          
customizing. These products will prepare the Company and its subsidiaries for   
the Year 2000 and the conversion to a single European currency under the EMU.   
This capital expenditure will occur during the second half of the year, and     
management does not expect this expenditure to exceed $565,000. No other        
significant capital expenditures are currently anticipated.                     

During the fourth quarter of 1997, Prima Industrie consummated certain
transactions under an agreement pursuant to which it became a minority owner of 
Macromeccanica of Turin, Italy. Macromeccanica has two primary lines of         
business -- refurbishment of machine tool equipment for customers and           
subcontracting of sophisticated machining services. Pursuant to the agreement,  
Prima Industrie sold certain machine tools and equipment (the "Equipment")      
previously used by Prima Industrie to create parts for its Products, to a       
leasing company, which then leased the Equipment to Macromeccanica. Prima       
Industrie received 1.05 billion Lit (approximately $600,000) for the Equipment. 
Prima Industrie and Macromeccanica entered into a requirements supply agreement,
whereby Macromeccanica provides Prima Industrie machining services previously   
performed internally by Prima Industrie or sub-contracted by other sources. As a
result of this transaction, Prima Industrie expects to reduce its cost of       
manufacturing parts for its Products and increase the capacity of Prima         
Industrie's assembly operations by up to 30% above current levels.              

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In addition, Prima Industrie purchased 25% of the existing equity of  
Macromeccanica from an existing shareholder of Macromeccanica for 600 million   
Lit (approximately $340,000) and has agreed to invest an additional 700 million 
Lit (approximately $400,000) in Macromeccanica (the "Follow-on Investment"). At 
the conclusion of this Follow-on Investment, Prima Industrie will hold          
approximately 37% of the outstanding capital stock of Macromeccanica. The other 
owners of Macromeccanica are unrelated to Prima Industrie. It is projected that 
Prima Industrie's business will account for approximately 10% of the total      
revenues of Macromeccanica (which are projected to be 18 billion Lit for 1998). 

The Company has also identified several additional candidates for     
acquisition or merger and is engaged in preliminary discussions regarding       
possible business combinations. Management expects discussions with these       
candidates to accelerate upon completion of this Offering, although no          
assurances can be given about the outcome of these discussions. The Company will
focus on those candidates that will add to earnings and provide significant     
critical mass to produce economies of scale in both sales and manufacturing     
activities.                                                                     

  The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto appearing elsewhere in this          
Prospectus. For purposes of the following discussion, references to exchange    
rates are between the Lit and the Dollar.                                       

RESULTS OF OPERATIONS                                                           

 THREE MONTH PERIOD ENDED MARCH 31, 1998, COMPARED TO THREE MONTH PERIOD ENDED
MARCH 31, 1997                                                                  

TABLE 1 
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                          FOR THE THREE                         
                                                                                           MONTHS ENDED                         
                                                                                             MARCH 31             CHANGE        
                                                                                        ------------------   -----------------  
                                                                                         1998       1997     AMOUNT    PERCENT  
                                                                                        -------    -------   ------    -------  
                                                                                                                                
TOTAL REVENUES......................................................................... $ 9,734    $ 6,659   $3,075      46.2%  
Cost of goods sold.....................................................................   7,476      5,164   2,312       44.8%  
Research and development costs.........................................................     331        329       2         --   
Selling, general and administrative costs..............................................   1,250      1,173      77        6.6%  
Total costs and expenses...............................................................   9,057      6,666   2,391       35.9%  
                                                                                        -------    -------   ------    -------  
Operating income (loss)................................................................     677         (7)    684              

OTHER INCOME (EXPENSE)                                                                                                          
  Gain on sale of assets...............................................................      11          2       9      450.0%  
  Interest and other income............................................................     265        222      43       19.4%  
  Interest and other expense...........................................................    (395)      (274)   (121 )    (44.2 )%
                                                                                        -------    -------   ------    -------  
Total Other Income (Expense)...........................................................    (119)       (50)    (69 )   (138.0 )%
Income (loss) before taxes and minority interest.......................................     558        (57)    615         --   
Current income taxes...................................................................    (201)      (103)    (98 )    (95.1 )%
Minority interest......................................................................     (76)       (63)    (13 )    (20.6 )%
                                                                                        -------    -------   ------    -------  
Net income (loss)...................................................................... $   281    $  (223)  $ 504         --   
                                                                                        -------    -------   ------    -------  
                                                                                        -------    -------   ------    -------  

    Consolidated revenues for the quarter ended March 31, 1998 increased 46.2%
to $9.734 million from $6.659 million for the quarter ended March 31, 1997.     
Stated without giving effect to fluctuations in the exchange rate between the   
Dollar and the Lit for these periods, consolidated revenues increased 58.8% from
Lit 11.044 billion for the quarter ended March 31, 1997 to Lit 17.538 for the   
quarter ended March 31, 1998.                                                   

   Backlog decreased 11.8% from $13.757 million on March 31, 1997 to $12.132
million on March 31, 1998. Started without the effect of fluctuations in the    
exchange rate, backlog decreased 4.3% from Lit 23.072 billion on March 31, 1997 
to Lit 22.074 billion on March 31, 1998.                                        

   The composition of revenues for the three months ended March 31, 1998 was
significantly different from the comparable period of 1997, reflecting the      
influence of several factors. Sales of 3-D Products and Laserwork 2-D Products  
together provided 41.9% of total sales for the three months ended March 31,     
1997. The contribution level for these Products declined to 18.8% of total sales
for the three months ended March 31, 1998, while the sales of the Platino 2-D   
Products expanded from                                                          

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4.4% of sales in the three months ended March 31, 1997 to 47.3% in the three    
months ended March 31, 1998. Unit sales of 3-D Products decreased from 6 units  
in the first quarter of 1997 to 5 units in the first quarter of 1998, while     
sales of Laserwork 2-D Products increased from zero units to 1 unit in the      
respective periods. Sales of the 2-D Platino Product increased from 1 unit to 10
units in the same periods, respectively. This realignment in the contribution to
revenues by product reflects the results of the development and marketing of the
Platino 2-D Products.                                                           

    Sales of service and parts increased by $.005 million or 0.3% in the three
months ended March 31, 1998, when compared to the comparable quarter in 1997.   
Sales by Prima Electronics decreased by $.282 million from the quarter ended    
March 31, 1997 to the quarter ended March 31, 1998. Due to the changing product 
mix, virtually all components of sales, except for the Platino product line,    
were reduced as a percentage of total sales, as shown in Table 2.               

TABLE 2 
CONTRIBUTION TO TOTAL SALES 
(IN PERCENT)

                                                        [Enlarge/Download Table]

                                                                                                  FOR THE THREE              
                                                                                                   MONTHS ENDED              
                                                                                                     MARCH 31                
                                                                                                  --------------             
                                                                                                                             
                                                                                                  1998     1997    DIFFERENCE
                                                                                                  -----    -----   ----------
By Prima Industrie:                                                                                                          
  3-D Products...................................................................................  15.2%    41.9%     (26.7) 
  Laserwork 2-D Products.........................................................................   3.6      -0-        3.6  
  Platino 2-D Products...........................................................................  47.3      4.4       42.9  
  Service and parts..............................................................................  15.5     22.5       (7.0) 

By Prima Electronics:                                                                                                        
  To Atlas Copco.................................................................................  14.4     24.7      (10.3) 
  To other customers.............................................................................   4.0      6.5       (2.5) 
                                                                                                  -----    -----   ----------
  Total sales.................................................................................... 100.0%   100.0%       -0-  
                                                                                                  -----    -----   ----------
                                                                                                  -----    -----   ----------

 Cost of goods sold, as percentage of consolidated revenues, improved to
76.8% during the three month period ended March 31, 1998, from 77.5% for the    
three months ended March 31, 1997. Cost of goods sold increased 44.8%, to $7.476
million for the three months ended March 31, 1998 from $5.164 million for the   
three months ended March 31, 1997. Without giving effect to fluctuations in     
exchange rates between the Dollar and Lit, cost of goods sold increased 57.2% to
Lit 13.469 billion in the three months ended March 31, 1998, from Lit 8.565     
billion in the three months ended March 31, 1997.                               

TABLE 3 
COMPONENTS OF COST OF GOODS SOLD
(IN PERCENT)

                                                        [Enlarge/Download Table]

                                                                                                     FOR THE                 
                                                                                                   THREE MONTHS              
                                                                                                      ENDED                  
                                                                                                     MARCH 31                
                                                                                                  --------------             
                                                                                                  1998     1997    DIFFERENCE
                                                                                                  -----    -----   ----------
                                                                                                                             
Materials........................................................................................  56.9%    54.5%      2.4   
Labor............................................................................................  19.1     27.4      (8.3)  
Overhead.........................................................................................  22.7     15.5       7.2   
Depreciation.....................................................................................   1.3      2.6      (1.3)  
                                                                                                  -----    -----       ---   
  Total.......................................................................................... 100.0%   100.0%      -0-   
                                                                                                  -----    -----       ---   
                                                                                                  -----    -----       ---   

    R&D, in Dollars, remained substantially unchanged between the three months
ended March 31, 1998 and the comparable period in 1997, at $.331 million and    
$.329 million respectively. However, without giving effect to exchange rate     
differences between the periods, R&D expense increased 9.5% from the three month
period ended March 31, 1997 to the comparable period ended March 31, 1998. As a 
percent of total revenues, R&D expenses declined due to the substantial increase
in revenues between the three months ended March 31, 1997 and March 31, 1998.   

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Selling general and administration ("SG&A") increased 6.6% from $1.173
million in the three months ended March 31, 1997 to $1.250 million in the three 
months ended March 31, 1998. However, without giving effect to exchange rate    
differences between the periods, SG&A increased 15.7% from Lit 1.945 billion in 
the three months ended March 31, 1997 to Lit 2.251 billion in the three months  
ended March 31, 1998. As a percentage of total revenues, SG&A expense declined  
due to the substantial increase in revenues between the three months ended March
31, 1997 and March 31, 1998.                                                    

   Other operating revenues, consisting primarily of governmental grants for
research and development and other studies, increased 110%, from $.030 million  
in the three months ended March 31, 1997 to $.063 million in the three months   
ended March 31, 1998.                                                           

As a result of the above factors operating income increased by $.684  
million, from a loss of $.007 million in the three months ended March 31, 1997  
to income of $.677 million in the three months ended March 31, 1998. Without    
giving effect to fluctuations in the exchange rate between the dollar and Lit   
during the periods, operating income increased from a loss of Lit .011 billion  
to income of Lit 1.221 billion.                                                 

  Interest and exchange gains together increased 19.4%, from $.222 million
for the three months ended March 31, 1997 to $.265 million for the three months 
ended March 31, 1998. A $.173 million increase in interest income, due primarily
to a government sponsored receivables financing program was offset by a $.130   
million reduction in exchange gains, for the net increase between the periods of
$.043 million.                                                                  

Interest and other expense increased 44.2%, from $.274 million for the
three months ended March 31, 1997 to $.395 million for the three months ended   
March 31, 1998. Interest expense related to the government receivables financing
program increased by an amount equivalent to the increase in interest income, or
$.166 million, while other interest expense declined by $.045 million, for the  
net increase between the periods of $.121 million. Interest expense due to bank 
borrowings was similar for the two periods, amounting to $.162 million for the  
three months ended March 31, 1997 and $.154 million for the three months ended  
March 31, 1998.                                                                 

Income before income taxes and minority interest increased by $.615   
million, from a loss of $.057 million in the three months ended March 31, 1997  
to income of $.558 million in the three months ended March 31, 1998.            

 Income taxes for the three months ended March 31, 1998 increased 95.1%,
from $.103 million in the three months ended March 31, 1997, to $.201 million in
the three months ended March 31, 1998.                                          

   Allocation of profits for the minority interest in the Prima Electronics,
S.p.A. subsidiary increased 20.6%, from $.063 million in the three months ended 
March 31, 1997 to $.076 million in the three months ended March 31, 1998.       

    Net income increased by $.504 million, from a loss of $.223 million in the
three months ending March 31, 1997 to income of $.281 million in the three      
months ending March 31, 1998. The change in results was primarily attributable  
to the 46.2% increase in revenues in the three months ended March 31, 1998, with
R&D and SG&A expenses remaining essentially equivalent to that of the three     
months ended March 31, 1997.                                                    

   Comprehensive income (loss) for the three months ended March 31, 1998 was
$.245 million compared to ($.630) million for the three months ended March 31,  
1997. Statement of Financial Accounting Standards (SFAS) No. 130, REPORTING     
COMPREHENSIVE INCOME was issued in June 1997 and adopted by the Company in the  
first quarter of 1998. This statement establishes standards for the reporting   
and display of comprehensive income in financial statements. Comprehensive      
income is generally defined as the change in equity of a business enterprise    
during the period from transactions and other events and circumstances from     
nonowner sources. The Company's consolidated statement of comprehensive income  
(loss) includes only foreign currency transactions adustments, which have       
historically been significant relative to net income. In accordance with SFAS   
No. 130, comprehensive income (loss) is also presented for all prior periods.   

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YEAR ENDED DECEMBER 31, 1997, COMPARED TO YEAR ENDED DECEMBER 31, 1996      

TABLE 4 
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                        YEAR ENDED                         
                                                                                       DECEMBER 31            CHANGE       
                                                                                    ------------------   ----------------- 
                                                                                     1997       1996     AMOUNT    PERCENT 
                                                                                    -------    -------   ------    ------- 
                                                                                                                           
TOTAL REVENUES..................................................................... $44,186    $42,315   $1,871      4.4 % 
Cost of goods sold.................................................................  35,157     34,357     800       2.3 % 
Research and development costs.....................................................   1,335      1,329       6        -- % 
Selling, general and administrative costs..........................................   5,513      5,218     295       5.6 % 
Total costs and expenses...........................................................  42,005     40,904   1,101       2.7 % 
                                                                                    -------    -------   ------    ------  
Operating income...................................................................   2,181      1,411     770      54.6 % 

OTHER INCOME (EXPENSE)                                                                                                     
  Gain on sale of assets...........................................................     441      1,059    (618)    (58.3 )%
  Interest and other income........................................................     544      1,033    (489)    (47.3 )%
  Interest and other expense.......................................................  (1,167)    (1,766)    599      33.9 % 
Total Other Income (Expense).......................................................    (182)       326    (508)       -- % 
Income before income taxes and minority interest...................................   1,999      1,737     262      15.1 % 
Current income taxes...............................................................    (444)      (189)   (255)    (134.9)%
Minority interest..................................................................    (192)      (213)     21       9.8 % 
                                                                                    -------    -------   ------    ------  
Net income (loss).................................................................. $ 1,363    $ 1,335   $  28       2.1 % 
                                                                                    -------    -------   ------    ------  
                                                                                    -------    -------   ------    ------  

   Consolidated revenues for the year ended December 31, 1997 increased 4.4%
to $44.186 million from $42.315 million for the year ended December 31, 1996.   
Stated without giving effect to fluctuations in the exchange rate between the   
Dollar and the Lit for these periods, consolidated revenues increased 16.0% from
Lit 65.165 billion for the year ended December 31, 1996 to Lit 75.598 billion   
for the year ended December 31, 1997. Backlog declined 6.2% from $10.53 million 
on December 31, 1996 to $9.87 million on December 31, 1997. Stated without      
giving effect to fluctuations in the exchange rate, backlog increased 7.1% from 
Lit 16.215 billion on December 31, 1996 to Lit 17.363 billion on December 31,   
1997.                                                                           

The composition of revenues for the year ended December 31, 1997 was  
significantly different from the year ended December 31, 1996, reflecting the   
influence of several factors. Sales of 3-D Products and Laserwork 2-D Products  
provided 44.8% and 19.0%, respectively of total sales (consolidated) during the 
year ended December 31, 1996. These contribution levels declined to 42.5% and   
9.6% of total sales, respectively, for the year ended December 31, 1997. While  
the number of 3-D Products sold in the year ended December 31, 1997 increased by
four units, sales of Laserwork 2-D Products declined by nine units, supplanted  
by an increase in sales by twenty-one units of the Platino line of 2-D Products.
This transition in sales of the 2-D Products toward the more efficient Platino  
line reflects the Company's strategy of selling 2-D Products to a wider variety 
of users.                                                                       

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    Sales of service and parts decreased by $.492 million or 9.1% for the year
ended December 31, 1997, when compared to the year ended December 31, 1996.     
Sales by Prima Electronics to Atlas Copco increased $.494 million or 9.0%, while
sales to other European customers declined by 11.5%. Due to the contribution to 
sales effected by the changing product mix, virtually all components of sales,  
except for the Platino product line, were reduced as a percentage of the total  
sales, as shown in Table 5.                                                     

TABLE 5 
CONTRIBUTION TO TOTAL SALES 
(IN PERCENT)

                                                        [Enlarge/Download Table]

                                                                                                    YEAR ENDED               
                                                                                                   DECEMBER 31               
                                                                                                  --------------             
                                                                                                  1997     1996    DIFFERENCE
                                                                                                  -----    -----   ----------
                                                                                                                             
By Prima Industrie:                                                                                                          
  3-D Products...................................................................................  42.5%    44.8%     (2.3)  
  Laserwork 2-D Products.........................................................................   9.6     19.0      (9.4)  
  Platino 2-D Products...........................................................................  18.6      4.5      14.1   
  Service and parts..............................................................................  11.2     13.1      (1.9)  

By Prima Electronics:                                                                                                        
  To Atlas Copco.................................................................................  13.7     13.4       0.3   
  To other customers.............................................................................   4.4      5.2      (0.8)  
                                                                                                  -----    -----   ----------
  Total sales.................................................................................... 100.0%   100.0%      -0-   
                                                                                                  -----    -----   ----------
                                                                                                  -----    -----   ----------

Cost of goods sold, as a percentage of consolidated revenues, improved
modestly from 81.2% during the year ended December 31, 1996 to 79.6% during the 
year ended December 31, 1997. The year-to-year comparison showed an increase of 
2.3% to $35.157 million for the year ended December 31, 1997 from $34.357       
million for the year ended December 31, 1996. Without giving effect to the      
fluctuations in exchange rates between the Dollar and Lit, cost of goods sold   
increased 13.7% to Lit 60.151 billion in the year ended December 31, 1997 from  
Lit 52.912 billion in the year ended December 31, 1996.                         

TABLE 6 
COMPONENTS OF COST OF GOODS SOLD
(IN PERCENT)

                                                        [Enlarge/Download Table]

                                                                                                     FOR THE                 
                                                                                                       YEAR                  
                                                                                                      ENDED                  
                                                                                                   DECEMBER 31               
                                                                                                  --------------             
                                                                                                  1997     1996    DIFFERENCE
                                                                                                  -----    -----   ----------
                                                                                                                             
Materials........................................................................................  61.7%    62.5%      (.8)  
Labor............................................................................................  16.4     15.9        .5   
Overhead.........................................................................................  20.3     19.8        .5   
Depreciation.....................................................................................   1.6      1.8       (.2)  
                                                                                                  -----    -----       ---   
  Total.......................................................................................... 100.0%   100.0%      -0-   
                                                                                                  -----    -----       ---   
                                                                                                  -----    -----       ---   

  The margin of profit between sales and cost of goods sold is expected to
improve further as the Company completes its transition to the Platino product  
line and achieves operational efficiencies as its experience in manufacturing   
these Products increases and economies of scale from production increase.       

As a percentage of consolidated revenues, R&D remained substantially  
unchanged between the years ended December 31, 1997 and 1996 at 3.0% and 3.1%,  
respectively. However, without giving effect to exchange rate differences       
between the periods, R&D expenses increased 11.6% from the year ended December  
31, 1996 to the year ended December 31, 1997. This increase resulted from the   
Company's ongoing R&D projects aimed at enhancing the technical capability of   
the Company's 2-D and 3-D Products.                                             

     SG&A expenses increased $0.295 million between the years ended December 31,
1996 and 1997. As a percentage of consolidated revenues, SG&A remained          
substantially identical at 12.5% for the years ended December 31, 1997 and 12.3%
for the year ended December 31, 1996. However, without giving effect to         
differences in the exchange rates, SG&A expenses                                

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increased 17.4% from Lit 8.035 billion for the year ended December 31, 1996 to  
Lit 9.432 billion for the year ended December 31, 1997. This relative change    
expressed in Lit occurred primarily as a result of increased sales efforts.     

     Other operating revenues, which consist of governmental grants for research
and development and license revenues, declined by $0.581 million for the year   
ended December 31, 1997 as compared to the year ended December 31, 1996. This   
change was due primarily to research grants being provided to the Company in    
1997 in the form of low interest loans rather than outright grants.             

As a result of the above factors, operating income for the year ended 
December 31, 1997 increased 54.6% to $2.181 million from $1.411 million for the 
year ended December 31, 1996. Without giving effect to the fluctuations in the  
exchange rate between the Dollar and Lit during these periods, operating income 
increased 71.8% from Lit 2.172 billion for the year ended December 31, 1996 to  
Lit 3.731 billion for the year ended December 31, 1997.                         

 Interest income declined $.425 million from the year ended December 31,
1996 to the year ended December 31, 1997 due to reductions in interest rates.   
Similarly, interest expense declined by $.208 million from the year ended       
December 31, 1996 to the year ended December 31, 1997. The Company recognized a 
gain of $.411 million in 1997 from the sale of equipment to Macromeccanica.     

  Income before income taxes increased from a profit of $1.737 million for
the year ended December 31, 1996 to $1.999 million for 1997.                    

     Income taxes for the year ended December 31, 1997 increased 134.9% to $.444
million from $.189 million during the year ended December 31, 1996. This        
increase occurred primarily as a result of taxes accrued on profits from the    
operations of Prima Electronics, which is subject to significantly higher       
taxation rates than Prima Industrie. Taxes were relatively higher in 1997 than  
in 1996, because a significant part of income in 1996 before taxes was the gain 
on the sale of Sapri S.p.A., which gain is not taxed under Italian law. As a    
result of loss carry-forwards, Prima Industrie's effective tax rate was 16.2%,  
instead of the normal Italian corporate tax rate of 53.2%, which applies to the 
earnings of Prima Electronics. Allocation of profits for the minority interest  
in the Prima Electronics subsidiary decreased 9.8% to $.192 million for the year
ended December 31, 1997 from $.213 million for the year ended December 31, 1996.

