<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                  FORM 10-QSB-A

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

                  For the Quarterly Period Ended March 31, 2000

                                       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 0-29797

                   ROYAL ACCEPTANCE CORPORATION AND SUBSIDIARY
             (Exact name of registrant as specified in its charter)

                Delaware                                       22-368051
     (State of other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                       Identification No.)

           90 Jericho Turnpike
          Floral Park, New York                                  11001
 (Address of principal executive office)                      (zip code)


        Registrant's telephone number, including area code: 516-488-8600

                                 Not Applicable
 (Former name, former address and former fiscal year, if changed since last
report)


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

             7,697,709 shares, $.001 par value, as of March 31, 2000

(Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date)


                                       1
<PAGE>

                   ROYAL ACCEPTANCE CORPORATION AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2000
                                   (Unaudited)




                                    I N D E X

<TABLE>
<CAPTION>
                                                                                                              Page No.
                                                                                                              --------
<S>                                                                                                          <C>
Part I  - Financial Information:

               Item 1.  Consolidated Financial Statements:

                        Consolidated Balance Sheets
                        As at March 31, 2000 and December 31, 1999 .................................         F-3 - F-4


                        Consolidated Statements of Operations
                        For the Three Months Ended
                        March 31, 2000 and 1999 ....................................................            F-5


                        Consolidated Statements of Stockholders' Equity
                        For the Three Months Ended
                        March 31, 2000 and 1999 ....................................................            F-6


                        Consolidated Statements of Cash Flows
                        For the Three Months Ended
                        March 31, 2000 and 1999 ....................................................            F-7


                        Notes to Consolidated Financial Statements .................................        F-8 - F-13


               Item 2.  Management's Discussion and Analysis of
                        Financial Condition and Results of Operations ..............................        F-14 - F-19



Part II - Other Information:

                            Item 3 Through Item 9 - Not Applicable ..................................

                            Signatures ..............................................................
</TABLE>


                                       2
<PAGE>

                   ROYAL ACCEPTANCE CORPORATION AND SUBSIDIARY

               CONSOLIDATED BALANCE SHEETS - RESTATED - SEE NOTE 2
                                   (Unaudited)


                                    A S S E T S
                                    -----------

                                                    March 31,     December 31,
                                                       2000            1999
                                                   -----------    ------------

Current assets:
  Cash                                             $    94,441    $     33,106
  Net investment in direct financing leases          7,290,884       7,759,531
  Prepaid expenses                                      25,400          13,375
                                                   -----------    ------------
        Total current assets                         7,410,725       7,806,012

Vehicles held for sale or re-lease                   1,674,701       1,300,843

Net investment in direct financing leases           20,907,417      19,349,913

Furniture and equipment - net of
  depreciation and amortization                        106,831         112,453

Due from related parties                                73,296          68,296

Deferred charges                                        32,810          49,999

Other assets                                             8,773          10,277
                                                   -----------    ------------
                                                   $30,214,553    $ 28,697,793
                                                   ===========    ============


                 See accompanying notes to financial statements.


                                        3
<PAGE>

                   ROYAL ACCEPTANCE CORPORATION AND SUBSIDIARY

         CONSOLIDATED BALANCE SHEETS - RESTATED - SEE NOTE 2 (Continued)
                                   (Unaudited)


                       LIABILITIES AND STOCKHOLDERS' EQUITY

                                                    March 31,     December 31,
                                                       2000            1999
                                                   -----------    ------------

Current liabilities:
  Current maturities of loans payable              $ 6,677,848    $  7,613,318
  Accounts payable and accrued expenses                337,057         512,324
  Loans payable - officer/stockholder                  115,486         107,894
                                                   -----------    ------------
        Total current liabilities                    7,130,391       8,233,536

Loans payable - net of current liabilities          21,051,405      18,996,847

Deferred income taxes                                  872,000         706,000
                                                   -----------    ------------

        Total liabilities                           29,053,796      27,936,383
                                                   -----------    ------------

Stockholders' equity:
  Common stock, no par value
    Authorized 35,000,000 shares
    Issued and outstanding - 7,697,709 shares
      at March 31, 2000 and 7,532,709 shares
      at December 31, 1999                               7,698           7,533
  Additional paid-in capital                           417,770         252,935
  Retained earnings                                  1,216,289         981,942
                                                   -----------    ------------
                                                     1,641,757       1,242,410
  Less:  Due from related party                        481,000         481,000
                                                   -----------    ------------
        Total stockholders' equity                   1,160,757         761,410
                                                   -----------    ------------

                                                   $30,214,553     $28,697,793
                                                   ===========     ===========


                 See accompanying notes to financial statements.


                                        4
<PAGE>

                   ROYAL ACCEPTANCE CORPORATION AND SUBSIDIARY

          CONSOLIDATED STATEMENTS OF OPERATIONS - RESTATED - SEE NOTE 2
                                   (Unaudited)


                                                           For the Three
                                                           Months Ended
                                                             March 31,
                                                   ---------------------------
                                                        2000            1999
                                                   -----------    ------------

Revenues:
  Amortization of unearned lease income             $1,423,936       $ 775,722
  Gain (loss) on sale of vehicles                     ( 35,436)         29,885
                                                   -----------    ------------
Total revenues                                       1,388,500         805,607
                                                   -----------    ------------

Costs and expenses:
  Interest                                             430,865         360,272
  Amortization of initial direct costs                  90,697          51,548
  Provision for bad debts                              101,306               -
  Salaries and wages                                   123,665          54,544
  Payroll taxes                                         11,998           7,729
  Rent and real estate taxes                            17,875          19,070
  Travel and entertainment                              21,802          27,316
  Professional fees                                     17,296           3,722
  Amortization of deferred charges                      17,189               -
  Other selling and administrative expenses            143,460         120,571
                                                   -----------    ------------
Total costs and expenses                               976,153         644,772
                                                   -----------    ------------

Income before provision for income taxes               412,347         160,835

Provision for income taxes                             178,000          69,000
                                                   -----------    ------------

Net income                                          $  234,347       $  91,835
                                                   ===========    ============


Earnings per share:

  Basic and diluted net income per share            $     0.03       $    0.01
                                                   ===========    ============

  Weighted average shares outstanding (A)            7,586,979       6,980,562
                                                   ===========    ============



(A) Pro forma - See Note 1(e).


