U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                   FORM 10-QSB/A-2



 QUARTERLY REPORT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended: September 30, 2000


                        Commission file number: 000-28583


                       NEW YORK REGIONAL RAIL CORPORATION
              (Exact name of small business issuer as specified in
                                  its charter)


                  DELAWARE                                    13-3081571
                  ---------                                   ----------
         (State or other jurisdiction of                    (I.R.S. Employer
         incorporation or organization)                    Identification No.)



                        4302 First Ave Brooklyn, NY 11232
                        ---------------------------------
          (Address of principal executive offices, including zip code)


                                 (718) 788-3690
                                 --------------
                           (Issuer's telephone number)


Indicate by check mark whether the Issuer (1) has filed all reports  required to
be filed by Section 14 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  such filing  requirements  for the past 90
days.

                                                  Yes [ X ] No [ ]


There were 170,238,655 shares of the Registrant's Common Stock outstanding as of
September 30, 2000


<PAGE>


                                      INDEX

Part  I: Financial Information

Item 1.  Financial Statements:

 Unaudited Consolidated Balance Sheet - as of September 30, 2000               2

 Unaudited  Consolidated  Statements  of  Operations,  Nine Months Ended
 September 30, 2000 and September 30, 1999 and the three months
 ending September 30, 2000 and September 30, 1999                              3

 Unaudited Consolidated Statement of Cash Flows, Nine Months Ended
 September 30, 2000 and September 30, 1999                                     4

 Notes to Consolidated Financial Statements                                  5-8

Item 2.
 Management's Discussion and Analysis or
 Plan of Operations                                                         9-13

Part II:
 Other Information                                                            13

Item 1.  Legal Proceedings                                                    13

Item  2. Change in Securities                                                 13

Item  3. Defaults Upon Senior Securities                                      14

Item  4. Submission of matters to a vote of Security Holders                  14

Item  5. Other Information                                                    14

Item  6. Exhibits and Reports on Form 8-K                                     14

Signatures                                                                    15


<PAGE>

                    NEW YORK RAIL CORPORATION AND AFFILIATES
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2000
                                   (Unaudited)
                                   (Restated)


                                     ASSETS

CURRENT ASSETS:
 Cash                                                      $             87,255
 Accounts receivable                                                    847,308
 Other current assets                                                   108,742
                                                             -------------------
  TOTAL CURRENT ASSETS                                                1,043,305

PROPERTY AND EQUIPMENT, net                                           4,200,438

OTHER ASSETS                                                            485,011
                                                             -------------------
                                                           $          5,728,754
                                                             ===================

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
 Accounts payable and accrued expenses                     $          2,560,112
 Notes payable and current maturities of long term debt               1,972,693
 Payroll and payroll taxes payable                                      745,088
                                                             -------------------
  TOTAL CURRENT LIABILITIES                                           5,277,893
                                                             -------------------

LONG TERM DEBT, NET OF CURRENT MATURITIES                               624,974

MINORTY INTEREST                                                        195,096

TEMPORARY EQUITY                                                      1,512,500

STOCKHOLDERS' DEFICIIT:
 Common stock, $ .0001 par value;
  authorized 200,000,000 shares;
  issued and outstanding 170,238,655 shares                              17,024
 Preferred stock series C convertible                                   500,000
 Additional paid-in capital                                          12,027,052
 Accumulated deficit                                                (14,425,785)
                                                             -------------------
  TOTAL STOCKHOLDERS' DEFICIT                                        (1,881,709)
                                                             -------------------
                                                           $          5,728,754
                                                             ===================












                 The accompanying notes are an integral part of
                           the financial statements.
                                        2
<PAGE>
                    NEW YORK RAIL CORPORATION AND AFFILIATES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>


                       Three Months Ended September 30,   Nine Months Ended September 30,
                      --------------------------------- ---------------------------------
                               2000            1999           2000            1999
                      --------------------------------- ---------------------------------
                           (Unaudited)      (Unaudited)    (Unaudited)     (Unaudited)
                                                                            (Restated)

<S>                       <C>            <C>            <C>             <C>
OPERATING REVENUES        $  1,907,424   $   1,733,182  $   6,781,199   $   3,033,486

OPERATING EXPENSES           1,617,485       1,597,330      5,801,277       2,665,541
                         -------------    ------------- -------------    ------------

INCOME FROM OPERATIONS         289,939         135,852        979,922         367,945

ADMINISTRATIVE EXPENSES        102,760         111,523        944,873       1,124,782
                         -------------    ------------- -------------    ------------
INCOME (LOSS) FROM
 OPERATIONS                    187,179          24,329         35,049        (756,837)

INTEREST EXPENSE               (48,104)       (892,467)      (952,993)     (1,507,672)

BENEFICIAL CONVERSION
 FEATURE                          -         (1,395,000)       (17,333)     (1,395,000)
                         -------------    ------------- -------------    ------------

INCOME (LOSS) BEFORE
 MINORITY INTEREST             139,075      (2,263,138)      (935,277)     (3,659,509)

MINORITY INTEREST IN
 INCOME OF SUBSIDIARY          (66,190)        (22,160)      (145,989)        (63,479)
                         --------------   ------------- -------------    -------------

