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 September 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 September 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)

September 30, 2002

(U.S. Dollars in
thousand)



PRIME HOLDINGS AND
INVESTMENTS INC.

September 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 September 30, 2002 and the consolidated statements of earnings,
stockholders' equity and cash flows for the nine months ended September 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.

November 18, 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

September 30, 2002

(U.S. Dollars in
thousand)

|                                                     |                                                                                                   | 2002  | 2001   
|---------------------------------------------------- | ------------------------------------------------------------------------------------------------- | ----- | -------
|                                                     |                                                                                                   |       |        
|ASSETS                                               |                                                                                                   |       |        
|Current:                                             |                                                                                                   |       |        
|                                                     | Cash and cash
      equivalents                                                                   | $     | 450    
|                                                     | Short-term
      investments                                                                      |       | --     
|                                                     | Accounts
      receivable, net of allowance for doubtful accounts (2002 - $512, 2001 -
      $54) |       | 5,997  
|                                                     | Inventory - note
      3                                                                          |       | 2,446  
|                                                     | Prepaid expenses                                                                                  |       | 339    
|                                                     |                                                                                                   |       |        
|                                                     |                                                                                                   |       | 9,232  
|                                                     |                                                                                                   |       |        
|Long-term accounts
      receivable                  |                                                                                                   | 1,212 |        
|Property, plant
      and equipment - note 4         |                                                                                                   | 827   |        
|Investments - note
      5                           |                                                                                                   | 625   |        
|Other investments
      - note 5                     |                                                                                                   | 100   |        
|Goodwill - note 6                                    |                                                                                                   | 2,058 |        
|Other intangible
      assets - note 7               |                                                                                                   | 101   |        
|                                                     |                                                                                                   |       |        
|                                                     |                                                                                                   | $     | 14,155 
|                                                     |                                                                                                   |       |        
|LIABILITIES AND
      STOCKHOLDERS' EQUITY           |                                                                                                   |       |        
|Current:                                             |                                                                                                   |       |        
|                                                     | Demand loan - note
      8                                                                        | $     | 3,125  
|                                                     | Accounts payable
      and accruals                                                               |       | 5,866  
|                                                     | Customer deposits
      - note                                                                    |       | -      
|                                                     | Corporate taxes
      payable                                                                     |       | 508    
|                                                     | Current portion of
      long term debt - note 9                                                  |       | 112    
|                                                     |                                                                                                   |       |        
|                                                     |                                                                                                   |       | 9,611  
|                                                     |                                                                                                   |       |        
|Other trade
      payables                           |                                                                                                   | --    |        
|Long-term debt -
      note 9                        |                                                                                                   | 65    |        
|Due to minority
      interest shareholders          |                                                                                                   | --    |        
|Reserve for
      employee termination indemnities   |                                                                                                   | 211   |        
|Minority interest                                    |                                                                                                   | 570   |        
|Preferred stocks                                     |                                                                                                   | 10    |        
|                                                     |                                                                                                   |       | 10,467 
|                                                     |                                                                                                   |       |        
|Contingent
      liabilities / commitments - note 13 |                                                                                                   |       |        
|                                                     |                                                                                                   |       |        
|Stockholders'
      equity                           |                                                                                                   |       |        
|                                                     | Capital stock and
      additional paid-in capital                                                |       | 5,584  
|                                                     | Other
      comprehensive income                                                                  | `     | 167    
|                                                     | Deficit                                                                                           |       | (2,063)
|                                                     |                                                                                                   |       | 3,688  
|                                                     |                                                                                                   | $     | 14,155 



---

On behalf of the
Board

_____________________________Director
________________________ Director
The accompanying notes
are an integral part of these financial statements.EVANCIC PERRAULT
ROBERTSONPRIME HOLDINGS AND
INVESTMENTS INC.STATEMENT
2

CONSOLIDATED STATEMENT
OF EARNINGS

For the periods ended
September 30, 2002

(U.S. Dollars in
thousand)

