Form 10-QSB

U.S. Securities and
Exchange Commission

Washington, D.C. 20549



(Mark One)

[X]    Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the period ended June 30, 2002

[ 
]    Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

for the transition period from _____ to _____



Commission File
NO:    000-30477



PRIME HOLDINGS AND
INVESTMENTS, INC.

(Exact name of small
business issuer as specified in its charter)



|Nevada                                                               | 88-0421215                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other
      jurisdiction of incorporation or organization) | (I.R.S.
      Identification No.)



8275 South Eastern
Avenue

Las Vegas, Nevada
89123

(Address of principal
executive offices)



(702) 990-8800

(Issuer's telephone
number)



Check whether the
issuer:

(1)   
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and

(2)   
has been subject to such filing requirements for the past 90
days.        Yes X   
No _____



Applicable only to
corporate issuers:

State the number of
shares outstanding of each of the issuer's classes of common equity, as of the
latest practicable date:    53,527,000 shares common stock issued
and outstanding as of June 30, 2002.



Transitional Small
Business Disclosure Format (check one)    Yes
_____    No X



PART I - FINANCIAL
INFORMATION

















































> PRIME HOLDINGS AND
>   INVESTMENTS INC.



Consolidated Interim
Financial Statements

(Unaudited)

June 30, 2002

(U.S. Dollars in
thousand)



PRIME HOLDINGS AND
INVESTMENTS INC.

June 30, 2002

(U.S. Dollars in
thousand)



---





















| | INDEPENDENT
      ACCOUNTANTS' REPORT                |            
| | ---------------------------------------------------- | -----------
| |                                                      |            
| | CONSOLIDATED
      BALANCE SHEET                     | STATEMENT 1
| |                                                      |            
| | CONSOLIDATED
      STATEMENT OF EARNINGS             | STATEMENT 2
| |                                                      |            
| | CONSOLIDATED
      STATEMENT OF STOCKHOLDERS' EQUITY | STATEMENT 3
| |                                                      |            
| | CONSOLIDATED
      STATEMENT OF CASH FLOWS           | STATEMENT 4
| |                                                      |            
| | NOTES TO THE
      CONSOLIDATED FINANCIAL STATEMENTS |            









EVANCIC PERRAULT
ROBERTSON

CERTIFIED GENERAL
ACCOUNTANTS







INDEPENDENT ACCOUNTANTS'
REPORT









To the Board of
Directors and Stockholders

Prime Holdings and
Investments Inc.





We have reviewed the
accompanying consolidated balance sheet of Prime Holdings and Investments Inc.
as at June 30, 2002 and the consolidated statements of earnings, stockholders'
equity and cash flows for the six months ended June 30, 2002. These consolidated
financial statements are the responsibility of Prime Holdings and Investments,
Inc.'s management.



We conducted our
review in accordance with standards established by the American Institute of
Certified Public Accountants. A review of consolidated financial statements
consists principally of applying analytical procedures to financial data and
making inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole. Accordingly,
no such opinion is expressed.



Based on our review,
we are not aware of any material modifications that should be made to the
accompanying consolidated financial statements for them to be in conformity with
generally accepted accounting principles established by the American Institute
of Certified Public Accountants.













CERTIFIED GENERAL
ACCOUNTANTS





North Vancouver, B.C.

August 14, 2002





#102 - 1975 Lonsdale
Avenue, North Vancouver, BC V7M 2K3

Telephone (604)
987-8101 Fax (604) 987-7194

Website: http//epr.ca
Email: cga@eprnv.ca

Office Across Canada

Affiliates Around the
World

PRIME HOLDINGS AND
INVESTMENTS INC.

CONSOLIDATED BALANCE
SHEET

June 30, 2002

(U.S. Dollars in
thousand)

