PRIMA GROUP INTERNATIONAL INC, S-1/A, 1998-03-30

PRIMA GROUP INTERNATIONAL INC
S-1/A, 1998-03-30
MACHINE TOOLS, METAL CUTTING TYPES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30, 1998

REGISTRATION NO. 333-38059

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 2

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) 366-8999
(Address, Telephone No. of principal executive offices)

JAMES R. CURRIER, SR.
447 S. SHARON AMITY ROAD, SUITE 250
CHARLOTTE, NC 28211
(704) 366-8999
(Name, Address and Telephone No. of Agent for Service)

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COPIES TO:

<TABLE>
<S> <C>
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
</TABLE>

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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. [ ]

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CALCULATION OF REGISTRATION FEE

[CAPTION]

<TABLE>
<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
<S> <C> <C> <C>
Common Stock,
par value $0.01 per share... 2,300,000 shares $11.00 $25,300,000

<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... $7,463.50
</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>

<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 MARCH 30, 1998)

2,000,000 SHARES

[PRIMA LOGO APPEARS HERE]

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.

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

PRIOR TO THIS OFFERING (THIS "OFFERING"), THERE HAS BEEN NO PUBLIC MARKET
FOR THE COMMON STOCK OF THE COMPANY, AND THERE CAN BE NO ASSURANCE THAT SUCH A
MARKET WILL DEVELOP AFTER COMPLETION OF THIS OFFERING OR THAT, IF DEVELOPED, IT
WILL BE SUSTAINED. IT IS CURRENTLY ESTIMATED THAT THE INITIAL PUBLIC OFFERING
PRICE WILL BE BETWEEN $9 AND $11 PER SHARE (THE "OFFERING PRICE"). SEE
"UNDERWRITING" FOR A DISCUSSION OF THE FACTORS TO BE CONSIDERED IN DETERMINING
THE INITIAL PUBLIC OFFERING PRICE. THE COMPANY HAS APPLIED FOR QUOTATION OF THE
COMMON STOCK 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.

[CAPTION]
<TABLE>
<S> <C> <C> <C>
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 Underwriters a warrant to purchase
200,000 shares of Common Stock, exercisable at a price per share equal to
150% 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 $ _______ and
a non-accountable expense allowance payable to the Underwriters 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 to the Underwriters an option, exercisable within 30
days after the date hereof, to purchase up to an aggregate of 300,000 shares
of Common Stock from the Company, solely to cover over-allotments, if any
(the "Over-Allotment Option"). If the Underwriters 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 named herein 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 on or about , 1998, at the offices of
Chatfield Dean & Co., Greenwood Village, Colorado, against payment therefor in
immediately available funds.

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

CHATFIELD DEAN & CO.

, 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>

<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 62% 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>

<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) 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;

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

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

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.... 4,700,300 shares
Use of Offering proceeds.............................. Equity contribution to subsidiary; marketing and sales promotion;
research and development; funding transactions with certain officers;
and general corporate purposes and working capital, including
providing a line of credit facility to subsidiaries
Proposed Nasdaq National Market symbol................ TPGI
</TABLE>

<PAGE>

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

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Total revenues.................................................... $44,186 $42,315 $38,560 $28,396 $28,779
Operating income (loss)........................................... 2,181 1,411 75 (3,798) (1,304)
Gain on sale of assets............................................ 441 1,059 -- -- --
Net income (loss) (2)............................................. 1,363 1,335 (2,400) (5,270) (765)
Pro forma earnings (loss) per share (2)........................... .50 .49 (1.39) (2.70) (.38)
Pro forma weighted average common and common equivalent shares
outstanding..................................................... 2,700 2,700 1,721 1,954 2,033
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1997
------------------------
AS
ACTUAL ADJUSTED(3)
------- ------------
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents......................................... $ 1,330 $ 19,077
Working capital................................................... 6,332 19,123
Total assets...................................................... 33,909 46,413
Total liabilities................................................. 28,531 23,444
Stockholders' equity.............................................. 5,378 22,529
</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) Adjusted to reflect (a) the sale by the Company of 2,000,000 Shares offered
hereby at an assumed Offering Price of $10.00 per share, after deducting
underwriting discounts and commissions and estimated offering expenses
payable by the Company, (b) the 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>

<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. A new factor in this decades-old problem is the budget deficit and
national debt requirements that European states must satisfy to be eligible to
join the European Monetary Union (the "EMU") which has, as one of its primary
objectives, the establishment of a single European currency by 1999. Although a
dispute arose over the 1998 proposed budget that included cuts in pension and
healthcare programs, the budget was eventually passed. The impetus for the
budget cuts was the requirements for entry into the EMU. Italy appears to have
met the criteria for entry into the EMU.

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 a S.p.A. has a single shareholder,
then the single

<PAGE>

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 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, 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."

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
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. to 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"). 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 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

<PAGE>

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."

RISK OF 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."

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

<PAGE>

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 1998. 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 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."

<PAGE>

<PAGE>
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 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. Prior to the effective date of this Offering,
the Company will purchase key-man life insurance policies, in the amount of
$1,000,000 each on the lives of James R. Currier, Sr., the Company's President
and Chief Executive Officer, and Gianfranco Carbonato, the Company's Executive
Vice President and Chief Operating Officer and the Managing Director and Chief
Executive Officer of Prima Industrie. 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

<PAGE>

<PAGE>
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 $450,000 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.

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. However, in addition to capital investments to be made
in Prima Industrie, the Company has established an initial secured lending
facility of up to $3 million with Prima Industrie in order to collateralize
certain advances made to Prima Industrie. See "Use of Proceeds."

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 2,700,300 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 their shares for a period of two years after the date of this Prospectus
without the prior written consent of both 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. 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."

ADDITIONAL SHARES ISSUED IN FUTURE ACQUISITIONS. The Company's strategy for
growth is based, in part, upon acquisitions of existing businesses. Those
acquisitions may involve additional issuances of shares of Common Stock or
preferred stock to the owners of the acquired businesses. While the Company has
had discussions with several potential acquisition candidates, it has no present
plans for acquisitions or the issuance of additional shares. The issuance of
additional shares may adversely affect the market price of the Common Stock. See
"Business -- Strategy."

NO PRIOR MARKET; POSSIBLE 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. 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 52.4% of their investment in the Shares
from the Offering Price. See "Dilution."

<PAGE>

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 REPRESENTATIVE'S INFLUENCE ON THE MARKET. The
representative of the Underwriters (the "Representative") may from time to time
following the completion of this Offering act as a market-maker and otherwise
effect transactions in the Common Stock. The Representative is 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 Representative is 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
Representative. In the event the Representative is 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 Representative from the market.

<PAGE>

<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 $17,200,000 ($19,900,000 if the
Over-Allotment Option is exercised in full), assuming an Offering Price of
$10.00 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>
Equity Contribution to Subsidiary (1)............................. $ 4,800,000 27.9% $ 4,800,000 24.1%
Marketing and Sales Promotion (2)................................. 3,000,000 17.4% 3,000,000 15.1%
Research and Development (3)...................................... 3,000,000 17.4% 3,000,000 15.1%
Transactions with Certain Officers (4)............................ 1,650,000 9.6% 1,650,000 8.3%
Working Capital (5)............................................... 4,750,000 27.7% 7,450,000 37.4%
----------- ------------- ----------- -------------
TOTAL........................................................ $17,200,000 100.0% $19,900,000 100.0%
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>

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

(1) 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 December
31, 1997, this line-of-credit had an outstanding balance of $1.71 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 December 31, 1997, the outstanding balance of
this second line-of-credit was $5.952 million. As of December 31, 1997, the
prime interest rate for these loans was 9%.

(2) 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.

(3) 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 $1,150,000 during the 1998 fiscal
year, $1,040,000 during the 1999 fiscal year, and $810,000 during the 2000
fiscal year.

(4) An aggregate of $450,000 will be paid to Messrs. Currier and Ciamaroni under
their employment agreements as a noncompetition payment. See "Management --
Employment Agreements." In addition, the Company will lend an aggregate of
$1,200,000 to Messrs. Currier and Ciamaroni that they will use to retire an
indebtedness to a shareholder of the Company incurred in connection with
their purchase of shares of Prima Industrie from that shareholder. See
"Certain Transactions."

(5) 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 $450,000 will be used in 1998
to fund the replacement of the information technology systems used by Prima
Industrie, Prima Electronics and their affiliates to ensure that the Company
and its subsidiaries will not be impacted by Year 2000 issues or the
conversion to a single European currency under the EMU. The Company will
provide an initial line of credit in the amount of $3 million to Prima
Industrie. Prima Industrie will use the proceeds of this line of credit to
reduce its indebtedness under credit facilities with Italian financial
institutions. The line of credit will be secured by a lien on the inventory
of Prima Industrie and by a lien on the receivables of Prima US, Prima
Industrie's subsidiary based in the United States. The balance of funds may
be used to finance acquisitions.

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

<PAGE>

<PAGE>
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. To the extent deemed appropriate by management,
the Company may acquire fully developed products or businesses which, in the
opinion of management, facilitate the growth of the Company or enhance the
market penetration or reputation of its Products. To the extent that the Company
identifies any such opportunities, an acquisition may involve the expenditure of
significant cash or the issuance of capital stock of the Company. Any
expenditure of cash will reduce the amount of cash available for working capital
or marketing and promotional purposes. The Company currently has no commitments,
understandings or arrangements with respect to any such acquisition.

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>

<PAGE>
CAPITALIZATION

The following table sets forth, as of December 31, 1997, (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 $10.00 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>
DECEMBER 31, 1997
--------------------
ACTUAL PRO FORMA
------- ---------
<S> <C> <C>
(IN THOUSANDS)
Short-term obligations(1).............................................................................. $ 8,472 $ 3,672
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, 4,700,300 shares issued and
outstanding.......................................................................................... 27 47
Additional paid-in capital............................................................................. 13,736 30,916
Accumulated deficit.................................................................................... (7,708) (7,708)
Cumulative translation adjustment...................................................................... (726) (726)
Total stockholders' equity............................................................................. 5,329 22,529
------- ---------
Total capitalization................................................................................... $13,801 $26,201
------- ---------
------- ---------
</TABLE>

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

(1) Short-term obligations consist of short-term indebtedness for borrowed money
and the current portion of capital lease obligations. See Note 7 of Notes to
Consolidated Financial Statements.

<PAGE>

<PAGE>
DILUTION

The net tangible book value of the Company as of December 31, 1997 was
$4,672,000, or approximately $1.73 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
$10.00 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 December 31, 1997 would be
$22,393,000, or $4.76 per share. This represents an immediate increase in pro
forma net tangible book value of $2.82 per share to existing stockholders and an
immediate dilution in pro forma net tangible book value of $5.19 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............................................................................ $10.00
Pro forma net tangible book value per Share before this Offering............................................ $1.73
Increase in pro forma net tangible book value per Share attributable to existing stockholders in this
Offering.................................................................................................. $3.03
Pro forma net tangible book value per share after this Offering............................................. $ 4.76
------
Dilution per share to new investors in this Offering........................................................ $ 5.24
------
------
</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 $10.00 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)....................................................... 2,700,300 57.4% $ 7,078,000 26.1%
New investors.................................................................. 2,000,000 42.6 20,000,000 73.9
--------- ------- ----------- -------
Total..................................................................... 4,700,300 100.0% $27,078,000 100.0%
--------- ------- ----------- -------
--------- ------- ----------- -------
</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; and (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.

<PAGE>

<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.
Immediately prior to the date of this Prospectus, 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. These historical results are not
necessarily indicative of the results to be expected in the future.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:(1)
Revenues:
Product sales........................................................ $43,560 $41,108 $37,356 $27,774 $27,814
Other.................................................................. 626 1,207 1,204 622 965
Total revenues......................................................... 44,186 42,315 38,560 28,396 28,779
Cost of product sales.................................................. 35,157 34,357 32,565 27,373 24,302
Gross profit........................................................... 9,029 7,958 6,847 2,297 4,477
Research and development............................................... 1,335 1,329 670 656 705
Selling, general and administrative.................................... 5,513 5,218 5,250 4,165 5,076
Total costs and expenses............................................... 42,005 40,904 38,485 32,194 30,083
Operating income....................................................... 2,181 1,411 75 (3,798) (1,304)
Gain on sale of assets................................................. 441 1,059
Other income (expense)................................................. (623) (733) (2,302) (1,637) 524
Income (loss) before provision
for income taxes..................................................... 1,999 1,737 (2,227) (5,435) (780)
Provision for income taxes............................................. (444) (189) (43) (4)
Minority interest...................................................... (192) (213) (130) 169 15
Net income (loss) (2).................................................. 1,363 1,335 (2,400) (5,270) (765)
Pro forma earnings (loss) per share (2)(3)(4).......................... $ 0.50 $ 0.49 $ (1.39) $ (2.70) $ (0.38)
Pro forma weighted average common and common equivalent shares
outstanding.......................................................... 2,700 2,700 1,721 1,954 2,033

CONSOLIDATED BALANCE SHEET DATA: (1)
Cash and cash equivalents.............................................. 1,330 585 804 620 2,518
Working capital........................................................ 6,332 6,320 3,574 (687) 2,365
Total assets........................................................... 33,909 36,352 35,268 31,244 34,240
Total liabilities...................................................... 28,531 31,608 32,037 33,796 31,871
Stockholders' equity................................................... 5,378 4,744 3,231 (2,552) 2,369
</TABLE>

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

(3) Reflects the issuance of 2,700,000 shares of Common Stock to substantially
all of the shareholders of Prima Industrie in exchange for their stock
interests in Prima Industrie.

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

<PAGE>

PRO FORMA COMBINED FINANCIAL INFORMATION

The Prima Group International, Inc. (PRIMA) has entered into a subscription
agreement with the shareholders of Prima Industrie S.p.A. (Prima Industrie)
whereby, prior to the effective date of Prima's public offering, PRIMA will
acquire substantially all of the outstanding shares of Industrie in exchange for
2,700,000 shares of PRIMA.

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

The accompanying unaudited pro forma balance sheet combines the December
31, 1997 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 as
if the transaction had occurred as of January 1, 1997.

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 document.

<PAGE>

THE PRIMA GROUP INTERNATIONAL, INC.

