Edgar Filing: PRIME RESOURCE INC

FORM 10-KSB

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

MARK ONE

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE OF
1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

[] TRANSITION REPORT pursuant to section 13 or 15(d) of the securities
exchange act of 1934

FOR THE TRANSITION PERIOD FROM N/A TO N/A

COMMISSION FILE NUMBER: 333-88480

PRIME RESOURCE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

UTAH 84106
-------------------------- -------------------------
(STATE OF INCORPORATION) ZIP CODE

1245 E. Brickyard Road, Suite 590
Salt Lake City, Utah
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES

(801) 433-2000 04-3648721 Registrant's telephone number, including area code
I.R.S. Employer Identification Number

Securities registered pursuant to Section 12(b) of the
Act:
150,000 Shares

Name of each exchange on
Title of each class which registered
------------------------- ------------------------
Common - $0.001 Par Value None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registration (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] YES [] NO

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

As of March 1, 2006, the aggregate market value of the common voting stock held
by non-affiliates of the Registrant, would be approximately $ 311,400. The
company has a very limited trading market on the OTCBB.

State issuer's revenues for its most recent fiscal year: $ 7,155,166.

As of March 1, 2006, the Registrant had outstanding 2,955,490 shares of common
stock ($0.001 par value); 50,000,000 common shares authorized.

TABLE OF CONTENTS
PART I
Page

ITEM 1 DESCRIPTION OF BUSINESS......................................3

ITEM 2 DESCRIPTION OF PROPERTY.....................................11

ITEM 3 LEGAL PROCEEDINGS...........................................11

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.........11

PART II

ITEM 5 MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.................................12

ITEM 6 PLAN OF OPERATION ..........................................12

ITEM 7 FINANCIAL STATEMENTS........................................15-33

ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURES.....................34

ITEM 8A CONTROLS & PROCEDURES.......................................34

ITEM 8B OTHER INFORMATION AND SELECTED RISK FACTORS.................35

PART III

ITEM 9 DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT..............35

ITEM 10 EXECUTIVE COMPENSATION......................................39

ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT..............................................40

ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............41

PART IV

ITEM 13 PRINCIPAL ACCOUNTANT FEES & SERVICES........................42

ITEM 14 EXHIBITS....................................................43

SIGNATURES..................................................44

PART I

Item 1. DESCRIPTION OF BUSINESS

Our discussion and analysis of the Business and subsequent discussion of
Financial Conditions may contain forward-looking statements that involve risks
and uncertainties. Some of the statements contained in this Report are not
purely historical but are forward-looking statements including, without
limitations, statements regarding Prime Resource, Inc. ("Prime's") expectations,
beliefs, estimates, intentions, anticipations, and strategies about its future
and future financial performance and those of its subsidiaries. Words such as,
"anticipates," "expects," "intends," "plans," "believes, "seeks," "estimates,"
or variations of such words and similar expressions, are intended to identify
such forward-looking statements, but their absence does not mean the statement
is not forward-looking. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties, and assumptions
that are difficult to predict; therefore, actual results may differ materially
from those expressed or forecasted in any such forward-looking statements as a
result of various factors. Specifically, and not in limitation of these factors,
Prime may alter its plans, strategies, objectives or business. This disclaimer
is made in reliance upon the safe harbor provisions of the Private Securities
Reform act of 1995.

GENERAL AND HISTORICAL

Prime Resource, Inc. ("Prime"), as a corporate entity, was filed in Utah on
March 29, 2002; however, essentially the same business purposes were engaged in
by its predecessor entity, Prime Resource, LLC, a Utah limited liability
company, as organized in 1996, but which was not active until the 1998
acquisition of its present subsidiaries: Belsen Getty, LLC ("Belsen Getty") and
Fringe Benefit Analysts, LLC ("Fringe Benefit"). Mr. Scott Deru acted as the
manager for Prime, LLC. From 1990 to 1998, Belsen Getty and Fringe Benefit
collaborated as independent corporations. In 1998, Prime LLC, became the parent
and coordinating entity and the two operating companies also became wholly owned
limited liability companies of Prime, LLC and changed their business structure
from corporations to limited liability companies owned by Prime LLC. Prime
Retirement Services, LLC ("Prime Ret.") was formed on July 3, 2003, after the
initial public offering by Prime, which offering became effective on June 16,
2003. Prime Retirement was formed with expectation to provide daily valuation
services to qualified retirement plans and related software but was closed
during 2005 due to inactivity.

As part of the 1998 reorganization of Prime, LLC, Mr. Scott Deru and Mr.
Terry Deru each contributed their 50% ownership interest in Fringe Benefit to
Prime. Mr. Terry Deru and Mr. William Campbell each contributed their 50%
ownership interest in Belsen Getty to Prime and Mr. Don Deru, the father of
Scott and Terry Deru, contributed capital. The resulting ownership percentages
in Prime, LLC were Scott and Terry Deru at 36 1/2% each; Mr. William Campbell at
23% and Mr. Don Deru 4%. Prime, LLC was later dissolved of record in April 2002
after transferring all assets to Prime, Inc. in anticipation of a public
offering of its shares.

Fringe Benefit was formed and licensed in November 1984 in Utah as a
general insurance agency. The company initially was formed and operated as a
Utah corporation with Mr. Scott Deru as its president. It was jointly owned by
Scott Deru and Terry Deru from inception. It was converted to a Limited
Liability Corporation in 1988. Fringe Benefit concentrated upon developing
employee benefits and writing insurance for business related purposes, such as
key man life policies, group health plans and related insurance. Mr. Scott Deru
and Mr. Terry Deru remained joint owners from 1984 to 1998 when their ownership
was acquired by Prime, LLC.

From 1998 forward, Fringe Benefit started collaborating closely with Belsen
Getty LLC, which was also formed in 1998 to primarily engage in investment
advisory services, business consulting and financial planning. Belsen Getty was
initially formed in 1990 as a corporation. Belsen Getty, which was and is
engaged as an investment advisor to individuals and firms and pension and
related plans, frequently referred clients to Fringe Benefit when insurance
funding was required. In like manner, Fringe Benefit would frequently refer
insurance clients needing business planning and investment advisory services to
Belsen Getty. However, neither firm operates upon an exclusive basis as to these
referrals.

Belsen Getty, Inc. was formed on November 9, 1990, by Mr. William Campbell
and Mr. Terry Deru as a Utah successor to a Nevada corporation. Mr. Terry Deru
joined the firm in the summer of 1985 and purchased a 50% interest in Belsen
Getty, Inc. of Nevada from Mr. Campbell. All interest in Belsen Getty, Inc. was
transferred to Belsen Getty LLC in 1998 which was then exclusively owned by
Prime, LLC. Mr. Terry Deru received a 36 1/2% interest in Prime and Mr. Campbell
a 23% interest in Prime.

In order to take advantage of some economies of scale and to work more
cohesively in cross- selling to the respective client base of Belsen Getty, Inc.
and Fringe Benefit, the foregoing reorganization occurred in 1998. Prime
Resource, LLC (an LLC organized on June 27, 1996, but having no real business
activity) was used as a holding company for the newly formed entities of Belsen
Getty, LLC and Fringe Benefit, LLC. These subsidiary entities were formed on
October 2, 1998 and became the successor firms for Belsen Getty, Inc. and Fringe
Benefit, respectively, each being wholly owned by Prime Resource, LLC.

Mr. William Campbell became associated with Prime Resource, LLC in 1998
resulting from a minimal cash contribution and his fifty per cent interest in
Belsen Getty. He received a 23% interest in Prime, LLC.

In January 2002 Prime, LLC purchased all of Mr. Campbell's interest in
Prime for $100,000. The prior Campbell interest was assigned to Andrew Limpert
on January 10, 2002 in consideration for the acknowledgment of Limpert's
advisory and organizational services which were valued at $113,000. The 26
percent (26%) membership share of the Company issued to Mr. Limpert was
accounted for as compensation expense and is included in "compensation and
benefits" in the statement of operations for the quarter ended March 31, 2002.
The value of the share of the Company issued to Mr. Limpert was based on what
the Company was required to pay a former member, Mr. William Campbell, for his
23 percent share of the Company, in connection with the Company's termination
and buy-out of Mr. Campbell effective January 1, 2002. Mr. Don Deru, the father
of Scott and Terry Deru, held a 4% interest in Prime LLC since inception and
exchanged his interest in Prime LLC for a 1.8% sharehold interest in Prime, Inc.

In March, 2002, Prime, LLC decided to incorporate in Utah in anticipation
of its initial public offering and issued in April, 2002 to Mr. Limpert 750,000
shares of its common stock, (26% of the issued and outstanding) for his prior
and continuing consulting services for and to Prime. The other stockholders are
Mr. Terry Deru, 1,000,000 shares; Mr. Scott Deru, 1,000,000 shares; and Mr. Don
Deru, 50,000 shares. Fringe Benefit and Belsen Getty continued under their
existing LLC structure as wholly owned subsidiaries of Prime, Inc. with Mr.
Terry Deru continuing as the manager of Belsen Getty and Mr. Scott Deru for
Fringe Benefit.

As limited liability companies, the historical revenues of Belsen Getty,
LLC and Fringe Benefit, LLC have flowed through to its member and sole owner,
Prime Resource, LLC. Within Prime the revenues, after payment of all operating
costs and wages and allowance for working capital reserves, were divided between
Mr. Scott Deru, Mr. Terry Deru and Mr. William Campbell, in accordance with
their limited liability ownership percentage, through December 31, 2001.

It was determined, upon incorporation of Prime Resource, Inc., that the
form of compensation and revenue transfer described by the prior paragraph will
no longer be feasible and that the corporation will need to retain and report
its income, if any, after salaries, overhead and other expenses as retained
earnings. In their respective capacities, management will be paid a fixed
salary.

Mr. Terry Deru, in addition to acting for Prime as its President and Chief
Executive Officer, will also continue to act as the Manager and principal
operator of Belsen Getty. Mr. Scott Deru will also devote a substantial majority
of his time to the business affairs of Fringe Benefit and such other time as
necessary as a corporate officer of Prime. It is anticipated that Mr. Terry Deru
will then assume most of the day-to-day management responsibilities for Prime.
Mr. Limpert will coordinate most governmental filings and reporting duties for
Prime, as well as continuing with Belsen Getty as a consultant.

Over the past three years, Belsen Getty has contributed approximately 11%
of the present revenues to Prime and Fringe Benefit has contributed the
remaining 89% of net revenue to Prime. As noted above, Prime, LLC was dissolved
in April, 2002 upon the transfer of assets to Prime, Inc. Prime, Inc., like its
predecessor, Prime LLC, is not anticipated to generate any independent sources
of revenue or income. All salaries and benefits in Belsen Getty and Fringe
Benefit have been and will be paid directly by Prime.