|                                                     |                                                                                                          | June 30, 2002 | June 30, 2001
|---------------------------------------------------- | -------------------------------------------------------------------------------------------------------- | ------------- | -------------
|                                                     |                                                                                                          |               |              
|ASSETS                                               |                                                                                                          |               |              
|Current:                                             |                                                                                                          |               |              
|                                                     | Cash and cash
      equivalents                                                                          | $             | 660          
|                                                     | Accounts
      receivable, net of allowance for doubtful accounts
      (2002 - $108)
      (2001 - $96) |               | 9,279        
|                                                     | Inventory - note 3                                                                                       |               | 2,401        
|                                                     | Net construction
      work in progress                                                                  |               | 39           
|                                                     | Prepaid expenses                                                                                         |               | 342          
|                                                     |                                                                                                          |               |              
|                                                     |                                                                                                          |               | 12,721       
|                                                     |                                                                                                          |               |              
|Long-term accounts
      receivable                  |                                                                                                          | -             |              
|Property, plant
      and equipment - note 4         |                                                                                                          | 853           |              
|Investments - note
      5                           |                                                                                                          | 624           |              
|Other investments
      - note 5                     |                                                                                                          | 43            |              
|Goodwill - note 6                                    |                                                                                                          | 2,058         |              
|Other intangible
      assets - note 7               |                                                                                                          | 112           |              
|                                                     |                                                                                                          |               |              
|                                                     |                                                                                                          | $             | 16,411       
|                                                     |                                                                                                          |               |              
|LIABILITIES AND
      STOCKHOLDERS' EQUITY           |                                                                                                          |               |              
|Current:                                             |                                                                                                          |               |              
|                                                     | Demand loan - note
      8                                                                               | $             | 3,454        
|                                                     | Accounts payable
      and accruals                                                                      |               | 6,723        
|                                                     | Customer deposits                                                                                        |               | -            
|                                                     | Corporate taxes
      payable                                                                            |               | 487          
|                                                     | Current portion of
      long term debt - note 9                                                         |               | 112          
|                                                     |                                                                                                          |               |              
|                                                     |                                                                                                          |               | 10,776       
|                                                     |                                                                                                          |               |              
|Long-term debt -
      note 9                        |                                                                                                          | 65            |              
|Reserve for
      employee termination indemnities   |                                                                                                          | 217           |              
|Minority interest                                    |                                                                                                          | 564           |              
|                                                     |                                                                                                          |               | 11,622       
|                                                     |                                                                                                          |               |              
|Contingent
      liabilities / commitments - note 13 |                                                                                                          |               |              
|                                                     |                                                                                                          |               |              
|Stockholders'
      equity                           |                                                                                                          |               |              
|                                                     | Capital stock and
      additional paid-in capital                                                       |               | 5,594        
|                                                     | Other
      comprehensive income                                                                         |               | 579          
|                                                     | Deficit                                                                                                  |               | (1,384)      
|                                                     |                                                                                                          |               | 4,789        
|                                                     |                                                                                                          | $             | 16,411       



---

On behalf of the
Board


_____________________________Director
________________________ Director

The accompanying notes
are an integral part of these financial statements.





EVANCIC PERRAULT
ROBERTSON



PRIME HOLDINGS AND
INVESTMENTS INC.

CONSOLIDATED STATEMENT
OF EARNINGS

For the periods ended
June 30, 2002

(U.S. Dollars in
thousand)

|                                                     |                                 | Three Months
      Ended June 30 | Six months ended
      June 30
|---------------------------------------------------- | ------------------------------- | -------------------------------- | ------------------------------
|                                                     |                                 |                                  | 2002                          
|Revenue                                              | $                               | 1,258                            | $                             
|                                                     |                                 |                                  |                               
|Operating expenses                                   |                                 |                                  |                               
|                                                     | Amortization                    |                                  | 77                            
|                                                     | Bank charges and
      interest |                                  | 129                           
|                                                     | Other operating
      expenses  |                                  | 19                            
|                                                     | Other provisions                |                                  | -                             
|                                                     | Outside services                |                                  | 743                           
|                                                     | Purchases                       |                                  | 260                           
|                                                     | Rent                            |                                  | 43                            
|                                                     | Salaries and
      benefits     |                                  | 80                            
|                                                     |                                 |                                  |                               
|                                                     |                                 |                                  | 1,351                         
|                                                     |                                 |                                  |                               
|                                                     |                                 | (93)                             |                               
|Other income
      (expense)                         |                                 |                                  |                               
|                                                     | Interest income                 |                                  | 4                             
|                                                     | Miscellaneous                   |                                  | 380                           
|                                                     | Extraordinary
      income      |                                  | -                             
|                                                     |                                 |                                  |                               
|Loss before
      minority interest and income taxes | 291                             |                                  | 131                           
|                                                     |                                 |                                  |                               
|Income taxes                                         |                                 | 6                                |                               
|                                                     |                                 |                                  |                               
|Loss before
      minority interest                  |                                 | 285                              |                               
|                                                     |                                 |                                  |                               
|Minority Interest                                    |                                 | 17                               |                               
|                                                     |                                 |                                  |                               
|Net earnings
      (loss) for the period             | $                               | 268                              | $                             
|                                                     |                                 |                                  |                               
|Weighted average
      common sharesoutstanding      |                                 | 53,527                           |                               
|                                                     |                                 |                                  |                               
|Earnings (loss)
      per share                      | $                               | 0.005                            | $                             





















The accompanying notes
are an integral part of these financial statements.





