SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                   For the fiscal year ended November 30, 1998

                                       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 0-24550


                                   PRIDE, INC.
             (Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>

<S>                                                                             <C>
                  Delaware                                                      65-0109088
                  (State or other jurisdiction of                               (I.R.S. Employer Identification No.)
                  Incorporation or organization)
</TABLE>

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

                                 011441923211888
              (Registrant's telephone number, including area code)

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

                                      NONE

                 Securities registered pursuant to Section 12(g)
                                  of the Act:
                          Common Stock, $.002 par value
                                (Title of Class)

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

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

     The aggregate  market value of the voting stock on May 6, 1998  (consisting
of  Common  Stock,  $.002  par  value  per  share)  held by  non-affiliates  was
approximately  $428,882,  based upon the average  bid and asked  prices for such
Common  Stock on said date ($0.66) as reported by a market  maker.  The issuer's
and its subsidiaries had on a consolidated basis, revenues of $8,329,000 for its
fiscal year ended  November 30, 1998. On November 30, 1998 there were  1,995,357
shares of Registrant's Common Stock outstanding.




<PAGE>
                                     PART I


ITEM 1.  DESCRIPTION OF BUSINESS

History of the Company

     Pride,  Inc. (the "Company") was incorporated as L.H.M.  Corp. in the State
of  Delaware  on May 10,  1988,  as a "blank  check"  company for the purpose of
seeking  potential  business  ventures through  acquisition or merger.  In April
1990, L.H.M.  Corp.  entered into an Agreement and Plan of  Reorganization  with
International  Sportsfest,  Inc.  ("ISI"),  a  company  formed  to engage in and
establish  sports  expositions  in sports  products  such as clothing and sports
related equipment.  At such time L.H.M. Corp. changed its name to ISI. ISI never
engaged in any business  operations.  In November 1992, ISI effected a 1 for 200
reverse split of its issued and  outstanding  shares of Common Stock. In January
1994,  ISI  entered  into an  Agreement  and Plan of  Reorganization  with Pride
Management Services, Plc. ("PMS"), an English corporation,  whereby PMS became a
wholly owned subsidiary of ISI and ISI changed its name to Pride, Inc.

     Pride Automotive Group, Inc., a Delaware  corporation ("PAG") was formed by
the Company in March 1995 for the purpose of  acquiring  all of the  outstanding
shares  of  common   stock  of  PMS,   which  has  been   accounted   for  as  a
"Reorganization." Prior to the Reorganization, PMS was a wholly owned subsidiary
of the Company.

     In connection  with the  Reorganization  and formation of PAG, PMS became a
wholly owned  subsidiary of PAG which,  prior to PAG's initial public  offering,
was  approximately  72.8% owned by Pride. PMS is a holding company which has six
wholly owned subsidiaries  which, prior to the Asset Disposition (as hereinafter
defined) engaged in the Company's  operations.  PMS's wholly-owned  subsidiaries
include; Pride Vehicle Contracts Limited, Baker Vehicle Contracts Limited, Pride
Vehicle Contracts (UK) Limited,  Pride Leasing Limited, Pride Vehicle Management
Limited and Pride Vehicle  Deliveries  Limited.  These companies operated as one
unit,  with the same  management and  facilities.  Unless the context  otherwise
requires,  all  references to the "Company" are to its wholly owned  subsidiary,
PMS and PMS's six wholly owned subsidiaries. See "Subsidiaries."

Public Offering of Pride Automotive Group, Inc.

     In April 1996, PAG completed an underwritten initial public offering of its
securities.  The  securities  were  registered  with the Securities and Exchange
Commission  ("SEC")  pursuant  to a  registration  statement  on Form SB-2.  The
initial public offering was declared  effective by the SEC on April 24, 1996. In
the  offering,  PAG sold  592,500  shares of its common stock to the public at a
price of $5.00 per share and 2,300,000 redeemable common stock purchase warrants
at a price of $.10 per warrant. The warrants are exercisable at a price of $5.75
per share,  subject to adjustment,  beginning  April 24, 1997 and expiring April
23, 2001. In connection  therewith,  PAG also granted to the underwriters of the
offering,  Mason Hill & Co., Inc. and the Thornwater  Group,  Inc.,  warrants to
purchase an aggregate of 95,000 shares of PAG's common stock at a purchase price
of $7.50 and 200,000  redeemable  common stock  purchase  warrants at a price of
$0.15 per warrant, each warrant


<PAGE>
exercisable  to purchase one share of common stock at a purchase  price of $7.50
per share.  Other  than with  respect to the  exercise  price,  the terms of the
warrants  granted to the underwriter are identical to those described above. The
securities of the Company are currently traded on the NASD Bulletin Board. Prior
to February 19, 1999,  PAG's securities were traded on the Nasdaq SmallCap Stock
Market and the Boston Stock Exchange, Inc. On February 19, 1999, both Nasdaq and
the Boston Stock Exchange halted trading in PAG's upon its dissemination of news
that it had  executed a letter of intent to  acquire a company  known as Digital
Mafia Entertainment,  LLC. ("DME"). Shortly thereafter, PAG received notice from
Nasdaq that it was being delisted for,  among other things,  failure to maintain
tangible book value of at least $2,000,000.

     In January 12, 1998, PAG filed a  registration  statement on Form SB-2 with
the SEC, to register  1,000,000  shares of PAG's  Common  Stock.  In  connection
therewith,  PAG had entered into a letter of intent with Mason Hill & Co., Inc.,
an NASD  broker-dealer,  to underwrite such securities a firm commitment  basis.
The Registration Statement was subsequently withdrawn by PAG.

Business of Pride Management Services, Plc.

     Prior to November 1998, the Company  engaged in the business of leasing new
automobiles to businesses  through PMS,  servicing such  automobiles  during the
lease term and remarketing the automobiles  upon the expiration of the lease. In
November 1998, PMS and its subsidiaries  entered into an agreement with Newcourt
Automotive  Services,  Ltd.  ("Newcourt) to sell it  substantially  all of their
leasing portfolios for the sum of approximately $14,763,000.  The portfolio sold
had been  carried  on the  books  of the  Company  at a value  of  approximately
$17,851,000.  PMS  currently  maintains  leases on  approximately  10  vehicles,
although it intends to discontinue its leasing operations by the end of calendar
year 1999.  The sale of such assets was deemed  necessary by PMS due to pressure
from its  lenders.  The sale of the  leasing  portfolios  and  operating  losses
reduced  PAG's net tangible  assets to a level which caused the NASDAQ  SmallCap
market to delist its securities.

Employees

     As of June 11,1999,  the Company employed no persons  directly.  As at such
date,  PAG  and  its  subsidiaries   employed  persons  respectively  for  their
operations.

Properties

     The Company,  through PMS,  maintains 6,000 square feet of executive office
space in a modern, free standing building at Pride House,  Watford Metro Centre,
Tolpits Lane Watford Hertfordshire,  WD1 8SB England. The building was purchased
by PMS in December 1992 at a cost of approximately  $895,000. The annual cost of
servicing  the  building's  mortgage  and  taxes is  approximately  $80,000  and
$18,000,  respectively.  Pride  Leasing  Limited  owned a building  in  Croydon,
England,  which it purchased in 1991 at a cost of  approximately  $825,000.  The
Company sold this property in November 1997 for $400,000.



                                        2

<PAGE>
Pending Litigation

     The Company is not a party to any material  pending  litigation  which,  if
decided  adversely to the Company,  would have a significant  negative impact on
the business, income, assets or operation of the Company, and the Company is not
aware of any material threatened  litigation which might involve the Company. In
England,  the owner of the automobile is not  considered  liable for the acts of
the driver where there is a lease  arrangement.  PAG is currently in  litigation
relating to sums claimed to be owed on a $95,000 promissory note. It is expected
that such litigation will be settled prior to June 30, 1999.

Acquisition of AC Car Group Limited

     In November 1996, PAG,  through its subsidiary AC Automotive  Group Limited
("Automotive"),  acquired  all of the assets of AC Cars  Limited ("AC Cars") and
Autokraft Limited  ("Autokraft"),  two companies  incorporated under the laws of
England and Wales, respectively.  AC Cars and Autokraft are specialty automobile
manufacturers that had been in administrative receivership since March 1996.

     The Asset Purchase was financed by a private placement,  whereby PAG issued
an aggregate of approximately  $1,615,000 of promissory notes and 170,000 shares
of Common Stock to Holders.  Mason Hill acted as placement agent in such private
placement. Additionally, Mason Hill loaned the Company $100,000 of which $29,000
was repaid in cash and $71,000 was repaid through the issuance of 142,000 shares
of PAG common stock in February 1999. Interest and principal due under the Notes
was in default at year end and PAG lacked the liquidity and capital resources to
repay  same.  The  Company's  16% equity  interest  in  Automotive  is valued at
approximately $4,048,460 as at the date hereof.

     Subsequent to the end of fiscal 1998,  PAG and the holders of $1,425,000 of
principal notes agreed to issue 2,850,000 shares of PAG common stock in exchange
for  principal  and interest  due under the Notes.  PAG has also entered into an
agreement to repay the holder of $95,000  principal  note the sum of $100,000 in
exchange  for  principal  and  interest  due under the Note,  together  with the
noteholder  agreeing to return  10,000  shares of PAG common  stock to PAG.  The
remaining holder of a $95,000  principal note has commenced  litigation  against
PAG. PAG expects to settle such litigation in June 1999.

Sale of PAG Interest in AC Car Group Limited to the Company

     PAG sold its 16% interest in Automotive to the Company for the sum of $1.00
on the closing of the Digital  Acquisition.  The sale of the Automotive interest
to the Company was  coupled  with the sale by PAG of its  interest in PMS to the
Company for the sum of $1.00.

Business of AC Car Group Limited

     AC Car Group  Limited  was  incorporated  in England  and Wales on June 28,
1996, as  Paradehaven  Limited.  The name was changed to AC Car Group Limited on
August 30, 1996.


                                        3

<PAGE>
     AC Cars was formed in 1901 as Autocar & Accessories Limited and has been in
continuous  operations  ever  since.  AC Cars is  Britain's  oldest  independent
manufacturer. Today, AC Car Group Limited manufactures and sell two automobiles,
the Superblower (a continuation of the AC Cobra) and the AC Ace.

     The AC Cobra is a  high-powered,  hand built  sports  car with an  aluminum
body.  The automobile is  manufactured  today using the same  traditional  coach
building  methods and  original  Cobra  tooling  which were used on the original
manufactured  Cobras in the 1960s.  Historically,  in 1963 the AC Cobra caused a
sensation  by racing  along the MI motorway  (England's  first  motorway) at 196
miles per hour, and by 1964, the 427 AC Cobra was listed in the Guinness Book of
Records as the fastest production car in the world. The AC Cobra sells for about
(pound)69,000 ($115,644).

     In 1994, the AC Ace prototype was first displayed at the London Motor show.
In 1995,  the AC Ace was  shown to the  North  American  public  at the  Detroit
Motorshow. When the AC Ace comes into production, it will sell for approximately
(pound)75,000  ($125,700).  As of January 1, 1998, AC has produced approximately
fifty pre-production AC Aces.

     In 1987,  Ford Motor Company  became a partner with  Autokraft and AC Cars.
The AC Cobra is equipped  with a Ford V8 engine.  Currently,  Ford Motor Company
owns the  trademark to the name Cobra.  However,  Autokraft and AC Cars used the
name Cobra under a license  arrangement with Ford Motor Company.  When they were
placed in administrative  receivership,  the license arrangement with Ford Motor
Company was voided.  After the Asset  Acquisition,  the Company negotiated a new
licensing  agreement with Ford Motor Company  whereby the Company has procured a
three year  license,  commencing  December 7, 1996,  to continue to use the name
"Cobra" on its AC Cobra model.  Notwithstanding  the foregoing,  the "Cobra" has
been recently updated and has been renamed the AC "Superblower."

Development Projects and Enhancements

     The Company is advised that Automotive,  through AC, intends to continue to
evaluate  developing the Cobra and the Ace's chassis to be compatible with other
engines.

Marketing and Sales; License Arrangement

     AC Cars has used very little, if any, print or other media advertising with
respect to the AC Ace. However, both the Cobra and the Ace have been the subject
of numerous  magazine  articles in automotive  publications,  and, as such, have
received extensive exposure.

     As discussed above, AC Cars and Autokraft were using the name Cobra under a
license  arrangement  with Ford Motor Company.  Although the arrangement  became
void when the two companies were placed in receivership,  PAG had entered into a
new  licensing  arrangement  with the Ford Motor  Company  whereby it procured a
three year license to use the name "Cobra," terminating in December 1999.


                                        4

<PAGE>
     The Company believes that the principal markets for sales of AC automobiles
are the United States, Australia,  Germany and the United Kingdom. Automotive is
in the process of negotiating distribution agreements in some of these important
markets,  including  Australia  and the United  Kingdom,  while  agreements  and
approvals in other key markets have already been received.

     The AC Cobra is Type approved for sale in certain countries of the European
Economic Community ("EEC").