     Net income increased by $.028 million, or 2.1%, for the year ended December
31, 1997 compared to the year ended December 31, 1996. Without giving effect to 
exchange rate differences, net income increased by 13.3% from Lit 2.056 billion 
for the year ended December 31, 1996 to Lit 2.331 billion for the year ended    
December 31, 1997.                                                              

YEAR ENDED DECEMBER 31, 1996, COMPARED TO YEAR ENDED DECEMBER 31, 1995      

TABLE 7 
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                        YEAR ENDED                          
                                                                                       DECEMBER 31            CHANGE        
                                                                                    ------------------   -----------------  
                                                                                     1996       1995     AMOUNT    PERCENT  
                                                                                    -------    -------   ------    -------  
                                                                                                                            
TOTAL REVENUES..................................................................... $42,315    $38,560   $3,755      9.7  % 
Cost of goods sold.................................................................  34,357     32,565   1,792       5.5  % 
Research and development costs.....................................................   1,329        670     659      98.3  % 
Selling, general and administrative costs..........................................   5,218      5,250     (32 )      --    
     Total costs and expenses......................................................  40,904     38,485   2,419       6.2  % 
                                                                                    -------    -------   ------    -------  
Operating income...................................................................   1,411         75   1,336        --    

OTHER INCOME (EXPENSE)                                                                                                      
  Gain on sale of Sapri............................................................   1,059         --   1,059        --    
  Interest and other income........................................................   1,033        776     257      33.1  % 
  Interest and other expense.......................................................  (1,766)    (3,078)  1,312      42.6  % 
Total other income (expense).......................................................     326     (2,302)  2,628        --    
Income before income taxes and minority interest...................................   1,737     (2,227)  3,964        --    
Current income taxes...............................................................    (189)       (43)   (146 )   (339.5 )%
Minority interest..................................................................    (213)      (130)    (83 )   (63.8  )%
                                                                                    -------    -------   ------    -------  
Net income (loss).................................................................. $ 1,335    $(2,400)  $3,735       --    
                                                                                    -------    -------   ------    -------  
                                                                                    -------    -------   ------    -------  

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   Consolidated revenues for the year ended December 31, 1996 increased 9.7%
to $42.315 million from $38.560 million for the year ended December 31, 1995.   
This increase was largely attributable to a decline in the Dollar relative to   
the Lit of 6% from approximately 1640 Lit during 1995 to approximately 1540 Lit 
during 1996. Consolidated revenues increased only 3.1% expressed in Lit, or Lit 
65.165 billion for 1996 from Lit 63.186 billion for 1995. The Company's         
relatively flat sales between the yearly periods resulted from offsetting trends
in the increasing sales of the Products and the divestiture of other Company    
products.                                                                       

    For the year ended December 31, 1996, sales of Prima Electronics accounted
for approximately 18.6% of total sales, up from 13.2% for the year ended        
December 31, 1995. The increase in Prima Electronics' revenues and percentage of
revenues was primarily the result of a 78.7% increase in the sales of regulators
for industrial compressors and generators manufactured by Atlas Copco from      
$3.118 million during the year ended December 31, 1995 to $5.489 million during 
the year ended December 31, 1996.                                               

As a percentage of total sales (consolidated), the Company's 3-D and  
Laserwork 2-D Products accounted for 44.8% and 19.0%, respectively, of the      
Company's total sales for the year ended December 31, 1996, and 46.1% and 27.6%,
respectively, of total sales, excluding sales by Sapri S.p.A., a former         
subsidiary, for the year ended December 31, 1995. Revenues derived from 2-D and 
3-D Products increased 15.2% and 31.3%, respectively, from the year ended       
December 31, 1995 to the year ended December 31, 1996. Expressed in unit        
revenues, 2-D Products increased 36.8% from 18 units for the year ended December
31, 1995 to 25 units for the year ended December 31, 1996; and 3-D Products     
increased 40.0% from 19 units to 26 units, respectively. These increases in     
sales of the Company's 2-D and 3-D Products resulted from: (i) the improvement  
in the worldwide economy, and (ii) exclusive R&D, sales and marketing focus on  
the Company's 2-D and 3-D Products.                                             

The year ended December 31, 1996 exhibited the early phases of the    
transition in the 2-D Product line from the smaller of the two Laserwork        
machines to the new Platino Product line. The percentage of contributions to    
total revenues by the various revenue sources, without sales of Sapri, can be   
seen in the following table:                                                    

TABLE 8 
CONTRIBUTION TO TOTAL SALES 
(IN PERCENT)

                                                        [Enlarge/Download Table]

                                                                                                    YEAR ENDED               
                                                                                                   DECEMBER 31               
                                                                                                  --------------             
                                                                                                  1996     1995    DIFFERENCE
                                                                                                  -----    -----   ----------
                                                                                                                             
By Prima Industrie:                                                                                                          
  3-D Products...................................................................................  44.8%    46.1%      (1.3) 
  Laserwork 2-D Products.........................................................................  19.0     27.6       (8.6) 
  Platino 2-D Products...........................................................................   4.5       --        4.5  
  Service and parts..............................................................................  13.1     10.1        3.0  

By Prima Electronics:                                                                                                        
  To Atlas Copco.................................................................................  13.4     10.2        3.2  
  To other customers.............................................................................   5.2      6.0       (0.8) 
                                                                                                  -----    -----   ----------
  Total sales.................................................................................... 100.0%   100.0%         0  
                                                                                                  -----    -----   ----------
                                                                                                  -----    -----   ----------

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    See Table 9 below for a graphic presentation of the growth in revenues for
the Prima Electronics and 2-D/3-D Products compared to the discontinued         
products. Please note that the Y Axis is represented in billion Lit.            

TABLE 9 

 Cost of goods sold as a percentage of consolidated revenues improved to
81.2% for the year ended December 31, 1996 from 84.5% for the year ended        
December 31, 1995. This improvement was the result of economies of scale in the 
purchase of raw materials occurring because of increased sales in the Company's 
Products. The year-to-year comparison showed a 5.5% increase from $32.565       
million for the year ended December 31, 1995 to $34.357 million for the year    
ended December 31, 1996; however, this increase was attributable to the decline 
in value of the Dollar to the Lit as explained above.                           

During the year ended December 31, 1996 labor costs declined as a     
percentage of total cost of goods sold, while a corresponding larger percentage 
of total cost of goods sold was attributed to materials cost. This gradual      
reduction in labor and related costs can be seen in the following Table 10:     

TABLE 10
COMPONENTS OF COST OF GOODS SOLD
(IN PERCENT)

                                                        [Enlarge/Download Table]

                                                                                                   FOR THE YEAR              
                                                                                                  ENDED DECEMBER             
                                                                                                        31                   
                                                                                                  --------------             
                                                                                                  1996     1995    DIFFERENCE
                                                                                                  -----    -----   ----------
                                                                                                                             
Materials........................................................................................  62.5%    59.5%       3.0  
Labor............................................................................................  15.9     18.7       (2.8) 
Overhead.........................................................................................  19.8     19.3         .5  
Depreciation.....................................................................................   1.8      2.5        (.7) 
                                                                                                  -----    -----   ----------
  Total.......................................................................................... 100.0%   100.0%       -0-  
                                                                                                  -----    -----   ----------
                                                                                                  -----    -----   ----------

   R&D expense, net of grants received, doubled from the year ended December
31, 1995 to the year ended December 31, 1996 from $.670 million to $1.329       
million, respectively. As a percentage of consolidated revenues, R&D increased  
from 1.7% to 3.1% for the same periods. This increase in R&D expense was        
attributable to the completion of the Company's Platino 2-D equipment and       
"Primach"numeric controller developed by Prima Electronics.                     

     SG&A expenses were equivalent at $5.250 million for the year ended December
31, 1995 and $5.218 million for the year ended December 31, 1996, representing a
.06% decline. SG&A decreased to 12.3%, as a percentage of consolidated revenues,
for the year ended December 31, 1996 from 13.6% for the year ended December 31, 
1995. This decline occurred as a result of: (i) favorable exchange rates, (ii)  
the decrease in Company employees from 204 in 1995 to 193 in 1996, (iii) the    

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transfer of employees from overhead activities to manufacturing operations, and 
(iv) the divestiture of underperforming product lines and associated overheads. 

As a result of the above factors, operating income for the year ended 
December 31, 1996 increased to $1.411 million from $.075 million in the prior   
year. Net other income and expense changed from a net expense of $2.302 million 
for the year ended December 31, 1995 to net income of $.326 million for the year
ended December 31, 1996. These effects on net other income and expense were     
produced by: (i) the gain of approximately $1 million recognized on the sale of 
Sapri S.p.A., (ii) larger down payments with orders, (iii) lower bank interest  
rates during the period, and (iv) the addition of new capital from the year     
ended December 31, 1995.                                                        

  Income before income taxes and minority interest improved from a loss of
$2.227 million for the year ended December 31, 1995 to a profit of $1.737       
million for the year ended December 31, 1996. This was attributable to the      
following factors: (i) the Company's increase in operating income, (ii) interest
and other income, without the gain on the sale of Sapri S.p.A., increased 33.1% 
from $.776 million for the year ended December 31, 1995 to $1.033 million for   
the year ended December 31, 1996, and (iii) interest and other expenses         
decreased 42.6% from $3.078 million for the year ended December 31, 1995 to     
$1.766 million for the year ended December 31, 1996.                            

     Income taxes for the year ended December 31, 1996 increased 339.5% to $.189
million from $.043 million for the year ended December 31, 1995. Net income was 
reduced by the 40% minority interest in the Company's Prima Electronics         
subsidiary to produce a consolidated net income of $1.335 million for the year  
ended December 31, 1996, compared with a loss of $2.4 million for the year ended
December 31, 1995, although the minority interest increased 63.8% to $.213      
million for 1996 from $.130 million for 1995. The minority interest increased as
a result of the increased profitability of Prima Electronics' operations.       

LIQUIDITY AND CAPITAL RESOURCES                                                 

     The Company has historically funded its cash requirements through cash flow
from operations and by borrowings from banks and government agencies. At March  
31, 1998, the Company had outstanding bank and government agency debt of $11.202
million.                                                                        

   Net cash provided by (used in) operating activities was ($2.545 million),
and $2.724 million for the three months ended March 31, 1998 and for the year   
ended December 31, 1997, respectively. Cash flow from operations for the three  
months ended March 31, 1998 decreased by $5.269 million compared to the year    
ended December 31, 1997, primarily due to increases in inventories, and         
reductions in payables and accrued expenses between the two periods.            

  Trade accounts receivable, net of allowances, decreased $.476 million to
$18.631 million at March 31, 1998 from December 31, 1997 and decreased $2.137   
million to $19.107 million at December 31, 1997 from $21.244 million at December
31, 1996. Inventories increased $1.676 million to $9.899 million at March 31,   
1998 from December 31, 1997, and increased $.274 million to $8.223 million at   
December 31, 1997 from $7.949 million at December 31, 1996. The increase in     
inventory at March 31, 1998 was necessitated by planned increases in sales and  
related production in 1998.                                                     

     Cash provided by (used in) investing activities was ($.238 million) for the
three months ended March 31, 1998 and ($.644 million) for the year ended        
December 31, 1997. The use of cash for investing activities for the three months
ended March 31, 1998 was primarily attributable to capital expenses. The        
increase in the use of cash for the year ended December 31, 1997 compared to the
year ended December 31, 1996 was similarly due to capital expenses, along with  
the investment in Macromeccanica.                                               

 Capital expenditures were $.086 million and $.594 million for the three
months ended March 31, 1998 and year ended December 31, 1997, respectively. In  
general, these expenditures reflect the acquisition of additional manufacturing 
and research and development equipment.                                         

Cash provided by (used in) financing activities primarily reflects    
borrowings and payments related to bank and other debt. Cash used in financing  
activities for the three months ended March 31, 1998 and for the three months   
ended March 31, 1998 and for the year ended December 31, 1997 included advances 
from Prima Industrie to the Company to fund costs related to the Company's      
initial public offering. Cash provided by (used in) financing activities were   
$2.319 million for the three months ended March 31, 1998 and ($1.397 million)   
for the year ended December 31, 1997.                                           

 As of March 31, 1998, the Company had lines of credit with 13 different
Italian banks totaling $13.300 million, collateralized by the Company's accounts
receivable sales contracts. As of March 31, 1998, the Company had drawn down    
$11.202 million, and as of December 31, 1997 the Company had drawn down $8.916  
million. Wide fluctuation in the usage of the lines of credit are normal        
throughout the year because the Company's revenues are highly seasonal. The     
first and third quarters of each year are negatively affected by European       
holidays during Christmas and New Year's, and the month long summer holiday in  
August.                                                                         

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   The Company engages in policies designed to minimize the risk of loss (or
gain) resulting from fluctuations among foreign currencies. General practices   
consist of activities such as (1) attempting to make purchases in volumes       
equivalent to sales in the same foreign currency and (2) financing the sales of 
products in the same currency in which the sales of products in the same        
currency in which the sales invoice is denominated. From time to time, the      
Company engages in currency swaps to: (1) buy at a fixed future date a certain  
currency needed to settle payments to a supplier at that date, and (2) sell at a
fixed future date a certain currency needed to cover the full amount of the     
receivable.                                                                     

   Currency fluctuations are expected to remain volatile and unstable during
the forthcoming periods because of the continued strength of the U.S. economy   
and the desirability of the Dollar as an international currency. Until the EMU  
has reached more significant levels of consensus among its membership, European 
currencies may continue to experience wide fluctuations against the Dollar, as  
well as against intra-European currencies, as individual European nations       
attempt reconciliations of their domestic economies to EMU requirements.        
Historically, the Lit experiences greater fluctuations against the Dollar than  
against its European counterparts. For so long as the Lit remains volatile      
against the Dollar and other important trading currencies, the Company will     
attempt to minimize exposure to exchange rate fluctuations by purchasing        
non-Italian goods and services in currencies with more favorable exchange rates 
(e.g., the DM) and to use forward currency purchases to stabilize currency      
translation volatility.                                                         

 During the forthcoming periods, the Company expects increasing revenues
from non-European sources, particularly the Far East, South America and North   
America, where pricing can be established under Dollar denominations. This      
practice will lead to more stable presentations of the Company's financial      
position in Dollars and less impact from currency translations.                 

The Company intends to fund significant increases in R&D and marketing
expenditures with a portion of the net proceeds of this Offering. Similarly, the
expenditures for new hardware and software necessary to update management and   
control systems will be funded by a portion of the net proceeds of this         
Offering. See discussion under "Use of Proceeds."                               

   The allowance for bad debts remained at approximately the same percentage
of accounts receivable at March 31, 1998, as at December 31, 1997.              

     The collection of trade accounts receivable by the Company has historically
been slow, conforming to a traditional pattern in the machine tool business in  
Italy. Collection of accounts receivable, while slightly improved, remain       
extended, and for the past several fiscal years have averaged 172 days.         

YEAR 2000 ISSUE                                                                 

  The Company plans to address computer software that could be affected by
the Year 2000 problem, by the installation of new hardware and software programs
that will be Year 2000 compliant during the second half of 1998. The Company    
estimates that the costs of such efforts will be approximately $565,000, to be  
funded with a portion of the proceeds of this Offering. The Year 2000 problem is
the result of computer programs being written using two digits rather than four 
to define the applicable year. Any programs that have time-sensitive software   
may recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a major system failure or miscalculations. The Company believes 
that the new hardware and software programs will address the Year 2000 problem, 
but cannot give assurances that no Year 2000 problems will occur. The Year 2000 
problem may impact other entities with which the Company transacts business, and
the Company cannot predict the effect of the Year 2000 problem on such entities.

The Company is relying upon Microsoft Corporation to provide necessary
improvements to Microsoft WindowsT and Windows NTT operating systems to resolve 
Year 2000 problems with respect to its Products.                                

DISCLOSURE ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION              

 Statement of Financial Accounting Standards 131 supersedes Statement of
Financial Accounting Standards 14, "Financial Reporting for Segments of a       
Business Enterprise". Statement 131 establishes standards on the way that public
companies report financial information about operating segments in annual       
financial statements beginning December 31, 1998 for the Company and requires   
reporting of selected information about operating segments in interim financial 
statements issued to the public. It also establishes standards for disclosures  
regarding products and services, geographic areas and major customers. Statement
131 defines operating segments as components of a company about which separate  
financial information is available that is evaluated regularly by the chief     
operating decision maker in deciding how to allocate resources and in assessing 
performance. Management believes that the operations of Prima Electronics would 
presently comprise a separate segment as defined by Statement 131. Results of   
operations and financial position, however, will be unaffected by implementation
of this standard.                                                               

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HISTORY OF THE COMPANY

    The Company was incorporated in Delaware on July 29, 1997. In April, 1998,
the Company acquired 99.98% of the outstanding capital stock of Prima Industrie.
The Company has acquired, through the holdings of Prima Industrie, approximately
60% of the outstanding capital stock of Prima Electronics. The holding company  
structure, with the Company, a Delaware corporation, as the parent and Prima    
Industrie, as its subsidiary, was established to promote the                    
internationalization of the Company's business. Historically, Prima Industrie   
has focused its marketing and sales efforts in Europe. In order to achieve the  
objectives set forth in "Business -- Strategy" below, management believes that a
presence in the United States is critical. In addition, management believes that
a public offering of the Company's securities will be more readily received than
one by Prima Industrie because a Delaware corporation is a more familiar        
corporate entity than an Italian S.p.A. and the Company's presence in the U.S.  
will facilitate better shareholder relations and communications. There are      
certain risks associated with a holding company structure (including certain    
risks peculiar to Italian law), see "Risks of Holding Company Structure" and    
"Risks of Doing Business in Italy." Management believes these risks are similar 
to those that a direct shareholder of Prima Industrie would experience.         

PRIMA INDUSTRIE                                                                 

The predecessor of Prima Industrie was Prima Progetti S.p.A. ("Prima  
Progetti"), an engineering company formed in 1977. Prima Industrie was formed in
1980 and merged with Prima Progetti in October of 1985. The business evolved    
from assisting in engineering and design of its customers' products to          
manufacturing its own or customer-designed products. In 1979, Prima Progetti    
introduced its first 3-D Product for plastic cutting and, in 1982, its first 3-D
Product for metal cutting.                                                      

In 1985, Amada Co. Ltd. ("Amada"), a large Japanese holding company,  
invested approximately Lit 8.561 billion in the share capital of Prima          
Industrie, becoming its largest shareholder and subsequently arranged for term  
loan financing for Prima Industrie. Prima Industrie began the development of new
products for Amada, including a robotic sheet-metal bending machine.            

In 1992, Prima Industrie acquired the assets of Laser Work AG, a      
Switzerland-based manufacturer of 2-D laser cutting machines. Prima Industrie   
transferred the manufacturing assets of Laser Work AG from Zurich, Switzerland  
to Turin, Italy.                                                                

   In 1993, Prima Industrie transferred to Amada a division dedicated to the
development of products for third parties. This division had worked almost      
exclusively for Amada. In that year, Prima Industrie experienced weak demand for
its products, and Europe was in an economic recession. Prima Industrie organized
a sales subsidiary in the United States in order to better penetrate the        
American markets.                                                               

    In 1994, the relationship with Amada ended, and Prima Industrie determined
to concentrate its efforts in a single business sector -- precision laser       
cutting and welding systems. This determination was based upon its competitive  
position, the research and development efforts that had produced a complete     
range of products in this business sector and the potential for growth in this  
business sector. The discontinuance of business with Amada and losses in its    
other lines of business, Prima Electronics and Sapri S.p.A., led to a $5.27     
million loss in 1994, despite a 50% increase in the sale of the Products. The   
investment of Prima Industrie in Sapri S.p.A. was written off, as the losses    
suffered by Sapri were greater than its net capital. Sapri was engaged in the   
manufacture and sale of arc welding cells and robots, which business was        
adversely affected by intense competition, industry consolidation, low margins  
and economic conditions. The loss experienced by Prima Electronics was primarily
due to the discontinuance of its work for Amada and a change in products being  
produced by Prima Electronics.                                                  

     In 1995, Prima Industrie reached agreement to sell its interest in Sapri to
Asea Brown Boveri. The loss experienced in 1994 and the termination of the      
relationship with Amada resulted in a recapitalization of Prima Industrie in    
1995. Amada forgave a Lit 3 Billion loan to Prima Industrie. Amada's            
participation in the share capital of Prima Electronics was sold to the         
management of Prima Electronics in exchange for cash. As a condition to         
cancellation of its loan to Prima Industrie and the renunciation of its share   
capital, Amada required that the equity in Prima Industrie be reduced to zero or
less. It was, therefore, necessary under Italian law for Prima Industrie to     
attract new equity investments. In March 1995, an agreement was reached among   
Itainvest S.p.A., formerly known as GEPI--Gestion e Participazion Industrieli   
S.p.A., a government-owned merchant bank ("Itainvest"), Gian Mario Rossignolo,  
Gianfranco Carbonato, Hans Werthen, Cambria Ltd., on behalf of Miojusti         
Invesments BV, and Prima Industrie to increase the share capital of Prima       
Industrie to approximately Lit 10.9 billion. See "Management" and "Certain      
Beneficial Owners" for further information on this entity and these individuals.
The parties to this agreement agreed to subscribe for a capital investment of   
Lit 10.9 billion, of which Itainvest was to invest Lit 5.0 billion. There were  
certain remaining shareholders holding approximately Lit .228 billion in equity 
capital.                                                                        

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Itainvest had entered into an agreement with the other subscribing    
shareholders that permitted those shareholders to require Itainvest to sell its 
shares in Prima Industrie to those shareholders. As a result of this Offering,  
Itainvest and the other subscribing shareholders of Prima Industrie have        
restructured their agreement. Itainvest will retain full ownership of 394,121 of
the 1,212,683 shares of Common Stock that it received prior to this Offering and
will grant purchase options to each of the subscribing shareholders for the     
remaining 818,562 shares. Miojusti has the right to purchase 424,440 of the     
remaining shares of Common Stock at any time during the period commencing on the
sixth month anniversary of the date of this Prospectus and ending on the one    
year anniversary of the date of this Prospectus at a price equivalent to a      
minimum of 4,945 Lit. ($2.91) per share. Messrs. Carbonato, Rossignolo and      
Werthen have the right to purchase 118,234, 137,944, and 137,944, respectively, 
of the remaining shares of Common Stock during a two-year period beginning on   
the second anniversary of the date of this Prospectus. The purchase price for   
Mr. Carbonato is equivalent to 4,125 Lit. ($2.43) per share. The purchase price 
for Messrs. Rossignolo and Werthen is equivalent to a minimum of 4,945 Lit.     
($2.91) per share.                                                              

     In 1996, the sale of Sapri S.p.A. to Asea Brown Boveri was completed. Prima
Industrie also introduced a new 2-D precision cutting and welding system, the   
Platino. In July 1997, Prima Industrie received ISO 9001 certification. Also in 
July 1997, Prima Industrie licensed certain of its 2-D Product technology to    
Strippit for the manufacture and sale of those Products in North America. See   
"Business -- Licensing."                                                        

PRIMA ELECTRONICS                                                               

  Prima Electronics was organized in 1978 as a controlled company of Prima
Progetti, manufacturing industrial process controls. In 1990, Prima Electronics 
entered into an agreement with Atlas Copco to supply regulators and drives      
pursuant to Atlas Copco's specifications. The agreement provides for pricing and
quantity requirements, which are adjusted periodically. The agreement was       
extended in 1996 through December 31, 2001. In 1994, Prima Industrie's Products 
were equipped with new numeric controls, under the trade name "PRIMACH," which  
were developed by Prima Electronics. In December, 1997, Prima Electronics       
received ISO 9001 certification.                                                

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BUSINESS

GENERAL                                                                         

   The Company is an international provider of software-controlled, robotic,
precision laser cutting and welding systems. The Company designs, manufactures  
and sells 2-D Products that cut and weld shapes on a flat surface, and 3-D      
Products that trim, punch, slot and weld shaped or profiled materials. The      
Company's Products are used in automotive prototype development and the         
manufacture of consumer durable goods. The Company's customers include major    
European and North American automotive manufacturers, such as BMW, Fiat, Ford,  
Chrysler, Mercedes-Benz, Nissan, Peugeot, Renault and Volvo. The Products are   
also used by Tier One suppliers for the manufacture of automotive components    
that are incorporated into the vehicles sold by these manufacturers. Prima      
Industrie and Prima Electronics are ISO 9001 certified.                         