EVANCIC PERRAULT
ROBERTSON

PRIME HOLDINGS AND
INVESTMENTS INC.

CONSOLIDATED STATEMENT
OF STOCKHOLDERS' EQUITY

For the six months ended
June 30, 2002

(U.S. Dollars in
thousand)

|                                          |                                       | Common Stock                   |                                      |                           |                                  |       |      
|----------------------------------------- | ------------------------------------- | ------------------------------ | ------------------------------------ | ------------------------- | -------------------------------- | ----- | -----
|                                          |                                       | Common Stock
      Number(000) | and Additional
      Paid-in Capital | Accumulated
      Deficit | Other
      Comprehensive Income | Total
|Balance, December
      31, 2000          | 740                                   |                                | 4,623                                |                           | (972)                            |       | (1)  
|Net loss for the
      period             | -                                     |                                | 937                                  |                           | (266)                            |       | (243)
|                                          |                                       |                                |                                      |                           |                                  |       |      
|Balance, June 30,
      2001              | 740                                   |                                | 5,560                                |                           | (1,238)                          |       | (244)
|                                          |                                       |                                |                                      |                           |                                  |       |      
|Increase in
      paid-in capital in SITI |                                       |                                |                                      |                           |                                  |       |      
|                                          | S.p.A. before
      reverse           |                                |                                      |                           |                                  |       |      
|                                          |                                       |                                |                                      |                           |                                  |       |      
|Reverse
      Acquisition                 |                                       |                                |                                      |                           |                                  |       |      
|                                          | Pre-acquisition
      shares of Prime |                                |                                      |                           |                                  |       |      
|                                          | Holdings and
      Investment Inc.,   |                                |                                      |                           |                                  |       |      
|                                          | (Note 2)                              | 3,527                          |                                      | 34                        |                                  | -     |      
|                                          |                                       |                                |                                      |                           |                                  |       |      
|                                          | Issuance of common
      shares for   |                                |                                      |                           |                                  |       |      
|                                          | reverse
      acquisition of SITI on  |                                |                                      |                           |                                  |       |      
|                                          | September 13, 2001                    | 50,000                         |                                      | -                         |                                  | -     |      
|                                          |                                       |                                |                                      |                           |                                  |       |      
|                                          | Less exchange of
      SITI S.p.A.    |                                |                                      |                           |                                  |       |      
|                                          | shares                                | (740)                          |                                      | -                         |                                  | -     |      
|                                          |                                       |                                |                                      |                           |                                  |       |      
|Balance after
      reverse acquisition   | 53,527                                |                                | 5,594                                |                           | (1,238)                          |       | (244)
|                                          |                                       |                                |                                      |                           |                                  |       |      
|Net loss for the
      period             | -                                     |                                | -                                    |                           | (100)                            |       | 253  
|                                          |                                       |                                |                                      |                           |                                  |       |      
|Balance, December
      31, 2001          | 53,527                                |                                | 5,594                                |                           | (1,338)                          |       | 9    
|Net income (loss)
      for the period    | -                                     |                                | -                                    |                           | (46)                             |       | 570  
|                                          |                                       |                                |                                      |                           |                                  |       |      
|Balance, June 30,
      2002              | 53,527                                | $                              | 5,594                                | $                         | (1,384)                          | $     | 579  

























The accompanying notes
are an integral part of these financial statements.

EVANCIC PERRAULT
ROBERTSON

PRIME HOLDINGS AND
INVESTMENTS INC.

CONSOLIDATED STATEMENT
OF CASH FLOWS

For the six months ended
June 30, 2002

(U.S. Dollars in
thousand)