Current Ownership of Shares by Affiliates:

The principal owners of Prime (10% or greater shareholders) as of December
31, 2005, were:

Name of Shareholder Number of Shares (a) Percent of Outstanding
---------------------- -------------------- ----------------------
1. Mr. Terry Deru 984,000 33%
2. Mr. Scott Deru 999,500 34%
3. Mr. Andrew Limpert 717,900 24%
4. All Directors 2,701,400 91%
---------------------- -------------------- ------------------------

(a) There are no outstanding shareholder options, warrants or other stock
rights as of the date of this Report. Shares listed for individuals may
include spouse and grantor trusts.

Initial Public Offering (IPO):

The company completed its initial public offering in July 2003 pursuant to
an SB-2 registration in which it raised $750,000 in gross proceeds and $709,664
in net proceeds. Prime had expended all such proceeds as of September 2005. The
expenditure of offering proceeds were more particularly treated under Rule 463
in prior disclosures of Management's Plan of Operation and are additionally
discussed below in the Plan of Operation.

Belsen Getty Business

Belsen Getty is a Utah financial management company offering investment
advisory services, financial planning, pension, and retirement planning, and
general business consulting and planning for firms or individuals who may
participate to the extent they deem appropriate in any of these financial
products and services. Belsen Getty was originally formed as a Nevada
corporation in 1990. Belsen Getty remained active until 1996, and was a lapsed
corporation continuing to conduct business from 1996 to 1998 when it was
reorganized as a Utah limited liability company. Belsen Getty has continued to
date as a Utah limited liability company as previously described in the Company
History. Belsen Getty manages assets primarily under a fee based management
system. Belsen Getty uses sophisticated modeling software to complete its
investment advisory aspects of its services to clients who wish it to manage
their funds for various pension and retirement or other offered plans. In this
capacity, Belsen

Getty also acts as an investment advisory firm.

Belsen Getty also has expertise in providing consulting services for
retirement planning, pension and general business financing and planning.

Belsen Getty offers its services to individual retirement accounts, trust
accounts, as well as creating 401(k) plans and other pension plans for corporate
clients. These services may range from simple cash management to complex custom
growth portfolio planning for wealthy individuals or businesses.

Belsen Getty markets through several mediums. First, the firm has a
sophisticated database for tracking services to clients, prospects, and business
associates. This tracking assures each client and prospect are contacted monthly
by mail, email, phone, or other form of communication. Second, prospects that go
into this tracking system are located in several ways, such as referrals from
existing clients, referrals from other business associates, and referrals from
Fringe Benefit Analysts, as well as direct mailing and educational seminars. To
a limited extent, the firm currently engages in prospect mailings and may
explore other media advertising.

In November of 2002, Belsen Getty received 684,000 restricted common shares
in an inactive public company known as Mortgage Professionals Lead Source, Inc.
(MPLS) incident to consulting and advisory services provided to MPLS by Andrew
Limpert. MPLS became known as Neuro Bioscience, Inc. (NBI) pursuant to an
acquisition of this private company. The shares were issued and held in the name
of Prime Resource, Inc., the parent entity to Belsen Getty, by informal
assignment from Andrew Limpert who performed the consulting services as an
employee of Belsen Getty. While Limpert acted to locate the acquired company,
NBI, neither he nor Belsen Getty had a contractual duty to locate or provide
such entity as part of his consulting services or entitlement to earn the shares
for consulting services to MPLS.

Subsequently in 2006, Belsen Getty requested and received 339,500
restricted shares in the public parent company of NBI, "Bioaccelerate," which
has a limited trading market on the Electronic Bulletin Board (EBB). Belsen
Getty received 339,500 shares of Bioaccelerate (BACL.OB) in exchange for its NBI
shares, because certain performance expectations were not met by the company.
Bioaccelerate currently trades for $1.35 to $1.50 per share.

Belsen Getty is currently managed by Mr. Terry Deru and has seven full-time
and one part-time employee.

Fringe Benefit Analysts Business

Fringe Benefit is primarily a diversified independent insurance broker
which provides various lines of insurance, such as health, life, dental,
disability, etc., as needed by its clients to provide various business, as well
as employee related insurance programs and plans. Fringe Benefit may also, in
the future, engage in recruiting independent agents, rolling up and acquiring
existing health care insurance agencies and/or their book of business.

Fringe Benefit currently has eleven full-time employees, two part-time
employees and over fifty sub-agents who act as independent contractors in
various insurance lines.

Prime Retirement Services Business:

Prime Retirement Services was closed during calendar year 2005 as it had no
activity and no additional activity was anticipated by management in the future.

PRODUCTS AND MARKETS

I. Prime Resource, Inc.

As the parent management entity for its subsidiaries, Prime does not have
any significant independent income and derives its income from its subsidiary
operations as defined and described previously and below. Prime does not
independently market any service or product, but acts solely and exclusively
through its operating subsidiaries as more specifically described under the
following paragraphs. Prime is generally responsible for the payment from
subsidiary income of all general operating expenses of the consolidated
companies.

II. Belsen Getty, LLC

Belsen Getty is a Utah financial advisory company offering investment
advice, financial planning as well as pension and retirement planning and
general business consulting. Belsen Getty acts both for individuals and firms
who may participate to the extent they deem appropriate in any of these
financial products and services.

For the calendar year ending 2005, Belsen Getty would estimate that
approximately $668,602 or 9% of Prime's revenues were derived from Belsen Getty
activities. Of these amounts, approximately $396,339 or 59 % of its revenues
were derived from direct financial advisory services and approximately $272,263
or 41% were derived from other pension retirement and general business
consulting services. Approximately 11% of the business services performed by
Belsen Getty are a direct result of referrals by the other Prime subsidiary,
Fringe Benefit Analysts.

III. Fringe Benefit Analysts, LLC

Fringe Benefit Analysts has become the primary insurance arm for the Prime
companies. It has a synergistic relationship in that it provides insurance
coverage to various pension and retirement plans developed by Belsen Getty.

Fringe Benefit estimates that, for calendar year 2005, its total
contribution to the revenues of Prime were approximately $6,441,499 or 90%.
Approximately 18% of the services performed by Fringe Benefit Analysts are a
direct result of referrals by Belsen Getty.

USE OF OFFERING PROCEEDS

Historically Prime generally attempted to grow and expand each phase of its
related business practices by internal growth through the application of
retained earnings to expand services and acquire new clients. In addition to the
standard growth anticipated through retained earnings, Prime also employed the
net proceeds from its IPO to increase sales, general business operations and to
explore acquisition and merger opportunities. These expenditures from offering
proceeds have been reported pursuant to SEC Rule 463 in various periodic
quarterly reports on Form 10-QSB. The last expenditures occurred in September
2005. Total expenditures of the offering proceeds are summarized as follows:

Category of Expenditure Amount Percentage of Net
-------------------------------- --------- -----------------
Working Capital Expenditures (a) $ 400,000 56%
Technology & Computers $ 60,000 8%
Employees, Marketing, Misc $ 249,000 36%

(a) Includes acquisition expenses including a loan to LightSpace and
miscellaneous overhead.

LIGHTSPACE CONVERTIBLE NOTE

As part of the company's ongoing efforts to attempt to find a suitable
merger and/or reorganization candidate, Prime loaned various amounts of money in
2005 to a development stage technology company known as LightSpace Corporation.
LightSpace is generally involved in the business of creating unique proprietary
computer controlled patented light panels which are used for advertising and
promotion purposes and are linked to generate visual and sound advertising,
directions, or information. The company contemplated and was substantially
involved in negotiations with LightSpace for a reverse acquisition, but which
negotiations were subsequently terminated when LightSpace elected to pursue
independently its own registration of its stock rather than complete a reverse
acquisition with Prime.

Leading up to the termination of acquisition discussions, Prime had
advanced to LightSpace the sum of $350,000 by various notes. Prime is presently
owed directly the sum of $372,510.62 on the notes with interest payable at 8%.
The notes are convertible to the common stock of LightSpace after it completes
its registration and at the election of Prime. Prime intends to convert the
outstanding LightSpace notes to shares of LightSpace stock at the completion of
the registration. While it is not presently determined at exactly what market
price, if any, the LightSpace shares may trade at the conclusion of their
registration, the estimated conversion price would be at $.80 per share.

Of the LightSpace shares to be generated by this anticipated conversion,
Prime is presently intending to issue out directly to all Prime shareholders of
record all the LightSpace conversion shares on a pro-rata basis. It is
anticipated that these shares, as distributed, will be registered securities -
that is they will be part of the anticipated LightSpace registration.

PLANNED PRIME REORGANIZATION

At least two seminal events occurred in calendar year 2005 which may affect
your interest and rights as a Prime shareholder. Discussion of these matters is
included within this 10-KSB only as forward-looking information and which will
subsequently be included in a proxy solicitation for shareholders' consideration
in the second quarter of 2006. First, Prime has determined, and includes as part
of this 10-KSB disclosure, that it will go forward with the LightSpace
conversion and stock distribution, as described in the preceding section.
Secondly, Prime has made a management determination, based upon its experience
with LightSpace and other prospective merger or acquisition candidates, that its
current core business operations of insurance related planning and services are
not compatible with most merger or acquisition discussions or proposals. As a
result, Prime believes it would be in the best interest of the company to obtain
shareholder approval to spin out or to release the core existing assets to the
Prime principals for a reduction in their shares. The exact terms of any
proposed distribution of assets will be included in a separate future proxy
solicitation material to be sent to all shareholders, together with discussions
of dissenting shareholder rights (if any exist under current Utah law), risk
factors, alternatives and other germane discussions of the proposed transaction.
THE REORGANIZATION WOULD REQUIRE MAJORITY APPROVAL OF THE DISINTERESTED
SHAREHOLDERS.

The purpose of this section is merely to indicate that the Board, late in
2005, made a determination to pursue this proposed reorganization and proxy
solicitation and to set-out in this section the reasons generally for seeking a
subsequent proxy solicitation for approval of the proposed reorganization of
Prime to remove its existing present business activities and assets in exchange
for a share reduction from the principal holders who will receive the
transferred assets. The public shareholders would also receive the Bioaccelerate
shares described below.

As part of the anticipated reorganization, Prime will also propose that
each of the non-affiliated and non-employee public shareholders of Prime should
receive Prime's Bioaccelerate shares on a pro-rata basis. These shares were
earlier described on page 7 of this Annual Report and are intended as
distribution to be included as part of the 2006 proxy solicitation. It is
anticipated the Bioaccelerate shares would be distributed to Prime's public
shareholders as restricted shares. All shareholders of Prime will also receive
their pro-rata portion of the LightSpace shares to be acquired as described by a
preceding section, though it is anticipated that the LightSpace distribution
would occur with or without the approval of the reorganization of the company.
Again, all of the matters related to this proposed reorganization will be
contained in and made available to shareholders in a more detailed and separate
proxy solicitation in the second quarter of 2006.