   The Company believes that it has a leading position in the market for the
manufacture and sale of 3-D precision laser cutting and welding systems. The    
Company's advantages are based on proprietary processes and technologies for    
automated robotic systems that integrate traditional machine tool equipment with
laser, laser optics and computer technology. These robotic systems utilize      
electronic process control systems that interface with CAE/CAD/CAM software to  
convert engineering designs into instructions for machinery operations.         

The Company, through Prima Electronics, its majority-owned indirect   
subsidiary, designs and manufactures state-of-the-art software and              
hardware-based industrial process controls for the Company's equipment and for  
other industrial equipment manufacturers. Industrial process controls function  
as the "brains" of machinery, directing all aspects of its operations. Prima    
Electronics' primary outside customer is Atlas Copco, one of the world's leading
suppliers of power generation and pneumatic equipment.                          

   The Company sells its Products to manufacturers of consumer durable goods
such as automobiles, trucks, appliances, farm implements and aircraft for use in
producing components that are incorporated into such manufacturer's finished    
products. The Company believes that manufacturers in other industries tend to   
follow the lead of the automotive industry in choosing manufacturing methods.   
Accordingly, the Company has traditionally focused, and will continue to focus, 
its marketing efforts on the automotive industry.                               

MARKET                                                                          

The Company's primary market for its 3-D Products is the automotive   
industry. Currently, there are 40 automotive manufacturers throughout the world,
of which 20 are widely recognized. Of the 20 primary automotive suppliers, 8    
control approximately 50% of the worldwide market. The Company believes, based  
upon its own analysis of industry projections, that, by 2015, an additional 160 
assembly plants will be constructed outside Europe, the United States, and      
Japan, representing an increase of 80% over the current 200 assembly facilities 
worldwide. Moreover, these sources further indicate that, by the year 2015,     
vehicle consumption in Europe, the United States and Japan, which currently     
account for half of the world sales of automobiles, will slip to approximately  
34% of worldwide consumption. As a result, major automotive manufacturers will  
accelerate the construction of assembly operations outside of these territories.
These new plants will be equipped with advanced factory automation systems,     
potentially including those provided by the Company, in place of traditional    
manufacturing and assembly technologies. Therefore, the Company expects vigorous
demand for its Products in developing markets, as well as accelerating demand   
within Europe and the United States as older assembly operations are            
retrofitted, relocated or replaced.                                             

The Company expects that decision making for the purchase of capital  
equipment for use in worldwide assembly operations will remain highly           
centralized. Furthermore, the primary automotive manufacturers have reduced     
their Tier One suppliers to approximately 1,000 vendors each, down from         
approximately 25,000 each ten years ago. Therefore, it is expected that the     
Company's sales and marketing efforts will be focused on a limited number of    
manufacturers' headquarter operations and Tier One suppliers, resulting in a    
more efficient sales and marketing organization.                                

THE AUTOMOTIVE FABRICATION PROCESS                                              

    Automotive components have traditionally been produced through an assembly
line process utilizing tool and die equipment. Under the traditional method, raw
material is stamped or pressed into the basic shape through the use of a die    
that is constructed to form the appropriate shape in the material. After the    
basic shape has been formed, additional dies, along with various mechanical     
machine tools, are used to stamp, cut, slot, punch and trim the appropriate     
details into the component.                                                     

    Although the purchase of a die for component production represents a large
capital expenditure, the duration of its use is limited because it must be      
constructed to stamp particular shapes or details. When the style of a component
changes, a new                                                                  

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die must be constructed to reflect the new shape and details of the component.  
In response to this problem, manufacturers have begun to use, in limited volume 
production runs, laser cutting systems, such as those produced by the Company,  
to replace the mechanical tool and die technology traditionally used to punch,  
cut, slot and trim appropriate details into automotive components after the     
stamping or pressing of the initial shape. Because laser cutting systems may be 
reprogrammed to cut different patterns, there is no need to purchase a new die  
each time the style of a component changes. Thus, a manufacturer is not forced  
to undertake large capital expenditures each time it wishes to make changes to  
the details of a component.                                                     

 While the ability to generate different patterns and shapes makes laser
cutting technology more cost-effective than traditional tool and die technology,
its use has been limited primarily to prototype development and limited         
production runs, due to the inability of laser cutting systems to cut components
at the same speed as a mechanical die. In addition, the available laser cutting 
systems products have not been designed to be installed within an assembly line 
for full production runs.                                                       

PROTOTYPE DEVELOPMENT. The initial stage of manufacturing a component 
involves the development of a prototype for testing and marketing purposes.     
During this process, the automotive manufacturer and Tier One supplier may      
produce several different versions of the prototype in succession, each version 
containing refinements suggested by tests run on the earlier versions. It is    
cost-prohibitive to use dies in producing these prototypes because a new die    
would have to be constructed for each successive version of the prototype. Thus,
the prototype development process traditionally has involved metal-working by   
hand or with small machine tools. The advent of laser technology, however, has  
greatly increased the precision and efficiency with which prototypes can be     
manufactured. The use of the laser avoids the natural imperfections that result 
from metal working by hand or by conventional tool and die technology. Moreover,
because the laser can interface directly with CAE/CAD/CAM, there is no danger of
translation errors that may occur when the CAE/CAD/CAM design is converted into 
cutting instructions. In addition, because the laser's cutting instructions are 
stored in its computer operating system, it can be used to create duplicates of 
the prototype without significantly increasing costs.                           

  PRODUCTION. Following the manufacturer's approval of the prototype, full
scale production of the component begins. Traditionally, this process commences 
with the casting of one die to stamp the basic shape of the component into the  
sheet metal and additional dies to stamp the necessary details into the basic   
shape. As discussed above, re-programmable laser cutting and welding systems may
be used to perform the precision cutting and finishing functions traditionally  
performed by dies. However, the use of laser cutting systems as a replacement   
for tool and die technology in the precision cutting and finishing stages of    
manufacturing has been limited to relatively low volume production runs.        

    The Company believes that certain trends in the manufacturing industry are
causing an increasing emphasis on lower volume production runs and a decreasing 
emphasis on the speed of precision cutting and finishing. These trends include: 
(i) the decentralization of the production of components that make up a finished
product among a wider array of factories as a result of manufacturers' increased
reliance on the outsourcing of component production; (ii) the shift towards     
just-in-time production methods and away from the stockpiling of partially      
finished goods; (iii) the acceleration of the rate of change in a product's     
internal components from one year's model to the next; and (iv) the use of a    
larger number of small components in the design of a finished product. The      
Company believes that this increasing emphasis on lower volume production runs  
and decreasing emphasis on speed will result in continued increases in the      
demand for laser cutting and welding systems, such as those produced by the     
Company, as replacements for tool and die systems in the precision cutting and  
finishing stages of manufacturing.                                              

 The advantages of laser cutting and welding technology over traditional
tool and die technology for production operations include the following:        

(Bullet) laser systems produce more precise structural configurations 
            without the imperfections inherent in tool and die applications,
              resulting in fewer rejects and more efficient assembly operations;

(Bullet) the automotive industry is producing lighter and more fuel   
            efficient vehicles because of cost considerations and government
             mandates and, as a result, automotive manufacturers are utilizing
           formed steel and composite profiles that cannot be processed by
conventional tool and die technology; and           

    (Bullet) because of the integration of CAE/CAD/CAM technologies within the
              Company's Products, interruptions in the production process caused
             by design errors are minimized, resulting in better assembly fits
       of component parts and enhanced structural integrity of the
vehicle.                                            

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PRODUCTS                                                                        

The Company sells both 2-D and 3-D Products. 2-D Products cut and weld
shapes on a flat surface, while 3-D Products trim, punch, slot and weld objects 
on a three-dimensional basis. The Company's Products are based upon high-power  
carbon dioxide lasers.                                                          

  The term "laser" is an acronym for "light amplification by the simulated
emission of radiation." A laser converts energy into an intense beam of light   
comprised of a single or limited number of wavelengths. A laser beam may be     
strong enough to cut sheet metal or may be sensitive enough to perform eye      
surgery.                                                                        

THREE-DIMENSIONAL LASERS. The Company produces two 3-D Products -- the
Rapido 5 model and the Optimo model. Both models utilize a flying optics system 
pursuant to which the material to be cut remains stationary while the laser head
moves to the appropriate position for cutting. Both models are equipped with a  
five-axis laser head, which permits profile cutting, i.e., cutting on           
three-dimensional, rather than flat, materials. Both models have an industrial  
process control system developed by Prima Electronics, which allows for the     
machine to either interface with CAE/CAD/CAM software or be controlled by       
off-line, manual instructions. In addition, both machines can store instructions
in memory for future repetitions. The laser head of the Rapido 5 is controlled  
by a fully retracting arm, while the laser head of the Optimo is controlled by a
gantry structure which allows longer strokes than the fully retracting arm of   
the Rapido. In the gantry structure, the laser head is suspended from a spanning
frame that is supported by four corner poles. The Optimo model is designed to   
process large automobile body parts and to provide cutting and trimming to large
areas. The Optimo permits laser cutting and welding to five sides of the piece  
(i.e., front, back, right, left, and top). The Optimo is the Company's highest  
priced product because it requires more expensive installation and on-site      
commissioning. The retracting arm of the Rapido 5 is a cantilever structure that
does not support as much weight as the Optimo does. The term "cantilever" refers
to the retracting arm which is supported at only one end. The cantilever        
structure of the Rapido 5 permits laser cutting and welding to four sides of the
work piece (i.e., front, right, left, and top).                                 

TWO DIMENSIONAL LASERS. The Company produces two 2-D Products -- the  
Platino model and the Laserwork Gold model. Both models utilize a flying optics 
system. Both models have an industrial process control system developed by Prima
Electronics, which allows the machine to either interface with CAE/CAD/CAM or be
controlled by off-line, manual instructions. In addition, both machines can     
store instructions in memory for future repetitions. The laser head of the      
Platino is controlled by a cantilevered arm that extends over the work area. The
laser head moves along this arm in accordance with instructions and the arm     
itself moves over the work area, with the laser head remaining at all times     
perpendicular to the cutting surface. The laser head of Laserwork Gold is       
controlled by a gantry structure. The same distinctions between the cantilever  
and gantry structures as discussed above apply to the Platino and the Laserwork 
Gold models.                                                                    

  NEW PRODUCT DEVELOPMENTS. As described above under "Market," the Company
anticipates greater demand for its Products; however, its 3-D Products must     
undergo certain design changes to meet the requirements of the production       
environment. The Company will embark on its "Laser On-Line" development program 
to produce a family of production-oriented 3-D Products. The 3-D product family,
tentatively named "Laser-Gate," will consist of a high speed cutting and welding
system of integrated units.                                                     

INDUSTRIAL CONTROLS                                                             

  Prima Electronics manufactures industrial controls. Prima Industrie uses
these controls in its Products to instruct the laser head as to the specific    
tasks to be completed as well as the laser settings.                            

Prima Electronics also produces regulators and drives for Atlas Copco 
pursuant to a supply agreement extending through 2001. The specifications and   
technology for these products were developed by Prima Electronics, but are owned
by Atlas Copco, and Prima Electronics manufactures these products solely for    
Atlas Copco's use in its products. The supply agreement provides for the        
maintenance of rigorous quality standards.                                      

QUALITY                                                                         

   Prima Industrie and Prima Electronics have each obtained certification as
being in compliance with International Organization for Standardization ("ISO") 
9001. The ISO is a worldwide federation of national standards bodies, one from  
each of over one hundred countries. ISO 9000 standards, of which ISO 9001 is a  
part, are basic rules for quality systems, that ensure that a supplier has the  
capability to produce the required goods or services and to meet fully customer 
expections. ISO 9000 standards were developed to establish a common set of      
universally accepted quality standards, especially for international trade. The 
procedure for attaining certification is for the applicant to evaluate and      
revise its quality procedures against the                                       

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requirements of the applicable standard, e.g., ISO 9001. The applicant presents 
its revised quality procedures to the national standards body for its country.  
Representatives of the national standards body assess the procedures and the    
applicant's operations prior to certification. Certain countries or business    
sectors may not accept products or services from businesses without such        
certification. Series ISO 9001 provides certification for companies that design,
manufacture, install or service products. The certification means that the      
production processes of Prima Industrie and Prima Electronics incorporate       
quality practices, disciplines and checks and balances on a fully documented    
basis.                                                                          

BACKLOG                                                                         

    At March 31, 1998, Prima Industrie had orders for 20 Products with a value
of Lit 16.335 billion, or approximately $8.98 million. This compares to a       
backlog of Lit 18.473 billion, or approximately $11.02 million, on March 31,    
1997, consisting of 22 units. At March 31, 1998, Prima Electronics had orders   
from customers other than Prima Industrie with a value of Lit 5.739 billion, or 
approximately $3.15 million, compared to a backlog of Lit 4.599 billion, or     
approximately $2.74 million, at March 31, 1997.                                 

STRATEGY                                                                        

  The Company's goal is to exploit its technological superiority to become
the leading international provider of fully integrated robotic systems for the  
precision cutting and finishing stages of the manufacturing process. The Company
also intends to become a recognized supplier of industrial process controls for 
the machine tool industry. The following discussion summarizes the major aspects
of the Company's corporate strategy:                                            

(Bullet) ACHIEVE VERTICAL AND HORIZONTAL INTEGRATION THROUGH STRATEGIC
         ACQUISITIONS AND JOINT VENTURES. Following this Offering, the
        Company will seek to expand its operations through strategic
    acquisitions throughout the world. In pursuing strategic
           acquisitions, the Company will attempt to achieve both vertical
     integration, through the acquisition of critical material
          suppliers (e.g., laser and auxiliary equipment suppliers), and
            horizontal integration, through the acquisition of complementary
            businesses and products. In addition, the Company may enter into
           joint ventures pursuant to which a local manufacturer will join
              with the Company to provide products to the automotive industry in
             the region. The Company will target acquisitions in the following
         areas and industry sectors: (i) the highly fragmented Italian
           multi-axis machine tool industry, where the Company can achieve
              added critical mass and economies of scale in production, research
         and development, and sales and marketing activities, (ii) the
          worldwide sheet metal fabricating industry, particularly those
             sectors that are highly compatible with production laser systems,
     (iii) worldwide system integrators for metal fabricators,
        particularly those with experience integrating complex laser
        system solutions with other metal fabricating activities and
           factory control systems, and (iv) laser manufacturers, to avoid
         dependence on third party laser suppliers. The Company has no
              agreements for any acquisitions as of the date of this Prospectus.

     (Bullet) ENHANCE THE COMPANY'S PRODUCTS FOR USE IN HIGHER VOLUME PRODUCTION
           ENVIRONMENTS. The Company believes that there is a trend in the
             manufacturing industry towards lower volume production runs. This
          trend favors the use of laser cutting and welding systems over
           tool and die technology for the precision cutting and finishing
       stages of the manufacturing process as a method of reducing
            production costs per unit. The Company expects to take advantage
           of this trend by enhancing its Products for use in a production
           environment as part of its "Laser-On-Line" development program.
              Through this program, the Company will modify its Products to make
             them better able to withstand the rigors of a full production run
             and will add automated loading and unloading systems to allow the
Products to be integrated into an assembly line.    

(Bullet) MAINTAIN AND EXPAND ITS CURRENT MARKET SHARE IN 2-D AND 3-D  
             PRODUCTS THROUGH AGGRESSIVE GLOBAL MARKETING. The Company intends
            to maintain its current share of the market for both 2-D and 3-D
             Products through aggressive global marketing and sales promotion.
             Marketing initiatives will include exhibits at major machine tool
     exhibitions throughout the world, extensive marketing and
         promotional efforts to introduce new products and key account
promotions.                                         

(Bullet) MARKET PRIMA ELECTRONICS' INDUSTRIAL PROCESS CONTROLS THROUGH
            WORLDWIDE DISTRIBUTION CHANNELS. The Company intends to leverage
       the experience of Prima Electronics in providing industrial
        controls to Prima Industrie and Atlas Copco by independently
              marketing its state-of-the-art industrial process control products
              through electronic and electrical distribution channels worldwide.
      While initial marketing efforts will focus on machine tool
      companies, management believes that its industrial control
              products, both hardware and software, can be utilized by virtually
          all flexible manufacturing, automated production and assembly,
            automated material handling, welding, and process control system
suppliers.                                          

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   (Bullet) DEVELOP, AS A DISCRETE PROFIT CENTER, COMPREHENSIVE WARRANTY AND
              SERVICE, TRAINING AND SUPPORT, PREVENTIVE MAINTENANCE PROGRAMS AND
          UPGRADES FOR THE COMPANY'S PRODUCTS. The Company expects these
             programs to increase its competitive position in both the 2-D and
              3-D markets by establishing a corporate reputation for quality and
          service. Accordingly, the Company intends to expand its direct
             support infrastructure worldwide and expand its field service and
      support. The establishment of these activities will entail
              recruiting and training qualified personnel, identifying qualified
        independent service organizations and building effective and
              highly trained organizations that can provide service to customers
in various countries in their assigned regions.     

 (Bullet) EXPAND THE LICENSING OF ITS TECHNOLOGY FOR THE MANUFACTURE AND
          SALE OF THE COMPANY'S 2-D PRODUCTS OUTSIDE EUROPE. The Company
        will seek more licensing partners for its 2-D equipment. The
              Company has entered into a license agreement with Strippit for the
         manufacture and sale of products using the technology for the
         Platino product. Moreover, the Company has executed a license
              agreement with a licensee in China for the Company's 2-D Products,
              subject to the approval of the government of the People's Republic
         of China. See "Business -- Licensing." Assuming the requisite
              approvals are obtained, the revenues generated from this licensing
             program may significantly increase total revenues. Moreover, this
          program will allow the Company to take advantage of purchasing
           economies of scale because subassemblies purchased by licensees
        from the Company's outside suppliers will be included in the
       calculation of the Company's volume discounts. Finally, the
              Company expects this program to increase its sales of 3-D Products
        by requiring licensees to refer customers interested in such
            products to the Company. However, there can be no assurance that
       the Company's licensing strategy will achieve such results.

RESEARCH AND DEVELOPMENT                                                        

  The Company believes it has achieved a technology leadership position in
the 3-D Products market by investing heavily in research and development and by 
developing higher performance products and satisfying the needs of its          
customers. The Company intends to continue to invest heavily in research and    
development; however, the Company's development programs do not involve the     
authorship of any new technology. The Company already utilizes Intel PentiumT   
based hardware and Microsoft WindowsT and Windows NTT based software;           
accordingly, off-line interfaces are easily specified and developed. Prima      
Electronics has developed automatic loading and unloading sequences and         
conveying equipment, and these devices and technology are also readily available
from third party suppliers. For the Company, adapting automotive "prototyping"  
equipment to the production environment involves only the refinement of existing
bodies of technology to a different manufacturing environment. In 1995, 1996 and
1997, the Company spent, net of grants received for current projects, $.670     
million, $1.329 million, and $1.335 million, respectively. The Company received 
R&D grants for current projects of $.231 million in 1995, $.199 million in 1996 
and $.114 million in 1997.                                                      

COMPETITION                                                                     

  The Company currently has four significant competitors in the market for
3-D laser-cutting and welding systems, including Trumpf of Germany; Mazak and   
NTC, both located in Japan; and Lumonics, Inc., a U.S. supplier of YAG based    
laser cutting and welding products. All of these companies are larger than the  
Company and have access to greater financial, technical and other resources than
the Company. Although the Company believes that these competitors are not yet   
supplying technically equivalent laser cutting products, the Company believes   
that these companies will aggressively seek larger positions in the 3-D market. 
To remain competitive, the Company believes that it will be required to         
manufacture and deliver products to customers on a timely basis and without     
significant defects and that it will also be required to maintain a high level  
of investment in research and development and in sales and marketing. In        
addition, the market for 3-D laser cutting and welding equipment is still small 
and developing, and there can be no assurance that larger competitors with      
substantially greater financial resources, including manufacturers of 2-D laser 
products and other manufacturers of industrial lasers will not attempt to enter 
the market.                                                                     

Competition in the 2-D laser cutting and welding industry is intense, 
characterized by large, multi-national corporations with significantly more     
resources than the Company. The competition has achieved their successes        
primarily as a result of their participation in the conventional machine tool   
stamping and cutting industry. The Company enjoys no significant technological  
advantage over the competitors in the 2-D marketplace; however, the Company     
maintains competitive, state-of-the-art products, and has achieved, maintained  
and extended its participation in the 2-D market place without the benefit of   
complementary product lines or sales resources.                                 

 Currency devaluation resulting from the economic conditions in Asia may
result in a competitive advantage to certain competitors located in Asia,       
especially Japan. This devaluation may cause competitors' products to be        
significantly less expensive than Products manufactured by the Company.         

