<PAGE>


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



                                   FORM 10-QSB



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

                 For the quarterly period ended: March 31, 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 168,220,300 shares of the Registrant's Common Stock outstanding ad of
March 31, 2000
<PAGE>

                                      INDEX

Part  I:          Financial Information

Item 1.           Financial Statements:

         Unaudited Consolidated Balance Sheets - as of March 31, 2000 and
         December 31, 1999....................................................3

         Unaudited Consolidated Statements of Operations, Three Months Ended
         March 31, 2000 and March 31, 1999....................................4

         Unaudited Consolidated Statement of Cash Flows, Three Months Ended
         March 31, 2000 and March 31, 1999....................................5

         Notes to Consolidated Financial Statements.........................6-11

Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations..............12

Part II:          Other Information..........................................13

         Item 1.  Legal Proceedings..........................................13

         Item  2. Change in Securities.......................................13

         Item  3. Defaults Upon Senior Securities............................13

         Item  4. Submission of matters to a vote
                           of Security Holders...............................13

         Item  5. Other Information..........................................13

         Item  6. Exhibits and Reports on Form 8-K...........................13


Signatures...................................................................13




<PAGE>

                NEW YORK REGIONAL RAIL CORPORATION AND AFFILIATES

                           CONSOLIDATED BALANCE SHEET

                                     ASSETS

                                                     March 31,      December 31,
                                                       2000            1999
                                                    -----------     ------------
                                                    (Unaudited)

CURRENT ASSETS:
 Cash                                              $   126,807      $   211,512
 Accounts receivable -
  trade, net of allowance
  for doubtful accounts of $58,715                     633,769          693,506
 Other current assets                                  463,507          413,015
                                                    -----------     ------------
  TOTAL CURRENT ASSETS                               1,224,083        1,318,033

PROPERTY AND EQUIPMENT,
 net of accumulated
 depreciation and amortization                       4,144,690        4,147,575

OTHER ASSETS                                            87,825           90,625
                                                    -----------     ------------

                                                   $ 5,456,598      $ 5,556,233
                                                    ===========     ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts payable
  and accrued expenses                             $ 2,768,319     $  3,285,386
 Notes payable and
  current maturities of long term debt               2,179,271        2,615,927
 Payroll and payroll taxes payable                     665,151          564,577
                                                    -----------     ------------
         TOTAL CURRENT LIABILITIES                   5,612,741        6,465,890
                                                    -----------     ------------

LONG TERM DEBT, NET OF CURRENT MATURITIES              733,172          758,551

MINORTY INTEREST                                       301,604          276,750

STOCKHOLDERS' EQUITY:
 Common stock, $ .0001 par value;
  authorized 200,000,000 shares;
  issued and outstanding 168,220,300 shares             16,822           16,096
 Preferred stock series B convertible                1,250,000        1,250,000
 Additional paid-in capital                          9,456,282        8,518,890
 Accumulated deficit                               (11,914,023)     (11,729,944)
                                                    -----------     ------------
 TOTAL STOCKHOLDERS' EQUITY                         (1,190,919)      (1,944,958)
                                                    -----------     ------------

                                                   $5,456,598      $  5,556,233
                                                   ============     ============


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

                                        3
<PAGE>

                NEW YORK REGIONAL RAIL CORPORATION AND AFFILIATES


                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                      Three Months Ended March 31,
                                  ----------------------------------
                                        2000              1999
                                  ----------------------------------
                                     (Unaudited)       (Unaudited)


OPERATING REVENUES                $   2,402,104      $    191,809

OPERATING EXPENSES                    2,147,819           258,795
                                    -------------      -----------

INCOME (LOSS)
 FROM OPERATIONS                        254,285           (66,986)
                                    -------------      -----------

ADMINISTRAIVE EXPENSES                  322,798           178,393
                                    -------------      -----------

LOSS FROM OPERATIONS                    (68,513)         (245,379)

INTEREST EXPENSE                        (64,710)          (23,031)
                                    -------------      -----------

NET LOSS BEFORE
 MINORITY INTEREST                     (133,223)         (268,410)

MINORITY INTEREST
 IN INCOME OF SUBSIDIARY                (50,856)          (21,618)
                                    -------------      -----------