SPECIFIC BUSINESS PLAN AND PROJECTIONS

Because of the anticipated reorganization discussed above, Prime is not
going to pursue any significant initiatives to expand or modify its current core
business activities in 2006. It should also be noted that Prime has exhausted,
through its normal business activities and as part of pursuing various merger
and reorganization candidates, all of the remaining net proceeds of its earlier
public offering, as reported in its 10-QSB report for the third quarter of 2005.
As a result, it is not anticipated that the company will generally use any
outside sources of capital to fund business expansion or changes during calendar
year 2006 and will concentrate management efforts on operating and maintaining
the core insurance and insurance consulting services, as previously described,
on a maintenance level until such time as the disinterested shareholders can
make an informed determination and vote upon the proposed reorganization to
remove that core business and business assets from the company upon the terms
generally outlined above and to be more particularly described in a subsequent
proxy statement.

With the foregoing general understanding in mind, Prime can report that
during calendar year 2005, it had a growth in revenues over calendar year 2004
of approximately $1,728,702 or 32%. Net earnings decreased marginally from
$131,112 in calendar year 2004 to $75,862 in 2005 or 42% as discussed below.

It is not anticipated that there will be any significant growth in revenues
or incomes during calendar year 2006. It is anticipated, because of the various
related costs and interruption of normal business practice by the anticipated
reorganization, that revenues and earnings may decrease in 2006, and the company
may potentially realize a net loss on operational activities during this period
resulting from this proposed reorganization.

COMPETITIVE FACTORS

All of the business areas in which the company operates (Belsen Getty in
financial advisory services and planning; and Fringe Benefit Analysts which is
primarily engaged in insurance programs related to business) are highly
competitive industry segments. In each of these business segments, the company
is faced with competition from larger and better capitalized companies such as
Marsh & McClellen and AON Corporation as well as several local insurance
agencies in the applicable insurance lines offered by the company; Merrill Lynch
& Co. and Smith Barney and other wire houses and investment advisory firms in
the financial advisory and consulting areas. In the business of pension planning
services competition arises from many large public accounting firms and law
firms.

Each of these competitive factors and entities may pose a significant
competitive risk to the company in that they may be able, because of size and
scale, to provide additional services, as well as providing the same services at
a lower per unit cost to various customers of the client.

Prime believes that it may remain competitive in these industries due to
some unique incentive programs which it employs, but can give no assurance or
warranty that it will ultimately be successful in competing in any of the given
areas in which it has elected to provide business services. Obviously, these
incentive factors will be irrelevant if the reorganization is completed.

Fringe Benefit joined United Benefit Advisors ("UBA") in 2005. UBA is a
national affiliation of independent health insurance providers. It is
anticipated, that this affiliation may bring national programs and insurance
carriers to the markets Fringe Benefit serves that were not previously available
and may create discounts on software and other insurance industry related
services. Fringe Benefit hopes that this affiliation may enhance its competitive
position in the relevant market. Prime has not had sufficient experience to date
to evaluate the impact of the UBA programs.

NUMBER OF PERSONS EMPLOYED

As listed above, Prime has attempted to break out under the general
description of each business subsidiary the number of persons employed by each
business subsidiary. In the aggregate, the Prime organizations employ 18
full-time personnel, 3 part-time personnel and approximately 50 insurance agents
as of the date of this report. These numbers also include officers of the
corporation employed on a full-time basis.

No projection of future employees or agents which may be required, in
addition to those described above, can be determined until the nature and extent
of the asset transfer and other business issues which are projected for the
company has been determined. Changes in employment are reported by Prime as part
of its annual 10-KSB Report and may be included where deemed significant in the
various quarterly or special reports filed by the company with the SEC.

ENVIRONMENTAL COMPLIANCE

Prime does not regard itself as operating primarily in industries with a
high degree of environmental risk exposure or environmental regulation by
various governmental entities. However, the Board of Directors has reviewed with
legal counsel and determined, at the present time, there is no known
environmental compliance regulations to which the company in its present lines
of business would be subject other than customary safety standards in the
workplace discussed below. The company maintains a policy of reviewing
periodically with various legal counsel any potential environmental disclosures,
filings or other regulatory requirements which may arise with regard to the
company. The company's office workers are subject to various state and local
regulations on employment conditions, as well as common standards for the office
environment place which may be imposed by the Occupation and Safety and Health
Administration ("OSHA") and the United States Environmental Protection Agency
("EPA"). To the best of the knowledge of the company's present management, the
company is fully in compliance with all safety, health and OSHA standards for
its office workers and insurance sales agents.

GOVERNMENTAL COMPLIANCE

Each of the areas in which the company presently operates is subject to
some specific governmental regulation. For instance, to provide investment
advisory services, Belsen Getty must maintain a licensure within the state of
Utah and the Securities and Exchange Commission ("SEC") as a registered and
licensed investment advisors and have maintained that status incident to the
services provided.

Fringe Benefit Analysts, as an insurance provider, is subject to licensing
and regulation by various state insurance departments where it conducts business
and has maintained in a current status its licensing requirements as a general
insurance agency.

Prime, as a collective entity, is a public company subject to various
reporting and regulatory requirements of the Securities and Exchange Commission
("SEC").

Item 2. DESCRIPTION OF PROPERTY

Prime presently maintains a leasehold estate in business suites located at
1245 East Brickyard Road, Suite 590, Salt Lake City, Utah. Prime leases
approximately 3,239 square feet of lease space with a remaining 2-year term on
its present lease in an office tower at this location. Within this office space
it has approximately four separate offices, together with two conference rooms
and secretarial and support staff areas. The Salt Lake space primarily houses
the Belsen Getty division. The monthly lease payment is currently $5,063 per
month. The Fringe Benefit Analysts division rents space in Layton, Utah on a
month to month basis at the rate of $4,393.70 per month.

In addition to the foregoing leasehold estate, Prime owns various office
furnishings and equipment which would value at approximately $ 30,000.

Prime does not have any other place of business nor does it anticipate
moving its principal place of business at any time in the foreseeable future.

Item 3. LEGAL PROCEEDINGS

Prime does not have any legal actions or claims in which the company is
presently engaged.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS

Prime last held a general shareholder meeting on June 5th , 2004. In its
June 2004 shareholder meeting, Prime shareholders elected the current Board and
ratified the continuation of the current auditors to the company. Any interested
party may review the minutes of that meeting and obtain a copy by contacting the
company. The anticipated reorganization generally outlined above will be
presented for shareholder vote pursuant to a detailed proxy solicitation in
2006. The company will require approval of any reorganization proposals by a
majority of disinterested shareholders to be more fully explained in the proxy
materials.

Part II

Item 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

After substantial delay by the NASD, Prime commenced trading on the
Over The Counter Electronic Bulletin Board (OTCBB) on May 28, 2004. Its trading
symbol is PRRO. Following is a table of the trading ranges for its shares in
calendar year 2005:

High Low High Low
------- ---------- --------- ------- --------- -------
Q1 2005 $6.25 $5.00 Q1 2004 NA NA
Q2 $5.50 $2.50 Q2 $6.00 $5.50
Q3 $5.75 $1.10 Q3 $6.90 $5.50
Q4 $5.25 $1.50 Q4 $6.25 $5.90
------- ---------- --------- ------- --------- -------

Item 6. PLAN OF OPERATION

This Form 10-KSB includes "forward-looking" statements about future
financial results, future business changes and other events that have not yet
occurred. For example, statements like we "expect," we "anticipate" or we
"believe" are forward-looking statements. Investors should be aware that actual
results may differ materially from our expressed expectations because of risks
and uncertainties about the future. We will not necessarily update the
information in this Form10-KSB in any forward-looking statement later turns out
to be inaccurate. Details about risks affecting various aspects of our business
are discussed throughout this Form 10-KSB. Investors should read all of these
risks carefully.

LIQUIDITY AND CONTINUED OPERATIONS

On December 31, 2005, Prime had assets of $1,734,548. At December 31, 2005,
the company's current assets totaled $1,107,977 compared to current liabilities
of $531,765. Working capital at December 31, 2005, totaled $576,212, a decrease
of 40% compared to $808,972 at December 31, 2004. The decrease in working
capital primarily occurred because of the expenditure of the remaining offering
proceeds. The company had a current ratio at December 31, 2005, of approximately
2.08. The long term debt of the company as of December 31, 2005, was $23,034 and
the retained earnings were $ 301,125. As of December 31, 2005, its approximate
market valuation was $ 3,405,035 based upon limited trading.

At December 31, 2005, there were no significant commitments for capital
expenditures, and the company does not intend to continue with expenditure of
its net proceeds for capital expenditures due to the anticipated reorganization
discussed above.

In the event the reorganization, as subsequently proposed is adopted, Prime
would no longer have a core business purpose or assets and would exclusively
devote its limited management efforts to seeking out potential merger or
acquisition candidates and maintaining the company as a viable public company.
No assurance or warranty of success in this regard can be made and the company
would only have limited part-time management.

Prime, should it continue in its existing business, fully intends to
primarily grow its insurance company portion of its business through anticipated
net earnings and to apply estimated net earnings for calendar year 2006 to the
growth of other aspects of its business. Net retained earnings for 2006, if any,
are projected to be less than 2005 due to the proposed reorganization activity.
The company will attempt to allocate net earnings to different aspects of its
business growth as it shall determine in accordance with its independent
business discretion.

At present, Prime has no financing commitments or other significant long
term debt. The company believes it can continue to operate with modest growth
based upon its utilization of retained earnings. The company has no present
intent to engage in any further borrowing or capital formation activities for
the foreseeable future. The company currently has two outstanding loans and a
line of credit in the amount of $59,762.

CAPITAL RESOURCES

If the company were required in the future to raise additional capital, it
would have to either attempt to engage in another sale of its capital stock
through a registered offering, seek private placement financing or seek to
obtain one or more lines of credit for debt financing. As noted previously, the
company has no plans to engage in any type of capital or debt creation for the
foreseeable future.