|                                              |                                                         |                                                    | Six Months Ended
      June 30, 2002 | Six Months Ended
      June 30, 2001
|--------------------------------------------- | ------------------------------------------------------- | -------------------------------------------------- | ------------------------------------ | ------------------------------------
|Cash flows from
      operating activities:   |                                                         |                                                    |                                      |                                     
|                                              | Loss from
      operating activities                    | $                                                  | (47)                                 | $                                   
|                                              | Items not
      requiring an outlay of funds            |                                                    |                                      |                                     
|                                              |                                                         | Amortization                                       |                                      | 107                                 
|                                              |                                                         | Minority interest                                  |                                      | 18                                  
|                                              |                                                         |                                                    |                                      | 78                                  
|                                              |                                                         |                                                    |                                      |                                     
|                                              | Changes in
      non-cash working capital               |                                                    |                                      |                                     
|                                              |                                                         | Accounts
      receivable                          |                                      | (2,691)                             
|                                              |                                                         | Long-term
      receivables                        |                                      | -                                   
|                                              |                                                         | Inventory                                          |                                      | (71)                                
|                                              |                                                         | Net construction
      work in progress            |                                      | (36)                                
|                                              |                                                         | Prepaid expenses                                   |                                      | 580                                 
|                                              |                                                         | Accounts payable
      and accrued liabilities     |                                      | 2,059                               
|                                              |                                                         | Customer deposits                                  |                                      | (454)                               
|                                              |                                                         | Corporate taxes
      payable                      |                                      | 40                                  
|                                              |                                                         | Reserve for
      employee termination indemnities |                                      | (67)                                
|                                              |                                                         |                                                    |                                      | (562)                               
|                                              |                                                         |                                                    |                                      |                                     
|Cash flows from
      financing activities:   |                                                         |                                                    |                                      |                                     
|                                              | Proceeds
      (repayment) of long-term debt            |                                                    | (22)                                 |                                     
|                                              | Increase in
      minority interest                     |                                                    | 110                                  |                                     
|                                              | Increase in share
      capital/paid in capital         |                                                    | -                                    |                                     
|                                              | Proceeds of demand
      loans                          |                                                    | 600                                  |                                     
|                                              | Decrease in due to
      minority interest shareholders |                                                    | (109)                                |                                     
|                                              |                                                         |                                                    |                                      | 579                                 
|                                              |                                                         |                                                    |                                      |                                     
|Cash flows from
      investing activities:   |                                                         |                                                    |                                      |                                     
|                                              | Purchases of
      capital assets                       |                                                    | (15)                                 |                                     
|                                              | Sale (purchase) of
      long-term investments          |                                                    | 40                                   |                                     
|                                              | Sale of other
      investments                         |                                                    | 119                                  |                                     
|                                              | Net cash acquired
      on acquisition of business      |                                                    | -                                    |                                     
|                                              |                                                         |                                                    |                                      | 144                                 
|                                              |                                                         |                                                    |                                      |                                     
|Effect of exchange
      rate changes on cash |                                                         | 101                                                |                                      | (99)                                
|                                              |                                                         |                                                    |                                      |                                     
|Increase in cash                              |                                                         | 262                                                |                                      | 860                                 
|                                              |                                                         |                                                    |                                      |                                     
|Cash, beginning of
      period               |                                                         | 398                                                |                                      | 554                                 
|                                              |                                                         |                                                    |                                      |                                     
|Cash, end of
      period                     | $                                                       | 660                                                | $                                    | 1,414                               
|                                              |                                                         |                                                    |                                      |                                     
|Supplemental
      Disclosures                |                                                         |                                                    |                                      |                                     
|                                              |                                                         | Interest paid                                      | $                                    | 147                                 
|                                              |                                                         | Income taxes paid                                  |                                      | -                                   





The accompanying
notes are an integral part of these financial statements.

EVANCIC PERRAULT
ROBERTSON





---



PRIME HOLDINGS AND
INVESTMENTS INC.

NOTES TO THE FINANCIAL
STATEMENTS

June 30, 2002

(U.S.
Dollars in thousand)



The Company was
incorporated on December 3, 1998, under the laws of the State of Nevada.

On August 8, 2001,
the Company changed its name to Prime Holdings and Investments, Inc. (Prime) and
acquired 100% of the shares of SITI S.p.A. Societa Italiana Telecommunicazioni
Integrate (SITI), an Italian corporation. The Company's principal activities are
telecommunications and construction contracting.



1. Nature of Business



> 

S.I.T.I. S.p.A. owns
majority interest in a group of companies specializing in the engineering and
construction of transportation infrastructure and fiber optics networks; resort
construction; manufacture and sale of telecommunications hardware and related
network systems; and asset management and brokerage services for works of art.



Datico S.p.A. is
established in 1981. It is an information technology services company that
specialises in the design, building and maintenance of advanced network systems.
It manufactures and markets network components such as modems, converters,
adapters, statistical multiplexers, ethernet hubs and media converters under the
Datico trade name. In addition, Datico is a certified distributor for network
component supply companies which includes Nokia, Cisco and Newbridge.



Datico Services S.p.A.
is a switchless long distance reseller and prepaid phone cards supplier to
ethnic group and call shop centers, focused in southern Italy. Over the next 3
years, Datico Services S.p.A. will expand operations and continue its move into
international telecommunications transmissions.



Kelti S.r.L. is a
long distance reseller that aims at providing telephone systems to the banking
sector in the eastern part of Italy, including the region of Abruzzo.