                 See accompanying notes to financial statements.


                                        5
<PAGE>


                   ROYAL ACCEPTANCE CORPORATION AND SUBSIDIARY

     CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - RESTATED - SEE NOTE 2
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                        Common Stock           Additional                                   Total
                                                  --------------------------     Paid-In     Retained     Due from     Stockholders'
                                                     Shares        Amount       Capital      Earnings   Related Party     Equity
                                                     ------        ------       -------      --------   -------------     ------

For the Three Months Ended March 31, 2000:

<S>                                                <C>           <C>           <C>          <C>          <C>            <C>
  Balance at January 1, 2000                        7,532,709     $ 7,533       $252,935     $ 981,942   ($481,000)      $ 761,410

  Issuance of shares of common stock for cash         165,000         165        164,835             -           -         165,000

  Net income for the three months
    ended March 31, 2000                                    -           -              -       234,347           -         234,347
                                                   ----------    --------      ---------    ----------   ----------     ----------
  Balance at March 31, 2000                         7,697,709     $ 7,698       $417,770    $1,216,289   ($481,000)     $1,160,757
                                                   ==========    ========      =========    ==========   ==========     ==========
</TABLE>


                 See accompanying notes to financial statements.


                                       6
<PAGE>

                   ROYAL ACCEPTANCE CORPORATION AND SUBSIDIARY

          CONSOLIDATED STATEMENTS OF CASH FLOWS - RESTATED - SEE NOTE 2
                                   (Unaudited)


                                                             For the Three
                                                             Months Ended
                                                               March 31,
                                                        -----------------------
                                                           2000          1999
                                                        ----------     --------
                                                      (Consolidated)

Cash flows from operating activities:

  Net income                                            $ 234,347      $ 91,835
                                                       -----------  -----------
  Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
    Depreciation and amortization                          96,319        55,548
    Deferred income taxes                                 166,000        68,000
    Amortization of deferred changes                       17,189            -
    Increase (decrease) in cash flows as
        a result of changes in asset and
        liability account balances:
      Net investment in direct finance leases          (1,179,554)  ( 6,385,120)
      Vehicles held for sale or re-lease               (  373,858)       14,183
      Prepaid expenses                                 (   12,025)  (    14,514)
      Other assets                                          1,504            -
      Loans payable                                     1,119,088       510,914
      Accounts payable and accrued expenses            (  175,267)    5,539,466
      Proceeds of vehicles sold                                 -       129,950
                                                       -----------  -----------
  Total adjustments                                    (  340,604)  (    81,573)
                                                       -----------  -----------

Net cash provided by (used in) operating activities    (  106,257)       10,262
                                                       -----------  -----------

Cash flows used in investing activities:

  Due from related parties                             (    5,000)  (   150,000)
                                                       -----------  -----------

Cash flows from financing activities:

  Sale of common stock                                    165,000             -
  Loans payable - officer/stockholder                       7,592             -
                                                       -----------  -----------
Net cash provided by investing activities                 172,592             -
                                                       -----------  -----------

Net increase (decrease) in cash                            61,335   (   139,738)

Cash at beginning of period                                33,106       237,957
                                                       -----------  -----------

Cash at end of period                                    $ 94,441      $ 98,219
                                                       ===========  ===========

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period for:

    Interest                                            $ 430,865     $ 360,272
                                                       ===========  ===========

    Income taxes                                          $ 7,000           $ -
                                                       ===========  ===========



                 See accompanying notes to financial statements.


                                        7
<PAGE>



                   ROYAL ACCEPTANCE CORPORATION AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - REVISED

                                 MARCH 31, 2000
                                   (UNAUDITED)

NOTE  1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

           (a)      Organization:

                      Royal Acceptance Corporation ("Royal") was incorporated in
           the State of Delaware on November 15, 1996. On July 15, 1999,
           pursuant to a reorganization under section 368(a)(1)(B) of the
           Internal Revenue Code, Royal acquired from Alliance Holdings Limited
           Partnership ("Alliance") all of the issued and outstanding capital
           stock of RIT Auto Leasing Group, Inc. ("RIT") in exchange for
           5,650,000 shares of Royal's common stock. After the acquisition, the
           former RIT stockholder, who is Alliance's general partner, and who
           became President, Secretary and Director of Royal owned
           approximately 72% of Royal's outstanding common stock. The
           transaction is being accounted for as a reverse acquisition of Royal
           by RIT. The results of operations of Royal are included in the
           accompanying financial statements since the date of acquisition.
           Royal, prior to the RIT acquisition, had been virtually inactive.

                      The following summarized unaudited pro forma information
           assumes the acquisition had occurred on January 1, 1998.