Trademarks

     Acquired  as part of the Asset  Acquisitions  was the rights to utilize the
"Ace" mark on sales of the Ace. The right to use the Cobra name was subject to a
license arrangement which was in place with Ford Motor Company, the owner of the
trademark just prior to the appointment of Receivers.  Although this arrangement
became void when the two businesses were sold by the Receivers to Automotive, AC
Car Group Limited,  AC Car Group Limited entered into a new licensing  agreement
with the From  Motor  Company  whereby  it  procured  a license  to use the name
"Cobra".  Former  management of Autokraft and AC Cars had advised PAG that it is
not aware of any actions  attempting  to invalidate or challenge its use of such
trademarks  and that it has not  received  any notice or claims of  infringement
regarding its trademarks.

Products Liability Insurance

     At present,  AC maintains  product  liability  insurance  through Lloyds of
London.  The limit of the indemnity is  (pound)2,000,000  ($3,520,000)  for each
instance.  Although  AC has  procured  this  insurance  policy,  there can be no
assurance that it will be able to maintain such  insurance,  that such insurance
will be sufficient to cover claims, if any, or that such insurance will continue
to be available at  commercially  reasonable  terms. If AC is unable to maintain
products liability insurance for the automobiles that it manufactures,  it would
adversely  affect  the  business  of  AC  and  could  potentially  cause  it  to
discontinue  operations.  However, there can be no assurance that such insurance
will be obtained, or that if obtained, that such insurance will be sufficient to
cover claims,  if any, or that such  insurance  will continue to be available at
commercially  reasonable  terms.  If  the  Company  or AC  are  required  to pay
uninsured claims, it would adversely affect the businesses of the Company and AC
and could cause a discontinuation of operations. The Company,  Automotive and AC
do not carry business interruption or key man insurance. See "Risk Factors."

Properties

     AC  currently  occupies  premises  on a four  acre  site at the  Brooklands
Industrial Park in Surrey, England. The property comprises a factory,  workshop,
showroom and office space. In all, the facility  provides  approximately  90,000
square feet of  manufacturing  area and 20,000  square feet of executive  office
area. PAG had agreed to lease the premises currently occupied by AC for a period
of  one  year  commencing  December  1,  1996.  Its  lease  costs  approximately
(pound)32,000  ($53,632)  per month.  AC  exercised  its option to purchase  the
premises for the purchase price of (pound)5,200,000 ($8,715,200) in July

                                        5

<PAGE>
1997. AC then sold the property for  (pound)5,600,000  ($9,385,600)  and entered
into a 15 year  lease for  39,000  square  feet of the  property  at the rate of
(pound)18,000 ($30,200) per month.

Employees

     At the time of their acquisition, Autokraft and AC Cars together employed a
total of 83 persons. Automotive retained approximately 31 of such employees upon
completion of the Asset  Acquisition  and has hired 16  additional  employees to
oversee the manufacturing and marketing of the automobiles.

ITEM 2.  DESCRIPTION OF PROPERTY

     The Company  maintains  6,000  square feet of  executive  office space in a
modern,  free standing  building at Pride House,  Watford Metro Centre,  Tolpits
Lane Watford  Hertfordshire,  WD1 8SB England. The building was purchased by PMS
in  December  1992 at a cost  of  approximately  $895,000.  The  annual  cost of
servicing  the  building's  mortgage  and  taxes is  approximately  $80,000  and
$18,000,  respectively.  Pride  Leasing  Limited  owned a building  in  Croydon,
England, which it purchased in 1991 at a cost of approximately $825,000. It sold
this property in November 1997 for $400,000.

     AC  currently  occupies  premises  on a four  acre  site at the  Brooklands
Industrial Park in Surrey, England. The property comprises a factory,  workshop,
showroom and office space. In all, the facility  provides  approximately  90,000
square feet of  manufacturing  area and 20,000  square feet of executive  office
area. AC and Automotive had agreed to lease the premises  currently  occupied by
AC for a period  of one year  commencing  December  1,  1996.  The  lease  costs
approximately  (pound)32,000  ($53,632)  per month.  AC exercised  its option to
purchase the premises for the purchase price of (pound)5,200,000 ($8,715,200) in
July 1997. AC then sold the property for  $9,385,600  and entered into a 15 year
lease for 39,000 square feet of the property at the rate of $30,200 per month.

ITEM 3.  LEGAL PROCEEDINGS

     AC is not a party to any material litigation. Although the Company acquired
the assets of AC Cars and  Autokraft  and does not believe that it will have any
exposure to liability  claims for  automobiles  built by AC Cars and  Autokraft,
there can be no assurance  that the Company is correct in such belief.  Any such
claim relating to new automobiles built by AC or to automobiles built by AC Cars
and Autokraft could have an adverse effect on the Company.

Acquisition of Digital Mafia Enterprises, LLC

     PMS is  winding  down its  operations  and has a negative  net  worth.  The
Company has acquired PMS from PAG for nominal consideration (ie, $1.00) together
with its interest in Automotive.  Although Automotive has a book value in excess
of $4,000,000,  the Company  advised PAG that it would not acquire PMS, with its
negative  book value,  without  acquiring  the 16% interest in  Automotive.  The
Company  is of the  opinion  that PMS is of no  commercial  value and  agreed to
acquire  same from PAG to orderly sell off the  remaining  assets and attempt to
minimize any  additional  losses to lenders of PMS. The  disposition  of PMS and
Automotive was approved by the shareholders of PAG (which the Company,

                                        6

<PAGE>
as majority  shareholder,  approved by vote of the Company's board of directors)
and was  completed on June 18, 1999  simultaneous  with PAG's  completion of the
acquisition of Digital Mafia Enterprises, LLC.
("DME" or "Digital").

     The  opportunity  to acquire DME was presented to PAG by Mason Hill.  Mason
Hill had  agreed to act as PAG's  investment  bankers  in  connection  with such
acquisition  opportunity  and will be  compensated  therefor.  In addition,  the
Company  retained  Mason Hill as  investment  bankers  subsequent  to the end of
fiscal  1998 and has issued  Mason  Hill  81,000  shares of its common  stock as
compensation therefor.

     On February 19,  1999,  PAG entered into a letter of intent to acquire 100%
of the capital stock of Digital in exchange for 7,400,000 shares of PAG"s common
stock.  After  receiving  a  notice  of  delisting  from  NASDAQ,  PAG  and  DME
renegotiated  the terms of the  acquisition,  and agreed to double the number of
shares being issued to DME to  14,800,000 in exchange for 100% of the issued and
outstanding  capital stock of DME. The  Acquisition  was completed in June 1999.
PAG will have  approximately  23,352,999  shares of its common  stock issued and
outstanding, 1,425,000 of which are owned by the Company.

     This includes approximately 728,000 shares being issued in lieu of debt and
costs of $364,000 and 740,000  shares of common stock being issued to Mason Hill
for its investment banking services in connection with the Digital Transaction.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Company did not submit any  matters to a vote of its  security  holders
during its fiscal year ended November 30, 1998.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock,  $.002 par value per share, is currently traded
sporadically  and on a limited basis in the  over-the-counter  market on the OTC
Bulletin  Board.  The  following  table sets forth  representative  high and low
closing  prices by calendar  quarters as reported by a market maker,  during the
periods provided for herein. Quotations represent prices between dealers, do not
include resale  mark-ups,  mark-downs or other fees or  commissions,  and do not
necessarily represent actual transactions.


                                        7

<PAGE>
<TABLE>
<CAPTION>
                                    Common Stock
    Calendar Quarter                     Prices
         Ended                      Low       High

<S>                                 >C?     <C>
12/01/97 to 2/28/97                 1/4     1
3/01/97   to 5/31/97                1/4     1
6/01/97  to 8/31/97                 5/16    1
9/01/97  to 11/30/97                1/4     1
12/01/97 to 2/28/98                 5/16    1
3/01/98  to 5/31/98                 1/4     1
6/01/98  to 8/31/98                 5/16    1
9/01/98  to 11/30/98                1/4     1

</TABLE>

     On January 13, 1994,  the Company  entered  into an  Agreement  and Plan of
Reorganization  with  PMS  and  the  shareholders  of PMS.  The  Company  issued
9,000,000  (pre 10 for 1 reverse  stock  split)  shares  of Common  Stock to the
stockholders of PMS for all the shares of PMS, thereby making PMS a wholly-owned
subsidiary of the Company.  On September 20, 1994, the Company  effected a 1 for
10 reverse  stock split of its issued and  outstanding  shares of Common  Stock,
thereby  reducing  the  issued  and  outstanding  shares  of Common  Stock  from
12,205,355 shares to 1,220,537 shares.

     As of November 30, 1998 the number of  registered  holders of record of the
Common  Stock,  $.002  par  value,  of the  Company  was  approximately  40,  as
determined by the Company's stockholder records, and does not include beneficial
owners at the Common  Stock whose  shares are held in names of various  security
holders, dealers and clearing agencies. The Company believes there are in excess
of 400 beneficial holders of the Common Stock.

     The Company has paid no dividends and has no present plan to pay dividends.
Payment of future dividends will be determined from time to time by its board of
directors, based upon its future earnings, if any, financial condition,  capital
requirements  and other  factors.  The Company is not  presently  subject to any
contractual or similar  restriction on its present or future ability to pay such
dividends.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS


     The  following  is  management's  discussion  and  analysis of  significant
factors  which have  affected the Company's  financial  position and  operations
during the years ended November 30, 1998 and 1997.

     Pride, Inc. (the "Company") which is a holding company, was incorporated as
International  Sportsfest,  Inc in the State of Delaware on September  11, 1988.
The Company was a development  stage company with no operations  through January
13, 1994. On January 13, 1994, the Company acquired

                                        8

<PAGE>
Pride  Management  Services,  Plc  ("PMS"),  a  consolidated  group of operating
companies  located in the United Kingdom.  Simultaneously  with the acquisition,
the Company changed its name from  International  Sportsfest,  Inc to Pride Inc.
and now has its  corporate  offices in Watford,  England and New York City,  New
York.  The Company also decided to change its year end from April 30 to November
30, in order to coincide accounting periods with its new subsidiary.

     Pursuant to the  acquisition,  the Company issued an aggregate of 9,000,000
(900,000  shares - post reverse  stock split - see Note 11) shares of its common
stock to the stockholders of PMS in the acquisition.  The 9,000,000 (pre-reverse
split) shares  represented 89% of the 10,155,350  (pre-reverse  split) shares of
common stock outstanding  immediately  after the acquisition.  The common stock,
was determined in arms-length negotiations between management of the company and
management of PMS. None of the stockholders or management of PMS were previously
affiliated  with the  Company in any  manner.  The  principal  basis used in the
negotiations  to determine  the number of shares to be issued by the Company was
the percentage of stock which would be owned by the new control groups after the
issuance thereof,  rather than any traditional  valuation formulas. By acquiring
100%  of  the  issued  and  outstanding  common  stock  of  PMS,  PMS  became  a
wholly-owned subsidiary of the Company. For accounting purposes, the acquisition
has been  treated as a  recapitalization  of PMS,  with PMS as the acquiror in a
reverse  acquisition.  In March 1997,  pursuant to the terms and conditions of a
reorganization,  the  Company  exchanged  all its  shares  in  Pride  Management
Services Plc for 1,500,000  shares of common stock in Pride Automotive Group Plc
(a newly  formed  Delaware  corporation).  As a result of this  exchange,  Pride
Automotive  Group, Inc ("PAG") became a majority owned subsidiary of the Company
and the parent of PMS.

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

     All references to the Company,  include its  subsidiary,  Pride  Automotive
Group, Inc, and its subsidiaries.

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

                                        9

<PAGE>
variables.  The  monthly  lease  payments  are  usually  sufficient  to pay  the
financing and servicing on the vehicles  during the lease term, with the bulk of
the profits, if any, coming on the resale of the automobile.

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

     On  November  29,  1996,  PAG,  through  its newly  formed  majority  owned
subsidiary,  AC Automotive  Group,  Inc, and its wholly-owned  subsidiary AC Car
Group Limited (registered in the United Kingdom), acquired certain of the assets
of AC Cars Limited and Autokraft  Limited.  The purchase price of  approximately
$6,000,000  was  financed  by  the  sale  of  common  stock  and by  loans.  The
acquisition  involved  the  purpose  of plant and  equipment,  the  brand  name,
inventories  and an  aircraft  and was  recorded  using the  purchase  method of
accounting.

     On February 12, 1998,  following  restructure of AC Automotive  Group, Inc,
the ownership of AC Automotive  Group,  Inc, by PAG was reduced to 16% (see Note
1- Description of Company).  PAG's  investment in AC Automotive  Group,  Inc, is
therefore being reported under the cost method of accounting.

     On December  11,  1998,  PAG,  through  its  subsidiary,  Pride  Management
Services Plc,  completed the sale of a large portion of its leasing  assets (see
Note  3  -  Subsequent  Event).  Pride  Management  Services  Plc,  through  its
subsidiaries, continues to service the remaining contract hire agreements.

