SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB





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

                        For the period ended May 31, 1997

                         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, England WD1 8SB
               (Address of principal executive offices) (Zip Code)

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




     Indicate by (X) whether 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 and (2) has been subject to such filing requirements for the
past 90 days. YES X NO

     Common Stock,  $.001 par value.  2,837,600 shares outstanding as of May 31,
1997.


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES


                                      INDEX



                                                                 Page(s)

PART I. Financial Information:

ITEM 1. Financial Statements Consolidated
Condensed Balance Sheets - May 31, 1997 
(Unaudited) and November 30, 1996                                3.

Consolidated Condensed Statements of Operations 
(Unaudited) - Six and Three Months Ended 
May 31, 1997 and 1996                                            4.

Consolidated Condensed Statements of Cash Flows 
(Unaudited) - Six Months Ended May 31, 1997 
and 1996                                                         5.

Notes to Interim Consolidated Condensed Financial 
Statements (Unaudited)                                           6.


ITEM 2. Management's Discussion and Analysis 
of Financial Condition and Results of Operations                 9.


PART II. Other Information                                       13.


SIGNATURES 14.


EXHIBITS: Exhibit 11 - Earnings (Loss) Per Share                 15.

Exhibit 27 - Financial Data Schedule                             16.

                                    Page 2.

<PAGE>



PART 1. Financial Information
ITEM 1. Financial Statements
<TABLE>
<CAPTION>

                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                   - ASSETS -

                                                                                May 31,           November 30,
                                                                                1997              1996
                                                                                (unaudited)       (As restated
                                                                                                  see Note 1)

                                     ASSETS:

<S>                                                                             <C>               <C>     
Cash and cash equivalents ......................................................$12,675           $250,699
Accounts receivable ............................................................1,680,790         2,022,011
Inventories ....................................................................1,631,786         1,022,655
Property, revenue producing vehicles and equipment - net (Note 2) ..............24,670,809        20,671,854
Intangible assets - net (Note 3) .............................................. 9,406,622         9,722,363
                                                                                ---------------   -----------

TOTAL ASSETS ...................................................................$37,402,682       $33,689,582
                                                                                ===============   ===========

                    - LIABILITIES AND SHAREHOLDERS' EQUITY -

LIABILITIES (Note 4):
Bank overdraft line of credit ..................................................$5,288,035        $3,719,565
Accounts payable                                                                1,508,852         624,953
Accrued liabilities and expenses ...............................................488,519           517,285
Bank debt ......................................................................995,281           1,002,571
Obligations under hire purchase contracts                                       14,187,097        11,034,951
Other loans - acquisition (Note 5) .............................................4,247,500         4,317,000
Other liabilities ..............................................................--                33,560
                                                                                ---------------   -----------

TOTAL LIABILITIES ..............................................................26,715,284        21,249,885
                                                                                ---------------   -----------

MINORITY INTERESTS (Note 1) ....................................................89,290            482,486
                                                                                -------------     -----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY (Note 5):
Preferred stock, $.01 par value, 2,000,000 shares authorized, none
issued or outstanding ........................................................  -                   -
Common stock, $.001 par value, 10,000,000 shares authorized;
2,837,600 and 2,652,500 shares issued and outstanding at May 31,1997 
and November 30, 1996                                                           2,838              2,653

Additional paid-in capital .....................................................13,453,407         13,487,388
Retained earnings (deficit) ....................................................(2,339,042)        (1,402,587) 
Foreign currency translation ...................................................(519,095)          (130,243)     
                                                                                --------------     -----------
TOTAL SHAREHOLDERS' EQUITY .....................................................10,598,108         11,957,211
                                                                                --------------     -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .....................................$37,402,682        $33,689,582
                                                                                =================  ===========
</TABLE>


        See notes to interim consolidated condensed financial statements

                                     Page 3.

