PRIMA GROUP INTERNATIONAL INC, S-1/A, 1998-07-13

PRIMA GROUP INTERNATIONAL INC
S-1/A, 1998-07-13
MACHINE TOOLS, METAL CUTTING TYPES

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

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

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 6

TO
FORM S-1

REGISTRATION STATEMENT

UNDER

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

(Exact Name Of Registrant As Specified In Its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 3541 56-2042959
(State or other jurisdiction (Standard Industrial (IRS Employer
of incorporation or organization) Classification Code Identification No.)
Number)
</TABLE>

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

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

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

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

------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
BE REGISTERED REGISTERED (1) PER SHARE (2) PRICE
Common Stock,
par value $0.01 per share... 2,300,000 shares $8.50 $19,550,000

<CAPTION>
TITLE OF EACH CLASS AMOUNT OF
OF SECURITIES TO REGISTRATION
BE REGISTERED FEE PAID (3)
<S> <C>
Common Stock,
par value $0.01 per share... $7,938.45
</TABLE>

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

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

<PAGE>

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

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

2,000,000 SHARES

THE PRIMA GROUP INTERNATIONAL, INC.
COMMON STOCK

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

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

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

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS (1) COMPANY (2)(3)
<S> <C> <C> <C>
Per Share........................................... $ $ $
Total............................................... $ $ $
</TABLE>

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

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

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

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

EBI SECURITIES CORPORATION

MILLENNIUM FINANCIAL GROUP, INC.

JOSEPH CHARLES & ASSOCIATES, INC.

, 1998

<PAGE>

<TABLE>
<S> <C>
CAD/CAM Application
3-D Laser Head
</TABLE>

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

<PAGE>

PROSPECTUS SUMMARY

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

THE COMPANY

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

THIS OFFERING

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

<PAGE>

RISK FACTORS

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

<PAGE>

USE OF PROCEEDS

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

DIVIDEND POLICY

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

<PAGE>
CAPITALIZATION

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

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

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

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

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

<PAGE>

DILUTION

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

<TABLE>
<S> <C> <C>
Assumed Offering Price per Share............................................................................. $8.00
Pro forma combined net tangible book value per Share before this Offering.................................... $1.72
Increase in pro forma combined net tangible book value per Share attributable to existing stockholders in
this Offering.............................................................................................. $2.01
Pro forma net tangible book value per share after this Offering.............................................. $3.73
-----
Dilution per share to new investors in this Offering......................................................... $4.27
-----
-----
</TABLE>

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

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

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

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

<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

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

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

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

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

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

<PAGE>

PRIMA GROUP INTERNATIONAL, INC.

PRO FORMA COMBINED FINANCIAL INFORMATION

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

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

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

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

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

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

<PAGE>

THE PRIMA GROUP INTERNATIONAL, INC.

PRO FORMA COMBINED BALANCE SHEET

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

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

See accompanying notes.

<PAGE>

THE PRIMA GROUP INTERNATIONAL, INC.

PRO FORMA COMBINED STATEMENT OF OPERATIONS

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

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

See accompanying notes.

<PAGE>

THE PRIMA GROUP INTERNATIONAL, INC.

PRO FORMA COMBINED STATEMENT OF OPERATIONS

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

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

See accompanying notes.

NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION

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

(b) To eliminate intercompany balances.

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

<PAGE>

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

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

OVERVIEW

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

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

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

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

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

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

<PAGE>

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

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

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

RESULTS OF OPERATIONS

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

TABLE 1
(IN THOUSANDS)

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

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

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

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

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

<PAGE>

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

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

TABLE 2
CONTRIBUTION TO TOTAL SALES
(IN PERCENT)

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

TABLE 4
(IN THOUSANDS)

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

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

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

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

<PAGE>

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

TABLE 5
CONTRIBUTION TO TOTAL SALES
(IN PERCENT)

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

TABLE 7
(IN THOUSANDS)

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

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

<PAGE>

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

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

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

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

TABLE 8
CONTRIBUTION TO TOTAL SALES
(IN PERCENT)

