SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB\A
(Mark One)
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended November 30, 1996

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

             For the transition period from __________ to __________

                         Commission File Number 0-27944


                          PRIDE AUTOMOTIVE GROUP, INC.
             (Exact name of registrant as specified in its charter)

Delaware                                98-0157860
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
Incorporation or organization)

    Pride House, Watford Metro Centre, Tolpits Lane, Watford, Hertfordshire,
                                WD1 8SB England
                    (Address of principal executive offices)

                                 (800) 698-6590
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
          Title of each class Name of each exchange on which registered

                                      NONE

                 Securities registered pursuant to Section 12(g)
                                  of the Act:
                          Common Stock, $.001 par value
                                (Title of Class)

Check  whether the Issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days.
Yes [X]   No [ ]

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB [ ].

The aggregate  market value of the voting stock on February 12, 1997 (consisting
of  Common  Stock,  $.001  par  value  per  share)  held by  non-affiliates  was
approximately  $2,443,632.80,  based upon the average  bid and asked  prices for
such Common  Stock on said date  ($1.89),  as reported  by a market  maker.  The
issuer's  and  its  subsidiaries  had  on  a  consolidated  basis,  revenues  of
$12,884,018  for its fiscal year ended  November 30, 1996. On February 18, 1997,
there were 2,792,500 shares of Registrant's Common Stock outstanding.




<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is  management's  discussion and analysis of  significant  factors
which have affected the Company's  financial  position and operations during the
years ended November 30, 1996 and 1995.

Pride  Automotive  Group,  Inc. (the "Company") was incorporated in the State of
Delaware in March 1995. Pursuant to the terms and conditions of a reorganization
agreement entered into in March 1995, the Company issued 1,500,000 shares of its
Common Stock to Pride,  Inc. (an entity  incorporated in the State of Delaware),
in exchange for all the issued and outstanding shares of PMS, thereby making the
Company a majority owned  subsidiary of Pride and PMS a wholly-owned  subsidiary
of the Company.  PMS is the holding company for six  wholly-owned  subsidiaries,
operating as one unit, located in the United Kingdom. The consolidated financial
statements  are based on the  assumption  that the Company and PMS were combined
for all  periods  presented,  in a manner  similar to the  pooling of  interests
method of accounting.  PMS and its wholly-owned  subsidiaries are located in the
United Kingdom and follow generally accepted accounting principles in the United
Kingdom.  For purposes of the consolidated  financial statements of the Company,
the  statements  have  been  converted  to  the  generally  accepted  accounting
principles in the United States.

Pride, the Company's  parent, is an entity reporting under the Exchange Act, and
its reports may be obtained and reviewed by either contacting the Company or the
Securities  and Exchange  Commission.  Pride,  Inc., on its own has virtually no
operations.  As such,  its financial  viability is  represented by the financial
statements of the Company.  Pride was incorporated as L.H.M.  Corp. in the State
of  Delaware  on May 10,  1988 as a "blank  check"  company,  for the purpose of
seeking  potential  business  ventures through  acquisition or merger.  In April
1990, L.H.M.  Corp.  entered into an Agreement and Plan of  Reorganization  with
International  Sportsfest,  Inc.  ("ISI"),  a  company  formed  to engage in and
establish  sports  expositions  in  sports  merchandise  such  as  clothing  and
equipment.  ISI never engaged in any business  operations.  In January 1994, ISI
entered  into an  Agreement  and Plan of  Reorganization  with PMS,  whereby PMS
became a wholly-owned  subsidiary of ISI and ISI changed its name to Pride, Inc.
Pride  also owns  100% of the  capital  stock of  Watford  Investments,  a South
African company with minimal operations. This Company was formed in March 1995.

The six wholly-owned  subsidiaries of PMS are Pride Vehicle  Contracts  Limited,
Baker Vehicle Contracts  Limited,  Pride Vehicle  Contracts (UK) Limited,  Pride
Leasing Limited,  Pride Vehicle  Management Limited and Pride Vehicle Deliveries
Limited,  which  comprise  the  operations  of the  Company.  Unless the context
otherwise  requires,  all references to the "Company"  include its  wholly-owned
subsidiary,  PMS, and PMS's wholly-owned  subsidiaries.  These companies jointly
engage in the business of leasing new automobiles to businesses,  servicing such
automobiles  during  the lease term and  remarketing  the  automobiles  upon the
expiration  of the lease term,  which  arrangement  is  described as a "contract
hire."  The  Company   purchases   each   vehicle   pursuant  to  its   clients'
specifications,  finances its purchase and pays for all the  maintenance  on the
vehicle during the lease term.

The  Company  has  servicing  agreements  with  automobile  dealers  and service
centers,  which specify pricing  schedules for maintenance and repair work to be
performed, all of which require the prior consent of the Company. Typically, the
term of the  loan  corresponds  with the term of the  lease,  whereby,  upon the
completion of the lease term,  the  automobiles  are fully paid and owned by the
Company. Upon the expiration of the lease, the Company remarkets the automobiles
through various  distribution  channels including,  but not limited to, used car
wholesalers  or used car  retailers.  Each  client's  monthly  lease  payment is
determined  by a computer  program  which takes into account  estimated  service
costs, new vehicle pricing, manufacturer bonuses, rebates and options, potential
residual value at lease end, as well as


<PAGE>



other  variable  information  including  interest  rates and other  current  and
anticipated  future economic  variables.  The monthly lease payments are usually
sufficient to pay the  financing and servicing on the vehicles  during the lease
term,  with  the  bulk of the  profits,  if any,  coming  on the  resale  of the
automobile.

The  Company's  principal  operations  are  conducted by PMS which  reflects its
financial statements in British pounds. As a result, most assets and liabilities
of the  foreign  operations  are  translated  into U.S.  dollars  using  current
exchange rates in effect at the balance sheet date.  Fixed assets and intangible
assets are translated at historical exchange rates. Revenue and expense accounts
are translated using an average exchange rate during the period except for those
expenses  related to assets and  liabilities  which are translated at historical
exchange rates.  These expenses include  depreciation and amortization which are
translated  at the  rates  existing  at the time the  asset  was  acquired.  Any
resulting  gains or losses due to the  translation  are  reflected as a separate
item of stockholders' equity.

On November 29,  1996,  the Company,  through its newly  formed  majority  owned
subsidiary  AC Automotive  Group,  Inc. and its  wholly-owned  subsidiary AC Car
Group Limited (registered in the United Kingdom), acquired certain of the assets
of AC Cars Limited and Autokraft  Limited.  These two companies  were engaged in
the  manufacture  and  sale of  specialty  automobiles.  The  purchase  price of
approximately  $6,000,000 was financed by the sale of common stock and by loans.
The  acquisition  involved the purchase of plant and equipment,  the brand name,
inventories  and an aircraft and has been recorded using the purchase  method of
accounting (see also Note 19c - notes to financial statements).