<PAGE>
<TABLE>
<CAPTION>



                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                  For the Six Months            For the Three Months
                                                  Ended May 31,                 Ended May 31,
                                                  
                                                      1997           1996            1997           1996

REVENUE:
<S>                                                   <C>             <C>            <C>            <C>        
Contract hire income ..............................   $ 3,525,059     $ 2,258,438    $ 1,872,575    $ 1,197,459
Sale of contract hire vehicles ....................   3,716,495       2,496,380      1,984,679      1,355,996
Sale of vehicles - AC Cars (Note 1) ...............   516,506         --             313,943        --
Fleet management and other income - contract hire .   409,828         423,975        303,408        237,924
Other income - AC Cars ............................   87,714          --             45,714         --

                                                      8,255,602       5,178,793      4,520,319      2,791,379

EXPENSES:
Cost of sales - contract hire .....................   4,295,023       2,702,151      2,268,866      1,582,533
Cost of sales - AC Cars ...........................   441,972         --             269,794        --
Depreciation - contract hire ......................   1,664,894       1,226,317      847,840        644,343
Depreciation - AC Cars ............................   218,558         --             109,279        --
General and administrative expenses - contract hire   739,996         662,139        363,969        259,405
General and administrative expenses - AC Cars .....   776,457         --             397,342        --
Amortization of intangible assets - contract hire .   315,360         315,360        157,680        157,680
Amortization of intangible assets - AC Cars .......   1,232           --             616            --
Interest expenses and other - contract hire .......   624,310         459,123        344,999        251,787
Interest expenses and other - AC Cars .............   185,964         --             107,581        --
Research and development costs - AC Cars ..........   313,922         --             232,010        --

                                                      9,577,688       5,365,090      5,099,976      2,895,748


LOSS BEFORE MINORITY INTERESTS ....................   (1,322,086)     (186,297)      (579,657)      (104,369)

Minority interests in net loss of consolidated
subsidiaries ......................................    385,631        --             182,256        --

LOSS BEFORE PROVISION FOR INCOME
TAXES .............................................   (936,455)       (186,297)      (397,401)      (104,369)

Provision (credit) for income taxes                    --             --             --             --

NET LOSS ..........................................   $ (936,455)     $(186,297)     $(397,401)     $(104,369)

LOSS PER COMMON SHARE (Note 6):
Net loss before minority interest .................   $ (.47)         $ (.09)        $ (.20)        $ (.05)
Minority interest in net loss of subsidiary .......   .14             --             .06            --

                                                      $ (.33)         $ (.09)        $ (.14)        $ (.05)

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (Note 6) .......................   2,790,016       2,163,519      2,820,866      2,266,087
</TABLE>

        See notes to interim consolidated condensed financial statements

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


                                                                                For the Six Months Ended
                                                                                           May 31,
                                                                                      1997           1996

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                   <C>            <C>         
  Net loss ...........................................................................$  (936,455)   $  (186,297)
  Adjustments to reconcile net loss to net cash provided by operating activities:
    Minority interest in net loss of subsidiary ......................................(385,631)          --
    Depreciation and amortization ....................................................1,904,595      1,246,229
    Amortization of goodwill .........................................................295,449        295,449
    (Gain) on disposal of fixed assets ...............................................(168,710)      (9,532)
    Provision for maintenance costs ..................................................--             23,691
  Changes in assets and liabilities:
Decrease (increase) in accounts receivable                                                           (81,644)
(Increase) in inventories                                                              (609,131)     (106,292)
Increase (decrease) in accounts payable, ..........................................    823,217       (1,162,253)
Net cash provided from operating activities                                            1,264,555     19,351

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of revenue producing assets .......................................        (6,781,178)    (3,207,506)
  Proceeds from sale of fixed assets .................................................1,030,421      570,037
Net cash (utilized) by investing activities                                           (5,750,757)    (2,637,469)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from bank lines of credit .............................................1,568,470      467,809
  Proceeds from sale of common stock and warrants ....................................92,500         3,282,500
  Costs associated with stock/debt offerings .........................................(126,296)      (882,206)
  Loans repaid to directors ..........................................................--             (123,668)
  Principal payments of long-term debt ...............................................(7,290)        (42,436)
  Payment of acquisition debt ........................................................(42,500)          --
  Proceeds from hire purchase contract funding .......................................9,079,975      3,795,711
  Principal repayments of hire purchase contract funding .............................(5,927,829)    (3,448,679)

Net cash provided by financing activities ............................................4,637,030      3,049,031

EFFECT OF EXCHANGE RATE CHANGES ON CASH ..............................................(388,852)      25,366

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS .................................(238,024)      456,279

  Cash and cash equivalents, beginning of year .......................................250,699        3,377

CASH AND CASH EQUIVALENTS, END OF PERIOD ........................................$    12,675    $   459,656
</TABLE>

        See notes to interim consolidated condensed financial statements


                                     Page 5.