     On February  19,  1999,  PAG executed a letter of intent to acquire all the
issued and  outstanding  capital stock of Digital Mafia  Entertainment,  LLC, in
exchange for the issuance of 7,400,000 shares of common stock. In addition,  PAG
also  announced  that it  will,  at the same  time,  sell  its  shares  in Pride
Management  Services Plc and its 16% interest in Automotive to the Company,  its
majority shareholder, for a nominal value ($1.00 each). After receiving a notice
of delisting from NASDAQ on March 12, 1999, PAG and DME  renegotiated  the terms
of the  acquisition,  and agreed to double the number of shares  being issued to
DME to  14,800,000  in exchange for 100% of the issued and  outstanding  capital
stock of DME.  The  Acquisition  was  completed  in June  1999.  PAG  will  have
approximately  23,352,999  shares of its common  stock  issued and  outstanding,
1,425,000 of which are owned by the Company.




                                       10

<PAGE>
RESULT OF OPERATIONS -
YEARS ENDED NOVEMBER 30, 1998 AND NOVEMBER 30, 1997

     The following  discusses the results of operations of the contract hire and
fleet  management  operations  of the  Company.  The  Consolidated  Statement of
Operations  for  November  30,  1997  included  the  consolidated  results of AC
Automotive Group, Inc.

     Contract hire income for the year ended November 30, 1998 was approximately
$8,329,000 compared to approximately  $8,410,000 for the year ended November 30,
1997,  a decrease  of $81,000.  The main reason for this small  decrease is that
there was an overall decrease in the contract hire fleet of 88 vehicles over the
year which gave rise to the decrease in revenues.

     Fleet  management and other income for the year ended November 30, 1998 was
approximately  $492,000 compared to approximately  $1,076,000 for the year ended
November  30, 1997,  a decrease of  $534,000.  This  decrease is mainly due to a
decrease  of 385  vehicles  managed  and loss of  rental  income  from  property
disposed at the end of 1997.

     Vehicle  sales  for the year  ended  November  30,  1998 was  approximately
$4,302,000 compared to approximately  $6,762,000 for the year ended November 30,
1997.  This  decrease  was mainly due to  reduction  in sale of  vehicles at low
margins to take advantage of dealer bonuses.

     For the year ended  November 30, 1998,  194 new vehicles  were  acquired as
against 550 in the year ended November 30, 1997.  The average  monthly rental of
new contracts written was $675 as against an average of $541 per vehicle for the
previous  year.  The average  monthly rental is dependant on the type of vehicle
being rented and the terms of the contract.

     For the year ended  November 30, 1998,  284  vehicles  were  disposed of on
termination of contracts. 152 vehicles were disposed of at an average net profit
of $2,830 and 132 vehicles were disposed of at an average net loss of $3,191 per
vehicle.  For the year ended November 30, 1997, 153 vehicles were disposed of on
termination of contracts at an average profit of $1,529 per vehicle. The average
profit per  disposal is  dependent  on the type and the current  market value of
vehicles  sold,  as well as any  additional  termination  income that accrues on
termination of the contract.

     As of November 30, 1998,  1,265  vehicles  were under lease and  management
compared to 1,740 vehicles as at November 30, 1997.

     Cost of sales including depreciation, decreased by approximately $3,146,000
or 16% when comparing the years ended November 30, 1998 and 1997.  This decrease
is less than the 19% decrease in revenues.  As a  percentage  of sales,  cost of
sales for 1998 was 85.5% versus 82.6% for 1997.

     General and administration expenses increased from approximately $1,958,000
to  $1,988,000,  an increase of $130,000  or 7%.  Management  believe  that this
increase was acceptable in a difficult trading environment.


                                       11

<PAGE>
     Interest  expense  increased from $1,747,000 in 1997 to $2,307,000 in 1998,
an increase of $560,000.  Management  attributes  this increase to the effect of
funding for a full year, the 550 new vehicles acquired in 1997 and the increased
cost of the increasing bank line of credit.

     After the completion of the sale of a substantial  portion of the contracts
and related  assets on December 11, 1998,  the Company  decided to write off the
intangibles.

     Loss for the years ended November 30, 1998 and 1997,  prior to amortization
and write off of goodwill for the period ($9,075,000 and $632,000  respectively)
and before minority interests aggregated ($2,477,283) and ($295,419).

LIQUIDITY AND CAPITAL RESOURCES

     Due to the nature of the Company's  business,  namely  contract  leasing of
motor  vehicles  which are fixed long term  assets,  the balance  sheet has been
prepared on an unclassified  basis.  Accordingly,  there is no classification of
current  assets and current  liabilities.  As at November 30, 1998 and 1997, the
Company's  balance  sheet  reflected  cash of $55,000 and $85,000  respectively,
accounts receivable of $1,572,000 and $1,959,000 respectively,  and total assets
of  $27,275,000  and  $40,087,000  respectively.  The  principal  reason for the
decrease  in total  assets  is due to the  deconsolidation  of the  assets in AC
Automotive Group, Inc, after the change in ownership and control.

     In December 1995, PAG 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 proceeds of $120,000 ($0.24 per share).

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

     During the years ended  November 30, 1998 and 1997,  the Company  generated
cash flows from operating activities  aggregating  approximately  $3,903,000 and
$1,362,000 respectively. Investing activities reflect uses of cash for the years
ended  November 30, 1998 and 1997 of $2,327,000  and  $11,701,000  respectively.
These uses of cash are the result of the  purchase  of fixed  assets  (primarily
revenue  producing  vehicles) net of the proceeds from sale of vehicles at lease
expiration dates and the acquisition  described above and the disposal of shares
in PAG for $236,000.

     For the year ended  November  30,  1998,  the  Company  utilized  cash from
financing  activities of $1,913,000.  This was due to financing provided by bank
lines  of  credit   ($966,000)  and  increases  in  financing  of  new  vehicles
($6,888,000) net of the amounts to reduce hire purchase  financing  ($9,757,000)
and long term debt  ($10,000).  For fiscal 1997, the Company  provided cash from
financing  activities  ($10,208,000)  primarily  due to  financing  provided  by
banking lines of credit ($4,012,000) plus increases in financing of new vehicles
($19,492,000) net of amounts needed to reduce hire purchase  contract  financing
($12,185,000) and debts ($1,207,000) and the net proceeds from the sale of stock
($96,000).

     There are no material planned capital expenditure.

                                       12

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

     The  Company  has  incurred  losses  from  operations  of  $11,552,148  and
$5,039,290  before minority  interests for the years ended November 30, 1998 and
1997.  The  losses  for the year  ended  November  30,  1997  includes a loss of
$4,111,664  incurred by its then  subsidiary,  AC Car Group Limited.  The equity
held in this  Company has since been  diluted  and the  Company's  accounts  are
therefore  no longer  consolidated.  The losses for the year ended  November 30,
1998  includes  $8,444,147  from the writing off of the goodwill  related to the
subsidiary,  Pride Management  Services Plc, as substantially  all of its assets
were sold on December 11, 1998 (see Note 3). The circumstances  described above,
together  with  the  material  events  discussed  in  Note  3 to  the  financial
statements,  which took place  subsequent to November 30, 1998, and the restated
proforma balance sheets after these events,  raise substantial  doubts about the
Company's ability to continue as a going concern.

     Management plans in regard to this matter were described in a press release
issued on February 19, 1999. In this press  release,  it was announced  that PAG
had  executed  a Letter of Intent to acquire  all of the issued and  outstanding
capital stock of Digital Mafia Entertainment,  LLC, in exchange for the issuance
of 7,400,000 shares in Pride Automotive  common stock.  After receiving a notice
of delisting from NASDAQ, PAG and DME renegotiated the terms of the acquisition,
and agreed to double the number of shares being issued to DME to  14,800,000  in
exchange  for 100% of the  issued  and  outstanding  capital  stock  of DME.  In
addition,  PAG also announced that it will, at the same time, sell its ownership
of Pride  Management  Services and its 16%  ownership  interest in Automotive to
Pride, Inc, its majority  shareholder,  for nominal value ($1.00 each). The sale
was completed in June 1999.

     Management may also raise capital through the sale of its PAG stock for the
purpose of meeting its financial  obligations  and those of Automotive.  If this
raising of capital is  unsuccessful,  then  Automotive  will not have sufficient
cash on hand to meet its current  obligations.  The financial  statements do not
include any adjustments that might result from this uncertainty.



ITEM 7. FINANCIAL STATEMENTS

        See attached Financial Statements.




                                       13

<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
        AND FINANCIAL DISCLOSURE

     On November 15, 1994, the firm of Lazar,  Levine & Company,  LLP, Certified
Public  Accountants,  which had served as  auditors of Pride,  Inc.'s  financial
statements for the fiscal year ended November 30, 1993, ceased to act as such by
mutual  agreement  with  the  registrant's  Board  of  Directors.  The  Board of
Directors of the registrant thereupon engaged Civvals, Chartered Accountants and
Registered  Auditors,  of  London,  England,  as  auditors  of its  consolidated
financial statements for the years ended November 30, 1994, 1995, 1996, 1997 and
1998.  This Firm was previously the auditors of PMS, the acquiror for accounting
purposes in the reverse acquisition.

     There  have  been no  disagreements  between  registrant  and  the  firm of
Civvals,  Chartered  Accountants  and  Registered  Auditors  on  any  matter  of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedure.




                                       14

<PAGE>
                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
        PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers.

     The executive officers and directors of the Company at year end fiscal 1998
are as follows:
<TABLE>
<CAPTION>

        NAME                                 AGE                     POSITION

<S>                                           <C>                    <C>
        Alan Lubinsky                         41                     President,
                                                                     Secretary
                                                                     Chairman of
                                                                     the Board
                                                                     and Director


        Ivan Averbuch                         43                     Chief Financial
                                                                     Officer
                                                                     and Director

        Allan Edgar                           53                     Director

</TABLE>


     Alan Lubinsky.  Mr Lubinsky has been the President,  Secretary and director
of the Company  since January 14, 1994.  Mr.  Lubinsky has been the Chairman and
Managing Director of Pride Management Services,  Plc ("PMS") since its inception
in 1988. Mr. Lubinsky was been the President and a director of Pride  Automotive
Group, Inc. ("PAG") since its inception in March 1995 to June 1999. Mr. Lubinsky
has been the Chief Executive Officer and a director of AC Automotive Group, Inc.
since its inception in 1996. Mr.  Lubinsky has 18 years  experience in the motor
vehicle industry in positions of executive management.


     Ivan  Averbuch has been the Chief  Financial  Officer of the of the Company
since December 1995. Mr.  Averbuch has been the Chief  Financial  Officer of PAG
since  December  1995 to June 1999.  Mr.  Averbuch  was a  director  of PAG from
December 1995 until  February  1998.  From  September 1987 to November 1995, Mr.
Averbuch  was  employed  at Kessel  Feinstein,  a member  firm of Grant  Thorton
International, an accounting firm. In January 1989, Mr. Averbuch was promoted to
audit manager and appointed as a partner in October 1992.

     Allan Edgar has been a director of the Company since May 1997 to June 1999.
Mr.  Edgar has been a  director  of PAG since  May  1997.  Mr.  Edgar has been a
director of AC Automotive Group, Inc. since its inception in 1996. Mr. Edgar has
been the Marketing Director of Hyatt Hotels & Resorts for Europe,

                                       15

<PAGE>
     Africa and the Middle East since 1990.  Mr. Edgar has extensive  experience
in the automobile industry, including positions at Hertz Rent-a-Car,  Volkswagen
Interent, and Leyland Motor Corporation.

     The directors of the Company are elected  annually by the  shareholders and
hold  office  until the next  annual  meeting of  shareholders,  or until  their
successors  are  elected  and  qualified.  The  Executive  officers  are elected
annually  by the board of  directors,  serve at the  discretion  of the board of
directors  and hold office  until their  successors  are elected and  qualified.
Vacancies on the board of directors may be filled by the remaining directors.

     As permitted under Delaware  Corporation Law, the Company's  certificate of
incorporation  eliminates the personal liability of the directors to the Company
or any of its  shareholders  for damages for breaches of their fiduciary duty as
directors.  As a result of the inclusion of such provision,  stockholders may be
unable to recover  damages  against  directors  for actions  taken by them which
constitute  negligence  or gross  negligence  or that are in  violation of their
fiduciary duties.  The inclusion of this provision in the Company's  Certificate
of  Incorporation  may reduce the  likelihood of derivative  litigation  against
directors and other types of shareholder litigation.

Compliance with Section 16(a) of the Exchange Act

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the Company's officers, directors and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities to file reports
of securities  ownership and changes in such  ownership  with the Securities and
Exchange  Commission ("SEC").  Officers,  directors and greater than ten percent
beneficial  owners also are required by rules  promulgated by the SEC to furnish
the Company with copies of all Section 16(a) forms they file.  Based solely upon
a review of the copies of such forms  furnished to the Company,  the Company has
been informed that no officers,  directors or greater than 10% shareholders have
filed such  reports as is  required  pursuant to Section  16(a)  during the 1996
fiscal year. Alan Lubinsky,  Ivan Averbuch and Allan Edgar have stated that they
intend on filing Form 5's to rectify the situation.  The Company has no basis to
believe that any other required filing by any of the above indicated individuals
has not been made.