NET LOSS                          $    (184,079)     $   (290,028)
                                    =============      ===========

LOSS PER  COMMON SHARE
 - BASIC AND DILUTED              $      (0.001) $         (0.002)
                                    =============      ===========

WEIGHTED AVERAGE
 NUMBER OF COMMON SHARES            168,220,300       148,028,812
                                    =============      ===========





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

                                        4

<PAGE>

                NEW YORK REGIONAL RAIL CORPORATION AND AFFILIATES

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                         2000           1999
                                                    ----------------------------
                                                        (Unaudited)  (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                             $   (133,223)   $(246,792)
                                                          ---------    ---------
 Adjustments  to  reconcile
  net loss to net cash  (used  in)  provided  by
  operating activities:
 Depreciation and amortization                              78,550       94,000
 Minority interest in subsidiary earnings                   50,856      (21,618)

 Changes in assets and liabilities:
  Increase (decrease) in accounts receivable                59,737      (15,062)
  Decrease in current assets                                (3,397)        -
  Increase in accounts payable                            (604,625)     (94,749)
  Decrease in accrued expenses                               7,421         -
  Decrease in payroll taxes payable                        100,574         -
  Increase in deferred rent                                 (1,811)        -
                                                          ---------    ---------
                                                          (312,695)     (37,429)
                                                          ---------    ---------

NET CASH USED IN OPERATING ACTIVITIES                     (445,918)    (284,221)
                                                          ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
 Capital expenditures                                      (72,865)      (4,877)
                                                          ---------    ---------
NET CASH USED IN INVESTING ACTIVITIES                      (72,865)      (4,877)
                                                          ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Payments of long term debt                                (24,965)     134,495
 Payments of convertible notes - other                    (286,000)        -
 Payments of convertible notes - related party            (300,000)        -
 Proceeds from other current debt- related party           320,000         -
 Payments of other current debt - other                   (170,656)        -
 Advances to affiliates                                       -         (63,754)
 Proceeds from issuance of capital stock                   895,700      212,550
                                                          ---------    ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES        434,079      283,291
                                                          ---------    ---------

NET DECREASE IN CASH                                       (84,704)      (5,807)

CASH - BEGINNING OF PERIOD                                 211,511        8,291
                                                          ---------    ---------

CASH - END OF PERIOD                                  $    126,807    $   2,484
                                                          =========    =========



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

                                        5
<PAGE>




                NEW YORK REGIONAL RAIL CORPORATION AND AFFILIATES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       NATURE  AND  ORGANIZTION  OF  BUSINESS  AND  SUMMARY   OF   SIGNIFIGANT
         ACCOUNTING POLICIES

         Nature and Organization of Business

                 New York  Regional  Rail  Corporation  ("NYRR") is a management
         company  that was  established  (effective  January 1, 1996) to acquire
         control of an equipment  company (CH Proprietary,  Inc.), and a company
         that  operates an interstate  railroad (New York Cross Harbor  Railroad
         Terminal  Corporation).  As of March  31,  1999,  the NYRR  holds a 95%
         interest in CH  Proprietary,  Inc. and a 90% interest in New York Cross
         Harbor Railroad Terminal Corporation.

                 New York Cross Harbor Railroad Terminal Corporation  ("NYCHRR")
         is the  operator  of an ICC  certified  railroad.  Its  business  is to
         transport  rail  traffic to and to deliver that rail traffic via barges
         across New York Harbor and the East River, thus enabling New York City,
         Long Island,  and Southern New England to connect to the national  rail
         freight  system.  In addition,  it receives  and  delivers  railcars at
         certain industrial  facilities located on its own trackage of three and
         one-half  miles plus seven miles of leased track on the  Brooklyn,  New
         York  waterfront  and two and one-half miles of its own track in jersey
         City, New Jersey.

                 CH  Proprietary,  Inc. ("CHP") holds title to railroad, marine,
         and terminal equipment, which it leases to NYCHRR.

                 In May 1996, NYRR merged with Best Sellers Group, Inc ("BSLR"),
         an OTC publicly traded company.