RESULTS OF OPERATIONS

Revenues for 2005 totaled $7,155,166, an increase of $1,728,702 from
calendar year 2004. Net income for 2005 totaled $75,862 compared to $131,112 in
2004. The increase in revenues was due primarily to growth of the business
activities of the company and particularly the writing of more insurance
policies. The decrease in net earnings resulted from lower average profit
margins on policies and various acquisition efforts, particularly LightSpace.
Prime also realized more modest growth in its Belsen Getty financial consulting
and planning sectors and in its pension and profit sharing efforts. The
individual sector revenue and profit breakdowns for these subsidiaries are
set-out as follows:

NET PROFITS
OR LOSSES % OF PRIME TOTAL
CALENDAR YEAR 2005 GROSS REVENUES (Pretax) REVENUES
-------------------------- ---------------- --------------- ----------------
Fringe Benefit Analysts $ 6,441,499 $ 479,660 90%
-------------------------- ---------------- --------------- ----------------
Belsen Getty $ 668,602 $ (121,507) 9%
-------------------------- ---------------- --------------- ----------------
Prime Resource $ 45,065 $ (230,151 1%
-------------------------- ---------------- --------------- -----------------
NET PROFITS % OF PRIME TOTAL
CALENDAR YEAR 2004 GROSS REVENUES OR LOSSES REVENUES
-------------------------- ---------------- --------------- ----------------
Fringe Benefit Analysts $ 4,780,855 $ 546,100 88%
-------------------------- ---------------- --------------- ----------------
Belsen Getty $ 628,948 $ (158,213) 12%
-------------------------- ---------------- --------------- ----------------
Prime Resource $ 16,661 $ (191,033) 0%
-------------------------- ---------------- --------------- ----------------

The net operating profit margin for Prime was approximately 1% in 2005
with Belsen Getty having a profit margin (after taxes and consolidation) of
approximately (11) %, Fringe Benefit Analysts' margin being approximately 4%.

Expenses for Prime primarily involved executive salaries, commissions,
and operation of the business offices, including general salaries and overhead.
These expenses for 2005 can be set-out and compared with 2004 in the following
table:

% CHANGE
BETWEEN 2004
Description of Expense 2005 2004 & 2005
------------------------------------ ------------ ------------ ------------
Officers' salaries and compensation $ 1,460,822 $ 1,317,600 11%
------------------------------------ ------------ ------------ -------------
Commissions 4,799,377 3,218,717 49%
------------------------------------ ------------ ------------ -------------
General Operating Expenses 562,567 507,511 11%
------------------------------------ ------------ ------------ -------------
Occupancy 133,866 145,499 (9)%
------------------------------------ ------------ ------------ -------------
Interest 4,007 3,679 8%
------------------------------------ ------------ ------------ -------------
Depreciation 61,495 49,868 23%
------------------------------------ ------------ ------------ -------------
TOTALS $ 7,022,134 $ 5,242,880 34%
------------------------------------ ------------ ------------ -------------

RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under FASB Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 149 is generally effective for
contracts entered into or modified after June 30, 2003 and for hedging
relationships designated after June 30, 2003. The adoption of this pronouncement
did not have a present impact on the company's financial condition or results of
operations.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." SFAS
No. 150 establishes standards for how an issuer measures certain financial
instruments with characteristics of both liabilities and equity and requires
that an issuer classify a financial instrument within its scope as a liability
(or asset in some circumstances). SFAS No. 150 was effective for financial
instruments entered into or modified after May 31, 2003 and otherwise was
effective and adopted by the company on July 1, 2003. As the company has no such
instruments, the adoption of this statement did not have a present impact on the
company's financial condition or results of operations.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3." This
statement changes the requirements for the accounting for and reporting of a
change in accounting principle. Previously, Opinion 20 required that most
voluntary changes in accounting principle be recognized by including in net
income of the period of change the cumulative effect of changing to a new
principle. This statement requires retrospective application to prior periods'
financial statements of changes in accounting principle, when practicable.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary risk faced by Prime is the market risk from larger and better
capitalized companies engaging in the same services which the company provides
at a lower price or other competitive advantage to the company.

Secondly, Prime faces some risk arising out of operating within tightly
regulated areas of industry which may be subject to limitations and controls by
various governmental regulatory authorities.

Thirdly, Prime is experiencing a limitation on its growth potential to
the extent present management is not finding suitable growth opportunities by
expanding its insurance base through acquisitions paid from net offering
proceeds.

Significant risks may be imposed by the anticipated reorganization
generally discussed above and which risks would be more fully set-out in any
proxy solicitation related to such reorganization.

Item 7. FINANCIAL STATEMENTS

Following are the audited Financial Statements. These financial statements
constitute the formal presentation of financial information by the company, such
that all other financial information contained in this 10-KSB report should be
read and reviewed in light of the following Financial Statements and notes
thereto. Should there exist any conflict between information appearing elsewhere
in this Report and the following Financial Statements, the Financial Statements
should be given primary definition and control. The notes attached to the
Financial Statements constitute an integral part of the financial disclosure and
should be read and reviewed in connection with the Financial Statements.

Prime Resource, Inc. and Subsidiaries

Consolidated Financial Statements
with
Independent Auditors' Report Thereon
Years Ended December 31, 2005 and 2004

Prime Resource, Inc. and Subsidiaries

Consolidated Financial Statements

December 31, 2005

Contents

Report of Independent Registered Public Accounting Firm.....................18

Consolidated Financial Statements:

Consolidated Balance Sheet ........................................19

Consolidated Statements of Operations..............................20

Consolidated Statements of Stockholders' Equity....................21

Consolidated Statements of Cash Flows..............................22

Notes to Consolidated Financial Statements .................................23

Report of Independent Registered Public Accounting Firm

To the Board of Directors,
Prime Resource, Inc., and Subsidiaries:

We have audited the accompanying consolidated balance sheet of Prime Resource,
Inc. and Subsidiaries as of December 31, 2005, and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 2005 and 2004. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 Prime Resource, Inc.
and Subsidiaries as of December 31, 2005, and the results of its operations and
its cash flows for the years ended December 31, 2005 and 2004, in conformity
with accounting principles generally accepted in the United States of America.

Child, Van Wagoner & Bradshaw, PLLC
Kaysville, Utah
March 21, 2006

Prime Resource, Inc. and Subsidiaries

Consolidated Balance Sheet
December 31, 2005

ASSETS
Current assets:

Cash and cash equivalents $ 586,147
Accounts receivable 462,331
Interest receivable 37,844
Trading securities (Note 2) 2,497
Income taxes receivable (Note 11) 19,158
Deferred tax assets -
Other current assets -
-----------------
Total current assets 1,107,977

Leasehold improvements and equipment, net of accumulated
depreciation and amortization of $209,053 (Note 3) 144,278

Notes receivable 390,000
Investments in non-trading securities 60,000
Deferred tax assets (Note 11) 19,189
Other assets 13,104
-----------------

Total assets $ 1,734,548
=================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 42,776
Accrued compensation, commissions and benefits 445,016
Deferred tax liabilities (Note 11) 7,245
Current portion of notes payable, including line of credit (Note 4) 36,728
-----------------
Total current liabilities 531,765

Notes payable, excluding current portion (Note 4) 23,034
Deferred tax liability - long-term (Note 11) -
-----------------

Total liabilities 554,799

Commitments and contingencies (Note 10) -

STOCKHOLDERS' EQUITY (Note 5)
Common stock, no par value; 50,000,000 authorized
shares; 2,972,950 shares issued and 2,955,490 shares outstanding 964,802
Treasury stock (86,178)
Retained earnings 301,125
-----------------
Total stockholders' equity 1,179,749
-----------------

Total liabilities and stockholders' equity $ 1,734,548
=================

See accompanying notes to financial statements.

Prime Resource, Inc. and Subsidiaries

Consolidated Statements of Income

Years ended December 31,
2005 2004
-------------- -------------
Revenues

Commissions $ 6,441,499 $ 4,780,855
Investment and business advisory fees 668,602 628,948
Interest and dividends 45,065 16,661
-------------- -------------
7,155,166 5,426,464

Expenses
Commissions 4,799,377 3,218,717
Compensation and benefits 1,460,822 1,317,606
General and administrative 562,567 507,511
Occupancy and related expenses 133,866 145,499
Interest 4,007 3,679
Depreciation and amortization 61,495 49,868
-------------- -------------
7,022,134 5,242,880
-------------- -------------

Net operating income 133,032 183,584

Gains and (losses)
Realized gains (losses) on trading securities (111) 5,848
Unrealized gains (losses) on trading securities (4,919) 4,020
Net gains from disposals of fixed assets - 3,402
-------------- -------------
Net gains (losses) (5,030) 13,270
-------------- -------------
Net income before income taxes 128,002 196,854

Income taxes 52,140 65,742
-------------- -------------

Net income $ 75,862 $ 131,112
============== =============

Weighted average shares outstanding 2,944,529 2,934,000

Basic and fully diluted net income per share $ .03 $ .04

See accompanying notes to financial statements.

Prime Resource, Inc. and Subsidiaries

Consolidated Statements of Stockholders' Equity

Retained
Common Stock Treasury Earnings
Shares Amount Stock (Deficit) Total
----------- ---------- ---------- ---------- ------------

Balance at January 1, 2004 2,934,000 $ 907,427 $ (77,755) $ 94,151 $ 923,823

Net income - - - 131,112 131,112
----------- ---------- ---------- ---------- ------------

Balance at December 31, 2004 2,934,000 907,427 (77,755) 225,263 1,054,935

Common stock issued for compensation 22,950 57,375 - - 57,375

Purchase of treasury stock (1,460) - (8,423) - (8,423)

Net income - - - 75,862 75,862
----------- ---------- ---------- ---------- ------------

Balance at December 31, 2005 2,955,490 $ 964,802 $ (86,178) $ 301,125 $ 1,179,749
=========== ========== ========== ========== ============

See accompanying notes to financial statements.

Prime Resource, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Years ended December 31
2005 2004
--------------- -----------------
Cash Flows From Operating Activities:

Net income $ 75,862 $ 131,112
Adjustments to reconcile net income to cash
used in operating activities:
Depreciation and amortization 61,495 49,868
Common stock issued for compensation 57,375 -
(Gain) on disposal of assets - (3,402)
Unrealized (gain) losses on trading securities 4,919 (4,020)
Realized (gain) losses on sale of trading securities 111 (5,848)
Changes in operating assets and liabilities:
Trade and other accounts receivable (54,628) (96,271)
Other current assets - 10,000
Income taxes receivable (9,388) 23,584
Deferred tax assets 16,271 800
Accounts payable 2,085 32,367
Accrued liabilities and compensation 58,687 104,772
Deferred tax liabilities - (15,510)
--------------- -----------------
Net cash provided by (used in) operating activities 212,789 227,452
--------------- -----------------

Cash Flows From Investing Activities:
Notes receivable (350,000) -
Purchases of equipment and leasehold improvements (42,870) (43,581)
Proceeds from sale of trading securities 17,207 354,443
Purchases of trading securities (51,530) (96,603)
--------------- -----------------
Net cash provided by (used in) investing activities (427,193) 214,259
--------------- -----------------
Cash Flows From Financing Activities:
Purchase of treasury stock (8,423) -
Payments on notes payable (9,452) (3,795)
Net (payments) borrowings on line of credit (8,978) (9,915)
--------------- -----------------
Net cash provided by (used in) financing activities (26,853) (13,710)
--------------- -----------------

Net increase in cash and cash equivalents (241,257) 428,001
Cash and cash equivalents at beginning of year 827,404 399,403
--------------- -----------------
Cash and cash equivalents at end of year $ 586,147 $ 827,404
=============== =================

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 4,082 $ 3,679
=============== =================

Cash paid for taxes $ 49,500 $ 56,868
=============== =================

Non-cash Investing and Financing Activities:

Company vehicle purchased and financed through a
trade-in $6,500 and a note payable $30,821 $ - $ 37,321
=============== ================

See accompanying notes to financial statements.

