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>



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


<PAGE>



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

The  Company's  principal  operations  are  conducted by PMS which  reflects its
financial statements in British pounds. As a result, most assets and liabilities
of the  foreign  operations  are  translated  into 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. (See also Note 19c - notes to financial statements).

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 $306,000 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 ($328,741) or $.16 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 hire  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 $9,544,000 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  ($2,967,000)
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 $2,450,000. During the year ended
November 30, 1996, the Company generated $456,000 of cash flows from operations.


<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.




<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.









MARBEL ARCH HOUSE        FEBRUARY 14, 1997 EXCEPT
66-68 SEYMOUR STREET     AS TO NOTES 12 AND 19(c)
LONDON W1H 5AH           WHICH ARE DATED                              CIVVALS
UNITED KINGDOM           JUNE 26, 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,  7 and 19c) ..................................................     20,671,854       9,924,318
    Intangible assets - net (Notes 2f and 19c) ......................................      9,544,293      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 (Note 12) ........................................      5,677,891            --
                                                                                                        ------------

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 ......................................................      8,425,722      12,126,311
    Retained earnings (deficit) .....................................................     (1,555,104)     (1,226,363)
    Foreign currency translation (Note 2h) ..........................................       (297,304)        409,636
                                                                                        ------------    ------------

TOTAL SHAREHOLDERS' EQUITY ..........................................................      6,577,305      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) ......................        315,346            --
                                                                          ------------

LOSS BEFORE PROVISION FOR INCOME TAXES ................       (328,741)     (1,019,624)

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

NET LOSS ..............................................   $   (328,741)   $ (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 subsidiaries            .16            --
                                                          ------------    ------------
NET LOSS PER SHARE ....................................   $       (.16)   $       (.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) .......................--             --       (3,706,409)  --          --            (3,706,409)

Foreign currency translation adjustment .................--             --       --           --          (706,940)     (706,940)

Net loss for the year ended November 30, 1996 ...........--             --       --           (328,741)   --            (328,741)
                                                                        

BALANCE AT NOVEMBER 30, 1996 ............................1,995,357      $3,991   $8,425,722   $(1,555,104) $(297,304)   $6,577,305
</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) .....................................................................   $   (328,741)   $ (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 .............................       (315,346)           --
          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)
      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 .......................        456,321       2,450,434
                                                                                       ------------    ------------

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)
                                                                                       ------------    ------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH ............................................       (766,041)        312,446
                                                                                       ------------    ------------

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  19a) and by loans  (see Note 10).  The
               acquisition  has been  recorded  using  the  purchase  method  of
               accounting (see also Note 19c).

 .



                                                          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:

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

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

       (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 $16,780.  This
               amount was assigned to the brand name and is to be amortized over
               20 years on a straight-line basis. See also Note 19c.

               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):

         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

       (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:

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

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

               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:

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

Buildings and improvements ..................   $ 1,719,415   $ 1,719,415
Revenue producing vehicles ..................    17,282,095    11,989,192
Furniture, fixtures, plant and equipment ....     4,641,388       519,753
Aircraft ....................................       927,751          --
                                                              -----------
                                                 24,570,649    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
                                                -----------   -----------
                                                $20,671,854   $ 9,924,318
                                                ===========   ===========

               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:

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

Taxes other than income taxes    $418,082   $333,586
Miscellaneous accrued expenses     72,833     25,306
                                   --------  --------
                                   $490,915 $358,892

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 $3,720,000 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:

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

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

Unsecured  notes  payable  on demand  after May 31, 1998;
interest payable quarterly at 2% above the base rate
                                                               839,000

Other short-term notes payable (see Note 19) ............    2,581,470
                                                            ----------
                                                            $5,098,470


                                     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 $3,706,409 in order to
               properly  reflect the aggregate  minority  interest  liability at
               $5,677,891  which  represents  43.45%  of the net  assets  of PAG
               including the minority interest in PAGs 70% owned,  newly formed,
               subsidiary, AC Automotive Group Inc.


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:

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

Current tax expense ..............   $ 760,350    $ 860,000
Deferred tax expense .............     174,650         --
Investment tax credits on vehicles    (935,000)    (860,000)
                                     ---------    ---------
                                     $$$$$$$$$    $$$$$$$$$
                                     =========    =========

                                     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:

                                  1996        1995

Operating loss carryforward   $ 38,000    $ 51,000
Valuation allowance .......    (38,000)    (51,000)
                              --------    --------
                              $$$$$$$$    $$$$$$$$
                                          ========

               The Company has available operating losses  carryforwards for tax
               purposes  aggregating  approximately  $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:

       (a)     In December 1996, PAG completed a private  placement of 14 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 $1,400,000 was used to
               satisfy a portion of the debt owed re: the acquisition of AC Cars
               (see Notes 1 and 10).

       (b)     The Company also entered into a loan  agreement with its bank for
               $755,100  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.

       (c)     In connection  with the  acquisition of AC Cars Limited (see Note
               1) PAG originally  recorded fixed assets  aggregating  $3,038,182
               and intangible assets aggregating $1,990,215. In April 1997, PAG,
               through  the  services  of  an  independent  third-party  expert,
               determined  that  the  value of the  fixed  assets  was  actually
               $6,643,365.  Accordingly,  as of the  date  of  acquisition,  PAG
               reclassified the intangible assets to fixed assets,  and recorded
               negative goodwill of $1,614,968 in order to reflect the increased
               value of the fixed assets acquired. In accordance with Accounting
               Principles  Board Opinion No. 16, the negative  goodwill has been
               offset against non-current assets acquired.

                                     F - 18

<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 18th day of September, 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            9/18/97
ALAN LUBINSKY                      of the Board of Directors (Principal         Date
                                   Executive Officer)


/s/ Ivan Averbuch                  Chief Financial Officer                      9/18/97
IVAN AVERBUCH                                                                   Date


/s/ Allan Edgar                    Director                                     9/18/97
ALLAN EDGAR                                                                     Date
</TABLE>