                                       16

<PAGE>
ITEM 10.         EXECUTIVE COMPENSATION


Executive Compensation

Summary of Cash and Certain Other Compensation

     The following provides certain information concerning all Plan and Non-Plan
(as  defined in Item 402 (a)(ii) of  Regulation  S-B)  compensation  awarded to,
earned by,  paid by Pride  Vehicle  Contracts  Limited  during  the years  ended
November 30,  1997,  1997 and 1996.  The Company did not incur any  compensation
expenses during such period.

<TABLE>
<CAPTION>

                                                 Summary Compensation Table

                                                     Annual Compensation

      (a)                                (b)                (c)               (d)              (e)

Name and Principal                                                                            Other Annual
   Position  (1)                         Year             Salary($)         Bonus($)      Compensation($)(2)
-----------------------                  ----             ---------         --------      ------------------

<S>                                      <C>               <C>                <C>                  <C>
Alan Lubinsky (3)(4)(5)(6)               1998              $82,500            -                    $30,000
                                         1997              $176,000           -                    $30,000
  President, Secretary                   1996              $160,000           -                    $30,000
  and Chairman of the Board

</TABLE>

     (1) All of the Company's administrative functions, including the payment of
salaries,  are performed by Pride Vehicle Contracts Limited, since the Company's
operations  run  basically as one  operation.  The Company  believes  that it is
easier and cost  effective  to  operate in this  manner.  The  Company  plans on
continuing this practice in the future.

     (2) Includes contributions to the Company's pension plan of $18,000 in each
of 1998, 1997 and 1996, respectively, and the cost of an automobile and expenses
of $12,000 annually.

     (3) Alan Lubinsky  entered into an employment  agreement with PAG in August
1995.  The  agreement  is for a term of three  years,  and pays Mr.  Lubinsky an
annual  salary of  $160,000  per annum with 10% yearly  escalations,  subject to
adjustment by PAG's board of directors.  Pursuant to the agreement, Mr. Lubinsky
received stock options under PAG's Senior Management  Incentive Plan to purchase
100,000 shares at $5.50 per share. These options vest at the rate of 33 1/3% per
annum commencing August 1996.

     (4) On May 8, 1996,  Mr.  Lubinsky  was  granted an option to  purchase  an
additional  175,000 shares of the Company's Common Stock at an exercise price of
$0.48 per share.  The shares  underlying this option vest one year from the date
of grant.

     (5) On December 28, 1994, Mr. Lubinsky was granted an option to purchase up
to an aggregate of 60,000  shares of the  Company's  Common Stock at an exercise
price of $1.65 per share.  The shares  underlying this option vested on December
28, 1995. On February 14, 1995,  Mr.  Lubinsky was granted an option to purchase
an additional  110,000 shares of the Company's Common Stock at an exercise price
of $0.90 per share.  The shares  underlying  this option  vested on February 14,
1996.  On July 21,  1995,  Mr.  Lubinsky  was  granted an option to  purchase an
additional  75,000 shares of the Company's  Common Stock at a purchase  price of
$0.50 per share.  These  shares vest 25,000 on each  anniversary  of the date of
grant commencing July 21, 1996.

                                       17

<PAGE>
     (6) On June 2, 1997,  Mr.  Lubinsky was granted an option to purchase up to
an  aggregate  of 250,000  shares of the  Company's  Common Stock at an exercise
price of $0.38 per share. The shares underlying this option will vest on June 2,
1998.


Stock Options

     The following table sets forth certain information  concerning the grant of
stock options made during the year ended November 30, 1998,  under the Company's
1994 Stock Option Plan.
<TABLE>
<CAPTION>


                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (Individual Grants)

====================================================================================================================================


                                                Individual Grants
------------------------------------------------------------------------------------------------------------------------------------
             (a)                           (b)                      (c)                     (d)                       (e)
                                                                 % of Total
                                     # of Securities           Options/SAR's
                                        underlying               Granted to
                                      Options/SAR's             Employees in          Exercise or Base
             Name                      Granted(1)               Fiscal Year             Price ($/SH)            Expiration Date
------------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>         <C>                            <C>                      <C> <C>
Alan Lubinsky                                   250,000     78.13%                         $0.38                    6/1/03
------------------------------------------------------------------------------------------------------------------------------------
Ivan Averbuch                                    35,000     10.94%                         $0.38                    6/1/08
------------------------------------------------------------------------------------------------------------------------------------
Allan Edgar                                      35,000     10.94%                         $0.38                    6/1/08
====================================================================================================================================
</TABLE>

     (1)  Represents  incentive  stock options  granted under the Company's 1994
Stock Option Plan (the "Plan"),  as amended.  Options granted under the Plan are
intended to qualify as incentive  stock options under the Internal  Revenue Code
of 1986,  as  amended.  Under the terms of the Plan,  options  may be granted to
officers, key employees, directors and consultants of the Company until December
1999.  Options  granted to directors,  who are not officers or employees,  or to
consultants,  do not qualify as incentive  stock  options.  The option price per
share may not be less than the fair market value of the Company's  shares on the
date the option is granted. However, options granted to persons owning more than
10% of the  Company's  Common  Stock may not have a term in excess of five years
and may not have an option  price of less than 110% of the fair market value per
share of the  Company's  shares on the date the option is  granted.  See "--1994
Stock Option Plan."

                                       18

<PAGE>
     The following table contains  information  with respect to employees of the
Company concerning options held as of November 30, 1998

               AGGREGATED OPTION/SAR EXERCISE IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>

================================================================================================================================
             (a)                         (b)                     (c)                     (d)                      (e)
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Value of
                                                                                      Number of             Unexercised In-
                                                                                     Unexercised               The-Money
                                                                                   Options/SAR's at          Options/SAR's
                                                                                      FY-End (#)             at FY-End($)
                                   Shares Acquired              Value                Exercisable/            Exercisable/
            Name                   on Exercise (#)           Realized($)            Unexercisable            Unexercisable
--------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                     <C>                  <C>                      <C>
Alan Lubinsky                             0                       0                    60,000/0                 0/0 (1)
--------------------------------------------------------------------------------------------------------------------------------
Alan Lubinsky                             0                       0                   110,000/0                 0/0 (2)
--------------------------------------------------------------------------------------------------------------------------------
Alan Lubinsky                             0                       0                 50,000/25,000           $7,812.50/0 (3)
--------------------------------------------------------------------------------------------------------------------------------
Alan Lubinsky                             0                       0                   175,000/0             30,843.75/0 (4)
--------------------------------------------------------------------------------------------------------------------------------
Alan Lubinsky                             0                       0                   0/250,000                 0/0(5)
--------------------------------------------------------------------------------------------------------------------------------
Allan Edgar                               0                       0                    0/35,000                 0/0(6)
--------------------------------------------------------------------------------------------------------------------------------
Ivan Averbuch                             0                       0                    50,000/0              8,812.50/0(7)
--------------------------------------------------------------------------------------------------------------------------------
Ivan Averbuch                             0                       0                    0/35,000                 0/0(8)
================================================================================================================================
</TABLE>


     (1) As of March 13,  1998,  the average of the prior day's  closing bid and
ask  prices was  $0.66.  Since the  exercise  prices of the  Options  ($1.65) is
greater than the current average price, the Company believes the Options have no
value.

     (2) As of March 13,  1998,  the average of the prior day's  closing bid and
ask  prices was  $0.66.  Since the  exercise  prices of the  Options  ($0.90) is
greater than the current average price, the Company believes the Options have no
value.

     (3) As of March 13,  1998,  the average of the prior day's  closing bid and
ask prices was $0.66.  As of March 13,  1998,  50,000  shares  underlying  these
options have vested. However, Mr. Lubinsky has not exercised this option.

     (4) As of March 13,  1998,  the average of the prior day's  closing bid and
ask prices was $0.66.  As of March 13, 1998,  175,000  shares  underlying  these
options have vested. However, Mr. Lubinsky has not exercised this option.

     (5) As of March 13, 1998, none of the shares  underlying these options have
vested.

     (6) As of March 13, 1998, none of the shares  underlying these options have
vested.

     (7) As of March 13,  1998,  the average of the prior day's  closing bid and
ask prices was $0.66.  As of March 13,  1998,  50,000  shares  underlying  these
options have vested. However, Mr. Averbuch has not exercised this option.

     (8) As of March 13, 1998, none of the shares  underlying these options have
vested.



                                       19

<PAGE>
Employment Agreements

     No Officer  receives  compensation  from the Company or has any  employment
agreement with the Company.  Alan Lubinsky entered into an employment  agreement
with PAG in August 1995.  The  agreement is for a term of three years,  and pays
Mr. Lubinsky an annual salary of $160,000 per annum with 10% yearly escalations,
subject to adjustment by PAG's board of directors.  Pursuant to the terms of his
employment  agreement,  Mr.  Lubinsky  will devote all his business  time to the
affairs of the Company and PAG. Pursuant to the agreement, Mr. Lubinsky received
stock options under the Company's Senior  Management  Incentive Plan to purchase
100,000 shares at $5.50 per share. These options vest at the rate of 33 1/3% per
annum  commencing  August  1996.  The  agreement  restricts  Mr.  Lubinsky  from
competing with the Company for a period of one year after the termination of his
employment.

     Ivan Averbuch  entered into an employment  agreement  with PAG in September
1995,  for a term of 24 months,  commencing  December 1, 1995.  The agreement is
automatically extendable for an additional 24 months, subject to cancellation by
either PAG or Mr. Averbuch on 90 days written  notice.  Pursuant to the terms of
the agreement, Mr. Averbuch is to receive an annual salary of $55,000 per annum,
with an annual  increase of 10% per annum,  subject to review by the PAG's board
of directors.

1994 Stock Option Plan

     During 1994, the Company  adopted the Company's 1994 Stock Option Plan (the
"Plan").  The Board  believes  that the Plan is  desirable to attract and retain
executives  and other key  employees  of  outstanding  ability.  Under the Plan,
options to purchase an aggregate of not more than 500,000 shares of Common Stock
may be granted from time to time to key employees, officers, directors, advisors
and independent consultants to the Company and its subsidiaries.

     During  the  1996  annual  meeting  of  shareholders,  a  majority  of  the
shareholders authorized an amendment to the Plan increasing the number of shares
of Common Stock authorized and available for issuance thereunder from 500,000 to
1,000,000.

     The Board of  Directors  is charged with  administration  of the Plan,  the
Board is  generally  empowered  to  interpret  the  Plan,  prescribe  rules  and
regulations  relating  thereto,  determine  the terms of the option  agreements,
amend them with the consent of the  optionee,  determine  the  employees to whom
options are to be granted,  and determine  the number of shares  subject to each
option  and the  exercise  price  thereof.  The per  share  exercise  price  for
incentive  stock options  ("ISOs") will not be less than 100% of the fair market
value of a share of the Common Stock on the date the option is granted  (110% of
fair market value on the date of grant of an ISO if the optionee  owns more than
10% of the Common Stock of the Company).

     Options will be exercisable  for a term  determined by the Board which will
not be less than one year.  Options  may be  exercised  only while the  original
grantee has a relationship with the Company or a subsidiary of the Company which
confers  eligibility  to be  granted  options  or up to ninety  (90) days  after
termination at the sole discretion of the Board. In the event of termination due
to retirement, the Optionee, with the consent of the Board, shall have the right
to exercise his option at any time during the thirty-six (36) month period after
such  retirement.  Options may be exercised up to  thirty-six  (36) months after
death or total and permanent  disability.  In the event of certain basic changes
in the Company,  including a change in control of the Company (as defined in the
Plan)  in the  discretion  of the  Board,  each  option  may  become  fully  and
immediately  exercisable.  ISOs are not  transferable  other than by will or the
laws of descent and  distribution.  Options may be exercised during the holder's
lifetime only by the holder, his or her guardian or legal representative.

     Options  granted  pursuant to the Plan may be designated as ISOs,  with the
attendant  tax  benefits  provided  under  Section 421 and 422A of the  Internal
Revenue Code of 1986.  Accordingly,  the Plan provides  that the aggregate  fair
market  value  (determined  at the time an ISO is granted)  of the Common  Stock
subject  to ISOs  exercisable  for the  first  time by an  employee  during  any
calendar  year  (under all plans of the Company  and its  subsidiaries)  may not
exceed $100,000.  The Board may modify, suspend or terminate the Plan; provided,
however, that certain material modifications affecting the Plan must be approved
by the  shareholders,  and any change in the Plan that may  adversely  affect an
optionee's rights under an option previously granted under the Plan requires the
consent of the optionee.


                                       20

<PAGE>
     On  December  28,  1994,  60,000  and 5,000  options  were  granted to Alan
Lubinsky and Alan Berkun, respectively,  to purchase shares of Common Stock at a
purchase price of $1.65 per share. These options are exercisable  commencing one
year from the date of grant until five years from the date of grant.

     On February  14,  1995,  110,000  and 5,000  options  were  granted to Alan
Lubinsky and Alan Berkun, respectively,  to purchase shares of Common Stock at a
purchase price of $0.90 per share. These options are exercisable  commencing one
year from the date of grant until five years from the date of grant.

     On July 21, 1995,  75,000 options were granted to Alan Lubinsky to purchase
shares of Common Stock at a purchase  price of $0.50 per share.  25,000 of these
options are  exercisable  each July 21 commencing July 21, 1996 until five years
from the date of grant.