Results of Operations - Years Ended November 30, 1996 and November 30, 1995:

Revenues  for the year ended  November 30, 1996 were  approximately  $12,884,000
compared to  approximately  $9,723,000  for the year ended November 30, 1995, an
increase of  $3,161,000  or 32.5%.  The primary  reason for this increase was an
increase in revenues from contract hire income and from the sales of vehicles at
lease maturity,  and an overall  increase in the contract hire fleet size. There
was also an increase in the fleet management division.

The Company's cost of sales increased both in actual dollars and as a percent of
sales,  when comparing the years ended  November 30, 1996 and 1995.  These costs
increased by approximately  $2,945,000 or 40.3%. As a percent of sales, costs of
sales for 1996 were 79.5% versus 75.1% for 1995.  Management  believes  that the
increase  was   primarily   due  to  the   continuation   of  the  more  prudent
(conservative)  approach to estimating the residual  values of vehicles  thereby
increasing  depreciation  expense and costs of sales and reducing residual value
risk.  This more  conservative  approach  reduces the residual  value of an auto
thereby increasing the amount of the auto to be depreciated.  This approach will
therefore increase depreciation expense, which costs will reduce the income from
contract  leasing.  Since the residual  value is now lower,  the income from the
ultimate sale of the vehicle is now higher.

General  and  administrative  expenses  decreased  from  $2,036,000  for 1995 to
$1,802,000 for 1996 a decrease of $234,000 or 11.5%. As a percent of sales these
expenses  represented  14.0% of sales for 1996 and  20.9%  for 1995.  Management
believes  that the  decrease in overhead  costs  relate to an  aggressive  costs
reduction program instituted by management during 1996 and 1995.

Interest  expense  increased  when comparing the year ended November 30, 1996 to
1995 from  $630,000 to  $860,000,  an increase of $230,000 or 36.5%.  Management
attributes  this  increase to a higher  volume of  borrowings  on hire  purchase
contracts.   The  Company  is  continuously  negotiating  with  various  banking
institutions  to obtain credit  lines,  all of which are secured by the vehicles
purchased.



<PAGE>



(Loss) before taxes and minority interests for the years ended November 30, 1996
and 1995,  prior to  amortization  of  goodwill  for the  period  ($635,000  and
$631,000,  respectively)  aggregated  $20,000 and $239,000,  respectively.  This
decrease in the loss was primarily  due to the  increased  revenues as described
above.  For the year ended November 30, 1996,  the Company  reflected a net loss
(after minority  interests in the net loss of  subsidiaries) of $600,622 or $.25
per share. For the year ended November 30, 1995, the Company reported a net loss
of $870,145 or $.42 per share.

Liquidity and Capital Resources

Due to the nature of the Company's  business,  namely contract  leasing of motor
vehicles which are fixed long-term  assets,  the balance sheet has been prepared
on an unclassified  basis.  Accordingly,  there is no  classification of current
assets and current  liabilities.  At November 30, 1996 and 1995,  the  Company's
balance  sheet  reflected  cash of $251,000 and $3,000,  respectively,  accounts
receivable  of  $2,022,000  and  $1,241,000,  respectively,  and total assets of
$33,690,000  and  $21,600,000,  respectively.  The  principal  reasons  for  the
increase in total assets are the  acquisition  described  above,  an increase in
contract hire  vehicles  available for lease and the proceeds from the Company's
initial public offering.

In December 1995, the Company completed a private placement  offering selling 20
units, each unit consisting of 25,000 shares of Common Stock, at $6,000 per unit
for aggregate gross proceeds of $120,000 ($.24 per share).

In April 1996 the Company  successfully  completed an initial public offering of
its common stock, which yielded net proceeds to the Company of $2,166,000.

The Company's  total assets as of November 30, 1996 and 1995 include  intangible
assets  of  approximately  $9,700,000  and  $10,300,000,   respectively.   These
intangible  assets  consist  of the  unamortized  portion  of the costs over net
assets acquired in acquisitions,  which are being amortized over periods ranging
from 10 to 20 years. When adjusted for these intangible assets, the net tangible
book value of the Company at November  30, 1996 and 1995 would be  approximately
$2,200,000 and $1,210,000, respectively.

The Company had reflected  convertible debt of $562,292 as of November 30, 1994.
These loans were to bear interest of 6% and were  repayable  five years from the
date of issue. The original debt,  which was not convertible,  arose at the time
PMS  acquired  one of its  subsidiaries  in  1992.  The  Company  acquired  this
subsidiary for $1 and assumed approximately $11,500,000 of net liabilities.  The
acquisition  resulted in goodwill of  approximately  $11,500,000.  The  ultimate
holder of the debt in 1994,  was given the option of converting  such loans into
shares of Pride,  Inc.'s (the Company's  parent) common stock at the end of such
period based upon their  guarantee  of the ultimate  sales values of the related
revenue producing vehicles.  This debtholder was the controlling  shareholder of
the Company's parent at the time of this transaction.

During the year  ended  November  30,  1995,  the  Company  determined  with the
agreement of the  debtholder,  that the estimated  ultimate  sales values of the
vehicles  were less  than  expected  and it was  agreed  that the debt  would be
written off against the debtholder guarantee. The balance of the debt, $562,292,
was  therefore  treated as an early  extinguishment  of debt. At the time of the
extinguishment,  the debt outstanding was owed to a related party. In accordance
with APB No. 26, extinguishment  transactions between related entities should be
treated as capital transactions. Accordingly, the gain on the extinguishment was
added to additional paid-in capital.




<PAGE>


During the year ended November 30, 1995,  the Company  generated cash flows from
operating activities aggregating approximately $1,550,000. During the year ended
November 30, 1996, the Company generated $508,000 of cash flows from operations.

Investing  activities reflect uses of cash for the years ended November 30, 1996
and 1995 of $8,759,000 and $2,526,000,  respectively. These uses of cash are the
result of the purchases of fixed assets (primarily  revenue producing  vehicles)
net of the proceeds received from the sale of vehicles at lease expiration dates
and the acquisition described above.

In order to replenish its fleet of revenue  producing  vehicles,  annually,  the
Company is required to purchase  from 300 to 400 new vehicles at an average cost
of approximately  $25,000 each. At the time of purchase,  the Company  typically
makes a cash deposit of approximately 10% and finances the balance.  The Company
has funding  lines with several  financing  institutions  for this purpose which
aggregate approximately  $18,200,000 at November 30, 1996. At November 30, 1996,
there was approximately  $11,000,000  outstanding under these lines. These lines
are typically open for between 24 and 60 months depending on the terms, the most
important term being the interest rate.  Therefore,  the principal amount of the
Company's  current  credit lines is  constantly  changing.  Since the  Company's
funding  lines are asset based  (secured by the  vehicles  purchased),  there is
generally  no  difficulty  obtaining  funding  lines,  however,  the  Company is
continuously  seeking  to find the best  terms and  rates.  Typically  financing
institutions authorize credit lines with a fixed interest rate, which line is to
be open for a certain  period of time.  During the term of the line, the Company
may draw down on such line in order to  finance  the  purchase  of  vehicles  to
lease.  When the time for drawing down on the line  expires,  the Company can no
longer  draw down on such line to  finance  additional  vehicles,  however,  the
amount drawn is repaid pursuant to the terms of such line.