                  The  Companies  grant  credit  terms in  the normal  course of
         business  to their  customers.  Customers  include  a wide  variety  of
         industries that utilize the services of a railroad.  Concentrations  of
         credit risk with  respect to these  trade  receivables  are  considered
         minimal due the  Companies'  diverse  customer  base.  As part of their
         ongoing control procedures, the Companies monitor the credit worthiness
         of their customers.  Bad debts have been minimal.  The Companies do not
         normally require collateral or other security to support credit sales.

Principles Of Consolidation

                  The accompanying consolidated financial statements present the
         combination of NYRR and the  consolidated  interests in CHP and NYCHRR,
         in which  NYRR  either  holds a majority  interest,  or which are under
         common control.  All intercompany  balances and transactions  have been
         eliminated in the consolidation.

                                      6

<PAGE>

Revenue Recognition

                  The  Company  recognizes  revenue  as  earned  on the  date of
         freight delivery to the cosignee or other commercial carrier.

Inventory

                  Inventory  consists  of  spare  parts,  marine  gear and spare
         railroad track,  ties and turnouts.  Inventory is stated at cost, using
         the specific identification method.

Property, Plant and Equipment And Depreciation and Amortization

                  Property,  plant and  equipment  are stated at cost except for
         certain  transferred assets which are based on current appraisals and a
         favorable land lease value, which is recorded at its present value (see
         note 8).

                  Expenditures for maintenance,  repairs and renewals of a minor
         nature are charged  against  earnings as incurred.  Major  renewals and
         betterments are capitalized.  Depreciation and amortization is provided
         using the  straight-line  method over the estimated useful lives of the
         related assets.

Loan Acquisition Costs and Other Intangible Assets

                  Loan  acquisition  costs  are  amortized  over the term of the
         related loan by the straight-line method.

                  Other  intangibles,  including  startup costs, are capitalized
         and amortized on a straight-line basis over a period of five years.


Estimates

                  The  preparation  of financial  statements in conformity  with
         generally accepted  accounting  principles  requires management to make
         estimated and  assumptions  that affect the reported  amounts of 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.

                                       7

<PAGE>



Income Taxes

                  The  Companies  have  adopted  the  Statement   of   Financial
         Accounting  Standards  No. 109. (SFAS No. 109")  "Accounting for Income
         Taxes" which requires the use of the liability method of accounting for
         deferred income taxes.

Earnings Per Share

                  The  Consolidated   financial   statements  are  presented  in
         accordance with SFAS No. 128, "Earnings per Share".  Basic earnings per
         common  share are  computed  using  weighted  average  number of common
         shares outstanding during the period. Diluted earnings per common share
         incorporate the incremental  shares issuable upon the assumed  exercise
         of stock options and warrants.


Goodwill and Other Intangible Assets

                  Organization  expenses are recorded at cost and are  amortized
         on a straight-line basis over a five-year useful life.

                  The value of the NYRR's  investment  in CH Partners,  Inc. and
         New York Cross Harbor  Railroad  Terminal  Corporation was based on the
         audited  net book  value  per  share of the  contributed  equity  as of
         December 31, 1993, which management estimates to be the market value as
         of  the  date  of  acquisition.  This  costs  is to be  amortized  on a
         straight-line basis over a 40-year life

2.       PROPERTY, PLANT AND EQUIPMENT

                  Combined  property,  plant and  equipment as of March 31, 2000
         consists of the following:

         Marine transportation equipment and dock facilities        $ 1,334,092
         Railroad locomotive cars and equipment                         215,205
          Tract and related land improvements                         1,210,498
         Automobiles and other                                          256,165
         Idle Property and equipment                                  1,450,000
                                                                      ==========
                                                                      4,465,960

         Less Accumulated depreciation and amortization                 321,270
                                                                      ----------
                                                                    $ 4,144,690
                                                                      ==========

                                       8

<PAGE>



3.       NOTES PAYABLE

         Notes Payable                                              $ 2,912,443
         Current Portion Due                                          2,179,271
                                                                      ----------
                                                                    $   733,172
                                                                      ==========

         Interest Expenses for the period March 31, 2000 amounted to:  $ 64,760
         Interest Expenses for the period March 31, 1999 amounted to:  $ 23,031

4.       LEASING ARRANGEMENT

                  NYCHRR leases,  on a month-to-month  basis,  land and building
         from the City of New York.  Related  rent  expense  was  $6,600 for the
         three months ended March 31, 2000.