                                           For the Three
                                            Months Ended
                                           March 31, 1999
                                           --------------

                      Revenues                 $805,607
                                               ========

                      Net income               $ 38,056
                                               ========

                      Earnings per share:
                        Basic and diluted       $0.01
                                                =====

           (b)      Principles of Consolidation:

                      The accompanying balance sheet as of December 31, 1999
           includes the accounts of Royal and its wholly owned subsidiary, RIT.
           The accompanying balance sheet as of March 31, 2000 and for the
           three months then ended include the accounts of Royal and RIT.


                                        8
<PAGE>

NOTE  1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLCIES.  (Continued)

           (c)      Basis of Presentation:

                      The accompanying unaudited financial statements have been
           prepared in accordance with generally accepted accounting principles
           for interim financial information and with the instructions for Form
           10-Q and Article 10 of Regulations S-X. Accordingly, they do not
           include all of the information and footnotes required by generally
           accepted accounting principles for complete financial statements. In
           the opinion of management, the statements contain all adjustments
           (consisting only of normal recurring accruals) necessary to present
           fairly the financial position as of March 31, 2000 and the results
           of operations and cash flows for the three months ended March 31,
           2000 and 1999. The results of operations for the three months ended
           March 31, 2000 and 1999 are not necessarily indicative of the
           results to be expected for the full year.

                      The December 31, 1999 balance sheet has been derived from
           the audited financial statements at the date included in the
           Company's annual report contained in Form 10SB. Those unaudited
           financial statements should be read in conjunction with the
           financial statements and notes thereto included in the Company's
           annual report contained in Form 10SB.

           (d)      Financial Statement Presentation:

                      The preparation of financial statements in conformity with
           generally accepted accounting principles requires management to make
           estimates and assumptions that affect the reported amounts and
           disclosures accordingly, actual results could differ from those
           estimates.

           (e)      Per Share Data:

                      Net income per share was computed by the weighted average
           number of shares outstanding during each period. In order to make
           the share data more comparable, the weighted average number of
           shares outstanding for the year ended December 31, 1999 and for the
           three months ended March 31, 2000 reflect the acquisition of Royal
           as if it had occurred on December 31, 1998.


                                        9
<PAGE>

NOTE 2 - RESTATEMENT.

                      The accompanying financial statements included in the
           March 31, 2000, Form 10-QSB have been restated to give effect o
           certain comments by the Securities and Exchange Commission
           regarding the Company's filing of Amendment 2 to Form 10-SB as
           follows:


<TABLE>
<CAPTION>
                                                                  As At March 31, 2000
                                                 --------------------------------------------------------------
                                                                             As                     Difference
                                                                         Originally                Restated Over
                                                  As Restated               Filed                (Under) Original
                                                  -----------            ----------              ----------------
                 A s s e t s
                 -----------
<S>                                               <C>                   <C>                    <C>
Current assets:
  Cash                                            $     94,441          $     94,441                       $      -
  Net investment in direct
    finance leases                                   7,290,884             7,271,434               (a)       19,450
  Prepaid expenses                                      25,400                     -               (b)       25,400
                                                  ------------          ------------                       --------
    Total current assets                             7,410,725             7,365,875                         44,850
                                                  ------------          ------------                       --------

Vehicles held for sale or re-leases                  1,674,701             1,674,701                              -
Net investment in direct
  finance leases                                    20,907,417            20,907,417                              -
Furniture and fixtures - net                           106,831               106,831                              -
Due from related parties                                73,296                    -                (b)       73,296
Deferred charges                                        32,810                    -                (e)       32,810
Other assets                                             8,773               107,469               (b)     ( 98,696)
                                                  ------------          ------------                       --------
                                                    22,803,828            22,796,418                          7,410
                                                  ------------          ------------                       --------

                                                  $ 30,214,553          $ 30,162,293                       $ 52,260
                                                  ============          ============                       ========
    Liabilities and Stockholders' Equity
Current liabilities:

  Current maturities of loans payable             $  6,677,848          $  6,677,848                       $      -
  Accounts payable and

    accrued expenses                                   337,057               336,424               (c)          633
  Loans payable - officer/
    stockholder                                        115,486               115,486                             -
                                                  ------------          ------------                       --------
    Total current liabilities                        7,130,391             7,129,758                            633

Loans payable - net of
  current maturities                                21,051,405            21,051,405                             -
Deferred income taxes                                  872,000               872,000                             -
                                                  ------------          ------------                       --------
    Total liabilities                               29,053,796            29,053,163                            633
                                                  ------------          ------------                       --------

Stockholders' equity:
  Common stock                                           7,698                 7,698                              -
  Additional paid-in capital                           417,770               328,472               (d)       89,298
  Retained earnings                                  1,216,289             1,253,960           (a,d,e)     ( 37,671)
  Less:  Due to related party                        ( 481,000)            ( 481,000)                             -
                                                  ------------          ------------                       --------
    Total stockholders' equity                       1,160,757             1,109,130                         51,627
                                                  ------------          ------------                       --------

                                                  $ 30,214,553           $30,162,293                        $52,260
                                                  ============          ============                       ========
</TABLE>

<TABLE>
<CAPTION>

                                                                  As At December 31, 2000
                                                 --------------------------------------------------------------
                                                                              As                    Difference
                                                                          Originally               Restated Over
                                                  As Restated                Filed               (Under) Original
                                                  -----------             ----------             ----------------
                 A s s e t s
                 -----------
<S>                                               <C>                   <C>                    <C>
Current assets:
  Cash                                            $     33,106          $     33,106                       $      -
  Net investment in direct
    finance leases                                   7,759,531             7,712,004               (a)       47,527
  Prepaid expenses                                      13,375                13,375                              -
                                                  ------------          ------------                       --------
    Total current assets                             7,806,012             7,758,485                         47,527
                                                  ------------          ------------                       --------