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

1. Summary of Significant Accounting Policies

Organization and Business Activity
Prime Resources, Inc. (the Company), is a 100 percent owner of Belsen Getty,
LLC, (Belsen Getty), and Fringe Benefit Analysts, LLC, (FBA), with offices in
Salt Lake City and Layton, Utah, respectively. Belsen Getty is a fee-only
financial management firm, providing investment advice to high-wealth
individuals and employee groups in connection with company retirement plans. FBA
sells group and employee benefit products, primarily health insurance, to
employers and individuals throughout Utah.

Basis of Financial Presentation
The accompanying consolidated financial statements include the accounts of Prime
Resource, Inc., and its wholly owned subsidiaries, Belsen Getty, LLC and Fringe
Benefit Analysts, LLC. All significant inter- company balances and transactions
have been eliminated in consolidation.

Uses of Estimates
The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. In
preparing the consolidated financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets,
liabilities and disclosures as of the date of the balance sheet and revenues and
expenses for the period. Actual results could significantly differ from those
estimates. Significant estimates that may change dramatically in the near term
are estimates of unrealized gains and losses on trading securities and resulting
deferred tax assets and liabilities, as well as the value of shares received for
services. Gains actually realized upon the eventual disposal of these
investments could vary from a loss of $2,500 to a substantial gain based on
non-discounted share values.

Cash and Cash Equivalents
Cash and cash equivalents consist of checking and money market accounts. For
purposes of the statement of cash flows, the Company considers all highly liquid
instruments with original maturities of three months or less to be cash
equivalents. As of December 31, 2005 and 2004 cash and cash equivalents of
$153,773 and $335,861, respectively, were either not covered by federal
insurance or exceeded those limits.

Trade Receivables
Trade receivables are estimates of commissions and fees due to the Company for
insurance sales and investment advice earned but not yet received. No allowance
for bad debts has been established for any of these amounts as the process for
recording receivables is based on reviews and analysis of actual historical cash
receipts. This cash receipt analysis takes into account both bad debt and
potential charge backs on premium cancellations and excludes them from
receivables balances when recording revenues and trade receivables. Management
estimates that bad debts and charge backs do not change significantly from
period to period.

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

1. Summary of Significant Accounting Policies (continued)

Trade Receivables (continued)
Accordingly, an additional reserve at any point in time is not considered
necessary.

Trading Securities
Trading securities are recorded at fair value. Unrealized holding gains or
losses on trading securities are reported on the statement of operations. A
decline in the market value of the securities below cost that is deemed other
than temporary is charged to earnings resulting in the establishment of a new
cost basis for the security.

Investments in Non-Trading Securities
Investments that do not qualify as trading securities or available for sale
securities under Statement of Financial Accounting Standard No. 115, "Accounting
for Certain Investments in Debt and Equity," are included in Investments in
non-trading securities on the consolidated balance sheet and are accounted for
under the cost method as they are non-public companies for which we do not exert
significant influence or public securities for which sale is restricted. For
these investments, management regularly reviews the assumptions underlying the
operating performance and cash flow forecasts based on information requested
from these companies. Generally, this information may be more limited, may not
be as timely as and may be less accurate than information available from
publicly traded companies. Assessing each investment's carrying value requires
significant judgment by management. If it is determined that there is an
other-than-temporary decline in the fair value of a security, management will
write-down the investment to its fair value and record the related write-down as
a loss on investments in the consolidated statement of income.

Leasehold Improvements and Equipment
Leasehold improvements and equipment are recorded at cost. Depreciation is
calculated on the straight- line method over the estimated useful lives of
depreciable assets as follows:

Years
Automobiles 5
Furniture & equipment 5-7
Computer software & equipment 3-5

Management reviews its leasehold improvements and equipment for impairment on an
annual basis and records any related loss on impairments at the time any
impairment is recognized.

Notes Receivable
Notes receivable consisted of two notes. One note receivable for $40,000 at
December 31, 2005, has a stated interest rate of 10% per year on outstanding
principle which resulted in $15,333 of interest receivable on the balance sheet.
The note requires no periodic payments of

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

1. Summary of Significant Accounting Policies (continued)

Notes Receivable (continued)
principal or interest and is due with all outstanding principal and accrued
interest on March 1, 2007.

During the year ended December 31, 2005, the Company entered into a second
promissory note receivable by lending money to an unrelated entity in
anticipation of a contemplated merger with that entity. The note receivable
bears interest at 8% and is due on demand on or after ninety days from the date
of the agreement. Management anticipates the note is collectible and believes
the fair value to be substantially equal to its carrying value based on the
terms of repayment. In the event that these factors are not met and the loan
would be called there is certain intellectual property and guarantees from two
founding shareholders of the private company beyond all other corporate assets
to repay the loan. Prime is considering conversion of the loan to equity in the
entity after the entity completes its public registration. In either event,
Prime feels it has sufficient liquid resources to properly finance its core
business and provide for growth outside of the capital committed to this note.
Management does not yet intend to pursue collection of the note nor convert the
note to equity in the short-term. Accordingly, the instrument has been
classified as long-term. Accrued interest receivable on this note totaled
$22,511 at December 31, 2005.

Interest is accrued on notes receivable according to the terms of the note.
Management evaluates each note on an annual basis or sooner if necessary to
determine the financial status of the note holder. Upon a determination that
there is doubt as to the collectability of any or all principal and interest
due, the Company will write off of the applicable accrued interest and an
allowance is established against the principal amount determined uncollectible
as estimated by management.

Income Taxes
The Company uses the asset and liability method of accounting for income taxes,
in accordance with Statement of Financial Accounting Standard No. 109
"Accounting for Income Taxes." Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
settled or recovered. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the period that includes the enactment
date.

Revenue Recognition
The Company generates revenues from two primary sources, commissions on the sale
of insurance and fees for providing investment advice.

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

1. Summary of Significant Accounting Policies (continued)

Revenue Recognition (continued)
Fees from the investment advisory services are billed and earned based on an
agreed-upon percentage of the fair value of investment portfolios under
management. Such fees are typically one percent per year, and are calculated and
billed on a monthly basis at one twelfth of one percent of the fair value of
investments under management as of the beginning of each calendar month, and are
recognized as revenue in the month billed.

Revenues, in the form of commissions, are earned on brokered sales of group and
individual health insurance products under agency marketing agreements with
applicable health insurance providers. Commissions are generally collected on a
monthly basis and are recognized as revenue in the month for which the related
insurance premiums apply. Commissions earned by the Company are split, at
management's discretion, between the Company and its licensed agents, on a
case-by-case basis. The Company recognizes the full amount of commissions
received under its agency agreements as commission revenue and the portion paid
to its licensed agents as commission expense.

Credit Risks and Concentrations
The Company's primary customers are individuals and small to medium sized
businesses that may be affected by changes in economic conditions. The Company
believes that approximately 99% of its customers are geographically based in
Utah. The Company has no client that accounts for more than 4% of its revenues.
The Company's largest insurance carriers that pay the commissions on insurance
sales generate 33%, 29%, and 12% of its annual insurance commissions revenues.
Investment advisory fees make up approximately 9% of the Company's total
revenues and no one individual or customer accounts for more than approximately
7% of that revenue.

Earnings Per Share
The Company adopted Statement of Financial Accounting Standard No. 128 (SFAS No.
128), "Earnings per Share", which is effective for annual periods ending after
December 15, 1997. Earnings per share (EPS) are computed based on the weighted
average number of shares actually outstanding. Basic earnings per share and
fully diluted earnings per share are the same as there are no dilutive or
anti-dilitive shares as of December 31, 2005 and 2004.

New Accounting Pronouncements
In December of 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - An Amendment of FASB Statement No.
123." FAS 148 provides alternative methods of transition for a voluntary change
to the fair value based method of accounting for stock-based employee
compensation. In addition, the statement amends the disclosure requirement of
Statement No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results.

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

1. Significant Accounting Policies (continued)

New Accounting Pronouncements (continued)
In April, 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under FASB Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 149 is generally effective for
contracts entered into or modified after June 30, 2003 and for hedging
relationships designated after June 30, 2003.

In May, 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
establishes standards for how an issuer measures certain financial instruments
with characteristics of both liabilities and equity and requires that an issuer
classify a financial instrument within its scope as a liability (or asset in
some circumstances). SFAS No. 150 was effective for financial statements entered
into or modified after May 31, 2003 and otherwise was effective and adopted by
the Company in 2003.

None of the above pronouncements have current application to the Company but may
be applicable to its future financial reporting.

2. Trading Securities

Trading securities comprise investments in common stocks as of December 31,
2005. The cost basis of trading securities at December 31, 2005 totaled $4,230.
Unrealized gains and (losses) on such securities for the year ended December 31,
2005 and 2004 totaled $(4,919) and $4,020, respectively. Realized gains and
(losses) for the year ended December 31, 2005 totaled $(111) and $5,848,
respectively. Dividends realized and reinvested in 2005 and 2004, totaled $3,356
and $10,714, respectively.

3. Leasehold Improvements and Equipment

Leasehold improvements and equipment and related accumulated depreciation and
amortization at December 31, 2005 consists of the following:

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

3. Leasehold Improvements and Equipment (continued)

Leasehold improvements $ 31,980
Furniture and equipment 120,481
Computer equipment and software 135,997
Vehicles 64,873
-----------
353,331
Accumulated depreciation and amortization (209,053)
-----------
$ 144,278
===========

4. Notes Payable

The Company had notes payable outstanding to three financial institutions as of
December 31, 2005:

Note payable, bearing interest at 2.9% per annum, principle and
interest payments of $552 due on the 2nd of each month, maturing
September 2, 2009. The note is collateralized by a company
vehicle with a net book value of $26,748. $ 23,034

Note payable, bearing interest at 1.9% per annum, principle and
interest payments of $316 due on the 14th of each month, maturing
June 14, 2008. The note is collateralized by a Company vehicle
with a net book value of $13,320. 9,243

Bank line of credit, bearing interest at prime plus 2% per annum,
interest only payments due the 5th of each month, maturing on
March 5, 2006. 27,485
--------

Total notes payable 59,762
Less current portion (36,728)
--------
Total long-term notes payable $ 23,034
========

Schedule of notes payable principal maturities:

Year ended
December 31,
-------------------------
2006 $ 36,728
2007 9,934
2008 8,286
2009 4,814
--------
$ 59,762
========

Management expects to refinance the bank line of credit that matures on March 5,
2006 under similar terms as currently exist.