<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)



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.  The PMS companies are engaged in the leasing of motor vehicles
primarily on contract hire to local  authorities and select 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.

     On November 29, 1996, the Company,  through its newly formed, 70%, 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 Autocraft Limited.  These two companies
were engaged in the manufacture and sale of specialty automobiles.  The purchase
price of  approximately  $6,067,000  was financed with the proceeds of a private
offering of the Company's common stock and by loans.  Fixed assets recorded as a
result of this acquisition  aggregated  $3,038,182.  In April 1997, the Company,
through the services of an independent  third-party expert,  determined that the
value of such fixed  assets  acquired  was  actually  $6,643,365  at the date of
acquisition. A portion of this increase ($1,990,215) was previously reflected as
an  intangible  asset,  which  has now been  reclassified.  The  balance  of the
increase of $1,614,968,  recorded as negative goodwill,  has been offset against
non-current  assets  acquired.  The balance  sheet as of November 30, 1996 (year
end)  included  herein has  therefore  been  restated to reflect this  corrected
valuation  as  follows:  Fixed  Assets  has been  increased  by  $1,990,215  and
Intangible  Assets  has  been  reduced  by  $1,990,215.  In  addition  financial
statements for the year ended November 30, 1996 have been restated to correct an
error  in  the  method  by  which  the  Company  was   reflecting  the  minority
shareholders'  interest  in  AC  Automotive  Group,  Inc.  The  effect  of  this
restatement  was to  increase  the  minority  interest  liability  and  decrease
additional  paid-in  capital as of November  30, 1996 in the amount of $482,486.
The Company is in the process of  preparing  an amended  Form 10-KSB to be filed
with the Securities and Exchange Commission to reflect such restatements.


     The accounting  policies followed by the Company are set forth in Note 2 to
the Company's consolidated financial statements included in its Annual report on
Form 10-KSB for the year ended November 30, 1996 which is incorporated herein by
reference.  Specific  reference is made to this report for a description  of the
Company's securities and the notes to consolidated financial statements included
therein.


                                     Page 6.

<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1 - DESCRIPTION OF COMPANY (Continued):

     In  the  opinion  of  management,   the  accompanying   unaudited   interim
consolidated  condensed financial statements of Pride Automotive Group, Inc. and
its wholly  owned  subsidiaries,  contain all  adjustments  necessary to present
fairly the  Company's  financial  position as of May 31, 1997 and the results of
its  operations  for the six and three month periods ended May 31, 1997 and 1996
and its cash flows for the six month periods ended May 31, 1997 and 1996.

     The results of operations for the six and three month periods ended May 31,
1997 are not  necessarily  indicative of the results to be expected for the full
year.


NOTE 2 - FIXED ASSETS:

     Fixed assets consists of the following:

                                   May 31,        November 30,
                                   1997           1996

Building and improvements          $ 1,719,415    $ 1,719,415
Revenue producing vehicles         22,218,436     17,282,095
Furniture, fixtures and machinery  4,739,322      4,641,388
Aircraft                           927,751        927,751

                                   29,604,924     24,570,649
Less: accumulated depreciation     4,934,115      3,898,795
                                   -------------  ------------
                                   $24,670,809    $20,671,854


NOTE 3 - INTANGIBLE ASSETS:

                                                  
     Intangible  assets consist 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
May 31,  1997 and  November  30,  1996  aggregated  $3,307,218  and  $2,990,626,
respectively.

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

                                     Page 7.

     <PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)



NOTE 4 - LIABILITIES:

     Included in liabilities as of May 31, 1997, are amounts in the aggregate of
$13,140,301  which are not due and payable until after May 31, 1998. This amount
consists of amounts due to trade  creditors,  loans payable and equipment  notes
payable.


NOTE 5 - COMMON STOCK/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.

     In April  1996,  the  Company  successfully  completed  an  initial  public
offering of its common  stock.  The Company sold 592,500  shares of common stock
(including the  underwriter's  over allotment) at a price of $5.00 per share and
2,000,000  redeemable  common  stock  purchase  warrants  at a price of $.10 per
warrant for aggregate  net proceeds of  $2,280,294.  Each common stock  purchase
warrant entitles the holder to purchase one share of common stock at an exercise
price of $5.75.

