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, 1996

                                       OR

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

             For the transition period from __________ to __________

                         Commission File Number 0-24550


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

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

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

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

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

                                      NONE

                 Securities registered pursuant to Section 12(g)
                                  of the Act:
                          Common Stock, $.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 [ ].

The aggregate  market value of the voting stock on January 31, 1997  (consisting
of  Common  Stock,  $.002  par  value  per  share)  held by  non-affiliates  was
approximately $409,387.86,  based upon the average bid and asked prices for such
Common Stock on said date ($.63),  as reported by a market  maker.  The issuer's
and its  subsidiaries had on a consolidated  basis,  revenues of $12,982,098 for
its fiscal year ended  November  30,  1996.  On February  21,  1997,  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 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, the Company effected a 1 for 200
reverse split of its issued and  outstanding  shares of Common Stock. In January
1994,  the Company  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 the Company and the Company changed its name
to Pride, Inc.

         The Company also owns 100% of the capital stock of Watford  Investments
(Pty) Limited ("WI"), a South African  company,  which was formed in March 1995.
WI was formed for the purpose of obtaining a 24% interest in Masonic Motors,  an
automobile  dealership in South Africa,  which WI subsequently sold in September
1995. WI is an import and export company,  which had no revenues from operations
in fiscal 1995.

         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.

         Pursuant to the terms and  conditions  of the  Reorganization  in March
1995,  between the  Company,  PMS and PAG,  PAG issued  1,500,000  shares of its
common  stock to the Company in exchange  for all of the issued and  outstanding
shares of PMS. In connection with the  Reorganization  and formation of PAG, PMS
became a wholly owned  subsidiary of PAG which is  approximately  72.8% owned by
the Company.  PMS is a holding  company which has six wholly owned  subsidiaries
which engage in PAG'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 operate as one unit, with
the same management and facilities.  Unless the context otherwise requires,  all
references  to the  "Company"  are to its  subsidiary  PAG,  PAG's  wholly owned
subsidiary, PMS and PMS's six wholly owned subsidiaries. See "--Subsidiaries."




<PAGE>



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  950,000  shares of its common stock to the public at a
price of $5.00 per share and 2,000,000 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  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 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 are currently traded on the Nasdaq SmallCap Stock Exchange and
the Boston Stock Exchange, Inc.

Acquisition of AC Car Group Limited

         In November  1996,  PAG,  through its  subsidiary AC Car Group Limited,
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.

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.

         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, Autokraft and AC Cars manufacture and sell two
automobiles, 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 ($115,782).

         In 1986,  the AC Ace  prototype was first  displayed at the  Birmingham
Motor show.  The AC Ace was shown at the London Motor Show in the same year.  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)66,000 ($110,748). As of February 19, 1997, AC has produced approximately
fifty  pre-production  AC Aces.  The AC Ace should go into its final  production
stage in August 1997.

                                                              2

<PAGE>




         Also 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,  PAG  negotiated a
licensing  agreement  with Ford Motor  Company  whereby PAG has procured a three
year license,  commencing  December 7, 1996, to continue to use the name "Cobra"
on its AC Cobra model.

Administrative Receivership

         AC Cars has  incurred  losses in recent years as a result of design and
development costs incurred in bringing the AC Ace into production. Although most
of the  development  work is now complete and  approximately  fifty AC Aces have
been  produced  to date as  pre-production  vehicles,  the  expenses AC Cars and
Autokraft  incurred  in  connection  with  the  development  of the  Ace  forced
Autokraft and AC Cars to seek  additional  capital  investments  so as to enable
them to both meet  current  production  needs  and  increase  future  production
levels.  Once  it  became  clear  to  Autokraft  and AC  Cars'  management  that
additional funds were unlikely to be forthcoming in time to allow the businesses
to meet their financial obligations, coupled with their bankers indications that
they no longer had  confidence in the current  ownership,  the Director's of the
businesses   resolved  to  request  their  bankers  to  appoint   Administrative
Receivers. Administrative receivers were appointed on March 7, 1996.

Development Projects and Enhancements

         PAG,  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 has entered
into a  licensing  arrangement  with  the Ford  Motor  Company  whereby  PAG has
procured a three year license to use the name "Cobra".

         Whereas  PAG is pleased  that it has been able to  procure a  licensing
arrangement  to  continue  to use  the  name  "Cobra",  PAG  anticipates  that a
significantly larger portion of its future marketing efforts will concentrate on
the venerable history and prestige associated with the name "AC", which name PAG
acquired outright as part of the Asset Acquisition.

         PAG believes  that the principal  markets for sales of its  automobiles
are the United States, Australia,  Thailand, Germany and the United Kingdom. PAG
is in the process of negotiating distribution

                                                              3

<PAGE>



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.  Although the Thailand distribution agreement became void when AC
Cars and  Autokraft  were placed in  receivership,  management  of PAG  received
verbal   confirmation  that  the  Thailand  agreement  will  be  continued  upon
consummation of the Asset Acquisitions.

         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. As discussed above,
PAG has entered into a new license agreement with Ford Motor Company whereby PAG
has procured a three year license to use the name "Cobra".  Former management of
Autokraft  and AC Cars  has  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.

Insurance

         PAG  and AC  are  in  the  process  of  purchasing  products  liability
insurance.  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  PAG or AC are  required  to pay  uninsured
claims, it would adversely affect the businesses of PAG and AC and could cause a
discontinuation of operations.  PAG and AC do not carry business interruption or
key man insurance. See "Risk Factors."

Legal Proceedings

         AC is not a party to any material litigation. Autokraft and AC Cars are
involved in legal proceedings, all of which are related to their being placed in
administrative receivership.

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 has agreed to lease the premises currently occupied by AC for a period
of  one  year  commencing  December  1,  1996.  PAG  lease  costs  approximately
(pound)32,000 ($53,696) per month. AC has an option to purchase the premises for
the purchase price of (pound)5,200,000 ($8,725,600) during the nine month period
commencing December 1, 1996 and ending August 1, 1997.


                                                              4

<PAGE>



Employees

         Autokraft  and AC Cars  together  employed  a total of 83 persons as of
March 7, 1996,  the date the two  companies  were  placed in  receivership.  PAG
retained  approximately  31 of  such  employees  upon  completion  of the  Asset
Acquisition and has hired four additional employees to oversee the manufacturing
and marketing of the automobiles.

Business of Pride Management Services, Plc.

         The  Company  engages 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. the Company's business strategy is
to (i) provide  personal  and  attentive  service to its  clientele,  (ii) lease
primarily  to  high-quality  credit  applicants  in order to continue to build a
lease portfolio with low  delinquency  and credit loss rates,  (iii) finance its
lease portfolio with competitive  credit terms and (iv) manage its residual risk
relating to PAG's resale of automobiles  after the expiration of the lease term.
The leasing, financing and servicing of the vehicles is described as a "contract
hire."

         The Company purchases each automobile pursuant to the specifications of
its clients,  finances the purchase and pays for all the maintenance and repairs
on the vehicle  during the term of lease.  Typically,  the Company  pays off the
purchase price of the vehicles during the term of the lease and then resells the
automobile at the end of the lease term.

Acquisitions

         The Company has  expanded  its  operations  in the past  several  years
through  acquisition.  In May 1990, the Company  formed Baker Vehicle  Contracts
Limited ("Baker") to acquire certain assets, including the right to the name and
contracts  of  Baker  Hire  Limited,  an  English  company.  At the  time of its
acquisition, Baker was a division of W.H. Baker Limited, which company had filed
for bankruptcy protection. Baker's vehicle leasing is primarily in Wales and the
southwest  region of England.  In December  1990,  PMS was contracted to run the
business  of  County  Contract  Hire  Limited  ("County"),  which  at that  time
comprised  approximately  3,500 leased  vehicles.  In February 1992, the Company
purchased County from Berisford  International  Plc., an English public company,
pursuant  to a  stock  purchase  agreement,  whereby  PMS  acquired  all  of the
outstanding  shares  of  County  and  changed  County's  name to  Pride  Vehicle
Contracts (UK) Limited.  In October 1994, the Company acquired certain assets of
Master Vehicle Contracts Limited ("Master"), an English company, pursuant to the
terms of an asset purchase  agreement.  The assets purchased  included vehicles,
vehicle lease agreements and customer lists. At the time of the sale, Master was
in  receivership,  whereby  the  sale  was  entered  into by PMS  and the  court
appointed receivers.  In connection with this purchase, the Company acquired the
rights to use the name Master Vehicle Contracts Limited.