NET INCOME (LOSS)         $     72,885   $  (2,285,298) $  (1,081,266)  $  (3,722,988)
                         ==============   ============= =============    =============

INCOME (LOSS PER COMMON
SHARE-BASIC AND DILUTED   $       0.00   $       (0.02) $       (0.01)  $       (0.02)
                         ==============   ============= =============    =============

WEIGHTED AVERAGE NUMBER
 OF COMMON SHARES          161,500,000     151,284,460    161,500,000     151,284,460
                         ==============   ============= =============    =============


</TABLE>


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

                                        3

<PAGE>
                    NEW YORK RAIL CORPORATION AND AFFILIATES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                                                 Nine Months Ended September 30,
                                                --------------------------------
                                                    2000                 1999
                                                --------------------------------
                                                 (Unaudited)         (Unaudited)
                                                                      (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                     $ (1,081,266)        $ (3,722,988)
                                                ------------        ------------
 Adjustments to reconcile net loss to
  net cash used in operating activities:
   Depreciation                                    306,740              205,000
   Amortization                                     29,925               35,000
   Minority interest in subsidiary earnings        145,989               80,629
   Warrants issued for conversion of debt          717,038            1,347,384
   Beneficial conversion feature                    17,333            1,395,000
   Common stock issued for services                143,480                 -

Changes in assets and liabilities:
 (Increase) in accounts receivable                (189,451)            (413,396)
 (Increase) in prepaid expenses                    (12,727)                -
 (Increase) decrease in other assets               154,387             (182,435)
 Increase (decrease) in accounts payable          (728,820)             309,792
 Decrease in accrued expenses                         -                 228,477
 Inrease (decrease) in payroll taxes payable        35,083             (341,469)
 Increase in deferred rent                           2,750               10,000
                                             ---------------        ------------
                                                  (621,727)           2,673,982
                                             ---------------        ------------

NET CASH USED IN OPERATING ACTIVITIES             (459,539)          (1,049,006)
                                             ---------------        ------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Capital expenditures                             (359,603)            (261,117)
                                              ---------------        -----------
NET CASH USED IN INVESTING ACTIVITIES             (359,603)            (261,117)
                                             ---------------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from notes payable                       522,500                  -
 Payment of long term debt                          (1,308)             (73,544)
 Receipts from convertible
  notes - other                                    170,000              662,740
 Receipts from (payment of)convertible
  notes - related party                               -                 654,532
 Payment of other current debt
   - related party                                    -                 (73,414)
 Payment of other current debt                        -                 (50,000)
 Proceeds from issuance of capital stock              -                 198,889
 Proceeds from exercise of stock options            12,231                 -
                                             ---------------        ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES          703,423            1,319,203
                                             ---------------        ------------

NET DECREASE IN CASH                              (115,719)               9,080

CASH - BEGINNING OF PERIOD                         202,974                8,291
                                             ---------------        ------------

CASH - END OF PERIOD                          $     87,255         $     17,371
                                             ===============        ============




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

                                        4


<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  statements and with the instructions to Form 10-QSB and Article 10 of
Regulation  S-X.  Accordingly,  they  do not  include  all the  information  and
disclosures required for annual financial statements.

In the opinion of the  Company's  management,  all  adjustments  (consisting  of
normal recurring  accruals)  necessary to present fairly the Company's financial
position as of September 30, 2000,  and the results of operations and cash flows
for the nine-month period ending September 30, 2000 and 1999 have been included.

The results of operations for the nine - month  period ended  September 30, 2000
are not necessarily  indicative of the results to be expected for the full year.


2.       CAPITAL STOCK
                                                      Number of Shares
                                                         Issued and
                                      Authorized        Outstanding       Amount

         Preferred  C                     500,000           500,000      500,000

         Common $.0001 par value      200,000,000       170,238,655       17,024


a.       Changes in Securities:

In July 2000, the Company issued to two unrelated parties 25,000 shares each of
the Company's common stock in settlement of additional interest owed as a result
of previous notes payable.

In September 2000, the Company's corporate counsel exercised 302,086 options at
$.21 per share. The options were exercised in order to satisfy accrued legal
fees in the amount of $63,438, incurred by the Company through August 2000.

In September 2000, the Company issued 377,920 shares of common stock in payment
of repair services valued at $60,000 and accrued interest of $9,031.


In 1998,  the  Company  reversed  the  issuance  of  12,500  shares  of Series B
Cumulative  Convertible  Preferred  Stock  ("  the  Preferred  Shares")  to  the
Company's  former  president  which were  issued in  exchange  for his return of
10,000,000  common shares.  Counsel  determined  that the preferred  shares were
invalidly  issued  because  an  amendment  to the  terms of the  Series B shares
required shareholder approval, which the Company never obtained. The Company has
not returned the 10,000,000  shares to the former  president and accordingly has
recorded the redemption value of the common shares in a temporary equity account
pending resolution of the transaction.