|                                                     |                                 | Three Months
      Ended September 30 | Nine months
      ended September 30
|---------------------------------------------------- | ------------------------------- | ------------------------------------- | ------------------------------------
|                                                     |                                 |                                       | 2002                                
|Revenue                                              | $                               | 246                                   | $                                   
|                                                     |                                 |                                       |                                     
|Operating expenses                                   |                                 |                                       |                                     
|                                                     | Administrative
      expense    |                                       | --                                  
|                                                     | Amortization                    |                                       | 36                                  
|                                                     | Bank charges and
      interest |                                       | 8                                   
|                                                     | Other operating
      expenses  |                                       | 2                                   
|                                                     | Other provisions                |                                       | 493                                 
|                                                     | Outside services                |                                       | 217                                 
|                                                     | Purchases                       |                                       | 36                                  
|                                                     | Rent                            |                                       | 46                                  
|                                                     | Salaries and
      benefits     |                                       | 62                                  
|                                                     |                                 |                                       |                                     
|                                                     |                                 |                                       | 900                                 
|                                                     |                                 |                                       |                                     
|                                                     |                                 | (654)                                 |                                     
|Other income
      (expense)                         |                                 |                                       |                                     
|                                                     | Interest income                 |                                       | 2                                   
|                                                     | Miscellaneous                   |                                       | (19)                                
|                                                     | Extraordinary
      income      |                                       | -                                   
|                                                     |                                 |                                       |                                     
|                                                     |                                 |                                       | (17)                                
|Loss before
      minority interest and income taxes | (671)                           |                                       | 372                                 
|                                                     |                                 |                                       |                                     
|Income taxes                                         |                                 | 3                                     |                                     
|                                                     |                                 |                                       |                                     
|Loss before
      minority interest                  |                                 | (674)                                 |                                     
|Minority Interest                                    |                                 | 5                                     |                                     
|                                                     |                                 |                                       |                                     
|Net loss for the
      period                        | $                               | (679)                                 | $                                   
|                                                     |                                 |                                       |                                     
|Weighted average
      common sharesoutstanding      |                                 | 53,527                                |                                     
|                                                     |                                 |                                       |                                     
|Earnings (loss)
      per share                      | $                               | (0.013)                               | $                                   





















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 nine months
ended September 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                                |                           | (971)                            |       | (1)  
|                                          |                                                   |                                 |                                      |                           |                                  |       |      
|Increase in
      paid-in capital in SITI |                                                   |                                 |                                      |                           |                                  |       |      
|                                          | S.p.A. before
      reverse acquisition           | --                              |                                      | 937                       |                                  | --    |      
|                                          |                                                   |                                 |                                      |                           |                                  |       |      
|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                          |                                      | -                         |                                  | -     |      
|                                          |                                                   |                                 |                                      |                           |                                  |       |      
|                                          | Allocation to
      issuance off preferred shares | --                              |                                      | (10)                      |                                  | --    |      
|                                          |                                                   |                                 |                                      |                           |                                  |       |      
|                                          | Less exchange of
      SITI S.p.A.                |                                 |                                      |                           |                                  |       |      
|                                          | shares                                            | (740)                           |                                      | -                         |                                  | -     |      
|                                          |                                                   |                                 |                                      |                           |                                  |       |      
|Net loss for the
      period             | --                                                |                                 | --                                   |                           | (130)                            |       | (134)
|Balance, September
      30, 2001         | 53,527                                            |                                 | 5,584                                |                           | (1,101)                          |       | (135)
|                                          |                                                   |                                 |                                      |                           |                                  |       |      
|Net loss for the
      period             | -                                                 |                                 | -                                    |                           | (237)                            |       | 144  
|                                          |                                                   |                                 |                                      |                           |                                  |       |      
|Balance, December
      31, 2001          | 53,527                                            |                                 | 5,584                                |                           | (1,338)                          |       | 9    
|Net loss for the
      period             | -                                                 |                                 | -                                    |                           | (725)                            |       | 158  
|                                          |                                                   |                                 |                                      |                           |                                  |       |      
|Balance, September
      30, 2002         | 53,527                                            | $                               | 5,574                                | $                         | (2,063)                          | $     | 167  

























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 nine months
ended September 30, 2002

(U.S. Dollars in
thousand)