PRO FORMA COMBINED BALANCE SHEET

DECEMBER 31, 1997
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA
PRIMA PRO FORMA COMBINED
PRIMA INDUSTRIE ADJUSTMENTS (A)
----- ---------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................................... $ 26 $ 1,330 $ $ 1,356
Trade accounts receivable, net of allowance of $345..................... -- 19,107 19,107
Other accounts receivable............................................... -- 2,452 2,452
Inventories............................................................. -- 8,223 8,223
Other................................................................... -- 193 193
----- ---------- ----------- ----------
TOTAL CURRENT ASSETS................................................. 26 31,305 31,331
PROPERTY, PLANT AND EQUIPMENT, net........................................ -- 1,551 1,551
DEFERRED OFFERING COSTS................................................... 521 -- 521
PATENTS AND OTHER INTANGIBLE ASSETS, net.................................. -- 143 143
INVESTMENTS AND OTHER ASSETS.............................................. -- 467 467
ADVANCES TO AFFILIATE..................................................... -- 443 (443)(b) --
----- ---------- ----------- ----------
TOTAL ASSETS......................................................... $547 $ 33,909 $(443) $ 34,013
----- ---------- ----------- ----------
----- ---------- ----------- ----------

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of notes payable and long-term debt..................... $ -- $ 8,472 $ $ 8,472
Accounts payable........................................................ 146 12,063 10(d) 12,219
Customer deposits....................................................... -- 343 343
Other accrued expenses and liabilities.................................. -- 3,692 3,692
Deferred income......................................................... -- 72 72
Income taxes payable.................................................... -- 331 331
Advances from affiliate................................................. 443 -- (443)(b) --
----- ---------- ----------- ----------
Total current liabilities............................................ 589 24,973 (433) 25,129
LONG-TERM DEBT............................................................ -- 444 444
EMPLOYEE TERMINATION ACCRUAL.............................................. -- 2,455 2,455
MINORITY INTEREST......................................................... -- 659 659
STOCKHOLDERS' EQUITY:
Common stock............................................................ -- 27 27
Additional paid-in capital.............................................. 3 13,775 (42)(a) 13,736
Foreign currency translation adjustments................................ -- (726) (726)
Common stock subscriptions receivable................................... (3 ) -- (3)
Accumulated deficit..................................................... (42 ) (7,698) 32(a)(d) (7,708)
----- ---------- ----------- ----------
Total stockholders' equity........................................... (42 ) 5,378 (10) 5,326
----- ---------- ----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................ $547 $ 33,909 $(443) $ 34,013
----- ---------- ----------- ----------
----- ---------- ----------- ----------
</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
-------- ---------- ----------- ----------
<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 5,513 933(c) 6,488
-------- ---------- ----------- ----------
Total costs and expenses........................................... 42 42,005 933 42,980
-------- ---------- ----------- ----------
OPERATING INCOME........................................................ (42) 2,181 (933) 1,206
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 AND MINORITY INTEREST................. (42) 1,999 (933) 1,024
CURRENT INCOME TAXES.................................................... -- (444) (444)
MINORITY INTEREST....................................................... -- (192) (192)
-------- ---------- ----------- ----------
NET INCOME (LOSS)....................................................... $ (42) $ 1,363 $(933) $ 388
-------- ---------- ----------- ----------
-------- ---------- ----------- ----------
PRO FORMA NET INCOME (LOSS) PER SHARE................................... $(140.00) $ .50 $ .14
-------- ---------- ----------
-------- ---------- ----------
PRO FORMA WEIGHTED AVERAGE COMMON SHARES OUTSTANDING.................... 300 2,700,000 2,700,300
-------- ---------- ----------
-------- ---------- ----------
</TABLE>

See accompanying notes.

<PAGE>

THE PRIMA GROUP INTERNATIONAL, INC.

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.

<PAGE>

<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. Immediately prior to the date
of this Prospectus, 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. The following discussions of
historical results of operations, liquidity and capital resources reflect the
consolidated condition of Prima Industrie and Prima Electronics and not the
Company. 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 below and elsewhere in this
Prospectus, particularly under "Risk Factors."

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 will concentrate 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, Inc.
("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. 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." Furthermore, upon
completion of this Offering, significant portions of the subsidiary operations'
cash requirements (initially up to $3,000,000) will be financed by the Company
at more favorable interest rates on a consolidated basis.

The Company expects research and development ("R&D") and marketing expenses
to increase significantly during the 1998 Fiscal Year. Development of the
Company's "Laser On-Line" family of 3-D Products will involve substantial
development costs, and the introduction of that product family to the market in
late 1998 or early 1999 will have an impact on earnings for the year, although
Company management believes net income will increase in year-to-year comparisons
and as a percentage of sales. See "Business -- Research & Development" and "Use
of Proceeds."

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 ensure that the Company and its subsidiaries
will not be impacted by Year 2000 issues or the conversion to a single European
currency under the EMU. This capital expenditure will occur during the middle
part of the year, and management does not expect this expenditure to exceed
$450,000. 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 will receive 1.05
billion Lit (approximately $600,000) for the Equipment. Prima Industrie and
Macromeccanica

<PAGE>

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.

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 will subscribe to an increase in capital of
Macromeccanica for 700 million Lit (approximately $400,000) (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

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

TABLE 1
(IN THOUSANDS)

<TABLE>
<CAPTION>
CHANGE
-----------------
12/31/97 12/31/96 AMOUNT PERCENT
------- ------- ------ -------
<S> <C> <C> <C> <C>
TOTAL REVENUES $44,186 $42,315 $1,871 4.4%
Cost of sales...................................................................... 35,157 34,357 800 2.3%
Research and development........................................................... 1,335 1,329 6 --%
Selling, general and administrative expenses....................................... 5,513 5,218 295 5.6%
Total costs........................................................................ 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 (loss) before taxes......................................................... 1,999 1,737 262 15.1%
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 (unconsolidated) 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 43.9% and 17.6%, respectively of sales during the year
ended December 31, 1996. The contribution levels declined to 41.3% and 9.3% of
total sales, respectively, for the year ended December 31, 1997. While the
number of

<PAGE>

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.

Sales of service and parts increased by $.708 million or 22.1% for the year
ended December 31, 1997, when compared to the year ended December 31, 1996, as
did sales to Atlas Copco, which increased $.369 million or 6.1%. 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 2.

TABLE 2
CONTRIBUTION TO REVENUES
(IN PERCENT)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
--------------
1997 1996 DIFFERENCE
----- ----- ----------
<S> <C> <C> <C>
By Prima Industrie:
3-D Products................................................................................... 41.3% 43.9% (2.6)
Laserwork 2-D Products......................................................................... 9.3 17.6 (8.3)
Platino 2-D Products........................................................................... 18.4 4.2 14.2
Service and parts.............................................................................. 11.1 12.8 (1.7)

By Prima Electronics:
To Atlas Copco................................................................................. 12.3 12.4 (0.1)
To other customers............................................................................. 3.9 4.8 (0.9)
To Prima Industrie............................................................................. 3.7 4.3 (0.6)
----- ----- ----------
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 Decmeber 31, 1996.

TABLE 3
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.

<PAGE>

<PAGE>
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.

Selling, general and administrative ("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 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 $.28 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.

<PAGE>

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

TABLE 4
(IN THOUSANDS)

<TABLE>
<CAPTION>
CHANGE
-----------------
12/31/96 12/31/95 AMOUNT PERCENT
------- ------- ------ -------
<S> <C> <C> <C> <C>
TOTAL REVENUES..................................................................... $42,315 $38,560 $3,755 9.7%
Cost of sales...................................................................... 34,357 32,565 1,792 5.5%
Research and development........................................................... 1,329 670 659 98.3%
Selling, general and administrative................................................ 5,218 5,250 (32 ) --
Total costs................................................................... $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 taxes................................................................ $ 1,737 $(2,227) $3,964 --
Income taxes....................................................................... (189) (43) (146) (339.5)%
Minority Interest.................................................................. (213) (130) (83) (63.8)%
------- ------- ------ -----
Net income (loss).................................................................. $ 1,335 $(2,400) $3,735 --
------- ------- ------
------- ------- ------
</TABLE>

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, Prima Electronics accounted for
approximately 21.5% of total revenues, up from 20.9% 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. Additionally, and without giving effect to
intercompany eliminations in the consolidated financial statements, Prima
Electronics' sales to the Company increased 11.6% from $1.672 million for the
year ended December 31, 1995 to $1.867 million for the year ended December 31,
1996. The increase in sales from Prima Electronics to the Company was the result
of the Company's increasing sales of the Products.

As a percentage of revenues (unconsolidated), the Company's 3-D and 2-D
Products accounted for 43.9% and 17.6%, respectively, of the Company's total
revenues for the year ended December 31, 1996, and 42.1% and 27.0%,
respectively, for the year ended December 31, 1995. Revenues derived from 2-D
and 3-D Products increased 26.2% and 22.8%, 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.

<PAGE>

<PAGE>
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 can be seen in the following
table:

TABLE 5
CONTRIBUTION TO REVENUES
(IN PERCENT)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
--------------
1996 1995 DIFFERENCE
----- ----- ----------
<S> <C> <C> <C>
By Prima Industrie:
3-D Products................................................................................... 43.9% 42.1% 1.8
Laserwork 2-D Products......................................................................... 17.6 27.0 (9.4)
Platino 2-D Products........................................................................... 4.2 -- 4.2
Service and parts.............................................................................. 12.8 10.0 2.8

By Prima Electronics:
To Atlas Copco................................................................................. 12.4 9.0 3.4
To other customers............................................................................. 4.8 7.0 (2.2)
To Prima Industrie............................................................................. 4.3 4.9 (0.6)
----- ----- ----------
Total sales.................................................................................... 100.0% 100.0% 0
----- ----- ----------
----- ----- ----------
</TABLE>

See Table 6 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 6

[GRAPHIC APPEARS HERE]

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.

<PAGE>

<PAGE>
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 7:

TABLE 7
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 stable at $5.250 million for the year ended December 31,
1995 and $5.218 million for the year ended December 31, 1996, representing a
0.6% 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
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 $0.75 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 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 $.13 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
December 31, 1997, the Company had outstanding bank and government agency debt
of $8.916 million.

<PAGE>

Net cash provided by (used in) operating activities was $2.724 million, and
($.265 million), for the year ended December 31, 1997 and for the year ended
December 31, 1996, respectively. Cash flow from operations for the year ended
December 31, 1997 increased by $2.989 million compared to the year ended
December 31, 1996, primarily due to net income for the year and an increase in
payables.

Trade accounts receivable, net of allowances, decreased $2.137 million to
$19.107 million at December 31, 1997 from December 31, 1996 and increased $3.278
million to $21.244 million at December 31, 1996 from December 31, 1995.
Inventories increased $.274 million to $8.223 million at December 31, 1997 from
December 31, 1996. Inventories decreased $.463 million to $7.949 million at
December 31, 1996 from December 31, 1995 reflecting the draw down of stocks
resulting from the growth in sales for 1996.

Cash provided by (used in) investing activities was ($.644 million) for the
year ended December 31, 1997 and $.596 million for the year ended December 31,
1996. The increase in cash used for investing activities for the year ended
December 31, 1997 was primarily attributable to capital expenditures and the
investment in Macromeccanica. The increase in cash provided for the year ended
December 31, 1996 was generated primarily by the sale of Sapri S.p.A..

Capital expenditures were $.594 million and $.231 million for the years
ended December 31, 1997 and 1996, 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 year ended December 31, 1997 included advances to an
affiliated company to fund costs related to the Company's initial public
offering. Cash provided by (used in) financing activities was ($1.397 million)
for the year ended December 31, 1997 as compared to ($.811 million) used for the
year ended December 31, 1996.

As of December 31, 1997, the Company had lines of credit with 12 different
Italian banks totaling $12.804 million, collateralized by the Company's accounts
receivable sales contracts. As of December 31, 1996, the Company had drawn down
$8.977 million, and as of December 31, 1997, the Company had drawn down $7.662
million. Wide fluctuations 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.

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 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 December 31, 1997, as at December 31, 1996.

<PAGE>

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 extended, has remained
relatively constant for the past several fiscal periods, at an average of 178
days. In the final quarter of 1997, this average improved to an annualized rate
of 158 days.

<PAGE>

<PAGE>
HISTORY OF THE COMPANY

The Company was incorporated in Delaware on July 29, 1997. As of the date
of this Prospectus, the Company has 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.

<PAGE>

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 Investments BV 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, Inc. 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.

<PAGE>

<PAGE>
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 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>

<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>

<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 December 31, 1997, the Company had orders for 17 Products with a value
of Lit 12.225 billion, or approximately $7.15 million. This compares to a
backlog of Lit 11.558 billion, or approximately $7.51 million, on December 31,
1996, consisting of 16 units. At December 31, 1997, Prima Electronics had orders
from customers other than Prima Industrie with a value of Lit 5.138 billion, or
approximately $2.72 million, compared to a backlog of Lit 4.657 billion, or
approximately $3.02 million, at December 31, 1996.

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) 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.

(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 will significantly increase

<PAGE>

<PAGE>
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.

(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.

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.

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.

<PAGE>

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 December 31, 1997, the Company employed 207 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>

<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 February 28, 1997, 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........................ 52 Executive Vice President, Chief Operating Officer
and Director
Giovanni Ciamaroni.......................... 52 Vice President Business Development and Director
Michael H. Gilbert.......................... 56 Vice President Finance and Administration, Chief
Financial Officer, Secretary and Treasurer(1)
Mario Mauri................................. 47 Director
Hans Lennart Oscar Werthen.................. 82 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 seven 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 these 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 executive officers and directors of Prima Industrie and their ages, as
of February 28, 1998, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------- --- ----------------------------------------------
<S> <C> <C> <C>
Gianfranco Carbonato........................... 52 Managing Director and Chief Executive Officer
Gian Mario Rossignolo.......................... 67 Chairman of Board of Directors
Mario Mauri.................................... 47 Director
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 February 28, 1998, are as follows:

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

<PAGE>

<PAGE>
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 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.

MARIO MAURI has served as a Director of Prima Industrie since 1995. He has
also served as Chairman of the Board of Directors and Chief Executive Officer of
Cambria Ltd. since 1990. Cambria Ltd. is a private merchant bank regulated by
IMRO headquartered in London.

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.

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.

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. Mauri, McMahan and
Almond.

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

<PAGE>

Audit Committee also will recommend to the Board the appointment of the
Company's independent auditors. The Audit Committee will be composed of Messrs.
Mauri, 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> <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 paid 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 March 13, 1998, the exchange rate among banks
selling in amounts of $1 million or more as published by the WALL STREET
JOURNAL was 1792 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 $150,000, 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.
Messrs. Currier and Ciamaroni have also agreed to extend the period during which
their respective Non-Compete Covenants will remain in effect for a period of
five years after the expiration of the initial term of such Non-Compete
Covenants (the "Extended Non-Compete Period"). Messrs. Currier and Ciamaroni
will each receive eight (8) annual installments of $135,000, beginning in

<PAGE>

1999, for a total of $1,080,000 each, as consideration for agreeing to the
extended Non-Compete Period (the "Extended Non-Compete Payments").

Messrs. Currier and Ciamaroni will use a portion of their respective
Extended Non-Compete Payments to repay certain indebtedness due to the Company.
See "Certain Transactions." The Company has agreed that payment of the Extended
Non-Compete Payments will be accelerated, at the option of the employee, if any
of the following events occur:

(1) The employment of the employee is terminated without cause or his
employment agreement is not renewed by the Company;

(2) Substantially all of the assets or stock of the Company are sold
(including a merger where the Company is not the surviving entity) for
a per share consideration greater than or equal to 130% of the Offering
Price;

(3) The Company receives gross proceeds of $30 million or more from a
follow-on public offering of equity or debt securities; or

(4) There is a 100% increase as of the end of any fiscal year in any of the
following financial measures of the Company as compared to those
results at the end of the month in which this Offering is consummated:

(a) Shareholder's equity;

(b) Total revenues;

(d) Market capitalization, based upon public float.

1997 STOCK INCENTIVE PLAN

The shareholders 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> <C> <C>
James R. Currier, Sr......... 100,000 1st anniversary(3) 115%
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) 115%
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>

<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS AND RELATED MATTERS

The Company's Articles 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 Investment BV ("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.

The Company has agreed to make a loan to Messrs. Currier and Ciamaroni,
separately, in the amount of $600,000 each (for an aggregate of $1,200,000) from
the proceeds of this Offering to retire the indebtedness to Miojusti so that
their shares of Common Stock can be used as collateral for their loans from the
Company. The loans from the Company will bear interest at the annual compounded
rate of six percent (6%) and will require the payment of eight equal annual
installments of $96,621.57 each. Such installments will be paid with the
proceeds of the Extended Non-Compete Payments. See "Management -- Employment
Agreements."