Vehicles held for sale or re-leases                  1,300,843             1,300,843                              -
Net investment in direct
  finance leases                                    19,349,913            19,349,913                              -
Furniture and fixtures - net                           112,453               112,453                              -
Due from related parties                                68,296                     -               (b)       68,296
Deferred charges                                        49,999                     -               (e)       49,999
Other assets                                            10,277                78,573               (b)     ( 68,296)
                                                  ------------          ------------                       --------
                                                    20,891,781            20,841,782                         49,999
                                                  ------------          ------------                       --------

                                                  $ 28,697,793          $ 28,600,267                       $ 97,526
                                                  ============          ============                       ========
    Liabilities and Stockholders' Equity
Current liabilities:

  Current maturities of loans payable             $  7,613,318           $ 7,613,318                       $      -
  Accounts payable and

    accrued expenses                                   512,324               517,091               (c)      ( 4,767)
  Loans payable - officer/
    stockholder                                        107,894               107,894                              -
                                                  ------------          ------------                       --------
    Total current liabilities                        8,233,536             8,238,303                        ( 4,767)

Loans payable - net of
  current maturities                                18,996,847            18,996,847                            -
Deferred income taxes                                  706,000               701,000             (a,e)        5,000
                                                  ------------          ------------                       --------
    Total liabilities                               27,936,383            27,936,150                            233
                                                  ------------          ------------                       --------

Stockholders' equity:
  Common stock                                           7,533                 7,533                           -
  Additional paid-in capital                           252,935             1,282,693               (d)  ( 1,029,758)
  Retained earnings                                    981,942             ( 145,109)          (a,d,e)    1,127,051
  Less:  Due to related party                        ( 481,000)            ( 481,000)                             -
                                                  ------------          ------------                       --------
    Total stockholders' equity                         761,410               664,117                         97,293
                                                  ------------          ------------                       --------

                                                  $ 28,697,793          $ 28,600,267                       $ 97,526
                                                  ============          ============                       ========
</TABLE>


(a) Cumulative adjustment pursuant to change in accounting for amortization
    of initial direct costs from the cash method to the interest method.
(b) Reclassification from "Other assets".
(c) Miscellaneous adjustment.
(d) Change in accounting for the reverse acquisition of Royal by RIT from a
    pooling of interests to a purchase. (e) Cumulative effect of amortizating
    value of stock issud for services over a two (2) year period.


                                       10
<PAGE>



NOTE  2 -  RESTATEMENT.  (Continued)

                Statements of Operations:


<TABLE>
<CAPTION>
                                                           For the Three Months Ended March 31, 2000
                                                  --------------------------------------------------------------
                                                                             As                     Difference
                                                                         Originally                Restated Over
                                                  As Restated               Filed               (Under) Original
                                                  -----------            ----------              ----------------
<S>                                               <C>                   <C>                    <C>
Revenues:
  Amortization of unearned                        $  1,423,936          $  1,423,936                       $      -
    lease income
  Gain (loss) on sale of vehicles                     ( 35,436)             ( 35,436)                             -
                                                  ------------          ------------                       --------
Total revenues                                       1,388,500             1,388,500                              -
                                                  ------------          ------------                       --------

Costs and expenses:
  Interest                                             430,865               430,865                              -
  Amortization of initial direct costs                  90,697                62,220               (a)       28,477
  Provision for bad debts                              101,306               101,306                              -
  Salaries and wages                                   123,665               123,665                              -
  Payroll taxes                                         11,998                     -               (b)       11,988
  Rent and real estate taxes                            17,875                     -               (b)       17,875
  Travel and entertainment                              21,802                     -               (b)       21,802
  Professional fees                                     17,296                     -               (b)       17,296
  Amortization of deferred charges                      17,189                     -               (c)       17,189
  Other selling and
    administrative expenses                            143,460               212,431               (b)     ( 68,971)
                                                  ------------          ------------                       --------
                                                       976,153               930,487                         45,656
                                                  ------------          ------------                       --------

Income before provision
  for income taxes                                     412,347               458,013                       ( 45,656)

Provision for income taxes                             178,000               178,000                              -
                                                  ------------          ------------                       --------

Net income                                        $    234,347          $    280,013                       ($45,656)
                                                  ============          ============                       ========

Earnings (loss) per share:
  Basic and diluted:
    Net income (loss) per share                   $       0.03          $       0.04                         ($0.01)
                                                  ============          ============                       ========

Weighted average number
  of shares outstanding                              7,596,979             7,596,979                              -
                                                  ============          ============                       ========
</TABLE>

<TABLE>
<CAPTION>
                                                           For the Three Months Ended March 31, 1999
                                                  --------------------------------------------------------------
                                                                             As                     Difference
                                                                         Originally                Restated Over
                                                  As Restated               Filed                (Under) Original
                                                  -----------            ----------              ----------------
<S>                                               <C>                   <C>                    <C>
Revenues:
  Amortization of unearned                        $    775,722          $    775,722                       $      -
    lease income
  Gain (loss) on sale of vehicles                       29,885                29,885                              -
                                                  ------------          ------------                       --------
Total revenues                                         805,607               805,607                              -
                                                  ------------          ------------                       --------