5.       PAYROLL TAXES PAYABLE

                  The liability for payroll taxes includes  delinquent  federal,
         state and local  taxes of  $665,151  including  estimated  penalty  and
         interest. In June 1999 the Company paid $290,000 on order to settle all
         federal liabilities through 1997. The Company is currently  negotiating
         with the  appropriate  taxing  authorities in order to settle all other
         outstanding claims.

6.       LEASE AND ASSET AGREEMENT

                  Pursuant to a Lease and Asset Agreement dated January 20, 1993
         between  Consolidated  Rail Corporation  ("Conrail").  CRC  Properties,
         Inc. ("CRCP") and  New York Cross Harbor Railroad Terminal Corporation,
         Conrail is  leasing to NYCHRR for $1.00 certain all real property owned
         by  CRPC (and granted to Conrail under an operating  easement).  At the
         same  time,  Conrail sold NYCHRR all of the operating assets located on
         the  aforementioned  real  property for $1.00.  NYCHRR agrees to remove
         these  operating assets from real property should the original lease be
         canceled  or terminated.  Based on current appraisals, the valuation of
         such  assets transferred to NYCHRR is summarized below.


               Float Bridges                                        $ 1,525,000
               Marine mooring cells (seven)                             420,000
               Roadbed and tracks (including two bridges
               and various other related assets)                        985,000
               Miscellaneous                                             93,500
                                                                      ----------
                                                                    $ 3,023,500
                                                                      ==========

                                       9

<PAGE>



         Land Lease

                  As noted  above,  NYCHRR  acquired a  long-term  lease on real
         property,  expiring January 2023, at a rate that is significantly below
         market value (which is estimated to be approximately $12,500 per month,
         or  $4,500,000  over the entire term of the lease by  management).  The
         transaction  has been  recorded at its net present  value of $1,505,918
         using a 9% discount rate to be recognized over the remaining 300 months
         of the lease.

                  The $3,023,500 of transferred  assets and the $1,505,918 value
         of the favorable land lease were considered additional pain-in-capital.

7.       INCOME TAXES

                  As discussed in Note 1, the Companies have adopted SFAS No.109

                  The Companies total deferred tax asset, which results from net
         operating loss  carryovers  that are available to offset future taxable
         income and deferred tax  valuation  allowance as of March 31, 2000 were
         as follows:

                  Deferred tax asset                                $ 2,434,079
                  Less valuation allowance                            2,434,079
                                                                      ----------
                  Net deferred tax asset                            $         -
                                                                      ==========

                  The  Comoanues  have  net  operating  loss   carryforwards  of
         approximately  $6,600,000,  which will expire in the years 1999 through
         2013. there is no provision for income taxes for the period ended March
         31,  2000  because  of  the   availability   of  net   operating   loss
         carryforwards.

8.       CAPITAL STOCK
                                                     Number of Shares
                                                     Issued and
                                    Authorized       Outstanding       Amount
                                    ----------       -----------      --------
Preferred                           15,000           12,680           1,019,000

Common $.0001 par value            160,000,000      168,220,300          16,822

                  The  company  has  amended  its  Articles  of Incorporation to
         increase the authorized common stock to 200,000,000

                                       10
<PAGE>

9.       PRIOR PERIOD ADJUSTMENTS

                  As a condition of the reverse  merger  between the Company and
Best  Sellers,  certain  intangible  assets  were  acquired.  At the time of the
merger,  these intangibles were valued at approximately four million dollars. It
was  management's  intent to sell these  assets for value.  The natures of these
assets were not in keeping with the Company's desire to expand the core business
(i.e.  regional  freight  transportation).  After several  attempts to divest of
these  assets,  it became  clear that said  assets were  materially  overvalued.
Management has taken the position that these intangible  assets should be deemed
of no  value as of the  date of the  merger  (March  1996).  Therefore,  opening
retained  earnings of the consolidated  entity has been restated to reflect thus
revaluation of asset value.