Impresa Mondelli
S.r.L. is an engineering and general contracting company, specializing in the
construction of cable and fiber optic networks, bridges, highways and commercial
buildings. Mondelli has a notable 120-year history of partnering with major
Italian construction companies and related consortia to from Temporary
Associations of Enterprises, having completed major works throughout Italy.



Artel S.r.L. is a
company that specialize in the purchase, sale and brokerage of works of art,
painting, furniture, watches, rugs, prints, antique drawings, antiques and
contemporary works of art.



Sardegna 97 S.p.A. is
developing an 80-Villa resort project in Sardinia. The project is in Phase I and
is approximately 20% completed.









2. SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES



> Basis of consolidationThe financial
>   statements of entities, which are controlled by the Company, referred to as
>   subsidiaries, are consolidated. Entities which are not controlled but over
>   which the Company has the ability to exercise significant influence, referred
>   to as associated companies, are accounted for using the equity method.
>   Investments in entities that the Company does not control or over which it
>   does not exercise significant influence are accounted for using the cost
>   method.The acquisition by
>   the Company of the shares of SITI S.p.A. on September 13, 2001 was accounted
>   for as a reverse acquisition whereby SITI S.p.A. is considered the acquiring
>   company. The comparative figures presented are those of SITI S.p.A..

Reverse acquisition



> On September 13,
>   2001, the Company completed an agreement with the shareholders of SITI S.p.A.,
>   an Italian company, whereby the Company issued 50,000,000 common shares to
>   acquire all of the issued and outstanding shares of SITI S.p.A. No cash was
>   transacted.
>   
>   The acquisition has
>   been accounted for as a reverse takeover using the purchase method, and
>   accordingly, for financial statement reporting purposes, the net assets of
>   SITI have been included in the consolidated balance at book values, and the
>   net assets of Prime have been recorded at fair market value at the date of
>   acquisition. The consolidated operations of the Company for the period from
>   January 1, 2001 to the date of acquisition, September 13, 2001, are those of
>   SITI and exclude the results of operations of Prime. The results of Prime are
>   included in the consolidated statements of operations after the date of
>   acquisition.The cost of the
>   acquisition is the assumption of the liability position of Prime Holdings and
>   Investments Inc as at September 13, 2001 and consists of:
>   Accounts
>             payable
>           34Total
>             liabilities assumed on acquisition
>           34
>       This amount has
>       been reflected as increase in capital stock on the statement of
>       stockholders' equity.

Cash and cash
    equivalents



Cash and cash
  equivalents includes cash and those short-term market instruments which, on
  acquisition, have a term to maturity of three months or less.



Marketable securities



Publicly traded
  securities deemed available-for-sale by the Company are measured at fair
  value. Gains and losses on available-for-sale securities are presented
  separately in the stockholders' equity section.



Use of Estimates



The preparation of
  the Company's consolidated financial statements in conformity with generally
  accepted accounting principles requires management to make estimates and
  assumptions that affect the reported amounts of assets and liabilities and
  disclosures of contingent assets and liabilities at the date of the financial
  statements and the reported amounts of revenues and expenses during the
  reporting period. Actual results could differ from those estimates.



Inventory



Inventory is recorded
  at the lower of cost and net realizable value. Cost is established on a LIFO
  basis. No reserve for obsolete and slow-moving inventories is deemed
  necessary.



Investments



Investments are shown
  at the lower of cost or fair market value.



Property, plant and
  equipment



Property, plant and
  equipment are recorded at cost. Amortization is provided annually on a
  straight-line basis at rates calculated to write-off the assets over their
  estimated useful lives as follows except in the year of acquisition when one
  half of the rate is used.



> Buildings
>               3%Plant and machinery
>               15.50%Other equipment
>               25%Other plant and
>                 equipment
>               12% - 25%



Intangible Assets



Intangible assets are
  stated at cost, reduced on a straight-line basis to their net book value
  through provision for amortization provided at the following annual rates:



> Licences, trade-marks
>                 and similar rights
>               20%Patents and
>                 intellectual property rights
>               33%Purchased goodwill
>               10%Other intangible
>                 assets
>               20%

Additions during the
    year are amortized at the above rates.



Goodwill



Prior to July
    2001, goodwill arising on consolidation was not amortized, whereas the
    goodwill arising on the acquisition of a business by S.I.T.I. S.p.A. is
    amortized over 10 years.