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LICENSING                                                                       

The Company has begun licensing the technology for manufacture of 2-D 
Products in territories outside Europe. The first licensing agreement was       
reached in July 1997, with Strippit for the manufacture and sale of products    
using the technology for the Company's Platino Product. The agreement provides  
for an exclusive sales territory limited to North America with a non-exclusive  
license for the rest of the world, excluding Europe and certain markets in Asia.
The license agreement provides for an up-front royalty payment with additional  
payments per machine sold, subject to a minimum royalty payment during the      
period ending on December 31, 1999. Strippit is also required to furnish to the 
Company information regarding potential purchases of 3-D Products. Strippit is  
the wholly owned subsidiary of Idex Corporation. Idex Corporation has announced 
that it is offering to sell Strippit and has commenced a process to solicit bids
for the acquisition of Strippit. The purchase of Strippit by an entity with     
interests adverse to those of the Company could have a material adverse effect  
on the Company's licensing activities in North America. Accordingly, the Company
is monitoring the auction process.                                              

The Company has executed the China License with Beijing Machinery and 
Electricity Institute for the manufacture and sale in China of the Company's 2-D
Laserwork Product, subject to the approval of the government of the People's    
Republic of China. The China License has a term of five years, commencing with  
the approval by the government, and grants a non-exclusive license for the      
manufacture and sale of the Laserwork Product in China. The China License       
requires an initial payment for the License and royalty payments based upon net 
sales of the Products. The approval of the China License by the government of   
the People's Republic of China has been significantly delayed. The Company      
cannot predict when such approval will be forthcoming, if at all.               

EMPLOYEES                                                                       

     As of March 31, 1998, the Company employed 210 people on a full-time basis,
including 20 in sales and services offices outside Italy. The Company believes  
that its relations with its employees are good. None of the employees is covered
by a collective bargaining agreement. See "Risk Factors -- Dependence on Key    
Personnel."                                                                     

MANUFACTURING                                                                   

     Prima Industrie's manufacturing activities consist of assembly, integration
and testing. These activities are performed in a 72,000 square foot facility in 
Turin, Italy. In order to focus on its core technology, leverage the expertise  
of its key suppliers and respond more efficiently to customer demand, the       
Company has outsourced some of its machining operations on certain structural   
subassemblies. During the fourth quarter of 1997, the Company completed a       
transaction with Macromeccanica pursuant to which it sold certain machine tools 
and equipment previously used by Prima Industrie to manufacture parts for its   
Products to a leasing company, which then leased such equipment to              
Macromeccanica. The Company entered into a requirements contract pursuant to    
which Macromeccanica will supply such parts to the Company. The Company will no 
longer machine the frame and structure components of its Products. With the     
exception of smaller machining on the laser head and other small parts, Prima   
Industrie will focus its manufacturing activities primarily on assembly         
operations. In the event Macromeccanica is unable to satisfy quality standards  
or production quantities, Prima Industrie will experience temporary delivery    
problems until other machining subcontractors can be retained, which            
subcontractors are readily available to Prima Industrie.                        

     At present, the production capacity of Prima Industrie is approximately 100
machines per year, and it is operating at 80% of capacity. In the event that    
sales increases as a result of the Company's strategic initiatives, the Company 
intends to commence assembly operations in North American and Asia at the       
appropriate time.                                                               

FACILITIES                                                                      

     Prima Industrie's headquarters and manufacturing facilities are housed in a
72,000 square foot building located in Collegno, Turin, which Prima Industrie   
leases under a lease expiring in 2002. Prima Electronics' headquarters and      
manufacturing facilities are housed in a 33,850 square foot building located in 
Moncalieri, Turin, which Prima Electronics leases under a lease expiring in     
1998. Upon expiration of the lease in 1998, Prima Electronics will acquire the  
facility with the final payment under the lease. The Company maintains its U.S. 
headquarters at 447 S. Sharon Amity Road, Suite 250, Charlotte, North Carolina. 
Prima Industrie also leases various office spaces in France, The United Kingdom,
Spain, Switzerland, and the United States either directly or through wholly     
owned subsidiaries.                                                             

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS                                                

 The executive officers and directors of the Company, who have served in
such capacities since the Company was incorporated on July 29, 1997 unless      
otherwise indicated, and their ages, as of July 2, 1998, are as follows:        

                                                        [Enlarge/Download Table]

NAME                                          AGE                       POSITION                     
--------------------------------------------  ---  --------------------------------------------------
                                                                                                     

Gian Mario Rossignolo.......................  67   Chairman of the Board of Directors                
James R. Currier, Sr........................  51   President, Chief Executive Officer and Director   
Gianfranco Carbonato........................  53   Executive Vice President and Director             
Giovanni Ciamaroni..........................  52   Vice President Business Development and Director  
Michael H. Gilbert..........................  57   Vice President Finance and Administration, Chief  
                                                     Financial Officer, Secretary and Treasurer(1)   
Hans Lennart Oscar Werthen..................  83   Director                                          
Pio Pellegrini..............................  52   Director(2)                                       

---------------                                                                 

(1) Mr. Gilbert was elected to serve in the positions shown above effective     
October 1, 1997.                                                        

(2) Mr. Pellegrini was elected to serve as a member of the Board of Directors of
the Company on October 15, 1997.                                        

  The number of members of the Board of Directors is set at nine and there
are six directors currently serving. After the closing of this Offering, the    
Board of Directors intends to elect Mr. W. Edwin McMahan and Mr. Michael A.     
Almond to fill two of the three vacancies. Mr. McMahan, age 53, and             
Mr. Almond, age 49, have agreed to accept the election and to serve on the      
Board, provided that acceptable directors' and officers' liability insurance is 
in place and appropriate indemnification agreements with the Company are        
obtained. It is anticipated that Messrs. McMahan and Almond will serve as       
independent directors of the Company and on the Compensation and Audit          
Committees of the Board of Directors, but they have not participated in the     
affairs of the Company or, in any way, in the preparation of this Prospectus.   
The Board of Directors intends to fill the remaining vacancy with a nominee to  
be designated by EBI Securities Corporation after the closing of this Offering  
pursuant to the Underwriting Agreement. See "Underwriting."                     

    The executive officers and directors of Prima Industrie and their ages, as
of July 2, 1998, are as follows:                                                

                                                        [Enlarge/Download Table]

NAME                                             AGE                     POSITION                   
-----------------------------------------------  ---  ----------------------------------------------
                                                                                                    

Gianfranco Carbonato...........................  52   Managing Director and Chief Executive Officer 
Gian Mario Rossignolo..........................  67   Chairman of Board of Directors                
Hans Lennart Oscar Werthen.....................  82   Vice Chairman of Board of Directors           
Alberto Delle Piane............................  50   Deputy General Manager                        

   The executive officers and directors of Prima Electronics and their ages,
as of July 2, 1998, are as follows:                                             

                                                        [Enlarge/Download Table]

NAME                                             AGE                     POSITION                   
-----------------------------------------------  ---  ----------------------------------------------
                                                                                                    
Domenico Peiretti..............................  47   Managing Director and Chief Executive Officer 
Gianfranco Carbonato...........................  52   Chairman of Board of Directors                

     GIAN MARIO ROSSIGNOLO, a founder of Prima Industrie, has served as Chairman
of Prima Industrie since July 1995. Prior to that, he served as its Vice        
President from July 1, 1985, to February 9, 1995. Mr. Rossignolo serves as a    
member or chairman of the Board of Directors of seventeen European companies,   
including Telecom Italia S.p.A. Group, Electrolux Zanussi S.p.A., Atlas Copco   
Italia S.p.A., Perstop S.p.A., Sanitari Pozzi and Consortium, Ericsson S.p.A.,  
SKF Industrie S.p.A., and SKF, Incorporated. The shares of Telecom Italia S.p.A.
Group are traded on the Milan, Italy stock exchange and on the New York Stock   
Exchange through American Depositary Receipts. SKF Incorporated is traded on the
National Market System of the NASDAQ Stock Market, Inc.                         

JAMES R. CURRIER, SR., served as President of Apogee Robotics, Inc.   
("Apogee"), from October 1994 to June 1997. Apogee filed in December 1994, a    
petition under Chapter 11 in the United States Bankruptcy Court for the District
of                                                                              

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Colorado. On June 17, 1997, the proceeding was converted to a Chapter 7 case.   
From August 1994 to present, Mr. Currier has also served as Secretary and       
Treasurer of Currier Properties, Inc., a commercial real estate company. From   
February 1987 to November 1992, Mr. Currier served as Executive Vice President  
of NDC Automation, Inc., a publicly held factory automation company.            

 GIANFRANCO CARBONATO has served as Chief Executive Officer and Managing
Director of Prima Industrie since June 7, 1985. Mr. Carbonato was General       
Manager of Prima Progetti from July 1977 until its merger with Prima Industrie  
in May 1984. Mr. Carbonato has also served as President of Prima Electronics    
since April 1995.                                                               

GIOVANNI CIAMARONI has served as Managing Partner of Rimex GmbH, a    
technology broker, since 1993, and as a business consultant since 1991. Mr.     
Ciamaroni was a founder and served as Chairman of the Board of Directors and    
Chief Executive Officer from 1974 to July 1991 of Logosystem S.p.A., a company  
involved in computer integrated manufacturing.                                  

  MICHAEL H. GILBERT is a certified public accountant and from May 1986 to
September 1997, was a shareholder, officer and director of Hitchner, Whitt &    
Co., P.A., a firm of certified public accountants in Charlotte, North Carolina. 

HANS LENNART OSCAR WERTHEN has served as Vice Chairman of the Board of
Directors of Prima Industries since October 1995. Mr. Werthen is retired and    
serves as Honorary Chairman of the Board of Directors of AB Electrolux. Prior to
retirement, Mr. Werthen served as Chairman of the Board of Directors of         
Electrolux from 1991 to 1993.                                                   

PIO PELLEGRINI has served as Manager of Itainvest, a government owned 
investment firm, from May 1982 to present.                                      

  DOMENICO PEIRETTI has served in various management capacities with Prima
Electronics since November 1987. In the period from 1986 to 1996, he served as  
Vice-President of Prima Electronics. Since October 1987, he has served as       
General Manager of Prima Electronics. Since April 1995, he has also served as   
Managing Director of Prima Electronics.                                         

  ALBERTO DELLE PIANE has served as Deputy General Manager and Director of
Sales for Prima Industrie since January 26, 1994. From January 1989 to January  
1994, he served as Director of the Laser Division of Prima Industrie.           

     W. EDWIN MCMAHAN is a nominee for election as a director after consummation
of this Offering. Mr. McMahan has served since 1974 as Chief Executive Officer  
of Little & Associates Architects, an architectural firm based in Charlotte,    
North Carolina, and as President of McMahan-Carver Properties, Inc., an         
affiliated real estate development company.                                     

MICHAEL A. ALMOND is a nominee for election as a director after       
consummation of this Offering. Mr. Almond is an attorney and has been a member  
of the law firm of Parker, Poe & Adams and Bernstein, LLP in Charlotte, North   
Carolina, since March 1, 1984. Mr. Almond has specialized in the practice of    
international law, representing U.S. businesses overseas and foreign businesses 
in the U.S.                                                                     

LEGAL PROCEEDINGS INVOLVING FORMER DIRECTOR                                     

 On July 9, 1998, Mr. Mario Mauri, who had served as a director of Prima
Industrie since 1995 and as a director of the Company since July 1997, resigned 
both posts. Mr. Mauri, along with the other directors of a now bankrupt Italian 
company, has been accused by an Italian prosecutor of certain allegedly improper
transactions between the bankrupt company and its affiliates. Neither the       
Company nor any of its subsidiaries has or had any business relationship with   
the bankrupt company or its affiliates. Mr. Mauri is now under house arrest in  
Italy. The effect of these events, if any, on Mr. Mauri's future status as the  
Chairman of Cambria, Ltd., an entity that controls Miojusti (a substantial      
shareholder of the Company), is uncertain. See "Certain Beneficial Owners."     

DIRECTOR COMPENSATION                                                           

Members of the Company's Board of Directors who are employed by the   
Company, Prima Industrie, Prima Electronics or their affiliates do not receive  
compensation for their services as directors. All other directors receive       
$10,000 per year, plus expenses. As part of the Company's 1997 Stock Incentive  
Plan, the directors of the Company who are not officers, employees or original  
stockholders of the Company participate in a formula grant program. Original    
stockholders are those stockholders of the Company prior to the Offering. As of 
the date such individual becomes a director, he or she will receive an option to
purchase 500 shares of Common Stock at an exercise price of 105% of the fair    
market value of the Common Stock on such date. Thereafter, each such director   
will receive an option to purchase 500 shares of Common Stock on the anniversary
of the individual becoming a director at an exercise price equal to the fair    
market value of the Common Stock on such date.                                  

BOARD COMMITTEES                                                                

Upon completion of this Offering, the Board will have two standing    
committees, the Compensation Committee and the Audit Committee. The Compensation
Committee will be responsible for reviewing the compensation of executives of   
the Company and recommending changes to the Board. The Compensation Committee   
also will administer The PRIMA International Group, Inc. 1997 Stock Incentive   
Plan. The Compensation Committee will be composed of Messrs. McMahan and        
Almond.                                                                         

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The Audit Committee will be responsible for meeting periodically with 
representatives of the Company's independent certified public accountants to    
review the general scope of audit coverage, including consideration of the      
Company's accounting practices and procedures and systems of internal controls, 
and will report to the Board with respect thereto. The Audit Committee also will
recommend to the Board the appointment of the Company's independent auditors.   
The Audit Committee will be composed of Messrs. McMahan and Almond.             

EXECUTIVE COMPENSATION                                                          

   The following table sets forth in summary form information concerning the
compensation awarded to, earned by, or paid for services rendered to Prima      
Industrie or Prima Electronics in all capacities during the year ended December 
31, 1997, by (i) the Chief Executive Officer of each entity and (ii) the most   
highly compensated executive officers of either entity whose salary and bonus   
for such year exceeded $100,000 (the "Named Executive Officers").               

SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1)(2) 

                                                                [Download Table]

                                                                     OTHER ANNUAL  
NAME AND PRINCIPAL POSITION       YEAR  SALARY ($)    BONUS ($)    COMPENSATION ($)
--------------------------------  ----  ----------    ---------    ----------------
                                                                                   
Gianfranco Carbonato............  1997    221,500(3)        --       11,100(4)(6)  
  CEO Prima Industrie             1996    244,400(3)        --       11,700(4)(6)  
                                  1995    181,100(3)        --       12,300(4)(6)  
Alberto Delle Piane.............  1997    118,600       19,900(5)    11,700(4)(6)  
  Deputy General Manager          1996    129,600       25,300(5)    13,600(4)(6)  
  Prima Industrie                 1995    104,400       24,600(5)    12,900(4)(6)  
Domenico Peiretti...............  1997    128,500(3)        --       10,000(4)(6)  
  CEO Prima Electronics           1996    140,600(3)        --       11,000(4)(6)  
                                  1995     96,400       12,300       11,000(4)(6)  

---------------                                                                 

(1) All compensation described in this table was denominated in Italian lire,   
but has been converted to U.S. dollars at the following exchange rates: 
1,629 Lira to the dollar for 1995, 1,543 Lira to the dollar for 1996 and
   1,711 Lira to the dollar for 1997. On July 1, 1998, the exchange rate among
banks selling in amounts of $1 million or more as published by the WALL 
STREET JOURNAL was 1791 Lira to the dollar.                             

(2) Prima Industrie and Prima Electronics do not have incentive compensation    
plans or make any form of payouts or awards under long term compensation
plans.                                                                  

(3) Included in salary are amounts paid to Messrs. Carbonato and Peiretti as    
managing director or director fees for Prima Industrie and Prima        
Electronics.                                                            

(4) The Chief Executive Officer and each Named Executive Officer receive        
 perquisites and other personal benefits, however, the aggregate amount is
less than ten percent (10%) of the total salary and bonus shown in the  
table.                                                                  

(5) Mr. Delle Piane receives a discretionary bonus based upon performance as    
determined by the Managing Director of Prima Industrie, Mr. Carbonato.  

(6) The compensation shown is paid by the employer pursuant to the requirements 
of a government program. The employee is entitled to receive the amounts
 paid on behalf of the employee when the employee is no longer employed by
the employer.                                                           

EMPLOYMENT AGREEMENTS                                                           

  The Company has entered into employment agreements with Messrs. Currier,
Ciamaroni, Carbonato and Gilbert. Each employment agreement has an initial term 
of three years and contains certain covenants regarding the employee's right to 
compete with the Company following the termination of his employment (the       
"Non-Compete Covenants"). Messrs. Currier and Carbonato will each receive a base
salary of $250,000 per year, while Messrs. Ciamaroni and Gilbert will each      
receive a base salary of $150,000 per year. A portion of Mr. Carbonato's salary 
will be paid by Prima Industrie. Under each of these agreements, non-qualified  
stock options have been granted as described below. Messrs. Currier and         
Ciamaroni will also receive payments of $300,000 and $180,000, respectively, for
entering into the Non-Compete Covenants. Messrs. Carbonato and Gilbert will not 
receive any additional compensation for entering into the Non-Compete Covenants.

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    The employment agreements for Messrs. Currier and Ciamaroni also contain a
bonus provision, pursuant to which they will each receive a bonus of 60,000     
shares of Common Stock, together with a cash payment necessary to compensate    
them for any their individual tax liability related the receipt of the shares,  
upon the first to occur of the following events:                                

 (a) Nonrenewal of the employment agreement by the Company; or

      (b) An increase in the Company's consolidated net revenues for any
    fiscal year of $20,000,000 over the Company's consolidated net revenues in
  1997 resulting from a merger with, or acquisition of, a company based in
the United States.                                                    

1997 STOCK INCENTIVE PLAN                                                       

     The stockholders of the Company have adopted an incentive compensation plan
entitled "The PRIMA Group International, Inc. 1997 Stock Incentive Plan" (the   
"Plan"). The purpose of the Plan is to reward and provide incentives for        
executive officers, key employees, non-employee directors and consultants by    
providing them with an opportunity to acquire equity interests in the Company,  
thereby increasing their personal interest in the success of the Company. The   
purpose of the Plan is also to retain the services of executive officers and key
employees as well as to assist in attracting new executive officers and key     
employees. The maximum number of shares authorized to be issued under the Plan  
is 1,000,000 shares of Common Stock and the maximum number of shares underlying 
awards that can be granted to an individual employee in a calendar year is      
200,000 shares of Common Stock.                                                 

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     As of the date of this Prospectus, an aggregate of 550,000 shares of Common
Stock had been reserved under the Plan through the exercise of non-qualified    
stock options. The following table sets forth information regarding the         
outstanding options under the Plan:                                             

                                                                [Download Table]

                                SHARES OF                                 
                               COMMON STOCK                               
                                UNDERLYING        WHEN           EXERCISE 
PARTICIPANT                       OPTION     EXERCISABLE (1)     PRICE (2)
-----------------------------  ------------  ---------------     ---------
                                                                          
James R. Currier, Sr.........     100,000    1st anniversary(3)     102%  
                                   30,000    1st anniversary(3)     120%  
                                   30,000    2nd anniversary(3)     130%  
                                   40,000    3rd anniversary(3)     140%  
Gianfranco Carbonato.........      30,000    1st anniversary(3)     120%  
                                   30,000    2nd anniversary(3)     130%  
                                   40,000    3rd anniversary(3)     140%  
Giovanni Ciamaroni...........     100,000    1st anniversary(3)     102%  
                                   30,000    1st anniversary(3)     120%  
                                   30,000    2nd anniversary(3)     130%  
                                   40,000    3rd anniversary(3)     140%  
Michael H. Gilbert...........      20,000    1st anniversary(3)     110%  
                                   15,000    2nd anniversary(3)     120%  
                                   15,000    3rd anniversary(3)     130%  

---------------                                                                 

(1) The stock options vest and become exercisable on the indicated anniversary  
dates of this Offering.                                                 

(2) The exercise price on date of grant will be the indicated percentage of the 
Offering Price.                                                         

(3) These grants have been made in aggregate totals of 200,000 to Messrs.       
  Currier and Ciamaroni, 100,000 to Mr. Carbonato and 50,000 to Mr. Gilbert.
The table sets forth the installments as they became exercisable.       

   The Plan permits the granting of stock options, including incentive stock
options ("ISOs") as defined under Section 422 of the Internal Revenue Code of   
1986, as amended (the "Code"), and non-qualified stock options ("NQSOs") which  
do not qualify as ISOs.                                                         

    The Plan is administered by the Compensation Committee, which has the sole
and complete authority to select the employees (including executive officers),  
directors and consultants who will receive options under the Plan. The          
Compensation Committee has the authority to determine the number of stock       
options to be granted to eligible individuals, whether the options will be ISOs 
or NQSOs and the terms and conditions of the options (which may vary from       
grantee to grantee). The Compensation Committee determines the period for which 
each stock option may be exercisable, but in no event may a stock option be     
exercisable more than ten years from the date the option becomes vested. The    
number of shares available under the Plan and the exercise price of the options 
granted thereunder are subject to adjustment by the Compensation Committee to   
reflect stock splits, stock dividends, recapitalization, mergers, or other major
corporate actions.                                                              

   The Compensation Committee also has the authority under the Plan to grant
Stock Appreciation Rights ("SARs") to participants. SARs confer on the holder a 
right to receive, upon exercise, the excess of the fair market value of one     
share on the date of exercise over the grant price of the SAR as specified by   
the Committee, which price may not be less than 100% of the fair market value of
one share on the date of grant of the SAR. The grant price, term, methods of    
exercise, dates of exercise, methods of settlement and any other terms and      
conditions of any SAR are determined by the Committee.                          

 The Board of Directors may discontinue, amend, or suspend the Plan in a
manner consistent with the Plan's provisions or existing agreements, provided   
such changes do not violate the federal or state securities laws.               