<PAGE>

<PAGE>
CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of December 18, 1997, 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.

<TABLE>
<CAPTION>
DIRECTORS, EXECUTIVE OFFICERS SHARES BENEFICIALLY
& 5% SHAREHOLDERS OWNED (1) PERCENTAGE (2)
------------------------------- ------------------- --------------
<S> <C> <C> <C>
Itainvest (3)
Via Del Serafico
Rome, Italy.......................................................... 1,212,683 25.8%
Miojusti Invesments BV (3)(4)
3105 Stravinsky Laan
Amsterdam The Netherlands............................................ 285,036 6.1%
Gian Mario Rossignolo(3)............................................... 422,657 9.0%
James R. Currier, Sr................................................... 60,150 1.3%
Gianfranco Carbonato(3)................................................ 199,643 4.2%
Giovanni Ciamaroni..................................................... 60,150 1.7%
Michael H. Gilbert..................................................... 0 0%
Mario Mauri (3) (4).................................................... 285,036 6.1%
Hans Werthen(3)........................................................ 405,036 8.6%
All directors and executive
officers as a group
(seven persons)...................................................... 1,432,672 30.5%
</TABLE>

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

(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 4,700,300.

(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. Mario Mauri, a director of the Company, is the
Chairman of Cambria Ltd. and, accordingly, may be deemed to beneficially own
the shares of Common Stock held by Miojusti.

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 Articles 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.

<PAGE>

<PAGE>
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 March 26, 1998, 2,700,300 shares of Common Stock were outstanding and
held of record by 12 stockholders.

PREFERRED STOCK

Pursuant to the Company's Articles 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.

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 4,700,300 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 2,700,300 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.

<PAGE>

As a result of contractual restrictions described below and the provisions
of Rules 144, 144(k) and 701, those 2,700,300 Restricted Shares will be
available for sale in the public market in the Public market without the consent
of the Company or Chatfield Dean & Co. 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 47,000 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.

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement, the Underwriters named below, for whom Chatfield Dean & Co. 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>
Chatfield Dean & Co.............................................................................................
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 a price that represents a
concession not in excess of $ per share under the Offering Price. 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. Any Underwriter may allow, and such dealers may
reallow, a concession not in excess of $ per share to other Underwriters or to
certain other dealers.

The Company and the Selling Shareholder have granted to the Underwriters an
option, exercisable within 30 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. To the extent that the Underwriters exercise the Over-Allotment
Option, each of the Underwriters will be committed, subject to certain
conditions, to purchase such additional Shares in approximately the same
proportion as set forth in the above table. The Underwriters may purchase such
Shares only to cover over-allotments made in connection with the Offering.

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

<PAGE>

<PAGE>
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 Chatfield Dean & Co.

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. 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
150% 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" registration rights with
respect to the shares of Common Stock underlying such warrant. Such registration
rights expire seven (7) 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 four-year period. During the term of the Underwriters' Warrant, the
Underwriters may transfer a portion or all of the Underwriters' Warrant to such
Underwriters' officers or partners. 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 the Representative
pursuant to which the Representative 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
one year commencing at the completion of this Offering. The agreement states
that the Representative will be paid a consulting fee of $40,000, which will be
paid upon the consummation of this Offering.

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 Representative. 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

<PAGE>

<PAGE>
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.

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-1
Balance Sheet -- December 31, 1997..................................................................................... F-2
Statement of Operations -- For the Period from Inception (July 29, 1997) to December 31, 1997.......................... F-3
Statement of Stockholders' Equity -- For the Period from Inception (July 29, 1997) to December 31, 1997................ F-4
Statement of Cash Flows -- For the Period from Inception (July 29, 1997) to December 31, 1997.......................... F-5
Notes to Financial Statements.......................................................................................... F-6

PRIMA INDUSTRIE S.P.A.
Independent Auditor's Report........................................................................................... F-9
Consolidated Balance Sheets -- As of December 31, 1997 and 1996........................................................ F-10
Consolidated Statements of Operations -- For the Years Ended December 31, 1997, 1996, and 1995......................... F-11
Consolidated Statements of Stockholders' Equity -- For the Period from January 1, 1995 to December 31, 1997............ F-12
Consolidated Statements of Cash Flows -- For the Years Ended December 31, 1997, 1996, and 1995......................... F-13
Notes to Consolidated Financial Statements............................................................................. F-14
</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

F-2

<PAGE>

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

BALANCE SHEET

($ IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31, PRO FORMA
1997 UNAUDITED
------------ ---------
<S> <C> <C>
(NOTE 4)
ASSETS
CURRENT ASSETS:
Cash............................................................................................. $ 26
DEFERRED OFFERING COSTS............................................................................ 521
------------
TOTAL ASSETS....................................................................................... $547
------------
------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities......................................................... $146
Advances from affiliate.......................................................................... 443
------------
TOTAL CURRENT LIABILITIES.......................................................................... 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 13,736
Common stock subscriptions receivable............................................................ (3) (3)
Foreign currency translation adjustments......................................................... -- (726)
Accumulated deficit.............................................................................. (42) (7,708)
------------ ---------
Total stockholders' equity.................................................................... (42) 5,326
------------ ---------
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......................................................... $547
------------
------------
</TABLE>

See accompanying notes to these financial statements.

F-3

<PAGE>

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

STATEMENT OF OPERATIONS

FOR THE PERIOD FROM INCEPTION (JULY 29, 1997) TO DECEMBER 31, 1997
($ IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

<TABLE>
<S> <C>
REVENUES........................................................................................................... $ --
EXPENSES:
Salaries and payroll taxes....................................................................................... 40
Other............................................................................................................ 2
--------
Total expenses................................................................................................ 42
--------
NET LOSS........................................................................................................... $ (42)
--------
--------
NET LOSS PER SHARE................................................................................................. $(140.00)
--------
--------
SHARES OUTSTANDING................................................................................................. 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 DECEMBER 31, 1997
($ 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)
------ ------- ---------- ------------- -----------
------ ------- ---------- ------------- -----------

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

See accompanying notes to these financial statements.

F-5

<PAGE>

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

STATEMENT OF CASH FLOWS

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

<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................................................................................ $(42)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from affiliate............................................................................................. 443
Increase in accounts payable and accured liabilities................................................................ 146
Increase in deferred offering costs................................................................................. (521)
----
Net cash provided by financing activities........................................................................ 68
----
NET CHANGE IN CASH.................................................................................................... 26
CASH, beginning of period............................................................................................. --
----
CASH, end of period................................................................................................... $ 26
----
----
</TABLE>

See accompanying notes to these financial statements.

F-6

<PAGE>

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

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 December 31,
1997.

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.

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 115%
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%
- ---------------- ---
550,000 124%
- ---------------- ---
- ---------------- ---
</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.

EMPLOYMENT AGREEMENTS -- The Company has agreed to enter into employment
agreements with three officers, effective upon closing of the proposed public
offering. These agreements call for salaries of $250,000, $150,000, and
$150,000, respectively, per year for a period of three years. Two of the
officers will also receive payments of $300,000 and $150,000, respectively, in
1998 for entering into non-compete covenants under their employment agreements.
These payments are subject to a three-year vesting period. These officers have
agreed to extend the period of their non-compete agreements for an additional
five-year term in exchange for eight annual payments of $135,000 each.

F-7

<PAGE>

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

NOTES TO FINANCIAL STATEMENTS -- CONTINUED

3. COMMITMENTS: -- Continued

The Company has agreed to make loans to two officers aggregating
$1,200,000. The proceeds of these loans will be used to purchase existing shares
of Prima Industrie stock, which will be converted to 120,000 shares of the
Company's stock after the acquisition described in Note 4. The loans will have
an eight-year term, with interest at 6%, and will be collateralized by the stock
acquired.

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. The Company
has also agreed to enter into a subscription agreement with the stockholders of
Prima Industrie, whereby prior to the closing of the IPO, the Company would
exchange 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 December
31, 1997. This transaction will be accounted for as a recapitalization of Prima
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>

<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, 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

F-9

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS OF U.S. DOLLARS)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1997 1996
------------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents......................................................................... $ 1,330 $ 585
Trade accounts receivable, net of allowance of $345 and $426, respectively........................ 19,107 21,244
Other accounts receivable......................................................................... 2,452 3,127
Inventories....................................................................................... 8,223 7,949
Prepaid expenses and other current assets......................................................... 193 872
------------- -------
Total current assets........................................................................... 31,305 33,777
PROPERTY, PLANT AND EQUIPMENT....................................................................... 5,859 7,612
Less accumulated depreciation..................................................................... (4,308) (5,966)
------------- -------
Property, plant and equipment, net............................................................. 1,551 1,646
PATENTS AND OTHER INTANGIBLE ASSETS, net............................................................ 143 339
INVESTMENTS AND OTHER ASSETS........................................................................ 467 590
ADVANCES TO AFFILIATE............................................................................... 443 --
------------- -------
TOTAL ASSETS........................................................................................ $33,909 $36,352
------------- -------
------------- -------

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of notes payable and long-term debt............................................... $ 8,472 $10,276
Accounts payable.................................................................................. 12,063 12,721
Customer deposits................................................................................. 343 506
Other accrued expenses and liabilities............................................................ 3,692 3,210
Deferred income................................................................................... 72 559
Income taxes payable.............................................................................. 331 185
------------- -------
Total current liabilities.................................................................... 24,973 27,457
LONG-TERM DEBT...................................................................................... 444 948
EMPLOYEE TERMINATION ACCRUAL........................................................................ 2,455 2,655
MINORITY INTEREST................................................................................... 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
Additional paid-in capital..................................................................... 13,775 13,775
Foreign currency translation adjustments....................................................... (726) 3
Accumulated deficit............................................................................ (7,698) (9,061)
------------- -------
Total stockholders' equity................................................................... 5,378 4,744
------------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.......................................................... $33,909 $36,352
------------- -------
------------- -------
</TABLE>

See accompanying notes to these consolidated financial statements.

F-10

<PAGE>

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-----------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
REVENUES:
Net sales............................................................................ $ 43,560 $ 41,108 $ 37,356
Other operating revenue.............................................................. 626 1,207 1,204
--------- --------- ---------
Total revenues.................................................................... 44,186 42,315 38,560
COSTS AND EXPENSES:
Cost of goods sold................................................................... 35,157 34,357 32,565
Research and development costs....................................................... 1,335 1,329 670
Selling, general and administrative costs............................................ 5,513 5,218 5,250
--------- --------- ---------
Total costs and expenses........................................................ 42,005 40,904 38,485
--------- --------- ---------
OPERATING INCOME....................................................................... 2,181 1,411 75
OTHER INCOME (EXPENSE):
Interest and other income............................................................ 393 818 776
Gain on sale of equipment............................................................ 441 -- --
Gain on sale of Sapri................................................................ -- 1,059 --
Gain (loss) on foreign exchange...................................................... 151 215 (618)
Interest expense..................................................................... (1,167) (1,375) (2,460)
Other expenses....................................................................... -- (391) --
--------- --------- ---------
(182) 326 (2,302)
--------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST................................ 1,999 1,737 (2,227)
CURRENT INCOME TAXES................................................................... (444) (189) (43)
MINORITY INTEREST...................................................................... (192) (213) (130)
--------- --------- ---------
NET INCOME (LOSS)...................................................................... $ 1,363 $ 1,335 $ (2,400)
--------- --------- ---------
--------- --------- ---------
PRO FORMA NET INCOME (LOSS) PER SHARE.................................................. $ .50 $ .49 $ (1.40)
--------- --------- ---------
--------- --------- ---------
PRO FORMA WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,700,000 2,700,000 1,721,000
--------- --------- ---------
--------- --------- ---------
</TABLE>

See accompanying notes to these consolidated financial statements.

F-11

<PAGE>

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE PERIOD FROM JANUARY 1, 1995 TO DECEMBER 31, 1997
(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
--------- ------ ---------- ----------- ----------- -------------
--------- ------ ---------- ----------- ----------- -------------
</TABLE>

See accompanying notes to these consolidated financial statements.

F-12

<PAGE>

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS OF U.S. DOLLARS)

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-----------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................................................... $ 1,363 $ 1,335 $(2,400)
Adjustments to reconcile to cash from operating activities:
Depreciation and amortization............................................................ 575 745 839
(Gain) loss on sale of assets, net....................................................... (441) (708) (40)
(Gain) loss on foreign exchange.......................................................... (151) (215) 618
Changes in:
Receivables............................................................................ 245 (1,214) (5,159)
Inventory.............................................................................. (1,287) 933 434
Other assets........................................................................... 587 (736) 168
Accounts payable, accrued liabilities, and customer deposits........................... 1,684 (929) 3,523
Deferred income........................................................................ (430) 317 228
Taxes payable.......................................................................... 174 151 32
Employee termination accrual........................................................... 149 (156) (80)
Minority interest...................................................................... 184 212 177
Other.................................................................................. 72 -- --
------- ------- -------
Net cash provided by (used in) operating activities................................. 2,724 (265) (1,660)
CASH FLOW FROM INVESTING ACTIVITIES:
Payments for property, plant and equipment.................................................. (594) (231) (1,452)
Additions to patent and other intangibles................................................... -- (288) (49)
Proceeds from sale of property, plant and equipment......................................... 68 52 647
Additions to investments and other assets................................................... (340) -- --
Proceeds from sale of investments........................................................... 222 1,063 325
------- ------- -------
Net cash provided by (used in) investing activities................................. (644) 596 (529)
CASH FLOW FROM FINANCING ACTIVITIES:
Net changes in short-term debt.............................................................. (216) (384) (2,398)
Additions to long-term debt................................................................. 406 565 620
Repayments of long-term debt................................................................ (1,144) (992) (1,683)
Advances to affiliate....................................................................... (443) -- --
Proceeds from issuance of common stock...................................................... -- -- 6,469
------- ------- -------
Net cash provided by (used in) financing activities.................................... (1,397) (811) 3,008
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS.................................. 62 261 (635)
------- ------- -------
NET CHANGE IN CASH AND CASH EQUIVALENTS 745 (219) 184
CASH AND CASH EQUIVALENTS, beginning of period................................................ 585 804 620
------- ------- -------
CASH AND CASH EQUIVALENTS, end of period...................................................... $ 1,330 $ 585 $ 804
------- ------- -------
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest...................................................................... $ 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-13

<PAGE>

PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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. as described in Note 15. Diluted
earnings per share is not presented as the Company has no potential common
stock.

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.

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, Inc. 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.

F-14

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES: -- Continued
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 130, "Reporting Comprehensive Income" establishes standards for
reporting and display of comprehensive income, its components and accumulated
balances. Comprehensive income is defined to include all changes in equity
except those resulting from investments by owners and distributions to owners.
Among other disclosures, Statement 130 requires that all items that are required
to be recognized under current accounting standards as components of
comprehensive income shall be classified based on their nature and shall be
reported in the financial statements. A total amount for comprehensive income
shall be displayed in the financial statements.

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.

Statements 130 and 131 are effective for financial statements for periods
beginning after December 15, 1997 and require comparative information for
earlier years to be restated. Because of the recent issuance of these standards,
management has been unable to fully evaluate the impact, if any, the standards
may have on the future financial statement disclosures. 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-15

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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>

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>

F-16

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. INVESTMENTS AND OTHER ASSETS: -- Continued
In December 1997, the Company acquired a 25% interest in Macromeccanica
S.p.A. (Macromeccanica) from an existing shareholder of Macromeccanica 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
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.