For the year ended November 30, 1996,  the Company  provided cash from financing
activities  of  approximately  $9,240,000  primarily  as  a  result  of  an  IPO
($2,200,000) and the financing needed to acquire new vehicles  ($11,500,000) net
of the amounts utilized to pay hire purchase  contract  financing  ($6,100,000).
For fiscal 1995, the Company provided cash for financing  activities  ($759,000)
primarily  due to financing  provided by bank lines of credit plus the increases
in financing of new vehicles  ($3,262,000)  net of the amounts  needed to reduce
hire purchase contract financing ($3,496,000).

Other than the annual  acquisitions of revenue  producing  vehicles as mentioned
above, there are no material planned capital expenditures at the present time.

The  Company  believes  that its cash flow from  operations,  and its  available
funding  lines  for  the  acquisition  of  revenue  producing  vehicles  will be
sufficient for at least the ensuing 12 month period.

This report contains forward-looking statements and information that is based on
management's beliefs and assumptions, as well as information currently available
to management.  When used in this document, the words "anticipate, " "estimate,"
"expect,"   "intend,"   and  similar   expressions   are  intended  to  identify
forward-looking statements.  Although the Company believes that the expectations
reflected in such  forward-looking  statements  are  reasonable,  it can give no
assurance that such expectations  will prove to be correct.  Such statements are
subject to certain risks,  uncertainties and assumptions.  Should one or more of
these risks or uncertainties  materialize,  or should the underlying assumptions
prove  incorrect,  actual results may vary  materially  from those  anticipated,
estimated or expected.




<PAGE>



                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                                           Page Nos

<S>                                                                                            <C>
Independent Auditors' Report ...........................................................   F - 2

Financial Statements:
    Consolidated Balance Sheets as of November 30, 1996 and 1995 .......................   F - 3
    Consolidated Statements of Operations for the Years Ended November 30, 1996 and 1995   F - 4

    Consolidated Statement of Changes in Shareholders' Equity for the Two Years in the
    Period Ended November 30, 1996 .....................................................   F - 5

    Consolidated Statements of Cash Flows for the Years Ended November 30, 1996 and 1995   F - 6


Notes to Consolidated Financial Statements .............................................   F - 7
</TABLE>

                                      F - 1


<PAGE>
                          INDEPENDENT AUDITORS' REPORT


We have audited the accompanying consolidated balance sheets of Pride Automotive
Group,  Inc. and  subsidiaries  as of November 30, 1996 and 1995 and the related
consolidated statements of operations,  changes in shareholders' equity and cash
flows for each of the two years in the period ended  November  30,  1996.  These
consolidated  financial  statements are the  responsibility of the Corporation's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United Kingdom which are  substantially the same as those followed in the
United States.  Those  standards  require that we plan and perform the audits to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatements.  An audit includes examining on a test basis,  evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the above mentioned  consolidated  financial statements present
fairly, in all material  respects,  the consolidated  financial  position of the
Corporation as of November 30, 1996 and 1995 and the results of their operations
for the two years in the period  ended  November  30,  1996 in  conformity  with
accounting principles generally accepted in the United States of America.

Our audits also include the  translation  of British  pounds into United  States
dollars for amounts included in the consolidated  financial  statements.  In our
opinion,  such  translation has been made in conformity with the basis stated in
Note 2(h) of the notes to the consolidated financial statements.













MARBEL ARCH HOUSE            FEBRUARY 14, 1997 EXCEPT
66-68 SEYMOUR STREET         AS TO NOTES 18 AND 19(c)
LONDON W1H 5AH               WHICH ARE DATED              CIVVALS
UNITED KINGDOM               JUNE 26,  1997               CHARTERED ACCOUNTANTS






                                      F - 2


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                              - ASSETS (Note 6(a) -

<TABLE>
<CAPTION>
                                                                                     November 30,
                                                                                 1996            1995
                                                                                ---------------- -----------

ASSETS:
<S>                                                                              <C>             <C>         
  Cash and cash equivalents ..................................................   $    250,699    $      3,377
  Accounts receivable (Notes 2c and 3) .......................................      2,022,011       1,241,167
  Inventories (Note 2d) ......................................................      1,022,655          31,137
  Property, revenue producing vehicles and equipment - net
    (Notes 2e, 4, 6, 7 and 19c) ..............................................     20,671,854       9,924,318
  Intangible assets - net (Notes 2f and 19c) .................................      9,722,363      10,340,396
  Deferred offering costs ....................................................           --            59,940
                                                                                 ------------    ------------
TOTAL ASSETS .................................................................   $ 33,689,582    $ 21,600,335
                                                                                 ============    ============

                    - LIABILITIES AND SHAREHOLDERS' EQUITY -

LIABILITIES:
  Bank line of credit (Note 6a) ..............................................   $  2,964,465    $  1,093,680
  Accounts payable ...........................................................        624,953       1,291,368
  Accrued liabilities and expenses (Note 5) ..................................        490,915         358,892
  Bank debt (Note 6b) ........................................................      1,002,571       1,070,492
  Obligations under hire purchase contracts (Note 7) .........................     11,034,951       5,578,565
  Loans payable - directors (Note 9) .........................................           --           123,668
  Other liabilities (Note 8) .................................................         33,560         532,804
  Acquisition debt payable (Note 10) .........................................      5,098,470            --
                                                                                                 ------------
TOTAL LIABILITIES ............................................................     21,249,885      10,049,469
                                                                                 ------------    ------------

MINORITY INTEREST IN SUBSIDIARY (Note 18) ....................................        482,486            --
                                                                                                 ------------

COMMITMENTS AND CONTINGENCIES (Notes 14 and 17)

SHAREHOLDERS' EQUITY (Notes 11, 12 and 19):
  Preferred stock, $.01 par value, 2,000,000 shares authorized, none issued
    or outstanding ...........................................................           --              --
  Common stock, $.001 par value, 10,000,000 shares authorized 2,652,500
    and 1,560,000 shares issued and outstanding in 1996 and 1995, respectively          2,653           1,560
  Additional paid-in capital .................................................     13,487,388      11,741,922
  Retained earnings (deficit) ................................................     (1,402,587)       (801,965)
  Foreign currency translation (Note 2h) .....................................       (130,243)        609,349
                                                                                 ------------    ------------

TOTAL SHAREHOLDERS' EQUITY ...................................................     11,957,211      11,550,866
                                                                                 ------------    ------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...................................   $ 33,689,582    $ 21,600,335
                                                                                 ============    ============
</TABLE>




                See notes to consolidated financial statements.