In June 2000, the Company issued 500,000 shares of its Series C Preferred  stock
to John  Marsala,  a principal  shareholder,  in payment of $500,000 in past due
convertible  notes and  accrued  interest  owed to him.  Each  Share of Series C
Preferred Stock is entitled to an annual dividend of $0.10 per share, commencing
June 2000.  Dividends not declared by the Board of Directors cumulate and accrue
interest at 10% per annum.  Upon any  liquidation or dissolution of the Company,
each outstanding Series C Preferred share is entitled to a distribution of $1.20
per share (plus any unpaid  dividends)  prior to any distribution to the holders
of the  Company's  common  stock.  At the option of Mr.  Marsala,  each Series C
Preferred  share may be  converted  into the greater of (i) 12.82  shares of the
Company's common stock or (ii) the number of shares determined by dividing $1.00
by an amount equal to 90% of the average  closing price of the Company's  common
stock for the five trading days preceding the date of conversion. For each share
of common stock received upon the  conversion of the Series C Preferred  shares,
Mr.  Marsala  will  recive a warrant  which will allow Mr.  Marsala to  purchase
1.0452 shares of the Company's common stock at a price of $0.12 per share at any
time prior to the later of 90 days following the dated the shares  issuable upon
the  exercise of the  warrant  have been  registered  for public sale or 90 days
after the conversion of the Preferred  shares.  Each Series C Preferred share is
entitled to 300 votes on any matter presented to the Company's shareholders. The
closing price of the  Company's  common stock was $.27 on the date the preferred
shares were issued.

                                       5

<PAGE>

3.       LEGAL MATTERS AND OTHER COMMITMENTS AND CONTINGENCIES


LEGAL

In 1993 and  again  in  1995,  the  Port  Authority  of New York and New  Jersey
("PANYNJ")  obtained  judgments  against NYCH for  approximately  $440,000.  The
judgments are for claims  involving rent arrearages on property  occupied by the
Company  at the  PANYNJ's  Atlantic  Terminal  facility  and for  accrued  lease
payments and rental payments for a Tug Boat owned by PANYNJ.

The financial statements have been restated to account for these judgments.  The
Company has reflected the full amount of the judgment as a current liability. In
addition,  statutory  interest  at a  rate  of 9%  has  been  accrued  annually.
Therefore  the  effect of  recording  these  judgments  is to  increase  current
liabilities  and  decrease   stockholders'  deficit  by  approximately  $658,000
(including accrued interest of ($218,000).

In January  2000,  the PANYNJ  enforced  its  judgments by placing a lien on the
Company's  accounts  receivables with Norfolk Southern ("NS").  In February 2000
the Company and PANYNJ reached a temporary repayment agreement whereby, NS would
remit 20% of all accounts  receivable  due the Company to PANYNJ until such time
as a permanent agreement could be reached. The temporary repayment agreement has
been subsequently extended on several occasions. Through July 2000 approximately
$25,000 has been remitted to the PANYNJ in partial satisfaction of the judgment.
Management  is  currently  negotiating  with PANYNJ in an attempt to arrive at a
settlement amount and structure a longterm repayment schedule.


In researching the judgment with the PANYNJ,  the Company discovered that a deal
had  previously  been  reached   regarding  this  dispute,   whereby  NYCH  (our
subsidiary),  agreed not to contest  the  judgment.  Along with other  terms and
conditions,  the  PANYNJ  agreed to settle  the issue for  $100,000.  One of the
reasons  for such a reduction  was that the  tugboat in question  was not in the
condition agreed upon its charter.  In continuing  negotiations with the PANYNJ,
they agreed that the Cross Harbor Floating  Operations were vital to the region,
and  therefore  the PANYNJ  released the lien on a  monthtomonth  basis.  During
fiscal year 2000 the company  received  100 % of all  revenues.  Recently,  upon
further meetings with the PANYNJ,  they agreed to release the lien until further
notice.  They also suggested that the Company submit to their Board for approval
the benefits of the company to interstate commerce for both NY & NJ. It was felt
that a compelling  argument would greatly reduce, if not totally eliminate,  the
necessity for future payments.

EMPLOYMENT AGREEMENTS

In September 2000, the Company  terminated the services of its current President
(Mr.  Robert  Bentley) under the current  employment  agreement.  As part of the
termination agreement, the Company agreed to compensate the former president for
wages due from the date of termination  through  December 31, 2000. In addition,
the Company agreed to issue common shares per the original employment agreement.
The Company will issue share grants of 333,333  shares per year for a three year
period, beginning March 2001.

In September 2000, the Company hired a President of NYRR,  NYCHRR,  CHP and OSK.
The Company  entered into an agreement  whereby the President and his designated
affiliate will receive an annual salary of $84,000.  In addition,  the President
is eligible for incentive  bonuses.  These bonuses are a combination of cash and
stock options. The incentive bonuses are based upon performance related to sales
increases of NYCHRR. This agreement is for a period of one year and is renewable
at the option of the parties.

In September  2000,  the Company  hired a Vice  President of Operations of NYRR,
NYCHRR and CHP.  The  Company  and the  individual  entered  into an  employment
agreement.  This  agreement  provides for annual  compensation  of $42,000.  The
agreement further stipulates that for every six months of satisfactory  service,
the VP of  Operations  is vested for 25,000  options.  This  agreement  is for a
period of one year and is renewable at the option of the parties.