     On May 8, 1996,  175,000,  50,000 and 20,000  options  were granted to Alan
Lubinsky,  Ivan Averbuch and Peter Dixon,  respectively,  to purchase  shares of
Common  Stock  at a  purchase  price of  $0.48  per  share.  These  options  are
exercisable  one year from the date of grant  until  five years from the date of
grant.

     On June 2, 1997,  250,000,  35,000 and 35,000  options were granted to Alan
Lubinsky,  Ivan Averbuch and Allan Edgar,  respectively,  to purchase  shares of
Common Stock at a purchase price of $0.38.


                                       21

<PAGE>
ITEM 11. PRINCIPAL STOCKHOLDERS

     The following  table sets forth certain  information  at November 30, 1998,
with  respect to the  beneficial  ownership  of Common  Stock by (i) each person
known by the  Company  to be the owner of 5% or more of the  outstanding  Common
Stock;  (ii) by each  director;  (iii) and by all  officers  and  directors as a
group. Except as otherwise indicated below, each named beneficial owner has sole
voting and investment power with respect to the shares of Common Stock listed.
<TABLE>
<CAPTION>


                                                            Number of                      Percentage of
Name                                                         Shares                       Share Ownership

<S>                                                          <C>                               <C>
Alan Lubinsky (1)(2)(3)(4)                                   1,765,535                         70.3%
c/o Pride House
Watford Metro Centre
Tolpits Lane
Watford Hertfordshire
WD1 8SB England

Ivan Averbuch (5)                                               50,000                           *
c/o Pride House
Watford Metro Centre
Tolpits Lane
Watford Hertfordshire
WD1 8SB England

Allan Edgar                                                           *                          *
c/o Pride House
Watford Metro Centre
Tolpits Lane
Watford Hertfordshire
WD1 8SB England

New World Finance, Ltd. (1)                                   1,050,535                        52.6%
c/o Pride House
Watford Metro Centre
Tolpits Lane
Watford Hertfordshire
WD1 8SB England



                                       22

<PAGE>
Eros Nominees, Ltd. (1)                                         100,000                         5.0%
c/o Pride House
Watford Metro Centre
Tolpits Lane
Watford Hertfordshire
WD1 8SB England

Fort Investments, Ltd. (1)                                      100,000                         5.0%
c/o Pride House
Watford Metro Centre
Tolpits Lane
Watford Hertfordshire
WD1 8SB England

All officers and
Directors as a group
 (3 persons) (1)(2)(3)(4)(5)                                  1,845,535                        70.3%


</TABLE>

     (1)  Although Mr.  Lubinsky  disclaims  beneficial  ownership of the shares
owned by New World Finance,  Ltd., Eros Nominees,  Ltd., Fort Investments,  Ltd.
and Regent  Nominees,  Ltd.,  it may be expected that each of such entities will
vote their respective shares in favor of proposals espoused by Mr. Lubinsky.

     (2) Includes 170,000 shares which are issuable upon the exercise of options
granted  under the  Company's  1994 Stock  Option  Plan.  Of the 170,000  shares
issuable  upon  exercise of the options,  60,000 vested on December 28, 1995 and
110,000 vested on February 14, 1996.

     (3) Includes 175,000 shares which are issuable upon the exercise of options
granted under the Company's  1994 Stock Option Plan on May 8, 1996.  None of the
175,000 shares issuable upon the exercise of the options are vested.

     (4) Includes  75,000 shares which are issuable upon the exercise of options
granted  under the  Company's  1994 Stock Option Plan on July 21,  1995.  Of the
75,000 shares  issuable upon the exercise of the options,  25,000 vested on July
21, 1996.

     (5) Includes  50,000 shares which are issuable upon the exercise of options
granted  under the Company's  1994 Stock Option Plan.  None of the 50,000 shares
issuable upon the exercise of the options are vested.




                                       23

<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On January 13, 1994,  the Company  entered  into an  Agreement  and Plan of
Reorganization  with  PMS  and  the  shareholders  of PMS.  The  Company  issued
9,000,000  (pre 10 for 1 reverse  stock  split)  shares  of Common  Stock to the
stockholders of PMS for all the shares of PMS, thereby making PMS a wholly-owned
subsidiary of the Company.  On September 20, 1994, the Company  effected a 1 for
10 reverse  stock split of its issued and  outstanding  shares of Common  Stock,
thereby  reducing  the  issued  and  outstanding  shares  of Common  Stock  from
12,205,355 shares to 1,220,537 shares.

     On September 20, 1994 and October 18, 1994, the Company issued to New World
Finance, Ltd., the Company's principal  shareholder,  281,250 and 114,285 shares
of Common Stock,  respectively,  in exchange for the  cancellation  by New World
Finance, Ltd. of debt of approximately $1,125,000 and $400,000, respectively.

     In October  1994,  the Company  sold an  additional  114,285  shares of its
common  stock  (post  Reverse-split)  at a price of $1.75 per  share to  foreign
investors  pursuant to  Regulation  S of the  Securities  Act of 1933.  Woodbury
Capital Assets, Inc. received a commission in connection with such transaction.

     In December  1994,  the Company  granted  60,000 and 5,000  Options to Alan
Lubinsky  and Alan Berkun,  respectively,  to purchase  shares of the  Company's
Common Stock at $1.65 per share.

     In February  1995,  the Company  granted  110,000 and 5,000 Options to Alan
Lubinsky  and Alan Berkun,  respectively,  to purchase  shares of the  Company's
Common Stock at $0.90 per share.

     In March 1995, the Company formed Pride Automotive  Group,  Inc. ("PAG") in
the State of Delaware and reorganized its corporate  structure by exchanging all
of its shares of PMS for 1,500,000 shares of the Company's Common Stock,  making
PMS a wholly owned subsidiary of PAG.

     In March 1995,  PAG issued  60,000  shares of its Common Stock to Lampert &
Lampert, counsel to PAG for fees and expenses of $60,000.

     In July 1995,  PMS  entered  into a loan  agreement  with PAG's  president,
whereby PMS borrowed  approximately  $232,500. The loan is payable on demand and
accrues  interest  at the rate of 2.5%  over the  Midland  Bank base  rate.  The
principal  balance  of such loan was  $123,668  as of  November  30,  1995.  The
principal amount of the loan,  including accrued interest thereon,  will be paid
from the proceeds of PAG's Offering. "Use of Proceeds."

     In December 1995, PAG consummated a private placement offering, whereby PAG
sold 20 units,  each unit comprised  25,000 shares of Common Stock at a purchase
price of $6,000 per unit.

     In April 1996, PAG consummated an initial public offering, whereby PAG sold
950,000  shares of its common  stock at a purchase  price of $5.00 per share and
2,000,000  redeemable  common  stock  purchase  warrants at a price of $0.10 per
warrant.  The warrants are exercisable at a price of $5.75 per share, subject to
adjustment,  beginning April 24, 1997 and expiring April 23, 2001. In connection
therewith,  PAG also  granted to the  underwriter  of the  offering a warrant to
purchase  95,000  shares of PAG's common stock at a purchase  price of $5.00 and
200,000 redeemable common stock purchase warrants,  each warrant  exercisable to
purchase one share of common stock at a purchase price of $7.50

                                       24

<PAGE>
per share.  Other  than with  respect to the  exercise  price,  the terms of the
warrants  granted to the  underwriter  are identical to those  described  above.
PAG's  securities  were traded on the Nasdaq  SmallCap  Stock  Exchange  and the
Boston  Exchange until March 1999,  when they were delisted.  PAG's common stock
and warrants currently trade on the NASD OTC Bulletin Board.

     In  November  1996,  PAG,  through  its  subsidiary  AC Car Group  Limited,
purchased all the assets of AC Cars Limited and Autokraft Limited.

     In December 1996, PAG consummated a private placement offering, whereby PAG
sold 17 units,  each unit  comprised of a 10%  promissory  note in the amount of
10,000  shares of Common  Stock at a purchase  price of  $100,000  per unit.  In
connection with such offering, AC sold an aggregate of 1,028,700 shares to three
affiliates  of the  Underwriter  for  aggregate  consideration  of $1,030.  Such
persons  currently  own an  aggregate  of 14% of the  capital  stock  of AC.  In
addition,  the  Underwriter  loaned  PAG the sum of  $100,000,  $71,000 of which
remains outstanding.

     For a description of the Company's  employment  agreements,  see "Executive
Compensation - Employment Agreements."


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following  financial  statements of the Company are included as Part II,
Item 8:
<TABLE>
<CAPTION>

<S>               <C>                                                                              <C>
                  1)       Independent Auditors Reports                                          F-1
                  2)       Balance Sheets                                                        F-2
                  3)       Statements of Operations                                              F-3
                  4)       Statement of Stockholders' Equity                                     F-4
                  5)       Statements of Cash Flows                                              F-5
                  6)       Notes to Financial Statements                                         F-7
</TABLE>

                  FINANCIAL STATEMENT SCHEDULES

(b) During the 1998 fiscal year, the Company filed no Reports on Form 8-K.


(c) The exhibits designated with an asterisk have previously been filed with the
Commission in connection  with Pride,  Inc.'s Report on Form 8-K,  dated January
13,  1994,  PAG's  Registration  Statement  on Form SB-2 dated  January 12, 1996
(33-296-NY) and PAG's Report on Form 8-K dated September 5, 1996, pursuant to 17
C.F.R. ss.230.411, are incorporated by reference herein.
<TABLE>
<CAPTION>


<S>                        <C>
 2.1*             -        Agreement and Plan of Reorganization dated effective as of January
                           13, 1994.
 3.1*             -        Amendment to the Certificate of Incorporation of the Company dated January
                           15, 1994.
 3.2*             -        By-Laws of the Company.

                                       25

<PAGE>
10.2*             -        Employment Agreement with Alan Lubinsky.
10.3*             -        Employment Agreement with Ivan Averbuch.
10.5*             -        Loan Agreement between PMS and Alan Lubinsky.
10.6*             -        Form of Service Agreement.
10.7*             -        Asset purchase agreement between Pride Vehicle Contracts (UK)
                           Limited and Master Vehicle Contracts, Limited.
10.8*             -        Form of Hire Purchase Agreement.
10.9*             -        Mortgage on Pride House, Watford Metro Centre.
10.10*            -        Mortgage on Croydon, England property.
10.11*            -        Lease agreement with respect to the Croydon, England property.
10.12*            -        Form of Agreement to purchase all of the assets of AC Cars Limited and
                           Autokraft Limited.
24.1*             -        Letter from Mark H. Sternberg, with respect to the change in
                           accountants [incorporated by reference to Exhibit 7(a)(1) of the Amendment
                           to the Report on Form 8-K/A dated June 6, 1994].
24.2*             -        Letter from Lazar, Levine & Company, Certified Public Accountants,
                           with respect to the change in accountants [incorporated by reference to
                           Exhibit 4(a)(v) of the Report on Form 8-K dated November 14, 1994].

</TABLE>


                                       26

<PAGE>
                                   SIGNATURES


     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
has duly  caused  this  report to be signed  on its  behalf by the  undersigned,
thereunto duly authorized, this 26th day of June, 1999.


                                                     PRIDE, INC.


                                                     /s/ Alan Lubinsky
                                                     ALAN LUBINSKY, President


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  Registrant and in the capacities and on
the dates indicated.

<TABLE>
<CAPTION>



<S>                                 <C>                                                 <C>
/s/ Alan Lubinsky                   President, Secretary and Chairman                   6/28/99
ALAN LUBINSKY                       of the Board of Directors (Principal                Date
                                    Executive Officer)


/s/ Ivan Averbuch                   Chief Financial Officer                             6/28/99
IVAN AVERBUCH                                                                           Date



/s/ Allan Edgar                     Director                                            6/28/99
ALLAN EDGAR                                                                             Date

</TABLE>
                                       27

<PAGE>
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>


                                                                                                              Page Nos

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

Financial Statements:

    Consolidated Balance Sheets as of November 30, 1998 and 1997                                                  F - 3

    Consolidated Statements of Operations for the Years Ended November 30, 1998 and 1997                          F - 4

    Consolidated Statement of changes in Shareholders' Equity for the Years Ended November 30, 1998 and 1997      F - 5

    Consolidated Statements of Cash Flows for the Years Ended November 30, 1998 and 1997                          F - 6

    Notes to Consolidated Financial Statements                                                                 F - 7 to 22

</TABLE>


                                      F - 1


<PAGE>
                          INDEPENDENT AUDITORS' REPORT


     We have audited the accompanying consolidated balance sheets of Pride, Inc.
and  subsidiaries as of November 30, 1998 and 1997 and the related  consolidated
statements of  operations,  changes in  shareholders'  equity and cash flows for
each of the two years in the period ended November 30, 1998. These  consolidated
financial statements are the responsibility of the Corporation's management. Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

     In our  opinion,  the above  mentioned  consolidated  financial  statements
present fairly, in all material respects, the consolidated financial position of
the  Corporation  as of  November  30,  1998 and 1997 and the  results  of their
operations for the two years in the period ended November 30, 1998 in conformity
with accounting principles generally accepted in the United States of America.

