UNITED STATES
                     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 September 30, 1996

                                    or

          ( ) Transition Report Pursuant to Section 13 or 15(d) of the
                       Securities Exchange Act of 1934

                       Commission File Number 0-3743
                      -------------------------------
                    
                     CONTINENTAL INVESTMENT CORPORATION
           (Exact name of registrant as specified in its charter)

             Georgia                                    58-0705228
  (State or other jurisdiction of                     (I.R.S.Employer
  incorporation or organization)                    Identification No.)

                   10254 Miller Road, Dallas, Texas 75238
             (Address of principal executive offices) (Zip Code)

     Registrant's telephone number, including area code: (214) 691-1100

     Securities registered pursuant to Section 12(b) of the Act:  None

     Securities registered pursuant to Section 12(g) of the Act:

                      Common Stock, $0.50 par value
                         (Title of each class)

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

        Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB.  (X)
<PAGE>
        The aggregate market value of the voting stock held by non-
affiliates of the registrant, as of December 27, 1996, is approximately
$113,378,973 based upon the closing price of $21.125 per share as
reported for such date by Trading and Market Services of The Nasdaq
Stock Market, Inc.

        As of  December 27, 1996, the registrant had outstanding 11,313,195
shares of Common Stock.
<PAGE>
                                  PART I

ITEM 1. BUSINESS.
----------------
Background
----------

        Continental Investment Corporation ("CICG" or the "Company") was
incorporated on October 3, 1958, in the State of Georgia, as a real
estate investment and development company. In 1965, the Company
purchased 133 acres of land (the "Property") located approximately 10
miles southwest of downtown Atlanta, Georgia. From 1966 to 1993, 65
acres of the land along with mineral rights were leased to a mining and
quarrying company unrelated to CICG. The lease and rights to extract
minerals from the Property expired in 1993. Subsequently, CICG
participated in reclamation activities in preparation for an alternative
use of the land. During fiscal 1996, the Company purchased an
additional 96 acres adjacent to the 133-acre Property.

        Effective January 5, 1994, the Company acquired all of the
capital stock of FIBER-SEAL Holdings, Inc.("FSH"). The acquisition was
accomplished by the merger of a wholly-owned subsidiary of the Company
with and into FSH. During fiscal year 1995, all unexploited marketing
rights to the intellectual property of the FIBER-SEAL(Registered Trademark)
Fabric Care System were transferred to FIBER-SEAL Franchise Corporation
("FSFC"), a wholly-owned subsidiary of CICG which was newly formed to
facilitate the expansion of the FIBER-SEAL business. On September 20,1996,
the Company entered into an agreement with the 20th Century Group, an entity
comprised of Sterritt Properties, Inc. ("SPI"), FIBER-SEAL Services
International, Inc. ("FSSI"), 20th Century Partners, Inc. and 20th Century
Holdings, Inc. This agreement called for the transfer of certain rights
and assets owned by 20th Century Group. The consideration for the
transfer was a $1,150,000 note payable. The property transferred
consisted of assets related to the FIBER-SEAL business. This included
all operations formerly carried out by FSSI, all operations of the
Dallas, Texas licensee of FIBER-SEAL and all trademarks, servicemarks,
logos, and tradenames of or related to FIBER-SEAL. As a result of this
transaction, the Sterritt Family has transferred all of their FIBER-
SEAL related holdings to CICG. The effective date of the agreement was
September 30, 1996.

        CICG is now engaged in developing the operations of FIBER-SEAL and
in analyzing waste disposal opportunities, initially at the Property
located in Atlanta, Georgia.
<PAGE>
FIBER-SEAL Operations
---------------------

        FIBER-SEAL brand services and products provide customers with
cleaning, stain removal and lasting protection for carpets and other
fine interior fabric coverings and surfaces and cleaner, newer looking
interiors. These products and services have been provided since 1971
under the FIBER-SEAL brand trademark and servicemark. The products and
services are currently being provided in the United States and other
countries through licensing agreements with approximately 60 service
centers now in operation through FSSI. With over 25 years of continuous
operations, the FIBER-SEAL business has established long-term
relationships, credibility and brand awareness with architects, interior
designers and manufacturers. Customers' premises include individual
residences, real estate developments, restaurants, offices, and
commercial aircraft.