OTHER

On September 1, 2000 the Company was informed by the Gloucester  County Landfill
Improvement  Authority  (GCLIA) that the current waste supply agreement  between
the companies will not be renewed.  Therefore,  effective December 31, 2000, the
Company  will no longer be  entitled to dispose of waste at current  rates.  The
Company is currently  negotiating with other landfill facilities and anticipates
continuing landfill operations without any interruption.

                                       6

<PAGE>

4.      Pro Forma Results of Operations

The following unaudited proforma condensed combined statements of operations for
the nine  months  ended  September  30,  1999  gives  retroactive  effect to the
acquisition  of JST on April 1, 1999,  which was accounted for as purchase.  The
unaudited proforma condensed combined statements of operations gives retroactive
effect to the  foregoing  transaction  as if it had occurred at the beginning of
1999.  The proforma  statement  does not purport to represent what the Company's
results of operations would actually have been if the foregoing  transaction had
actually  been  consummated  on such date or project  the  Company's  results of
operations for any future period or date.

                 The proforma statement should be read in conjunction with the
historical financial statements and notes thereto.


                                                     Nine Months Ended
                                                        September 30,
                                                           1999
                                                     -------------------
Revenues                                                $ 3,501,135
Loss before extraordinary items
 and minority interest                                   (3,529,509)
Net Loss                                                 (3,651,988)
Loss per share                                                (0.02)
Weighted average number of shares outstanding           151,284,460

5.   Segment Information

The  following  information  is  presented  in  accordance  with  SFAS No.  131,
Disclosures About Segments of an Enterprise and Related  Information,  which was
adopted by the Company during 1999.

The following  tables provide  summarized  information  concerning the Company's
reportable segments.

                                  Railroad         Trucking             Total
                                -------------   ---------------      -----------
As of September 30, 2000
-----------------------
Segment assets                  $ 3,919,556      $ 1,809,198         $5,728,754

Nine months ended September 30, 2000
-------------------------------------
Operating revenues              $   965,683      $ 5,815,516         $6,781,199
Gross profit                        639,176          340,746            979,922
Segment profit (loss)            (1,233,215)         151,949         (1,081,266)
Interest income                        -                -                  -
Interest expense                    922,493           30,500            952,993
Depreciation and amortization        98,300           60,000            158,300


                                  Railroad         Trucking             Total
                                -------------   ---------------      -----------
Nine months ended September 30, 1999
-------------------------------------
Operating revenues              $   595,141     $  2,438,345         $3,033,486
Gross profit                        169,018          198,927            367,945
Segment profit (loss)            (3,806,908)          83,920         (3,722,988)
Interest income                        -                -                  -
Interest expense                  1,471,735           35,937          1,507,672
Depreciation and amortization       141,000           99,000            240,000

 MAJOR CUSTOMER

Trucking  operations sales to Waste Management Inc.,  represented  approximately
13% and 30% of net sales for the nine months ended  September  30, 2000 and 1999
respectively.  There was no other  customer of the Company whose sales  exceeded
10%.

                                       7

<PAGE>

6.      RESTATEMENT

The  accompanying  financial  statements have been restated to properly  reflect
restatements made to the financial statements of 1999 and prior years.  Accounts
payable  and accrued  expenses  have been  adjusted  to reflect  the  additional
accruals of expenses  associated with a judgement obtained by the Port Authority
of New York/New  Jersey.  An account has been created called Temporary Equity to
reflect the 1998 reversal of the issuance of 12,500 shares of an amended  Series
B Preferred  Stock to the Company's  former  president in exchange for return of
his 10,000,000 common shares.  Counsel determined that the preferred shares were
invailidly  issued because of an amendment to the terms of the Series B required
shareholder  approval,  which the Company  never  obtained.  The Company has not
returned the  10,000,000  shares and has recorded  the  redemption  value of the
common  shares as temporary  equity and has reversed the charge  reflecting  the
beneficial  conversion  feature  of the  amended  Series  B  Preferred  stock of
$567,000.

The 1999 financial  statements  have been revised to reflect the following:  (i)
reversal of the overstated  beneficial conversion feature of $4,628,699 and (ii)
to record the Black-Scholes value of warrants issued on conversion of notes plus
options issued of $2,223,532.


The 2000  financial  statements  have been  restated to reflect the  issuance of
warrants  on  conversion  of  notes in March  and May 2000 of  $717,038  and the
beneficial  conversion feature on $60,000 of notes issued in March/April 2000 of
$17,333.


The effect of such restatements on the Company's quarterly financial statement
is as follows:

                                           As                            As
                                        Reported      Adjustments     Restated
                                      ------------------------------------------

Balance Sheet Adjustments
 Property and equipment              $  4,358,438       (158,000)  $  4,200,438
 Other assets                              87,011        398,000        485,011
 Accounts payable and accrued
  expenses                              3,282,207       (722,095)     2,560,112
 Temporary Equity                          -           1,512,500      1,512,500
 Minority Interest                        487,324       (292,228)       195,096
 Additional paid-in capital            15,283,912     (3,256,860)    12,027,052
 Accumulated deficit                  (17,424,468)     2,998,683    (14,425,785)