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INDEMNIFICATION OF DIRECTORS AND OFFICERS AND RELATED MATTERS                   

    The Company's Certificate of Incorporation limit the personal liability of
directors and officers for monetary damages for breach of their fiduciary duties
as directors and officers (other than liabilities arising from acts or omissions
which involve intentional misconduct, fraud or knowing violations of law or the 
payment of distributions in violation of the General Corporation Law of         
Delaware). The Company's Bylaws provide that the Company shall indemnify        
directors and officers for all costs reasonably incurred in connection with any 
action, suit or proceeding in which such director or officer is made a party by 
virtue of his being an officer or director of the Company, except where such    
director or officer is finally adjudged to have been derelict in the performance
of his duties in such capacity. The Company has entered into indemnification    
agreements with its officers and directors containing provisions which may      
require the Company, among other things, to indemnify the officers and directors
against certain liabilities that may arise by reason of their status or service 
as directors or officers (other than liabilities arising from willful misconduct
of a culpable nature), and to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified. At the present   
time, there is no pending material litigation or proceeding involving a         
director, officer, employee or other agent of the Company in which              
indemnification would be required or permitted. The Company is not aware of any 
threatened material litigation or proceeding which may result in a claim for    
such indemnification.                                                           

INDEMNIFICATION AGREEMENTS                                                      

The Company has entered into indemnification agreements or employment 
agreements with each of its directors and executive officers pursuant to which  
the Company is obligated to indemnify such individuals to the fullest extent    
permitted by law including certain liabilities and claims arising under the     
Securities Act.                                                                 

CERTAIN TRANSACTIONS

    Prior to this Offering, Messrs. Currier and Ciamaroni each entered into an
agreement with Miojusti to purchase 247,385 shares of Prima Industrie for       
$600,000. Each of them delivered to Miojusti a non-recourse promissory note in  
the amount of $600,000 in payment of the purchase price. These promissory notes 
do not bear interest and are due thirty days after consummation of the Offering.
If the promissory note is not paid when due, Miojusti's sole recourse is to     
obtain a return of the Prima Industrie shares or the shares of Common stock     
received in exchange for the Prima Industrie shares. In the exchange of shares  
by the shareholders of Prima Industrie for shares of the Company, Messrs.       
Currier and Ciamaroni each received 60,000 shares of Common Stock. In           
consideration of an amendment to employment agreements with Messrs. Currier and 
Ciamaroni, the Company has agreed to assume their obligations to Miojusti and to
receive their rights to the 120,000 shares of Common Stock. Messrs. Currier and 
Ciamaroni reached agreement with Miojusti to reduce the total obligation to an  
amount based upon the Offering Price, estimated to be $960,000 (based upon an   
Offering Price of $8.00 per share). The Company intends to pay this obligation  
out of the net proceeds of this Offering (see "Use of Proceeds") and to cancel  
the 120,000 shares of Common Stock in the manner of a redemption.               

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CERTAIN BENEFICIAL OWNERS 

The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of July 13, 1998, and as adjusted   
reflect the sale of the Shares offered hereby, by (i) each person with address  
who is not an executive officer or director of the Company and who is known by  
the Company to own beneficially more than 5% of the Company's outstanding stock,
(ii) each Named Executive Officer, (iii) each of the Company's directors and    
(iv) all current directors and executive officers as a group. Some of the       
officers and directors may purchase shares of Common Stock in the public market 
after the Offering is commenced. No information is provided with respect to     
these future purchases.                                                         

                                                        [Enlarge/Download Table]

                     DIRECTORS, EXECUTIVE OFFICERS                      SHARES BENEFICIALLY                
                           & 5% SHAREHOLDERS                                 OWNED (1)       PERCENTAGE (2)
                    -------------------------------                     -------------------  --------------
                                                                                                           

Itainvest (3)                                                                                              
  Via Del Serafico                                                                                         
  Rome, Italy..........................................................      1,212,683             26.5%   
Miojusti Invesments BV (3)(4)                                                                              
  3105 Stravinsky Laan                                                                                     
  Amsterdam The Netherlands............................................        285,036              6.2%   
Gian Mario Rossignolo (3)..............................................        422,657              9.2%   
James R. Currier, Sr...................................................            150                *    
Gianfranco Carbonato (3)...............................................        199,643              4.4%   
Giovanni Ciamaroni.....................................................            150                *    
Michael H. Gilbert.....................................................              0                0%   
Hans Werthen (3).......................................................        405,036              8.8%   
Pio Pellegrini.........................................................              0                0%   
All directors and executive                                                                                
  officers as a group                                                                                      
  (eight persons)......................................................      1,312,672             28.7%   

---------------                                                                 

* Less than 1%.                                                               

(1) Beneficial ownership is determined in accordance with the rules of the      
Securities and Exchange Commission and generally includes voting or     
investment power with respect to securities. Except as indicated by     
footnote, and subject to community property laws where applicable, the  
    persons named in the table above have sole voting and investment powers with
respect to all the shares of common stock shown as beneficially owned by
them.                                                                   

(2) For purposes of this table, the number of outstanding of the Company's      
Common Stock is 4,580,300.                                              

(3) Not including the right to acquire a portion or all of the 818,562 shares of
  Common Stock held by Itainvest S.p.A. See discussion under "History of the
Company -- Prima Industrie."                                            

(4) Cambria 1990 Ltd. Partnership and Demercroft Holding N.V. hold 97.75% and   
2.25%, respectively, of the outstanding capital stock of Miojusti. The  
general partner of Cambria 1990 Ltd. Partnership is Cambria Ltd. Cambria
  1990 Ltd. Partnership's limited partners are Cambria 1990 Exempt Trust (an
entity owned 50% by Candover Investments p.l.c. and 50% by West Midland 
   Authorities Pension Fund), Candover Investments p.l.c. and Kleinwort Benson
   Investment Trust Ltd. In addition, Demercroft Investments Ltd. is a special
   limited partner of Cambria. Mr. Mario Mauri is the Chairman of Cambria Ltd.
and, accordingly, may be deemed to beneficially own the shares of Common
Stock held by Miojusti. Prior to his resignation from both positions on 
July 9, 1998, Mr. Mauri was a director of the Company and of Prima      
 Industrie. See "Management--Legal Proceedings Involving Former Director."

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DESCRIPTION OF CAPITAL STOCK

   The authorized capital stock of the Company consists of 14,000,000 shares
of Common Stock, $.01 par value, and 1,000,000 shares of Preferred Stock, $.01  
par value.                                                                      

     The following summary of certain rights and preferences of the Common Stock
and Preferred Stock does not purport to be complete and is subject to, and      
qualified in its entirety by, the provisions of the Company's Certificate of    
Incorporation, which are included as an exhibit to the Registration Statement of
which this Prospectus is a part and by the provisions of applicable law.        

COMMON STOCK                                                                    

The holders of Common Stock are entitled to one vote per share on all 
matters to be voted upon by the stockholders. Subject to preferences that may be
applicable to any outstanding Preferred Stock, the holders of Common Stock are  
entitled to receive ratably such dividends, if any, as may be declared from time
to time by the Board of Directors out of funds legally available therefor. See  
"Dividend Policy." In the event of a liquidation, dissolution or winding up of  
the Company, the holders of Common Stock are entitled to share ratably in all   
assets remaining after payment of liabilities, subject to prior rights of       
Preferred Stock, if any, then outstanding. The Common Stock has no preemptive or
conversion rights or other subscription rights. There are no redemption or      
sinking fund provisions available to the Common Stock. All outstanding shares of
Common Stock are fully paid and non-assessable, and the shares of Common Stock  
to be issued upon completion of this Offering will be fully paid and            
non-assessable.                                                                 

     At July 2, 1998, 2,700,300 shares of Common Stock were outstanding and held
of record by 10 stockholders.                                                   

PREFERRED STOCK                                                                 

Pursuant to the Company's Certificate of Incorporation, the Board of  
Directors has the authority, without further action by the stockholders, to     
issue up to 1,000,000 shares of Preferred Stock in one or more series and to fix
the designations, powers, preferences, privileges, and relative participation,  
optional or special rights and the qualifications, limitations or restrictions  
thereof, including dividend rights, conversion rights, voting rights, terms of  
redemption and liquidation preferences, any or all of which may be greater than 
the rights of the Common Stock. The Board of Directors, without stockholder     
approval, can issue Preferred Stock with voting, conversion or other rights that
could adversely affect the voting power and other rights of the holders of      
Common Stock. Preferred Stock could thus be issued quickly, with terms          
calculated to delay or prevent a change in control of the Company or make       
removal of management more difficult. Additionally, the issuance of Preferred   
Stock may have the effect of decreasing the market price of the Common Stock.   
Upon the completion of this Offering, there will be no shares of Preferred Stock
outstanding. The Company has no present plans to issue any of the Preferred     
Stock. See "Risk Factors -- Charter and Bylaw Provisions; Availability of       
Preferred Stock for Issuance."                                                  

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock are American    
Securities Transfer & Trust, Inc.                                               

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SHARES ELIGIBLE FOR FUTURE SALE 

Prior to this Offering, there has been no public market for the Common
Stock of the Company and no predictions can be made of the effect, if any, that 
the sale or availability for sale of shares of additional Common Stock will have
on the market price of the Common Stock. Nevertheless, sales of substantial     
amounts of such shares in the public market, or the perception that such sales  
could occur, could adversely affect the market price of the Common Stock and    
could impair the Company's future ability to raise capital through an offering  
of its equity securities.                                                       

     Upon completion of this Offering, the Company will have 4,580,300 shares of
Common Stock outstanding, assuming no exercise of the Over-Allotment Option. Of 
these shares, the 2,000,000 shares sold in this Offering will be freely tradable
without restriction or registration under the Securities Act, except that any   
shares purchased by "affiliates" of the Company, as that term is defined under  
the Securities Act ("Affiliates"), may generally only be sold in compliance with
the limitations of Rule 144 described below.                                    

The remaining 2,580,300 shares of outstanding Common Stock are deemed 
"Restricted Shares" under Rule 144. The number of shares of Common Stock        
available for sale in the public market is limited by restrictions under the    
Securities Act and lock-up agreements under which the holders of such shares    
have agreed not to sell or otherwise dispose of any of their shares for a period
of two years after the date of this Prospectus without the prior written consent
of the Underwriters and the Company; provided, that the Underwriters will waive 
the restrictions contained in such agreements, on a pro rata basis to all       
parties subject to such agreements, if the Company undertakes a public offering 
or private placement of Common Stock and the underwriter or placement agent for 
such public offering or private placement agrees that the shares of Common Stock
for which such restrictions are waived will be sold as part of the orderly      
distribution of securities to be sold in such public offering or private        
placement. Restricted Shares may be sold in the public market only if registered
or if they qualify for an exemption from Registration under Rules 144, 144(k) or
701 promulgated under the Securities Act.                                       

    As a result of contractual restrictions described below and the provisions
of Rules 144, 144(k) and 701, those 2,580,300 Restricted Shares will be         
available for sale in the public market without the consent of the Company or   
EBI Securities Corporation upon expiration of their respective two-year holding 
periods.                                                                        

  In general, under Rule 144 of the Securities Act as currently in effect,
beginning 90 days after this Offering, a person (or persons whose shares are    
aggregated) who has beneficially owned "restricted" shares for at least one     
year, including a person who may be deemed an Affiliate, is entitled to sell    
within any three-month period a number of shares of Common Stock that does not  
exceed the greater of 1% of the then outstanding shares of Common Stock of the  
Company (approximately 45,800 shares after giving effect to this Offering) or   
the average weekly trading volume of the Common Stock on the National Market    
System of the NASDAQ Stock Market, Inc. during the four calendar weeks preceding
such sale. Sales under Rule 144 of the Securities Act are subject to certain    
restrictions relating to manner of sale, notice, and the availability of current
public information about the Company. A person who is not an Affiliate at any   
time during the 90 days preceding a sale, and who has beneficially owned shares 
for at least one year, would be entitled to sell such shares immediately        
following this Offering without regard to the volume limitations, manner of sale
provisions, or notice or other requirements of Rule 144 of the Securities Act.  

   No predictions can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the         
prevailing market price for the Common Stock. Sales of substantial amounts of   
Common Stock, or the perception that such sales might occur, could adversely    
affect prevailing market prices for the Common Stock and could impair the       
Company's future ability to obtain capital through an offering of equity        
securities.                                                                     

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UNDERWRITING

    Under the terms and subject to the conditions contained in an Underwriting
Agreement, the Underwriters named below, for whom EBI Securities Corporation,   
Millennium Financial Group, Inc., and Joseph Charles & Associates, Inc., are    
serving as Representatives, have severally agreed to purchase, and the Company  
has agreed to sell to the Underwriters, the respective number of shares of      
Common Stock set forth opposite their names below:                              

                                                        [Enlarge/Download Table]

                                                                                                                   NUMBER  
NAME                                                                                                              OF SHARES
----------------------------------------------------------------------------------------------------------------  ---------
                                                                                                                           
EBI Securities Corporation......................................................................................           
Millennium Financial Group, Inc.................................................................................           
Joseph Charles & Associates, Inc................................................................................           

TOTAL...........................................................................................................  2,000,000
                                                                                                                  ---------
                                                                                                                  ---------

 The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Shares of Common Stock       
offered hereby are subject to the approval of certain legal matters by counsel  
and to certain other conditions. The Underwriters are obligated to take and pay 
for all of the Shares of Common Stock offered hereby (other than the shares     
covered by the Over-Allotment Option) if any are taken.                         

  The Underwriters initially propose to offer part of the Shares of Common
Stock offered hereby directly to the public at the Offering Price set forth on  
the cover page hereof and part to certain dealers at the Offering Price less a  
concession not in excess of $     per share. The Underwriters intend to offer   
Shares to the public and to certain dealers and institutions in the United      
States and in Europe, principally Italy, Switzerland, France and the United     
Kingdom. One or more Italian investment banks may participate as Underwriters or
dealers in the Offering. Any such Underwriter or dealer will distribute Shares  
only to investors in Italy. Any Underwriter may allow, and such dealers may     
reallow, a concession not in excess of $      per share to other dealers.       

The Company has granted to the Representatives an option, exercisable 
within 60 days of the date hereof, to purchase up to an additional 300,000      
Shares from the Company to cover over-allotments, if any, at the same price per 
Share as the initial 2,000,000 Shares to be purchased by the Underwriters. The  
Underwriters may purchase such Shares only to cover over-allotments made in     
connection with the Offering.                                                   

     The Representatives will also receive a nonaccountable expense allowance of
3% of the gross proceeds of the Offering, including the over-allotment option,  
if exercised, of which $30,000 has been paid by the Company to date. The Company
has previously paid $60,000 in accountable expenses to third parties that may   
be deemed underwriters' compensation.                                           

  The Company and the Underwriters have each agreed to indemnify the other
parties against certain liabilities, including liabilities under the Securities 
Act.                                                                            

     Subject to certain limited exceptions, the Company has agreed not to offer,
pledge, sell, contract to sell, sell any option or contract to purchase,        
purchase any option or contract to sell, grant any option, right or warrant to  
purchase, or otherwise transfer or dispose of, directly or indirectly, any      
shares of Common Stock, or any securities convertible into or exercisable or    
exchangeable for Common Stock, or enter into any swap or similar agreement that 
transfers in whole or in part, the economic risk of ownership of the Common     
Stock for a period of 180 days after the date of this Prospectus without the    
prior written consent of EBI Securities Corporation ("EBI").                    

In connection with this Offering, the Underwriters and selling group  
members and their respective affiliates may engage in transactions that         
stabilize, maintain or otherwise affect the market price of the Common Stock.   
Such transactions may include stabilization transactions effected in accordance 
with Rule 104 of Regulation M, pursuant to which such persons may bid for or    
purchase Common Stock for the purpose of stabilizing its market price. The      
Underwriters also may create a short position for the account of the            
Underwriters by selling more Common Stock in connection with the Offering than  
they are committed to purchase from the Company, and in such case, may purchase 
Common Stock in the open market following completion of the Offering to cover   
all or a portion of such short position. The Underwriters may also cover all or 
a portion of such short position, up to 300,000 shares of Common Stock, by      
exercising the Over-Allotment Option. In addition, the Underwriters may impose  
"penalty bids" whereby they may reclaim from each other (or any dealer          
participating in the Offering) for their account, the selling concession with   
respect to Common Stock that is distributed in the Offering but subsequently    
purchased for their account in the open market. Any of the transactions         
described in this paragraph may result in the maintenance of the price of the   
Common Stock at a level above that which might otherwise prevail in the open    
market.                                                                         

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None of the transactions described in this paragraph is required, and, if they  
are undertaken, they may be discontinued at any time.                           

    The Company has agreed to sell to the Representative, for a purchase price
of $100.00, a warrant to purchase shares of Common Stock at a price equal to    
120% of the Offering Price. The total number of shares of Common Stock that may 
be purchased on the exercise of the Underwriters' Warrant will be equal to 10%  
of the number of shares sold in this Offering, excluding shares sold as part of 
the Over-Allotment Option. Pursuant to the Underwriters' Warrant, the           
Underwriters have been granted certain "piggyback" and demand registration      
rights with respect to the shares of Common Stock underlying such warrant. Such 
registration rights expire five (5) years after the effective date of this      
Offering. The Underwriters' Warrant will be nonexercisable for a period of 12   
months following the date of this Prospectus and will thereafter be exercisable 
during the next succeeding five-year period. The Underwriters' Warrant may not  
be sold, transferred, assigned or hypothecated at any time, other than to       
officers or partners of the Underwriters or members of the selling group.       

     The Company has a financial consulting agreement with EBI pursuant to which
EBI will provide the Company with services, including advising the Company in   
connection with possible acquisitions, stockholder relations (including the     
preparation of the annual report), long-term financial planning, corporate      
reorganization, expansion and capital structure and other financial assistance. 
The consulting agreement has a term of twenty-four months commencing at the     
completion of this Offering. The agreement states that EBI will be paid a       
consulting fee of $3,000 per month during the term of the agreement.            

     The Underwriting Agreement provides EBI with the right, for a period of two
(2) years from the date of the closing of this Offering, to designate one       
nominee for election to the Board of Directors, provided such nominee is        
reasonably acceptable to the Company.                                           

Prior to this Offering, there has been no public market for the Common
Stock. Consequently, the Offering Price will be determined through negotiations 
among the Company and the Representatives. Among the factors considered in such 
negotiations will be the history of, and prospects for, the Company and the     
industry in which it competes, an assessment of the Company's management, the   
Company's past and present operations and financial performance, its past and   
present earnings and the trend of such earnings, the prospects for future       
earnings of the Company, the present state of the Company's development, the    
general condition of the securities markets at the time of this Offering and the
market prices of publicly traded common stocks of comparable companies in recent
periods.                                                                        

LEGAL MATTERS 

     The validity of the Common Stock offered hereby will be passed upon for the
Company by Rayburn, Moon & Smith, P.A., Charlotte, North Carolina. Certain legal
matters relating to this Offering will be passed upon for the Underwriters by   
Dorsey & Whitney LLP, Denver, Colorado.                                         

EXPERTS 

     The financial statements of the Company as of December 31, 1997 and for the
period from inception to December 31, 1997 and the consolidated financial       
statements of Prima Industrie as of December 31, 1996 and 1997 and for each of  
the three years in the period ended December 31, 1997 included in this          
Prospectus have been audited by Hein + Associates LLP, independent auditors, as 
stated in their report appearing herein, and have been so included in reliance  
upon the report of such firm given upon their authority as experts in accounting
and auditing.                                                                   

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ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form S-1, including amendments       
thereto, under the Securities Act with respect to the shares of Common Stock    
offered hereby. This Prospectus omits certain information contained in the      
Registration Statement, and reference is made to the Registration Statement and 
the exhibits and schedules thereto for further information with respect to the  
Company and the Common Stock offered hereby. Statements contained herein        
concerning the provisions of any documents are not necessarily complete, and in 
each instance reference is made to the copy of such document filed as an exhibit
to the Registration Statement. Each such statement is qualified in its entirety 
by such reference. The Registration Statement, including exhibits and schedules 
filed therewith, may be inspected without charge at the public reference        
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of all or any part thereof may 
be obtained from such office upon payment of the prescribed fees. The Commission
maintains a World Wide Web site that contains reports, proxy and information    
statements and other information regarding registrants that file electronically 
with the Commission. The address of the site is http://www.sec.gov.             

   The Company intends to furnish its stockholders annual reports containing
consolidated financial statements audited by its independent auditors.          

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THE PRIMA GROUP INTERNATIONAL, INC. 
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                        [Enlarge/Download Table]

                                                                                                                         PAGE
                                                                                                                         ----
                                                                                                                             
THE PRIMA GROUP INTERNATIONAL, INC.                                                                                          
Independent Auditor's Report...........................................................................................   F-2
Balance Sheet -- As of March 31, 1998 (Unaudited) and December 31, 1997................................................   F-3
Statements of Operations -- For the Three Months Ended March 31, 1998 (Unaudited), the Period from Inception (July 29,       
  1997) to December 31, 1997, and Cumulative from Inception through March 31, 1998 (Unaudited).........................   F-4
Statement of Stockholders' Equity -- For the Period from Inception (July 29, 1997) to March 31, 1998 (Unaudited).......   F-5
Statements of Cash Flows -- For the Three Months Ended March 31, 1998 (Unaudited), the Period from Inception (July 29,       
  1997) to December731, 1997 and Cumulative from Inception through March 31, 1998 (Unaudited)..........................   F-6
Notes to Financial Statements..........................................................................................   F-7

PRIMA INDUSTRIE S.P.A.                                                                                                       
Independent Auditor's Report...........................................................................................   F-9
Consolidated Balance Sheets -- As of March 31, 1998 (Unaudited) and December 31, 1997 and 1996.........................  F-10
Consolidated Statement of Operations -- For the Three Months Ended March 31, 1998 and 1997 (Unaudited) and for the           
  Years Ended December 31, 1997, 1996, and 1995........................................................................  F-11
Consolidated Statement of Comprehensive Income (Loss) -- For the Three Months Ended March 31, 1998 and 1997 (Unaudited)      
  and for the Years Ended December 31, 1997, 1996, and 1995............................................................  F-12
Consolidated Statements of Stockholders' Equity -- For the Period from January 1, 1995 to March 31, 1998 (Unaudited)...  F-13
Consolidated Statements of Cash Flows -- For the Three Months Ended March 31, 1998 and 1997 (Unaudited) and for the          
  Years Ended December 31, 1997, 1996, and 1995........................................................................  F-14
Notes to Consolidated Financial Statements.............................................................................  F-15

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INDEPENDENT AUDITOR'S REPORT

BOARD OF DIRECTORS                                                              
THE PRIMA GROUP INTERNATIONAL, INC.                                             
Charlotte, North Carolina                                                       

We have audited the accompanying balance sheet of The PRIMA Group     
International, Inc. (a development stage enterprise) as of December 31, 1997,   
and the related statements of operations, stockholders' equity and cash flows   
for the period from inception (July 29, 1997) through December 31, 1997. These  
financial statements are the responsibility of the Company's management. Our    
responsibility is to express an opinion on these financial statements based on  
our audit.                                                                      

We conducted our audit in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audit provides a reasonable basis for our opinion.          