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

5. Stockholders' Equity

On April 4, 2002, the Company was reorganized from a limited liability company
to a corporation. The Company was authorized to issue 50,000,000 shares of a
single class of common stock with no par value. The Company issued 2,800,000 of
such shares to existing members representing the entire ownership interest of
the Company at the time of incorporation. As there was no change in control of
the organization, the value of the stock, issued in the reorganization, was
based on the book value of the predecessor organization of approximately
$197,763, as of March 31, 2002. Accordingly, there was no change in the recorded
book values of Company assets or liabilities due to the reorganization.

In April of 2003, the Company registered its common stock with the Securities
and Exchange Commission and was successful in offering 150,000 shares for
$750,000. Net proceeds to the Company were $709,664.

During the year ended December 31, 2005, the Company issued 22,950 shares of
common stock to its employees as compensation. Management estimated the fair
value of the stock to be $2.50 per share based on recent trading activity. The
Company recorded compensation expense of $57,375 for the issuance of shares for
compensation.

6. Employee Benefit Plan

The Company has a defined contribution 401(K) plan and profit sharing plan. All
employees who meet certain minimum requirements are eligible to participate in
the plan. Employees may make contributions to the plan up to the applicable
federal limits. Company contributions under both the 401(K) and profit sharing
provisions of the plan are also discretionary. The Company's expense from
contributions to the plan totaled $28,540 and $29,276 for 2005 and 2004,
respectively.

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

7. Segment Information

Information as to the operations of the Company's different business segments is
set forth below. Segments are identified based on the nature of the products and
services offered. The Company's reportable segments are asset management,
insurance products and other. The asset management segment includes investment
portfolio management services provided by Belsen Getty. The insurance products
segment includes employee health insurance brokerage services provided by FBA.
Certain headquarters functions are included in the "other" segment. Income on
Company-wide savings and investments is also included in "other".

The Company's segments use the same policies as those described in the "Summary
of Significant Accounting Policies". The Company has no intersegment revenues or
expenses and the intercompany accounts were eliminated.

Asset Management Insurance Products
----------------------------------- -----------------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2005 2004 2005 2004
---------------- ----------------- ----------------- ----------------

Revenues $ 668,602 $ 628,948 $ 6,441,499 $ 4,780,855
Expenses 785,430 797,150 5,961,839 4,234,755
---------------- ----------------- ----------------- ----------------
Operating profit (loss) (116,828) (168,202) 479,660 546,100
Other gains (losses),
including unrealized gains (4,679) 9,989 - -
----------------- ----------------- ----------------- ----------------
Income (loss) before tax (121,507) (158,213) 479,660 546,100
Income tax expense (benefit) (49,494) (55,223) 195,383 184,735
----------------- ----------------- ----------------- ----------------
Net income (loss) $ (72,013) $ (102,990) $ 284,277 $ 361,365
================= ================= ================= ================

Other Consolidated
----------------------------------- -----------------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2005 2004 2005 2004
---------------- ----------------- ----------------- ----------------

Revenues $ 45,065 $ 16,661 $ 7,155,166 $ 5,426,464
Expenses 274,865 210,975 7,022,134 5,242,880
---------------- ----------------- ----------------- ----------------
Operating profit (loss) (229,800) (194,314) 133,032 183,584
Other gains (losses),
including unrealized gains (351) 3,281 (5,030) 13,270
----------------- ----------------- ------------------ ----------------
Income (loss) before tax (230,151) (191,033) 128,002 196,854
Income tax expense (benefit) (93,749) (63,770) 52,140 65,742
----------------- ----------------- ----------------- ----------------
Net income (loss) $ (136,402) $ (127,263) $ 75,862 $ 131,112
================= ================= ================= ================

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

7. Segment Information (continued)

Depreciation expense for the year ended December 31, 2005 was $32,104, $28,141,
and $1,250 at the asset management, insurance products and other segments,
respectively.

Depreciation expense for the year ended December 31, 2004 was $24,666, $23,898,
and $1,304 at the asset management, insurance products and other segments,
respectively.

Total assets by segment:
2005 2004
---------------- -----------------
Asset Management $ 275,514 $ 134,757
Insurance Products $ 473,215 $ 398,031
Other $ 985,819 $ 1,036,377
--------------- -----------------
$ 1,734,548 $ 1,569,165
=============== =================

Expenditures for long-lived assets by segment during the year ended December 31,
2005 were as follows: Asset management $22,710, Insurance products $20,160 and
other $0.

Expenditures for long-lived assets by segment during the year ended December 31,
2004 were as follows: Asset management $39,080, Insurance products $41,822 and
other $0.

8. Fair Value of Financial Instruments

The carrying amount of certain financial instruments in the accompanying
consolidated financial statements including: cash and cash equivalents, trade
receivables, accounts payable, and accrued liabilities, approximate fair value
due to the short-term nature of the instruments. The carrying value of notes
receivable and notes payable also approximate fair market value due to the
short-term maturity of the notes or floating interest rates that approximate
current market rates.

Trading securities at December 31, 2005 and 2004 are set forth in Note 2.

9. Related Party Transactions

Royalty Expense
During the year ended December 31, 2005 and 2004, Prime made royalty payments
totaling $127,897 and $196,000, respectively, to two partnerships, which are
related to controlling shareholders and officers of the Company. The royalties
were paid in connection with the use of certain intellectual rights to the "FBA
Advantage Program" held by the related partnerships.

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

9. Related Party Transactions (continued)

Rent Expense
The Company leases office space for two locations. One leased location has some
common ownership to that of the Company's shareholders and officers. The net
rent paid for this location was approximately $29,674 and $32,474 in 2005 and
2004, respectively. The initial lease term ended in March of 2004 and is
currently month to month. Management intends to negotiate new lease rates at
estimated fair market prices.

10. Commitments and Contingencies

The Company leases certain office space under agreements classified as operating
leases. The space was leased from two entities, one that had certain common
owners to those of the Company, as previously discussed. Net rent expense, under
these leases, totaled $89,383 and $90,537 for the years ended December 31, 2005
and 2004, respectively.

The Company has also entered into license agreements on software and web-based
access for the Company's clients to review, research and analyze their insurance
coverage plan(s). The terms of these agreements are cancelable with written
notice generally required from 30-90 days prior to cancellation.

Future minimum payments required under the non-cancellable lease agreement as of
December 31, 2005 are as follows:

Year Ended
December 31,
---------------
2006 $ 60,762
2007 25,317
---------------
Total $ 86,079
===============

11. Income Taxes

Income tax expense (benefit) comprises the following for the year ended December
31, 2005:

Current Deferred Total
------------- ------------- -------------
U.S. Federal $ 27,992 $ 13,945 $ 41,937
State 7,878 2,325 10,203
------------- ------------- -------------
$ 35,870 $ 16,270 $ 52,140
============= ============= =============

Income tax expense (benefit) comprises the following for the year ended December
31, 2004:

Current Deferred Total
------------- ------------- -------------
U.S. Federal $ 68,631 $ (12,871) $ 55,760
State 11,821 (1,839) 9,982
------------- ------------- -------------
$ 80,452 $ (14,710) $ 65,742
============= ============= =============

Prime Resource, Inc.
Notes to Financial Statements
For the year ended December 31, 2005

11. Income Taxes (continued)

Total income tax expense differs from the amounts computed by applying the U.S.
federal tax income rate of 35 percent to pretax income as a result of the
following:

Year Ended December 31,
2005 2004
---------- --------
Federal income tax expense
(benefit) at statutory rate $ 44,800 $ 68,899

Benefit of graduated rates (13,326) (14,114)
Redetermination of prior year taxes 9,887 -
Other non-deductible and non-includable items 576 1,650
State taxes, net of federal benefit 10,203 9,307
---------- --------
Total $ 52,140 $ 65,742
========== ========

The tax effects of temporary differences that give rise to significant portions
of deferred tax assets and liabilities at December 31, 2005 and 2004 are as
follows:

Year Ended December 31,
2005 2004
---------- ----------
Current deferred tax assets (liability):
Accounts receivable $ (200,071) $ (178,219)
Accounts payable 16,788 16,277

Accrued liabilities 178,006 154,532
Unrealized gains (1,968) (1,608)
---------- ----------
Net current deferred tax asset (liability) $ (7,245) $ (9,018)
========== ==========

Long-term deferred tax assets (liability):
Depreciation differences $ (55,273) $ (14,278)
Deferred income-stock compensation 74,462 51,511
---------- ----------
Net long-term deferred tax asset (liability) $ 19,189 $ 37,233
========== ==========

Temporary differences resulting in deferred tax assets and liabilities from
accounts receivable, accounts payable and accrued liabilities arise from the
Company's election to use the cash method of accounting for income tax purposes.

Realization of the deferred tax assets depends on the Company's ability to
generate sufficient future taxable income. Management believes that the Company
will generate such future earnings and, accordingly, realize the benefit of the
gross deferred tax assets. Therefore, management has not provided for any
valuation allowance.

Income taxes receivable arise when estimated pre-payments exceeds the Company's
current tax liability.

Item 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Prime has no disagreements with its prior or current independent auditors.
In May, 2003 Prime changed its independent auditors, and effective January,
2006, the board of directors ratified the appointment of Child, VanWagoner and
Bradshaw, PLLC as its auditor.

However in 2005 based upon SEC review, the company was required to restate
its annual and quarterly financial statements for the period ending December 31,
2004 and through the three quarterly periods ending September 30, 2005 and to
modify its accounting controls and procedures as set-out below.