Statement of Operations
 Adjustments
Nine months ended September 30, 1999
 Loss from operations                $    756,837   $       -      $    756,837
 Net loss                               7,004,303     (3,281,315)     3,722,988
 Net loss per common share basic     $      (0.05)  $       -      $      (0.02)

Three months ended September 30, 1999
 Income from operations              $     24,329   $       -      $     24,329
 Net loss                               6,074,925     (3,789,627)     2,285,298
 Net loss per common share basic     $      (0.04)  $       -      $      (0.01)

Nine months ended September 30, 2000
 Income from operations                $   61,778   $    (26,729)  $     35,049
 Net loss                                 268,292        812,974      1,081,266
 Net loss per common share basic     $      (0.00)  $       -      $      (0.01)

                                       8
<PAGE>

Item 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following  discussion  contains  forward-looking  statements  that involve a
number  of  risks  and  uncertainties.  While  these  statements  represent  the
Company's  current judgment in the future direction of the business,  such risks
and  uncertainties  could cause  actual  results to differ  materially  from any
future performance suggested herein. Certain factors that could cause results to
differ materially from those projected in the forward-looking statements include
level of freight shipments,  competition, future contractual terms with landfill
authorities,  impact of  government  regulations,  availability  of  capital  to
finance growth and general economic conditions.

The  following  should  be read  in  conjunction  with  the  attached  financial
statements and notes thereto of the company.

RESULTS OF OPERATIONS

The  components  of the  Company's  operating  revenues and expenses by business
segment during the nine months ending September 30, 2000 were

                                            Railroad       Trucking

Operating revenues                          $966,000       $5,815,000
Operating expenses                          $462,000       $5,339,000
Gross profit                                $504,000       $  476,000


During the nine months ending  September 30, 2000, the Company had $6,781,199 in
revenue  compared to $3,033,406 in revenue during the  corresponding  prior year
period,  an  increase of 123.55%.  This  increase  was due to an increase in the
trucking  operations to approximately  $5,800,000 from approximately  $2,900,000
for the corresponding  nine month period in 1999 an increase of 100% (See Note 4
for pro forma results).

Operating expenses for the nine months ending September 30, 2000 were $5,801,277
compared  to   $2,665,541   an  increase  of  $3,135,736  or  117.64%  over  the
corresponding year. This increase in expense is due primarily to a corresponding
increase in  operating  expenses  for the  trucking  operation  due to increased
revenues plus the inclusion of JST's  operating  expenses for a full nine months
versus  six  months  in the  prior  year.  The  increase  was the  result of the
acquisition of JST and the inclusion of JST's  operating  expenses of $5,339,000
for the full nine months.  JST's  operating  expenses  consist of  $1,567,000 in
hauling fees,  $1,094,000 in landfill  fees and  equipment and  depreciation  of
$191,000.

Operating expenses as a percentage of operating revenues were 88% for the nine
months ended September 30, 1999. In 2000 operating expenses decreased to 86% of
operating revenues due to modernization. Operating expense from rail operations
decreased by 33% in 2000 to approximately $462,000 from approximately $696,000
in 1999.

Administrative expenses decreased in the nine months ended September 30, 2000 by
$180,000.  As  a  percentage  of  operating  revenues,  administrative  expenses
decreased to 13.9% nine months ended  September 30, 2000 from 37.1% for the nine
months  ended  September  30, 1999.  The  decrease of  $180,000,  comes from the
conscious effort of the Company to reduce costs.

                                       9
<PAGE>


Interest  expense  and  beneficial  conversion  feature  for nine  months  ended
September  30, 2000 and 1999,  was $970,326 and  $2,902,672  respectively.  This
includes,  the issuance of warrants and options on the sale of promissory  notes
which were convertible into shares of the Company's common stock at prices below
prevailing  market  rates,  of $734,371 and  $2,685,775,  respectively  of which
$221,351 and $1,516,487 respectively, was to related parties.

The Company  recognized a net profit for the three months  ended  September  30,
2000 of $72,885  versus a loss for the three months ended  September 30, 1999 of
$(2,285,298).


LIQUIDITY AND CAPITAL RESOURCES

The  Company's  working  capital  deficit at September  30, 2000 was  $4,234,588
compared to a deficiency  of  $5,147,857  at December 31, 1999.  The increase in
working capital was primarily due to the conversion of approximately  $1,500,000
of  convertible  notes and debt into shares of common and  preferred  stock.  In
addition,  the Company  recognized  profits from  operations for the nine months
ended  September 30, 2000 of $35,049 versus a loss from  operations for the nine
months ended September 30, 1999 of $756,837.

The  Company's  dramatic  improvement  in operating  income was due to increased
revenues and expense with  corresponding  reductions of expenses at both JST and
NYCH.  Management  anticipates  continued growth and increased  profitability in
both its  rail/barge  and  trucking  operations.  The  acquisition  of JST was a
significant  contributor  to the overall  profits  from  operations.  Management
intends on acquiring  the remaining  49% of the  outstanding  shares of JST. The
terms of the acquisition  are still under  negotiation.  Management  anticipates
completion of this transaction in the near future.