                                                              5

<PAGE>



Industry Overview

         Companies have a variety of financing alternatives available to them in
acquiring the use of a new  automobile,  either through the purchase or lease of
such  vehicle.  In financing  the  purchase of a vehicle  there are various loan
alternatives  including,  fully amortizing,  balloon payment, no money down, low
down payment and business equity loans. In terms of leasing vehicles,  there are
various options including,  payment schedules,  term, maintenance and repurchase
rights. The primary benefit of leasing over purchasing is that leasing typically
provides a consumer with the  opportunity to acquire the use of a new automobile
at a lower monthly payment than financing the purchase of such vehicle,  usually
without a  significant  initial  cash  outlay,  and  enables  the  return of the
automobile without any further liability at the end of the lease term. Companies
which provide  employees with  automobile  transportation  typically  lease such
vehicles and expense the costs.

         The increase in new vehicle  prices in relation to annual median family
income  has been a  contributing  factor in the growth in the  leasing  and used
automobile markets. This has provided the Company with a further opportunity for
revenue growth through the resale of its vehicles after the term of the lease or
in the event there are defaults of the leases.

Business Objectives

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



                                                              6

<PAGE>



Subsidiaries

         The following table lists all the wholly owned subsidiaries of PMS, the
date of their formation and business operations.  These companies operate as one
unit in conducting the business affairs of the Company.
<TABLE>
<CAPTION>

                                             Date of
         Name                                Formation                 Business Operations

         <S>                                <C>                        <C>    <C>    <C>    <C>    <C>
         Pride Vehicle Contracts 
          Limited                           12/23/86                   Conducts all administrative functions for the Company,
                                                                       including paying salaries and all operational expenses of
                                                                       the Company.

         Baker Vehicle  Contracts  Limited  02/22/89                   Vehicle leasing,  primarily the business operations of Baker
                                                                       Hire Contracts Limited, acquired in May 1990, which
                                                                       operations are primarily in Wales and the south west region 
                                                                       of England.

         Pride Vehicle Contracts            09/28/88                   Vehicle leasing, acquired County Contract Hire Limited
          (UK) Limited                                                 Hire Limited and Master Vehicle Contracts Limited in
                                                                       February 1992 and March 1994, respectively.

         Pride  Leasing  Limited            02/22/89                   Owns property and a building in Croydon,
                                                                       England, which is leased to an unaffiliated company.

         Pride Vehicle Management           02/14/90                   Operates the Company's fleet management services.
          Limited

         Pride Vehicle Deliveries           06/14/90                   Provides vehicle distribution and collection services for
          Limited                                                      all the Company's leasing operations.

</TABLE>

Leasing, Maintenance and Resale

           The  Company   purchases  each  vehicle   pursuant  to  its  client's
specifications;  finances its purchase and pays for all the  maintenance  on the
vehicle during the term of the lease.  The Company usually finances the purchase
of each  vehicle to  correspond  with the term of the lease,  such that upon the
completion of the lease term the  automobiles are fully paid. As of February 25,
1997, the Company had approximately 1,420 vehicles under lease.

         The term of the leases average generally between 24 and 48 months, with
the average lease being 36 months.  In addition to setting forth the lease term,
the amount of the rental payments and the mileage allowance, each lease requires
the lessee to pay all fees, taxes,  fines and other costs relating to the use of
the  vehicle.  Generally,  the lessee  pays the first and last two months  lease
payment  in advance  of the lease  term.  The  lessee is  required  to  maintain
liability and casualty insurance on each vehicle at specified limits and to name
the  Company as an  additional  insured and loss  payee.  The Company  will only
approve policies which have a maximum deductible of $500.

         The Company's  sales policy  emphasizes  leasing to  financially  sound
clients and requires certain financial  disclosures prior to executing any lease
agreement. Customer accounts are targeted from profitable, growing, medium-sized
corporate companies. For the years ended November 30, 1995 and

                                                              7

<PAGE>



1996,  the Company  had two  unaffiliated  customers,  Westbury  Homes Plc.  and
Campbell  Distillers  Limited,  which  companies  accounted for in the aggregate
approximately 18% and 17%,  respectively,  of the Company's total revenues.  For
the three month period ended  February 29, 1995 and the two month period January
31, 1996, revenues from these two unaffiliated customers aggregated 18% and 12%,
respectively,  of total  revenues.  The  Company  also  leases  vehicles  to the
following local government agencies;  Swansea Council in Wales, Brent Council in
London and Mid Glarmorgan Council in Wales.

         Each lease applicant must provide  information  regarding,  among other
things, corporate history, length of time in business, ability to pay based both
on income level and certain debt to income  ratios  developed by the Company and
credit history,  including comparable borrowing experience.  Review of financial
statements,  audited where obtainable allows for the independent verification of
the  Company's  financial  position and past history.  The foregoing  procedures
provide the general basis for the Company's credit  decisions,  but the ultimate
determination   is  in  the  discretion  of  the  Company's   credit   analysts.
Accordingly, certain of the leases entered into by the Company may not meet each
of the Company's credit guidelines.

         The  Company  has  servicing  agreements  with  over  1,400  automotive
dealerships  and independent  service centers in its areas of operations.  Since
all of the leased vehicles are new, there are warranties  typically ranging from
12 to 36 months or 20,000 to 60,000  miles,  which  ever comes  first,  with the
average being 24 months or 40,000 miles.  Also each lease has milage  limitation
and  additional  fees for  overages.  Therefore,  the  Company  does  not  incur
significant  expenses for  repairs.  Maintenance  is regularly  performed on all
vehicles,  pursuant to negotiated pricing schedules.  No work is permitted to be
performed on any vehicle,  unless  performed by one of the Company's  contracted
service centers with the prior consent of the Company.

         The monthly  lease  payment  which the  Company  charges its clients 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  anticipated  future  economic  variables.  The
client is responsible for maintaining its own insurance, of which the Company is
the beneficiary, in the event the vehicle is damaged.

         The Company  typically  attempts to match the  financing  term with the
lease  term,  whereby  at  the  end of the  lease  term  the  Company  owns  the
automobile.  The Company does not currently  perform  repairs or refurbishing on
the returned  vehicles,  rather,  the Company  attempts to resell such  vehicles
immediately  upon their  return in the same  condition  as they are returned in.
This enables the Company to increase its cash flow,  though the Company believes
it could obtain  higher  prices for the used vehicles in the event minor repairs
were  performed  prior to resale.  The  Company  manages  its  residual  risk by
focusing on the leasing of vehicle  models  which it believes  will have a broad
appeal  in the  used  automobile  market  at the end of the  lease  term  and by
utilizing multiple remarketing  channels including,  but not limited to used car
wholesalers and used car retailers.  The Company upon pricing the lease of a new
vehicle reviews the listed  wholesale price as listed in several pricing guides,
predominantly  the Current Auction Prices ("CAP") book,  which gives the current
wholesale price of the model being leased. The Company currently attempts to get
at least 85% of the CAP listed wholesale price upon the resale

                                                              8

<PAGE>



of the vehicle.  The Company  believes that with increased  working  capital and
cash flow from operations,  the Company can make minor repairs and refurbishings
on the automobiles  performed and seek higher prices on resales of up to 110% of
the  wholesale  price on popular  models.  The Company  sells its used  vehicles
through  used  automobile   wholesalers  and  retailers,   automobile  auctions,
unaffiliated dealers and pursuant to sales to related parties of the lessees. In
the event the market for used automobiles  decreases the models or conditions of
the vehicles returned to the Company decrease their resale value or vehicles are
returned pursuant to defaults in the lease agreements, such events may adversely
affect the Company's cash flow,  profitability and business operations.  See "--
Financing and Collections" and "-- Competition."

Fleet Management Services

         In 1994,  the  Company  opened  its fleet  management  division,  which
division manages the automobiles for certain of its corporate clients who choose
to  own  the  vehicle(s)  directly.  Customarily,  these  clients  purchase  the
automobiles through the Company in order to take advantage of the Company's bulk
purchase  discounts.  The  Company  maintains  these  vehicles on behalf of such
clients  pursuant to a monthly  management  fee,  usually $15 per automobile and
disposes of the vehicles thereafter on behalf of the client. The client pays all
costs  associated with the purchase,  maintenance and resale of the automobiles.
The Company  estimates that for the year ended November 30, 1996 less than 5% of
the Company's revenues were from fleet management services.