Item 8A. CONTROLS AND PROCEDURES

(a) Prime's Board maintains controls and procedures designed to provide
reasonable assurance that information required to be disclosed in the reports
that the Company files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission. Based upon
their evaluation of those controls and procedures in October, 2005 and after
notice by the SEC that such controls did not appear adequate in conforming with
SEC Item 307 of Regulation S-B, the chief executive officer and the principal
financial officer of the Company concluded that the Company's disclosure
controls and procedures were not effective at a reasonable assurance level for
its present activities under the foregoing rule in consideration of the
restatement of certain financial statements by Prime for the year ending 2004 in
our 10- KSB/A Report and for the first three quarterly reports for the calendar
year 2005. The Company identified the following material weaknesses: 1)the lack
of sufficient knowledge and experience among the internal accounting personnel
regarding the application of US GAAP and SEC requirements; 2) insufficient
written policies and procedures for accounting and financial reporting with
respect to the current requirements and application of US GAAP and SEC
disclosure requirements. The particular enhanced review standards in response to
these insufficiencies are more fully discussed below in subparagraph b. The
Company knows of no fraudulent activities within the Company or any material
accounting irregularities. The Company currently does not have an independent
audit committee. The Company is advised that an independent audit committee is
not required for Electronic Bulletin Board Listings, but will further review the
advisability and feasibility of establishing such a committee in the future.

(b) Changes in internal controls. The Company made no specific or
significant changes in its internal controls during the quarter ended September
30, 2005. In October 2005 Prime was made aware of certain accounting errors
pursuant to an SEC review and comment pertaining to its earlier filed periodic
reports for the year ending in 2004 and the first three quarters of 2005. Prime
then reported retroactively the year ending in 2004, and the first three
quarters of 2005 contain requested changes and restate certain financial
information, as well as the included changes in management's discussion and
analysis. In particular, this section pertaining to controls and procedures
describes action taken to ensure more accurate and effective accounting controls
and procedures. In response to the foregoing the company has implemented the
following enhanced financial review standards. (1) The company has provided a
longer review period of time and more rigorous internal review of accounting
data prior to formal review by our independent auditors. (2) During November
2005, the Company has engaged the services of an outside accounting professional
which has significant expertise in the application of US GAAP and SEC reporting
requirements to advise the Company in the preparation of their financial
statements. (3) The Company plans to further implement written policy and
procedures for accounting and financial statement preparation in accordance with
current and future requirements of SEC Item 307 of Regulation S-B and SOX 404.
The Company has not currently estimated the cost of implementing these changes
in controls and procedures.

(c) The company is aware of the general standards and requirements of the
recent Sarbanes- Oxley Act of 2002 and has implemented procedures and rules to
comply, so far as applicable, such as a

prohibition on company loans to management and affiliates. The company does not
have an audit committee as it does not believe the act requires a separate
committee for companies that are reporting companies, but not registered under
the Securities and Exchange Act of 1934 [15(d) companies] and whose shares trade
only on the Electronic Bulletin Board.

Item 8B. OTHER INFORMATION AND SELECTED RISK FACTORS

The company has generally employed this section to further discuss certain
significant 2005 events and the proposed reorganization.

I. If the proposed reorganization is successful, as may be approved by a
majority of disinterested shareholders, each shareholder should understand the
following results or consequences of such reorganization:

* The company would have no active ongoing business and would be
required to find a suitable merger or acquisition candidate to
continue as an ongoing enterprise.

* Management would devote substantially less time to manage Prime as an
inactive public company seeking a suitable merger or acquisition
candidate.

* It is doubtful if the disinterested shareholders will realize any
value in their shares absent a subsequent successful merger or
acquisition.

* The LightSpace notes may or may not be converted to common stock
unless a successful registration is completed by LightSpace; at which
point a market may not automatically exist, but would be anticipated.
These shares are to be distributed pro-rata to the Prime shareholders
if the reorganization moves forward.

II. The Bioaccelerate shares to be distributed pursuant to the proposed
reorganization are not registered and are thinly traded.

III. The company was required by the SEC in 2005 to restate its financial
results and modify its Financial Controls and Procedures as now reported in
amended 10-QSB filings for the first three quarters of 2005 and the 10-KSB
filing for December 31, 2004.

PART III

Item 9. DIRECTORS, EXECUTIVE OFFICERS OF REGISTRANT

Following this table is a brief biographical description for each of the
management principals with a brief description of their business experience and
present relationship to Prime, together with all required relevant disclosures
for the past five years.

Following the biographical information for the directors and officers is a
remuneration table showing current compensation and following this table is a
security ownership table showing security ownership of the principal officers
and directors, as well as those holding 5% or more of the issued and outstanding
stock.

NAME POSITION CURRENT TERM OF OFFICE
------------------- -------------------------- -----------------------------
Mr. Terry Deru* Director, CEO/President/ Appointed Director in
Chairman of the Board Organizational Minutes-April,
2002, elected in 2004. Will
serve as a Director until
next elected, annual meeting
not yet set. Will serve as an
officer pursuant to leave of
the Board of Directors.
------------------- -------------------------- -----------------------------
Mr. Scott Deru* Director/V.P. Operations Appointed Director in
Organizational Minutes-April,
2002, elected 2004. Will
serve as Director until next
elected, annual meeting not
yet set. Will serve as an
officer pursuant to leave of
the Board of Directors.
------------------- -------------------------- -----------------------------
Mr. Andrew Limpert* Director/Treasurer/ Appointed Director in
Secretary/ CFO Organizational Minutes-April,
2002, elected 2004. Will
serve as Director until next
elected, annual meeting not
yet set. Will serve as an
officer pursuant to leave of
the Board of Directors.

* Mr. Scott Deru and Mr. Terry Deru are brothers. Mr. Limpert was not an
owner of Prime, LLC, but acted as an advisor to Prime, LLC and has
become a shareholder of Prime Resource, Inc., the successor entity to
Prime, LLC.

BIOGRAPHICALS

TERRY M. DERU - PRESIDENT
Age: 51

Mr. Deru is currently a consultant and manager with Belsen Getty LLC and an
officer/director in Prime as outlined above. He also served Belsen Getty as an
officer/director when operating as a predecessor corporation. Belsen Getty is a
Salt Lake City, Utah based financial advisory and retirement planning firm. The
firm, or its predecessor, has been a licensed investment advisory firm with the
State of Utah since 1984. Mr. Deru is a Certified Financial Planner and a
Registered Financial Consultant. Mr. Deru has been with Belsen Getty or its
predecessor since 1985. Since affiliation with Belsen Getty, he has served as a
consultant and director from 1985 to 1998 and as a consultant from 1998 to the
present. He has been the manager of Belsen Getty since July, 2000. Mr. Deru will
continue his part- time affiliation with Belsen Getty while also acting as the
part-time officer of Prime. The estimated allocation of services to each entity
is set-out in the following table. Mr. Deru also acted as a part-time CEO for
Kinship Systems, Inc., a small public company which is not presently active.

Kinship abandoned its original marketing efforts of attempting to sell licensed
accident reconstruction software in early 2002 and has subsequently acquired a
resort management company as its wholly owned operating subsidiary. Mr. Deru
resigned as an officer and director pursuant to this reorganization on November
14, 2002, and he is no longer affiliated with that company. The company
continues under a new name of Caribbean Club Group, Inc. (CCI). Mr. Deru
obtained a B.A. degree from the University of Utah in Salt Lake City, Utah, in
finance in 1977 and an M.B.A. degree from that institution in 1979.

MR. SCOTT DERU - DIRECTOR, VICE-PRESIDENT OPERATIONS Age: 45

Mr. Scott Deru has been employed full-time since 1982 as a principal
officer of Fringe Benefit Analysts, LLC. Since 1998 he has been the manager and
principal officer of Fringe Benefit, one of the current subsidiary operating
companies of Prime. In this capacity, he has primarily been engaged in creating
and selling life, health and other insurance products for business clients of
Prime. In addition to his full-time services to Fringe Benefit Analysts, he
worked as a director of insurance for Care of Utah, Inc., developing insurance
programs, primarily for the health care industry from October, 1994 to July,
2000. Mr. Deru is a 1984 graduate of the University of Utah with a B.S. degree
in finance from that institution. He is also a Registered Health Underwriter and
a Registered Employee Benefit Consultant. He presently is also a licensed
insurance consultant and agent within the state of Utah, and by reciprocity in
other western states.

MR. ANDREW W. LIMPERT - CHIEF FINANCIAL OFFICER Age : 36

Mr. Limpert has been a financial and retirement planner associated with the
Salt Lake based firm of Belsen Getty, LLC since 1998. He is licensed as a
Registered Investment Advisor Representative, but he is not a Certified
Financial Planner. As a licensed Investment Advisor, Mr. Limpert has completed
licensing requirements and testing prescribed by the State of Utah. Mr. Limpert
plans to continue his full-time employment with Belsen Getty. He will also serve
as a director, treasurer, CFO and secretary for Prime. Prior to the foregoing
positions, he worked with Prosource Software of Park City, Utah as a software
sales agent from 1993 to 1998. Mr. Limpert is assisting Prime on a limited as
needed basis. In 1998 Mr. Limpert served briefly as an interim outside director
in a small public company, then known as Mt. Olympus Resources, Inc. Mr. Limpert
resigned as part of a reorganization of Olympus in November, 1998. Mr. Limpert
was also affiliated, on a part-time as-needed basis, with a small presently
inactive company known as Kinship Systems, Inc. as a director and its
treasurer/secretary and CFO/accounting officer. Due to Kinship's change of
control he is no longer affiliated with that firm. Mr. Limpert was appointed to
these positions in February, 2000 as part of the initial organization. As noted
above, Kinship acquired a new operating subsidiary and Mr. Limpert resigned as
an officer and director effective November 14, 2002. He has no continuing
affiliation with Kinship/CCI. Mr. Limpert also acts as a business and financial
consultant to various small public and private companies. Mr. Limpert holds a
B.S. degree in finance from the University of Utah in Salt Lake City, Utah in
1995 and an M.B.A. from Westminster College of Salt Lake City, Utah in 1998.

ESTIMATED ALLOCATION OF TIME AND SERVICES

The following table attempts to set-out the 2005 estimated allocation of
time devoted by the foregoing officers for Prime and each of the Prime related
entities:

BELSEN FRINGE
NAME PRIME GETTY BENEFIT PRINCIPAL OFFICER OF:
------------------ --------- ------- --------- --------------------
Mr. Terry Deru 20% 80% 0% Belsen Getty
------------------ --------- ------- --------- --------------------
Mr. Scott Deru 20% 0% 80% Fringe Benefit
------------------ --------- ------- --------- --------------------
Mr. Andrew Limpert 40% 60% 0% N/A
------------------ --------- ------- --------- --------------------

Remuneration of Directors & Officers

Directors

No director will be provided remuneration for service in that capacity, but
may be paid a stipend for attending meetings as future revenues may permit. It
is anticipated Directors will receive $500 per Board Meeting.