In July 2001, the
    Financial Accounting Standards Board ("FASB") issued Statement of
    Financial Accounting Standards No. 141, "Business Combinations"
    ("SFAS 141") and statement of Financial Accounting Standards No.
    142, "Goodwill and Other Intangible Assets" ("SFAS
    142"). SFAS 141 requires all business combinations to be accounted for
    using the purchase method of accounting and that certain intangible assets
    acquired in a business combination shall be recognized as assets apart from
    goodwill. SFAS 142 recognizes that goodwill has an indefinite useful life
    and will no longer be subject to periodic amortization. Goodwill will be
    tested at least annually for impairment in lieu of amortization. The SFAS
    142 requires that goodwill arising from acquisitions subsequent to June 30,
    2001 should not be amortized.



The Company
    evaluates the carrying value of goodwill and long-lived assets to be held
    and used. The carrying value of an asset is considered impaired when the
    anticipated undiscounted cash flow from such assets is less than its
    carrying value. In that event, a loss is recognized based on the amount by
    which the carrying value exceeds the fair market value. Fair market value is
    determined using the anticipated cash flows discounted at a rate
    commensurate with the risk involved. Losses on long-lived assets to be
    disposed of are determined in a similar manner, except that fair market
    values are reduced by the cost of disposition of such assets.



Revenue recognition



Telecommunication
    products and services:



Revenue is recorded net
of trade discounts and allowances upon shipment of products or rendering of
services and when all significant contractual obligations have been satisfied
and collection is reasonably assured.



> Construction
>   activities:

Construction contracts
range up to 8 years in length and revenues are recognized using the
percentage-of-completion method. Percentage-of-completion is calculated using
the cost-to-cost method.

> 



Income taxes



> National corporate
>   taxes (IRPEG) in Italy are levied on book income adjusted for disallowable
>   expenses at the rate of 36% (36% in 2001).

In addition, a regional
tax on value produced (IRAP) is levied at the rate of 4.25%. In accordance with
the principles established by the Italian accounting profession, this tax is
classified with income taxes, even though certain significant costs and expenses
(e.g. personnel costs and interest expense) are not deductible in the
determination of the related IRAP tax liability.



> Reserve for Employee
>   Termination Indemnities
>   
>   
>   Provision has been
>   made, under Italian law and labour regulations, for termination indemnities to
>   employees upon termination of employment.
>   
>   Earnings (Loss) per
>   share
>   
>   
>   Basic EPS is
>   determined using net income divided by the weighted average shares outstanding
>   during the period. Diluted EPS is computed by dividing net income by the
>   weighted average shares outstanding, assuming all dilutive potential common
>   shares were issued. Since the Company has no common shares that are
>   potentially issuable, such as stock options, convertible securities or
>   warrants, basic and diluted EPS are the same.

As the acquisition has
been recorded as a reverse acquisition, the shares outstanding after the
acquisition was used in the EPS calculations for the 2000 year.



> Translation of foreign
>   currencies
>   
>   
>   The functional
>   currency of the Company is the United States dollar. The financial statements
>   of the Company's operations whose functional currency is other than the United
>   States dollar are translated from such functional currency to United States
>   dollars using the current rate method. Under the current rate method, assets
>   and liabilities are translated at the exchange rates in effect at the balance
>   sheet date. Revenues and expenses, including gains and losses on foreign
>   exchange transactions, are translated at average rates for the period. Where
>   the current rate method is used, the unrealized translation gains will be
>   accumulated in other comprehensive income under the shareholders' equity
>   section.



> Financial instruments
>   
>   
>   The estimated fair
>   value of cash and equivalents, short-term investments, accounts receivable,
>   loans receivables, and accounts payable and accrued liabilities approximate
>   their carrying amounts in the financial statements. Unless otherwise noted, it
>   is management's opinion that the Company is not exposed to significant
>   interest, currency, or credit risks arising from these financial statements.

3. INVENTORY



|               | June 30 2002         | June 30 2001          
|-------------- | -------------------- | ----------------------
|Raw materials  | $         
      233 | $             
      -
|Finished goods | 2,168                | 1,219                 
|               | $      
      2,401  | $      
      1,219   





4. PROPERTY, PLANT AND
EQUIPMENT

|                                          |             |                          | June 30 2002   | June 30 2001   
|----------------------------------------- | ----------- | ------------------------ | -------------- | ---------------
|                                          | Cost        | Accumulated Amortization | Net Book Value | Net Book  Value
|Fixed assets construction in
    progress | $ 251       | $ -                      | $ 251          | $ 198          
|Land and buildings                        | 284         | 154                      | 130            | 119            
|Other equipment                           | 376         | 364                      | 12             | 17             
|Other plant and equipment                 | 316         | 174                      | 142            | 63             
|Plant
    and machinery                   | 1,061       | 743                      | 318            | 371            
|                                          | $
    2,288 | $
    1,435              | $
    853      | $
    768      