Costs and expenses:
  Interest                                             360,272               360,272                              -
  Amortization of initial direct costs                  51,548                26,088                         25,460
  Provision for bad debts                                    -                     -                              -
  Salaries and wages                                    54,544                54,544                              -
  Payroll taxes                                          7,729                     -                          7,729
  Rent and real estate taxes                            19,070                     -                         19,070
  Travel and entertainment                              27,316                     -                         27,316
  Professional fees                                      3,722                     -                          3,722
  Amortization of deferred charges                           -                     -                             -
  Other selling and
    administrative expenses                            120,571               178,408                       ( 57,837)
                                                  ------------          ------------                       --------
                                                       644,772               619,312                         25,460
                                                  ------------          ------------                       --------

Income before provision
  for income taxes                                     160,835               186,295                       ( 25,460)

Provision for income taxes                              69,000                69,000                              -
                                                  ------------          ------------                       --------

Net income                                        $     91,835          $    117,295                       ($25,460)
                                                  ============          ============                       ========

Earnings (loss) per share:
  Basic and diluted:
    Net income (loss) per share                         ($0.01)               ($0.02)                      $      -
                                                  ============          ============                       ========

Weighted average number
  of shares outstanding                              6,980,562             6,980,562                              -
                                                  ============          ============                       ========
</TABLE>


(a) Reduction of amortization of initial direct cost pursuant of change to
    interest method which decreased income by $28,477 and $25,460, respectively.
(b) Reclassification of other selling, general and administrative expenses which
    had no effect on net income in both periods.
(c) Adjustment pursuant to change in period of amortization of value of stock
    issued for services rendered decreased income by $17,189 in 2000.



                                       11
<PAGE>

NOTE  2 -  RESTATEMENT.  (Continued)

                 Consolidated Statements of Changes in Stockholders' Equity:

<TABLE>
<CAPTION>
                                                           For the Three Months Ended March 31, 2000
                                                  --------------------------------------------------------------
                                                                             As                     Difference
                                                                         Originally                Restated Over
                                                  As Restated               Filed                (Under) Original
                                                  -----------            ----------              ----------------
<S>                                               <C>                   <C>                    <C>
Common shares:
  Balance at beginning of period                     7,532,709             7,532,709                              -
  Sale of shares for cash                              165,000               165,000                              -
                                                  ------------          ------------                       --------
  Balance at end of period                           7,697,709             7,697,709                              -
                                                  ============          ============                       ========

Common stock amount:
  Balance at beginning of period                  $      7,533          $      7,533                       $      -
  Sale of shares for cash                                  165                   165                              -
                                                  ------------          ------------                       --------
  Balance at end of period                        $      7,698          $      7,698                       $      -
                                                  ============          ============                       ========

Additional paid-in capital:
  Balance at beginning of period                  $    252,935          $    163,637               (a)     $ 89,298
  Sale of shares for cash                              164,835               164,835                              -
                                                  ------------          ------------                       --------
  Balance at end of period                        $    417,770          $    328,472                       $ 89,298
                                                  ============          ============                       ========

Retained earnings:
  Balance at beginning of period                  $    981,942          $    973,947               (a)     $  7,995
  Net income                                           234,347               280,013               (b)     ( 45,666)
                                                  ------------          ------------                       --------
  Balance at end of period                        $  1,216,289          $  1,253,960                       ($37,671)
                                                  ============          ============                       ========

Due from related party:

  Balance at beginning of period                  ($   481,000)         ($   481,000)                      $      -
  Sale of shares for cash                                    -                     -                              -
                                                  ------------          ------------                       --------
  Balance at end of period                        ($   481,000)         ($   481,000)                      $      -
                                                  ============          ============                       ========

Total stockholders' equity:
  Balance at beginning of period                  $    761,410           $ 664,117                         $ 97,293
  Sale of shares for cash                              165,000             165,000                                -
  Net income (loss)                                    234,347             280,013                         ( 45,666)
                                                  ------------          ------------                       --------
  Balance at end of period                        $  1,160,757          $1,109,130                         $ 51,627
                                                  ============          ============                       ========
</TABLE>


(a)    Change in accounting for the reverse acquisition of Royal by RIT from a
       pooling of interests to a purchase.

(b)    Reduction of amortization of initial direct cost pursuant to change to
       interest method and adjustment pursuant to change in period of
       amortization of value of stock issued for services rendered.


                                       12
<PAGE>

NOTE  2 -  RESTATEMENT.  (Continued)

               Consolidated Statements of Cash Flows:


<TABLE>
<CAPTION>
                                                              For the Three Months Ended March 31, 2000
                                                     --------------------------------------------------------------
                                                                                As                     Difference
                                                                            Originally                Restated Over
                                                     As Restated               Filed                (Under) Original
                                                     -----------            ----------              ----------------
<S>                                                  <C>                   <C>                    <C>
Cash flows from operating activities:
Net income (loss)                                    $    234,347          $    280,013               (a)     ($45,656)
                                                     ------------          ------------                       --------
Adjustments to reconcile net income
    (loss) to net cash provided by
    (used in) operating activities:
  Depreciation and amortization                            96,319                67,842               (b)       28,477
  Gain (loss) on sale of vehicles                               -              ( 29,885)              (e)       29,885
  Deferred income taxes                                   166,000               171,000               (c)      ( 5,000)
  Amortization of deferred charges                         17,189                     -               (d)       17,189
  Increase (decrease) in cash flows as
      a result of changes in asset and
      liability account balances:
    Net investment in direct finance leases             1,179,554)         (  1,262,856)              (e)       83,302
    Interest receivable from officer/stockholders'   (     12,025)               13,375               (f)     ( 25,400)
    Prepaid expenses                                            -                     -                              -
    Vehicles held for sale or re-lease               (   373, 858)         (    373,858)                             -
    Loans payable                                       1,119,088             1,119,088                              -
    Accounts payable and accrued expenses            (    175,267)         (    180,667)                         5,400
    Other assets                                            1,504          (     28,898)              (f)       30,402
    Proceeds from vehicles sold                                 -               113,589                              -
                                                     ------------          ------------                       --------
Total adjustments                                    (    340,604)         (    391,270)                       164,255
                                                     ------------          ------------                       --------
Net cash provided by (used in)
  in operating activities                            (    106,257)         (    111,257)                       118,599
                                                     ------------          ------------                       --------