Suppliers

         The  Company  purchases  all of the  automobiles  that it leases to its
clients from  automotive  dealerships,  usually  several at a time. For the year
ended  November 30, 1996 and two months ended January 31, 1997,  General  Motors
and  Renault  were  the   manufacturers  of   approximately   16.2%  and  16.2%,
respectively and 11.7% and 11.7%, respectively, of the vehicles which it leased.
The Company does not depend on any individual dealership for the purchase of any
vehicle  brand.  The Company has no written  agreements  with any  dealership it
purchases   vehicles   from,   though  it  does  receive   yearly  rebates  from
manufacturers  based on quantity of automobiles  purchased.  Management believes
that  the  price  it pays  and the  terms it  receives  for the  automobiles  it
purchases  are  more  favorable  than  it  would  receive  if it was  purchasing
automobiles on an individual  basis.  The Company believes that it will continue
to be able to  purchase  automobiles  at  competitive  prices and terms into the
future.

         A portion of the Company's  profit margin is based on rebates  received
directly  from the  automobile  manufacturers  on a yearly  basis.  The  Company
receives  a  rebate  on most  vehicles  purchased  based  upon the  quantity  of
automobiles  purchased from said  manufacturer each year. This rebate is usually
between $100 and $400 per vehicle.  However,  the Company has no assurances that
it will be able to  acquire  automobiles  at  favorable  prices in the future or
receive  such  rebates  in the  future.  No  assurance  can  be  given  that  an
uninterrupted  and  adequate  supply of  automobiles  will be  available  to the
Company  in  the  future,  although,  the  Company  believes  that  there  are a
sufficient number of automobile dealerships, so that in the event any individual
or group of dealerships can no longer service the Company's  needs,  the Company
will be able to find other  dealerships at competitive  prices. In the event the
Company  cannot  obtain  the   automobiles  of  any  specific   manufacturer  or
automobiles in general or

                                                              9

<PAGE>



is not able to  purchase  such  automobiles  on  similar  terms as is  presently
available to it, the Company may be materially adversely affected.

Financing and Collections

         The Company  provides new  automobiles to its clients  pursuant to each
individual  client's  specifications,  with  personal and  attentive  service to
include all of its clients  needs.  The  Company's  sales  representatives  have
extensive  experience in the  automobile  finance and leasing  industry and work
closely with the clients to meet their driving and financial needs.

         Since  November  1992,  when  entering into new lease  agreements,  the
Company purchases the automobile,  which usually requires a 10% down payment and
pays down the note on the purchase  including  principal and interest during the
term of the lease.  Prior to  November  1992,  the  Company  would  finance  the
purchase of automobiles  through  promissory notes which required the payment of
interest  during the term of the loan and the  repayment  of the  principal in a
balloon payment at loan maturity which is the same as the end of the lease term.
This financing strategy enabled the Company to increase its cash flow during the
term of the lease,  but the higher  financing fees and interest  expense reduced
the Company's profit on the resale of the vehicles.

         The Company used $1,000,000 of the proceeds from its Public Offering to
purchase vehicles pursuant to customer orders. The automobiles purchased will be
subsequently  utilized  as a group as  security  for bank loans  obtained by the
Company.  The principal  amount of such loans will  typically be equal to 90% of
the  value  of the  vehicles  used as  security.  For  example,  if the  Company
purchases separately 10 automobiles during a month, pursuant to customer orders,
at an aggregate  purchase  price of $200,000,  the Company would seek a loan for
$180,000,  with the 10 vehicles being used as security for the loan. The Company
believes  that by  obtaining  loans  on  groups  of  vehicles  instead  of on an
individual  basis it will be able to obtain better  financing  terms and reduced
financing costs,  based on (i) the security for each loan is a group of vehicles
instead on one individual  vehicle and (ii) there being less  administrative and
closing costs incurred by the Company  because there are fewer loans to process.
This  process will be cyclical  for the  Company,  whereby,  the proceeds of the
loans will be used to purchase additional vehicles, pursuant to customer orders,
which vehicles will in turn be financed in groups.

         The  Company  has asset  funding  lines to  acquire  revenue  producing
vehicles  with  several  institutions  in  England  in the  aggregate  amount of
$18,200,000  of which the Company has borrowed  approximately  $11,000,000 as of
January  31,  1997.  The  increase  in  the  Company's  asset  funding  line  is
attributable  to the equity raised in the Company's  initial public  offering in
April 1996. See "Management's Discussion and Analysis of Financial Condition and
Results of  Operations  -  Liquidity  and  Capital  Resources."  Under the lease
agreements,  the lessees generally have no right to terminate their leases prior
to the end of their scheduled term. In the event that any lease terminates prior
to the end of its scheduled term (whether by way of default,  the destruction or
theft of the  vehicle),  the lessee is liable to the  Company  for the amount by
which the  lessee's  default  termination  liability  under the lease  agreement
exceeds the realized  value of such vehicle,  which may be obtained  through the
proceeds of the sale of the vehicle (including a sale following repossession) or
the proceeds of any applicable insurance on the vehicle.  Under the terms of the
lease, the term "default termination liability" includes;

                                                             10

<PAGE>



(i) all  payments  due under the lease  agreement  up to the  termination  date,
inclusive of interest,  (ii) future rental  payments due from  termination  date
until the contracted lease  termination date, less maintenance and a 5% discount
and (iii) the difference between the amount received pursuant to the sale of the
vehicle and the estimated  residual  value,  if such sale price is less than the
estimated residual value. Under its agreements with the lessee, the Company pays
the sale or  insurance  proceeds  to its  lender  up to the  amount  of the then
remaining balance of the note payable related to the vehicle. Any shortfall is a
credit  loss and is borne by the  lessee,  and any  excess  is  retained  by the
Company.

         The  Company  attempts  to enhance  the  performance  of its leases and
thereby  minimize its financial  risks by  maintaining  timely,  consistent  and
direct   customer   contact.   When  a  default  does  occur,   collections  and
repossessions are handled by the Company's collection  department.  Upon a lease
payment default and after the passage of three days, the Company mails a written
notice to the defaulting  customer and attempts to contact the customer directly
by phone. Once contact is established,  the collection department will work with
the customer  until the default is cured.  If contact is not made or the default
is not satisfactorily  cured, the Company will proceed to repossess the vehicle.
The Company will repossess the vehicle upon a determination that there is a risk
of not  recovering  the  vehicle.  In the event  repossession  is  required,  it
typically will take place within 20 days after the initial default.  Pursuant to
English  law, a company  can  repossess  a vehicle  for non payment in the event
payment is not received within two days of the due date, however,  the Company's
lease agreements provide for a seven day grace period. No notice is required and
no demand for payment need be made prior to  repossession.  The Company,  as the
vehicles owner,  has all key numbers with respect to the vehicles it leases.  In
the event the  Company  deems  repossession  necessary  it sends an  employee to
physically  drive the vehicle  away from the lessee.  Repossessed  vehicles  are
offered by the Company at public sale,  after the giving of notice,  and sold by
the Company in a commercially  reasonable manner. There were no repossessions of
vehicles in fiscal 1996 and there have been none to date in 1997.  There were no
repossessions  in fiscal 1995.  Only one vehicle was  repossessed  during fiscal
1994.

Competition

         The  Company's   business  is  highly   competitive,   with  relatively
insignificant  barriers to entry and with numerous firms  competing for the same
customers. The Company is in direct competition with local (includes the city of
Hertfordshire  and the surrounding  areas),  regional  (includes  London and the
surrounding areas) and national  (includes all of the United Kingdom,  inclusive
of England,  Wales, Scotland and Northern Ireland) automotive leasing companies,
many of which  have  greater  resources  and  more  extensive  distribution  and
marketing than the Company.  The largest leasing companies in direct competition
with the Company are Cowie  Interleasing,  a division  of Cowie,  Plc.,  and Lex
Vehicle  Leasing  Limited,  each of  which  claim  to have  presently  on  lease
approximately  65,000  vehicles.  As of February 25, 1997, the Company had 1,420
vehicles  under lease.  The Company also  competes in the  automobile  financing
industry with providers of other forms of financing.  Other competitors  include
finance companies affiliated with automobile manufacturers,  a variety of local,
regional and national finance  companies,  commercial banks,  savings and loans,
and other consumer  lenders such as industrial  thrifts and credit  unions.  The
automobile  leasing business is highly  competitive and the Company competes for
business on the basis of both pricing and service. The Company believes that the
main  concern  of the lessee or buyer of a new  automobile  is the amount of the
monthly payment and of any

                                                             11

<PAGE>



down  payment.  Many of the Company's  competitors  have  significantly  greater
financial,  technical and marketing resources and market share than the Company.
Automobile finance companies affiliated with automobile manufacturers, from time
to time offer aggressive  leasing and financing programs at below market pricing
to promote the sale of certain  vehicle  models.  Many of the  national  leasing
companies have extensive advertising campaigns which develop and reinforce brand
recognition.  In  addition,  many of such  manufacturers  have  agreements  with
vehicle  leasing  entities to jointly  advertise  and market their  products and
services.