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>

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

*Prime was 9% at December 31, 1997.

F-17

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. NOTES PAYABLE AND LONG-TERM DEBT: -- Continued
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.

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

F-18

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. INCOME TAXES: -- Continued
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 5 billion lire ($3,100,000). In addition, 1,370,000 shares
of stock were sold to other stockholders for a total of 5.6 billion 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.

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 noncancellablle operating leases
are as follows:

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31, $ IN 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.

F-19

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. COMMITMENTS AND CONTINGENCIES: -- Continued
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 effected by changes in economic or other
conditions described below.

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 $19,452,000 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>
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,

F-20

<PAGE>
PRIMA INDUSTRIE S.P.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. CONCENTRATIONS OF CREDIT RISK: -- Continued
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:

Substantially all of the stockholders of the Company have agreed to enter
into a subscription agreement with The PRIMA Group International, Inc. (PRIMA),
whereby, prior to the closing of PRIMA's proposed public offering, the
stockholders would exchange their shares for 2,700,000 shares of 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 subscription agreement must close before the offering commences. If the
subscription transaction does not occur, the offering will not occur.

F-21

<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, ANY SELLING
STOCKHOLDER OR ANY UNDERWRITERS. 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

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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............................... 31
Business............................................. 33
Management........................................... 39
Certain Transactions................................. 43
Certain Beneficial Owners............................ 45
Description of Capital Stock......................... 45
Transfer Agent and Registrar......................... 46
Shares Eligible for Future Sale...................... 46
Underwriting......................................... 47
Legal Matters........................................ 48
Experts.............................................. 48
Additional Information............................... 49
Index to Consolidated Financial Statements........... F-1
</TABLE>

2,000,000 SHARES

THE PRIMA GROUP
INTERNATIONAL, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
CHATFIELD DEAN & CO.
, 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......................................................................... $ 7,463.50
NASD Filing Fee.......................................................................... 3,639.50
Nasdaq National Market Listing fee....................................................... *
Printing................................................................................. *
Legal Fees and Expenses.................................................................. *
Accounting Fees and Expenses............................................................. *
Blue Sky Fees and Expenses............................................................... *
Transfer Agent Fees...................................................................... *
Miscellaneous............................................................................ *
----------
Total............................................................................... $
----------
----------
</TABLE>

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

* To be supplied

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

II-1

<PAGE>

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.

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.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement+
3.1 Articles 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, Term Loan and Security Agreement.*
10.11 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.
10.12 Form of Promissory Note and Loan Agreement between the Registrant
and James R. Currier, Sr. A second agreement in substantially the
same form will be made between the Registrant and Giovanni
Ciamaroni.
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 supplied

* To be supplied 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.

II-2

<PAGE>

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.

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. 2 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 26th day of March, 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 March 26, 1998
JAMES R. CURRIER, SR. (Principal Executive Officer)

/s/ Vice President Finance and Administration, March 26, 1998
MICHAEL H. GILBERT Secretary and Treasurer (Principal Financial
and Accounting Officer)

/s/ Executive Vice President, Chief Operating March 26, 1998
GIANFRANCO CARBONATO Officer and Director

/s/ Vice President Sales and Marketing and Director March 26, 1998
GIOVANNI CIAMARONI

/s/ Chairman of the Board of Directors March 26, 1998
GIAN MARIO ROSIGNOLO

/s/ Director March 26, 1998
MARIO MAURI

/s/ Director March 26, 1998
HANS WERTHEN

/s/ Director March 26, 1998
PIO PELLEGRINI
</TABLE>

II-4

EMPLOYMENT AGREEMENT

AGREEMENT made as of March 16, 1998 between THE PRIMA GROUP
INTERNATIONAL, INC. ("Employer") and JAMES R. CURRIER, SR.
("Employee").

WITNESSETH:

WHEREAS, the parties hereto desire to provide for the Employee's
employment by Employer.

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:

1. Employment.

Employer agrees to employ the Employee and the Employee agrees to enter
into the employ of Employer on the terms and conditions hereafter set forth.

2. Capacity and Duties.

The Employee shall be employed as President and Chief Executive Officer
of Employer and shall perform such duties and have such responsibilities as
normally attributed to a president and chief executive officer of a Delaware
corporation. The Employee shall perform his responsibilities in accordance with
the direction and supervision of the Board of Directors of Employer, and he
shall devote such time, skill, energies, business judgment, knowledge and best
efforts to the business of Employer and the performance of such executive,
administrative and operational duties on behalf of Employer and its affiliates,
appropriate to the offices he holds or shall hold hereunder, as the Board of
Directors of Employer may request. The requirement that the Employee devote his
time to the business of Employer shall not preclude him from undertaking other
business and personal activities that do not, singly or in the aggregate,
materially impair his ability to fulfill his responsibilities under this
Agreement. Employer specifically acknowledges that Employee will continue to
provide consulting services on a part-time basis and that, from time to time,
this may create a conflict of interest. Employee agrees to offer Employer the
opportunity to take advantage of any business opportunities which arise from
Employee's consulting services.

3. Term.

The term of the Employee's employment hereunder shall be for the a
period of three (3) years, commencing on April 1, 1998, and ending on March 31,
2001, unless such term is terminated earlier by or pursuant to Section 8. In
addition, the term of Employee's employment shall commence only after Employer
is declared effective in the registration of it's securities by the United
States Securities and Exchange Commission, and the Employee has received
confirmation that a director and officer liability policy satisfactory to
Employee is in full force and effect and that said policy covers Employee. The
term of employment shall be automatically renewed for successive one-year terms,
unless written notice of non-renewal is given by either party not less than
ninety (90) days prior to the end of the initial three-year, or the then current
one-year, term.

<PAGE>

4. Compensation.

(a) Salary. Employer shall pay or cause to be paid to the Employee a
salary of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) per year, payable in
equal semi-monthly installments (the "Base Salary"). The Base Salary shall be
increased each year on the anniversary of the effective date of this Agreement
in line with increases in the cost of living for the immediately preceding
twelve (12) months. However, in no event shall such increase be less than the
percentage increase in the "Consumer Price Index - United States Average for the
Urban Wage Earners and Clerical Workers - All Items", as published by the United
States Department of Labor (Bureau of Labor Statistics) for the immediately
preceding twelve (12) months. In addition, Base Salary shall be reviewed prior
to each anniversary date of this Agreement by the Board of Directors of
Employer.

(b) Bonus. For each fiscal year during the term of this Agreement,
beginning with the fiscal year ending December 31, 1998, Employee shall receive
a bonus payable at the discretion of the Board of Directors, or any committee
thereof, based upon operational, financial and stock market performance of
Employer.

(i) As consideration for the covenants of Employee in
section 9 for the period of the initial term of this
Agreement, Employer shall pay to Employee within five (5)
business days of the consummation of Employer's initial public
offering ("IPO"), the sum of THREE HUNDRED THOUSAND DOLLARS
($300,000). The non-vested portions of this payment shall be
subject to forfeiture if Employee voluntarily terminates this
Agreement prior to the expiration of the initial term.
One-third of the payment will vest on the effectiveness of the
term of this Agreement. The remaining one-third portions of
the payment will vest on the first and second anniversaries of
the effectiveness of this Agreement, respectively.

(ii) As consideration for extending the covenants of
Employee in Section 9 for an additional five-year period,
Employer shall pay to Employee on March 31 of 1999 and each
anniversary thereafter until March 31, 2006, the sum of One
Hundred Thirty-Five Thousand Dollars ($135,000). These
payments will be subject to forfeiture if Employee voluntarily
terminates this Agreement prior to the due date of future
payments.

5. Expenses. Employer shall reimburse Employee, to the extent not otherwise paid
for by Employer or one of its affiliates, for reasonable and necessary
out-of-pocket expenses, including, without limitation, entertainment, travel and
similar expenses incurred by him in performing the duties set forth in Section 2
hereof. Employee shall present an itemized account of such expenses, supported
by such documentation as is required under the Internal Revenue Code of 1986, as
amended, to support the deductibility of such expenses for federal income tax
purposes.

<PAGE>

6. Benefits and Vacations.

(a) Stock Option Plan. Employer shall establish a Stock Incentive Plan
for key employees and directors of Employer and its subsidiaries in the form of
EXHIBIT "A". Upon the effective date of the IPO, Employee shall receive options
to acquire TWO HUNDRED THOUSAND (200,000) shares of Employer's Common Stock.
Options to purchase 100,000 shares of Employer's Common Stock shall be
exercisable on the first anniversary date of the IPO and shall have an exercise
price of 115% of the public offering price of the IPO. The options to purchase
the remaining 100,000 shares of Employer's Common Stock shall be exercisable in
three (3) installments of 30,000, 30,000 and 40,000 shares on the first, second
and third anniversaries of the effective date of the IPO, respectively. The
exercise price for the installments shall be 120%, 130%, and 140%, respectively
of the public offering price of the IPO. The options shall have a term of ten
years (five years if Employee is a ten percent (10%) shareholder and the option
is an incentive stock option as defined under Section 422 of the Internal
Revenue Code) and shall survive termination or expiration of this Agreement. If
this Agreement is terminated for cause as defined herein, then the options will
be exercisable for a period of six months after termination. If Employee leaves
the employment by Employer for reasons other than termination for cause, then
the options shall remain exercisable during their full term.

(b) Insurance.

(i) Major Medical, Health and Dental. Employer shall
provide group coverage for Employee, and such dependents as
Employee shall select, with respect to major medical, health
and dental expenses. Employer shall pay one hundred percent
(100%) of premiums with respect to such coverage.

(ii) Disability. Employer shall provide group
disability, accidental death and dismemberment, and life
insurance coverage for Employee, with Employer paying one
hundred percent (100%) of the related premiums.

(iii) Additional Term Insurance. Employee shall be
provided additional term life insurance in the principal
amount of $1,000,000, payable to such beneficiaries as
selected by Employee. At the termination of this Agreement,
Employee shall be given the right to assume the policy and pay
the premiums due thereunder.

(c) Automobile Allowance. Employee shall receive an automobile
allowance of $1,500 per month during the term of this Agreement.

(d) Vacation. The Employee shall be entitled to six (6) weeks annual
paid vacation during each year of this Agreement. Employee shall also be
entitled to the same paid holidays, sick and personal time as are available to
all other employees in accordance with the policies of Employer.

<PAGE>

(e) Withholding. The Employee acknowledges that certain payments
provided for herein are subject to withholding and other taxes.

7. Indemnification.

(a) Notwithstanding the termination of Employee's employment under
Section 8 of this Agreement, it is confirmed that, with respect to all periods
during which Employee shall be employed by Employer, (i) Employer shall
indemnify and reimburse expenses to the fullest extent permitted by the
indemnification and reimbursement provisions of Employer's Certificate of
Incorporation and By-Laws in effect as of the date of this Agreement, provided
that such coverage is not prohibited under the provisions of the applicable
General Corporation Law; and (ii) Employer shall use its best efforts to
maintain in effect it's Directors' and Officers' Indemnification Insurance
policies (under which Employee shall be deemed an "insured" to the fullest
extent provided in such policy) and to purchase substitute policies in form and
content substantially similar to those presently in force during all periods
under which Employee may remain liable under any applicable statute of
limitations. Upon request, Employer shall promptly provide Employee with copies
of all such policies and any notice of cancellation of them.

(b) In addition to the foregoing, as authorized by the Employer's
Certificate of Incorporation and By-Laws in effect as of the date of this
Agreement, the Employer further agrees, to the extent not prohibited by the
applicable General Corporation Law, to defend Employee by legal counsel
reasonably acceptable to Employee in any threatened or pending action, suit or
proceeding as to which Employee may be entitled to indemnification under this
Agreement. In this regard, payment in advance by the Employer of all expenses
incurred or to be incurred by Employee in defending or investigating each and
every such action, suit or proceeding which has been instituted and is pending
on the date of this Agreement or which shall subsequently be instituted is
authorized by the Board of Directors of the Employer, and Employee agrees to
repay such advanced amounts in the event it is ultimately determined that
Employee is not entitled to be indemnified by the Employer as authorized under
its Certificate of Incorporation and By-Laws, and the applicable General
Corporation Law. As regards any decision to advance expenses as to any action,
suit or proceeding not already referred to in this subparagraph, Employee will
be given the same consideration in the reaching of any such decision as shall be
given to any person who is a director or officer of Employer at the time of such
decision.

(c) Employer further agrees to notify Employee of all threatened or
pending actions, suits, or other proceedings by or against Employer to which
Employee is named a party, and to filed in connection with it, and shall
otherwise keep Employee reasonably informed of the status of such actions and
any offers of settlement.

(d) Employee agrees to notify Employer of all threatened or pending
actions, suits, or other proceedings against Employee in any capacity as an
employee of Employer.

<PAGE>

8. Termination.

Notwithstanding Section 3, the term of the Employee's employment
hereunder shall terminate on the earliest of the (i) termination date provided
for under Section 3 or (ii) under any of the paragraphs of this Section 8.

(a) Death. In the event of the Employee's death, the Employee's
employment shall terminate automatically, effective as of the date of death, and
Employer shall pay to his estate the Base Salary amount in effect for that year
for a period of one year after his death. In addition, Employer shall pay to
Employee's estate any other amounts that otherwise would have been paid to the
Employee pursuant to Section 4 for the year after his death.

(b) Disability. If the Employee, due to physical or mental illness,
shall be disabled to perform the essential functions of his employment
hereunder, with or without reasonable accommodation, (a "disability"), then
either the Employee or Employer may by notice terminate the Employee's
employment under this Agreement effective as of a date 30 days after the date
such notice is given. Employee shall continue to receive all compensation
payable under Section 4 for a period of six (6) months after the date such
notice is given; provided, however, that it shall be reduced by the amount of
any disability or similar benefits to which he is entitled, notwithstanding
anything contained elsewhere in this Agreement to the contrary.

(c) By Employer for Cause. The Employee's employment may be terminated
effective immediately by Employer for "cause" by notice of termination to the
Employee. "Cause" for such termination shall be limited to convictions of a
felony, malfeasance in office or a material breach by the Employee of the
covenants contained in this Agreement (as determined by a majority vote of the
Employers Board of Directors), which breach continues for 30 days following
receipt of written notice given by Employer's Board of Directors specifying the
breach and requesting that the Employee correct the same.

(d) Compensation Upon Termination. Except as provided in Sections 8(a)
and 8(b), Employee shall receive compensation upon termination as follows: in
the event that Employer terminates Employee's Employment under this Agreement
other than for cause as provided in Section 8(c), Employee shall be entitled to
receive the full amount of his salary and benefits provided for in Section 6 for
the remaining term of this Agreement, and any stock options or shares under
stock bonus programs held by Employee shall become and remain exercisable or
vested for the period as set forth in the agreement governing such options or
bonus programs.

(e) Termination by Employee.

(i) If Employee shall voluntarily resign from
employment by Employer prior to the expiration of this
Agreement, any compensation payable to Employee under Section
4 shall be prorated through the date of termination.

<PAGE>

(ii) If the Board of Directors or any designee
thereof prohibits Employee from issuing press releases, making
public filings, or prosecuting the business plan outlined in
the Employer's registration statement of Form S-1 that
Employee reasonably believes to be required under federal or
state law and if Employee has received advice of counsel
engaged by him confirming his belief, then Employee shall have
the right to terminate this Agreement. Upon such termination,
Employer shall pay to Employee the compensation payable to
Employee under Section 4 and shall provide the Employee the
benefits required under Section 6, for a period one year from
the date of termination. Employer shall pay the amount
prescribed in this sub-paragraph (ii) in cash on the date of
termination.