     In 1997, the Company  completed a private  placement of 18 1/2 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 notes  are  payable  on the  earlier  of 18  months  from the date of
issuance or a closing of an  underwritten  public  offering of the Company's (or
any of its subsidiaries) securities.


NOTE 6 - EARNINGS (LOSS) PER SHARE:

     Earnings  (loss) per share are  computed  based upon the  weighted  average
shares and common equivalent shares  outstanding.  Common stock equivalents have
been excluded from the computation since the results would be anti-dilutive. The
shares issued in  connection  with the  reorganization  (see Note 1), and shares
issued at values  below the  price at which  shares  were sold in the  Company's
initial public  offering (see Note 5) have been treated as  outstanding  for all
periods  presented,  in accordance  with the  guidelines of the  Securities  and
Exchange Commission.


     In February 1997, the Financial Accounting Standards Board issued Statement
No.  128  "Earnings  Per  Share"  ("SFAS  128"),  which  changes  the method for
calculating  earnings per share.  SFAS 128 requires the  presentation of "basic"
and "diluted"  earnings per share on the face of the income statement.  SFAS 128
is effective for financial statements for periods ended after December 15, 1997.
The  Company  will adopt  SFAS 128 for the year ended  November  30,  1997,  and
accordingly restate prior periods, as early adoption is not permitted. Statement
No. 128 is not expected to materially  differ from primary  earnings  (loss) per
share as reported in Exhibit 11 in the Company's quarterly Form 10-QSB.

                                     Page 8.

<PAGE>



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

     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 Inc.
("Pride") and PMS a wholly-owned  subsidiary of the Company.  PMS is the holding
company for nine wholly-owned  subsidiaries,  operating as one unit,  located in
the United Kingdom.  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  acquisitions 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.

     In December  1995,  Pride  Automotive  Group,  Inc.  consummated  a private
placement  offering of common stock of 500,000  shares,  which  reduced  Pride's
ownership  interest  to 72.8%.  In April  1996,  Pride  Automotive  Group,  Inc.
completed an initial public  offering of 592,500 shares of common stock at $5.00
per share and  2,000,000  redeemable  common  stock  warrants at a price of $.10
each. The effect of the offering was to reduce the Pride's ownership interest to
56.55%.

     On November 29, 1996, the Company,  through its newly formed, 70%, 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 Autocraft Limited.  These two companies
were engaged in the manufacture and sale of specialty automobiles.  The purchase
price of  approximately  $6,067,000  was financed with the proceeds of a private
offering of the Company's common stock and by loans.  Fixed assets recorded as a
result of this acquisition  aggregated  $3,038,182.  In April 1997, the Company,
through the services of an independent  third-party expert,  determined that the
value of such fixed  assets  acquired  was  actually  $6,643,365  at the date of
acquisition. A portion of this increase ($1,990,215) was previously reflected as
an  intangible  asset,  which  has now been  reclassified.  The  balance  of the
increase of $1,614,968,  recorded as negative goodwill,  has been offset against
non-current  assets  acquired.  The balance  sheet as of November 30, 1996 (year
end)  included  herein has  therefore  been  restated to reflect this  corrected
valuation  as  follows:  Fixed  Assets  has been  increased  by  $1,990,215  and
Intangible  Assets  has  been  reduced  by  $1,990,215.  In  addition  financial
statements for the year ended November 30, 1996 have been restated to correct an
error  in  the  method  by  which  the  Company  was   reflecting  the  minority
shareholders'  interest  in  AC  Automotive  Group,  Inc.  The  effect  of  this
restatement  was to  increase  the  minority  interest  liability  and  decrease
additional  paid-in  capital as of November  30, 1996 in the amount of $482,486.
The Company is in the process of  preparing  an amended  Form 10-KSB to be filed
with the Securities and Exchange Commission to reflect such restatements.

                                     Page 9.

<PAGE>

     The  financial  information  presented  herein  include:  (i)  Consolidated
Condensed Balance Sheets as of May 31, 1997 and November 30, 1996 (as restated);
(ii) Consolidated Condensed Statements of Operations for the Six and Three Month
Periods Ended May 31, 1997 and 1996 and (iii) Consolidated  Condensed Statements
of Cash Flows for the Six Month Periods Ended May 31, 1997 and 1996.