         The  used  automobile  sales  business  is  highly  competitive,   with
competition coming from individuals, independent used automobile wholesalers and
dealerships  and used  automobile  lots operated by new  automobile  dealers and
rental car companies.

Marketing and Sales

         The sales policies of the Company have  emphasized  quality of business
rather than  volume,  both in its own new  business  contracts  and its acquired
contracts.  This  controlled  and  conservative  approach  to growth  allows the
Company to write  what it  considers  to be good  quality,  profitable  contract
hires.  Customer service and satisfaction is then emphasized as a high priority,
to ensure that the group's premium pricing policies can be maintained for repeat
business.

         Customer accounts are targeted from profitable,  growing,  medium-sized
corporate companies together with public sector referrals.  The Company's credit
underwriting  policies reflect this prudent  approach,  and ensure that the high
quality of the portfolio is maintained. The Company takes a balanced,  portfolio
approach to risk  management  with a variety of company sizes to balance  credit
risk against profit margin.

         The Company executes a finance company standard hire purchase agreement
for each lease and the  finance  company  takes a  registered  charge  (security
interest)  over the underlying  agreement  between the Company and its customer.
The security of the lender is further increased by the Company's down payment on
the vehicles and the monthly  payments of principal and interest during the term
of the  lease.  The  Company  has all  required  liens  and  security  interests
appropriately filed and recorded.

         As part of its  obligations,  the Company  performs all  administrative
functions in the  acquisition,  registration  and leasing of the  automobile and
controls  and pays for all  required  servicing  of its  vehicles.  The  Company
obtains  appropriate  vehicle  registrations  and titles for all lease vehicles,
tracks compliance with insurance requirements, negotiates and handles all claims
with  insurance  companies  and  remits  all  appropriate  sales  taxes on lease
payments to the taxing authority.

Government Regulations

         The Company is subject to regulation by the United  Kingdom  Department
of Trade and Industry  (the  "Department  of Trade").  The  Department  of trade
establishes  general  rules and  regulations  with respect to the operation of a
business in the United Kingdom.  The Department of Trade has not established any
regulations  or licensing  requirements  specifically  regulating the leasing of
automobiles

                                                             12

<PAGE>



to  companies.  There  can be no  assurances  that  such will be the case in the
future or that if licensing or other form of  regulation is required in order to
engage  in the  Company's  business  that  the  Company  will be  successful  in
obtaining such licenses or in meeting the requirements of such regulations.  The
Department of Trade, in accordance with the credit  agreement act,  requires the
issuance of a license in order to lease vehicles to  individuals,  which license
the Company has obtained,  however,  the Company never has nor does it presently
intend to lease  vehicles to  individuals.  In  addition,  the Company must also
comply  with a wide  range  of other  state  and  local  rules  and  regulations
applicable to its business,  including  regulations  covering  labor  relations,
safety  standards,  affirmative  action and the  protection of the  environment.
Continued  compliance with the broad regulatory network of the United Kingdom is
essential and costly and the failure to comply with such regulations may have an
adverse effect on the Company's operations.

         In August 1995, the British  Government  passed a law allowing  leasing
companies to be reimbursed by the Government for the value added tax "VAT" which
is added to all consumer goods including  automobiles.  The VAT tax is currently
at 17.5%.  Reimbursement  of the VAT tax will allow the Company to charge  lower
lease rates.

Employees

         As of January 31,  1997,  the Company  employed 50  full-time  persons,
eight are in management  (three of which are officers),  eleven  administrative,
three  sales  representative  and  two  drivers.   None  of  the  employees  are
represented by a union, and the Company considers employee relations to be good.


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  owns a  building  in  Croydon,
England, which it purchased in 1991 at a cost of approximately  $825,000,  which
it currently leases to an unaffiliated  company. The lease term expires in 2004,
and generates gross income of  approximately  $80,000 per annum. The annual cost
of  servicing  that  building's  mortgage  and taxes is estimated at $70,000 per
annum.

         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. The Company has 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 ($53,696) per month. AC has an option to purchase the premises for
the purchase price of (pound)5,200,000 ($8,725,600) during the nine month period
commencing December 1, 1996 and ending August 1, 1997.



                                                             13

<PAGE>



ITEM 3.           LEGAL PROCEEDINGS

         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.

         AC is not a party to any material litigation. Autokraft and AC Cars are
involved in legal proceedings, all of which are related to their being placed in
administrative receivership.


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, 1996.


                                                           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.
<TABLE>
<CAPTION>

                                    Common Stock                                                   Common Stock
    Calendar Quarter                     Prices               Calendar Quarter                         Prices
         Ended                      Low       High                  Ended                      Low                 High

<S>                                <C>       <C>              <C>                              <C>                 <C>
12/1/94 to 2/28/95                  11/16   21/2              3/1/96 to 5/31/96                1/16                1 7/16
3/1/95  to 5/31/95                  1/4     11/4              6/1/96 to 8/31/96                1                   1 7/16
6/1/95  to 8/31/95                  1/4     1/4               9/1/96 to 11/30/96               5/8                 1 7/16
9/1/95  to 11/30/95                 1/4     1/4               12/1/96 to 2/21/97               1/4                 1 7/16
12/1/95 to 2/29/96                  3/32    1/8
</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

                                                             14

<PAGE>



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 February 21, 1997, 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, 1996 and 1995.

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 13) 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 consideration
given by the Company, in the form of 9,000,000 (pre-reverse split) shares of its
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  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 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 purchase 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
centers,  which specify pricing  schedules for maintenance and repair work to be
performed, all of which require the prior consent of the Company. Typically, the
term of the  loan  corresponds  with the term of the  lease,  whereby,  upon the
completion of the lease term,  the  automobiles  are fully paid and owned by the
Company. Upon the expiration of the lease, the Company remarkets the automobiles
through various  distribution  channels including,  but not limited to, used car
wholesalers  or used car  retailers.  Each  client's  monthly  lease  payment is
determined  by a computer  program  which takes into account  estimated  service
costs, new vehicle pricing, manufacturer bonuses, rebates and options, potential
residual  value at lease end, as well as other  variable  information  including
interest rates and other current and anticipated future economic variables.  The
monthly lease payments are usually sufficient to


<PAGE>



pay the financing and servicing on the vehicles  during the lease term, with the
bulk of the profits, if any, coming on the resale of the automobile.

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

On November 29, 1996, 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.  These  two  companies  were  engaged  in  the
manufacture   and  sale  of  specialty   automobiles.   The  purchase  price  of
approximately  $6,000,000 was financed by the sale of common stock and by loans.
The  acquisition  involved the purchase of plant and equipment,  the brand name,
inventories  and an aircraft and has been recorded using the purchase  method of
accounting.

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

Revenues  for the year ended  November 30, 1996 were  approximately  $12,982,000
compared to  approximately  $9,778,000  for the year ended November 30, 1995, an
increase of  $3,204,000  or 32.8%.  The primary  reason for this increase was an
increase in revenues from contract hire income and from the sales of vehicles at
lease maturity,  and an overall  increase in the contract hire fleet size. There
was also an increase in the fleet management division.

The Company's cost of sales increased both in actual dollars and as a percent of
sales,  when comparing the years ended  November 30, 1996 and 1995.  These costs
increased by approximately  $2,675,000 or 35.2%. As a percent of sales, costs of
sales for 1996 were 79.1% versus 77.7% for 1995.  Management  believes  that the
increase  was   primarily   due  to  the   continuation   of  the  more  prudent
(conservative)  approach to estimating the residual  values of vehicles  thereby
increasing  depreciation  expense and costs of sales and reducing residual value
risk.  This more  conservative  approach  reduces the residual  value of an auto
thereby increasing the amount of the auto to be depreciated.  This approach will
therefore increase depreciation expense, which costs will reduce the income from
contract  leasing.  Since the residual  value is now lower,  the income from the
ultimate sale of the vehicle is now higher.