                                      F - 3


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                           
                                                                             November 30,
                                                                          1996            1995
                                                                         ---------------- -----------

REVENUES (Notes 2i and 14):
<S>                                                                      <C>             <C>         
  Contract hire income ...............................................   $  6,286,677    $  4,723,539
  Sale of vehicles ...................................................      5,839,080       4,629,860
  Fleet management and other income ..................................        758,261         369,657
                                                                         ------------    ------------

TOTAL REVENUE ........................................................     12,884,018       9,723,056
                                                                         ------------    ------------

COSTS AND EXPENSES:
  Cost of sales ......................................................     10,241,850       7,297,331
  General and administrative expenses ................................      1,802,111       2,035,529
  Amortization of goodwill ...........................................        634,813         630,718
  Interest and other .................................................        860,242         629,623
                                                                         ------------    ------------

                                                                           13,539,016      10,593,201

LOSS BEFORE MINORITY INTERESTS .......................................       (654,998)       (870,145)

  Minority interest in net loss of consolidated subsidiaries (Note 18)         54,376            --
                                                                                         ------------

LOSS BEFORE PROVISION FOR INCOME TAXES ...............................       (600,622)       (870,145)

  Provision for income taxes (Notes 2g and 13) .......................           --              --
                                                                                         ------------

NET LOSS .............................................................   $   (600,622)   $   (870,145)
                                                                         ============    ============

LOSS PER COMMON AND DILUTIVE COMMON
  EQUIVALENT SHARE (NOTE 2j):

    Net loss before minority interests ...............................   $       (.27)   $       (.42)
    Minority interest in net loss of subsidiaries ....................            .02            --
                                                                         ------------    ------------

NET LOSS PER SHARE ...................................................   $       (.25)   $       (.42)
                                                                         ============    ============

WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON
  EQUIVALENT SHARES OUTSTANDING (Note 2j) ............................      2,405,760       2,060,000
                                                                         ============    ============
</TABLE>

                See notes to consolidated financial statements.

                                      F - 4


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>


                                     Shares                           Additional      Retained       Foreign        Total
                                    (As Restated        Common        Paid-in         Earnings      Currency      Shareholders'
                                    - See Note 1)     Stock           Capital         (Deficit)    Translation       Equity
                                   --------------  ------------  ---------------  -------------    ------------------------

<S>                 <C>                <C>         <C>            <C>             <C>             <C>             <C>         
Balance at December 1, 1994 .....      1,500,000   $      1,500   $ 11,119,690    $     68,180    $    407,768    $ 11,597,138

Compensatory stock (Note 11) ....         60,000             60         59,940            --              --            60,000

Early extinguishment of debt
with related party (Note 16) ....           --             --          562,292            --              --           562,292

Foreign currency translation
adjustment ......................           --             --             --              --           201,581         201,581

Net loss for the year ended
November 30, 1995 ...............           --             --             --          (870,145)           --          (870,145)
                                                   ------------   ------------    ------------    ------------    ------------

Balance at November 30, 1995 ....      1,560,000          1,560     11,741,922        (801,965)        609,349      11,550,866

Private offering of common stock
(Note 11) .......................        500,000            500        119,500            --              --           120,000

Shares and warrants sold in
initial public offering (Note 11)        592,500            593      2,165,336            --              --         2,165,929

Adjustment for minority interest
(Note 18) .......................           --             --         (539,370)           --              --          (539,370)

Foreign currency translation
adjustment ......................           --             --             --              --          (739,592)       (739,592)

Net loss for the year ended
November 30, 1996 ...............           --             --             --          (600,622)           --          (600,622)
                                                                  ------------    ------------    ------------    ------------

BALANCE AT
NOVEMBER 30, 1996 ...............      2,652,500   $      2,653   $ 13,487,388    $ (1,402,587)   $   (130,243)   $ 11,957,211
                                    ============   ============   ============    ============    ============    ============
</TABLE>

                See notes to consolidated financial statements.

                                      F - 5


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                        November 30,
                                                                                   1996            1995
                                                                                  ---------------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                 <C>             <C>          
  Net (loss) ....................................................................   $   (600,622)   $   (870,145)
  Adjustments to reconcile net (loss) to net cash (utilized) provided by
     operating activities:
         Minority interest in net loss of subsidiary ............................        (54,376)           --
         Depreciation and amortization ..........................................      2,354,942       1,852,825
         Amortization of goodwill ...............................................        594,735         630,718
         Extinguishment of debt with related party ..............................           --           562,292
         (Gain) loss on disposal of fixed assets ................................       (119,030)        229,563
         Compensatory stock .....................................................           --                60
         Provision for maintenance costs ........................................        (18,524)       (176,302)
Changes in assets and liabilities:
     (Increase) in accounts receivable ..........................................       (599,753)       (236,681)
     (Increase) decrease in inventories .........................................        (93,794)        111,382
     (Decrease) increase in accounts payable, accrued expenses and bank overdraft       (955,172)       (553,388)
                                                                                    ------------    ------------
     Net cash provided from operating activities ................................        508,406       1,550,324
                                                                                    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of fixed assets ...................................................     (9,858,724)     (3,433,132)
     Acquisition of assets in new subsidiary ....................................       (969,279)           --
     Proceeds from sale of fixed assets .........................................      2,068,601         906,727
                                                                                    ------------    ------------
     Net cash (utilized) by investing activities ................................     (8,759,402)     (2,526,405)
                                                                                    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Bank lines of credit .......................................................      1,870,785       1,093,680
     Funds received from sale of common stock ...................................      2,285,929            --
     Loans received from officers ...............................................           --           232,500
     Loans repaid to officers ...................................................       (304,759)       (108,832)
     Loans repaid to affiliate ..................................................           --          (132,147)
     Principal payments of long term debt .......................................        (67,921)        (92,375)
     Proceeds from hire purchase contract funding ...............................     11,530,175       3,262,390
     Principal repayments of hire purchase contract funding .....................     (6,073,790)     (3,495,819)
                                                                                    ------------    ------------
     Net cash provided from financing activities ................................      9,240,419         759,397
                                                                                    ------------    ------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH .........................................       (742,101)        201,581
                                                                                    ------------    ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ............................        247,322         (15,103)

  Cash and cash equivalents, beginning of year ..................................          3,377          18,480
                                                                                    ------------    ------------

CASH AND CASH EQUIVALENTS, END OF YEAR ..........................................   $    250,699    $      3,377
                                                                                    ============    ============
</TABLE>

SUPPLEMENTAL INFORMATION:
  (i)    In November 1996, the Company acquired certain of the assets of AC Cars
         Limited   aggregating   $6,067,749   and  incurred   debt   obligations
         aggregating $5,098,470.