9. Exclusivity. Employee shall devote his best efforts to the performance of his
duties under this Agreement. Employee agrees that all information which he
obtains in the course of his employment is the property of Employer and agrees
that he will not discuss any such information or use any such information for
the benefit of himself or any person or entity other than Employer at any time
during or after his employment. During the period of five (5) years after
termination of employment of Employee hereunder, Employee agrees that he will
not engage in employment or business activities which are reasonably deemed to
be competitive to Employer and its business. The foregoing restriction shall not
apply if Employer elects to terminate this Agreement without cause and Employee
elects not to receive any further cash compensation as provided under the terms
of this Agreement. The parties hereto, recognizing that irreparable injury will
result to Employer, its business and property in the event of a breach of this
Agreement by Employee, and that employment is based primarily upon this
Agreement, it is agreed that in such event Employer shall be entitled, in
addition to any other remedies and damages available, to an injunction to
restrain the violation thereof by Employee, his partners, agents, servants,
employers, and Employees, and all persons acting for or with him. The Employee
represents and admits that in the event of the termination of his employment for
any cause whatsoever, his experiences and capabilities are such that he can
obtain employment in business engaged in other lines and/or of a different
nature, and that the enforcement of a remedy by way of injunction will not
prevent him from earning a livelihood.

10. Representation by the Employee.

The Employee hereby represents and warrants to Employer that the
execution of this Agreement and the performance of his duties and obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or by which he is bound and that he is not now subject to any
covenant against competition or similar covenant that would affect the
performance of his duties hereunder.

11. No Assignment.

This Agreement is personal and shall in no way be subject to
assignment, except by Employer incident to the sale of all or substantially all
of its business (whether by asset sale, stock sale or merger). Any attempt by
one party to assign this Agreement in any other circumstances without the prior
written consent of the other party shall be null and void.

<PAGE>

12. Loan.

Concurrent with the consummation of the IPO, Employer shall loan to
Employee Six Hundred Thousand Dollars ($600,000) to be repaid in eight equal
annual installments with interest accruing at the applicable federal rate
("AFR") as published by the Internal Revenue Service on the date of the loan.
The loan shall be unsecured but Employer shall have the right to set-off any
payments otherwise due Employee against due but not yet made payments of
Employee under the loan. The loan may be prepaid by Employee at any time and in
any amount without penalty.

13. Enforceability.

If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a duly authorized court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

14. Notices.

All notices and other communications required or permitted to be given
hereunder shall be given by delivering the same in hand or by mailing the same
by certified or registered mail, return receipt requested, postage prepaid, as
follows:

if to Employer, to: The PRIMA Group International, Inc.
447 S. Sharon Amity Road, Ste. 250
Charlotte, North Carolina 28211

if to the Employee, to: Mr. James R. Currier, Sr.
1301 Meadowood Lane
Charlotte, North Carolina 28211

(or to such other address as either party shall have furnished to the other by
like notice).

A notice shall be effective as of the date of such delivery or mailing, as the
case may be.

15. Entire Agreement.

This Agreement constitutes the only agreement and understanding between
Employer and the Employee in relation to the subject of the Employee's
employment by Employer; and there are no promises, representations, conditions,
provisions or terms related thereto other than those set forth herein. This
Agreement supersedes all previous understandings, agreements and
representations, written or oral, between Employer and the Employee regarding
the Employee's employment by Employer.

<PAGE>

16. Governing Law.

This contract shall be construed under and be governed in all respects
by the internal laws, and not the laws pertaining to choice or conflicts of
laws, of the State of North Carolina.

17. Waiver; Amendment.

No waiver in any instance by either party of any provision of this
Agreement shall be deemed a waiver by such party of such provision in any other
instance or a waiver of any other provision hereunder in any instance. This
Agreement cannot be amended, supplemented or otherwise modified except in a
writing signed by Employer, and by the Employee (so long as he shall be employed
by Employer).

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

The PRIMA Group International, Inc.

By:_______________________________
Name:_____________________________
Title:____________________________

(SEAL) __________________________________
James R. Currier, Sr.

EMPLOYMENT AGREEMENT

AGREEMENT made as of October ___, 1997 between THE PRIMA GROUP
INTERNATIONAL, INC. (Employer") and GIANFRANCO CARBONATO ("Employee").

WITNESSETH:

WHEREAS, the parties hereto desire to provide for the Employee's
employment by Employer.

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:

1. Employment.

Employer agrees to employ the Employee and the Employee agrees to enter
into the employ of Employer on the terms and conditions hereafter set forth. It
is understood that Employee is employed by PRIMA Industrie S.p.A., an Italian
subsidiary of the Employer (hereinafter, the "Italian subsidiary"), wherein the
Employee has a pre-existing employment agreement. Employer and Employee
acknowledge that any benefits described herein are not in addition to current
benefits provided by the Italian subsidiary. Insofar as the benefits described
herein are in addition to those being provided to Employee by the Italian
subsidiary, then the Employee shall be entitled to difference between the
benefits. Insofar as the benefits described herein are less than those being
provided to Employee by the Italian subsidiary, then the Employee shall continue
to enjoy those benefits without reduction or offset to the benefits provided
herein. The parties also acknowledge that as a result of the Employee's Italian
citizenship and residence, certain benefits accrue to the Employee by operation
of Italian law, and this agreement shall not limit or offset the benefits
accruing to the Employee as a result of his Italian citizenship and residence.

2. Capacity and Duties.

The Employee shall be employed as Executive Vice President and Chief
Operating Officer of Employer and shall perform such duties and have such
responsibilities as normally attributed to a chief operating officer of a
Delaware corporation. The Employee shall perform his responsibilities in
accordance with the direction and supervision of the President and the Board of
Directors of Employer, and he shall devote such time, skill, energies, business
judgment, knowledge and best efforts to the business of Employer and the
performance of such executive, administrative and operational duties on behalf
of Employer and its affiliates, appropriate to the offices he holds or shall
hold hereunder, as the President and the Board of Directors of Employer may
request. The requirement that the Employee devote his time to the business of
Employer shall not preclude him from undertaking other business and personal
activities that do not, singly or in the aggregate, materially impair his
ability to fulfill his responsibilities under this Agreement.

<PAGE>

3. Term.

The term of the Employee's employment hereunder shall be for the a
period of three (3) years, commencing on the effective date of Employer's
Initial Public Offering ("IPO") and ending on the date prior to the third
anniversary of the date thereof, unless such term is terminated earlier by or
pursuant to Section 8. In addition, the term of Employee's employment shall
commence (a) only after Employee has received confirmation that a director and
officer liability policy satisfactory to Employee is in full force and effect
and that said policy covers Employee; and (b) the Compensation Committee of
Employer, consisting of at least two independent directors, shall approve this
Agreement. The term of employment shall be automatically renewed for successive
one-year terms, unless written notice of termination is given by either party
not less than ninety (90) days prior to the end of the initial three-year, or
the then current one-year, term.

4. Compensation.

(a) Salary. Employer shall pay or cause to be paid to the Employee a
salary of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) per year, payable in
equal semi-monthly installments (the "Base Salary"). The Base Salary shall be
increased each year on the anniversary of the effective date of this Agreement
in line with increases in the cost of living for the immediately proceeding
twelve (12) months. However, in no event shall such increase be less than the
percentage increase in the "Consumer Price Index - United States Average for the
Urban Wage Earners and Clerical Workers - All Items", as published by the United
States Department of Labor (Bureau of Labor Statistics) for the immediately
preceding twelve (12) months. In addition, Base Salary shall be reviewed prior
to each anniversary date of this Agreement by the Board of Directors of
Employer. Prima Industrie S.p.A. shall be responsible for ______ percent
(_____%) of the base salary.

(b) For each fiscal year during the term of this Agreement, beginning
with the fiscal year ending December 31, 1998, Employee shall receive a bonus
payable at the discretion of the Board of Directors, or any committee thereof,
based upon operational, financial and stock market performance of Employer.

6. Benefits and Vacations.

2
<PAGE>

anniversary of the effective date, respectively. The exercise price for the
installments shall be 120%, 130% and 140%, respectively, of the public offering
price of the IPO. The options shall have a term of ten years (five years if
Employee is a ten percent (10%) shareholder and the option is an incentive stock
option as defined under Section 422 of the Internal Revenue Code) from vesting
and shall survive termination or expiration of this Agreement. If this Agreement
is terminated for cause as defined herein, then those options vested at the time
of such termination will be exercisable for a period of six months after
termination. If the Employee leaves the employment by Employer for reasons other
than termination for cause, then the options shall remain exercisable during
their full term.

(b) Insurance.

(c) Automobile Allowance. Employee shall receive an automobile
allowance, payable by Employer's Italian subsidiary and the Employee's existing
terms and conditions of employment with that subsidiary.

(e) Withholding. The Employee acknowledges that certain payments
provided for herein are subject to withholding and other taxes.

7. Indemnification.

<PAGE>

under any applicable statutes of limitations. Upon request, Employer shall
promptly provide Employee with copies of all such policies and any notice of
cancellation of them.

(d) Employee agrees to notify Employer of all threatened or pending
actions, suits, or other proceedings against Employee in any capacity as an
employee of Employer.

8. Termination.

(a) Death. In the event of the Employee's death, the Employee's
employment shall terminate automatically, effective as of the date of death, and
Employer shall pay to his estate the salary that otherwise would have been paid
to the Employee pursuant to Section 4(a) up to the end of the fiscal quarter in
which he died.

4
<PAGE>

(d) Compensation Upon Termination. Except as provided in Sections 8(a)
and 8(b), Employee shall receive compensation upon termination as follows: in
the event that Employer terminates Employee's Employment under this Agreement
other than for cause as provided in Section 8(c), Employee shall be entitled to
receive the full amount of his salary and benefits provided for in Section 6 for
the remaining term of this Agreement, and any stock options or shares under
stock bonus programs held by Employee shall become and remain exercisable or
vested for a period of the remaining term of this Agreement or for one (1) full
year, whichever is longer.

(e) Termination by Employee.

(ii) If the Board of Directors or any designee
thereof prohibits Employee from issuing press releases or
making public filings that Employee reasonably believes to be
required under federal or state law and if Employee has
received advice of counsel engaged by him confirming his
belief, then Employee shall have the right to terminate this
Agreement. Upon such termination, Employer shall pay to
Employee the compensation payable to Employee under Section 4
and shall provide the Employee the benefits required under
Section 6, for a period one year from the date of termination.
Employer shall pay the amount prescribed in this sub-paragraph
(ii) in cash on the date of termination.

9. Exclusivity. Employee shall devote his best efforts to the performance of his
duties under this Agreement. Employee agrees that all information which he
obtains in the course of his employment is the property of Employer and agrees
that he will not discuss any such information or use any such information for
the benefit of himself or any person or entity other than Employer at any time
during or after his employment. During the period of one (1) year after
termination of employment of Employee hereunder, Employee agrees that he will
not engage in employment or business activities which are reasonably deemed to
be competitive to Employer and its business. The foregoing restriction shall not
apply if Employer elects to terminate this Agreement without cause and Employee
elects not to receive any further cash compensation as provided under the terms
of this Agreement. The parties hereto, recognizing that irreparable injury will
result to Employer, its business and property in the event of a breach of this
Agreement by Employee, and that employment is based primarily upon this
Agreement, it is agreed that in such event Employer shall be entitled, in
addition to any other remedies and damages available, to an injunction to

<PAGE>

restrain the violation thereof by Employee, his partners, agents, servants,
employers, and Employees, and all persons acting for or with him. The Employee
represents and admits that in the event of the termination of his employment for
any cause whatsoever, his experiences and capabilities are such that he can
obtain employment in business engaged in other lines and/or of a different
nature, and that the enforcement of a remedy by way of injunction will not
prevent him from earning a livelihood.

10. Representation by the Employee.

11. No Assignment.

12. Enforceability.

13. Notices.

if to Employer, to: The PRIMA Group International, Inc.
447 S. Sharon Amity Road, Ste. 250
Charlotte, North Carolina 28211

if to the Employee, to: Mr. Gianfranco Carbonato
C. Siracusa 108
10137 Torino
Italy

(or to such other address as either party shall have furnished to the other by
like notice).

<PAGE>

A notice shall be effective as of the date of such delivery or mailing, as the
case may be.

14. Entire Agreement.

15. Governing Law.

This contract shall be construed under and be governed in all respects
by the internal laws, and not the laws pertaining to choice or conflicts of
laws, of the State of North Carolina.

16. Waiver; Amendment.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

The PRIMA Group International, Inc.

By:______________________________________
Name:____________________________________
Title:___________________________________

_____________________________(SEAL)
Gianfranco Carbonato

EMPLOYMENT AGREEMENT

AGREEMENT made as of March 16, 1998 between THE PRIMA GROUP
INTERNATIONAL, INC. (Employer") and GIOVANNI CIAMARONI ("Employee").

WITNESSETH:

WHEREAS, the parties hereto desire to provide for the Employee's
employment by Employer.

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:

1. Employment.

Employer agrees to employ the Employee and the Employee agrees to enter
into the employ of Employer on the terms and conditions hereafter set forth.

2. Capacity and Duties.

The Employee shall be employed as Vice President/Business Development
of Employer and shall perform such duties and have such responsibilities as
designated by the President of Employer and the Bylaws of Employer. The Employee
shall perform his responsibilities in accordance with the direction and
supervision of the President or the Board of Directors of Employer, and he shall
devote such time, skill, energies, business judgment, knowledge and best efforts
to the business of Employer and the performance of such executive,
administrative and operational duties on behalf of Employer and its affiliates,
appropriate to the offices he holds or shall hold hereunder, as the President or
the Board of Directors of Employer may request. The requirement that the
Employee devote his time to the business of Employer shall not preclude him from
undertaking other business and personal activities that do not, singly or in the
aggregate, materially impair his ability to fulfill his responsibilities under
this Agreement. Employer specifically acknowledges that Employee will continue
to provide consulting services on a part-time basis and that, from time to time,
this may create a conflict of interest. Employee agrees to offer Employer the
opportunity to take advantage of any business opportunities which arise from
Employee's consulting services.

3. Term.

<PAGE>

successive one-year terms, unless written notice of non-renewal is given by
either party not less than ninety (90) days prior to the end of the initial
three-year, or the then current one-year, term.

4. Compensation.

(a) Salary. Employer shall pay or cause to be paid to the Employee a
salary of ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000) per year, payable in
equal semi-monthly installments (the "Base Salary"). The Base Salary shall be
increased each year on the anniversary of the effective date of this Agreement
in line with increases in the cost of living for the immediately preceding
twelve (12) months. However, in no event shall such increase be less than the
percentage increase in the "Consumer Price Index - United States Average for the
Urban Wage Earners and Clerical Workers - All Items", as published by the United
States Department of Labor (Bureau of Labor Statistics) for the immediately
preceding twelve (12) months. In addition, Base Salary shall be reviewed prior
to each anniversary date of this Agreement by the Board of Directors of
Employer.