Cash flows used in investing activities
  Due from related party                             (      5,000)                    -               (f)     (  5,000)
                                                     ------------          ------------                       --------

Cash flows from financing activities:
  Sale of common stock                                    165,000               165,000                              -
  Loans payable - officer/stockholder                       7,592                 7,592                              -
                                                     ------------          ------------                       --------
Net cash provided by (use in)
  financing activities                                    172,592               172,592                              -
                                                     ------------          ------------                       --------

Net increase (decrease) in cash                            61,335                61,335                        113,599
Cash at beginning of period                                33,106                33,106                              -
                                                     ------------          ------------                       --------

Cash at end of period                                $     94,441          $     94,441                       $113,599
                                                     ============          ============                       ========
</TABLE>

<TABLE>
<CAPTION>

                                                             For the Three Months Ended March 31, 1999
                                                    --------------------------------------------------------------
                                                                               As                     Difference
                                                                           Originally                Restated Over
                                                    As Restated               Filed                (Under) Original
                                                    -----------            ----------              ----------------
<S>                                                 <C>                   <C>                    <C>
Cash flows from operating activities:
Net income (loss)                                   $     91,835          $    117,295               (b)    ($ 25,460)
                                                    ------------          ------------                       --------
Adjustments to reconcile net income
    (loss) to net cash provided by
    (used in) operating activities:
  Depreciation and amortization                           55,548                30,088               (b)       25,460
  Gain (loss) on sale of vehicles                              -                35,436               (e)    (  35,436)
  Deferred income taxes                                   68,000                68,000                              -
  Amortization of deferred charges                             -                     -                              -
  Increase (decrease) in cash flows as
      a result of changes in asset and
      liability account balances:
    Net investment in direct finance leases         (  6,385,120)         (  6,420,556)              (e)       35,436
    Interest receivable from officer/stockholders'             -                     -                              -
    Prepaid expenses                                (     14,514)         (     14,514)                             -
    Vehicles held for sale or re-lease                    14,183                14,183                              -
    Loans payable                                      5,539,466             5,539,466                              -
    Accounts payable and accrued expenses                510,914               510,914                              -
    Other assets                                               -                     -                              -
    Proceeds from vehicles sold                          129,950               129,950                              -
                                                    ------------          ------------                       --------
Total adjustments                                   (     81,573)         (    107,033)                        25,460
                                                    ------------          ------------                       --------
Net cash provided by (used in)
  in operating activities                                 10,262                10,262                              -
                                                    ------------          ------------                       --------

Cash flows used in investing activities
  Due from related party                            (    150,000)         (    321,000)                             -
                                                    ------------          ------------                       --------

Cash flows from financing activities:
  Sale of common stock                                         -               106,025               (g)    ( 106,025)
  Loans payable - officer/stockholder                          -                     -
                                                    ------------          ------------                       --------
Net cash provided by (use in)
  financing activities                                         -               106,025               (g)    ( 106,025)
                                                    ------------          ------------                       --------

Net increase (decrease) in cash                     (    139,738)         (    204,713)                     ( 106,025)
Cash at beginning of period                              237,957               237,957                              -
                                                    ------------          ------------                       --------

Cash at end of period                               $     98,219          $     33,244                      ($106,025)
                                                    ============          ============                       ========
</TABLE>

(a)  See restatement of statements of operations. (F-11)
(b)  Reduction of amortization of initial direct cost pursuant to change to
     interest method.
(c)  Adjustment for the provision for income tax which relates to currently
     payable portion.
(d)  Adjustment pursuant to change in period of amortization of value for stock
     issued for services rendered.
(e)  Cumulative effect of reduction in amortization of additional direct costs
     and reclassification of gain (loss) on sale of vehicles.
(f)  Reclassification of interest receivable due from officer.
(g)  Change in accounting for reverse acquisition of Royal by RIT from a
     pooling of interests to a purchase.


                                       13
<PAGE>

ITEM 2.  MANAGEMENT'S AND DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General:

The Company is in the business of leasing predominately new and pre-owned
automobiles with terms generally ranging from twelve to sixty months. It markets
its leasing services through its dealer network and advertising. The sources of
its automobile for lease are generally automobile dealers in the Eastern region
of the United States. The Company also leases and finances commercial industrial
equipment such as computers, airplanes, boats and construction equipment.
However, through March 31, 2000 commercial industrial equipment accounts for an
insignificant portion of company leases.

Forward Look Statements and Certain Risk Factors:

The Company cautions readers that certain important factors may affect the
Company's actual results and could cause such results to differ materially from
any forward-looking statements that may be deemed to have been made in this Form
10SB or that are otherwise made by or on behalf of the Company. For this
purpose, any statements contained in the Form 10-QSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the generally of the foregoing, words such as "may", "expect", "believe",
"anticipate", "intend", "could", "estimate", or the negative variations thereof
or comparable terminology are intended to identify forward-looking statements.
Factors that may affect the Company's results include, but are not limited to,
the lack of substantial profits, its dependence on key personnel, its ongoing
need for additional financing and its dependence on the automobile industry. The
Company is also subject to other risks detailed herein or which will be detailed
from time to time in the Company's future filings with the Securities and
Exchange Commission.