  (ii)   The loss on the  disposal  of fixed  assets  resulted  from the sale of
         certain  non-revenue  producing  assets  whereby the proceeds were less
         than the carrying value.

                See notes to consolidated financial statements.

                                      F - 6


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995



NOTE 1 - DESCRIPTION OF COMPANY:

               Pride Automotive  Group, Inc. (the "Company") was incorporated in
               the State of Delaware  in March  1995.  Pursuant to the terms and
               conditions of a reorganization  in March 1995, the Company issued
               1,500,000  shares of its common  stock to Pride,  Inc. (an entity
               incorporated  in the  State  of  Delaware),  thereby  making  the
               Company a majority  owned  subsidiary  of Pride Inc., in exchange
               for all of the issued and outstanding shares held by Pride, Inc.,
               of Pride Management  Services Plc (PMS), a consolidated  group of
               operating  companies  located  in the  United  Kingdom  which are
               engaged in the leasing of motor  vehicles  primarily  on contract
               hire  to  local  authorities  and  selected  corporate  customers
               throughout the United Kingdom. This exchange of stock resulted in
               PMS  becoming  a wholly  owned  subsidiary  of the  Company.  The
               Company,  its subsidiary PMS and PMS's  subsidiaries are referred
               to as the "Company" unless the context  otherwise  requires.  The
               accompanying  consolidated  financial statements are based on the
               assumption that the Company and PMS were combined for all periods
               presented, in a manner similar to the pooling of interests method
               of accounting.

               On November  29,  1996,  the  Company,  through its newly  formed
               majority  owned  subsidiary,  AC  Automotive  Group Inc.  and its
               wholly owned  subsidiary AC Car Group Limited  (registered in the
               United  Kingdom),  completed the acquisition of certain assets of
               AC Cars Limited and Autokraft  Limited.  These two companies were
               engaged in the manufacture and sale of specialty automobiles. The
               purchase price of approximately $6,067,000 is being financed with
               the proceeds of a private offering of the Company's common stock,
               (see Note 19a) and by loans (see Note 10).  The  acquisition  has
               been recorded using the purchase method of accounting.  (See also
               Notes 2f and 19c).

               The following  unaudited  pro-forma  results of operations assume
               the acquisition occurred as of March 1, 1996 (amounts in millions
               except per share data):

Revenues ................   $   14.2
Net loss ................       (1.8)
Earnings per common share   $    (.75)

               The  pro-forma  financial  information,  which is only  available
               beginning  March 1, 1996,  is not  necessarily  indicative of the
               operating  results that would have  occurred had the  acquisition
               been  consummated as of March 1, 1996,  nor are they  necessarily
               indicative of future operating  results.  This is because AC Cars
               Limited and Autokraft Limited were in administrative receivership
               in the United Kingdom and this severely restricted the ability of
               the  companies  to  manufacture  and market their  products.  The
               Company  has made  the  United  States  Securities  and  Exchange
               Commission  aware of the fact that  financial  information is not
               available for prior periods.

                                      F - 7


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

               PMS, the operating  group of  companies,  which is located in the
               United Kingdom,  follows generally accepted accounting principles
               in  the  United  Kingdom.  For  purposes  of  these  consolidated
               financial statements,  the Company has converted to the generally
               accepted accounting principles of the United States.

      (a)      Basis of Consolidation and Presentation:

               The consolidated financial statements include the accounts of the
               Company  (Pride  Automotive  Group,   Inc.),  its'  wholly  owned
               subsidiary  Pride  Management  Services Plc and its' wholly owned
               subsidiaries,  and its' majority  owned  subsidiary AC Automotive
               Group,  Inc.  and its'  wholly  owned  subsidiary.  All  material
               intercompany balances and transactions have been eliminated.

               Due to the nature of the Company's business,  contract leasing of
               motor vehicles  (revenue  producing  assets) which are treated as
               non-current  fixed  assets,  the balance sheet is reflected on an
               unclassified  basis.  Accordingly,  current  assets  and  current
               liabilities  are  not  reflected  separately  on the  face of the
               balance sheet.

      (b)      Use of Estimates:

               In preparing  financial  statements in accordance  with generally
               accepted   accounting   principles,   management   makes  certain
               estimates  and  assumptions,  where  applicable,  that affect the
               reported  amounts of assets and  liabilities  and  disclosures of
               contingent  assets and  liabilities  at the date of the financial
               statements,  as well as the  reported  amounts  of  revenues  and
               expenses during the reporting period.  While actual results could
               differ  from those  estimates,  management  does not expect  such
               variances,  if any,  to have a material  effect on the  financial
               statements.

      (c)      Concentration of Credit Risk/Fair Value:

               Financial  instruments  that  potentially  subject the Company to
               concentrations  of  credit  risk in  accordance  with SFAS No 105
               consist principally of accounts receivable.  The Company believes
               however,  that risks  associated  with  accounts  receivable  are
               limited  due to its  large  customer  base and the  fact  that it
               leases vehicles to companies in many industries.

               The  carrying  amounts  of  cash  and  cash  equivalents,   trade
               receivables,  other assets, accounts payable and debt obligations
               approximate fair value.




                                      F - 8


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

      (d)      Inventories:

               Inventories  include vehicles which are no longer being leased to
               customers and which are temporarily being held for resale at cost
               less accumulated depreciation,  which approximates net realizable
               value.  The  inventories  of AC  Automotive  Group,  Inc. and its
               subsidiary  consist of finished goods, work in progress and spare
               parts of  specialty  automobiles  and are  stated at the lower of
               cost,   (first-in,   first-out  method)  or  market.   Market  is
               considered as net realizable value.

               As of November  30, 1996 and 1995  inventories  consisted  of the
following:

                         1996           1995
                         

Cars held for resale   $  124,932   $   31,137
Finished goods .....       75,510         --
Work-in-progress ...      684,305         --
Spare parts ........      137,908         --
                       ----------   ----------
                       $1,022,655   $   31,137
                       ==========   ==========

      (e)      Fixed Assets and Depreciation:

               Fixed assets are stated at cost less  depreciation.  Depreciation
               is  provided on all assets at rates  calculated  to write off the
               cost of each asset over its estimated useful life, as follows:

                               Building and improvements 50 years  straight-line
                               basis  Revenue   producing   vehicles  3-6  years
                               straight-line  basis  Furniture  and  fixtures  4
                               years  double   declining   basis  Machinery  and
                               equipment 4 years double declining basis Aircraft
                               4 years double declining basis

               Maintenance  and  repairs  are  charged to  operations  and major
               improvements  are  capitalized.  Upon  retirement,  sale of other
               disposal, the associated cost and accumulated depreciation of the
               asset are eliminated  from the accounts and any resulting gain or
               loss is included in operations.