Officers

As previously noted, each officer in the corporation is paid directly by
Prime regardless of where his services may be allocated among the various
subsidiaries. Accordingly, the following table sets forth all compensation
received by any officer in connection with these services to Prime, including
any and all of the subsidiaries:

Item 10. EXECUTIVE COMPENSATION

Restricted Securities
Name and Principal (b) Other Annual Stock Underlying LTIP Other
Position Year Salary Bonus Compensation Awards(s) Options Payouts (Loans)
-------------------- ---- --------- -------- ------------ ---------- ------------ ---------- -------

2005 $ 190,908 $ 31,897 $ 48,000 __ __ __
Mr. Terry Deru, 2004 $ 191,741 __ $ 98,000 __ __ __ 0
President 2003 $ 240,000 __ __ __ __ __
2002 $ 240,000 __ __ __ __ __
-------------------- ---- --------- -------- ------------ ---------- ------------ ---------- -------
2005 $ 192,000 __ $ 79,897 __ __ __
Mr. Scott Deru, 2004 $ 213,405 $ 22,000 $ 98,000 __ __ __ 0
Secretary 2003 $ 240,000 __ __ __ __ __
2002 __ __ __ __ __
-------------------- ---- --------- -------- ------------ ---------- ------------ ---------- -------
2005 $ 204,280 __ __ __ __ __
Mr. Andrew Limpert, 2004 $ 204,388 __ __ __ __ __ 0
Treasurer 2003 $ 210,000 __ __ __ __ __
2002 $ 165,000 __ __ __ __ __
-------------------- ---- --------- -------- ------------ ---------- ------------ ---------- -------

(b) Historically, the principals of Prime Resource LLC have taken draws
equal to a salary compensation of $240,000 per year in the case of Mr.
Scott Deru, and $240,000 for Mr. Terry Deru. Mr. Terry Deru received a
salary of $262,000 in 2001, and received $240,000 in 2002. He also
received this salary in 2003. Mr. Limpert was paid compensation of
$118,000 in 2001, and $165,000 in 2002 and was paid $210,000 in 2003.
The officers have decided after the restructuring of Prime Resource to
fix their salaries at these levels as evidenced by an employment
contract, earlier discussed under "Remuneration of Officers and
Directors". The most essential term of such contract is that the
Company may terminate the employment agreement, without cause, at
anytime upon notice. If Prime is successful in completing this
offering, the Company may consider executive stock options or other
incentive plans.

To date, directors have not been paid any compensation for attendance at Board
of Directors meetings. It is anticipated that as soon as revenues would justify
such expenditure, Directors will be paid a per diem payment of $500 for
attending each Board of Directors meeting.

Each of the three principal officers serves Prime pursuant to a written
employment agreement which is essentially identical in terms for each officer,
except for the compensation provisions outlined above. The essential terms of
the employment agreements provide as follows:

(1) Each employment contract runs for three years from April 5, 2002.
There is no present intent to renew these contracts prior to
consideration of the proposed reorganization;

(2) There are no currently adopted benefits or stock rights, except
18 days of paid leave per year for each officer. Two of the three
principals receive medical, and dental provided by the company.

(3) Prime may terminate the employment with or without cause. If
termination is without cause, the employee is to receive a
severance equal to three months pay. Otherwise, the employee is
paid through the month the notice of termination is given. The
employee has no right to terminate the agreement without cause.

(4) The employment contract has standard provisions protecting
proprietary rights and property of the company from being used by
the employee or appropriated;

(5) The employment agreement provides for the exclusive full-time
service by each officer to Prime or one or more of its
subsidiaries.

Each shareholder or other interested person may view a copy of the
employment agreements attached to the earlier SB-2 Registration Statement by
viewing this registration statement online at the SEC filing site
(www.sec.gov/edgar), or by requesting a copy from Prime.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

SHARES OWNED BY MANAGEMENT AND CERTAIN SECURITY HOLDERS

The following tables set forth the ownership, as of the date of this
prospectus, of our common stock by each person known by us to be the beneficial
owner of 5% or more of our outstanding common stock; by each of our directors;
and by all executive officers and our directors as a group. To the best of our
knowledge, all persons named below have sole voting and investment power with
respect to such shares.

-----------------------------------------------------------------------------------------
Title Name and Current Shares Current Percentage of
of Class Address of Owner Owned Outstanding (Rounded)
-----------------------------------------------------------------------------------------

Common Stock Terry Deru
99 Cove Lane
Layton, Utah 84040 984,000 33%
-----------------------------------------------------------------------------------------
Common Stock Scott Deru
6855 N. Frontier Drive
Mountain Green, Utah 84050 999,500 34%

-----------------------------------------------------------------------------------------
Common Stock Andrew Limpert 717,900 24%
8395 S. Parkhurst Circle
Sandy, Utah 84094
-----------------------------------------------------------------------------------------
Common Stock Officers and Directors as 2,701,400 91%
a Group(2)
-----------------------------------------------------------------------------------------

Changes in Control. There are currently no arrangements which would result
in a change in our control.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

o To date none of the management has had any independent determination of
the reasonableness or amounts of compensation or benefits, such as shares issued
to management or salaries, and it is not likely there will be any independent
review of such matters in the future as the management, the Board and the
principal shareholders are substantially the same persons.

o The Company has historically made and received loans and advances from
owners and employees without independent Board review. These historical loans
are now paid. Under the provisions of the recent Sarbanes-Oxley Act, Prime has
discontinued, as a public company, any further loans or advances to officers,
directors or employees.

o Each of the principal officers of Prime have received shares and interest
in Prime based primarily upon the contribution of their prior intangible
business interest in Prime LLC and other intangible assets which are not capable
of exact evaluation. As a result, each of the present principal owners of Prime
may be deemed to hold shares and interest in the company which were not
determined through any arm's length transaction or independent determination of
value.

o Messrs. Terry Deru, Scott Deru and Andrew Limpert would be considered
founders and promoters of the current Prime Resource, Inc. As such, Scott Deru
contributed his interest in the prior Prime LLC for his approximate 36% stock
interest in Prime; Terry Deru has contributed his interest in Prime LLC for an
approximate 36% stock interest; and Mr. Limpert has contributed his interest in
Prime LLC for an approximate 27% stock interest in Prime. None of these
transfers by the promoters can be considered independent or arms-length
transactions.

o The company is not aware of any further transactions which would require
disclosure under this section by the company and any affiliated party.

Part IV

Item 13. PRINCIPAL ACCOUNTANT FEES AND SERVICES

In a board meeting in May, 2004, the Board of Directors decided to affirm
the continuance of Child Sullivan & Company now known as Child, Van Wagoner and
Bradshaw, PLLC of 1284 West Flint Meadow Drive, Suite D, Kaysville, Utah 84037
as the independent auditors. This action was ratified by shareholder vote in
June, 2004.

On January 2, 2006, our independent auditor, Child, Sullivan, & Company,
changed its accounting practice from a corporation to a professional limited
liability company named Child, Van Wagoner & Bradshaw, PLLC, (the PLLC). Because
Child, Van Wagoner & Bradshaw, PLLC, is viewed as a separate legal entity, we
were obliged to dismiss Child, Sullivan & Company as our independent auditor,
and to engage Child, Van Wagoner & Bradshaw, PLLC, as our independent auditor
for the fiscal year ending December 31, 2005 and the interim periods for 2006.
The decision to change our independent auditor was approved by our Board of
Directors.

None of the reports of Child, Sullivan & Company on our financial
statements for either of the past two years or subsequent interim period
contained an adverse opinion or disclaimer of opinion, or was qualified or
modified as to uncertainty, audit scope or accounting principals.

There were no disagreements between us and Child, Sullivan & Company, for
either of the past two years or subsequent interim period on any matter of
accounting principals or practices, financial statement disclosure, or auditing
scope or procedure, which, if not resolved to the satisfaction of Child,
Sullivan & Company, would have cause it to make reference to the subject matter
of the disagreement in connection with its report. No reportable events of the
type described in item 304(a)(1)(iv)(B) of Regulation S-B occurred during the
two most recent fiscal years.

We provided Child, Sullivan & Company with a copy of this disclosure and
requested that they furnish the Company with a letter addressed to the
Commission stating whether Child, Sullivan & Company agrees or disagrees with
the statements by us in a Current Report on Form 8-K and, if not, stating the
respects in which it does not agree. A letter from Child, Sullivan and Company
to such effect is attached as Exhibit 16.1 to our current report on Form 8-K
filed with the Securities and Exchange Commission on January 6, 2006.

During our two most recent fiscal years, we have not consulted with Child,
Van Wagoner & Bradshaw, PLLC, on any matter that (i) involved the application of
accounting principals to a specific completed or contemplated transaction, or
the type of audit opinion that might be rendered on our financial statements, in
each case where written or oral advice was provided, that was an important
factor considered by us in reaching a decision as the accounting, auditing or
financial reporting issue; or (ii) was either the subject of a disagreement or
event, as that term is described in item 304(a)(1)(iv)(A) of Regulation S-B.

For the calendar year 2005, the accounting firm of Sullivan Child & Company
(now known as Child, Van Wagoner & Bradshaw, PLLC) charged the company a total
of $24,569 for independent accounting and auditing fees. As noted above, the
company has no material disagreements with its auditing firm as to the financial
statements contained in this annual report.

Item 14. EXHIBITS AND REPORTS ON FORM 8-K

Under the following exhibit index are all of the relevant exhibits and
reports required to be filed or referenced by the 10-KSB:

There was an 8-K Report filed in calendar year 2005 stating its auditor had
changed its name. This action to appoint Child VanWagoner & Bradshaw, PLLC was
ratified by the Prime board of directors (11/05).

There was also an 8-K Report noting changes in the Company's Financial
Review Procedures (11/05).

(a) Exhibit Index:

Exhibit No.

(3.1) Articles of Incorporation of Registrant. Earlier filed and
incorporated as part of SB-2 Registration Statement. (4/2003)

(3.2) By-Laws of Registrant. Earlier filed and incorporated as part
of SB-2 Registration Statement.

(10) Material contracts. Earlier filed and incorporated as part of
SB-2 Registration Statement.

(23) Consent of Experts and Counsel. Attached.

(31 & 32) Certifications. Attached.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
behalf by the undersigned, thereunto duly authorized.

REGISTRANT:

PRIME RESOURCE, INC.

Dated: 3/30/06 By: /s/ Terry Deru
---------- ---------------------------------------
Terry Deru, President
Chief Executive Officer

Dated: 3/30/06 By: /s/ Andrew Limpert
---------- ---------------------------------------
Andrew Limpert, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
the following persons on behalf of the Registrant and in the capacities and on
the date indicated have signed this report below:

Dated: 3/30/06 By: /s/ Terry Deru
---------- ----------------------------------------
Terry Deru, Chairman of the Board

Dated: 3/30/06 By: /s/ Scott Deru
---------- ----------------------------------------
Scott Deru, Director

Dated: 3/30/06 By: /s/ Andrew Limpert
---------- ----------------------------------------
Andrew Limpert, Director