Results of Operations:

Three Months Ended March 31, 2000 and 1999:

Revenues are summarized as follows:

                                      For the Three Months Ended March 31,
                                      ------------------------------------
                                                                           %
                                                           Increase    Increase
                                     2000         1999    (Decrease)  (Decrease)
                                     -----        -----   ----------  ----------

(a)  Amortization of unearned
       lease income              $1,423,936    $ 775,722   $648,214       83.6
(b)  Gain (loss) on sale
       of vehicles               (   35,436)      29,885   ( 65,321)   ( 218.6)
                                 ----------    ---------   --------    -------

                                 $1,388,500    $ 805,607   $582,893       72.4
                                 ==========    =========   ========    =======


                                       14
<PAGE>

Revenues are summarized as follows:  (Continued)

a)     The total amount of unearned lease income on leases in force at the
       beginning of the periods and on leases entered during the three month
       periods was $10,352,481 during the March 2000 quarter and $4,805,373
       during the March 1999 quarter. Amortization of unearned lease income
       represented 14% of total unearned income during the March 2000 quarter
       and 16% during the March 1999 quarter. The dollar value increase of
       $648,214 (a 84% increase) was a result of management's efforts to
       increase its dealer network, which has been expanded to include locations
       in Florida, North Carolina, California, Georgia and Illinois. Increase in
       customer referrals has also had an impact on the Company's revenues.

       Included in unearned income are initial payments received from leases
       which during the March 2000 quarter aggregated $179,320 and $201,207 for
       the March 1999 quarter. Approximately 50% of which represents
       nonrefundable payments of the first month lease payment. It is the
       Company's policy to charge these amounts to operations when received.
       Such recognition policy results in approximately the same revenues as
       would be recognized if the interest method were used.

b)     In the event that the purchase option is not exercised by the lessee or
       the vehicle is repossessed, the Company either re-leases or sells the
       vehicle. In the event of a sale, the variant between the selling price
       and the carrying amount of the lease is picked up in income. During the
       March 2000 quarter the Company incurred a loss of $35,436, during the
       March 1999 quarter the Company realized a $29,885 gain. The loss during
       the March 2000 quarter was the result of the mix of vehicles which came
       off leases. During the March 2000 quarter, the leases on many of the
       vehicles which were sold did not go to full term as many of the
       vehicles were repossessed. During the March 1999 quarter most of the
       vehicles which were sold went to full term and the Company was able to
       recoup the residual values and in many cases make a profit on the sale
       of the vehicles.


                                       15
<PAGE>

Interest expense:

Average yield of implicit on income earnings assets versus average cost of
financing.

<TABLE>
<CAPTION>
                                                    For the Three Months Ended March 31,
                                               --------------------------------------------
                                                                                     %
                                                                                 Increase
                                                   2000           1999          (Decrease)
                                                   -----          -----         ----------
<S>                                            <C>             <C>                  <C>
Average yield implicit on income
     earning assets:

  Amortization of unearned lease income        $ 1,423,936     $   775,722
  Average investment in leases                 $27,654,000     $17,200,000
                                               -----------     -----------
  Rate of return on income earning assets         20.6%           18.0%              2.6
                                                  ====            ====

Average cost of financing:
  Interest expense                             $   430,865     $   360,272
  Average loans payable balance                $27,170,000     $15,626,000
                                               -----------     -----------
                                                   6.3%            - %              (2.9)
                                                   ===            ===               ----

Percentage spread                                 14.3%           9.2%               5.1
                                                  ====            ===               ====
</TABLE>

The profitability of the Company's leases is primarily based upon the difference
between the interest rate implicit in it's leases and it's cost of funds (the
"Spread"). As summarized above the Spread during the 2000 quarter was 14.3% as
compared to 8.8% during the 1999 quarter. In order for the Company to increase
its leasing business, it was necessary to accept less credit worthy leases. In
order for the Company to compensate for its increased risk, the interest rate
implicit in its leases were increased. In addition, the Company leased more
expensive care during the 2000 quarter which generally carries higher implicit
interest rate.

<TABLE>
<CAPTION>
                                                         For the Three Months Ended March 31,
                                               ---------------------------------------------------------
                                                                                                   %
                                                                                 Increase      Increase
                                                   2000           1999          (Decrease     (Decrease)
                                                   -----          -----         ---------     ----------
<S>                                            <C>             <C>              <C>               <C>
Amortization of unearned
  lease income                                 $1,423,936      $775,722         $648,214          83.6
Amortization of initial
  direct costs                                     90,697        57,548           33,149          57.6
                                               ----------      --------         --------          ----

Percentage                                         6.4%           7.4%            1.0%
                                                   ====           ====            ====
</TABLE>

Initial Direct Costs:

Initial direct costs consists primarily of commissions, automobile repairs and
repair costs. Such costs are amortized over the life of the lease using the
interest method basis. As a percentage of revenue, such amortization decreased
by .28% from the March 1999 quarter as compared to the March 2000 quarter


                                       16
<PAGE>

Selling, general and administrative expenses as a percentage of total revenues:

<TABLE>
<CAPTION>
                                                    For the Three Months Ended March 31,
                                                    ------------------------------------
                                                                                 Increase
                                                   2000           1999          (Decrease)
                                                   -----          -----         ----------
<S>                                            <C>             <C>               <C>

Total revenues                                 $1,388,500      $805,607          $582,893
Selling, general and
  administrative expenses                         454,591       232,952           221,639
                                               ----------      --------          --------

Increase as percentage of revenues                32.7%          28.9%             3.8%
                                                  =====          =====             ====
</TABLE>

Selling, general and administrative expenses increased from $232,952 during the
March 1999 quarter to $454,591 during the March 2000 quarter (3.8% increase on
total revenues). This increase was attributed to increases in bad debts and
salaries and wages caused by the large increase in revenues.