General  and  administrative  expenses  decreased  from  $1,941,000  for 1995 to
$1,835,000  for 1996 a decrease of $106,000 or 5.5%. As a percent of sales these
expenses  represented  14% of sales  for 1996 and  19.9%  for  1995.  Management
believes  that the  decrease in overhead  costs  relate to an  aggressive  costs
reduction program instituted by management during 1996 and 1995.

Interest  expense  increased  when comparing the year ended November 30, 1996 to
1995 from  $630,000 to  $884,000,  an increase of $254,000 or 40.3%.  Management
attributes  this  increase to a higher  volume of  borrowings  on hire  purchase
contracts.   The  Company  is  continuously  negotiating  with  various  banking
institutions  to obtain credit  lines,  all of which are secured by the vehicles
purchased.



<PAGE>



Income (loss) before taxes for the years ended November 30, 1996 and 1995, prior
to amortization of goodwill for the period ($635,000 and $631,000, respectively)
aggregated $276,000 and ($389,000), respectively. This improvement was primarily
due to the  increased  revenues as  described  above and a portion of the losses
being allocated to minority shareholders.  For the year ended November 30, 1996,
the Company  reflected a net loss of ($359,492) or $.18 per share.  For the year
ended November 30, 1995, the Company  reported a net loss of ($1,019,624 or $.54
per share.

Liquidity and Capital Resources

Due to the nature of the Company's  business,  namely contract  leasing of motor
vehicles which are fixed long-term  assets,  the balance sheet has been prepared
on an unclassified  basis.  Accordingly,  there is no  classification of current
assets and current  liabilities.  At November 30, 1996 and 1995,  the  Company's
balance sheet  reflected  cash of $255,000 and $74,000,  respectively,  accounts
receivable  of  $1,936,000  and  $1,256,000,  respectively,  and total assets of
$33,535,000  and  $21,426,000,  respectively.  The  principal  reasons  for  the
increase in total assets are the  acquisition  described  above,  an increase in
contract higher vehicles available for lease and the proceeds from PAG's initial
public offering.

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 gross proceeds of $120,000 ($.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 $2,166,000.

The Company's  total assets as of November 30, 1996 and 1995 include  intangible
assets of $11,535,000 and $10,141,000,  respectively.  These  intangible  assets
consist of the  unamortized  portion of the costs  over net assets  acquired  in
acquisitions,  which are being  amortized  over  periods  ranging  from 10 to 20
years. When adjusted for these intangible assets, the net tangible book value of
the Company at November  30, 1996 and 1995 would be  approximately  ($4,649,000)
and $1,172,000, respectively.

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

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

During the year ended November 30, 1995,  the Company  generated cash flows from
operating activities aggregating approximately $2,763,000. During the year ended
November 30, 1996, the Company utilized  $310,000 of cash flows from operations.
The  differences  in  utilization  of cash in 1996 was primarily due to currency
translation adjustments.


<PAGE>


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

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

For the year ended November 30, 1996,  the Company  provided cash from financing
activities  of  approximately  $9,250,000  primarily  as a  result  of  minority
shareholders  investments  ($2,300,000)  and the financing needed to acquire new
vehicles ($11,500,000) net of the amounts utilized to pay hire purchase contract
financing ($6,100,000). For fiscal 1995, the Company utilized cash for financing
activities ($185,000) primarily due to loan repayments and the amounts needed to
reduce hire purchase  contract  financing  ($3,496,000) net of new hire purchase
contract financing.

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

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

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


ITEM 7.           FINANCIAL STATEMENTS

         See attached Financial Statements.


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 and  November 30,
1995.  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.




                                                             18

<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 are as follows:
<TABLE>
<CAPTION>

         NAME                                        AGE               POSITION

         <S>                                         <C>               <C>
         Alan Lubinsky                               38                President, Secretary
                                                                       Chairman of the Board

         Peter Dixon                                 52                Vice President, Treasurer
                                                                       and Director

         Alan Berkun                                 38                Director


         Ivan Averbuch                               41                Chief Financial Officer
</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 has been the President and a director of Pride  Automotive
Group, Inc. ("PAG") since its inception in March 1995. Mr. Lubinsky has 18 years
experience in the motor vehicle industry in positions of executive management.

     Peter Dixon has been the Vice  President,  Treasurer  and a director of the
Company since January 14, 1994. Mr. Dixon has been the Vice President, Treasurer
and a  director  of PAG  since  its  inception  in March  1995.  Mr.  Dixon  has
experience  in  corporate  finance,   investment   banking,   and  manufacturing
industries.  From  April  1990 to  present,  Mr.  Dixon has been a  director  of
Kingsland  Community  Services  Limited,  and  Kingsland  Developments  Limited,
companies  which own and lease  properties.  From February 1990 to present,  Mr.
Dixon has been a director of Snuggledown of Norway (UK) Limited,  a distribution
of camping  goods.  His executive  positions  have  included  being the managing
director  of the  securities  division  of Den Norske Bank from 1986 to 1990 and
Chairman of several  subsidiaries  at Berisford  International  Plc from 1977 to
1986 and from December 1990 to August 1992. From August 1994 to August 1995, Mr.
Dixon  was a  director  of Welpac  Plc,  a company  which was a  distributor  of
hardware.



                                                             19

<PAGE>



     Alan Berkun has been a director of the Company since January 1994.  For the
past five years, Mr Berkun has been employed by Russo  Securities as its general
counsel.  Mr. Berkun has been a director of Multimedia  Concepts  International,
Inc.  since June 12, 1995.  Mr. Berkun has also been a director of American Toys
and Play Co.  Toys since  1993.  Mr.  Berkun was  licensed  as an NASD  series 7
Registered  Representative  with Russo  Securities  from  October  1991  through
November 1991 and June 1989 through  October 1989. Mr. Berkun's Series 7 license
lapsed in December 1993,  however,  subsequently,  Mr. Berkun  received a waiver
from the NASD and renewal of his Series 7 status.  Presently,  Mr. Berkun is the
sole officer, director and stockholder of Emme Corp., d/b/a Marlowe & Company, a
registered NASD  broker/dealer.  Mr. Berkun is an attorney licensed in the State
of New York.

     Ivan  Averbuch has been the Chief  Financial  Officer of the of the Company
since December 1995.  Mr.  Averbuch has been a director and the Chief  Financial
Officer of PAG since  December  1995.  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.

         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 all  officers,  directors  or greater  than 10%
shareholders  have  stated  that they have  filed such  reports  as is  required
pursuant to Section 16(a) during the 1996 fiscal year,  except Alan Lubinsky did
not file a Form 4 with respect to the receipt of stock  options in July 1995 and
May 1996. Mr.  Lubinsky has stated that he intends on filing a Form 5 to rectify
the situation. Neither Ivan Averbuch nor Peter Dixon filed a Form 4 with respect
to the receipt of stock  options in May 1996.  Messrs.  Averbuch  and Dixon have
stated that they intent to file Form 5's

                                                             20

<PAGE>



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.

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,  1996,  1995 and 1994.  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               Options/
   Position (1)                     Year             Salary($)           Bonus($)       Compensation($)(2)         SARS
------------------------            ----             ---------           --------       ------------------         ------

Alan Lubinsky
<S>                                 <C>               <C>                <C>            <C>                        <C>
  President, Secretary              1996              $160,000           -              $30,000                    275,000(3)(4)
  and Chairman of the Board         1995              $137,750           -               30,000                    245,000(5)
                                    1994              $135,000           -               30,000                    -
</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 1996, 1995 and 1994, 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

                                                             21

<PAGE>



         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.


Stock Options


         The following table sets forth certain information concerning the grant
of stock  options  made  during  the year ended  November  30,  1996,  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> 
Alan Lubinsky                                   175,000          71.4%                    $0.48                    5/8/01

Ivan Averbuch                                    50,000          20.4%                    $0.48                    5/8/01

Peter Dixon                                      20,000          8.2%                     $0.48                    5/8/01
</TABLE>

------------------------

(1)      Represents  incentive  stock options  granted under the Company's  1994
         Stock Option Plan (the "Option Plan"). Options granted under the Option
         Plan are  intended  to qualify as  incentive  stock  options  under the
         Internal  Revenue  Code of 1986,  as  amended.  Under  the terms of the
         Option  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."