(i) As consideration for the covenants of Employee in
section 9 for the initial term of this Agreement, Employer
shall pay to Employee, within five (5) business days of the
consummation of Employer's initial public offering ("IPO"),
the sum of ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000). The
non-vested portions of this payment shall be subject to
forfeiture if Employee voluntarily terminates this Agreement
prior to the expiration of the initial term. One-third of the
payment will vest on the effectiveness of the term of this
Agreement. The remaining one-third portions of the payment
will vest on the first and second anniversaries of the
effectiveness of this Agreement, respectively.

<PAGE>

6. Benefits and Vacations.

(b) Insurance.

(c) Automobile Allowance. Employee shall receive an automobile
allowance of $1,500 per month during the term of this Agreement.

3
<PAGE>

(e) Withholding. The Employee acknowledges that certain payments
provided for herein are subject to withholding and other taxes.

7. Indemnification.

(d) Employee agrees to notify Employer of all threatened or pending
actions, suits, or other proceedings against Employee in any capacity as an
employee of Employer.

4
<PAGE>

8. Termination.

(e) Termination by Employee.

5
<PAGE>

reasonably believes to be required under federal or state law
and if Employee has received advice of counsel engaged by him
confirming his belief, then Employee shall have the right to
terminate this Agreement. Upon such termination, Employer
shall pay to Employee the compensation payable to Employee
under Section 4 and shall provide the Employee the benefits
required under Section 6, for a period one year from the date
of termination. Employer shall pay the amount prescribed in
this sub-paragraph (ii) in cash on the date of termination.

10. Representation by the Employee.

11. No Assignment.

<PAGE>

12. Loan.

13. Enforceability.

14. Notices.

if to Employer, to: The PRIMA Group International, Inc.
447 S. Sharon Amity Road, Ste. 250
Charlotte, North Carolina 28211

if to the Employee, to: Mr. Giovanni Ciamaroni
Falkestrasse 57b
D-46146 Oberhausen
Germany

(or to such other address as either party shall have furnished to the other by
like notice).

A notice shall be effective as of the date of such delivery or mailing, as the
case may be.

15. Entire Agreement.

<PAGE>

16. Governing Law.

This contract shall be construed under and be governed in all respects
by the internal laws, and not the laws pertaining to choice or conflicts of
laws, of the State of North Carolina.

17. Waiver; Amendment.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

The PRIMA Group International, Inc.

By:________________________________
Name:______________________________
Title:_____________________________

(SEAL) ___________________________________
Giovanni Ciamaroni

THE PRIMA GROUP INTERNATIONAL, INC
1997 STOCK INCENTIVE PLAN

SECTION 1. PURPOSE.

The purpose of the Plan is to promote the interests of the Company and
its stockholders by aiding the Company in attracting and retaining management
personnel capable of assuring the future success of the Company, to offer such
personnel incentives to put forth maximum efforts for the success of the
Company's business and to afford such personnel an opportunity to acquire a
proprietary interest in the Company.

SECTION 2. DEFINITIONS.

As used in the Plan, the following terms shall have the meanings set
forth below:

(a) "Affiliate" shall mean (i) any entity that, directly or indirectly
through one or more intermediaries, is controlled by the Company, and (ii) any
entity in which the Company has a significant equity interest, in each case as
determined by the Committee. Prima Industries S.p.A. and Prima Electronics
S.p.A. shall be deemed Affiliates as of the Effective Date.

(b) "Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent or Other
Stock-Based Award granted under the Plan.

(c) "Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the Plan.

(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any regulations promulgated thereunder.

(e) "Committee" shall mean a committee of the Board of Directors of the
Company designated by such Board to administer the Plan, which shall consist of
members appointed from time to time by the Board of Directors.

(f) "Company" shall mean The Prima Group International, Inc., a
Delaware corporation, and any successor corporation.

(g) "Dividend Equivalent" shall mean any right granted under Section
6(e) of the Plan.

(h) "Effective Date" shall mean the date on which the stockholders of
the Company shall approve the Plan.

(i) "Eligible Person" shall mean any employee or officer of the Company
or any Affiliate who the Committee determines to be an Eligible Person. A
director of the Company who is not also an employee of the Company or an
Affiliate shall be an Eligible Person. In addition, "Eligible Person" shall
include any other individual defined as an employee under paragraph (1)(a) of
General Instruction A to Form S-8, promulgated under the Securities Act of 1933,
as amended,

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by the Securities and Exchange Commission as amended from time to time, or any
successor provision.

(j) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee. If at the time the determination
of fair market value is made, the Shares are traded on a national securities
exchange for which sales prices are regularly reported, the fair market value of
a share shall be the mean of the high and low bid prices or the closing sales
price reported for the Shares on that exchange on the day that the determination
of fair market value is made or, if such day is not a trading date, then on the
most recent preceding trading day (or the most recent trading day preceding the
day). For these purposes, the term "national securities exchange" shall include
the NASDAQ Stock Market.

(k) "Incentive Stock Option" shall mean an option granted under Section
6(a) of the Plan that is intended to meet the requirements of Section 422 of the
Code or any successor provision.

(l) "Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.

(m) "Option" shall mean an Incentive Stock Option or a NonQualified
Stock Option.

(n) "Other Stock-Based Award" shall mean any right granted under
Section 6(f) of the Plan.

(o) "Participant" shall mean an Eligible Person designated to be
granted an Award under the Plan.

(p) "Performance Award" shall mean any right granted under Section 6(d)
of the Plan.

(q) "Person" shall mean any individual, corporation, partner-ship,
association or trust.

(r) "Plan" shall mean this 1997 Stock Incentive Plan, as amended from
time to time.

(s) "Restricted Stock" shall mean any Share granted under Section 6(c)
of the Plan.

(t) "Restricted Stock Unit" shall mean any unit granted under Section
6(c) of the Plan evidencing the right to receive a Share (or a cash payment
equal to the Fair Market Value of a Share) at some future date.

(u) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended,
or any successor rule or regulation.

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(v) "Shares" shall mean shares of Common Stock, par value $0.01 per
share, of the Company or such other securities or property as may become subject
to Awards pursuant to an adjustment made under Section 4(c) of the Plan.

(w) "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.

SECTION 3. ADMINISTRATION.

(a) Power and Authority of the Committee. The Plan shall be
administered by the Committee. Subject to the express provisions of the Plan and
to applicable law, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to each Participant under the Plan; (iii) determine the number of Shares to be
covered by (or with respect to which payments, rights or other matters are to be
calculated in connection with) each Award; (iv) determine the terms and
conditions of any Award or Award Agreement; (v) amend the terms and conditions
of any Award or Award Agreement and accelerate the exercisability of Options or
the lapse of restrictions relating to Restricted Stock, Restricted Stock Units
or other Awards; (vi) determine whether, to what extent and under what
circumstances Awards may be exercised in cash, Shares, other securities, other
Awards or other property, or canceled, forfeited or suspended; (vii) determine
whether, to what extent and under what circumstances, cash, Shares, other
securities, other Awards, other property and other amounts payable with respect
to an Award under the Plan shall be deferred either automatically or at the
election of the holder thereof or the Committee; (viii) interpret and administer
the Plan and any instrument or agreement relating to, or Award made under, the
Plan; (ix) establish, amend, suspend or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (x) make any other determination and take any other action that
the Commit-tee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be
made at any time and shall be final, conclusive and binding upon any
Participant, any holder or beneficiary of any Award and any employee of the
Company or any Affiliate. In exercising its authority pursuant to the Plan, the
Committee shall adhere to all provisions of the Code as are applicable to the
grant, issuance and exercise of any Award.

(b) Delegation. The Committee may delegate its powers and duties under
the Plan to one or more officers of the Company or any Affiliate or a committee
of such officers, subject to such terms, conditions and limitations as the
Committee may establish in its sole discretion; provided, however, that the
Committee shall not delegate its powers and duties under the Plan with regard to
officers or directors of the Company or any Affiliate who are subject to Section
16 of the Securities Exchange Act of 1934, as amended.

SECTION 4. SHARES AVAILABLE FOR AWARDS.

(a) Shares Available. Subject to adjustment as provided in Section
4(c), the number of

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Shares available for granting Awards under the Plan shall be 1,000,000. Shares
to be issued under the Plan may be either Shares reacquired and held in the
treasury or authorized but unissued Shares. If any Shares covered by an Award or
to which an Award relates are not purchased or are forfeited, or if an Award
otherwise terminates without delivery of any Shares, then the number of Shares
counted against the aggregate number of Shares available under the Plan with
respect to such Award, to the extent of any such forfeiture or termination,
shall again be available for granting Awards under the Plan. The Company shall
at all times keep available the number of Shares to satisfy Awards granted under
the Plan.

(b) Accounting for Awards. For purposes of this Section 4, if an Award
entitles the holder thereof to receive or purchase Shares, the number of Shares
covered by such Award or to which such Award relates shall be counted on the
date of grant of such Award against the aggregate number of Shares available for
granting Awards under the Plan.

(c) Adjustments. In the event that the Committee shall determine that
any dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company
or other similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as it
may deem equitable, adjust any or all of (i) the number and type of Shares (or
other securities or other property) which thereafter may be made the subject of
Awards, (ii) the number and type of Shares (or other securities or other
property) subject to outstanding Awards and (iii) the purchase or exercise price
with respect to any Award; provided, however, that the number of Shares covered
by any Award or to which such Award relates shall always be a whole number.

SECTION 5. ELIGIBILITY.

(a) Designation of Participants. Any Eligible Person, including any
Eligible Person who is an officer or director of the Company or any Affiliate,
shall be eligible to be designated a Participant. In determining which Eligible
Persons shall receive an Award and the terms of any Award, the Committee may
take into account the nature of the services rendered by the respective Eligible
Persons, their present and potential contributions to the success of the Company
or such other factors as the Committee, in its discretion, shall deem relevant.
Notwithstanding the foregoing, an Incentive Stock Option may only be granted to
full or part-time employees (which term as used herein includes, without
limitation, officers and directors who are also employees) and an Incentive
Stock Option shall not be granted to an employee of an Affiliate unless such
Affiliate is also a "subsidiary corporation" of the Company within the meaning
of Section 424(f) of the Code or any successor provision.

(b) Award Limitations Under the Plan. No Eligible Person, who is an
employee of the Company at the time of grant, may be granted any Award or
Awards, the value of which Awards are based solely on an increase in the value
of the Shares after the date of grant of such Awards, for

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more than 200,000 Shares, in the aggregate, in any one calendar year, beginning
with the period commencing on the Effective Date and ending on December 31,
2007. The foregoing annual limitation specifically includes the grant of any
Awards representing "qualified performance-based compensation" within the
meaning of Section 162(m) of the Code.

SECTION 6. AWARDS.

(a) Options. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:

(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee; provided, however, that such
purchase price shall not be less than 100% of the Fair Market Value of a Share
on the date of grant of such Option.

(ii) Option Term. The term of each Option shall be fixed by the
Committee.

(iii) Time and Method of exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part and the
method or methods by which, and the form or forms (including, without
limitation, cash, Shares, promissory notes, other securities, other Awards or
other property, or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price) in which, payment of the
exercise price with respect thereto may be made or deemed to have been made.

(iv) Incentive and Non-qualified Stock Options. Each Option granted
pursuant to the Plan shall specify whether it is an Incentive Stock Option or a
Non-qualified Stock Option, provided that the Committee may, in the case of the
grant of an Incentive Stock Option, give the Participant the right to receive in
its place a Non-qualified Stock Option with identical provisions.

(b) Stock Appreciation Rights. The Committee is hereby authorized to
grant Stock Appreciation Rights to Participants subject to the terms of the Plan
and any applicable Award Agreement. A Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive upon exercise thereof
the excess of (i) the Fair Market Value of one Share on the date of exercise
(or, if the Committee shall so determine, at any time during a specified period
before or after the date of exercise) over (ii) the grant price of the Stock
Appreciation Right as specified by the Committee, which price shall not be less
than 100% of the Fair Market Value of one Share on the date of grant of the
Stock Appreciation Right. Subject to the terms of the Plan and any applicable
Award Agreement, the grant price, term, methods of exercise, dates of exercise,
methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.

(c) Restricted Stock and Restricted Stock Units. The Committee is
hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units
to Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the

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provisions of the Plan as the Committee shall determine:

(i) Restrictions. Shares of Restricted Stock and Restricted Stock Units
shall be subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to vote a
Share of Restricted Stock or the right to receive any dividend or other
right or property with respect thereto), which restrictions may lapse
separately or in combination at such time or times, in such
installments or otherwise as the Committee may deem appropriate.

(ii) Stock Certificates. Any Restricted Stock granted under the Plan
shall be evidenced by the issuance of a stock certificate or
certificates, which certificate or certificates shall be held by the
Company. Such certificate or certificates shall be registered in the
name of the Participant and shall bear an appropriate legend referring
to the terms, conditions and restrictions applicable to such Restricted
Stock. In the case of Restricted Stock Units, no Shares shall be issued
at the time such Awards are granted.

(iii) Forfeiture; Delivery of Shares. Except as otherwise determined by
the Committee, upon termination of employment (as determined under
criteria established by the Committee) during the applicable
restriction period, all Shares of Restricted Stock and all Restricted
Stock Units at such time subject to restriction shall be forfeited and
reacquired by the Company; provided, however, that the Committee may,
when it finds that a waiver would be in the best interest of the
Company, waive, in whole or in part, any or all remaining restrictions
with respect to Shares of Restricted Stock or Restricted Stock Units.
Any Share representing Restricted Stock that is no longer subject to
restrictions shall be delivered to the holder thereof promptly after
the applicable restrictions lapse or are waived. Upon the lapse or
waiver of restrictions and the restricted period relating to Restricted
Stock Units evidencing the right to receive Shares, such Shares shall
be issued and delivered to the holders of the Restricted Stock Units.

(d) Performance Awards. The Committee is hereby authorized to grant
Performance Awards to Participants subject to the terms of the Plan and any
applicable Award Agreement. A Performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards or other property and (ii)
shall confer on the holder thereof the right to receive payments, in whole or in
part, upon the achievement of such performance goals during such performance
periods as the Committee shall establish. Subject to the terms of the Plan and
any applicable Award Agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
Performance Award granted, the amount of any payment or transfer to be made
pursuant to any Performance Award and any other terms and conditions of any
Performance Award shall be determined by the Committee.

(e) Dividend Equivalents. The Committee is hereby authorized to grant
to Participants Dividend Equivalents under which such Participants shall be
entitled to receive payments (in cash,

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Shares, other securities, other Awards or other property as determined in the
discretion of the Committee) equivalent to the amount of cash dividends paid by
the Company to holders of Shares with respect to a number of Shares determined
by the Committee. Subject to the terms of the Plan and any applicable Award
Agreement, such Dividend Equivalents may have such terms and conditions as the
Committee shall determine.

(f) Other Stock-Based Awards. The Committee is hereby authorized to
grant to Participants such other Awards that are denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to,
Shares (including, without limitation, securities convertible into Shares), as
are deemed by the Committee to be consistent with the purpose of the Plan;
provided, however, that such grants must comply with Rule 16b-3 and applicable
law. Subject to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine the terms and conditions of such Awards. Shares or
other securities delivered pursuant to a purchase right granted under this
Section 6(f) shall be purchased for such consideration, which may be paid by
such method or methods and in such form or forms (including without limitation,
cash, Shares, promissory notes, other securities, other Awards or other property
or any combination thereof), as the Committee shall determine, the value of
which consideration, as established by the Committee, shall not be less than
100% of the Fair Market Value of such Shares or other securities as of the date
such purchase right is granted.

(g) General.

