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 August 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.  2,837,500 shares  outstanding as of August
31, 1997.


<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES


                                      INDEX
<TABLE>
<CAPTION>



                                                                                Page(s)
<S>                                                                             <C>
PART I. Financial Information: ITEM 1. Financial Statements Consolidated
Condensed Balance Sheets - August 31, 1997 (Unaudited) and November 30, 1996    3.

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

Consolidated Condensed Statements of Cash Flows (Unaudited) - Nine Months
Ended August 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.
</TABLE>

                                     Page 2

<PAGE>
      PART 1.  Financial Information
      ITEM 1.  Financial Statements

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

                                   - ASSETS -
<TABLE>
<CAPTION>


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

ASSETS:
<S>                                                                   <C>            <C>      
Cash and cash equivalents .........................................   $ 26,178       $ 250,699
Accounts receivable ...............................................   2,035,511      2,022,011
Inventories .......................................................   1,691,941      1,022,655
Property, revenue producing vehicles and equipment - net (Note 2) .   26,699,630     20,671,854
Intangible assets - net (Note 3) ..................................   9,247,939      9,722,363
-------------------------------------------------------------------   -------------------------

TOTAL ASSETS ......................................................   $ 39,701,199   $ 33,689,582
===================================================================   =========================

- LIABILITIES AND SHAREHOLDERS' EQUITY -
LIABILITIES (Note 4):
Bank overdraft line of credit .....................................   $ 5,972,743    $ 2,964,465
Accounts payable ..................................................   2,759,541      624,953
Accrued liabilities and expenses ..................................   374,944        490,915
Bank debt .........................................................   948,782        1,002,571
Obligations under hire purchase contracts .........................   15,326,166     11,034,951
Other loans - acquisition (Note 5) ................................   4,274,500      5,098,470
Other liabilities .................................................   114,627        33,560
-------------------------------------------------------------------   -------------------------

TOTAL LIABILITIES .................................................   29,771,303     21,249,885
-------------------------------------------------------------------   -------------------------

MINORITY INTERESTS (Note 1) .......................................   --             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;
2,837,500 and 2,652,500 shares issued and outstanding at August 31,
1997 and November 30, 1996                                            2,838          2,653
Additional paid-in capital ........................................   13,399,751     13,487,388
Retained earnings (deficit) .......................................   (3,138,333)    (1,402,587)
Foreign currency translation ......................................   (334,360)      (130,243)
-------------------------------------------------------------------   -------------------------

TOTAL SHAREHOLDERS' EQUITY ........................................    9,929,896     11,957,211
-------------------------------------------------------------------   -------------------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ........................   $ 39,701,199   $ 33,689,582
===================================================================   =========================
</TABLE>


        See notes to interim consolidated condensed financial statements

                                    Page 3.

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


                                                       For the Nine Months           For the Three Months
                                                       Ended August 31,              Ended August 31,

                                                       1997           1996           1997           1996

REVENUE:
<S>                                                    <C>            <C>            <C>            <C>       
Contract hire income                                   $ 5,571,724    $3,524,377     $2,046,665     $1,265,939
Sale of contract hire vehicles                         5,343,285      4,105,599      1,626,790       1,609,219
Fleet management and other income - contract hire      660,455        646,413        250,627         222,438
Sale of vehicles - AC Cars (Note 1)                    516,506        -              -                   -
Service and spare parts revenue - AC Cars              192,956        -              105,242             -
Other income - AC Cars                                 184,936        -              184,936             -

                                                       12,469,862     8,276,389      4,214,260       3,097,596

EXPENSES:
Cost of sales - contract hire                          6,530,114      4,415,012      2,235,091       1,712,861
Cost of sales - AC Cars                                492,353        -              50,381              -
Depreciation - contract hire                           2,559,706      1,984,034      894,812         757,717
Depreciation - AC Cars                                 329,057        -              110,499             -
General and administrative expenses - contract hire    1,029,518      1,017,478      289,522         355,339
General and administrative expenses - AC Cars          1,254,423      -              477,966             -
Amortization of intangible assets - contract hire      473,040        473,399        157,680         158,039
Amortization of intangible assets - AC Cars            1,847          -              615                 -
Interest expenses and other - contract hire            1,043,702      724,434        419,392         265,311
Interest expenses and other - AC Cars                  286,576        -              100,612             -
Research and development costs - AC Cars               691,166        -              377,244             -