                                                             22

<PAGE>



         The following table contains  information  with respect to employees of
the Company concerning options held as of November 30, 1996
<TABLE>
<CAPTION>

               AGGREGATED OPTION/SAR EXERCISE IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES


             (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                    25,000/50,000         $3,125/0 (3)

Alan Lubinsky                             0                       0                    0/175,000             0/0 (4)

Ivan Averbuch                             0                       0                    0/50,000              0/0 (4)

Peter Dixon                               0                       0                    0/20,000              0/0 (4)

Alan Berkun                               0                       0                    5,000/0               0/0 (1)

Alan Berkun                               0                       0                    5,000/0               0/0 (2)
</TABLE>



     (1) As of February 21, 1997, the average of the prior day's closing bid and
ask  prices was  $0.63.  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 February 21, 1997, the average of the prior day's closing bid and
ask  prices was  $0.63.  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 February 21, 1997, the average of the prior day's closing bid and
ask prices was $0.63. As of February 21, 1997,  25,000 shares  underlying  these
options have vested. However, Mr. Lubinsky has not exercised this option.

     (4) None of these  options vest until May 8, 1997,  therefore,  the Company
believes the Options have no value.

Employment Agreements

         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 PAG
and the Company.  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

                                                             23

<PAGE>



of 33 1/3% per  annum  commencing  August  1996.  The  agreement  restricts  Mr.
Lubinsky from competing with PAG 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 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.

         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

                                                             24

<PAGE>



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.

         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.



                                                             25

<PAGE>



ITEM 11.          PRINCIPAL STOCKHOLDERS

         The following table sets forth certain  information at February,  1997,
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 Hertordshire
WD1 8SB England

Peter Dixon (5)                                                  20,000                        *
c/o Pride House
Watford Metro Centre
Tolpits Lane
Watford Hertordshire
WD1 8SB England

Alan Berkun (6)                                                  10,000                        *
83 Arnold Court
East Rockaway, New York

Ivan Averbuch (7)                                                50,000                        *
c/o Pride House
Watford Metro Centre
Tolpits Lane
Watford Hertordshire
WD1 8SB England

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


                                                             26

<PAGE>



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

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

All officers and
Directors as a group
 (4 persons) (1)(2)(3)(4)(5)(6)(7)                               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  20,000 shares which are issuable upon the exercise of options
granted  under the Company's  1994 Stock Option Plan.  None of the 20,000 shares
issuable upon the exercise of the options are vested.

     (6) Includes  10,000 shares which are issuable upon the exercise of options
granted  under the  Company's  1994 Stock  Option  Plan.  Of the  10,000  shares
issuable  upon  exercise of the  options,  5,000 vested on December 28, 1995 and
5,000 vested on February 14, 1996 and 5,000 vested on December 28, 1995.

     (7) 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.




                                                             27

<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

                                                             28

<PAGE>



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 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 are
currently traded on the Nasdaq SmallCap Stock Exchange and the Boston Exchange.

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

     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:

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

                  FINANCIAL STATEMENT SCHEDULES

(b)      During the 1996 fiscal year,  the Company filed no Reports on Form 8-K.
         PAG filed a report on Form 8-K on September 5, 1996 with respect to the
         Asset Acquisition.

<PAGE>
(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.
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>



                                                             30

<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 February, 1997.


                                                     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            2/26/97
ALAN LUBINSKY                      of the Board of Directors (Principal         Date
                                   Executive Officer)


/s/ Ivan Averbuch                  Chief Financial Officer                      2/26/97
IVAN AVERBUCH                                                                   Date


/s/ Peter Dixon                    Vice-President, Treasurer and                2/26/97
PETER DIXON                        Director (Principal Financial Officer)       Date

/s/ Alan Berkun                    Director                                     2/26/97
ALAN BERKUN                                                                     Date

</TABLE>


<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>


                                                                                                            Page Nos

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

Financial Statements:

    Consolidated Balance Sheets as of November 30, 1996 and 1995                                            F - 3

    Consolidated Statements of Operations for the Years Ended November 30, 1996 and 1995                    F - 4

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

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


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

                                                         F - 1



<PAGE>



                          INDEPENDENT AUDITORS' REPORT


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

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

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

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



MARBLE ARCH HOUSE
66-68 SEYMOUR STREET
LONDON W1H 5AF                                         CIVVALS
UNITED KINGDOM                FEBRUARY 14, 1997        CHARTERED ACCOUNTANTS




                                      F - 2



<PAGE>
                           PRIDE INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                              - ASSETS (Note 6a) -
<TABLE>
<CAPTION>

                                                                                                  November 30,
                                                                                                  1996            1995
                                                                                                  --------------- ----------

ASSETS:
<S>                                                                                               <C>             <C>          
    Cash and cash equivalents                                                                     $    255,283    $      73,946
    Accounts receivable (Notes 2c and 3)                                                             1,936,166        1,255,690
    Inventories (Note 2d)                                                                            1,127,452           31,137
    Property, revenue producing vehicles and equipment - net (Notes 2e, 4, 6 and 7)                 18,681,638        9,924,318
    Intangible assets - net (Note 2f)                                                               11,534,509       10,141,130
                                                                                                  ------------      -----------
TOTAL ASSETS                                                                                       $33,535,048      $21,426,221
                                                                                                  ============     ============

                                             - LIABILITIES AND SHAREHOLDERS' EQUITY -

LIABILITIES:
    Bank line of credit (Note 6a)                                                                  $ 2,964,465      $ 1,093,680
    Accounts payable                                                                                   654,920        1,328,455
    Accrued liabilities and expenses (Note 5)                                                          490,915          358,892
    Bank debt (Note 6b)                                                                              1,002,571        1,070,492
    Obligations under hire purchase contracts (Note 7)                                              11,034,951        5,578,565
    Loans payable - directors (Note 9)                                                                 -                149,938
    Other liabilities (Note 8)                                                                          33,560          532,804
    Acquisition debt payable (Note 10)                                                               5,098,470            -
                                                                                                  -------------------------
TOTAL LIABILITIES                                                                                   21,279,852       10,112,826
                                                                                                 -------------     ------------

MINORITY INTERESTS IN SUBSIDIARIES                                                                   5,369,073             -
                                                                                                ----------------------------

COMMITMENTS AND CONTINGENCIES (Notes 15, 18 and 19)

SHAREHOLDERS' EQUITY (Notes 11, 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 and
         1,905,357 shares issued and outstanding in 1996 and 1995, respectively                          3,991            3,811
    Additional paid-in capital                                                                       8,824,392       12,126,311
    Retained earnings (deficit)                                                                     (1,585,855)      (1,226,363)
    Foreign currency translation (Note 2h)                                                            (356,405)         409,636
                                                                                                 -------------    -------------

TOTAL SHAREHOLDERS' EQUITY                                                                           6,886,123       11,313,395
                                                                                                 -------------     ------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                         $33,535,048      $21,426,221
</TABLE>

                       See notes to consolidated financial
                                  statements.

                                      F - 3

<PAGE>
                           PRIDE INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>


                                                                                                 November 30,
                                                                                                 1996              1995
                                                                                                 ----------------  ----------

REVENUES (Notes 2i and 15):
<S>                                                                                              <C>               <C>         
    Contract hire income                                                                         $   6,286,677     $  4,723,539
    Sale of vehicles                                                                                 5,839,080        4,629,860
    Fleet management and other income                                                                  856,341          369,657
    Gain on sale of investment                                                                         -                 54,780
                                                                                           -------------------   --------------

TOTAL REVENUES                                                                                      12,982,098        9,777,836
                                                                                                   -----------     ------------

COSTS AND EXPENSES:
    Cost of sales                                                                                   10,272,334        7,596,580
    General and administrative expenses                                                              1,834,815        1,940,539
    Amortization of goodwill                                                                           634,813          630,718
    Interest and other                                                                                 884,223          629,623
                                                                                                 -------------    -------------

                                                                                                    13,626,185       10,797,460

LOSS BEFORE MINORITY INTERESTS AND
    PROVISION FOR INCOME TAXES                                                                        (644,087)      (1,019,624)

    Minority interests (Note 12)                                                                       284,595            -
                                                                                                 --------------------------

LOSS BEFORE PROVISION FOR INCOME TAXES                                                                (359,492)      (1,019,624)

    Provision for income taxes (Notes 2g and 16)                                                         -                -
                                                                                           --------------------------------

NET LOSS                                                                                          $   (359,492)     $(1,019,624)
                                                                                                  ============      ===========

LOSS PER COMMON AND DILUTIVE COMMON
    EQUIVALENT SHARE (Note 2j):
         Net loss before minority interest                                                           $(.32)           $(.54)
         Minority interests in net loss of subsidiary                                                  .14             -
                                                                                                   -------           ---
NET LOSS PER SHARE                                                                                   $(.18)           $(.54)
                                                                                                     =====            =====

WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON
    EQUIVALENT SHARES OUTSTANDING (Note 2j)                                                       1,995,357         1,892,440
</TABLE>

                 See notes to consolidated financial statements.