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The PRIMA Group             
International, Inc. as of December 31, 1997, and the results of its operations  
and its cash flows for the period from inception (July 29, 1997) through        
December 31, 1997, in conformity with generally accepted accounting principles. 

HEIN + ASSOCIATES LLP                                                           

Denver, Colorado                                                                
March 25, 1998, except for Note 4 as to which the date is April 23, 1998        

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THE PRIMA GROUP INTERNATIONAL, INC. 
(A DEVELOPMENT STAGE ENTERPRISE)

BALANCE SHEET 

($ IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                        MARCH 31,   DECEMBER 31,  PRO FORMA
                                                                                          1998          1997      UNAUDITED
                                                                                       -----------  ------------  ---------
                                                                                                                           
                                                                                       (UNAUDITED)                (NOTE 4) 
ASSETS                                                                                                                     
CURRENT ASSETS:                                                                                                            
  Cash................................................................................    $   3         $ 26               
DEFERRED OFFERING COSTS...............................................................      756          521               
                                                                                       -----------  ------------           
TOTAL ASSETS..........................................................................    $ 759         $547               
                                                                                       -----------  ------------           
                                                                                       -----------  ------------           
LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                       
CURRENT LIABILITIES:                                                                                                       
  Accounts payable and accrued liabilities............................................    $ 175         $146               
  Advances from affiliate.............................................................      668          443               
                                                                                       -----------  ------------           
TOTAL CURRENT LIABILITIES.............................................................      843          589               
COMMITMENTS (Notes 3 and 4)                                                                                                
STOCKHOLDERS' EQUITY:                                                                                                      
  Preferred stock, .01 par value, 1,000,000 shares authorized, no shares issued.......                    --       $    -- 
  Common stock, .01 par value, 14,000,000 shares authorized, 300 shares issued and                                         
     outstanding, 2,700,300 shares pro forma..........................................                    --            27 
  Additional paid-in capital..........................................................        3            3        13,694 
  Common stock subscriptions receivable...............................................       (3)          (3)           (3)
  Foreign currency translation adjustments............................................       --           --          (762)
  Accumulated deficit.................................................................      (84)         (42)       (7,427)
                                                                                       -----------  ------------  ---------
     Total stockholders' equity.......................................................      (84)         (42)      $ 5,529 
                                                                                       -----------  ------------  ---------
                                                                                                                  ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............................................    $ 759         $547               
                                                                                       -----------  ------------           
                                                                                       -----------  ------------           

See accompanying notes to these financial statements. 

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THE PRIMA GROUP INTERNATIONAL, INC. 
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENTS OF OPERATIONS

($ IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        [Enlarge/Download Table]

                                                                                                      FOR THE                 
                                                                                                      PERIOD                  
                                                                                       FOR THE         FROM        CUMULATIVE 
                                                                                        THREE        INCEPTION        FROM    
                                                                                       MONTHS     (JULY 29, 1997)   INCEPTION 
                                                                                        ENDED           TO             TO     
                                                                                      MARCH 31,    DECEMBER 31,     MARCH 31, 
                                                                                        1998           1997           1998    
                                                                                     -----------  ---------------  -----------
                                                                                                                              
                                                                                     (UNAUDITED)                   (UNAUDITED)
REVENUES............................................................................  $      --      $      --        $  --   
EXPENSES:                                                                                                                     
  Salaries and payroll taxes........................................................         41             40           81   
  Other.............................................................................          1              2            3   
                                                                                     -----------  ---------------  -----------
     Total expenses.................................................................         42             42           84   
                                                                                     -----------  ---------------  -----------
NET LOSS............................................................................  $     (42)     $     (42)       $ (84)  
                                                                                     -----------  ---------------  -----------
                                                                                     -----------  ---------------  -----------
NET LOSS PER SHARE..................................................................  $ (140.00)     $ (140.00)               
                                                                                     -----------  ---------------             
                                                                                     -----------  ---------------             
SHARES OUTSTANDING..................................................................        300            300                
                                                                                     -----------  ---------------             
                                                                                     -----------  ---------------             

See accompanying notes to these financial statements. 

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THE PRIMA GROUP INTERNATIONAL, INC. 
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENT OF STOCKHOLDERS' EQUITY 

FOR THE PERIOD FROM INCEPTION (JULY 29, 1997) TO MARCH 31, 1998 
($ IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                        COMMON STOCK     ADDITIONAL                            
                                                      -----------------   PAID-IN    SUBSCRIPTIONS  ACCUMULATED
                                                      SHARES    AMOUNT    CAPITAL     RECEIVABLE      DEFICIT  
                                                      ------    -------  ----------  -------------  -----------
                                                                                                               
BALANCES, July 29, 1997.............................     --     $   --    $     --      $    --       $    --  
  Issuance of common stock..........................    300         --           3           (3)           --  
NET LOSS............................................     --         --          --           --           (42) 
                                                      ------    -------  ----------  -------------  -----------
BALANCES, December 31, 1997.........................    300         --           3           (3)          (42) 
NET LOSS (unaudited)................................     --         --          --           --           (42) 
                                                      ------    -------  ----------  -------------  -----------
BALANCES, March 31, 1998 (unaudited)................    300     $   --    $      3      $    (3)      $   (84) 
                                                      ------    -------  ----------  -------------  -----------
                                                      ------    -------  ----------  -------------  -----------


                                                         TOTAL                                                 
                                                     STOCKHOLDERS'                                             
                                                        EQUITY                                                 
                                                     -------------                                             
                                                                                                               
BALANCES, July 29, 1997.............................    $    --                                                
  Issuance of common stock..........................         --                                                
NET LOSS............................................        (42)                                               
                                                     -------------                                             
BALANCES, December 31, 1997.........................        (42)                                               
NET LOSS (unaudited)................................        (42)                                               
                                                     -------------                                             
BALANCES, March 31, 1998 (unaudited)................    $   (84)                                               
                                                     -------------                                             
                                                     -------------                                             

See accompanying notes to these financial statements. 

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THE PRIMA GROUP INTERNATIONAL, INC. 
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENTS OF CASH FLOWS

($ IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                                      FOR THE                 
                                                                                                      PERIOD                  
                                                                                       FOR THE         FROM        CUMULATIVE 
                                                                                        THREE        INCEPTION        FROM    
                                                                                       MONTHS     (JULY 29, 1997)   INCEPTION 
                                                                                        ENDED           TO             TO     
                                                                                      MARCH 31,    DECEMBER 31,     MARCH 31, 
                                                                                        1998           1997           1998    
                                                                                     -----------  ---------------  -----------
                                                                                                                              
                                                                                     (UNAUDITED)                   (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                         
  Net loss..........................................................................    $ (42)         $ (42)         $ (84)  
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                         
  Advances from affiliate...........................................................      225            443            668   
  Increase in accounts payable and accrued liabilities..............................       29            146            175   
  Increase in deferred offering costs...............................................     (235)          (521)          (756)  
                                                                                     -----------  ---------------  -----------
     Net cash provided by financing activities......................................       19             68             87   
                                                                                     -----------  ---------------  -----------
NET CHANGE IN CASH..................................................................      (23)            26              3   
CASH, beginning of period...........................................................       26             --             --   
                                                                                     -----------  ---------------  -----------
CASH, end of period.................................................................    $   3          $  26          $   3   
                                                                                     -----------  ---------------  -----------
                                                                                     -----------  ---------------  -----------

See accompanying notes to these financial statements. 

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THE PRIMA GROUP INTERNATIONAL, INC. 
(A DEVELOPMENT STAGE ENTERPRISE)
(INFORMATION FOR PERIODS SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

NOTES TO FINANCIAL STATEMENTS 

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:                    

     NATURE OF OPERATIONS -- The PRIMA Group International, Inc. ("PRIMA" or the
"Company") was formed on July 29, 1997 for the purpose of acquiring             
substantially all of the outstanding common stock of Prima Industrie S.p.A.     
(Prima Industrie). The Company has had no operations through March 31, 1998.    

     USE OF ESTIMATES -- The preparation of the Company's consolidated financial
statements in conformity with generally accepted accounting principles requires 
the Company's management to make estimates and assumptions that affect the      
amounts reported in these financial statements and accompanying notes. Actual   
results could differ from those estimates.                                      

   INCOME TAXES -- The Company accounts for income taxes under the liability
method, which requires recognition of deferred tax assets and liabilities for   
the expected future tax consequences of events that have been included in the   
financial statements or tax returns. Under this method, deferred tax assets and 
liabilities are determined based on the difference between the financial        
statements and tax bases of assets and liabilities using enacted tax rates in   
effect for the year in which the differences are expected to reverse.           

DEFERRED OFFERING COSTS -- Direct costs incurred by the Company in    
connection with its proposed initial public offering have been deferred, and    
will be charged against the proceeds of the offering when completed. Should the 
offering not be completed, such costs will be charged to expense.               

     UNAUDITED INTERIM INFORMATION -- The balance sheet as of March 31, 1998 and
the statement of operations for the three-month period ended March 31, 1998 were
taken from the Company's books and records without audit. However, in the       
opinion of management, such information includes all adjustments (consisting    
only of normal recurring accruals) which are necessary to properly reflect the  
financial position of the Company as of March 31, 1998 and the results of       
operations for the three months then ended.                                     

2. ADVANCES FROM AFFILIATE:                                                     

     Advances from affiliate represents non-interest bearing advances from Prima
Industrie. These advances have been used to pay costs associated with the       
Company's proposed initial public offering.                                     

3. COMMITMENTS:                                                                 

    STOCK OPTION PLAN -- The Company has proposed a 1997 Stock Incentive Plan,
under which 1,000,000 shares will be authorized for future issuance. The Company
has agreed to grant a total of 550,000 options under the plan to three officers 
of the Company and an officer of Prima Industrie. Following is a summary of     
options to be granted under the plan:                                           

                                                                [Download Table]

                                         WEIGHTED AVERAGE
                           WHEN              EXERCISE    
NUMBER OF SHARES      EXERCISABLE(1)         PRICE(2)    
----------------     ----------------    ----------------
                                                         
    20,000           1st Anniversary            110%     
   200,000           1st Anniversary            102%     
    90,000           1st Anniversary            120%     
    15,000           2nd Anniversary            120%     
    90,000           2nd Anniversary            130%     
    15,000           3rd Anniversary            130%     
   120,000           3rd Anniversary            140%     
----------------                                ---      
   550,000                                      119%     
----------------                                ---      
----------------                                ---      

---------------                                                                 

(1) The stock options will vest and become exercisable upon anniversary dates of
the public offering.                                                    

(2) The exercise price will be a percentage of the public offering price.       

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THE PRIMA GROUP INTERNATIONAL, INC. 
(A DEVELOPMENT STAGE ENTERPRISE)
(INFORMATION FOR PERIODS SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

NOTES TO FINANCIAL STATEMENTS -- CONTINUED

3. COMMITMENTS: -- Continued                                                    
  EMPLOYMENT AGREEMENTS -- The Company has agreed to enter into three-year
employment agreements with three officers. These agreements provide for         
aggregate salaries of $550,000 per year, generally commencing April 1, 1998,    
except for one salary of $150,000, which commenced January 1, 1998. Two of the  
officers will also receive aggregate payments of $480,000 in 1998 for entering  
into non-compete covenants under their employment agreements. These payments are
subject to a three-year vesting period.                                         

   Two officers have bonus arrangements in their employment agreements which
provide that, at the officers' option, they will receive an aggregate of 120,000
shares of common stock or its cash value (based upon the price the Company's    
common stock is sold in a proposed initial public offering -- see Note 8), plus 
cash to pay related income taxes if: the Company does not renew the employment  
agreements; or during the term of the agreement, the Company's revenues increase
by an annual amount of $20,000,000 as a result of a merger or other acquisition 
with another company based in the United States.                                

 OFFICE LEASE -- The Company has entered into an office sublease with an
entity owned by an officer and his spouse, for the period from January 1, 1998  
to June 30, 1999. The lease provides for monthly payments of $1,805 commencing  
December 1997 through June 1998 and $1,895 commencing July 1998 through June    
1999. It also provides for additional rent of $800 per month for office         
furniture and equipment.                                                        

4. INITIAL PUBLIC OFFERING:                                                     

    The Company has entered into a letter of intent with an underwriter for an
initial public offering (IPO) of 2,000,000 shares of common stock. In connection
with the IPO, the Company has agreed to repurchase 120,000 shares from a current
stockholder at the IPO price. On April 23, 1998, the Company exchanged 2,700,000
shares of stock for substantially 100% of the outstanding shares of Prima       
Industrie. The unaudited pro forma financial information presented on the face  
of the accompanying balance sheet reflects the issuance of these shares in      
exchange for the net equity of Prima Industrie as of March 31, 1998. This       
transaction will be accounted for as a recapitalization of Industrie in a manner
similar to a reverse acquisition, in which the transaction is treated as the    
issuance of stock by Prima Industrie for the net assets of PRIMA, and no        
goodwill or other intangibles will be recorded.                                 

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INDEPENDENT AUDITOR'S REPORT

BOARD OF DIRECTORS                                                              
PRIMA INDUSTRIE S.P.A.                                                          
Turin, Italy                                                                    

We have audited the accompanying consolidated balance sheets of Prima 
Industrie S.p.A. and subsidiaries as of December 31, 1997 and 1996, and the     
related consolidated statements of operations and comprehensive income,         
stockholders' equity, and cash flows for each of the years in the three-year    
period ended December 31, 1997. These consolidated financial statements are the 
responsibility of the Company's management. Our responsibility is to express an 
opinion on these financial statements based on our audits.                      

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

 In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Prima       
Industrie S.p.A. and subsidiaries as of December 31, 1997 and 1996, and the     
results of their operations and their cash flows for each of the years in the   
three-year period ended December 31, 1997, in conformity with generally accepted
accounting principles.                                                          

HEIN + ASSOCIATES LLP                                                           

Denver, Colorado                                                                
March 16, 1998, except for Note 15, as to which the date is April 23, 1998      

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

CONSOLIDATED BALANCE SHEETS 

(IN THOUSANDS OF U.S. DOLLARS)

                                                        [Enlarge/Download Table]

                                                                                              MARCH 31,      DECEMBER 31,    
                                                                                             -----------  ------------------ 
                                                                                                1998       1997       1996   
                                                                                             -----------  -------    ------- 
                                                                                             (UNAUDITED)                     
                                                                                                                             
ASSETS                                                                                                                       
CURRENT ASSETS:                                                                                                              
  Cash and cash equivalents................................................................    $   927    $ 1,330    $   585 
  Trade accounts receivable, net of allowance of $364 (unaudited), $345, and $426,                                           
     respectively..........................................................................     18,631     19,107     21,244 
  Other accounts receivable................................................................      2,707      2,452      3,127 
  Inventories..............................................................................      9,899      8,223      7,949 
  Prepaid expenses and other current assets................................................        117        193        872 
                                                                                             -----------  -------    ------- 
     Total current assets..................................................................     32,281     31,305     33,777 
PROPERTY, PLANT AND EQUIPMENT..............................................................      5,742      5,859      7,612 
  Less accumulated depreciation............................................................     (4,237)    (4,308)    (5,966)
                                                                                             -----------  -------    ------- 
     Property, plant and equipment, net....................................................      1,505      1,551      1,646 
PATENTS AND OTHER INTANGIBLE ASSETS, net...................................................        128        143        339 
INVESTMENTS AND OTHER ASSETS...............................................................        610        467        590 
ADVANCES TO AFFILIATE......................................................................        668        443         -- 
                                                                                             -----------  -------    ------- 
TOTAL ASSETS...............................................................................    $35,192    $33,909    $36,352 
                                                                                             -----------  -------    ------- 
                                                                                             -----------  -------    ------- 

LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                         
CURRENT LIABILITIES:                                                                                                         
  Current portion of notes payable and long-term debt......................................    $10,793    $ 8,472    $10,276 
  Accounts payable.........................................................................     11,122     12,063     12,721 
  Customer deposits........................................................................        804        343        506 
  Other accrued expenses and liabilities...................................................      2,757      3,692      3,210 
  Deferred income..........................................................................         93         72        559 
  Income taxes payable.....................................................................        517        331        185 
                                                                                             -----------  -------    ------- 
       Total current liabilities...........................................................     26,086     24,973     27,457 
LONG-TERM DEBT.............................................................................        409        444        948 
EMPLOYEE TERMINATION ACCRUAL...............................................................      2,443      2,455      2,655 
MINORITY INTEREST..........................................................................        631        659        548 
COMMITMENTS AND CONTINGENCIES (Notes 2 and 12)                                                                               
STOCKHOLDERS' EQUITY:                                                                                                        
     Common stock, .01 par value, 14,000,000 shares authorized, 2,700,000 shares issued and                                  
      outstanding..........................................................................         27         27         27 
     Additional paid-in capital............................................................     13,775     13,775     13,775 
     Foreign currency translation adjustments..............................................       (762)      (726)         3 
     Accumulated deficit...................................................................     (7,417)    (7,698)    (9,061)
                                                                                             -----------  -------    ------- 
       Total stockholders' equity..........................................................      5,623      5,378      4,744 
                                                                                             -----------  -------    ------- 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................................................    $35,192    $33,909    $36,352 
                                                                                             -----------  -------    ------- 
                                                                                             -----------  -------    ------- 

See accompanying notes to these consolidated financial statements.

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE DATA) 

                                                        [Enlarge/Download Table]

                                                                  FOR THE THREE                                            
                                                                   MONTHS ENDED                FOR THE YEARS ENDED         
                                                                    MARCH 31,                     DECEMBER 31,             
                                                              ----------------------   ----------------------------------- 
                                                                1998         1997        1997         1996         1995    
                                                              ---------    ---------   ---------    ---------    --------- 
                                                                   (UNAUDITED)                                             
                                                                                                                           
REVENUES:                                                                                                                  
  Net sales.................................................. $   9,671    $   6,629   $  43,560    $  41,108    $  37,356 
  Other operating revenue....................................        63           30         626        1,207        1,204 
                                                              ---------    ---------   ---------    ---------    --------- 
     Total revenues..........................................     9,734        6,659      44,186       42,315       38,560 
COSTS AND EXPENSES:                                                                                                        
  Cost of goods sold.........................................     7,476        5,164      35,157       34,357       32,565 
  Research and development costs.............................       331          329       1,335        1,329          670 
  Selling, general and administrative costs..................     1,250        1,173       5,513        5,218        5,250 
                                                              ---------    ---------   ---------    ---------    --------- 
       Total costs and expenses..............................     9,057        6,666      42,005       40,904       38,485 
                                                              ---------    ---------   ---------    ---------    --------- 
OPERATING INCOME.............................................       677           (7)      2,181        1,411           75 
OTHER INCOME (EXPENSE):                                                                                                    
  Interest and other income..................................       244           71         393          818          776 
  Gain on sale of equipment..................................        11            2         441           --           -- 
  Gain on sale of Sapri......................................        --           --          --        1,059           -- 
  Gain (loss) on foreign exchange............................        21          151         151          215         (618)
  Interest expense...........................................      (395)        (274)     (1,167)      (1,375)      (2,460)
  Other expenses.............................................        --           --          --         (391)          -- 
                                                              ---------    ---------   ---------    ---------    --------- 
       Total other income (expense)..........................      (119)         (50)       (182)         326       (2,302)
                                                              ---------    ---------   ---------    ---------    --------- 
INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST......       558          (57)      1,999        1,737       (2,227)
CURRENT INCOME TAXES.........................................      (201)        (103)       (444)        (189)         (43)
MINORITY INTEREST............................................       (76)         (63)       (192)        (213)        (130)
                                                              ---------    ---------   ---------    ---------    --------- 
NET INCOME (LOSS)............................................ $     281    $    (223)  $   1,363    $   1,335    $  (2,400)
                                                              ---------    ---------   ---------    ---------    --------- 
                                                              ---------    ---------   ---------    ---------    --------- 
PRO FORMA NET INCOME (LOSS) PER SHARE........................ $     .10    $    (.08)  $     .50    $     .49        (1.40)
                                                              ---------    ---------   ---------    ---------    --------- 
                                                              ---------    ---------   ---------    ---------    --------- 
PRO FORMA WEIGHTED AVERAGE COMMON SHARES OUTSTANDING......... 2,700,000    2,700,000   2,700,000    2,700,000    1,721,000 
                                                              ---------    ---------   ---------    ---------    --------- 
                                                              ---------    ---------   ---------    ---------    --------- 

See accompanying notes to these consolidated financial statements.

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) 

(IN THOUSANDS OF U.S. DOLLARS)

                                                        [Enlarge/Download Table]

                                                                                FOR THE THREE                               
                                                                                MONTHS ENDED        FOR THE YEARS ENDED     
                                                                                  MARCH 31,            DECEMBER 31,         
                                                                                -------------   --------------------------- 
                                                                                1998    1997     1997      1996      1995   
                                                                                ----    -----   ------    ------    ------- 
                                                                                 (UNAUDITED)                                
                                                                                                                            
NET INCOME (LOSS).............................................................. $281    $(223)  $1,363    $1,335    $(2,400)
  Other comprehensive income (loss):                                                                                        
     Foreign currency translation adjustment...................................  (36)    (407)    (729)      178       (249)
     Tax expense (benefit).....................................................   --       --       --        --         -- 
                                                                                ----    -----   ------    ------    ------- 
COMPREHENSIVE INCOME (LOSS).................................................... $245    $(630)  $  634    $1,513    $(2,649)
                                                                                ----    -----   ------    ------    ------- 
                                                                                ----    -----   ------    ------    ------- 

See accompanying notes to these consolidated financial statements.