     The accompanying  financial statements have been prepared assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the  Company  had  incurred  losses of  $11,552,148  and
$5,039,290  before minority  interests for the years ended November 30, 1998 and
1997, respectively. This, together with the sale of assets, the restated balance
sheets after this sale,  and the delisting of PAG's shares from the Nasdaq Small
Cap  Market  as  discussed  in  Note  3  to  the  financial  statements,  raises
substantial  doubts  about  PAG's  ability  to  continue  as  a  going  concern.
Management's  plans  regarding  these  matters are also  discussed in Note 2. As
discussed in Note 3, the restated pro forma  balance  sheets show that there was
an excess of  liabilities  over  assets on  December  11,  1998.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

     Our audits  also  include  the  translation  of British  pounds into United
States dollars for amounts included in the consolidated financial statements. In
our opinion,  such translation has been made in conformity with the basis stated
in Note 4(h) of the notes to the consolidated financial statements.












<TABLE>
<CAPTION>


<S>                                                   <C>                                        <C>
MARBLE ARCH HOUSE
66-68 SEYMOUR STREET
LONDON W1H 5AF                                                                                   CIVVALS
UNITED KINGDOM                                        APRIL 12, 1999                             CHARTERED ACCOUNTANTS

========================================       =============================       =================================================

</TABLE>


                                      F - 2


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS



                              - ASSETS (Note 8a) -
<TABLE>
<CAPTION>


                                                                                 November 30, 1998           November 30, 1997
                                                                              ------------------------    -----------------------
                                                                                         $                           $
ASSETS:
<S>                                                                                 <C>                         <C>
    Cash and cash equivalents                                                       54,953                      85,065
    Accounts receivable (Notes 4c and 5)                                            1,571,983                   1,959,355
    Inventories (Note 4d)                                                           -                           1,248,360
      Property, revenue producing vehicles and equipment - net
         (Notes 4e, 6, 8 and 9)                                                    21,599,835                  27,882,350
    Intangible assets - net                                                         -                           8,912,087
    Investment in affiliate                                                         4,048,460                   -

                                                                              ------------------------    -----------------------
    TOTAL ASSETS                                                                    27,275,231                  40,087,217
                                                                              ========================    =======================


                                          - LIABILITIES AND SHAREHOLDERS' EQUITY -


    LIABILITIES:
    Bank line of credit (Note 8a)                                                   6,264,245                   6,976,699
    Accounts payable                                                                558,314                     1,767,166
    Accrued liabilities and expenses (Note 7)                                       1,738,304                   865,977
    Bank debt (Note 8b)                                                             685,428                     695,782
    Obligations under hire purchase contracts (Note 9)                              15,231,850                  18,341,778
    Other liabilities (Note 11)                                                     284,452                     109,978
    Acquisition debt payable (Note 12)                                              1,686,000                   4,198,500

                                                                                                          -----------------------
                                                                              ------------------------
    TOTAL LIABILITIES                                                               26,448,593                  32,955,880
                                                                              ------------------------    -----------------------

MINORITY INTEREST IN SUBSIDIARY (Note 10)                                           370,043                     3,473,242
                                                                              ------------------------    -----------------------

COMMITMENTS AND CONTINGENCIES (Note 18)

    SHAREHOLDERS' EQUITY (Notes 10, 13 and 14):
      Preferred stock, $.001 par value, 5,000,000
       shares authorized, none issued or outstanding                                    -                           -
      Common stock, $.002 par value, 500,000,000 shares
       authorized, 1,995,357 shares issued and outstanding                              3,991                       3,991
    Additional paid-in capital                                                      8,332,895                   8,063,111
    Retained earnings (deficit)                                                     (7,903,830)                 (4,019,828)
    Deferred financing costs                                                        (44,734)                    (75,178)
    Foreign currency translation (Note 4h)                                          68,273                      (314,001)

                                                                              ------------------------    -----------------------
    TOTAL SHAREHOLDERS' EQUITY                                                      456,595                     3,658,095
                                                                              ------------------------    -----------------------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                      27,275,231                  40,087,217
                                                                              ========================    =======================



</TABLE>

                 See notes to consolidated financial statements.



                                      F - 3


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

<TABLE>
<CAPTION>


                                                                                 November 30, 1998           November 30, 1997
                                                                              ------------------------    -----------------------
                                                                                         $                           $
REVENUES (Notes 4i and 18):
<S>                                                                                 <C>                         <C>
    Contract hire income                                                            8,329,498                   8,410,366
    Sale of vehicles                                                                4,302,757                   7,090,028
    Fleet management and other income                                               492,248                     1,984,656

                                                                              ------------------------    -----------------------
    TOTAL REVENUE                                                                   13,124,503                  17,485,050
                                                                              ------------------------    -----------------------

    COSTS AND EXPENSES:
      Cost of sales                                                                 11,227,976                  14,368,881
      General and administrative expenses                                           1,988,093                   3,577,588
      Amortization of goodwill                                                      630,718                     632,207
      Interest and other expenses                                                   2,328,481                   2,209,150
      Loss on sale of fixed assets (Note 6)                                         -                           753,933
      Loss on sale of investment                                                    57,236                      -
      Research and development                                                      -                           982,581
      Write off of intangibles                                                      8,444,147                   -

                                                                              ------------------------    -----------------------
                                                                                    24,676,651                  22,524,340
                                                                              ------------------------    -----------------------

LOSS BEFORE MINORITY INTERESTS AND PROVISION FOR INCOME TAXES
                                                                                (11,552,148)                (5,039,290)

      Minority interest (Note 10)                                                   5,663,879                   2,574,566

                                                                                    (5,888,269)                 (2,464,724)

    PROVISION FOR INCOME TAXES (Notes 4g and 15)                                    -                           -

                                                                              ------------------------    -----------------------
    NET (LOSS)                                                                      (5,888,269)                 (2,464,724)
                                                                              ========================    =======================

LOSS PER COMMON AND DILUTIVE COMMON EQUIVALENT SHARE (Note 4j)

      Net loss before minority interests                                            $(5.79)                     $(2.53)
      Minority interest in net loss of subsidiaries                                 2.84                        1.29

                                                                              ------------------------    -----------------------
NET LOSS PER SHARE                                                                  (2.95)                      (1.24)
                                                                              ========================    =======================

WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING
                                                                                1,995,357                   1,995,357
                                                                              ========================    =======================


</TABLE>

                 See notes to consolidated financial statements.



                                      F - 4


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGE IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>


                                     Shares        Common     Additional   Retained        Deferred     Foreign         Total
                                                   Stock      Paid-In       Earnings       Financing    Currency       Shareholders'
                                                              Capital      (Deficit)       Costs        Translation      Equity
                                                     $            $            $             $             $              $

<S>                                  <C>              <C>       <C>          <C>             <C>        <C>          <C>
Balance at November 30, 1996 ....    1,995,357        3,991     8,425,722    (1,555,104)      --        (297,304)    6,577,305

Foreign currency translation ....         --           --            --            --         --         (16,697)      (16,697)
adjustment

Increase in minority ............         --       (362,611)         --            --         --        (362,611)
shareholders' interest

Deferred financing costs ........         --           --            --            --      (75,178)         --         (75,178)

Net Loss for the year ended .....         --           --      (2,464,724)         --         --      (2,464,724)
November-30, 1997

                                   -------------------------------------------------------------------------------------------------
Balance at November 30, 1997 ....    1,995,357        3,991     8,063,111    (4,019,828)   (75,178)     (314,001)    3,658,095

Deferred financing costs ........         --           --            --            --       30,444          --          30,444

Adjustment - AC Car Group Limited         --           --         286,567     2,004,267       --            --       2,298,834

Increase in minority ............         --        (16,783)         --            --         --         (16,783)
shareholders' interest

Foreign currency translation ....         --           --            --            --         --         382,274       382,274
adjustment

Net loss for the year ended .....         --           --      (5,888,269)         --         --      (5,888,269)
November-30, 1998
                                   -------------------------------------------------------------------------------------------------
BALANCE AT NOVEMBER .............    1,995,357        3,991     8,332,895    (7,903,830)   (44,734)       68,273       456,595
30, 1998
                                   =================================================================================================
</TABLE>






















                 See notes to consolidated financial statements



                                      F - 5


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                                 November 30, 1998           November 30, 1997
                                                                              ------------------------    -----------------------
                                                                                         $                           $
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net (loss)
<S>                                                                                 <C>                         <C>
Adjustments to reconcile net (loss) to net cash provided by operating activities:   (5,888,269)                 (2,464,724)
    Minority interest in net loss of subsidiary                                     (5,663,879)                 (2,574,566)
    Depreciation and amortization                                                   4,735,456                   3,946,635
    Amortization of goodwill                                                        9,074,865                   632,206
    Loss on disposal of fixed assets                                                715,694                     403,352
    Loss on sale of investment                                                      57,236                      -
    Changes in assets and liabilities:
    Decrease (Increase) in accounts receivable                                      298,600                     (23,189)
    Decrease (Increase) in inventories                                              132,369                     (120,908)
    Increase in accounts payable, accrued expenses and other creditors              440,687                     1,563,726

                                                                              ------------------------    -----------------------
    Net cash generated from operating activities                                    3,902,759                   1,362,532
                                                                              ------------------------    -----------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of revenue producing assets                                            (6,800,055)                 (16,144,143)
    Proceeds from sale of fixed assets                                              4,237,204                   4,442,160
    Proceeds on sale of investment                                                  235,870                     -

                                                                              ------------------------    -----------------------
    Net cash (utilized) by investing activities                                     (2,326,981)                 (11,701,983)
                                                                              ------------------------    -----------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Bank lines of credit                                                            966,558                     4,012,234
    Minority shareholders investment in subsidiary                                  -                           95,677
    Payment of acquisition debt                                                     -                           (899,970)
    Principal payment of long term debt                                             (10,354)                    (306,789)
    Proceeds from hire purchase contract funding                                    6,887,945                   19,491,763
    Principal repayments of hire purchase contract funding                          (9,757,781)                 (12,184,936)

                                                                              ------------------------    -----------------------
Net cash (utilized) provided by financing activities                                (1,913,632)                 10,207,879
                                                                              ------------------------    -----------------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                             307,742                     (38,646)

                                                                              ------------------------    -----------------------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS                                         (30,112)                    (170,218)

    Cash and cash equivalents, beginning of year                                    85,065                      255,283

CASH AND CASH EQUIVALENTS END OF YEAR                                               54,953                      85,065
                                                                              ========================    =======================



</TABLE>

                 See notes to consolidated financial statements.



                                      F - 6


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 1 - DESCRIPTION OF COMPANY:

     Pride, Inc. (the "Company") which is a holding company, was incorporated as
International  Sportsfest,  Inc in the State of Delaware on September  11, 1988.
The Company was a development  stage company with no operations  through January
13, 1994. On January 13, 1994, the Company acquired Pride  Management  Services,
Plc ("PMS"), a consolidated  group of operating  companies located in the United
Kingdom.  Simultaneously with the acquisition, the Company changed its name from
International Sportsfest, Inc to Pride Inc. and now has its corporate offices in
Watford, England and New York City, New York. The Company also decided to change
its year end from  April 30 to  November  30,  in order to  coincide  accounting
periods with its new subsidiary.

     Pursuant to the  acquisition,  the Company issued an aggregate of 9,000,000
(900,000  shares - post reverse  stock split - see Note 11) shares of its common
stock to the stockholders of PMS in the acquisition.  The 9,000,000 (pre-reverse
split) shares  represented 89% of the 10,155,350  (pre-reverse  split) shares of
common stock outstanding  immediately  after the acquisition.  The common stock,
was determined in arms-length negotiations between management of the company and
management of PMS. None of the stockholders or management of PMS were previously
affiliated  with the  Company in any  manner.  The  principal  basis used in the
negotiations  to determine  the number of shares to be issued by the Company was
the percentage of stock which would be owned by the new control groups after the
issuance thereof,  rather than any traditional  valuation formulas. By acquiring
100%  of  the  issued  and  outstanding  common  stock  of  PMS,  PMS  became  a
wholly-owned subsidiary of the Company. For accounting purposes, the acquisition
has been  treated as a  recapitalization  of PMS,  with PMS as the acquirer in a
reverse  acquisition.  In March 1995,  pursuant to the terms and conditions of a
reorganization,  the  Company  exchanged  all its  shares  in  Pride  Management
Services Plc for 1,500,000  shares of common stock in Pride Automotive Group Plc
(a newly  formed  Delaware  corporation).  As a result of this  exchange,  Pride
Automotive  Group, Inc ("PAG") became a majority owned subsidiary of the Company
and the parent of PMS.

     Pride   Management   Services  Plc  (PMS)  is  a  holding  company  of  six
subsidiaries engaged in the leasing of motor vehicles primarily on contract hire
to local  authorities  and selected  corporate  customers  throughout the United
Kingdom.

     On November 29,  1996,  the Company,  through  PAG's newly formed  majority
owned  subsidiary,  AC Automotive  Group Inc. and its wholly owned subsidiary AC
Car Group Limited (registered in the United Kingdom),  completed the acquisition
of net assets of AC Cars Limited and Autokraft Limited. These two companies were
engaged in the manufacture and sale of specialty automobiles. The purchase price
of $6,067,000  was financed  with the proceeds of a private debt offering  which
was  completed,  by PAG,  in  December  1996 and by loans  (see  Note  12).  The
acquisition was recorded using the purchase method of accounting.