Results of Operations

Contract Hire/Fleet Management:

     Revenues increased by $1,369,283 when comparing the three months period May
31, 1997 to the three months ended May 31, 1996.  The primary reason for the 49%
increase was due to an increase in revenues from contract hire, sale of vehicles
at lease  maturity and the selling of vehicles at low margins to take  advantage
of dealer  bonuses.  During this period,  128 new  contracts  were written at an
average rental of $608 per vehicle as against 85 contracts in the  corresponding
period in 1996 at an average rental of $512 per vehicle. During this quarter, 20
vehicles were disposed of on  termination  of contracts at an average  profit of
$3,275 per vehicle.  During the same quarter in 1996,  30 vehicles were disposed
of at an average profit of $2,910 per vehicle.

     For the six month period May 31, 1997,  revenues increased by $2,472,589 or
48%,  when  compared  to the same period in 1996.  The  primary  reason for this
increase was due to an increase in revenues from contract hire, sale of vehicles
at lease  maturity and the selling of vehicles at low margins to take  advantage
of dealer  bonuses.  During this period,  245 new  contracts  were written at an
average rental of $566 per vehicle as against 126 contracts in the corresponding
period  in 1996 at an  average  rental  of $498 per  vehicle.  For the six month
period  ending May 31, 1997,  60 vehicles  were  disposed of on  termination  of
contracts  at an  average  profit of $2,759 per  vehicle as against 46  vehicles
being  disposed of in the  corresponding  period in 1996 at an average profit of
$2,658 per vehicle.  As of May 31,  1997,  1,528  vehicles  were under lease and
management compared to 1,220 vehicles as at May 31, 1996.

     Cost of sales (including  depreciation)  as a percent of revenue  decreased
from 80% to 76% when  comparing  the three  months  ended May 31, 1997 and 1996.
Management  attributes  this decrease mainly to the increased  profitability  on
sale of vehicles on termination of contracts  during the quarter and the writing
of more profitable  contracts.  Cost of sales as a percent of revenue  increased
from 76% to 78% when  comparing  the six month  periods  ending May 31, 1997 and
1996.  Management  attributes this increase  primarily to the increase in buying
and selling of vehicles  and selling  onto third  parties at low margins to take
advantage of dealer  bonuses as well as the more prudent  approach to estimating
residual values of vehicles,  thereby  increasing the  depreciation  expense and
cost of sales and reducing the residual risk.

     General and  administrative  expenses  increased by $104,564 when comparing
the three month periods ended May 31, 1997 and 1996. This increase is mainly due
to an  increase  in staff  levels as result of  growth of  business  and  normal
increases in operating  overhead.  For the six month period ending May 31, 1997,
compared  to the same  period  in the prior  year,  general  and  administrative
expenses increased by $77,857 which is in line with the growth of the business.

     Interest expense increased by 37% and 36% for the three month and six month
periods  ending May 31, 1997 and 1996,  respectively.  This  increase is in line
with the increase in new contracts written and associated increase in funding of
vehicles.


                                    Page 10.

<PAGE>
AC Cars

     The  Company,  on November  29,  1996,  through its newly  formed 70% owned
subsidiary,  AC Automotive  Group,  Inc. and its wholly-owned  subsidiary AC Car
Group  Limited,  completed the  acquisition of certain assets of AC Cars Limited
and Autocraft  Limited.  These two companies are engaged in the  manufacture and
sale of sports  cars  among  which the famous AC Cobra  sells for  approximately
$100,000.

     The Company  acquired the business out of  administrative  receivership and
for the first half of the year has devoted most of its resources to resurrecting
operations.  This has involved  upgrading of  production  facilities,  improving
efficiency,  appointing  new  dealerships,  installing  systems and controls and
appointing new management where  necessary.  New dealerships have been appointed
in the United  Kingdom and a distributor  has also been  appointed in Australia.
The  Company  has  embarked on a program to bring the new AC Ace sports car into
production  in  the  last  quarter  of  1997,  and  has  incurred  research  and
development costs associated with such planned production.

     For the three-month period ended May 31, 1997, these operations  reported a
loss of $860,870.  Revenues for the period were $359,657 as against $244,563 for
the previous quarter. Cost of sales amounted to $269,794 as against $172,178 for
the previous quarter.  General and administrative  expenses increased marginally
from $379,115 to $397,342 when  comparing the quarters ended February 28 and May
31, 1997. Interest charges amounted to $107,581 as against $78,383 for the first
quarter.