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 

FOR THE PERIOD FROM JANUARY 1, 1995 TO MARCH 31, 1998 
(IN THOUSANDS OF U.S. DOLLARS)

                                                        [Enlarge/Download Table]

                                                                                    FOREIGN                              
                                                    COMMON STOCK      ADDITIONAL   CURRENCY                     TOTAL    
                                                 -------------------   PAID-IN    TRANSLATION  ACCUMULATED  STOCKHOLDERS'
                                                   SHARES     AMOUNT   CAPITAL    ADJUSTMENTS    DEFICIT       EQUITY    
                                                 ----------   ------  ----------  -----------  -----------  -------------
                                                                                                                         
BALANCES, January 1, 1995.......................    129,494    $  1    $  5,205      $  74      $  (7,996)     $(2,716)  
  Forgiveness of debt from stockholder..........         --      --       1,860         --             --        1,860   
  Common shares issued..........................  2,570,506      26       6,710         --             --        6,736   
  Foreign currency translation adjustments......         --      --          --       (249)            --         (249)  
  Net loss......................................         --      --          --         --         (2,400)      (2,400)  
                                                 ----------   ------  ----------  -----------  -----------  -------------
BALANCES, December 31, 1995.....................  2,700,000      27      13,775       (175)       (10,396)       3,231   
  Foreign currency translation adjustments......         --      --          --        178             --          178   
  Net income....................................         --      --          --         --          1,335        1,335   
                                                 ----------   ------  ----------  -----------  -----------  -------------
BALANCES, December 31, 1996.....................  2,700,000      27      13,775          3         (9,061)       4,744   
  Foreign currency translation adjustments......         --      --          --       (729)            --         (729)  
  Net income....................................         --      --          --         --          1,363        1,363   
                                                 ----------   ------  ----------  -----------  -----------  -------------
BALANCES, December 31, 1997.....................  2,700,000      27      13,775       (726)        (7,698)       5,378   
  Foreign currency translation adjustments                                                                               
     (unaudited)................................         --      --          --        (36)            --          (36)  
  Net income (unaudited)........................         --      --          --         --            281          281   
                                                 ----------   ------  ----------  -----------  -----------  -------------
BALANCES, March 31, 1998 (Unaudited)............  2,700,000    $ 27    $ 13,775      $(762)     $  (7,417)     $ 5,623   
                                                 ----------   ------  ----------  -----------  -----------  -------------
                                                 ----------   ------  ----------  -----------  -----------  -------------

See accompanying notes to these consolidated financial statements.

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(IN THOUSANDS OF U.S. DOLLARS)

                                                        [Enlarge/Download Table]

                                                                            FOR THE THREE                                    
                                                                             MONTHS ENDED           FOR THE YEARS ENDED      
                                                                              MARCH 31,                DECEMBER 31,          
                                                                          ------------------   ----------------------------- 
                                                                           1998       1997      1997       1996       1995   
                                                                          -------    -------   -------    -------    ------- 
                                                                             (UNAUDITED)                                     
                                                                                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                        
  Net income (loss)...................................................... $   281    $  (223)  $ 1,363    $ 1,335    $(2,400)
  Adjustments to reconcile to cash from operating activities:                                                                
     Depreciation and amortization.......................................      84        142       575        745        839 
     (Gain) loss on sale of assets, net..................................      --         --      (441)      (708)       (40)
     (Gain) loss on foreign exchange.....................................     (21)      (151)     (151)      (215)       618 
     Changes in:                                                                                                             
       Receivable........................................................    (452)     2,645       245     (1,214)    (5,159)
       Inventories.......................................................  (1,967)    (3,205)   (1,287)       933        434 
       Other assets......................................................      70        102       587       (736)       168 
       Accounts payable, accrued liabilities, and customer deposits......    (891)       352     1,684       (929)     3,523 
       Deferred income...................................................      23       (261)     (430)       317        228 
       Taxes payable.....................................................     199        103       174        151         32 
       Employee termination accrual......................................      71       (136)      149       (156)       (80)
       Minority interest.................................................      (7)        61       184        212        177 
       Other.............................................................      65         (7)       72         --         -- 
                                                                          -------    -------   -------    -------    ------- 
          Net cash provided by (used in) operating activities............  (2,545)      (578)    2,724       (265)    (1,660)
CASH FLOW FROM INVESTING ACTIVITIES:                                                                                         
  Payments for property, plant and equipment.............................     (86)      (125)     (594)      (231)    (1,452)
  Additions to patent and other intangibles..............................      --         --        --       (288)       (49)
  Proceeds from sale of property, plant and equipment....................       8          9        68         52        647 
  Additions to investments and other assets..............................    (160)        --      (340)        --         -- 
  Proceeds from sale of investments......................................      --        145       222      1,063        325 
                                                                          -------    -------   -------    -------    ------- 
          Net cash provided by (used in) investing activities............    (238)        29      (644)       596       (529)
CASH FLOW FROM FINANCING ACTIVITIES:                                                                                         
  Net changes in short-term debt.........................................   2,804        154      (216)      (384)    (2,398)
  Additions to long-term debt............................................     144        426       406        565        620 
  Repayments of long-term debt...........................................    (341)      (181)   (1,144)      (992)    (1,683)
  Advances to affiliate..................................................    (288)        --      (443)        --         -- 
  Proceeds from issuance of common stock.................................      --         --        --         --      6,469 
                                                                          -------    -------   -------    -------    ------- 
          Net cash provided by (used in) financing activities............   2,319        399    (1,397)      (811)     3,008 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS.............      61        (90)       62        261       (635)
                                                                          -------    -------   -------    -------    ------- 
NET CHANGE IN CASH AND CASH EQUIVALENTS..................................    (403)      (240)      745       (219)       184 
CASH AND CASH EQUIVALENTS, beginning of period...........................   1,330        585       585        804        620 
                                                                          -------    -------   -------    -------    ------- 
CASH AND CASH EQUIVALENTS, end of period................................. $   927    $   345   $ 1,330    $   585    $   804 
                                                                          -------    -------   -------    -------    ------- 
SUPPLEMENTAL DISCLOSURES:                                                                                                    
  Cash paid for interest................................................. $   426    $   312   $ 1,289    $ 1,421    $ 2,603 
  Cash paid for income taxes.............................................      --         --       113        325         11 
  Non-cash investing and financing activities --                                                                             
     Forgiveness of debt by stockholder..................................      --         --        --         --      1,860 

See accompanying notes to these consolidated financial statements.

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION FOR PERIODS SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED)

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:                    

   NATURE OF OPERATIONS -- Prima Industrie S.p.A. ("Prima Industrie" or "the
Company") manufactures software-controlled, robotic laser cutting and welding   
systems. The Company, through Prima Electronics S.p.A. (Prima Electronics), a   
60% owned subsidiary, also designs and manufactures electronic industrial       
process controls for its own equipment and for other industrial equipment       
manufacturers. The Company's manufacturing operations are located in Turin,     
Italy, and its customers include major automotive manufacturers in Europe and   
North America.                                                                  

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- The accompanying financial
statements have been prepared in accordance with generally accepted accounting  
principles in the United States.                                                

PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements  
include the accounts of the Company and its majority-owned subsidiaries.        
Investments in 20% to 50% owned affiliates are accounted for on the equity      
method. All significant intercompany accounts and transactions have been        
eliminated in consolidation.                                                    

     USE OF ESTIMATES -- The preparation of the Company's consolidated financial
statements in conformity with generally accepted accounting principles requires 
the Company's management to make estimates and assumptions that affect the      
amounts reported in these financial statements and accompanying notes. Actual   
results could differfrom those estimates.                                       

EARNINGS PER SHARE -- Basic earnings per share is computed using the  
weighted average number of shares outstanding. All share and per share data has 
been restated to reflect the exchange of the existing shares for 2,700,000      
shares of The PRIMA Group International, Inc. which occurred in April 1998, as  
described in Note 15. Diluted earnings per share is not presented as the Company
has no potential common stock.                                                  

    COMPREHENSIVE INCOME -- Statement of Financial Accounting Standards (SFAS)
No. 130, REPORTING COMPREHENSIVE INCOME was issued in June 1997 and adopted by  
the Company in the first quarter of 1998. This statement establishes standards  
for the reporting and display of comprehensive income in financial statements.  
Comprehensive income is generally defined as the change in equity of a business 
enterprise during the period from transactions and other events and             
circumstances from nonowner sources. The Company's consolidated statement of    
comprehensive income (loss) includes only foreign currency translation          
adjustments.                                                                    

CASH EQUIVALENTS -- The Company considers all highly liquid debt      
instruments purchased with an original maturity of three months or less to be   
cash equivalents.                                                               

INVENTORIES -- Inventories are stated at the lower of cost or market, 
determined by the average cost method.                                          

PROPERTY AND EQUIPMENT -- Property and equipment are stated at cost.  
Depreciation of property and equipment is calculated using the straight-line    
method over the estimated useful lives (ranging from 4 to 10 years) of the      
respective assets. The cost of normal maintenance and repairs is charged to     
operating expenses as incurred. Material expenditures which increase the life of
an asset are capitalized and depreciated over the estimated remaining useful    
life of the asset. The cost of properties sold, or otherwise disposed of, and   
the related accumulated depreciation or amortization are removed from the       
accounts, and any gains or losses are reflected in current operations.          

   IMPAIRMENT OF LONG-LIVED ASSETS -- Effective January 1, 1994, the Company
adopted Statement of Financial Accounting Standards No. 121 (SFAS 121). Pursuant
to SFAS 121, the Company evaluates the carrying value of property, plant and    
equipment, intangibles, investments, and other long-lived assets when facts and 
circumstances indicate that the carrying amount of an asset may not be          
recoverable. In such an instance, if the estimated future undiscounted cash     
flows are less than the carrying amount, impairment is recorded based on an     
estimate of future discounted cash flows. The adoption of SFAS 121 had no effect
on the Company's financial statements.                                          

    PATENTS AND OTHER INTANGIBLE ASSETS -- Patents and other intangible assets
are amortized on the straight-line method over their estimated useful life of 5 
years.                                                                          

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED 

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES: -- Continued       
    INVESTMENTS IN DEBT AND EQUITY SECURITIES -- Debt securities are generally
classified as held to maturity due to their short-term nature and the fact that 
they are pledged as collateral for a loan. Held to maturity securities are      
carried at cost, which approximates fair value. Equity securities are classified
as available for sale, and are carried at estimated fair value. Any unrealized  
gains or losses will be included in retained earnings. Realized gains or losses 
are included in other income.                                                   

ADVANCES TO AFFILIATE -- Advances to affiliate represent non-interest 
bearing advances to The PRIMA Group International, primarily to fund deferred   
offering costs. Should the offering not be completed, such costs will be charged
to expense.                                                                     

 INCOME RECOGNITION -- Income related to sales of equipment and parts is
recognized upon shipment.                                                       

  OTHER OPERATING REVENUE -- Other operating revenue consists primarily of
Italian government grants received for completed research and development       
projects and in 1997, license fees of approximately $280,000.                   

   INCOME TAXES -- The Company accounts for income taxes under the liability
method, which requires recognition of deferred tax assets and liabilities for   
the expected future tax consequences of events that have been included in the   
financial statements or tax returns. Under this method, deferred tax assets and 
liabilities are determined based on the difference between the financial        
statements and tax bases of assets and liabilities using enacted tax rates in   
effect for the year in which the differences are expected to reverse.           

EMPLOYEE TERMINATION ACCRUAL -- The Company's employees are eligible, 
immediately upon termination, for severance pay pursuant to Italian law. This   
entitlement is approximately 1 month's pay for each year of service, adjusted   
for inflation. The Company accrues a liability for such employee termination    
obligations, net of applicable advances, as provided by law. The amount accrued 
at each balance sheet date reflects the aggregate liability for all employees,  
if terminated. The expense related to this plan was $446,000, $531,000, and     
$654,000 for 1997, 1996, and 1995, respectively.                                

  RESEARCH AND DEVELOPMENT COSTS -- Research and development costs, net of
grants received from Italian government agencies as reimbursement for current   
project costs, are charged to operations in the period incurred.                

  FOREIGN CURRENCY TRANSLATION -- The Company's functional currency is the
Italian lire. Gains and losses from the effects of exchange rate fluctuations on
transactions denominated in foreign currencies are included in results of       
operations. Assets and liabilities of the Company's foreign subsidiaries are    
translated into Italian lire at period-end exchange rates, and their revenues   
and expenses are translated at average exchange rates for the period.           
Translation adjustments are accumulated in a separate component of stockholders'
equity until a foreign business is sold or substantially liquidated.            

  For United States reporting purposes, the financial statements have been
translated from Italian lire into U.S. dollars. Assets and liabilities were     
translated at the exchange rate at the applicable balance sheet date. Revenues  
and expenses were translated at average exchange rates for the period. All      
translation effects of exchange rate changes are included as a separate         
component of stockholders' equity.                                              

  RECLASSIFICATIONS -- Certain reclassifications have been made to conform
the 1996 and 1995 financial statements to the 1997 presentation. Such           
reclassifications had no effect on net income.                                  

  IMPACT OF RECENTLY ISSUED STANDARDS -- Statement of Financial Accounting
Standards 131, "Disclosures About Segments of an Enterprise and Related         
Information" supersedes Statement of Financial Accounting Standards 14,         
"Financial Reporting for Segments of a Business Enterprise." Statement 131      
establishes standards on the way that public companies report financial         
information about operating segments in annual financial statements and requires
reporting of selected information about operating segments in interim financial 
statements issued to the public. It also establishes standards for disclosures  
regarding products and services, geographic areas, and major customers.         
Statement 131 defines segments as components of a company about which separate  
financial information is available that is evaluated regularly by the chief     
operating decision maker in deciding how to allocate resources and in assessing 
performance.                                                                    

   Statement 131 is effective for financial statements for periods beginning
after December 15, 1997 and require comparative information for earlier years to
be restated. Management believes that the operations of Prima Electronics would 
presently comprise a separate segment as defined by Statement 131. Results of   
operations and financial position will be unaffected by implementation of these 
standards.                                                                      

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED 

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES: -- Continued       
     UNAUDITED INTERIM INFORMATION -- The balance sheet as of March 31, 1998 and
the statements of operations for the three-month periods ended March 31, 1998   
and 1997 were taken from the Company's books and records without audit. However,
in the opinion of management, such information includes all adjustments         
(consisting only of normal recurring accruals) which are necessary to properly  
reflect the financial position of the Company for the interim periods presented.

2. LIQUIDITY:                                                                   

     The Company's working capital needs have been funded primarily through bank
lines-of-credit. In order to fund the Company's plans for growth and related    
research and development expenditures, additional equity or debt funding will be
necessary. Management believes that the proceeds of the planned public offering 
will be adequate for this purpose. If the public offering is not successful,    
management's plans include pursuing long-term debt financing or changes in the  
planned rate of growth.                                                         

3. OTHER RECEIVABLES:                                                           

Other receivables consist of the following:                           

                                                                [Download Table]

                                                                DECEMBER 31,  
                                                              ----------------
                                                               1997      1996 
                                                              ------    ------
                                                                              
                                                                ($ IN 000'S)  
Tax refunds................................................   $1,641    $2,774
Other, primarily research and development grants...........      811       353
                                                              ------    ------
  Total....................................................   $2,452    $3,127
                                                              ------    ------
                                                              ------    ------

4. INVENTORIES:                                                                 

Inventories consist of the following:                                 

                                                                [Download Table]

                                                                DECEMBER 31,  
                                                              ----------------
                                                               1997      1996 
                                                              ------    ------
                                                                              
                                                                ($ IN 000'S)  
Raw materials..............................................   $5,426    $5,604
Work-in-progress...........................................    1,950     1,366
Finished goods.............................................      847       979
                                                              ------    ------
  Total....................................................   $8,223    $7,949
                                                              ------    ------
                                                              ------    ------

5. PROPERTY AND EQUIPMENT:                                                      

Property and equipment consists of the following:                     

                                                                [Download Table]

                                                                DECEMBER 31,  
                                                              ----------------
                                                               1997      1996 
                                                              ------    ------
                                                                              
                                                                ($ IN 000'S)  
Land and leasehold improvements............................   $1,149    $1,084
Machinery and equipment....................................    3,277     4,819
Office furniture and fixtures..............................    1,433     1,709
                                                              ------    ------
  Total....................................................   $5,859    $7,612
                                                              ------    ------
                                                              ------    ------

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED 

6. INVESTMENTS AND OTHER ASSETS:                                                

Investments and other assets consist of the following:                

                                                                [Download Table]

                                                                 DECEMBER 31, 
                                                                --------------
                                                                1997     1996 
                                                                ----    ------
                                                                              
                                                                 ($ IN 000'S) 
Treasury bonds and certificates of deposit...................   $261    $  590
Investments in and receivables from unconsolidated                            
  subsidiaries...............................................    206        --
                                                                ----    ------
  Total......................................................   $467    $  590
                                                                ----    ------
                                                                ----    ------

 In December 1997, the Company acquired a 25% interest in Macromeccanica
S.p.A. (Macromeccanica) from an existing shareholder for approximately $340,000.
Macromeccanica performs metal machining services and refurbishing of machine    
tools. The excess of cost over the Company's share of net assets of             
Macromeccanica is primarily attributed to the fair value of equipment, and is   
being amortized over 10 years.                                                  

  Summarized financial data of Macromeccanica in Italian GAAP for the year
ended December 31, 1997 (unaudited) is as follows:                              

                                                        [Enlarge/Download Table]

                                                                                                                   ($ IN 000'S)
                                                                                                                   ------------
                                                                                                                               
Current assets....................................................................................................    $6,235   
Other assets......................................................................................................       672   
Total assets......................................................................................................     6,907   
Current liabilities...............................................................................................     5,793   
Non-current liabilities...........................................................................................       448   
Net assets........................................................................................................       666   
Net sales.........................................................................................................     6,966   
Operating income..................................................................................................       236   
Net income........................................................................................................        65   

Also in December 1997, the Company sold its machining equipment to    
Macromeccanica for approximately $600,000, which was its appraised value as     
financed by a third party. Macromeccanica will provide machining services to the
Company with this equipment. The total gain on this transaction was             
approximately $576,000, of which $441,000 is included in the accompanying       
statement of operations and the remainder was eliminated due to the Company's   
25% ownership.                                                                  

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED 

7. NOTES PAYABLE AND LONG-TERM DEBT:                                            

Notes payable and long-term debt consist of the following:            

                                                        [Enlarge/Download Table]

                                                                                                            DECEMBER 31,     
                                                                                                         ------------------- 
                                                                                                          1997        1996   
                                                                                                         -------    -------- 
                                                                                                                             
                                                                                                            ($ IN 000'S)     
Borrowings under $2,641,000 bank line-of-credit, with interest at prime plus .5%*, without collateral... $ 1,710    $  2,864 
Borrowings under $10,163,000 bank line-of-credit, with interest at prime plus .5% for advances on                            
  accounts receivable and prime* for advances on customer orders collateralized by accounts receivable.                      
  Borrowing base is limited to 80% of accounts receivable and 50% of outstanding customer orders........   5,952       6,113 
Loan from an Italian government agency for research funding, payable in annual installments of                               
  approximately $216,000 through 1999, plus interest at 4.5% collateralized by investments of $590,000..     301         559 
Borrowings under factoring agreements with a financial institution, with interest at prime*,                                 
  collateralized by accounts receivable.................................................................     328         935 
Loan from Italian government agency, payable in annual installments of $33,000 from February 1998                            
  through 2007, with interest at 2.1% through February 1998 and 8.37% from February 1998 through 2007,                       
  without collateral....................................................................................     294         335 
Obligation under capital lease (Note 12)................................................................     189         333 
Other...................................................................................................     142          85 
                                                                                                         -------    -------- 
                                                                                                           8,916      11,224 
Less current portion....................................................................................  (8,472)    (10,276)
                                                                                                         -------    -------- 
Total................................................................................................... $   444    $    948 
                                                                                                         -------    -------- 
                                                                                                         -------    -------- 

---------------                                                                 

*The prime rate in Italy was 9% at December 31, 1997.                           

Aggregate maturities of long-term debt are due as follows:            

                                                                [Download Table]

                          YEARS ENDING                                         
                          DECEMBER 31,                             ($ IN 000'S)
                         -------------                             ------------
                                                                               
1998............................................................     $  8,472  
1999............................................................          197  
2000............................................................           23  
2001............................................................           25  
2002............................................................           27  
Thereafter......................................................          172  
                                                                   ------------
                                                                     $  8,916  
                                                                   ------------
                                                                   ------------

8. DISPOSITION OF SAPRI, S.P.A.:                                                

   During 1996, the Company sold its interest in Sapri, S.p.A., a 100% owned
subsidiary engaged in the manufacture and sale of robotic systems, for          
approximately $570,000. The sale resulted in a gain of approximately $1,059,000.
Sapri had net revenues of approximately $7,200,000 in 1995.                     

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED 

9. RESEARCH AND DEVELOPMENT GRANTS:                                             

   Government grants for research and development projects are recorded when
their realizability is assured. Grants received for current projects are        
credited to research and development expense. Grants received for completed     
projects are recorded as other operating revenue. Following is a summary of     
grants recorded for the periods indicated:                                      

                                                                [Download Table]

                                                           DECEMBER 31,       
                                                    --------------------------
                                                     1997      1996      1995 
                                                    ------    ------    ------
                                                                              
                                                           ($ IN 000'S)       
Other operating revenue..........................   $  346    $1,207    $1,204
Offset to research and development expense.......      114       199       231
                                                    ------    ------    ------
Total............................................   $  460    $1,406    $1,435
                                                    ------    ------    ------
                                                    ------    ------    ------

10. INCOME TAXES:                                                               

  The components of the net deferred tax asset at December 31, 1997 are as
follows:                                                                        

                                                                [Download Table]

                                                                   ($ IN 000'S)
                                                                   ------------
                                                                               
Inventory allowances..............................................   $    190  
Accounts receivable allowances....................................        184  
Warranty accrual..................................................        641  
Loss carryforwards................................................      1,108  
Other.............................................................         51  
Depreciation......................................................        (67) 
Grants............................................................        (29) 
                                                                   ------------
Net deferred tax asset............................................      2,078  
Valuation allowance...............................................     (2,078) 
                                                                   ------------
                                                                     $     --  
                                                                   ------------
                                                                   ------------

  Total income tax expense (benefit) differed from the amounts computed by
applying the Italian statutory tax rate of 53.2% to pre-tax income primarily due
to the fact that Prima Industrie and Prima Electronics file separate tax        
returns. Therefore, losses incurred by one company are not available to offset  
taxable income of the other. In addition, an equity tax is assessed each year on
the net equity of the Company without regard to taxable income, and losses      
carried forward result in a reduced tax rate.                                   

   As of December 31, 1997, the Company has net operating losses for Italian
tax purposes of approximately $2,367,000 which, if not utilized, will expire in 
the years 1998 through 2000. These loss carryforwards are not offset dollar for 
dollar against future taxable income, but rather result in a reduced tax rate.  