                                      F - 9


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

      (f)      Intangible Assets:

               Intangible  assets  consist  primarily of goodwill which arose in
               connection with the  acquisition of certain  subsidiaries of PMS.
               Goodwill  is being  amortized  over a period of 10-20  years on a
               straight-line basis.  Accumulated amortization as of November 30,
               1996 and 1995 aggregated $2,990,626 and $2,355,813, respectively.

               In November 1996, the Company  acquired  certain of the assets of
               AC Cars Limited and  Autokraft  Limited  (see Note 1 above).  The
               purchase  price  exceeded  the  tangible  net assets  acquired by
               $16,780.  This amount was assigned to the brand name and is to be
               amortized over 20 years on a  straight-line  basis (see also Note
               19c).

               The Company  periodically  reviews the valuation and amortization
               of  goodwill  and  other   intangibles   to  determine   possible
               impairment  by  evaluating  events and  circumstances  that might
               indicate  an  inability  to recover  the  carrying  amount.  Such
               evaluation  is  based  on  analysis,   including   profitability,
               projections  and  cash  flows  that  incorporate  the  impact  on
               existing Company business.

      (g)      Income Taxes:

               The  Company  conducts  all of its  operating  activities  in the
               United Kingdom (UK). As such, they are subject to taxation in the
               UK based upon that  country's  tax  statutes.  Under UK  taxation
               rules,  provision  is made for  taxation  deferred as a result of
               material timing  differences  between the incidence of income and
               expenditures  for taxation  and  accounting  purposes,  using the
               liability  method,  only to the extent  that there is  reasonable
               probability  that a liability  or asset will  crystallize  in the
               near future.  See also Note 13 regarding SFAS No 109 - Accounting
               for Income Taxes.

      (h)      Foreign Currency Translation:

               The  Company's  principal  operations  are conducted by PMS which
               reflects its financial statements in British pounds. As a result,
               most  assets  and  liabilities  of  the  foreign  operations  are
               translated into US dollars using current exchange rates in effect
               at the balance sheet date. Fixed assets and intangible assets are
               translated  at  historical  exchange  rates.  Revenue and expense
               accounts are translated using an average exchange rate during the
               period   except  for  those   expenses   related  to  assets  and
               liabilities  which are translated at historical  exchange  rates.
               These include  depreciation and amortization which are translated
               at the rates  existing  at the time the asset was  acquired.  Any
               resulting gains or losses due to the  translations  are reflected
               as a separate item of shareholders' equity.


                                     F - 10


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

      (i)      Income Recognition:

               Contract  hire  income  of  leased   vehicles  is  recognized  as
               operating  leases over the period of the  contract in  accordance
               with  SFAS  No  13  -  Accounting  for  Leases  and  the  related
               amendments   and   interpretations.   Income  from  the  sale  of
               previously  leased vehicles,  is reflected at the time of sale of
               the vehicle.  Fleet management revenues and miscellaneous  income
               are  reflected  on the  accrual  basis  over  the  term  that the
               services are provided.

      (j)      Earnings Per Share:

               Earnings per share are computed  based upon the weighted  average
               shares  and  common  equivalent  shares  outstanding.  The shares
               issued in connection  with the  reorganization  (see Note 1), the
               shares issued in lieu of compensation  for legal services and the
               shares sold during the year ended  November 30, 1996 in a private
               offering (see Note 11), have been treated as outstanding  for all
               periods  presented,  in  accordance  with the  guidelines  of the
               Securities and Exchange Commission. Common stock equivalents have
               been  excluded  from the  computation  since the results would be
               anti-dilutive.

      (k)      Cash and Cash Equivalents:

               For  purposes  of the  statements  of  cash  flows,  the  Company
               considers all highly liquid investments with an original maturity
               of three months or less to be cash equivalents.

      (l)      Lease Agreements:

               The Company leases vehicles with terms generally ranging from two
               to four years. The following table shows the future minimum lease
               payments of existing leases to be received,  net of related costs
               (see also Note 7):

November 30, 1997   $5,103,977
November 30, 1998    4,390,779
November 30, 1999    2,634,819
November 30, 2000    1,007,729
                    ----------
Total minimum lease payments receivable
net of executory costs   $13,137,304


      (m)      Accounting Changes:

               As   permitted   by  SFAS   123,   Accounting   for   Stock-Based
               Compensation,  which  becomes  effective  for the  Company  as of
               December  1,  1996,  and  which  encourages  companies  to record
               expense  for  stock  options  and  other   stock-based   employee
               compensation  awards  based on their fair value at date of grant,
               the Company will continue to apply its current  accounting policy
               under Accounting Principles Board Opinion No. 25 and will include
               the   necessary   disclosures   in  its  fiscal  1997   financial
               statements.

                                     F - 11


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 3 - ACCOUNTS RECEIVABLE:

Accounts receivable consist of the following:

                                   1996      1995
                              -------------- ----------

Trade receivables ...........   $1,192,949   $  955,437
Lease maintenance receivables      330,902       69,182
Value added tax .............      102,114       97,707
Due from related companies ..       95,125         --
Other .......................      300,921      118,841
                                ----------   ----------
                                $2,022,011   $1,241,167

               Included in the above trade  receivables is $59,002 due on a long
               term basis as of November 30, 1996.

               Based  upon past  experience,  the  Company  has  deemed  that no
               allowance for uncollectible accounts receivable is necessary.


NOTE 4 - FIXED ASSETS AND DEPRECIATION:

               Fixed assets consist of the following:
:
                                                       1996           1995
                                                   ---------------- -----------

Buildings and improvements ......................   $ 1,719,415   $ 1,719,415
Revenue producing vehicles ......................    17,282,095    11,989,192
Furniture, fixtures, plant and equipment ........     4,641,388       519,753
Aircraft ........................................       927,751          --
                                                                  -----------
                                                     24,570,649    14,228,360
Less: accumulated depreciation (including
      $3,388,495 and $3,853,753 of accumulated
      depreciation on revenue producing vehicles,
      for 1996 and 1995, respectively) ..........     3,898,795     4,304,042
                                                    -----------   -----------
                                                    $20,671,854   $ 9,924,318
                                                    ===========   ===========

               Depreciation  expense for the years ended  November  30, 1996 and
               1995 aggregated $2,295,164 and $2,415,117, respectively.

               One of the buildings  owned by Pride  Management is not currently
               being  utilized by the Company.  This building is being leased to
               an unrelated party at an annual rent of approximately $80,000 per
               annum.