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

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

<PAGE>

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

TABLE 9

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

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

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

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

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

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

<PAGE>

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

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

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

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

YEAR 2000 ISSUE

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

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

DISCLOSURE ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

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

<PAGE>

HISTORY OF THE COMPANY

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

PRIMA INDUSTRIE

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

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

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

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

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

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

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

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

PRIMA ELECTRONICS

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

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BUSINESS

GENERAL

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

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

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

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

MARKET

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

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

THE AUTOMOTIVE FABRICATION PROCESS

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

<PAGE>

PRODUCTS

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

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

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

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

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

INDUSTRIAL CONTROLS

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

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

QUALITY

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

<PAGE>

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

BACKLOG

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

STRATEGY

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

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

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

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

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

<PAGE>

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

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

RESEARCH AND DEVELOPMENT

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

COMPETITION

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

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

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

<PAGE>

LICENSING

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

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

EMPLOYEES

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

MANUFACTURING

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

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

FACILITIES

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

<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

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

<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------------------------- --- --------------------------------------------------
<S> <C> <C> <C>

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

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

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

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

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

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

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------- --- ----------------------------------------------
<S> <C> <C>

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

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

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------- --- ----------------------------------------------
<S> <C> <C>
Domenico Peiretti.............................. 47 Managing Director and Chief Executive Officer
Gianfranco Carbonato........................... 52 Chairman of Board of Directors
</TABLE>

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

LEGAL PROCEEDINGS INVOLVING FORMER DIRECTOR

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

DIRECTOR COMPENSATION

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

BOARD COMMITTEES

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

<PAGE>

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

EXECUTIVE COMPENSATION

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

SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1)(2)

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

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

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

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

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

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

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

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

EMPLOYMENT AGREEMENTS

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

<PAGE>

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

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

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

1997 STOCK INCENTIVE PLAN

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

<PAGE>

INDEMNIFICATION OF DIRECTORS AND OFFICERS AND RELATED MATTERS

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

INDEMNIFICATION AGREEMENTS

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

CERTAIN TRANSACTIONS

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

<PAGE>

CERTAIN BENEFICIAL OWNERS

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

<TABLE>
<CAPTION>
DIRECTORS, EXECUTIVE OFFICERS SHARES BENEFICIALLY
& 5% SHAREHOLDERS OWNED (1) PERCENTAGE (2)
------------------------------- ------------------- --------------
<S> <C> <C>

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

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

* Less than 1%.

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

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

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

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

<PAGE>

DESCRIPTION OF CAPITAL STOCK

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

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

COMMON STOCK

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

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

PREFERRED STOCK

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

TRANSFER AGENT AND REGISTRAR

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

<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

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

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

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

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

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

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

<PAGE>

UNDERWRITING

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

<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES
- ---------------------------------------------------------------------------------------------------------------- ---------
<S> <C>
EBI Securities Corporation......................................................................................
Millennium Financial Group, Inc.................................................................................
Joseph Charles & Associates, Inc................................................................................

TOTAL........................................................................................................... 2,000,000
---------
---------
</TABLE>

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

LEGAL MATTERS

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

EXPERTS

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

<PAGE>

ADDITIONAL INFORMATION

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

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

<PAGE>

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

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

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

F-1

<PAGE>

INDEPENDENT AUDITOR'S REPORT

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

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

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

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

HEIN + ASSOCIATES LLP

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

F-2

<PAGE>

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

BALANCE SHEET

($ IN THOUSANDS)

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

See accompanying notes to these financial statements.

F-3

<PAGE>

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

STATEMENTS OF OPERATIONS

($ IN THOUSANDS, EXCEPT PER SHARE DATA)

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

See accompanying notes to these financial statements.

F-4

<PAGE>

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

STATEMENT OF STOCKHOLDERS' EQUITY

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

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

<CAPTION>
TOTAL
STOCKHOLDERS'
EQUITY
-------------
<S> <C>
BALANCES, July 29, 1997............................. $ --
Issuance of common stock.......................... --
NET LOSS............................................ (42)
-------------
BALANCES, December 31, 1997......................... (42)
NET LOSS (unaudited)................................ (42)
-------------
BALANCES, March 31, 1998 (unaudited)................ $ (84)
-------------
-------------
</TABLE>

See accompanying notes to these financial statements.

F-5

<PAGE>

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

STATEMENTS OF CASH FLOWS

($ IN THOUSANDS)

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

See accompanying notes to these financial statements.