                                                       14,691,502     8,614,357      5,113,814       3,249,267

LOSS BEFORE MINORITY INTERESTS                         (2,221,640)    (337,968)      (899,554)       (151,671)

Minority interests in net loss of consolidated
subsidiaries (Note 1)                                  485,894        -              85,728              -


LOSS BEFORE PROVISION FOR INCOME TAXES                 (1,735,746)    (337,968)      (813,826)       (151,671)

Provision (credit) for income taxes                    -              -              -                   -


NET LOSS                                               $ (1,735,746)  $ (337,968)    $ (813,826)      $ (151,671)


LOSS PER COMMON SHARE (Note 6):
Net loss before minority interest                      $(.79)         $(.15)         $(.32)              $(.06)
Minority interest in net loss of subsidiary            .17            -              .03                 -

                                                       $(.62)         $(.15)         $(.29)              $(.06)

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (Note 6)                            2,805,878      2,328,139      2,837,600           2,652,500
</TABLE>


        See notes to interim consolidated condensed financial statements


                                     Page 4.

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


                                                                                          For the Nine Months Ended
                                                                                                 August 31,
                                                                                          1997           1996

      CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                       <C>             <C>          
        Net loss ......................................................................   $ (1,735,746)   $   (337,968)
        Adjustments to reconcile net loss to net cash provided by operating activities:
          Minority interest in net loss of subsidiary .................................       (485,894)           --
          Depreciation and amortization ...............................................      2,888,753       2,013,901
          Amortization of goodwill ....................................................        474,424         443,174
          (Gain) on disposal of fixed assets ..........................................       (193,752)        (46,078)
          Provision for maintenance costs .............................................           --            31,679
        Changes in assets and liabilities:
(Increase) in accounts receivables ....................................................        (13,500)       (351,809)
(Increase) in inventories .............................................................       (669,286)       (163,859)
Increase (decrease) in accounts payable, and other liabilities ........................      2,099,683      (1,055,398)
Net cash provided from operating activities                                                  2,364,682         533,642


      CASH FLOWS FROM INVESTING ACTIVITIES:
        Purchase of revenue producing assets ..........................................    (10,162,619)     (6,438,370)
        Proceeds from sale of fixed assets ............................................      1,443,250       1,195,509

        Net cash (utilized) by ........................................................     (8,719,369)     (5,242,861)

      CASH FLOWS FROM FINANCING ACTIVITIES:
        Net proceeds from bank lines of credit ........................................      3,008,278         452,301
        Proceeds from sale of common stock and warrants ...............................         92,500       3,282,500
        Costs associated with stock/debt offerings ....................................       (179,952)       (882,206)
        Loans repaid to directors .....................................................           --          (123,668)
        Principal payments of long-term debt ..........................................        (53,789)        (43,537)
        Payment of acquisition debt ...................................................       (823,970)           --
        Proceeds from hire purchase contract funding ..................................     14,438,622       7,628,185
        Principal repayments of hire purchase contract funding ........................    (10,147,407)     (5,533,009)
                                                                                          ------------    ------------
Net cash provided by financing activities .............................................      6,334,282       4,780,566


      EFFECT OF EXCHANGE RATE CHANGES ON CASH .........................................       (204,116)        (48,570)
                                                                                          ------------    ------------

      NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ............................       (224,521)         22,777

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

      CASH AND CASH EQUIVALENTS, END OF PERIOD ........................................   $     26,178    $     26,154
                                                                                          ============    ============
</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, and has 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  has filed an amended  Form  10-KSB  with the
Securities and Exchange Commission to reflect such restatements.