Although  during fiscal 2001 the Company  expects that its operations will begin
to generate net income, the Company nevertheless anticipates, based on projected
sales  volume that it will suffer  losses of  approximately  $100,000  until the
Company becomes profitable. The Company expects that it will be able to meet all
its  routine  working  capital  needs and  operational  costs from new  business
created based on customer demand during the current year.

As of September 30, 2000 the Company had the following liabilities;

   Accounts payable and accrued expenses        $       2,560,112
   Notes payable and current maturities
    of long-term debt                                   1,972,693
   Payroll taxes payable                                  745,088

Accounts  payable  and accrued  liabilities  include  $508,000  owed for accrued
interest  on  convertible  notes and for accrued  legal fees.  A majority of the
legal fees are payable through options granted to the respective law firms.  The
Company  anticipates  that most of the accrued  interest  and legal fees will be
satisfied through the exercise of said conversion features.

Accounts payable and accrued expenses include a perfected  judgement by the Port
Authority of New York and New Jersey  ("PANYNJ") in the amount of  approximately
$780,000  including  interest.  The Company is  currently  negotiating  with the
PANYNJ for a long-term payout. Management is confident such an agreement will be
reached in the near future.

Accounts  payable and accrued expenses include $345,000 to a former customer for
advances  and  accrued  tug boat  charges.  Management  has been  negotiating  a
settlement  in exchange for shares of common stock and  anticipates a resolution
in the near future.

Accounts  payable and accrued expenses also include  approximately  $725,000 for
accrued real estate taxes. The City of New York has billed the Company in excess
of $3,200,000 for property taxes dating back to 1984.  Management  expects,  but
cannot give assurance,  that the outstanding  liabilities  will be settled for a
lesser  amount.  Based upon  recent  discussions  the Company has had with local
taxing  authorities,  the Company  believes  that its  liability for real estate
taxes can be settled for approximately $150,000.

Subsequent to December 31, 1999,  notes in the principal  amount of  $1,022,861,
plus accrued interest, were converted into shares of the Company's common stock.
The Company  believes that all or  substantially  all of the remaining notes and
warrants  outstanding  will be  converted  into shares of the  Company's  common
stock.
                                       10

<PAGE>

The Company is  currently  negotiating  with  vendors,  federal and state taxing
authorities and the holders of several material obligations,  whereby management
is confident that  settlement of these amounts will be  significantly  less than
the amounts  currently  recognized  on the  Company's  books.  Long-range  plans
considered by management include  application for low interest loans through the
Federal Rail  Administration  ("FRA") for short-line  railroad's and grants from
New York and New Jersey State Department of Transportation.

During the nine months ended  September 30, 2000 the Company's  operations  used
$459,539 in cash and the Company acquired approximately $360,000 of property and
equipment.  The Company  financed  its cash needs  during this period  primarily
through the issuance of (LAMBDA) notes. In April 2000 JST became  profitable and
began  providing  the  Company  with a  source  of  cash.  In  order to fund its
operating   losses,   the  Company   sold  $60,000  of   convertible   notes  to
non-affiliated investors in private offerings.

The Company has incurred  substantial  losses since it was formed.  Although the
Company  expects to continue to incur  losses  until such time,  if ever,  as it
earns net income.  Management has taken many steps to improve  profitability and
increase  revenues.  Such  steps  include  the  acquisition  of JST,  which  has
increased  gross  profit.  In  addition  the  Company  has  reduced  outstanding
liabilities  substantially  which  has in turn  reduced  interest  expense.  The
Company has also made efforts to reduce administrative expenses by the reduction
of its  workforce  and has  reduced  operating  costs by better  utilization  of
manpower and equipment and other expense reductions.

The Company has needed to fund its working capital deficit. The Company has
raised these funds though issuance of floating rate convertible debentures. The
Company agreed to the terms of the convertible notes because the Company was
unable to obtain conventional financing due to the Company's financial
condition. Notes in the principal amount of approximately $650,000 restrict the
Note holder from short selling the Company's common stock with the intention of
covering the short position with shares received from the conversion of the
Note. Short selling is a practice of selling shares, which are not owned by a
seller with the expectation that the market price of the shares will decline in
value after the sale. With the exception of the restrictions on short selling,
the terms of the notes do not provide the Company or the Company's shareholders
with any protection in the event of a decline in the price of the Company's
common stock.

In June 2000 the Company issued 500,000 shares of its Series C Preferred stock
to John Marsala in payment of $500,000 in past due convertible notes and accrued
interest owed to Mr. Marsala. At the option of Mr. Marsala, each Series C
preferred share may be converted into the greater of (i) 12.82 shares of the
Company's common stock or (ii) the number of shares determined by dividing $1.00
by an amount equal to 90% of the average closing price of the Company's common
stock for the five trading days preceding the date of conversion. For each share
of common stock received upon the conversion of the Series C Preferred shares,
Mr. Marsala will receive a warrant which will allow Mr. Marsala to purchase
1.0452 shares of the Company's common stock at a price of $0.12 per share at any
time prior to the later of 90 days following the date the shares issuable upon
the exercise of the warrant have been registered for public sale or 90 days
after the conversion of the Preferred shares. The closing price of the Company's
common stock was $0.27 on the date the preferred shares were issued to Mr.
Marsala.