|                                              |                                                         |                                                    | 2002  | 2001   
|--------------------------------------------- | ------------------------------------------------------- | -------------------------------------------------- | ----- | -------
|Cash flows from
      operating activities:   |                                                         |                                                    |       |        
|                                              | Loss from
      operating activities                    | $                                                  | (725) | $      
|                                              | Items not
      requiring an outlay of funds            |                                                    |       |        
|                                              |                                                         | Amortization                                       |       | 143    
|                                              |                                                         | Minority interest                                  |       | 23     
|                                              |                                                         |                                                    |       | (559)  
|                                              |                                                         |                                                    |       |        
|                                              | Changes in
      non-cash working capital               |                                                    |       |        
|                                              |                                                         | Short-term
      investments                       |       | --     
|                                              |                                                         | Accounts
      receivable                          |       | (246)  
|                                              |                                                         | Long-term
      receivables                        |       | (1,141)
|                                              |                                                         | Inventory                                          |       | 110    
|                                              |                                                         | Prepaid expenses                                   |       | 600    
|                                              |                                                         | Accounts payable
      and accrued liabilities     |       | 1,272  
|                                              |                                                         | Customer deposits                                  |       | (467)  
|                                              |                                                         | Other trade
      payables                         |       | --     
|                                              |                                                         | Corporate taxes
      payable                      |       | 60     
|                                              |                                                         | Reserve for
      employee termination indemnities |       | (74)   
|                                              |                                                         |                                                    |       | (445)  
|                                              |                                                         |                                                    |       |        
|Cash flows from
      financing activities:   |                                                         |                                                    |       |        
|                                              | Proceeds
      (repayment) of long-term debt            |                                                    | (23)  |        
|                                              | Increase in
      minority interest                     |                                                    | 95    |        
|                                              | Proceeds from
      (payment of) demand loans           |                                                    | 300   |        
|                                              | Decrease in due to
      minority interest shareholders |                                                    | (112) |        
|                                              |                                                         |                                                    |       | 260    
|                                              |                                                         |                                                    |       |        
|Cash flows from
      investing activities:   |                                                         |                                                    |       |        
|                                              | Purchases of
      property, plant and equipment        |                                                    | (16)  |        
|                                              | Proceeds from
      (purchase of) long-term investments |                                                    | 41    |        
|                                              | Proceeds from
      (sale of) other investments         |                                                    | 164   |        
|                                              | Net cash acquired
      on acquisition of business      |                                                    | -     |        
|                                              | Acquisition of
      goodwill                           |                                                    | --    |        
|                                              |                                                         |                                                    |       | 189    
|                                              |                                                         |                                                    |       |        
|Effect of exchange
      rate changes on cash |                                                         | 48                                                 |       | 9      
|                                              |                                                         |                                                    |       |        
|Increase in cash                              |                                                         | 52                                                 |       | 765    
|                                              |                                                         |                                                    |       |        
|Cash, beginning of
      period               |                                                         | 398                                                |       | 554    
|                                              |                                                         |                                                    |       |        
|Cash, end of
      period                     | $                                                       | 450                                                | $     | 1,319  
|                                              |                                                         |                                                    |       |        
|Supplemental
      Disclosures                |                                                         |                                                    |       |        
|                                              |                                                         | Interest paid                                      | $     | 154    
|                                              |                                                         | 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

September 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
> specializes 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 that 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 specializes 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 consolidation
>   
>   
>   The 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                                                    
>     (34)



Total
  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:



> Licenses,
>         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 form 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 2001 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

> September
>   30            
>   September 30
>   2002                        
>   2001
> 
> 
> Raw
> materials                                                    
> $
> 234                        
> $ 1,051
> Work in
> progress                                                    
> 39                               
> 96
> Finished
> goods                                                  
> 2,173                                
> -

> $
>   2,446                        
>   $ 1,147







4. PROPERTY, PLANT AND
EQUIPMENT

> September 30  September 30
>   2002                 
>   2001
>   Accumulated  Net
>   Book          Net Book
>   Cost     Amortization    
>   Value             
>   Value



Fixed assets
construction in progress     $
251         $  
-                
$
251                
$ 212

Land and
buildings                                  
284          
156                 
128                   
114

Other
equipment                                     
377          
367                   
10                     
17

Other plant and
equipment                       
317         
180                  
137                     
64

Plant
and
machinery                            
1,064          
763                  
301                   
386



$ 2,293     $
1,466               
$
827                 
$ 793







5. INVESTMENTS AND OTHER
INVESTMENTS



> September 30         September 30
>   2002                    
>   2001

Investments in
enterprises



Advances to
sub-contractors of Impresa Mondelli Srl             
$   
54                    
$      -

Consortium Tecnos                                                                
571                          
526

Advances
to affiliated
companies                                                
-                           
830



Total                                                                                
$
625                     
$ 1,356



> 

Other investments



Other investments are
represented by fixed interest securities.