(i) No Cash Consideration for Awards. Awards shall be granted for no
cash consideration or for such minimal cash consideration as may be
required by applicable law.

(ii) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to,
in tandem with or in substitution for, any other Award or any award
granted under any plan of the Company or any Affiliate other than the
Plan. Awards granted in addition to or in tandem with other Awards or
in addition to or in tandem with awards granted under any such other
plan of the Company or any Affiliate may be granted either at the same
time as or at a different time from the grant of such other Awards or
awards.

(iii) Forms of Payment under Awards. Subject to the terms of the Plan
and of any applicable Award Agreement, payments or transfers to be made
by the Company or an Affiliate upon the grant, exercise or payment of
an Award may be made in such form or forms as the Committee shall
determine (including, without limitation, cash, Shares, promissory
notes, other securities, other Awards or other property or any
combination thereof), and may be made in a single payment or transfer,
in installments or on a deferred basis, in each case in accordance with
rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred payments
or the grant or crediting of Dividend

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Equivalents with respect to installment or deferred payments.

(iv) Limits on Transfer Awards. No Award and no right under any such
Award shall be transferable by a Participant otherwise than by will or
by the laws of descent and distribution; provided however that, if so
determined by the Committee, a Participant may, in the manner
established by the Committee, designate a beneficiary or beneficiaries
to exercise the rights of the Participant and receive any property
distributable with respect to any Award upon the death of the
Participant. Each Award or right under any Award shall be exercisable
during the Participant's lifetime only by the Participant or, if
permissible under applicable law, by the Participant's guardian or
legal representative. No Award or right under any such Award may be
pledged, alienated, attached or otherwise encumbered, and any purported
pledge, alienation, attachment or encumbrance thereof shall be void and
unenforceable against the Company or any Affiliate.

(v) Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee.

(vi) Restrictions; Securities Exchange Listing. All certificates for
Shares or other securities delivered under the Plan pursuant to any
Award or the exercise thereof shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under
the Plan or the rules, regulations and other requirements of the
Securities and Exchange Commission and any applicable federal or state
securities laws, and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such
restrictions. If the Shares or other securities are traded on a
securities exchange, the Company shall not be required to deliver any
Shares or other securities covered by an Award unless and until such
Shares or other securities have been admitted for trading on such
securities exchange.

(h) Formula Grant. Each director who is not an employee of the Company
or a shareholder (or designated by a shareholder to serve as a representative of
that shareholder on the Board of Directors) (an "Outside Director") shall
receive an Option to purchase 500 shares of the Company's Common Stock on the
date that such director first becomes a director of the Company (the "Initial
Option"). The exercise price for the Initial Option shall be 105% of the Fair
Market Value of the shares of Common Stock. Thereafter, each Outside Director
shall receive an Option to purchase 500 shares of the Company's Common Stock on
each anniversary of his becoming a director with an exercise price equal to the
Fair Market Value of the Company's Common Stock. Each Option granted under this
Section 6(h) shall be a non-qualified stock option, shall have a term of ten
(10) years regardless of whether the Outside Director continues to serve on the
Board of Director and shall be exercisable not less than six (6) months after
the date of grant. The grants of Options hereunder shall be automatic and
nondiscretionary. The provisions set forth in this Section 6(h) shall not be
amended more than once every six (6) months, other than to comport with changes
to the Code, the Employee Retirement Income Security Act of 1974, as amended, or
the values thereunder.

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SECTION 7. AMENDMENT AND TERMINATION; ADJUSTMENTS.

Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:

(a) Amendments to the Plan. The Board of Directors of the Company may
amend, alter, suspend, discontinue or terminate the Plan; provided however,
that, notwithstanding any other provision of the Plan or any Award Agreement,
without the approval of the stockholders of the Company, no such amendment,
alteration, suspension, discontinuation or termination shall be made that,
absent such approval:

(i) would cause Rule 16b-3 to become unavailable with respect to the
Plan;

(ii) would violate the rules or regulations of the NASDAQ Stock Market,
any other securities exchange or the National Association of Securities
Dealers, Inc., that are applicable to the Company; or

(iii) would cause the Company to be unable, under the Code, to grant
Incentive Stock Options under the Plan.

(b) Amendments to Awards. The Committee may waive any conditions of or
rights of the Company under any outstanding Award, prospectively or
retroactively. The Committee may not amend, alter, suspend, discontinue or
terminate any outstanding Award, prospectively or retroactively, without the
consent of the Participant or holder or beneficiary thereof, except as otherwise
herein provided.

(c) Correction of Defects, Omissions and Inconsistencies. The Committee
may correct any defect, supply any omission or reconcile any inconsistency in
the Plan or any Award in the manner and to the extent it shall deem desirable to
carry the Plan into effect.

SECTION 8. INCOME TAX WITHHOLDING; TAX BONUSES.

(a) Withholding. In order to comply with all applicable foreign,
federal or state income tax laws or regulations, the Company may take such
action as it deems appropriate to ensure that all applicable federal or state
payroll, withholding, income or other taxes, which are the sole and absolute
responsibility of a Participant, are withheld or collected from such
Participant. In order to assist a Participant in paying all or a portion of the
federal and state taxes to be withheld or collected upon exercise or receipt of
(or the lapse of restrictions relating to) an Award, the Committee, in its
discretion and subject to such additional terms and conditions as it may adopt,
may permit the Participant to satisfy such tax obligation by (i) electing to
have the Company withhold a portion of the Shares otherwise to be delivered upon
exercise or receipt of (or the lapse of restrictions relating to) such Award
with a Fair Market Value equal to the amount of such taxes or (ii) delivering to
the Company Shares, other than Shares issuable upon exercise or receipt of (or
the lapse of restrictions relating to) such Award, with a Fair Market Value
equal to the amount of

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such taxes. The election, if any, must be made on or before the date that the
amount of tax to be withheld is determined.

(b) Tax Bonuses. The Committee, in its discretion, shall have the
authority, at the time of grant of any Award under this Plan or at any time
thereafter, to approve cash bonuses to designated Participants to be paid upon
their exercise or receipt of (or the lapse of restrictions relating to) Awards
in order to provide funds to pay all or a portion of federal and state taxes due
as a result of such exercise or receipt (or the lapse of such restrictions). The
Committee shall have full authority in its discretion to determine the amount of
any such tax bonus.

SECTION 9. GENERAL PROVISIONS.

(a) No Rights to Awards. No Eligible Person, Participant or other
Person shall have any claim to be granted any Award under the Plan, and there is
no obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.

(b) Award Agreements. No Participant will have rights under an Award
granted to such Participant unless and until an Award Agreement shall have been
duly executed by the participant and the Company.

(c) No Limit on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company or any Affiliate from adopting or continuing
in effect other or additional compensation arrangements, and such arrangements
may be either generally applicable or applicable only in specific cases.

(d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate, nor will it affect in any way the right of the Company
or an Affiliate to terminate such employment at any time, with or without cause.
In addition, the Company or an Affiliate may at any time dismiss a Participant
from employment free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.

(e) Governing Law. The validity, construction and effect of the Plan or
any Award, and any rules and regulations relating to the Plan or any Award,
shall be determined in accordance with the laws of the State of North Carolina.

(f) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.

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(g) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.

(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash shall be paid in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

(i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

SECTION 10. EFFECTIVE DATE OF THE PLAN.

The Plan shall be effective as of the Effective Date.

SECTION 11. TERM OF THE PLAN.

Unless the Plan shall have been discontinued or terminated as provided
in Section 7(a), the Plan shall terminate on the tenth anniversary of the
Effective Date. No Award shall be granted after the termination of the Plan.
However, unless otherwise expressly provided in the Plan or in an applicable
Award Agreement, any Award theretofore granted may extend beyond the termination
of the Plan, and the authority of the Committee provided for hereunder with
respect to the Plan and any Awards, and the authority of the Board of Directors
of the Company to amend the Plan, shall extend beyond the termination of the
Plan.

AGREEMENT
FOR CO-DEVELOPMENT OF LASER-ON-LINE PRODUCTS AND TECHNOLOGY

This Agreement is made the ___ day of ________, 19__, (the "Effective
Date") by and among THE PRIMA GROUP INTERNATIONAL, INC., a Delaware corporation
with its principal place of business at 447 S. Sharon Amity Road, Suite 250,
Charlotte, North Carolina 28211 ("PRIMA"), PRIMA INDUSTRIE S.P.A., organized
under the laws of Italy with its principal place of business at Via Antonelli,
32, 10097 Regina Margherita Di Collegno, Torino, Italy ("Industrie"), and PRIMA
ELECTRONICS, S.P.A., organized under the laws of Italy with its principal place
of business in Moncalieri, Torino, Italy, ("Electronics"). (PRIMA, Industrie and
Electronics shall be referred to from time to time collectively as "Developers"
and individually as "Developer"); (the "Agreement").

WHEREAS, PRIMA, Industrie and Electronics desire to assist each other
in areas of mutual business interest including development of a new series of
products to be known as the "Laser On Line" series, Technology, and associated
intellectual property, and

WHEREAS, all of the parties hereto will benefit financially from
further Products and Technology development,

NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties agree as follows:

ARTICLE I
GENERAL PROVISIONS

1.01 Agreement of Joint Development. The Developers hereby agree,
subject only to the condition subsequent specified in Section 8.11, to the joint
development of the Products (the "Project") under the terms and provisions of
this Agreement and the rights and liabilities of the Developers shall be as
provided in this Agreement. The Developers do not hereby intend to form a
separate legal entity for the conduct of the development.

1.02 Name of the Project. The name of the Products shall be "Laser on
Line" and the Project shall be known as the "Laser on Line Project", or such
other name as the Developers from time to time may designate. The Developers
shall not cause to be filed an assumed or fictitious name certificate or
certificates for the Project but may seek registration of the name "Laser on
Line" as a trademark or servicemark.

1.03 Purpose of the Project. The purpose of the Project is to research
and develop, experiment with, manufacture and market the Products based upon the
Technology.

1.04 Duration of the Project. The Project shall commence upon the date
of execution of this Agreement, and shall continue until its termination in
accordance with the provisions of this Agreement.

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1.05 Definitions.

(a) "Affiliate" means a Person which directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the Person specified.

(b) "Development Program" shall mean the design, development
and implementation efforts undertaken by the Developers to develop the Products
and Technology under the terms and conditions of this Agreement.

(c) "Development Project" shall mean the efforts undertaken by
the Developers to integrate their services and to develop the Products under the
terms and conditions of this Agreement.

(d) "Patents" means all United States patents, patent
applications, all reissue and renewal applications, all divisional applications,
all continuation applications, all continuation-in-part applications, and all
corresponding foreign patents and patent applications which in the absence of a
valid license agreement would be infringed by the use, sale or manufacture or
other disposition of the Products or Technology.

(e) "Pre-existing Technology" shall means hardware, software,
know-how, or designs owned by or licensed to Electronics and Industrie existing
prior to the Effective Date, necessary for the development, implementation and
use of the Product and Technology.

(f) "Products" shall mean any and all tangible and intangible
products, including but not limited to hardware and software, to be known as the
"Laser on Line" series developed under this Agreement by the Developers and
Technology incorporated therein.

(g) "Technology" shall mean all inventions, know-how,
developments, improvements, technical data, results, data, designs, hardware,
software and other information in any form, patentable or unpatentable, which
are conceived, created, written, developed, reduced to practice, and acquired by
the Developers during the Duration of the Project and which relate to the
Development Project.

(h) "United States" means the United States of America, its
possessions and its territories.

(i) "GAAP" means generally accepted accounting principles.

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ARTICLE II

2.01 Contributions.

(a) PRIMA will provide funding for all Project activities
which shall be accounted for by the parties in accordance with United States
GAAP. PRIMA undertakes to use its best efforts to make available to Industrie
and Electronics such funds for research and development of the Products and
Technology as is reasonably necessary, in order for Industrie and Electronics to
pursue their obligations hereunder.

(b) Industrie and Electronics shall provide to the Project any
necessary rights in existing Technology, personnel, facilities, and daily
management.

ARTICLE III
PROJECT MANAGEMENT

3.01 Management of the Project. Strategic management of the Project
shall be provided by PRIMA; on site management and daily control of the business
and affairs of the Project shall be vested in Industrie, except as may be
otherwise provided in this Agreement.

3.02 Limitations on Authority. Notwithstanding any other provision of
this Agreement, no one Developer shall have the power, without the written
consent of the other Developers, to grant, encumber, license, transfer or
otherwise create any rights in any of the Technology in favor of any party other
than the Developers.

3.03 Products Liability or Infringement Claims. Each Developer shall
notify the other Developers of any infringement or products liability claim,
suit, action or proceeding against it arising from the development, sale,
assignment, licensing or other distribution of the Products. PRIMA shall have
the right, but not the obligation, to defend on behalf of itself and the other
Developers any such claim, suit, action or proceeding. The expenses (including
attorneys' fees) incurred in connection with the defense of any such claim,
suit, action or proceeding shall be allocated among the Developers in accordance
with US GAAP.

3.04 No Compensation. The Developers shall receive no compensation for
performing their duties as Developers under this Agreement.

3.05 Contracts with the Developers or their Affiliates.

(a) Industrie and Electronics may enter into contracts for
goods or services between themselves and/or any other Developer or any
Affiliates of any Developer. The validity of any transaction, agreement or
payment involving the Developer and the Project, or any Affiliate of a Developer
and the Project, otherwise permitted by the terms of this Agreement shall not be
affected by reason of (i) the relationship between the Project and Developer or
any Affiliate of any Developer or (ii) the approval of the transaction,
agreement or payment to the Developer or any Affiliate by officers or directors
of the Developer.

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(b) Industrie shall, among other things and in accordance with
its management and operation of the Project as contemplated in this Agreement,
(i) manufacture the Products during the term of this Agreement, and (ii) provide
marketing services for the Products in Italy.

3.06 Insurance. Industrie shall (a) maintain, with insurers or
underwriters of good repute, such insurance relating to the Project and the
Products as is customary for business of a like nature to maintain against such
risks (including without limitation against product liability actions and
actions in respect of product liability by third parties or any of the
Developers pursuant to such terms (including deductible limits or self-insured
retentions) as are customary for such businesses, and (b) pay all premiums and
other sums payable in respect of maintaining such insurance.

ARTICLE IV
DEVELOPMENT OF PRODUCTS AND TECHNOLOGY

4.01 Development agreement. Industrie and Electronics jointly and
severally agree to use their best efforts to perform research and
experimentation, including research and experimentation necessary to obtain
approval under any law or regulation in the United States, Italy or the world
governing intellectual property rights pertaining to the Products and/or
Technology for purposes of sale, licensing or other disposition around the
world; and that Industrie and Electronics shall pursue full and complete
intellectual property registration and protection of the Products and Technology
under such laws of such countries as agreed to from time to time by the
Developers.

4.02 Efforts of Developers. Industrie and Electronics shall diligently
pursue steps to continue to develop and improve the Products and Technology and
will take all steps necessary, in their reasonable judgment, to perfect the
Products and Technology as fully as possible.

4.03 Ownership of Products and Technology.

(a) PRIMA shall own all right, title and interest in and to
the Products and Technology, including without limitation any patents,
copyrights, trade secrets, know-how and other intellectual property rights
therein under the laws of any country (other than Italy).

(b) It is agreed between the Developers that with regard to
any intellectual property rights acquired in the Products or Technology under
the laws of Italy, Industrie shall be the sole and exclusive owner of any such
property rights, and shall, as between the Developers, have the exclusive right
to sell, assign, license or distribute the Products and Technology (according to
the terms of this Agreement) to any third party domiciled in Italy.