         The actual number of shares which will be issued upon the conversion of
the notes and the Company's Series C preferred stock, which remain outstanding
cannot be determined at this time and will depend upon the price of the
Company's common stock at the time of conversion. The issuance of common stock
upon the conversion of these securities or the exercise of the warrants, as well
as future sales of such common stock or the perception that such sales could
occur, could adversely affect the market price of the Company's common stock.

         If the holders of the notes or the preferred shares convert these
securities at a time when the Company's common stock is declining the Company
will be required to issue more shares of its common stock for any given dollar
amount converted. Shares issued upon the conversion of the notes or the Series C
Preferred shares will cause the Company's then outstanding shares to be diluted
and as a result the Company's stock price could decline further. Any decline in
the price of the Company's common stock may encourage short sales, which could
place further downward pressure on the price of the Company's common stock.

There is no limit as to the number of shares, which could be issued upon the
conversion of the Notes or the Series C Preferred stock nor is there any
limitation as to when, or under what conditions, these securities can be
converted. See Part II, Item 1, of the Company's registration statement Form
10SB, dated November 19, 2001, for information concerning the number of shares
which could be issued upon conversion based on various prices.

                                       11
<PAGE>

         Based upon the foregoing, the Company's anticipated capital needs for
the next twelve months are as follows;

  Operating Losses                                                      $100,000

  Payment of trade payables and accrued liabilities                     $100,000

  Repairs to Bush and Greenville terminals                              $100,000

  Repairs to locomotives and car floats                                 $100,000

  Payroll taxes, real estate taxes, and
   related interest and penalties                                       $750,000

The Company expects that any additional tractors or trailers required by JST can
be acquired through capital leases or similar types of equipment financing. JST
has been able to arrange these types of financing since January of 2000.

The Company rail operations do not have any available credit, bank financing or
other external sources of liquidity. Due to historical operating losses, the
Company's rail operations have not been a source of liquidity. Until such time
as the Company becomes profitable, the Company's continued operations will
depend upon the availability of additional funding. In order to obtain capital,
the Company may need to sell additional shares of its common stock or borrow
funds from private lenders. There can be no assurance that the Company will be
able to obtain additional funding, if needed, or, if available, on terms
satisfactory to the Company. There can be no assurance that the Company will be
able to generate sufficient revenues to be profitable. Additionally, there are
administrative remedies available to the Company's creditors including, but not
limited to, judgments, liens and levies, which can be placed on the Company's
bank accounts. Historically, these remedies have been used by the creditors of
the Company and have resulted in additional cash flow hardships for the Company.
There can be no assurance that these remedies may not be used in the future.

The Company expects that it will be able to meet all its routine working capital
needs and operational costs from new business created based on customer demand
during the current year. The Company's two largest expenditures in its rail
operations are towing and manpower. By utilizing its larger car float the
Company can greatly reduce these two expenditures. The third largest expense is
per diem car hire. The per diem car hire expenses are the rental charges that
the owners of rail cars charge railroads. Rents are charged to the Company after
the first day for cars destined for immediate transfer to other railroads, and
five days for cars which are destined for loading by the local customers of the
Company. The largest local customers of the Company's are its cocoa customers.
In the past these per diem car hire charges have amounted to 10% of the
Company's revenue. The Company has renegotiated the rate for local customers
whereas the rents now begin five days after the cars are loaded not received.
This change will greatly reduce the fees the Company will be charged.

 Change in Management

The following provides certain information concerning changes during the nine
months ending September 30, 2000 and the dates of service of the former and
present management of the Company.

                                                                Periods of
Name                     Position                                Service

W. Robert Bentley    Director                                   3/98 to 9/00

W. Robert Bentley    President                                 12/98 to 9/00

Irene Bodkin         Director                                  10/95 to 6/00

Donald Boehm         Director                                   3/98 to 5/00

Ira Levy             Chief Financial Officer                    5/99 to 6/00

Ronald Kuzon         Director                                   6/99 to 2/00

Tad Mahoney          VP Operations                              4/00 to 9/00

Gordon Kuhn          Director                                   9/00 to present

Ronald W.  Bridges   President                                  9/00 to present

Wayne Eastman        VP Operations                              9/00 to present

                                       12

<PAGE>

Ronald W. Bridges has been the  President of the Company since  September  2000.
Between May 1999 and September 2000 Mr. Bridges was an independent consultant to
numerous  transportation  companies.  Mr. Bridges served as Conrail's  Assistant
Vice President,  Forest and Manufactured  Goods Business Group,  from April 1994
until his retirement in May 1999.

Wayne A.  Eastman has been the  Company's  Vice  President of  Operations  since
September  2000.  Mr. Eastman was the District  Superintendent  of Conrail's Oak
Island Terminal and Yard  Operations in Newark,  NJ from 1998 to 2000. From 1987
To 1988 Mr. Eastman was superintendent of two regional railroads in the Midwest.
Between  1969 and 1987 Mr.  Eastman  held  various  positions  with the Illinois
Central Railroad.