                                     F - 12


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 5 - ACCRUED LIABILITIES AND EXPENSES:

               Accrued liabilities and expenses consist of the following:

                                   1996        1995
                                   

Taxes other than income taxes    $418,082   $333,586
Miscellaneous accrued expenses     72,833     25,306
                                 --------   --------
                                 $490,915   $358,892
                                 ========   ========


NOTE 6 - BANK LOANS/LINE OF CREDIT:

      (a)      The  Company  has a  $2,684,800  line of credit with a bank at an
               interest rate of 3% in excess of the base rate (6% as of November
               30,  1996).  This  line of  credit is  payable  on demand  and is
               secured by all assets of the Company other than revenue producing
               vehicles and  buildings  which are already  pledged (see Notes 6b
               and 7). As of November 30, 1996, the bank had granted a temporary
               increase to $2,965,000 at similar terms.

      (b)      At November 30, 1996,  bank loans  consisted of $1,002,571 due to
               two banks at rates of 3% and 5% in excess of the banks' base rate
               (6% as of  November  30,  1996).  These  loans are secured by the
               freehold properties (buildings) owned by Pride Management and its
               subsidiaries, and mature in 2001 and 2017.

               The scheduled principal payments of this bank debt as of November
30, 1996 are as follows:

                      For the Year Ended November 30,

                               1997                     $   98,890
                               1998                         98,890
                               1999                         98,890
                               2000                         98,890
                               2001                         98,890
                               Thereafter                  508,121
                                                       -----------
                                                        $1,002,571


NOTE 7 - HIRE PURCHASE CONTRACTS/EQUIPMENT FINANCING:

               The Company has funding lines with several financing institutions
               in the United  Kingdom in the aggregate  amount of  approximately
               $18,200,000  as of November 30,  1996.  These  funding  lines are
               utilized to acquire revenue  producing  vehicles,  which vehicles
               collateralize the outstanding obligations.


                                     F - 13


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 7 - HIRE PURCHASE CONTRACTS/EQUIPMENT FINANCING (Continued):

               Assets (revenue producing  vehicles) obtained under hire purchase
               contracts are  capitalized as fixed assets and  depreciated  over
               their useful lives. The obligations under such agreements,  which
               mature at various  dates  within five years from  inception,  are
               reflected  separately on the balance sheet net of finance charges
               which are charged to the periods to which they apply. At November
               30,  1996,  obligations  under  hire  purchase  contracts  are as
               follows:

               For the Year Ended November 30,

                      1997                            $  4,951,662
                      1998                               3,977,882
                      1999                               1,878,445
                      2000                                 226,962
                                                    --------------
                                                       $11,034,951

               The annual interest rates on these  obligations  range from 7.25%
to 15.6%.


NOTE 8 - OTHER LIABILITIES:

               At November  30,  1996 and 1995 other  liabilities  consisted  of
               $33,560 and  $532,804,  respectively  due to other  creditors  at
               interest  rates   approximating  the  current  market  rates  and
               repayable on a demand basis.


NOTE 9 - RELATED PARTY TRANSACTIONS:

               At November 30, 1995,  the Company was indebted to its  President
               in the aggregate  amount of $123,668.  These unsecured loans were
               repayable  on demand at an  interest  rate of 2 1/2% in excess of
               the  base  lending  rate  (6.75%  at  November  30,  1995) of the
               Company's  bank.  The  loan was  repaid  during  the  year  ended
               November 30, 1996.


NOTE 10 - ACQUISITION DEBT PAYABLE:

     As of November 30, 1996, acquisition debt payable (see Note 1) consisted of
the following:

Unsecured notes payable on demand after October 31, 1999;
interest payable quarterly at 8% per annum ...................   $1,678,000

Unsecured notes payable on demand after May 31, 1998; interest
payable quarterly at 2% above the base rate ..................      839,000

Other short-term notes payable (see Note 19) .................    2,581,470
                                                                 ----------
                                                                 $5,098,470

                                     F - 14


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 11 - COMMON STOCK/RECAPITALIZATION:

               In March 1995,  the  Company  issued  1,500,000  shares of common
               stock in connection with a reorganization (see Note 1).

               In March 1995,  the Company  issued 60,000 shares of common stock
               in lieu of compensation for legal services rendered.

               In  December  1995,  the Company  completed  a private  placement
               offering selling 20 units,  each unit consisting of 25,000 shares
               of common stock,  at $6,000 per unit for aggregate gross proceeds
               of $120,000.

               In April  1996 the  Company  successfully  completed  an  initial
               public  offering  ("IPO")  of its  common  stock  whereby it sold
               592,500  shares of common stock at a price of $5.00 per share and
               2,300,000  common stock purchase  warrants at a price of $.10 per
               warrant.  This  offering  yielded net  proceeds of  approximately
               $2,166,000.

               The  warrants  are  exercisable  at a price of $5.75  per  share,
               subject to  adjustment,  one year from the date of the  offering,
               for a period of four years.  The warrants are  redeemable  by the
               Company  at any time  commencing  one  year  from the date of its
               prospectus,  upon 30 days notice,  at a redemption  price of $.05
               per warrant.

               In addition, the Company entered into a consulting agreement with
               one of the Under- writers as a financial  consultant for a period
               of two years at a monthly  fee of $2,500  payable  in full at the
               closing of the offering.  The Underwriters have also been granted
               warrants  to acquire  95,000  shares of Common  Stock and 200,000
               warrants at 150% of the public offering prices or $7.50 per share
               and $.15 per Warrant, respectively.


NOTE 12 - STOCK OPTION PLANS:

               In September 1995, the board of directors adopted the 1995 Senior
               Management  Incentive  Plan  (the  "Management  Plan")  which was
               adopted  by  shareholder  consent.  The  Plan  provides  for  the
               issuance of up to 300,000 shares of the Company's common stock in
               connection  with the  issuance  of stock  options and other stock
               purchase rights to executive officers and other key employees.

               As of November  30,  1996,  the  Company  had granted  options to
               purchase  100,000  shares of common stock at an exercise price of
               $5.50  per  share,  none of which had been  exercised  as of that
               date.  These  options  are  exercisable  over a five year  period
               pursuant  to a three year  vesting  schedule  (331/3%  per annum)
               beginning in August 1996.

               See also Note 2(m) re: Accounting Changes.


                                     F - 15


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE   13  -          INCOME TAXES:

               The  provisions  for United  Kingdom  income taxes  utilizing the
               requirements  of SFAS No 109  consisted of the  following for the
               years ended November 30, 1996 and 1995:

                                        1996      1995
                                   -------------- ---------

Current tax expense ..............   $ 763,350    $ 860,000
Deferred tax expense .............     174,650         --
Investment tax credits on vehicles    (938,000)    (860,000)
                                     ---------    ---------
                                     $$$$$$$$$    $$$$$$$$$
                                     =========    =========

               At November 30, 1996,  investment  tax credits being carried over
               to future periods aggregated approximately $11,904,000.