(c) Work Made For Hire: To the extent that the Products or
Technology may be protectable by copyright laws of the United States of America,
copyrights in the Products shall be owned exclusively by PRIMA and shall be
deemed works made for hire for purposes of the U.S. Copyright Act. If the
Products shall be determined not to be work made for hire by a Court or other

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body of competent jurisdiction or if ownership of all right, title, and interest
of copyrights therein shall not otherwise be deemed to vest exclusively in the
owner of PRIMA, then Industrie and Electronics, without additional compensation,
shall forthwith assign to PRIMA, and do by this Agreement hereby assign to
PRIMA, the ownership of such rights, including the copyrights in the Products
and Technology, together with all rights arising from such copyright ownership,
and PRIMA shall have the right to register in its own name such copyrights.
Industrie and Electronics further agree to deliver to PRIMA assignments of all
of Industrie and Electronics other intellectual property rights in the Products
in a form satisfactory to PRIMA and its legal counsel.

4.04 Consultation. Consistent with the purposes and limitations herein,
the Developers shall consult with each other on a continuing basis to evaluate
the current state of the Products and Technology, as well as proposed pending
patent (or other applicable intellectual property rights) with regard to the
Products and Technology. Industrie and Electronics shall promptly communicate to
each other and to PRIMA any improvement or development in the Products or
Technology.

ARTICLE V
ACCESS TO TECHNOLOGY

5.01 Access to Technology. All Developers shall be entitled to access
to the Technology under this Agreement solely for the purposes set forth herein.
The Developers agree that at no time shall any Developer sell, assign, pledge,
license or otherwise dispose of or in any way encumber all or any part of its
interest in the Products or Technology or any other product embodying the
Products or derived from the Technology to any other party, except as agreed
herein. No part of the Products or Technology that is not protected by a patent
or other intellectual property right shall be disclosed by any Developer to any
party except as permitted by this Agreement.

5.02 Protection of Technology. Upon termination of this Agreement, and
subject to PRIMA's rights, Industrie and Electronics shall use their best
efforts to protect and safeguard all tangible manifestations of the Technology
(and all proprietary information of the Venture) in the possession of Industrie
or Electronics or any of their Affiliates, and except as set forth in this
Agreement shall not make, use, sell, disclose, license, or otherwise distribute,
the Products or any part of the Products or Technology or any products embodying
the Products or derived from the Technology and shall not assert that it has any
right to prevent any other Developer from making, using, selling, licensing or
disclosing any of the Technology or any product embodying or derived from the
Products or the Technology so long as such distribution is made in accordance
with the terms of this Agreement.

5.03 Pre-existing Technology. To the extent that any Pre-Existing
Technology is contained in the Products or Technology, Industrie and Electronics
grants to PRIMA an irrevocable, non-exclusive worldwide, royalty free license to
use, sale, market, sublicense or otherwise distribute such Pre-existing
Technology as part of the Products or Technology.

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ARTICLE VI
ASSIGNABILITY OF INTERESTS

6.01 Assignment of Interests. No Developer may sell, transfer, assign,
pledge, license or otherwise dispose of all or any part of its interest in the
Project (whether voluntarily, involuntarily or by operation of law) without the
prior written consent of the other Developers, which consent shall not be
unreasonably withheld by the other Developers.

ARTICLE VII
CONFIDENTIALITY

7.01 Confidentiality. The Products and Technology shall be considered
Confidential Information and maintained in confidence by the Developers. During
this Agreement and thereafter, Developers shall keep the Confidential
Information in strict confidence and shall not disclose it to any person, firm
or corporation, nor use the same for any purpose other than performing the
Development Project. Developers agree to safeguard the Confidential Information
by restricting its internal dissemination only to those employees within their
own companies having a need to know the Confidential Information for purposes of
this Agreement. Notwithstanding anything herein to the contrary, it is
understood and agreed that during the term of this Agreement and thereafter, the
Products shall be free to be used, sold or otherwise distributed to others
without restriction. Each Developer shall advise the other Developers in writing
of any misappropriation or misuse of the Confidential Information of which the
notifying party may become aware.

7.02 Exclusions. The foregoing duty of nonuse and nondisclosure of
Confidential Information shall not apply to information which: (a) is or becomes
in the public domain (for example, the information is disclosed in an issued
patent) through no fault or act of one of the Developers; (b) is obtained by one
of the Developers from a third party under no duty of nonuse and nondisclosure;
(c) is required to be revealed pursuant to law.

ARTICLE VIII
MISCELLANEOUS

8.01 Notices. Notices required or permitted hereunder shall be in
writing and shall be sent to the addresses set forth herein or to such other
addresses as the Parties may hereafter specify, and shall be deemed given on the
earlier of:

(a) physical delivery to a Developer; and

(b) five (5) days after mailing by prepaid first class or
express mail.

8.02 Successors and Assigns. Subject to the restrictions on transfer
set forth in this Agreement, it and each and every provision of it shall be
binding upon and shall inure to the benefit of the Developers, their respective
successors, successors-in-title, and assigns, and each and every
successor-in-interest to any Developer, whether such successor acquires such
interest by way of

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gift, purchase, foreclosure, or by any other method, shall hold such interest
subject to all of the terms and provisions of this Agreement.

8.03 Amendments. In addition to any amendments otherwise authorized in
this Agreement, amendments may be made to this Agreement from time to time by
unanimous written consent of the Developers.

8.04 Partition. The Developers agree that no Developer, nor any
successor-in-interest to any Developer, shall have the right while this
Agreement remains in effect to have the property of the Project partitioned, or
to file a complaint or institute any proceeding at law or in equity to have the
property of the Project partitioned, and each Developer, on behalf of itself,
its successors, representatives and assigns, waives any such right. It is the
intention of the Developers that during the term of this Agreement, the rights
of the Developers and their successors-in-interest, as among themselves, shall
be governed by the terms of this Agreement, and that the right of any Developer
or its successor-in-interest to assign, transfer, sell, license or otherwise
dispose of its interest in the Project shall be subject to the limitations and
restrictions of this Agreement.

8.05 No Waiver. The failure of any Developer to insist upon strict
performance of a covenant or of any obligation under this Agreement,
irrespective of the length of time for which such failure continues, shall not
be a waiver of such Developer's right subsequently to demand strict compliance.
No consent or waiver, express or implied, to or of any breach or default in the
performance of any obligation under this Agreement, shall constitute a consent
or waiver to or of any other breach or default in the performance of the same or
any other obligation under this Agreement.

8.06 Entire Agreement. This Agreement constitutes the full and complete
agreement of the parties with respect to the subject matter of this Agreement.

8.07 Captions. Titles or captions of articles, sections and paragraphs
contained in this Agreement are inserted only as a matter of convenience and for
reference, and in no way are intended to define, limit, extend or describe the
scope of this Agreement or the intent of any provision of it.

8.08 Counterparts. This Agreement may be executed in a number of
counterparts, all of which together shall for all purposes constitute one
Agreement, binding upon all Developers.

8.09 Applicable Law. This Agreement shall be deemed to have been
entered into and shall be construed and enforced in accordance with the laws of
the State of North Carolina as applied to contracts made and to be performed
entirely within North Carolina.

8.10 Severability. If any provision of this Agreement is or becomes or
is deemed invalid, illegal or unenforceable in any jurisdiction, (a) such
provision shall be construed or deemed amended to conform to applicable laws so
as to be valid and enforceable, or, if it cannot be so construed or deemed
amended without materially altering the intention of the parties, it shall be
stricken, (b) the validity, legality and enforceability of such provision will
not in any way be

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affected or impaired by it in any other jurisdiction and (c) the remainder of
this Agreement shall remain in full force and effect.

8.11 Condition Subsequent. The Effective Date of this Agreement shall
be the date of the closing of the initial public offering of PRIMA.

In witness whereof, the Developers have executed this Agreement as of
the ____ day of ______________, 19__.

The PRIMA Group International, Inc.

By: ______________________________
Name: ______________________________
Title: ______________________________

Prima Industrie S.p.A.

By: ______________________________
Name: ______________________________
Title: ______________________________

Prima Electronics S.p.A.

By: ______________________________
Name: ______________________________
Title: ______________________________

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SCHEDULE A

Contributions to the Project by the Developers

Terms used in this SCHEDULE A with initial capital letters that are
defined in the Co-Development Agreement to which this Schedule is attached (the
"Agreement") shall have the respective meanings ascribed to them in it.

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

PRIMA has contributed to the Project the sum of $____; Industrie and
Electronics have contributed all previous research and development regarding the
Products or Technology, and all Developers grant to each other the right to use
the Products and Technology on a royalty-free basis for the purposes of
developing, manufacturing and marketing the Products and Technology. Industrie
and Electronics also contribute (a) their agreement to improve the Products and
the Technology and to provide the Project and any Developers with the use of any
improvements to the Products and the Technology, (b) their agreement to
manufacture and market the Products (including their agreement to make available
their facilities and personnel to permit the Project to manufacture and market
the Products and Technology during the term of the Agreement, as more fully
described in the Agreement, at cost).

PROMISSORY NOTE AND SECURITY AGREEMENT

THIS PROMISSORY NOTE AND SECURITY AGREEMENT (the "Agreement" or "Note")
is made this _____ day of April, 1998 by and between JAMES R. CURRIER, a North
Carolina resident ("Borrower") and THE PRIMA GROUP INTERNATIONAL, INC., a
corporation organized under the laws of State of Delaware ("Lender" or
"Company").

WITNESSETH

WHEREAS Lender has agreed to lend to Borrower the principal amount of
$600,000 in order to retire certain indebtedness to Miojusti Investments BV; and

WHEREAS to induce Lender to provide the loan, Borrower has agreed to
grant Lender a security interest in certain collateral;

NOW THEREFORE, based upon the premises and the mutual promises and
covenants set forth herein, the parties agree as follows:

1. Loan. FOR VALUE RECEIVED, the undersigned Borrower promises to pay
Lender or order at 447 S. Sharon Amity Road, Suite 250, Charlotte, North
Carolina or such other place as the holder of this Note may designate, the
principal sum of SIX HUNDRED THOUSAND DOLLARS ($600,000), or so much as has been
advanced hereunder with interest thereon accruing from the date hereof at an
annual rate of six percent (6%).

2. Terms. Interest and Principal shall be payable in eight (8) equal
annual installments of NINETY-SIX THOUSAND SIX HUNDRED TWENTY-ONE AND 57/100
DOLLARS ($96,621.57) on the _____ day of _______________ each year, beginning on
__________________, 1999, with the final installment of principal and interest,
together with all unpaid sums under this Note shall be made on
______________________, 2006. In the event that any installment of interest and
principal shall not have been paid on or before its respective due date, and
shall remain delinquent for more than fifteen (15) days thereafter, then the
Lender may charge a penalty of four percent (4%) on said late installment. In
the event that the due date for any installment is not a business day, the
payment required for such date shall be made on the first preceding business
day.

All payments of principal and interest shall be made in lawful money of
the United States which shall be the legal tender in payment of all debts,
public and private, at the time of payment.

This Note may be prepaid in whole or in part without penalty or
premium. Partial payment shall be applied first to accrued and unpaid interest
and then to principal.

This Note is secured by a security interest in the Collateral as herein
defined.

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3. Security Interest. Borrower hereby hypothecates and grants a
security interest to Lender in his 60,000 shares of common stock of The Prima
Group International, Inc. (the "Collateral").

4. Title. Borrower represents and warrants that he has title to the
Collateral, and that he is not prohibited by contract, judgment or decree from
entering into this Agreement, granting the security interest created by this
Agreement and performing his obligations under this Agreement.

5. UCC Financing Statements. Borrower agrees to execute at any
reasonable time and from time to time such other document or instruments,
including financing statements under the Uniform Commercial Code, necessary or
appropriate to perfect and to continue in force the security interest created by
this Agreement.

6. Default and Remedies.

(a) The following events shall constitute a default under this
Agreement:

(i) Failure to pay the installments under this
Agreement when due; and

(ii) A breach of the representations, warranties
or covenants of this Agreement after failure
by Borrower to cure same within fifteen (15)
days of receipt by Borrower of notice from
or on behalf of Lender identifying the
breach.

(b) Upon the occurrence of a default, Lender shall have the
right to take possession of the Collateral and to apply the Collateral against
the outstanding indebtedness and to take any other actions or remedies provided
to a secured party or permitted under the Uniform Commercial Code.

7. Waivers. All parties to this Agreement, including the undersigned
and any sureties, endorsers or guarantors, hereby waive presentment for payment,
demand, protest, notice of dishonor, notice of acceleration of maturity, and all
defenses on the ground of extension of time for payment hereof, and agree to
continue and remain bound for the payment of principal, interest and all other
sums payable hereunder, notwithstanding any change or changes by way of release,
surrender, exchange, or substitution of any security for this Note or by way of
any extension of extensions of time for the payment of principal; and all such
parties waive all and every kind of notice of such change or changes and agree
that the same may be made without notice to or consent of any of them. The
rights and remedies of the holder as provided herein shall be cumulative and
concurrent and may be pursued singularly, successively or together at the sole
discretion of the holder, and may be exercised as often as occasion therefor
shall occur, and the failure to exercise any such right or remedy shall in no
event be construed as a waiver or release of the same.

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8. Acceleration of Indebtedness. The Lender and Borrower hereby agree
that any remaining outstanding indebtedness under this Agreement, at the option
of Borrower, will be accelerated upon the first to occur of the following
events:

(a) The employment of Borrower is terminated without cause or
his employment agreement is not renewed by the Company;

(b) Substantially all of the assets or stock of the Company
are sold (including a merger where the Company is not the surviving entity) for
a per share consideration greater than or equal to 130% of the Offering Price;

(c) The Company receives gross proceeds of $30 million or more
from a follow-on public offering of equity or debt securities; or

(d) There is a 100% increase as of the end of any fiscal year
in any of the following financial measures of the Company as compared to those
results at the end of the month in which this Offering is consummated:

(i) Shareholders' equity;

(ii) Total revenues;

(iii) Net income; or

(iv) Market capitalization, based upon public
float.

9. Miscellaneous.

(a) Maximum Interest. Nothing herein contained, nor any
transaction related hereto, shall be construed or so operate as to require the
undersigned, or any party liable for payment of this Note, to pay interest at a
greater rate than the maximum allowed by applicable law. Should any interest or
other charges paid or payable by the undersigned, or any party liable for the
payment of the Note, in connection herewith, result in the computation or
earning of interest in excess of the maximum allowed by applicable law, then any
and all such excess paid shall be automatically credited against and in
reduction of the balance due under this Note, and the portion of said excess
which exceeds the balance due under this Note shall be paid by the then holder
hereof to the undersigned and parties liable for the payment of this Note.

(b) Attorneys Fees. In addition to all amounts due under this
Note, the undersigned agrees to pay reasonable attorneys' fees actually incurred
at the usual hourly rate of such attorneys when and if this Note is placed in
the hands of an attorney for collection after default.

(c) Governing Law. This Note shall be governed by, and shall
be interpreted, construed and enforced in accordance with, the laws of the State
of North Carolina.

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IN WITNESS WHEREOF, the undersigned has executed this Note under seal,
this the day and year first above written.

___________________________(Seal)
James R. Currier

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, accompanying
the financial statements of The PRIMA Group International, Inc. and our report
dated March 16, 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
March 25, 1998