                                      F - 4



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


                                             Shares                         Additional    Retained      Foreign        Total
                                             (As Restated     Common        Paid-in       Earnings      Currency       Shareholders'
                                              - See Note 13)  Stock         Capital       (Deficit)     Translation    Equity


<S>                                          <C>              <C>           <C>           <C>           <C>             <C>       
Balance at December 1, 1994                  1,750,357        $3,501        $11,971,621   $(206,739)    $97,190         $11,865,573

Shares issued in exchange for debt 
(Notes 11 and 13)                            155,000          310           154,690       -             -               155,000

Foreign currency translation adjustment      -                -             -             -             312,446         312,446

Net loss for the year ended 
November 30, 1995                            -                -             -             (1,019,624)    -              (1,019,624)


Balance at November 30, 1995                 1,905,357        3,811         12,126,311    (1,226,363)    409,636        11,313,395

Compensatory stock (Note 13)                 90,000           180           5,820         -              -              6,000

Minority interest in shareholders equity at time of issue
of shares in subsidiary (Note 12)            -                -             (3,307,739)   -              -              (3,307,739)

Foreign currency translation adjustment      -                -             -             -              (766,041)      (766,041)

Net loss for the year ended 
November 30, 1996                            -                -             -             (359,492)      -              (359,492)


BALANCE AT NOVEMBER 30, 1996                 1,995,357        $3,991        $ 8,824,392   $(1,585,855)   $(356,405)     $ 6,886,123
</TABLE>

                 See notes to consolidated financial statements.




                                      F - 5


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

                                                                                                 November 30,
                                                                                                 1996               1995
                                                                                                 ---------------    ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                              <C>                <C>         
    Net (loss)                                                                                   $    (359,492)     $(1,019,624)
    Adjustments to reconcile net  (loss) to net cash (utilized)provided by
         operating activities:
             Depreciation and amortization                                                           2,354,942        2,361,515
             Minority interests in net loss of subsidiary                                             (284,595)         -
             Amortization of goodwill                                                                  594,735          630,718
             (Gain) loss on disposal of fixed assets                                                  (119,030)         223,446
             Provision for maintenance costs                                                           (18,524)        (176,302)
             Foreign currency translation                                                             (766,041)         312,446
    Changes in assets and liabilities:
         (Increase) in accounts receivable                                                            (556,622)        (369,352)
         (Increase) decrease in inventories                                                           (198,591)         111,382
         (Decrease) increase in accounts payable, accrued expenses and bank overdraft                 (956,502)         688,651
                                                                                                 -------------    -------------
         Net cash (utilized) provided by operating activities                                         (309,720)       2,762,880
                                                                                                 -------------    -------------

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

CASH FLOWS FROM FINANCING ACTIVITIES:
    Bank lines of credit                                                                             1,870,785         -
    Minority shareholders investment in subsidiary                                                   2,285,929         -
    Repayment of loans receivable                                                                      -                123,148
    Loans received from officers                                                                       -                149,938
    Loans repaid to affiliates                                                                         -               (132,147)
    Loans repaid to officers                                                                          (294,719)         -
    Principal payments of long term debt                                                               (67,921)         (92,375)
    Proceeds from hire purchase contract funding                                                    11,530,175        3,262,390
    Principal repayments of hire purchase contract funding                                          (6,073,790)      (3,495,819)
                                                                                                 -------------     ------------
    Net cash provided (utilized) by financing activities                                             9,250,459         (184,865)
                                                                                                 -------------    -------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                                              181,337           51,610

    Cash and cash equivalents, beginning of year                                                        73,946           22,336
                                                                                               ---------------    -------------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                          $      255,283     $     73,946
                                                                                                ==============     ============
</TABLE>

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

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

                 See notes to consolidated financial statements.

                                      F - 6

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


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
               13) 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 consideration
               given  by the  Company,  in the  form of  9,000,000  (pre-reverse
               split) shares of its 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 is being financed with the proceeds
               of a private  debt  offering  which  was  completed,  by PAG,  in
               December  1996 (see Note 19) and by loans.  The  acquisition  has
               been recorded using the purchase method of accounting.

 .



                                                          F - 7

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


NOTE 1 - DESCRIPTION OF COMPANY (Continued):

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

Revenues                 $14.3
Net loss                 (2.1)
Loss per common share    $(1.05)

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

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


NOTE   2  -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

       (a)     Basis of Consolidation and Presentation:

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

               Due to the current  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.

                                                          F - 8

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


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

       (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
               consist of finished  goods,  work in progress  and spare parts of
               specialty  automobiles  and  are  stated  at the  lower  of  cost
               (first-in,  first-out method) or market.  Market is considered as
               net realizable value.

               As of November  30, 1996 and 1995,  inventories  consisted of the
following:
<TABLE>
<CAPTION>


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

<S>                                                                              <C>                   <C>    
                               Vehicles held for resale                          $   124,932           $31,137
                               Finished goods                                        180,307           -
                               Work-in-progress                                      684,305           -
                               Spare parts                                           137,908           -

                                                                                  $1,127,452           $31,137
                                                                                  ==========           =======
</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 of other
               disposal, the associated cost and accumulated depreciation of the
               asset are eliminated  from the accounts and any resulting gain or
               loss is included in operations.



                                                          F - 9

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


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

       (f)     Intangible Assets:

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

               In November  1996,  the PAG acquired  certain of the assets of AC
               Cars  Limited and  Autokraft  Limited  (see Note 1). The purchase
               price  exceeded the tangible net assets  acquired by  $2,006,995.
               This amount was assigned to the brand name and various  contracts
               with suppliers and customers and is to be amortized over 20 years
               on a straight-line basis.

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

       (g)     Income Taxes:

               The  Company  conducts  all of its  operating  activities  in the
               United Kingdom (UK). As such, it is 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 16 regarding SFAS No 109 - Accounting
               for Income Taxes.

       (h)     Foreign Currency Translation:

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



                                                          F - 10

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


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

       (i)     Income Recognition:

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

       (j)     Earnings Per Share:

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

       (k)     Cash and Cash Equivalents:

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

       (l)     Lease Agreements:

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

<S>                                                                             <C>                 
                               November 30, 1997                                 $ 5,103,977
                               November 30, 1998                                   4,390,779
                               November 30, 1999                                   2,634,819
                               November 30, 2000                                   1,007,729

                      Total minimum lease payments receivable
                      net of executory costs                                     $13,137,304
</TABLE>


       (m)     Accounting Changes:

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

                                                          F - 11

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


NOTE   3  -    ACCOUNTS RECEIVABLE:

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

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

<S>                                                                               <C>               <C>       
                               Trade receivables                                  $1,288,074        $  955,437
                               Lease maintenance receivable                          330,902            69,182
                               Value added Tax                                       102,114            97,707
                               Other                                                 215,076           133,364
                                                                                 -----------      ------------
                                                                                  $1,936,166        $1,255,690
</TABLE>

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

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


NOTE   4  -    FIXED ASSETS AND DEPRECIATION:

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

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

<S>                                                                          <C>                  <C>         
                      Buildings and improvements                             $   1,719,415        $  1,719,415
                      Revenue producing vehicles                                17,282,095          11,989,192
                      Furniture, fixtures, plant and equipment                   2,247,430             519,753
                      Aircraft                                                   1,331,493             -
                                                                             ---------------------------
                                                                                22,580,433          14,228,360
                      Less:  accumulated depreciation (including
                             $3,388,495 and $3,853,753 of
                             accumulated depreciation on revenue
                             producing vehicles) for 1996 and 1995,
                             respectively                                        3,898,795           4,304,042
                                                                             -------------       -------------
                                                                               $18,681,638        $  9,924,318
                                                                               ===========        ============
</TABLE>

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

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


                                                          F - 12

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


NOTE   5  -    ACCRUED LIABILITIES AND EXPENSES:

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

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

<S>                                                                                   <C>             <C>     
                               Taxes other than income taxes                          $418,082        $333,586
                               Miscellaneous accrued expenses                           72,833          25,306
                                                                                    ----------      ----------
                                                                                      $490,915        $358,892
</TABLE>

NOTE   6  -    BANK LOANS/LINE OF CREDIT:

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

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

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

               For the Year Ended November 30,

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


NOTE   7  -    HIRE PURCHASE CONTRACTS/EQUIPMENT FINANCING:

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

                                                          F - 13

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


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

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

               For the Year Ended November 30,

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

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


NOTE   8  -    OTHER LIABILITIES:

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


NOTE   9  -    RELATED PARTY TRANSACTIONS:

               At November 30, 1995 the Company was indebted to its President in
               the  aggregate  amount of  $149,938  These  unsecured  loans were
               repayable  on demand at an  interest  rate of 2 1/2% in excess of
               the  base  lending  rate  (6.75%  at  November  30,  1995) of the
               Company's  bank.  The  loan was  repaid  during  the  year  ended
               November 30, 1996.