10.      CONTINGENCIES

                  New York City has assessed NYCHRR approximately $1,500,000 for
delinquent  real estate taxes.  The taxes were assessed  against  properties not
owned by NYCHRR.  The property  rolls have been  corrected by the New York State
Board of  Equalization  and Assessment and agreed to by management.  Preliminary
negotiations between management,  the New York City Real Estate Tax Assessor and
the New York City Corporate  Counsel have begun. It is managements  opinion that
based on these negotiations a payment of approximately $300,000 will be required
to settle all past liabilities.

                  An open  trade  receivable  exists in the  amount of  $493,064
representing  demurrage  charges  for  use of  Conrail  freight  cars by a trade
customer.  the customer  claims it is not  obligated to pay per diem charges but
has not denied its obligation to pay demurrage  charges.  As of the report date,
the matter is in arbitration proceedings, but outside counsel believes, based on
a review of the pertinent transportation contract and the demurrage tariff filed
by NYCHRR,  that the trade  customer is obligated to pay the demurrage  charges.
NYCHHRR hopes that the matter can be resolved through negotiation.

                                       11
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

         THIS REPORT CONTAINS  FORWARD-LOOKING  STATEMENTS THAT INVOLVE A NUMBER
OF RISKS AND  UNCERTAINTIES.  WHILE THESE  STATEMENTS  REPRESENT  THE  COMPANY'S
CURRENT  JUDGEMENT  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 TIMING
OF ORDERS AND  SHIPMENTS,  MARKET  ACCEPTANCE  OF PRODUCTS,  ABILITY TO INCREASE
LEVEL OF PRODUCTION, IMPACT OF GOVERNMENT REQUISITIONS,  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

         THREE  MONTHS  ENDED MARCH 31, 2000 VERSUS THREE MONTHS ENDED MARCH 31,
1999.

         DURING  THE  THREE  MONTHS  ENDED  MARCH  31,  2000,  THE  COMPANY  HAD
$2,402,104 IN REVENUE  COMPARED TO $191,804 IN REVENUE DURING THE  CORRESPONDING
PRIOR YEAR  PERIOD.  THE  INCREASE IN REVENUE WAS THE RESULT OF INCREASE OF RAIL
CAR  MOVEMENT  AND TRUCKING  OPERATIONS.  THE COMPANY HAD NO TRUCKING  OPERATING
REVENUES DURING THE CORRESPONDING PERIOD LAST YEAR.

         EXPENSES FOR THE THREE MONTHS ENDING MARCH 31, 2000 WERE  APPROXIMATELY
$322,798 COMPARED TO APPROXIMATELY $ 178,393 FOR THE  CORRESPONDING  YEAR . THIS
INCREASE  IN  EXPENSE  IS DUE IN THE  MOST  PART OF AN  INCREASE  IN  WAGES  AND
PERSONNEL.

         AS OF MARCH 31, 2000 THE HAD A WORKING CAPITAL DEFICIT OF APPROXIMATELY
($4,388,658)  COMPARED TO  APPROXIMATELY  ($5,147,857) AT DECEMBER 31, 1999. THE
DECREASE IS DUE TO THE CONVERSION OF NOTES TO COMMON STOCK.

         THE  COMPANY  PRESENTLY  HAS  NO   MATERIAL  COMMITMENTS  FOR   CAPITAL
 EXPENDITURES.

         THE  COMPANY  IS  CURRENTLY  REVIEWING  CERTAIN  TRANSACTIONS BY FORMER
MANAGEMENT.  THE BOARD HAS  APPROVED  AND THE COMPANY HAS  ENLISTED  THE AIDE OF
SPECIAL CORPORATE COUNCIL.

                                       12

<PAGE>




                           Part II: Other Information

Item:  1.         Legal Proceedings:

                  None

Item  2. Changes in Securities:

                  None

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 8-K:

         (a)      Exhibit   27   Financial   Data   Schedule   Filed    herewith
                  Electronically

         (b)      Reports on Form 8-K:

                  None


                                   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: May 30,2000                  By:/s/ W. Robert Bentley
                                          ____________________________
                                          W. Robert Bentley, President

Date: May 30,2000                  By:/s/ Ira Levy
                                          _________________________________
                                          Ira Levy, Chief Financial Officer

                                       13