5. INVESTMENTS AND OTHER
INVESTMENTS

|                                                          | June 30 2002 | June 30 2001
|--------------------------------------------------------- | ------------ | ------------
|Investments in
      enterprises                          |              |             
|                                                          |              |             
|Advances to sub-contractors of
      Impresa Mondelli Srl | $ 54         | $ -         
|Consortium Tecnos                                         | 570          | 490         
|Advances to Sardegna 97 S.p.A.                            | -            | 108         
|Advances to Kelti SrL                                     | -            | 303         
|Advances to Artel SrL                                     | -            | 73          
|Total                                                     | $ 624        | $ 974       







> 

Other investments



Other investments are
represented by fixed interest securities.



6. GOODWILL

|                         | June 30 2002 | June 30 2001
|------------------------ | ------------ | ------------
|Goodwill                 | $ 2,072      | $ 1,592     
|Accumulated amortization | 14           | 8           
|Total                    | $ 2,058      | $ 1,584     





7. OTHER INTANGIBLE
ASSETS



|                                               |             |                          | June 30 2002   | June 30 2001  
|---------------------------------------------- | ----------- | ------------------------ | -------------- | --------------
|                                               | Cost        | Accumulated Amortization | Net Book Value | Net Book Value
|Intangibles in progress and
      advances     | $ -         | $ -                      | $ -            | $ 10          
|Licences, trade-marks and
      similar rights | 85          | 55                       | 30             | 27            
|Others intangible assets                       | 127         | 50                       | 77             | 4             
|Patents and intellectual
      property rights | 16          | 13                       | 3              | 8             
|Research and development
      expenditures    | 8           | 6                        | 2              | -             
|                                               | $
      236 | $
      124              | $
      112    | $
      49    



8. DEMAND LOAN



> 

Group companies have
credit lines available to the extent of US $3.5 million at interest rates of
7.25% - 9.75% on June 30, 2002.



9. LONG-TERM DEBT



|                                                                                                                                                               |                      | June 30 2002 | June 30 2001
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ------------ | ------------
|Mortgage payable
      to Credito Fondiario S.p.A., secured by building,
      no payment terms
      and non-interest bearing.                                |                      |             
|                                                                                                                                                               | Balance              | $ 97         | $ -         
|Mortgage payable to
      Comit (Banca Commerciale Italiana), secured by building, requiring
      semi-annually payments of $4, including interest at 5.198%. |                      |             
|                                                                                                                                                               | Balance              | 24           | 25          
|Mortgage payable to
      Ambrosiano Veneto, secured by building, requiring semi-annually payments
      of $4, including interest at 4.675%.                  |                      |             
|                                                                                                                                                               | Balance              | 56           | 62          
|                                                                                                                                                               |                      | $ 177        | $ 87        
|                                                                                                                                                               | Less current portion | 112          | 16          
|                                                                                                                                                               |                      | $ 65         | $ 71        





9. LONG-TERM DEBT
(continue)



> 

Principal amounts due
within the next three years on mortgages payable are as follows:



> 2003
>               $ 1122004
>               562005
>               9

10. CAPITAL STOCK



> Authorized:
> 500,000,000 common shares with par value of $0.0001
> 100,000,000 preferred
> shares with par value of $0.001

11. ACQUISITIONS



> On June 4, 2001,
>   Datico S.p.A. acquired 93% of the share capital of Impresa Mondelli S.r.l.
>   which is an engineering and general contracting company specializing in the
>   construction of cable and fiber optic networks, bridges, highways and
>   commercial buildings. The purchase price was $127. The purchase included
>   goodwill of $5.
>   
>   On September 25,
>   2001, the Company acquired 51% of the share capital of Artel S.r.l. The
>   Company purchases, sells and brokers of works of art, paintings, furniture,
>   watches, rugs, prints and antique drawings. The purchase price was $7.
>   
>   On October 7, 2001,
>   the Company acquired 100% of the share capital of Sardegna 97 SpA. The Company
>   is developing on an 80-Villa resort project in Sardinia. The project is in
>   Phase I with approximately 20% completed. The purchase price was $112. The
>   purchase included goodwill with the amount of $101.
>   
>   All of these
>   acquisitions are accounted for under the purchase method. The consolidated
>   financial statements include the operating results of each of these businesses
>   from the beginning of the financial year in which the acquisition took place.
>   
>   Goodwill has been
>   determined on the basis of the difference between the purchase price paid and
>   the fair market value of the underlying assets and liabilities acquired.