Gordon Kuhn has been a director  of the  Company  since  September  2000.  Since
October 1997 Mr. Kuhn has been an independent  consultant to corporations in the
railroad  industry.  From November 1992 until his retirement in October 1997 Mr.
Kuhn was Conrail's  Senior Vice President in charge of its Core Business  Group,
with  annual  sales  of over  $1,800,000,000.  While  employed  by  Conrail  his
responsibilities  included all aspects of Sales,  Marketing,  Customer  Service,
Billing & Collecting, Car Management, as well as, Industrial Development.

In April 2000,  the Company hired Tad Mahoney,  formerly of Conrail as its VP of
Operations.  Mr. Levy,  the  Company's  CFO and director had left the Company to
work for BDO Seidman in June 2000.  Mr. Marcus  replaced Mr. Levy. In July 2000,
Mr. Mahoney  recommended  Mr. Kuhn to be a director to fill a vacancy.  Mr. Kuhn
was a seasoned, extremely successful railroad executive who had recently retired
from  Conrail.  Mr.  Kuhn was asked by the Board to find a  replacement  for Mr.
Bentley whose employment  agreement was soon to expire. Mr. Kuhn recommended Mr.
Bridges to the board as that  replacement.  Mr. Eastman  replaced Mr. Mahoney in
September 2000.


Part II:          Other Information

Item:  1.         Legal Proceedings:

Fraser,  McIntyre  and  Spartz v NYCH.  Supreme  Court of the State of New York,
County of Kings,  Index no. 45966/99 action commenced November 23, 1999. This is
a recently filed lawsuit by three individuals alleging ownership in NYCH. One of
the  individuals,  Stephen H.  Fraser is a  shareholder  of NYCH.  The other two
individuals  sold their  interest to Robert R. Crawford in or about 1993.  These
two individuals claim that they were not paid by Crawford. They allege that NYCH
has guaranteed the performance of Mr. Crawford.  Because of the recent nature of
this lawsuit we have not  conducted  an  extensive  review of this matter and at
this time cannot comment on the viability of the allegation.

Murphy,  Marseilles,  Smith  &  Nammack,  Inc.  Chapter  7 Case  No.  98 B 42104
(SMB)Richard E. O'Connell v NYRR Adversary  Proceeding No.  0002413.  This is an
action brought by the trustee for the Murphy, Marseilles,  Smith & Nammack, Inc.
Estate. The trustee claims that Murphy, Marseilles, Smith & Nammack, Inc. made a
loan to Best  Sellers in the amount of $50,000.  The Trustee has produced a copy
of a Note dated April 11, 1996.  NYRR has no record of having ever  received the
money nor did Best Sellers  disclose this  obligation  in the merger  documents.
Further, we have been informed that a certification was executed by Martin Weber
whereby he  affirms  that Best  Sellers  never  authorized  the note nor did the
Company  receive the proceeds.  We are attempting to locate this  document.  The
Company  is  currently  assessing  the  merits of the  claim  and has  consulted
counsel. The Company has settled this claim for $7,500.

The company is currently reviewing certain transactions by former management.

                                       13

<PAGE>

Item  2. Changes in Securities:

In July 2000, the Company issued to two unrelated parties 25,000 shares each of
the Company's common stock in settlement of additional interest owed as a result
of previous notes payable.

In September 2000, the Company's corporate counsel exercised 302,086 options at
$.21 per share. The options were exercised in order to satisfy accrued legal
fees in the amount of $63,438, incurred by the Company through August 2000.

In September 2000, the Company issued 377,920 shares of common stock in payment
of repair services valued at $60,000 and accrued interest of $9,031.


Item  3. Defaults Upon Senior Securities:

         None

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

         None

Item  5. Other Information:

         None

Item  6. Exhibits and Reports on Form 8K:


(a)

Exhibit
  No.      Description

10.1       Employment Agreement between NYRR and Tad Mahoney dated April 1, 2000

10.2       Employment  Agreement  between  Wayne A.  Eastman,  Jr.  and New York
           Cross Harbor Railroad Terminal Corporation, NYRR and CH Propriety
           dated September 18, 2000.

10.3       Handling Line Agreement between Norfolk Southern Corporation and New
           York Cross Harbor Railroad Terminal Corporation date April 19, 2000.

10.4       Promissory note dated May 25, 1999 (Incorporated by reference
           to Exhibit 10.16 of the Registrant's Amended Registration Statement
           on Form 10SB, Registration No.0-28583, dated November 20, 2001),
           schedule attached.

10.5       Promissory note dated December 6, 1999 (Incorporated by reference
           to Exhibit 10.21 of the Registrant's Amended Registration Statement
           on Form 10SB, Registration No.0-28583, dated November 20, 2001),
           schedule attached.

10.6       Form of Subscription Agreement (Incorporated by reference
           to Exhibit 10.27 of the Registrant's Amended Registration Statement
           on Form 10SB, Registration No.0-28583, dated November 20, 2001).

10.7       Promissory note dated June 1, 2000.


27         Financial Data Schedule

(b)      Reports on Form 8K:

                  None


                                       14

<PAGE>

                                   Signatures


         Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.


Date:  November 26, 2001                 /s/RONALD W. BRIDGES

                                         RONALD W. BRIDGES, PRESIDENT

Date:  November 26, 2001
                                         /s/JOEL MARCUS

                                         JOEL MARCUS, CHIEF FINANCIAL OFFICER

                                       15