     Due to operating losses of AC Automotive  Group,  the minority  interest in
its common stock has been written down to zero as of August 31, 1997.


     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>
                  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 August 31, 1997 and the results of
its  operations  for the nine and three month  periods ended August 31, 1997 and
1996 and its cash flows for the nine month  periods  ended  August 31,  1997 and
1996.


     The results of operations for the nine and three month periods ended August
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:

                                        August 31,     November 30,
                                        1997           1996

Building and improvements               $ 1,719,415    $ 1,719,415
Revenue producing vehicles              25,056,005     17,282,095
Furniture, fixtures and machinery       4,519,731      4,641,388
Aircraft                                927,751        927,751
-------------- -------------
                                        32,222,902     24,570,649
Less: accumulated depreciation          5,523,272      3,898,795
                                        ------------- ------------
                                        $26,699,630    $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
August 31, 1997 and  November 30, 1996  aggregated  $3,465,050  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 August 31, 1997, are amounts in the aggregate
of $13,773,911  which are not due and payable until after August 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  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, and has 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  has filed an amended  Form  10-KSB  with the
Securities and Exchange Commission to reflect such restatements.

                                     Page 9.

<PAGE>
                                                                            
     Due to operating losses of AC Automotive  Group,  the minority  interest in
its common stock has been written down to zero as of August 31, 1997.

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

Results of Operations

Contract Hire/Fleet Management:

                                        
     Revenues  increased by $826,486  when  comparing  the three  months  period
August 31, 1997 to the three months ended  August 31, 1996.  The primary  reason
for this 27% 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 quarter,  168 new contracts were
written at an average rental of $582 per vehicle  compared with 102 contracts in
the corresponding  period in 1996 at an average rental of $663 per vehicle.  The
average  monthly rental is dependent on the type of vehicle being rented and the
terms of the  contract.  During this  quarter,  32 vehicles  were disposed of on
termination of contracts at an average profit of $1,076 per vehicle.  During the
same  quarter in 1996,  30 vehicles  were  disposed  of at an average  profit of
$2,276 per vehicle.

     For the nine month period August 31, 1997, revenues increased by $3,299,075
or 40%,  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,  403 new  contracts  were written at an
average  rental  of  $572  per  vehicle  compared  with  235  contracts  in  the
corresponding  period in 1996 at an average rental of $574 per vehicle.  For the
nine month  period  ending  August 31,  1997,  92 vehicles  were  disposed of on
termination  of  contracts at an average  profit of $2,106 per vehicle  compared
with 76 vehicles  being  disposed of in the  corresponding  period in 1996 at an
average profit of $2,616 per vehicle. As of August 31, 1997, 1,654 vehicles were
under lease and management compared to 1,299 vehicles as at August 31, 1996.

                                                  
     Cost of sales  (including  depreciation)  as a percent of revenue  remained
constant at 80% when  comparing the three months ended August 31, 1997 and 1996.
Cost of sales as a percent of revenue increased  marginally from 77% to 78% when
comparing the nine month periods ending August 31, 1997 and 1996.

                                                                             
     General and administrative expenses decreased by $65,817 when comparing the
three month  periods  ended August 31, 1997 and 1996.  For the nine month period
ending August 31, 1997,  compared to the same period in the prior year,  general
and administrative expenses increased marginally by $12,040 which indicates that
despite the 40% growth in business general and administrative expenses are being
kept under control.

                                                                             
     Interest  expense  increased  by 58% and 44% for the  three  month and nine
month periods ending August 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.

                                                            
     Since the Company did not own AC Cars during the prior year, the discussion
below  represents the current quarter as compared to the previous quarter of the
current year.