     Research and  development  costs  incurred  relate to the  manufacture  and
distribution  of the AC Cobra and AC Ace cars.  These costs amounted to $313,922
and $232,010 for the six and three months ended May 31, 1997, respectively.

     The shortfall in the working  capital  requirements of the AC Cars has been
funded by the contract hire operations which have obtained  increased bank lines
of credit for this  purpose.  This will  continue in the future until AC Cars is
self  supportive  and able to fund its own  working  capital  requirements.  The
repayment of the monies owed to the contract hire  operations will be funded out
of proceeds of vehicle sales.

Consolidated

     For the three  months ended May 31,  1997,  the Company  reported a loss of
$421,361 before amortization and minority interests,  as compared to a profit of
$53,311 for the same period in 1996.  The reason for this,  is that this quarter
includes the operating  losses of AC Cars. The loss for the quarter  comprises a
loss of $756,349  before  amortization  and minority  interests in AC Cars and a
profit before goodwill amortization of $334,988 in the contract hire operations.

     For the six-month period ended May 31, 1997, the Company reported a loss of
$1,005,494 before amortization and minority interests as compared to a profit of
$129,063 for the same period in 1996.  The loss  comprises a loss of  $1,332,653
before  amortization  and  minority  interests  in AC Cars and a  profit  before
goodwill amortization of $327,159 in the contract hire operations.

Liquidity and Capital Resources

     In 1997, the Company completed a private placement of 18.5 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
proceeds  have  been  used  to  satisfy  a  portion  of the  debt  owed  for the
acquisition of AC Car Group Limited.


                                    Page 11.

<PAGE>



     The  Company  acquires  new  vehicles  as  required.  There are no material
planned capital expenditures at the present time.

Other

     Except for historical  information  contained herein, the matters set forth
above  may  be  forward-looking   statements  that  involve  certain  risks  and
uncertainties  that  could  cause  actual  results  to differ  from those in the
forward-looking  statements.  Potential  risks and  uncertainties  include  such
factors  as the  level  of  business  and  consumer  spending  in the  Company's
industry, the competitive environment,  the ability of the Company to expand its
operations,  the  level of  costs  incurred  in  connection  with the  Company's
expansion  efforts  and  economic  conditions.  Investors  are also  directed to
consider  other risks and  uncertainties  discussed  in  documents  filed by the
Company with the Securities and Exchange Commission.

                                    Page 12.

<PAGE>



PART II. OTHER INFORMATION


                         [TO BE COMPLETED BY ATTORNEYS]

                                    Page 13.

<PAGE>



                                   SIGNATURES





                          [TO BE INSERTED BY ATTORNEYS]

                                    Page 14.

<PAGE>
<TABLE>
<CAPTION>

                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                                   EXHIBIT 11
                    COMPUTATION OF EARNINGS PER COMMON SHARE
                                   (Unaudited)



                                                                    For the Six Months       For the Three Months
                                                                      Ended May 31  ,             Ended May 31,
                                                              ---------------------- -      ----------------------
                                                               1997          1996           1997           1996
                                                              -------------  ------------   -------------  -------

<S>                                                           <C>            <C>            <C>            <C>         
LOSS BEFORE MINORITY INTERESTS ............................   $(1,322,086)   $  (186,297)   $  (579,657)   $  (104,369)

Minority interests in net loss of consolidated subsidiaries       385,631           --          182,256           --
                                                                                            -----------    -----------

LOSS BEFORE PROVISION FOR INCOME TAXES ....................      (936,455)      (186,297)      (397,401)      (104,369)

Provision (credit) for income taxes .......................          --             --             --             --
                                                                                                           -----------

NET LOSS ..................................................   $  (936,455)   $  (186,297)   $  (397,401)   $  (104,369)
                                                              ===========    ===========    ===========    ===========


WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING ........................................     2,790,016      2,163,519      2,820,866      2,266,087
                                                              ===========    ===========    ===========    ===========


LOSS PER COMMON SHARE:
Net loss before minority interest .........................   $      (.47)   $      (.09)   $      (.20)   $      (.05)
Minority interest in net loss of subsidiary ...............           .14           --             (.06)          --
                                                              -----------    -----------    -----------    -----------
                                                              $      (.33)   $      (.09    $      (.14)   $      (.05)
                                                              ===========    ===========    ===========    ===========

</TABLE>

                                 - Exhibit 11 -

                                    Page 15.

<PAGE>