Such increases are summarized as follows:

<TABLE>
<CAPTION>
                                                    For the Three Months Ended March 31,
                                                    ------------------------------------
                                                                                    %
                                                                                 Increase
                                                   2000           1999          (Decrease)
                                                   -----          -----         ----------
<S>                                            <C>             <C>               <C>
Provision for bad debts                        $101,306        $      -          $101,306
Salaries and wages                              123,665          54,544            69,121
Payroll taxes                                    11,998           7,729             4,269
Rent and real estate taxes                       17,875          19,070           ( 1,195)
Travel and entertainment                         21,802          27,316           ( 5,514)
Professional fees                                17,296           3,722            13,574
Amortization of deferred charges                 17,189               -            17,189
Other selling, general and
  administrative expenses                       143,460         120,571            22,889
                                               --------        --------          --------
                                               $454,591        $232,952          $221,639
                                               ========        ========          ========
</TABLE>

The expansion of leasing operations during the latter part of 1999 and during
the March 2000 quarter necessitated the hiring of additional office personnel.
Due to the increase in leasing operations a provision for bad debts was required
during the March 2000 quarter whereas no provision was necessary, during the
March 1999 quarter. All other expenses remained relatively constant.


                                       17
<PAGE>

Financial Condition:

The Company's cash position at March 31, 2000 showed an increase of $61,335 from
the $33,106 balance which existed on December 31, 1999.

The net investment in direct financing leases represents the aggregate future
lease payments due to the Company from its leases; such amount was $28,198,301
at March 31, 2000 and $27,109,444 at December 31, 1999. The Company feels that
it has adequately reserved for any possible bad debts. The Company finances the
purchase of its lease vehicles under several separate credit facilities. Such
indebtedness aggregated to $27,729,253 and $26,610,165 at March 31, 2000 and
December 31, 1999, respectively.

Vehicles held for sale or re-leases increased from $1,300,843 at December 31,
1999 to $1,674,701 at March 31, 2000. Such increase was due to the higher volume
of automobiles coming off leases at March 31, 2000 compared with the year ended
December 31, 1999.

Through March 31, 2000, the Company had loaned $481,000 to an entity owned by
its President. Such amount is due on demand and bears interest at 9%. This loan
is accounted for as a reduction of stockholders' equity because the President
has collateralized the loan with his stock of the Company.

Accounts payable and accrued expenses at March 31, 2000 was $337,057 compared
with $512,324 at December 31, 1999, a decrease of $175,267.

At March 31, 2000, the Company is indebted to its President in the amount of
$115,436. Such debt outstanding at December 31, 1999 was $107,894.

Stockholders' equity increased by $339,347 during the period from December 31,
1999 to March 31, 2000. Such increase was the result of the sale of 165,000
common shares for $165,000 and net income of $234,347.


                                       18
<PAGE>

Liquidity and Capital Resources:

During the March 2000 quarter the Company used $106,257 in its operation which
resulted from (i) net income of $549,291 which is adjusted for noncash items of
$314,944, (ii) proceeds from the sale of vehicles of $113,589 and (iii) an
increase in prepaid expenses of $12,025. Offsetting the aforementioned increases
in cash flows was (i) a net decrease in the investment of direct finance
vehicles held for sale or re-lease of $373,858 and (iii) other items aggregating
$209,565.

During the March 2000 quarter, the Company raised $165,000 through the sale of
165,000 shares of its common stock pursuant to Rule 504 offerings.

The Company's working capital at March 31, 2000 was $280,334, an increase of
$707,858 over the negative working capital balance at December 31, 1999. When
the March 31, 2000 working capital balance is adjusted for the current portion
of unearned income of $1,768,995, the resulting working capital is $4,054,441.

Management's primary goal is to expand its leasing operations, increase and
obtain better terms with respect to the financing of the vehicles it leases and
to increase the profitability of its vehicle remarketing program. The strategy
for continued growth is to (i) increase lease origination by (a) increased name
recognition, (b) acquisition of similar companies or their assets, (c) the
development, expansion and retention of existing clients, and (d) the expansion
into new geographic markets, (ii) increase and improve the terms of its
financing arrangements, (iii) further develop and increase the profitability of
its used automobile remarketing operations and (iv) lease primarily to high
quality credit applicants in order to continue to build a lease portfolio with
low delinquency and credit loss rates.

Management believes that anticipated cash flow from operations and the proceeds
raised through its private offering will be sufficient to fund its operations
for the next 12 months assuming that those operations are consistent with
management's expectations of its anticipated increase in revenues. The Company
may need additional financing thereafter. There can be no assurance that the
Company will be able to obtain financing on a favorable or timely basis. The
type, timing and terms of financing elected by the Company will depend upon its
cash needs, the availability of other financing sources and the prevailing
conditions in the financial markets. Moreover, any statement regarding the
Company's ability to fund its operations from expected cash flows is speculative
in nature and inherently subject to risks and uncertainties, some of which
cannot be predicted or quantified.


                                       19
<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.

Date: March 16, 2001                         Royal Acceptance Corporation
                                                    (Registrant)


                                             By:  /s/ Richard Toporek
                                                  ------------------------------
                                                  Richard Toporek
                                                  President