12. SEGMENTED
INFORMATION



Telecommunications



> The telecommunication
>   segment supplies and installs telecommunication equipment in Italy under
>   contractual agreements with major telecommunication equipment suppliers.
>   
>   Construction
>   
>   The construction
>   segment contracts to build major highway projects in Italy under long-term
>   contracts ranging up to 8 years in length.
>   
>   
>   
>   
>   
>   Below are the sales
>   and operating profit by segment for the three month period ended
>   June 30, 2002 and a
>   reconciliation of segment operating profit to earnings before income taxes.

|                                                                            | Construction | Telecommunication | Total  
|--------------------------------------------------------------------------- | ------------ | ----------------- | -------
|Revenues                                                                    | $ 890        | $ 369             | $ 1,259
|Operating
      expenses                                                    | 953          | 399               | 1,352  
|Operating income (loss)                                                     | (63)         | (30)              | (93)   
|Other
      income (expenses)                                               | 19           | 365               | 384    
|Earnings (loss)
      before income
      taxes and minority
      interest | $ (44)       | $ 335             | $ 291  







13. COMMITMENTS AND
CONTINGENCIES



> Group companies
>   have provided guarantees to third parties relating to construction activities
>   approximating US $11 million and has received guarantees approximating US $4
>   million. These relate to construction projects substantially completed in
>   prior years and will be terminated once final completion of the related
>   projects has been authorized.

14. RELATED PARTY
TRANSACTIONS



> 

During the three
month period the Company has received from the former shareholders of SITI S.p.A.
$6 (2001 - nil) for reimbursement of acquisition expenses.







> 



Item 2. 
Management's Discussion and Analysis



This Management
Discussion and Analysis presents a review of the consolidated operating results
and financial condition of the Company for the quarter ended June 30, 2002. This
discussion and analysis is intended to assist in understanding the financial
condition and results of operation of the Company, its subsidiaries and
associated companies. This section should be read in conjunction with the
consolidated financial statements and the related notes appearing elsewhere in
this report.



The accompanying
consolidated financial statements include the accounts of the Company, its
subsidiaries and associated companies. The consolidated financial statements
include the operating results of each of these companies from the beginning of
the quarter ended March 31, 2002. A list of the Company's subsidiaries is
filed as Exhibit 21 to this Form 10-QSB.



The financial
statements of entities, which are controlled by the Company (referred to as
subsidiaries) are consolidated. These include the accounts of the following
companies: S.I.T.I. SpA; Datico SpA; Impresa Mondelli SrL; Datico Services SpA;
Sardegna '97 SpA; Artel SrL; and KELTI SrL. Investments in subsidiary
companies are accounted for using the purchase method. Entities which are not
controlled, and over which the Company does not exercise significant influence
(referred to as associated companies), are accounted for using the cost method.
This includes the accounts of Consorzio Tecnos.



From the date of
incorporation on December 3, 1998, to September 13, 2000, the Company was a
development stage company that did not have revenues from operations. From
December 3, 1998 to February 25, 2000, the Company operated under the name
Diligencia Technologies, Inc. and from February 25, 2000 to August 15, 2000,
operated under the name MyTravelGuide.com Inc. As of September 13, 2001, S.I.T.I.
held $1,337,000 in cash, a portion of which was used by the Company to satisfy
its cash requirements.



The Company believes
its existing cash balances will be sufficient to meet anticipated cash
requirements for at least the next twelve months. The Company may, nonetheless,
seek additional financing to support its activities during the next twelve
months or thereafter, including additional public offerings of its common stock.
There can be no assurances, however, that additional capital will be available
on reasonable terms, if at all, when needed or desired.





The Company has
issued shares of its Common Stock from time to time in the past to satisfy
certain obligations and expects in the future to also acquire certain services,
satisfy indebtedness and/or make acquisitions utilizing authorized shares of the
capital stock of the Company. If operations and cash flow can be improved
through these efforts, management believes that the Company's liquidity problems
will be resolved and that the Company can continue to operate. However, no
assurance can be given that management's actions will result in profitable
operations.





PART II - OTHER
INFORMATION



Item 1.  Legal
Proceedings



None.



Item 2.  Changes in
Securities and Use of Proceeds



None.



Item 3.  Defaults
Upon Senior Securities



Not applicable.



Item 4.  Submission
of Matters to a Vote of Security Holders



Not applicable.



Item 5.  Other
Information



Not applicable





SIGNATURES



In accordance with the
requirements of the Exchange Act, the registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.



PRIME HOLDINGS AND
INVESTMENTS, INC.





/s/ Giovanni Iachelli

Giovanni Iachelli

President and Duly
Authorized Officer