NOTE  10  -           ACQUISITION DEBT PAYABLE:
<TABLE>
<CAPTION>

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

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

                      Notes payable in 18 monthly installments of $46,611 plus
                      interest at 2% above the base rate                                            839,000

                      Other short-term notes payable (see Note 19)                                  2,581,470
                                                                                                                   -----------
                                                                                                    $5,098,470
</TABLE>

                                     F - 14

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


NOTE  11 -     CONVERTIBLE DEBT:

               The  Company  had  reflected  convertible  debt of $208,602 as of
               November 30, 1994.  These loans,  which were incurred at the time
               PMS acquired one of its subsidiaries, were to bear interest at 6%
               and were repayable five years from date of issue. The lenders had
               the option of converting  such loans into shares of the Company's
               common stock at the end of such period.  During the current year,
               the Company re-evaluated the aforementioned acquisition and found
               that the residual value of the net assets  acquired was less than
               anticipated at the maturity date of the contract hire agreements.
               Accordingly,  the Company and the holder of a portion of the debt
               reached  an  agreement  whereby  $53,602  of this  debt  would be
               canceled,  resulting in an  offsetting  reduction in the residual
               values  of  the  vehicles   acquired   and  their   corresponding
               accumulated  depreciation.  The effect of this change in estimate
               was to  reduce  depreciation  expense  in the  current  period by
               $53,602.  In January 1995,  the balance of $155,000 was converted
               into 155,000 shares of common stock.


NOTE 12  -     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 56.55%. The Company has recorded
               a charge to additional  paid-in capital of $3,307,739 in order to
               properly  reflect the minority  interest  liability at $5,369,073
               which represents 43.45% of the net assets of PAG.

               PAG owns 70% of a newly formed  subsidiary AC  Automotive  Group,
               Inc., ("AC Group"). As of November 30, 1996 the minority interest
               liabilities  in AC Group  were  written  down to zero  since  the
               losses  applicable to the minority  shareholders  exceeded  their
               interest in AC Group.


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.
               All  references  to the  number of common  shares  and per common
               share  amounts have been  restated to  retroactivity  reflect the
               reverse split.

               During  the year  ended  November  30,  1995 the  Company  issued
               155,000  shares of common  stock at a price of $1.00 per share in
               lieu of repayment of loans aggregating $155,000.

               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.




                                                          F - 15

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


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 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.

               As of November  30,  1996,  the  Company  had granted  options to
               purchase an aggregate of 500,000  shares of common stock to three
               directors,  at  exercise  prices  ranging  from $.48 to $1.65 per
               share,  aggregating  $365,850.  None of these  options  have been
               exercised.


NOTE 15  -     ECONOMIC DEPENDENCY:

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

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


NOTE  16  -           INCOME TAXES:

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

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

<S>                                                                                <C>               <C>      
                               Current tax expense                                 $   760,350       $ 860,000
                               Deferred tax expense                                    174,650         -
                               Investment tax credits on vehicles                     (935,000)       (860,000)
                                                                                  ------------       ---------
                                                                                   $         -       $       -
</TABLE>



                                                          F - 16

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


NOTE  16  -           INCOME TAXES (Continued):

               The  components  of the deferred  tax asset,  pursuant to SFAS No
       109, as of November 1996, are as follows:
<TABLE>
<CAPTION>
                                                                                           1996         1995

<S>                                                                                      <C>         <C>      
                               Operating loss carryforward                               $ 38,000    $  51,000
                               Valuation allowance                                        (38,000)     (51,000)
                                                                                         --------   ----------
                                                                                         $     -     $      -
</TABLE>


               The Company has available operating losses  carryforwards for tax
               purposes  aggregating  approxi mately $112,000 as of November 30,
               1996,  which may result in a deferred tax asset.  The Company has
               recognized this asset but has provided a valuation  allowance for
               the full amount since there is no assurance that such losses will
               be utilized in the near future.


NOTE  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  30,1996 and 1995 amounted to $33,264 and $55,817,
               respectively.


NOTE  18  -           COMMITMENTS:

       (a)     Leases:

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

       (b)     Employment Agreements:

               In August 1995, the Company entered into an employment  agreement
               with  its  President/Chairman  of the  Board of  Directors.  This
               three-year  agreement  provides for an annual  salary of $160,000
               with  annual   escalations  of  10%  and  also  contains  certain
               non-compete restrictions.  This employee was also granted 100,000
               stock options (see Note 14).

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




                                                          F - 17

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


NOTE 18  -     COMMITMENTS (Continued):

       (c)     Rental Income:

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


NOTE 19  -     SUBSEQUENT EVENT:

               In December 1996, PAG completed a private  placement of 16 units,
               each unit  consisting  of a 10%  promissory  note of $95,000  and
               10,000  shares of PAG's common  stock for an  aggregate  price of
               $100,000 per unit.  The gross  proceeds of $1,600,000 was used to
               satisfy a portion of the debt owed re: the acquisition of AC Cars
               (see Notes 1 and 10).

               The Company also entered into a loan  agreement with its bank for
               $755,000  with  interest  payable at 8% per  annum,  secured by a
               first lien on the  aircraft  owned by the  Company as a result of
               the  acquisition  described  in Note 1. This loan is to be repaid
               from the proceeds of the sale of the aircraft.



                                                          F - 18

<PAGE>
                  PRIDE AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
                                   EXHIBIT 27
                             FINANCIAL DATA SCHEDULE
                          ARTICLE 5 OF REGULATIONS S-X



The  schedule  contains  summary  financial   information   extracted  from  the
consolidated  financial  statements  for the year ended November 30, 1996 and is
qualified in its entirety by reference of such statements.
<TABLE>
<CAPTION>

<S>                                                                                                    <C>    
   Period type                                                                                         12 Mos.
   Fiscal year end                                                                               Nov. 30, 1996
   Period start                                                                                  Dec. 01, 1995
   Period end                                                                                    Nov. 30, 1996
   Cash                                                                                                255,283
   Securities                                                                                           0
   Receivables                                                                                       1,936,166
   Allowances                                                                                           0
   Inventory                                                                                         1,127,452
   Current assets                                                                                       0
   PP&E                                                                                             22,580,430
   Depreciation                                                                                      3,898,795
   Total assets                                                                                     33,535,048
   Current liabilities                                                                                  0
   Bonds                                                                                                0
   Common                                                                                                3,991
   Preferred mandatory                                                                                  0
   Preferred                                                                                            0
   Other SE                                                                                          6,882,132
   Total liability and equity                                                                       33,535,048
   Sales                                                                                            12,982,098
   Total revenues                                                                                   12,982,098
   CGS                                                                                              10,272,334
   Total costs                                                                                      10,272,334
   Other expenses                                                                                       0
   Loss provision                                                                                       0
   Interest expense                                                                                    884,223
   Income pretax                                                                                      (359,492)
   Income tax                                                                                           0
   Income continuing                                                                                  (359,492)
   Discontinued                                                                                         0
   Extraordinary                                                                                        0
   Changes                                                                                              0
   Net income                                                                                         (359,492)
   EPS primary                                                                                            (.18)
   EPS diluted                                                                                            (.18)
</TABLE>



                                                    - Exhibit 27 -