                                      F - 7


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 1 - DESCRIPTION OF COMPANY (Continued):

     On February 12, 1998, the board of Directors of AC Automotive  Group,  Inc.
authorized  the  issuance  of  6,130,000  shares of its  common  stock to Erwood
Holdings, Inc., a company affiliated with Alan Lubinsky, the President and Chief
Executive  Officer and director of the Company and AC Automotive Group, Inc, for
aggregate  consideration  of $6130.  In addition,  441,300 shares were issued to
other unrelated parties for aggregate  consideration of $443.  Following further
restructure and the foregoing issuance of shares, the ownership of AC Automotive
Group,  Inc.  by PAG has been  reduced to 16%.  Due to the  change in  ownership
percentage,  the  Company  does not  believe  that it still has the  ability  to
exercise  significant  influence  over AC Automotive  Group,  Inc.  Accordingly,
consolidation is not considered  appropriate.  PAG's investment in AC Automotive
Group, Inc., is therefore being reported under the cost method of accounting.

     See Note 3 regarding PAG's sale of substantially all of its leasing assets,
subsequent to the balance sheet date.


NOTE 2 - BASIS OF PRESENTATION:

     The  Company  has  incurred  losses  from  operations  of  $11,552,148  and
$5,039,290  before minority  interests for the years ended November 30, 1998 and
1997.

     The  losses  for the  year  ended  November  30,  1997  includes  a loss of
$4,111,664  incurred by its then  subsidiary,  AC Car Group Limited.  The equity
held in this  Company has since been  diluted  and the  Company's  accounts  are
therefore no longer consolidated.

     The losses for the year ended  November 30, 1998 includes  $8,444,147  from
the writing off of the  goodwill  related to the  subsidiary,  Pride  Management
Services Plc, as substantially  all of its assets were sold on December 11, 1998
(see Note 3).

     The  circumstances  described  above,  together  with the  material  events
discussed in Note 3 to the financial statements,  which took place subsequent to
November 30, 1998, and the restated  proforma balance sheets after these events,
raise  substantial  doubts  about the  Company's  ability to continue as a going
concern.

     Management plans in regard to this matter were described in a press release
issued by PAG on February 19, 1999. In this press release, it was announced that
PAG had executed a Letter of Intent to acquire all of the issued and outstanding
capital stock of Digital Mafia Entertainment,  LLC, in exchange for the issuance
of 7,400,000 shares in PAG common stock. In addition, PAG also announced that it
will, at the same time, sell its ownership of Pride  Management  Services to the
Company,  for  nominal  value.  At this  time,  the  these  sales  has not  been
consummated  and the terms are being  renegotiated in the light of the delisting
of PAG's shares as discussed in Note 3(b).



                                      F - 8


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 2 - BASIS OF PRESENTATION (Continued):

     Management  is also  raising  capital  for the  purpose  of  meeting  PAG's
financial obligations until such time as the Contract of Sale described above is
consummated. If this raising of capital is unsuccessful,  then PAG will not have
sufficient  cash  on  hand  to  meet  its  current  obligations.  The  financial
statements  do  not  include  any  adjustments   that  might  result  from  this
uncertainty.


NOTE 3 - SUBSEQUENT EVENT:

        (a)      Sale of Assets:

     On December  11,  1998,  PAG,  through  its  subsidiary,  Pride  Management
Services  Plc,  completed  the sale of  substantially  all its  leasing  assets,
leaving  approximately 13% of its revenue producing vehicles after the sale (see
also  Note 2 which  discusses  the sale of  PAG's  shares  in  Pride  Management
Services Plc to the Company).

     The  consideration  paid was  $14,763,680  against a balance sheet value of
$17,851,023.

     As a condition of sale,  hire purchase  creditors were paid  $14,537,000 in
full and final  settlement  of the debt  outstanding  on the leased  assets sold
against a balance sheet value of $13,127,303 at an early  settlement  penalty of
$1,409,697.

     In  addition,  the bank line of credit was  restructured  as follows.  Upon
completion  of the sale,  $1,815,000  was  repaid to the bank.  The  balance  of
$4,449,245 has been  converted into two loans;  Loan A for $1,485,000 and Loan B
for $2,964,245 respectively.

     Loan A of  $1,485,000  is repayable by July 31, 1999, in the event of which
Loan B of $2,964,245 will be forgiven.

     In the event that Loan A is not repaid by July 31,  1999,  the full  amount
outstanding on the two loans is repayable on demand.

     As a result of the sale, PAG has decided to write off its related goodwill,
which had a carrying value of $8,444,147.


                                      F - 9


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 3 - SUBSEQUENT EVENT:

        (a)      Sale of Assets (Continued):

     The following is a condensed proforma balance sheet of the Company assuming
this sale occurred as of November 30, 1998.
<TABLE>
<CAPTION>

                 Assets                                                              Exhibit 1        Exhibit 2
                                                                                     ---------        ---------

<S>                                                                               <C>              <C>
                 Cash                                                             $  1,050,987     $  1,050,987
                 Accounts receivable - net                                           1,571,989        1,571,989
                 Fixed assets - net (Note 6)                                         4,213,330        4,213,330
                 Investment in affiliate                                             4,048,460        4,048,460
                                                                                 -------------      -------------
                 Total Assets                                                      $10,884,766        $10,884,766
                                                                                   ===========        ===========


                 Liabilities and Shareholders Equity

                 Accounts payable                                                      649,889          649,889
                 Accrued liabilities and expenses (Note 7)                           4,206,305        4,206,305
                 Bank debt (Note 8a)                                                 5,134,673        2,170,428
                 Obligations under hire purchase contracts (Note 9)                  2,104,547        2,104,547
                 Loans payable                                                          99,719           99,719
                 Other liabilities                                                     209,514          209,514
                 Acquisition debt payable                                            1,686,000        1,686,000
                                                                                 -------------    -------------
                 Total Liabilities                                                  14,090,647       11,126,402
                 Shareholders equity (deficit)                                  (    3,205,881) (       241,636)
                                                                                 -------------   --------------
                                                                                   $10,884,766      $10,884,766
</TABLE>

     Exhibit 2 assumes that the bank  conditions will be met and the outstanding
loan balance of $2,964,245 will be forgiven.

        (b)      Nasdaq Small Cap Market Listing:

     On March 12, 1999, PAG was notified by NASDAQ that PAG's  securities  would
be delisted  from the Nasdaq Small Cap Market  effective  March 19, 1999,  since
PAG's financial condition does not meet the requirements for continual inclusion
of such securities. PAG is in the process of appealing this decision.


                                     F - 10


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

        (a)      Basis of Consolidation and Presentation:

     The consolidated  financial  statements include the accounts of the Company
(Pride, Inc.), its' subsidiary Pride Automotive Group, Inc and its' wholly owned
subsidiaries,  and for 1997 its' majority owned subsidiary AC Automotive  Group,
Inc. and its' wholly owned subsidiary.  All material  intercompany  balances and
transactions have been eliminated.

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

        (b)      Use of Estimates:

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

        (c)      Concentration of Credit Risk/Fair Value:

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

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

        (d)      Inventories:

     Inventories  include vehicles which are no longer being leased to customers
and which  are  temporarily  being  held for  resale  at cost  less  accumulated
depreciation,  which  approximates  net realizable  value. The inventories of AC
Automotive  Group,  Inc. and its  subsidiary  as of November 30, 1997 consist of
finished  goods,  work in progress and spare parts of specialty  automobiles and
are stated at the lower of cost, (first-in,  first-out method) or market. Market
is considered as net realizable value. The Company did not have any inventory as
of November 30, 1998.



                                     F - 11


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

        (d)      Inventories (Continued):

     As of November 30, 1998 and 1997, inventories consisted of the following:
<TABLE>
<CAPTION>

                                                                                  November 30,     November 30,
                                                                              1998             1997

<S>                                                                        <C>                      <C>
                 Cars held for resale                                      $         -              $   132,369
                 Finished goods                                                      -                   90,784
                 Work-in-progress                                                    -                  502,500
                 Spare parts                                                         -                  522,707
                                                                                    ----------        ---------
                                                                           $         -               $1,248,360
                                                                           ===================       ==========
</TABLE>

        (e)      Fixed Assets and Depreciation:

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

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

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

         (f)     Intangible Assets:

     Intangible assets consisted primarily of goodwill which arose in connection
with the acquisition of certain subsidiaries of PMS. Goodwill has been amortized
over a period of 10-20 years on a straight-line basis.  Accumulated amortization
as  of  November  30,  1998  and  1997  aggregated   $4,253,551  and  $3,622,833
respectively.

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


                                     F - 12


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

        (f)      Intangible Assets (Continued):

     On December 11, 1998, PAG, through its subsidiary Pride Management Services
Plc,  completed the sale of  substantially  all its leasing assets (see Note 3).
Accordingly,  PAG has  decided to write off its  related  goodwill,  which had a
carrying value of $8,444,147.

        (g)      Income Taxes:

     The Company conducts all of its operating  activities in the United Kingdom
(UK). As such,  they are subject to taxation in the UK based upon that country's
tax statutes.  Under UK taxation rules,  provision is made for taxation deferred
as a result of material timing  differences  between the incidence of income and
expenditures for taxation and accounting  purposes,  using the liability method,
only to the extent that there is  reasonable  probability  that a  liability  or
asset will  crystallize  in the near future.  See also Note 14 regarding SFAS No
109 - Accounting for Income Taxes.

        (h)      Foreign Currency Translation:

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

        (i)      Income Recognition:

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

     The Company leases vehicles with terms  generally  ranging from two to four
years.  The following  table shows the future minimum lease payments of existing
leases (after sale as discussed in Note 3) to be received,  net of related costs
(see also Note 9):
<TABLE>
<CAPTION>

<S>                       <C> <C>                                                                      <C>
                 November 30, 1999                                                                     $560,640
                 November 30, 2000                                                                      160,666
                 November 30, 2001                                                                      66,581
                 November 30, 2002                                                                      11,277
                                                                                                    ----------
                 Total minimum lease payments receivable net of executory costs                       $799,164
                                                                                                      ========

</TABLE>

                                     F - 13


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

         (j)     Earnings Per Share:

     Earnings per share are computed based upon the weighted  average shares and
common  equivalent  shares  outstanding.  The shares  sold during the year ended
November  30, 1996 in a private  offering  (see Note 12),  have been  treated as
outstanding for all periods presented,  in accordance with the guidelines of the
Securities and Exchange Commission.  Common stock equivalents have been excluded
from the computation since the results would be anti-dilutive.

     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 the period ending after December 15,
1997.  The Company has adopted  SFAS 128 for the year ending  November 30, 1998,
and accordingly restated prior periods.

        (k)      Cash and Cash Equivalents:

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

        (l)      Stock Based Compensation:

     SFAS No 123 "Accounting for Stock-Based  Compensation",  effective December
1996, requires the Company to either record  compensation  expense or to provide
additional disclosures with respect to stock awards and stock option grants made
after  December 31,  1994.  The  accompanying  Notes to  Consolidated  Financial
Statements include the disclosures required by SFAS 123. No compensation expense
is recognized  pursuant to the Company's stock option plans under SFAS 123 which
is consistent with prior treatment under APB No 25.

        (m)      New Accounting Pronouncements:

     SFAS No 130  "Reporting  Comprehensive  Income",  is  effective  for  years
beginning  after  December  15,  1997 and  early  adoption  is  permitted.  This
statement  prescribes  standards  for  reporting  comprehensive  income  and its
components. The Company has adopted these standards effective for the year ended
November 30, 1998.

                 See also Earnings (Loss) Per Share.






                                     F - 14


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

        (n)      Impact of the Year 2000 Issue:

     The year 2000 issue is the result of computer  programs being written using
two digits rather than four to designate the applicable year.  Accordingly,  any
of the  Company's  computer  programs that utilize date  sensitive  software may
recognize  a date using "00" as the year 1900  rather  than the year 2000.  This
could  potentially  result  in  a  system  failure  or  miscalculations  causing
disruptions of operations,  including among other things, a temporary  inability
to  process  transactions,  send  invoices,  or engage in other  similar  normal
business activities.

     The Company had  already  planned on  upgrading  its  computer  software to
increase operational  efficiencies and information analysis. In conjunction with
this  upgrade,  the Company  will ensure that the new systems  properly  utilize
dates that go beyond December 31, 1999. Due to the subsequent event described in
Note 3, the cost of this upgrade project,  as it relates to the Year 2000 issue,
is not expected to have a material  effect on the  operations of the Company and
will be funded through operating cash flows.