               The  components  of the deferred tax asset,  pursuant to SFAS No.
               109,  as of  November  30,  1996 and 1995,  respectively,  are as
               follows:

                              1996           1995
                              --------       -------

Operating loss carryforward   $ 52,000    $ 23,000
Valuation allowance .......    (52,000)    (23,000)
                              --------    --------
                              $$$$$$$$    $$$$$$$$
                              ========    ========

               The Company has available operating losses  carryforwards for tax
               purposes  aggregating  approximately  $148,000 as of November 30,
               1996,  which may result in a deferred tax asset.  The Company has
               recognized this asset but has provided a valuation  allowance for
               the full amount since there is no assurance that such losses will
               be utilized in the near future.


NOTE 14 - ECONOMIC DEPENDENCY:

               For the years ended  November 30, 1996 and 1995,  the Company had
               two unaffiliated  customers,  which accounted for an aggregate of
               approximately 17% (1995 - 18%) and 12% (1995 - 15%) respectively,
               of the Company's total revenues.

               The Company  purchases all of the  automobiles  that it leases to
               its clients from  automotive  dealerships,  usually  several at a
               time.  The Company does not depend on any one  dealership for its
               purchase of automobiles and does not have any written  agreements
               with any of the  dealerships  it  purchases  vehicles  from.  The
               Company  believes  that it will  continue  to be able to purchase
               automobiles at competitive prices and terms into the future.



                                     F - 16


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 15 - PENSION PLAN:

               PMS  and  its'   subsidiaries   have  a  fully  insured   defined
               contribution   plan   for   all   of  its   eligible   employees.
               Contributions to the plan, which are discretionary, for the years
               ended November 30, 1996 and 1995 amounted to $33,264 and $55,817,
               respectively.


NOTE 16 - CONVERTIBLE DEBT:

               The  Company  had  reflected  convertible  debt of $562,292 as of
               November  30, 1994.  These loans were to bear  interest at 6% and
               were repayable five years from date of issue.  The original debt,
               which was not convertible,  arose at the time PMS acquired one of
               its  subsidiaries  in 1992. The Company  acquired this subsidiary
               for $1 and assumed approximately  $11,500,000 of net liabilities.
               This   acquisition   resulted  in   goodwill   of   approximately
               $11,500,000.  The ultimate holder of the debt, in 1994, was given
               the option of  converting  such loans into shares of Pride Inc.'s
               (the  Company's  parent)  common stock at the end of such period,
               based upon their  guarantee of the  ultimate  sales values of the
               related  revenue  producing  vehicles.  The debt  holder  was the
               controlling  shareholder  of the Company's  parent at the time of
               this transaction.

               During the year ended November 30, 1995, the Company  determined,
               with  the  agreement  of the  debt  holder,  that  the  estimated
               ultimate sales values of the vehicles were less than expected and
               it was agreed that the debt would be written off against the debt
               holder's  guarantee.  The  balance  of the  debt,  $562,292,  was
               therefore treated as an early extinguishment of debt. At the time
               of  extinguishment,  the debt  outstanding  was owed to a related
               party. In accordance with APB No 26, extinguishment  transactions
               between   related   entities   should  be   treated   as  capital
               transactions.  Accordingly,  the gain on the  extinguishment  was
               added to additional paid-in capital.


NOTE   17  -          COMMITMENTS:

      (a)      Leases:

                    The Company has entered into a one-year lease  agreement for
               the manufacturing  facility being utilized for its new subsidiary
               at a cost of approximately  $54,000 per month. The Company has an
               option to purchase this facility at a cost of $8,700,000, through
               August 1997. This lease expires in December 1997.

      (b)      Employment Agreements:

                    In August  1995,  the  Company  entered  into an  employment
               agreement with its  President/Chairman of the Board of Directors.
               This  three-year  agreement  provides  for an  annual  salary  of
               $160,000 with annual escalations of 10% and also contains certain
               non-compete restrictions.  This employee was also granted 100,000
               stock options (see Note 12).



                                     F - 17


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1996 AND 1995


NOTE 17 - COMMITMENTS (Continued):

      (b)      Employment Agreements (continued):

               In  September  1995,  the  Company  entered  into  an  employment
               agreement  with an  officer/director  for a period of twenty four
               months   commencing   December  1,  1995.   This   agreement   is
               automatically  extendable  for a further twenty four month period
               and provides for an annual  salary of $55,000,  subject to review
               by the Board of Directors.

      (c)      Rental Income:

               The Company leases one of its owned facilities to an unaffiliated
               company.  The lease,  which expires in 2004,  provides for rental
               income of  approximately  $80,000  per annum.  The annual cost of
               servicing  the mortgage  and real estate  taxes on this  building
               approximates $70,000.


NOTE 18 - MINORITY INTEREST IN SUBSIDIARIES:

               The Company owns 70% of AC Automotive  Group,  Inc. ("AC Group").
               In  order to  properly  reflect  the  liability  to the  minority
               shareholders as a percentage of the total assets of the AC Group,
               the Company has reflected a charge to additional  paid-in capital
               of  $539,370.  As of November  30,  1996,  the  liability  to the
               minority shareholders aggregated $482,486.


NOTE 19 - SUBSEQUENT EVENT:

      (a)      In December 1996, the Company completed a private placement of 14
               units,  each  unit  consisting  of a 10%  promissory  note in the
               amount of $95,000 and 10,000 shares of the Company's common stock
               for an aggregate  price of $100,000 per unit.  The gross proceeds
               of $1,400,000 were used to satisfy a portion of the debt owed re:
               the acquisition of AC Car Group (see Notes 1 and 10).

      (b)      In December  1996, the Company also entered into a loan agreement
               with its bank  for  $755,100,  with  interest  payable  at 8% per
               annum,  secured  by a first  lien on the  aircraft  owned  by the
               Company as a result of the acquisition  described in Note 1. This
               loan  is to be  repaid  from  the  proceeds  of the  sale  of the
               aircraft.

      (c)      In connection  with the  acquisition  of AC Cars Limited
               (see  Note  1)  the  Company  originally  recorded  fixed  assets
               aggregating   $3,038,182   and  intangible   assets   aggregating
               $1,990,215. In June 1997, the Company, through the services of an
               independent third-party expert,  determined that the value of the
               fixed assets acquired was actually $6,643,365. Accordingly, as of
               the date of acquisition,  the Company reclassified the intangible
               assets  to  fixed  assets,  and  recorded  negative  goodwill  of
               $1,614,968 in order to reflect the  increased  value of the fixed
               assets acquired.  In accordance with Accounting  Principles Board
               Opinion No. 16, the  negative  goodwill  has been offset  against
               non-current assets acquired.

                                     F - 18



<PAGE>
                                   SIGNATURES


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


Dated:   September 15, 1997

Pride Automotive Group, Inc.
by: \s\ Alan Lubinsky
Alan Lubinsky
<PAGE>