F-6

<PAGE>

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

NOTES TO FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

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

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

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

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

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

2. ADVANCES FROM AFFILIATE:

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

3. COMMITMENTS:

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

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

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

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

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

F-7

<PAGE>

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

NOTES TO FINANCIAL STATEMENTS -- CONTINUED

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

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

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

4. INITIAL PUBLIC OFFERING:

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

F-8

<PAGE>

INDEPENDENT AUDITOR'S REPORT

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

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

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

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

HEIN + ASSOCIATES LLP

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

F-9

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

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

See accompanying notes to these consolidated financial statements.

F-10

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

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

See accompanying notes to these consolidated financial statements.

F-11

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

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

See accompanying notes to these consolidated financial statements.

F-12

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

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

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

See accompanying notes to these consolidated financial statements.

F-13

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS OF U.S. DOLLARS)

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

See accompanying notes to these consolidated financial statements.

F-14

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

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

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

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

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

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

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

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

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

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

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

F-15

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

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

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

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

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

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

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

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

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

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

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

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

F-16

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

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

2. LIQUIDITY:

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

3. OTHER RECEIVABLES:

Other receivables consist of the following:

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

4. INVENTORIES:

Inventories consist of the following:

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

5. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following:

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

F-17

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

6. INVESTMENTS AND OTHER ASSETS:

Investments and other assets consist of the following:

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

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

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

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

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

F-18

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

7. NOTES PAYABLE AND LONG-TERM DEBT:

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

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

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

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

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

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

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

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

F-19

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

9. RESEARCH AND DEVELOPMENT GRANTS:

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

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

10. INCOME TAXES:

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

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

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

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

11. STOCKHOLDERS' EQUITY:

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

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

F-20

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

12. COMMITMENTS AND CONTINGENCIES:

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

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

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

<TABLE>
<CAPTION>
YEARS ENDING ($ IN
DECEMBER 31, 000'S)
------------- -----------
<S> <C>
1998.............................................................. $ 195
1999.............................................................. 206
2000.............................................................. 48
-----------
$ 449
-----------
-----------
</TABLE>

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

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

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

13. FAIR VALUE OF FINANCIAL INSTRUMENTS:

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

14. CONCENTRATIONS OF CREDIT RISK:

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

F-21

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

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

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

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

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

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

*Less than 10%.

Following is a summary of sales by geographic region:

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

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

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

15. MERGER:

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

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

F-22

<PAGE>

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

<PAGE>

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

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

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

TABLE OF CONTENTS

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

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

MILLENNIUM FINANCIAL GROUP, INC.

JOSEPH CHARLES & ASSOCIATES, INC.

, 1998

<PAGE>

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

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

<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
-------------

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

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

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

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

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

II-1

<PAGE>

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

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

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

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

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------------------------------------------------
<S> <C>

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

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

+ Previously filed.

* To be filed by amendment.

(B) FINANCIAL STATEMENT SCHEDULES

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

ITEM 17. UNDERTAKINGS.

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

II-2

<PAGE>

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

The undersigned registrant hereby undertakes that:

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

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

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

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

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

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

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

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

II-3

<PAGE>

SIGNATURES

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

THE PRIMA GROUP INTERNATIONAL, INC.

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

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

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ ----------------------------------------------- ---------------

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

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

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

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

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

/s/ Director July 13, 1998
HANS WERTHEN

/s/ Director July 13, 1998
PIO PELLEGRINI
</TABLE>

II-4

<PAGE>

EXHIBIT INDEX

(A) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------------------------------------------------
<S> <C>

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

EXHIBIT 23.1

INDEPENDENT AUDITOR'S CONSENT

We consent to the use in the Registration Statement and Prospectus of The
PRIMA Group International, Inc. of our report dated March 25, 1998 (except for
Note 4 as to which the date is April 23, 1998), accompanying the financial
statements of The PRIMA Group International, Inc. and our report dated March 16,
1998 (except for Note 15 as to which the date is April 23, 1998), accompanying
the consolidated financial statements of Prima Industrie S.p.A. contained in
such Registration Statement, and to the use of our name and the statements with
respect to us, as appearing under the headings "Experts" and "Selected Financial
Data" in the Prospectus.

HEIN + ASSOCIATES LLP
Denver, Colorado
July 6, 1998