6. GOODWILL

> September
>   30            
>   September 30
>   2002                            
>   2001
> 
> Goodwill                                                            
> $
> 2,072                        
> $ 1,820
> Accumulated
> amortization                                          
> 14                                 
> 9



Total                                                                
$
2,058                        
$ 1,811





7. OTHER INTANGIBLE
ASSETS



> September 30 September 30
>   2002           2001
>   Accumulated     Net Book     Net Book
>   Cost    
>   Amortization        
>   Value         Value



Intangibles in process
and
advances              
$   -        
$    
-            
$      
-            
$     9

Licences, trade-marks
and similar
rights           
116            
92                  
24                
23

Others intangible
assets                                  
127            
51                  
76                 
3

Patents and intellectual
property
rights               
16            
15                    
1                 
6

Research
and development
expenditures              
4              
4                   
-                  
-



$ 263         $
162             
$ 101             $
41





8. DEMAND LOAN



> 

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



9. LONG-TERM DEBT

> September 30   September 30
>   2002                
>   2001
> 
> 
> Mortgage payable to
> Credito Fondiario S.p.A., secured by building,
> no specific 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                    
> 24
> Mortgage payable to
> Ambrosiano Veneto, secured by building, requiring semi-annually payments of $4,
> including interest at 4.675%.
> Balance                                                                                     
> 56                     
> 51





Less current
portion                                                                  
112                     
15

$  
65               
$     60





9. LONG-TERM DEBT
(continue)



> Principal amounts due
> within the next three years on mortgages payable are as follows:
> 
> 2003                               
>           $ 112
>           2004                                   
>           56
>           2005                                     
>           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
> The preferred shares
> are convertible to common shares at the rate of one preferred share for four
> common shares after the trading value of the common shares exceeds $5 US per
> share for a period of at least 30 consecutive days.

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 nine month period ended September 30,
>   2002 and a reconciliation of segment operating profit to earnings before
>   income taxes.
>   
>   
>   Construction     Telecommunication    
>   Others     Total
>   
>   
>   Revenues                                        
>   $
>   1,266                    
>   $
>   655                  
>   $     -     $ 1,921
>   Operating
>   expenses                            
>   1,585                    
>   1,515                        
>   4       3,104
>   Operating income
>   (loss)                        
>   (319)                    
>   (860)                       
>   (4)    (1,183)
>   Other
>   income
>   (expenses)                         
>   39                      
>   442                        
>   -          481
>   Earnings (loss) before
>   income
>   taxes
>   and minority
>   interest                
>   $
>   (280)                  
>   $
>   (418)                  
>   $   (4)   $ (702)





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 nine
>   month period ended September 30, 2002 the Company has received from the former
>   shareholders of SITI S.p.A. $107 (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 September 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 September 30, 2002.



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.









ITEM 3 Effectiveness of
the registrant's disclosure controls and procedures

Within the 90-day period
prior to the filing of this report, the Company carried out an evaluation of the
effectiveness of the Company's disclosure controls and procedures (as defined
by Rule 13a-14(c) under the Securities Exchange Act of 1934) under the
supervision and with the participation of the Company's chief executive
officer and chief financial officer. Based on and as of the date of such
evaluation, the aforementioned officers have concluded that the Company's
disclosure controls and procedures were effective.

The Company also
maintains a system of internal accounting controls that is designed to provide
assurance that assets are safeguarded and that transactions are executed in
accordance with management's authorization and properly recorded. This system
is continually reviewed and is augmented by written policies and procedures, the
careful selection and training of qualified personnel and an internal audit
program to monitor its effectiveness. During the first quarter of fiscal year
2003, there were no significant changes to this system of internal controls or
in other factors that could significantly affect those controls.



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



CERTIFICATION PURSUANT
TO SECTIONS 906 AND 302

OF THE SARBANES-OXLEY
ACT OF 2002





I, Giovanni Iachelli,
certify that:



1. I have reviewed this
quarterly report on Form 10-Q of Prime Holdings and Investments, Inc. for the
quarter ended September 30, 2002;



2. Based on my
knowledge, this quarterly report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly report;



3. Based on my
knowledge, the financial statements, and other financial information included in
this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this quarterly report.



4. The registrant's
other certifying offering officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure
controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
quarterly report is being prepared; b) evaluated the effectiveness of the
registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the "Evaluation
Date"); and c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;



5. The registrant's
other certifying officers and I have disclosed, based on our most recent
evaluation, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent function): a) all
significant deficiencies in the design or operation of internal controls which
could adversely affect the registrant's ability to record, process, summarize
and report financial data and have identified for the registrant's auditors
any material weaknesses in internal controls; and b) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the registrant's internal controls; and



6. The registrant's
other certifying officers and I have indicated in this quarterly report whether
or not there were significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.



Date: November 19th,
2002





Giovanni Iachelli

By: Giovanni Iachelli

President