11. STOCKHOLDERS' EQUITY:                                                       

   In December 1994, due to significant losses incurred, the Company and its
largest stockholder agreed to a recapitalization of the Company. 1,903,000      
shares of the Company's common stock were canceled. The stockholder agreed to   
forgive outstanding loans of 3,000 million lire ($1,860,000), contingent upon   
the Company raising additional equity.                                          

     In February 1995, an Italian government agency agreed to purchase 1,200,000
shares for a total of 500 million lire ($3,100,000). In addition, 1,370,000     
shares of stock were sold to other stockholders for a total of 5,600 million    
lire ($3,600,000). Upon the completion of these transactions, the $1,860,000 in 
debt described above was forgiven. This amount was credited to stockholders'    
equity in 1995 as part of the recapitalization.                                 

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED 

12. COMMITMENTS AND CONTINGENCIES:                                              

  CAPITAL LEASE OBLIGATIONS -- The Company leases certain facilities under
agreements classified as capital leases. Property under these leases has a cost 
of $824,000 and accumulated amortization of approximately $210,000 at December  
31, 1997. The following is a schedule of future minimum lease payments under    
capital leases at December 31, 1997.                                            

                                                                [Download Table]

                                                                   ($ IN 000'S)
                                                                   ------------
                                                                               
Future minimum lease payments.....................................    $  260   
Less amount representing interest.................................       (71)  
                                                                   ------------
Present value of net minimum lease payments.......................       189   
Less current portion..............................................      (189)  
                                                                   ------------
                                                                      $   --   
                                                                   ------------
                                                                   ------------

OPERATING LEASES -- The Company also leases certain facilities under  
operating leases. Future minimum payments on noncancellable operating leases are
as follows:                                                                     

                                                                [Download Table]

                           YEARS ENDING                                 ($ IN   
                           DECEMBER 31,                                000'S)   
                          -------------                              -----------
                                                                                
1998..............................................................      $ 195   
1999..............................................................        206   
2000..............................................................         48   
                                                                     -----------
                                                                        $ 449   
                                                                     -----------
                                                                     -----------

 Rent expense was approximately $321,000, $680,000, and $610,000 for the
years ended December 31, 1997, 1996, and 1995, respectively.                    

     LITIGATION -- The Company has been named as defendant in litigation matters
arising from the ordinary course of business. In the opinion of the Company's   
management and after consultation with outside legal counsel, the ultimate      
resolution of these matters will not have a material adverse effect on the      
Company's financial condition, results of operations or cash flows. Subsequent  
to December 31, 1996, the Company discovered that the accrual for potential     
losses from litigation matters was understated by approximately $190,000 due to 
interest and inflation adjustments mandated by Italian law related to one matter
which had commenced in 1985. The 1996 financial statements have been restated to
reflect this accrual.                                                           

  COMMITMENTS -- In connection with customer financing under certain sales
contracts, the Company has agreed to repurchase machines in the amount of       
$1,148,000 and $1,233,000 as of December 31, 1997 and 1996, respectively. The   
repurchase price is based on a percentage of the sales price, and decreases     
based on the amount of time elapsed since the sale. The Company believes that   
the repurchase prices are less than the market value of the machines, and does  
not consider any additional accrual for repurchase commitments to be necessary  
based on its past experience.                                                   

13. FAIR VALUE OF FINANCIAL INSTRUMENTS:                                        

 The estimated fair values for financial instruments under SFAS No. 107,
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, are determined at        
discrete points in time based on relevant market information. These estimates   
involve uncertainties and cannot be determined with precision. Management       
estimates that the carrying amounts reported in the consolidated balance sheets 
for cash and equivalents, accounts receivable, investments, and notes payable   
approximate fair value because of the short-term maturity of these financial    
instruments.                                                                    

14. CONCENTRATIONS OF CREDIT RISK:                                              

    Credit risk represents the accounting loss that would be recognized at the
reporting date if counterparties failed completely to perform as contracted.    
Concentrations of credit risk (whether on or off balance sheet) that arise from 
financial instruments exist for groups of customers or counterparties when they 
have similar economic characteristics that would cause their ability to meet    
contractual obligations to be similarly affected by changes in economic or other
conditions described below.                                                     

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PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED 

14. CONCENTRATIONS OF CREDIT RISK: -- Continued                                 
The Company operates in one industry segment, the manufacture of laser
cutting and welding systems. The Company's primary customers are in one         
industry, automobile manufacturers and, thus, may be subject to similar economic
risks. Financial instruments that subject the Company to credit risk consist    
principally of accounts receivable.                                             

At December 31, 1997, accounts receivable totaled $19,495,000 and the 
Company has provided an allowance for doubtful accounts of $345,000. The Company
performs periodic credit evaluations on its customers' financial condition and  
believes that the allowance for doubtful accounts is adequate.                  

   The Company had sales in excess of 10% of total revenues to the following
customers:                                                                      

                                                        [Enlarge/Download Table]

                                                                                       RECEIVABLE AT 
                                                                                        DECEMBER 31, 
                                                            1997    1996      1995          1997     
                                                           ------  ------    ------    --------------
                                                                                                     
                                                                         ($ IN 000'S)                
Customer A................................................ $6,022  $5,671         *        $2,030    
Customer B................................................ $6,017  $5,526         *        $  558    

---------------                                                                 

*Less than 10%.                                                                 

Following is a summary of sales by geographic region:                 

                                                        [Enlarge/Download Table]

                                                                       1997       1996       1995  
                                                                      -------    -------    -------
                                                                                                   
                                                                              ($ IN 000'S)         
Italy................................................................ $12,739    $13,153    $15,770
Other Western Europe.................................................  27,105     23,662     14,664
United States........................................................   3,548      2,471      2,320
Other................................................................     168      1,822      4,601
                                                                      -------    -------    -------
                                                                      $43,560    $41,108    $37,355
                                                                      -------    -------    -------
                                                                      -------    -------    -------

The Company may also be exposed to certain risks as a result of its   
manufacturing operation being located in Italy which are not typically          
associated with companies operating in the United States. These include risks   
associated with the political, economic, social, and legal environment and      
foreign currency exchange rates. Management believes that it has adequately     
compensated for these risks. There can be no assurance, however, that changes in
the political, economical, social, and other conditions will not result in any  
material adverse impact on the Company's business, financial condition or       
results of operations.                                                          

The Company maintains most of its cash balances with various banks and
financial institutions located in Italy. Consistent with local practice, such   
amounts are not insured or otherwise protected should the financial institutions
be unable to meet their liabilities. There has been no history of such credit   
losses.                                                                         

15. MERGER:                                                                     

 On April 23, 1998, substantially all of the stockholders of the Company
exchanged their shares for 2,700,000 shares of The PRIMA Group International,   
Inc. (PRIMA). This transaction will be accounted for as a recapitalization of   
the Company in a manner similar to a reverse acquisition, in which the          
transaction is treated as the issuance of stock by the Company for the net      
assets of PRIMA, and no goodwill or other intangibles will be recorded.         

  The historical equity section and earnings per share of the Company have
been restated in the accompanying financial statements to reflect the share     
exchange described above in a manner similar to a reverse stock split.          

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The Company's Rapido 5 installed at Tier 1 supplier in Italy. 

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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY            
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN  
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST 
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. 
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN   
OFFER TO BUY, ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT   
RELATES OR AN OFFER TO, OR A SOLICITATION OF, ANY PERSON IN ANY JURISDICTION    
WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF  
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,     
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE      
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS       
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.                           

     UNTIL               , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT     
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.    
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD       
ALLOTMENTS OR SUBSCRIPTIONS.                                                    

------------------

TABLE OF CONTENTS 

                                                                [Download Table]

                                                        PAGE
                                                        ----
                                                            

Prospectus Summary...................................     3 
Risk Factors.........................................     6 
Use of Proceeds......................................    13 
Dividend Policy......................................    14 
Capitalization.......................................    15 
Dilution.............................................    16 
Selected Consolidated Financial Data.................    17 
Pro Forma Combined Financial Information.............    18 
Management's Discussion and Analysis of Financial           
  Condition and Results of Operations................    22 
History of the Company...............................    33 
Business.............................................    35 
Management...........................................    41 
Certain Transactions.................................    46 
Certain Beneficial Owners............................    47 
Description of Capital Stock.........................    48 
Transfer Agent and Registrar.........................    48 
Shares Eligible for Future Sale......................    49 
Underwriting.........................................    50 
Legal Matters........................................    51 
Experts..............................................    51 
Additional Information...............................    52 
Index to Consolidated Financial Statements...........   F-1 

2,000,000 SHARES
THE PRIMA GROUP 
INTERNATIONAL, INC. 
COMMON STOCK
----------------
PROSPECTUS
----------------
EBI SECURITIES CORPORATION

MILLENNIUM FINANCIAL GROUP, INC.

JOSEPH CHARLES & ASSOCIATES, INC. 

              , 1998

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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS 

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.                           

The following table sets forth the costs and expenses, other than     
underwriting discounts and commissions, payable by the Company in connection    
with the sale of Common Stock being registered. All amounts are estimates except
the registration fee and the NASD filing fee.                                   

                                                        [Enlarge/Download Table]

                                                                                         AMOUNT    
                                                                                       TO BE PAID  
                                                                                      -------------

                                                                                                   
Registration Fee..................................................................... $    7,938.45
NASD Filing Fee......................................................................      3,639.50
Nasdaq National Market Listing fee...................................................     60,000.00
Printing.............................................................................    159,000.00
Legal Fees and Expenses..............................................................    312,000.00
Accounting Fees and Expenses.........................................................    245,631.00
Blue Sky Fees and Expenses...........................................................      9,500.00
Transfer Agent Fees..................................................................      5,500.00
Miscellaneous........................................................................    291,711.05
                                                                                      -------------
     Total........................................................................... $1,100,000.00
                                                                                      -------------
                                                                                      -------------

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.                             

   Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its Directors and Officers against liabilities    
that they may incur in such capacities (plus reimbursement for expenses         
incurred) including liabilities under the Securities Act of 1933, as amended    
(the "Securities Act").                                                         

     The Registrant's Certificate of Incorporation and Bylaws include provisions
to (i) eliminate the personal liability of its directors for monetary damages   
resulting from breaches of their fiduciary duty to the extent permitted by      
Section 102(b)(7) of the General Corporation Law of Delaware (the "Delaware     
Law") and (ii) require the Registrant to indemnify its Directors and officers to
the fullest extent permitted by Section 145 of the Delaware Law, including      
circumstances in which indemnification is otherwise discretionary. Pursuant to  
Section 145 of the Delaware Law, a corporation generally has the power to       
indemnify its present and former directors, officers, employees and agents      
against expenses incurred by them in connection with any suit to which they are 
or are threatened to be made, a party by reason of their serving in such        
positions so long as they acted in good faith and in a manner they reasonably   
believed to be in or not opposed to, the best interests of the corporation and  
with respect to any criminal action, they had no reasonable cause to believe    
their conduct was unlawful. The Registrant believes that these provisions are   
necessary to attract and retain qualified persons as Directors and officers.    
These provisions do not eliminate the Directors' duty of care, and, in          
appropriate circumstances, equitable remedies such as injunctive or other forms 
of non-monetary relief will remain available under Delaware Law. In addition,   
each Director will continue to be subject to liability for breach of the        
Director's duty of loyalty to the Registrant, for acts or omissions not in good 
faith or involving intentional misconduct, for knowing violations of law, for   
acts or omissions that the Director believes to be contrary to the best         
interests of the Registrant or its stockholders, for any transaction from which 
the Director derived an improper personal benefit, for acts or omissions        
involving a reckless disregard for the Director's duty to the Registrant or its 
stockholders when the Director was aware or should have been aware of a risk of 
serious injury to the Registrant or its stockholders, for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of 
the Director's duty to the Registrant or its stockholder, for improper          
transactions between the Director and the Registrant and for improper           
distributions to stockholders and loans to Directors and officers. The provision
also does not affect a Director's responsibilities under any other law, such as 
the federal securities law or state or federal environmental laws.              

The Registrant has entered into indemnity agreements with each of its 
Directors and executive officers that require the Registrant to indemnify such  
persons against expenses, judgments, fines, settlements and other amounts       
incurred (including expenses of a derivative action) in connection with any     
proceeding, whether actual or threatened, to which any such person may be made a
party by reason of the fact that such person is or was a Director or an         
executive officer of the Registrant or any of its affiliated enterprises,       
provided that such person acted in good faith and in a manner such person       
reasonably believed to be in or not opposed to the best interests of the        
Registrant and, with respect to any criminal proceeding, had no reasonable cause
to believe his conduct was unlawful. The indemnification agreements also set    
forth certain procedures that will apply in the event of a claim for            
indemnification thereunder. The Registrant has entered into similar indemnity   
agreements with certain of its key employees.                                   

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At present, there is no pending litigation or proceeding involving a  
Director or officer of the Registrant as to which indemnification is being      
sought nor is the Registrant aware of any threatened litigation that may result 
in claims for indemnification by any officer or Director.                       

    The Registrant has an insurance policy covering the officers and Directors
of the Registrant with respect to certain liabilities, including liabilities    
arising under the Securities Act or otherwise.                                  

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES                                

On July 29, 1997, the Registrant issued 150,000 shares to Mr. James R.
Currier, Sr. and 150,000 shares to Mr. Giovanni Ciamaroni for a total           
consideration of $3,000. The sales of the above securities were deemed to be    
exempt from registration under the Securities Act in reliance on Section 4(2) of
the Securities Act, or Regulation D promulgated thereunder. The recipients of   
securities in each such transaction represented their intention to acquire the  
securities for investment only and not with a view to or for sale in connection 
with any distribution thereof and appropriate legends were attached to the share
certificates issued in such transactions. All recipients had adequate access to 
information about the Registrant. Mr. James R. Currier, Sr. and Mr. Giovanni    
Ciamaroni have each delivered to the Registrant 149,850 shares (an aggregate of 
299,700 shares) for cancellation and they did not receive consideration for the 
cancellation.                                                                   

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                             

(A) EXHIBITS                                                                    

                                                        [Enlarge/Download Table]

EXHIBIT NO.  DESCRIPTION                                                                                               
-----------  ----------------------------------------------------------------------------------------------------------
                                                                                                                       

    1.1      Form of Underwriting Agreement*                                                                           
    3.1      Certificate of Incorporation of Registrant+                                                               
    3.2      Bylaws of Registrant+                                                                                     
    5.1      Opinion of Rayburn, Moon & Smith, P.A.+                                                                   
   10.1      Form of Indemnification Agreement with Directors and Officers+                                            
   10.2      Employment agreement with James R. Currier, Sr.+                                                          
   10.3      Employment agreement with Gianfranco Carbonato+                                                           
   10.4      Employment agreement with Giovanni Ciamaroni+                                                             
   10.5      Employment agreement with Michael H. Gilbert+                                                             
   10.6      1997 Stock Incentive Plan+                                                                                
   10.7      Cooperative Manufacturing and Selling Agreement dated July 15, 1997 between Strippit, Inc. and Prima      
             Industrie S.p.A.+                                                                                         
   10.8      Supply Agreement dated April 29, 1996, between Atlas Copco Airpower NV and Prima Electronics S.p.A.+      
   10.9      Selling and Manufacturing License Agreement dated July 11, 1997 by and between Prima Industrie S.p.A. and 
             Beijing Machinery and Electricity Institute.+                                                             
   10.10     Form of Revolving Credit and Security Agreement.+                                                         
   10.11     Amended Agreement for Co-Development of Laser-on-Line Products and Technology by and among The PRIMA Group
             International, Inc., Prima Industrie S.p.A. and Prima Electronics S.p.A.+                                 
   23.1      Independent Auditors' Consent                                                                             
   23.2      Consent of Counsel (included in Exhibit 5.1)+                                                             
   23.3      Rule 438 Consent -- Michael A. Almond+                                                                    
   23.4      Rule 438 Consent -- W. Edwin McMahan+                                                                     
   24.1      Powers of Attorney+                                                                                       
   27        Financial Data Schedule+                                                                                  

---------------                                                                 

+ Previously filed.                                                             

* To be filed by amendment.                                                     

(B) FINANCIAL STATEMENT SCHEDULES                                               

Schedules not listed above have been omitted because the information  
required to be set forth therein is not applicable or is shown in the financial 
statements or notes thereto.                                                    

ITEM 17. UNDERTAKINGS.                                                          

     The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such    
denominations and registered in such names as required by the Underwriters to   
permit prompt delivery to each purchaser.                                       

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    Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling      
persons of the Registrant pursuant to the provisions referenced in Item 14 of   
this Registration Statement or otherwise, the Registrant has been advised that  
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,    
unenforceable. In the event that a claim for indemnification against such       
liabilities (other than the payment by the Registrant of expenses incurred or   
paid by a director, officer, or controlling person of the Registrant in the     
successful defense of any action, suit or proceeding) is asserted by such       
director, officer or controlling person in connection with the securities being 
registered hereunder, the Registrant will, unless in the opinion of its counsel 
the matter has been settled by controlling precedent, submit to a court of      
appropriate jurisdiction the question of whether such indemnification by it is  
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.                                           

The undersigned registrant hereby undertakes that:                    

     (1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of Prospectus filed as part of this           
Registration Statement in reliance upon Rule 430A and contained in a form of    
Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)  
under the Securities Act shall be deemed to be part of this Registration        
Statement as of the time it was declared effective.                             

    (2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,  
and the offering of such securities at that time shall be deemed to be the      
initial bona fide offering thereof.                                             

   (3) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:                        

     (i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;                                               

       (ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent  
    post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the    
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
    deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission  
 pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
     price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the 
effective registration statement; and                                 

         (iii) To include any material information with respect to the plan of
    distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.    

     (4) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new     
registration statement relating to the securities offered therein, and the      
offering of such securities at that time shall be deemed to be the initial bona 
fide offering thereof.                                                          

    (5) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.                                                                       

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant, The PRIMA Group International, Inc., a corporation organized and    
existing under the laws of the State of Delaware, has duly caused this          
Pre-Effective Amendment No. 6 to the Registration Statement on Form S-1 to be   
signed on its behalf by the undersigned, thereunto duly authorized, in the City 
of Charlotte, State of North Carolina, on this 13th day of July, 1998.          

                                     THE PRIMA GROUP INTERNATIONAL, INC.

                                         By: /s/________________________________
                                           JAMES R. CURRIER, SR.
                                           PRESIDENT AND CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this      
Registration Statement has been signed by the following persons in the          
capacities and on the dates indicated.                                          

                                                        [Enlarge/Download Table]

                      SIGNATURE                                              TITLE                            DATE      
------------------------------------------------------  -----------------------------------------------  ---------------

                                                                                                                        
                         /s/                            President, Chief Executive, and Director         July 13, 1998  
                JAMES R. CURRIER, SR.                     (Principal Executive Officer)                                 

                         /s/                            Vice President Finance and Administration,       July 13, 1998  
                  MICHAEL H. GILBERT                      Secretary and Treasurer (Principal Financial                  
                                                          and Accounting Officer)                                       

                         /s/                            Executive Vice President, Chief Operating        July 13, 1998  
                 GIANFRANCO CARBONATO                     Officer and Director                                          

                         /s/                            Vice President Sales and Marketing and Director  July 13, 1998  
                  GIOVANNI CIAMARONI                                                                                    

                         /s/                            Chairman of the Board of Directors               July 13, 1998  
                 GIAN MARIO ROSIGNOLO                                                                                   

                         /s/                            Director                                         July 13, 1998  
                     HANS WERTHEN                                                                                       

                         /s/                            Director                                         July 13, 1998  
                    PIO PELLEGRINI                                                                                      

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EXHIBIT INDEX 

(A) EXHIBITS                                                                    

                                                        [Enlarge/Download Table]

EXHIBIT NO.  DESCRIPTION                                                                                               
-----------  ----------------------------------------------------------------------------------------------------------
                                                                                                                       

    1.1      Form of Underwriting Agreement*                                                                           
    3.1      Certificate of Incorporation of Registrant+                                                               
    3.2      Bylaws of Registrant+                                                                                     
    5.1      Opinion of Rayburn, Moon & Smith, P.A.+                                                                   
   10.1      Form of Indemnification Agreement with Directors and Officers+                                            
   10.2      Employment agreement with James R. Currier, Sr.+                                                          
   10.3      Employment agreement with Gianfranco Carbonato+                                                           
   10.4      Employment agreement with Giovanni Ciamaroni+                                                             
   10.5      Employment agreement with Michael H. Gilbert+                                                             
   10.6      1997 Stock Incentive Plan+                                                                                
   10.7      Cooperative Manufacturing and Selling Agreement dated July 15, 1997 between Strippit, Inc. and Prima      
             Industrie S.p.A.+                                                                                         
   10.8      Supply Agreement dated April 29, 1996, between Atlas Copco Airpower NV and Prima Electronics S.p.A.+      
   10.9      Selling and Manufacturing License Agreement dated July 11, 1997 by and between Prima Industrie S.p.A. and 
             Beijing Machinery and Electricity Institute.+                                                             
   10.10     Form of Revolving Credit and Security Agreement.+                                                         
   10.11     Amended Agreement for Co-Development of Laser-on-Line Products and Technology by and among The PRIMA Group
             International, Inc., Prima Industrie S.p.A. and Prima Electronics S.p.A.+                                 
   23.1      Independent Auditors' Consent                                                                             
   23.2      Consent of Counsel (included in Exhibit 5.1)+                                                             
   23.3      Rule 438 Consent -- Michael A. Almond+                                                                    
   23.4      Rule 438 Consent -- W. Edwin McMahan+                                                                     
   24.1      Powers of Attorney+                                                                                       
   27        Financial Data Schedule+                                                                                  

---------------                                                                 
+ Previously filed.                                                             
* To be filed by amendment.                                                     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘S-1/A’ Filing		Date		First		Last			Other Filings
		12/31/01		4		35			None on these Dates
		12/31/99		41
		6/30/99		61
		12/31/98		33		68
Filed on:		7/13/98		1		81
		7/9/98		43		48
		7/2/98		42		49
		7/1/98		44
		4/23/98		6		75
		4/1/98		61
		3/31/98		6		70
		3/25/98		55
		3/16/98		62
		1/1/98		61
		12/31/97		19		75
		12/15/97		69
		10/15/97		42
		10/1/97		42
		7/29/97		34		79
		7/15/97		79		82
		7/11/97		79		82
		6/17/97		43
		3/31/97		18		70
		12/31/96		27		74
		4/29/96		79		82
		12/31/95		29		74
		2/9/95		42
		1/1/95		54		66
		1/26/94		43
		1/1/94		68
		12/31/93		18
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