                                                            
     The Company  acquired the business out of  administrative  receivership and
for  most  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 August 31, 1997, these operations reported
a loss of $827,139. Revenues for the period were $290,178 compared with $359,657
for the previous  quarter.  Included in revenues is a profit of $184,936 related
to the sale of an option on the  property.  Cost of sales  amounted  to  $50,381
compared  with  $269,794 for the previous  quarter.  General and  administrative
expenses  increased  from $397,342 to $477,966 when comparing the quarters ended
May 31 and August  31,  1997.  The main  reason  for the  increase  is due to an
increase in factory  overheads over the last quarter.  Interest charges amounted
to $100,612 compared with $107,581 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 $377,244
and  $232,010  for  the  three  months  ended  August  31,  and  May  31,  1997,
respectively.

                                                            
     The  shortfall  in the  working  capital  requirements  of 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  require  ments.  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 August 31, 1997, the Company  reported a loss of
$741,259 before amortization and minority interests,  as compared to a profit of
$6,368  for the same  period  in 1996.  The  quarter  loss  comprises  a loss of
$826,524  before  amortization  and  minority  interests in AC Cars, a profit of
$131,140 in the contract hire operations before amortization,  and a loss in the
Holding Company of $45,875.

                                                            
     For the  nine-month  period ended August 31, 1997,  the Company  reported a
loss of $1,746,753 before  amortization and minority  interests as compared to a
profit of  $135,431  for the same period in 1996.  The loss  comprises a loss of
$2,159,177  before  amortization and minority  interests in AC Cars and a profit
before  goodwill  amortization of $509,079 in the contract hire operations and a
loss in the Holding Company of $96,655,  which is mainly due to interest accrued
on the acquisition loan of $1,850,000.


                                    Page 11.

<PAGE>
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.

                                                            
     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


ITEM 1 - Legal Proceedings.
None.
ITEM 2 - Changes in Securities.
None.
ITEM 3 - Defaults Upon Senior Securities.
None.
ITEM 4 - Submission of Matters to a Vote of Security Holders.
None.
ITEM 5 - Other Information.
None.
ITEM 6 - Exhibits or Reports on Form 8-K.
Exhibit 27 - Financial Data Schedule
Exhibit 11 - Computation of Earnings Per Share


                                    Page 13.

<PAGE>



                                   SIGNATURES





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





Dated: October 14, 1997                             PRIDE AUTOMOTIVE GROUP, INC.




                                                           By: /s/ Alan Lubinsky
                                                    Chief Executive Officer, and
                                                    Principal Accounting Officer

                                    Page 14.

<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                                   EXHIBIT 11
                    COMPUTATION OF EARNINGS PER COMMON SHARE
                                   (Unaudited)
<TABLE>
<CAPTION>



                                                                For the Nine Months          For the Three Months
                                                                    Ended August 31,            Ended August 31,
                                                              ----------------------------  -------------------------
                                                              1997           1996           1997           1996
                                                              --------------- ------------   ------------- -------

<S>                                                           <C>            <C>            <C>            <C>         
LOSS BEFORE MINORITY INTERESTS ............................   $(2,221,640)   $  (337,968)   $  (899,554)   $  (151,671)

Minority interests in net loss of consolidated subsidiaries       485,894           --           85,728           --
                                                                                            -----------    -----------

LOSS BEFORE PROVISION FOR INCOME TAXES ....................    (1,735,746)      (337,968)      (813,826)      (151,671)

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

NET LOSS ..................................................   $(1,735,746)   $  (337,968)   $  (813,826)   $  (151,671)
                                                              ===========    ===========    ===========    ===========


WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING ........................................     2,805,878      2,328,139      2,837,600      2,652,500
                                                              ===========    ===========    ===========    ===========


LOSS PER COMMON SHARE:
Net loss before minority interest .........................   $      (.79)   $      (.15)   $      (.32)   $      (.06)
Minority interest in net loss of subsidiary ...............           .17           --              .03           --
                                                              -----------    -----------    -----------    -----------
                                                              $      (.62)   $      (.15)   $      (.29)   $      (.06)
                                                              ===========    ===========    ===========    ===========




</TABLE>

                                 - Exhibit 11 -

                                    Page 15.

<PAGE>