NOTE 5 - ACCOUNTS RECEIVABLE:

                 Accounts receivable consist of the following:
<TABLE>
<CAPTION>

                                                                                  November 30,     November 30,
                                                                                        1998             1997
                 Trade receivables - net of allowance for doubtful
                 accounts of $NIL and $80,486 for 1998 and 1997,
<S>                                                                                <C>              <C>
                 respectively                                                      $   638,001      $   639,109
                 Lease maintenance receivables                                            -             943,261
                 Value added tax                                                           919          138,555
                 Due from related companies                                            558,729           83,219
                 Other                                                                 374,334          155,211
                                                                                  ------------     ------------
                                                                                    $1,571,983       $1,959,355
</TABLE>


                                     F - 15


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 6 - FIXED ASSETS AND DEPRECIATION:

                 Fixed assets consist of the following:
<TABLE>
<CAPTION>

                                                                                  November 30,     November 30,
                                                                              1998             1997

<S>                                                                              <C>              <C>
                 Buildings and improvements                                      $     784,599    $     820,160
                 Revenue producing vehicles                                         26,954,977       27,612,291
                 Furniture, fixtures, plant and equipment                              576,270        4,670,067
                                                                                  ------------      -----------
                                                                                    28,315,846       33,102,518
                 Less:        accumulated depreciation (including
                 $6,139,923 and $4,263,115 of accumulated
                 depreciation on revenue producing vehicles,
                 for 1998 and 1997 respectively)                                     6,716,011        5,220,168
                                                                                 -------------    -------------
                                                                                   $21,599,835      $27,882,350
                                                                                   ===========      ===========

</TABLE>
                 Depreciation  expense for the years ended November 30, 1998 and
1997 aggregated $4,735,456 and $4,681,932, respectively.

     On December 11,  1998,  PAG sold a  substantial  portion of its assets (see
Note 3) at a loss of $3,087,343.  The fixed assets and  depreciation  after this
transaction were:-
<TABLE>
<CAPTION>

<S>                                                                                <C>
                 Buildings and improvements                                        $   784,599
                 Revenue producing vehicles                                          4,050,639
                 Furniture, fixtures, plant and equipment                              576,270
                                                                                   -----------
                                                                                     5,411,508
                 Less:        accumulated depreciation (including
                 $612,840 of accumulated depreciation on
                 revenue producing vehicles)                                         1,198,178
                                                                                    $4,213,330
</TABLE>


NOTE 7 - ACCRUED LIABILITIES AND EXPENSES:

                 Accrued liabilities and expenses consist of the following:
<TABLE>
<CAPTION>

                                                                                  November 30,     November 30,
                                                                              1998             1997

<S>                                                                                 <C>                <C>
                 Taxes other than income taxes                                      $1,350,195         $438,289
                 Miscellaneous accrued expenses                                        388,109          427,688
                                                                                  ------------        ---------
                                                                                    $1,738,304         $865,977

     On December 11,  1998,  PAG sold a  substantial  portion of its assets (See
Note 3) and as a result,  incurred  sales  taxes.  The accrued  liabilities  and
expenses after this transaction were:-

                 Taxes other than income taxes                                      $3,360,323
                 Miscellaneous accrued expenses                                        845,982
                                                                                    $4,206,305

</TABLE>

                                     F - 16


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 8 - BANK LOANS/LINE OF CREDIT:

     As of November 30, 1998 PAG was in negotiation  with its bankers  regarding
the settlement of outstanding lines of credit in the amount of $6,264,245.  As a
result of these negotiations, the line of credit was restructured as follows:-
<TABLE>
<CAPTION>

                 Payable on completion of sale of assets on
<S>                       <C> <C>                       <C>                         <C>
                 December 11, 1998 as described in Note 3                           $1,815,000

                 Payable on July 31, 1999                                            1,485,000
                                                                                     ---------
                                                                                     3,300,000

                 To be forgiven if July 31, 1999 installment
                 is paid on time                                                     2,964,245
                                                                                    $6,264,245
</TABLE>

     At November 30, 1998, bank loans consisted of $685,428 payable at a rate of
3% in excess of the  bank's  base rate.  This loan is  secured  by the  freehold
property owned by Pride Management  Services and its subsidiaries and matures in
2017.

     The scheduled  principal payments of this bank debt as of November 30, 1998
are as follows:

                 For the Year Ended November 30,

                       1999                               $  77,043
                       2000                                  77,043
                       2001                                  77,043
                       2002                                  77,043
                       2003                                  77,043
                       thereafter                           300,213
                                                          ---------
                                                           $685,428


NOTE 9 - HIRE PURCHASE CONTRACTS/EQUIPMENT FINANCING:

     The Company has funding lines with several  financing  institutions  in the
United  Kingdom  in the  aggregate  amount of  approximately  $15,500,000  as of
November 30, 1998. These funding lines are utilized to acquire revenue producing
vehicles,  which vehicles  collateralize  the  outstanding  obligations.  Assets
(revenue  producing   vehicles)  obtained  under  hire  purchase  contracts  are
capitalized  as fixed  assets and  depreciated  over  their  useful  lives.  The
obligations  under such  agreements,  which mature at various  dates within five
years from  inception,  are  reflected  separately  on the balance  sheet net of
finance  charges  which are  charged  to the  periods to which  they  apply.  At
November 30, 1998, obligations under hire purchase contracts were $15,231,850.



                                     F - 17


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 9 - HIRE PURCHASE CONTRACTS/EQUIPMENT FINANCING (Continued):

     As a result of the sale of assets on December  11,  1998,  as  described in
Note 5,  $13,127,303  of the hire  purchase  contracts  was  repaid  at an early
settlement  penalty of $1,409,697.  The balance of hire purchase contracts after
this settlement was $2,104,547.


NOTE 10 - MINORITY INTERESTS:

     In April 1996, PAG successfully completed an initial public offering of its
common stock,  as a result of which the Company's  investment in PAG was reduced
to 56.45%.

     In November 1996, PAG completed a private  placement of 17 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 the aggregate price of $100,000. The effect of
this placement reduced the Company's investment in PAG to 53.33%.

     In August 1998,  the Company sold 70,000 shares of PAG common stock for net
proceeds of $235,870, realizing a loss of $57,236.

     As a result of this transaction,  the Company now holds 1,425,000 shares of
PAG common stock which represents a 50.49%  investment.  The minority  interests
liabilities  represents the minority  shareholders portion of the equity in this
subsidiary.


NOTE 11 - OTHER LIABILITIES:

     At November 30, 1998 and 1997 other  liabilities  consisted of $284,452 and
$109,978,  respectively due to other creditors,  at interest rates approximating
the current market rates and repayable on a demand basis.


                                     F - 18


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 12 - ACQUISITION DEBT PAYABLE:

     The acquisition debt payable (see Note 1) consisted of the following:
<TABLE>
<CAPTION>

                                                                                  November 30,     November 30,
                                                                              1998             1997

                 Unsecured notes payable on demand after
                 May 31, 1998; interest payable quarterly at
<S>              <C>                                                          <C>                   <C>
                 2% above the base rate                                       $         -           $   837,500

                 Unsecured notes payable on demand after
                 May 31, 1998; interest payable at 10% per
                 annum (see Note 12)                                                 1,615,000        1,615,000

                 Unsecured notes payable on demand after
                 October 31, 1999; interest payable quarterly
                 at 8% per annum                                                        -             1,675,000

                 Other short-term notes payable                                         71,000          71,000
                                                                                 -------------     -----------
                                                                                    $1,686,000       $4,198,500
                                                                                    ==========       ==========
</TABLE>

     PAG is in default with the repayment of the unsecured  notes due on May 31,
1998. One noteholder has sued the company to recover $95,000.


NOTE 13 - COMMON STOCK/RECAPITALIZATION:

     On  September  20,  1994,  the  Company's  board of  directors  approved  a
one-for-ten  reverse stock split of the Company's issued and outstanding  common
stock to be effective on September 28, 1994.

     In May 1996,  the Company  issued 90,000 shares of its common stock in lieu
of professional fees owed in the amount of $6,000.


NOTE 14 - STOCK OPTION PLANS:

     During 1994,  the Company  adopted a Stock Option Plan ("the Plan") whereby
options to purchase an aggregate of not more than 1,000,000  shares,  as amended
of, of common stock may be granted from time to time to key employees, officers,
directors,   advisors  and  independent  consultants  to  the  Company  and  its
subsidiaries.



                                     F - 19


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 14 - STOCK OPTION PLANS (Continued):

     The Company has elected to follow  Accounting  Principles  Board Opinion No
25,   "Accounting   for  Stock  Issued  to   Employees   (APB  25)  and  related
interpretations  in  accounting  for its  employee  stock  options  because,  as
discussed below,  the alternative fair value accounting  provided for under FASB
Statement  No 123  "Accounting  for  Stock-Based  Compensation"  requires use of
option  valuation  models that were not  developed  for use in valuing  employee
stock  options.  Under APB 25, if the exercise  price of the Company's  employee
stock  options  equal the market  price of the  underlying  stock on the date of
grant, no compensation expense is recognized.

     Pro forma  information  regarding  net  income  and  earnings  per share is
required  by  Statement  123,  and has been  determined  as if the  Company  had
accounted  for its employee  stock  options  under the fair value method of that
Statement.  The fair value for these  options was estimated at the date of grant
using a Black-Scholes  option pricing model with the following  weighted-average
assumptions for 1997 and 1996 respectively, risk free interest rates of 6.1% and
6.8% and dividend yields of 2.6% and 1.8%.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating the fair value of traded  options which have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.

     Because  the  Company's   employee   stock  options  have   characteristics
significantly  different from those of traded options and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is amortized to expense over the options vesting  period.  The Company's
pro forma information is as follows:-
<TABLE>
<CAPTION>

                                                                              1998             1997
                                                                       -----------------------------------
                 Net loss:
<S>                                                                                <C>             <C>
                       As reported                                                 $(2,464,724)    $   (328,741)
                       Pro forma                                                    (2,464,724)        (328,741)

                 Basic loss per share:
                       As reported                                                   (1.24)             (.16)
                       Pro forma                                                     (1.24)             (.16)
</TABLE>



                                     F - 20


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 14 - STOCK OPTION PLANS (Continued):

     A summary of stock option activity,  and related  information for the years
ended November 30, is as follows:-
<TABLE>
<CAPTION>

                                                                                                  Weighted
                                                                                                   Average
                                                                                                  Exercise
                                                                                  Options           Price
                                                                                  -------         --------

<S>                                       <C>                                     <C>                <C>
                 Outstanding at November, 1996                                    500,000            .48

                 Weighted average fair value of options
                       granted during the year                                                       -

                       Granted                                                    320,000            .38
                       Exercised                                                  -                  -
                       Canceled                                                   -                  -
                                                                                   ------            ---
                 Outstanding at November 30, 1997 and 1998                        820,000            .38
                                                                                  =======            ====

                 Weighted average fair value of options
                       granted during the year                                                       -

                 Options exercisable:
                       November 30, 1997 and 1998                                 475,000
</TABLE>


     Exercise prices for options outstanding as of November 30, 1998 ranged from
$.38 to $1.65. The weighted-average  remaining contractual life of these options
is seven years.


NOTE 15 - INCOME TAXES:

     The Company has available  operating losses carry forwards for tax purposes
aggregating  approximately  $4,000,000 as of November 30, 1998, which may result
in a deferred tax asset.  The Company has recognized this asset but has provided
a valuation  allowance for the full amount since there is no assurance that such
losses will be utilized in the near future.



                                     F - 21


<PAGE>
                           PRIDE, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           NOVEMBER 30, 1998 AND 1997


NOTE 15 - INCOME TAXES (Continued):

     The  components of the deferred tax asset,  pursuant to SFAS No. 109, as of
November 30, 1998 and 1997, respectively, are as follows:
<TABLE>
<CAPTION>


                                                                                  November 30,     November 30,
                                                                                   1998             1997

<S>                                                                               <C>               <C>
                 Operating loss carry forward                                     $  1,360,000      $    52,000
                 Valuation allowance                                                (1,360,000)         (52,000)
                                                                           $         -         $       -
                                                                           =================== =================
</TABLE>


NOTE 16 - ECONOMIC DEPENDENCY:

     For the years  ended  November  30,  1998 and  1997,  the  Company  had two
unaffiliated  customers,  which accounted for an aggregate of approximately  15%
(1997 17%) and 6% (1997 7%) respectively, of the Company's total revenues.

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


NOTE 17 - PENSION PLAN:

     PMS and its'  subsidiaries  have a fully insured defined  contribution plan
for  all  of its  eligible  employees.  Contributions  to the  plan,  which  are
discretionary,  for the years  ended  November  30,  1998 and 1997  amounted  to
$80,384 and $65,726, respectively.


NOTE 18 - COMMITMENTS:

                 Employment Agreements:

     In August 1995, the Company  entered into an employment  agreement with its
President/Chairman of the Board of Directors. This three-year agreement provided
for an  annual  salary  of  $160,000  with  annual  escalations  of 10% and also
contains  certain  non-compete  restrictions.  This  employee  was also  granted
100,000  stock  options  (see Note 13).  This  agreement  was not  renewed  upon
expiration and the employee is currently earning an annual salary of $82,500.

     In September 1995, the Company entered into an employment agreement with an
officer/director for a period of twenty four months commencing December 1, 1995.
This  agreement  is  automatically  extendible  for a further  twenty four month
period and  provides for an annual  salary of $55,000,  subject to review by the
Board of  Directors.  As at November 30,  1998,  the annual  salary  amounted to
$76,000.



                                     F - 22