        The Company has made a strategic decision to convert its FIBER-SEAL
Fabric Care System (Registered Trademark) business from a licensing mode to 
a potentially far more lucrative franchising operation. Further, the
Company will be instituting a program for the expansion of FIBER-SEAL
operations in all unexploited geographic areas. It is the Company's opinion
that the revenues derived from the FIBER-SEAL business can be significantly
enhanced. However, as the business areas in which FIBER-SEAL competes are
highly competitive, there can be no assurance that the Company will be able
to accomplish its goals regarding FIBER-SEAL.

Proposed Atlanta Region Waste Management Facility
-------------------------------------------------

        In 1994, the Company undertook an analysis of alternative uses of
its Atlanta Property. A study of the Property indicated its viability
as a potential multi-use waste disposal, waste transfer, and recycling
facility. The Company is presently evaluating the various categories of
potential operations, consisting principally of the different types of
waste and activities discussed below.

        An inert waste landfill is a disposal facility that may accept only
wastes that will not or are not likely to generate contamination to
surrounding soils or groundwater. Such wastes are limited to earth and
earth-like products, concrete, cured asphalt, rock, bricks, yard
trimmings, stumps, limbs, and leaves. A landfill permitted for construction
and demolition debris may accept building materials, rubble resulting from
construction, remodeling, repair, and demolition operations on pavements,
houses, commercial buildings and other structures. Such wastes include,
but are not necessarily limited to, asbestos containing wastes, wood,
bricks, metal, concrete, wallboard, paper, cardboard, all inert waste
landfill material, and other "non- putrescible" wastes, as these wastes
have a low potential for groundwater contamination upon decomposition.
A construction and demolition debris landfill must be permitted for
construction and operation.
<PAGE>
        A municipal solid waste landfill ("MSWL") can accept any
waste derived from households, including garbage, trash and sanitary waste
in septic tanks. Household waste includes solid waste from single-family
and multi-family residences, hotels and motels, bunkhouses, campgrounds,
picnic grounds, and day use recreation areas. The term also includes
commercial solid waste, but does not include solid waste from mining,
agricultural or silvicultural operations or industrial processes or
operations. Hence, compliance with landfill design and operation regulations
must be achieved. This includes such matters as liner installation, leachate
collection system installation, periodic cover requirements and
groundwater monitoring systems.

        A transfer station is a waste management facility where solid waste
is received from collection vehicles and then transferred to and
compacted in large, specially designed and constructed trailers for
transportation to distant disposal facilities. Transportation can be by
road or rail. A transfer station operation can effectively reduce costs
by positively impacting the utilization of personnel and equipment and
by reducing fuel costs. The greatest benefit of transfer stations is the
quick turnaround obtained for route collection vehicles.

Industry Background

        According to the National Solid Wastes Management Association
("NSWMA"), the solid waste industry was estimated to have had revenues of
approximately $32 billion in 1994. The industry is highly fragmented,
with the four largest companies accounting, in 1994, for approximately
30% of revenues, seven mid-sized public companies, accounting for
approximately 4% of revenues, and approximately 7,000 municipalities and
independent collection firms accounting for approximately 66% of
revenues. The industry has been consolidating in recent years as a
result of increased capital requirements arising primarily from
stringent environmental and other governmental regulations. The Company
expects the trend toward consolidation to continue as many independent
landfill and collection operators, including municipalities, lack the
capital resources, management skills and technical expertise necessary
to operate in compliance with such regulations.

        According to data published by the Environmental Protection Agency
("EPA"), in 1992, there were 5,345 municipal solid waste landfills in the
United States. The Company believes that approximately 80% of solid
waste landfills are owned by municipalities, 15% by private companies
and 5% by the federal and state governments. These landfills vary
greatly in size and capacity. The Company believes that the estimated
800 privately-owned landfills, of which approximately 300 are owned by
the three largest national solid waste companies, represent
approximately 50% of the remaining disposal capacity in the United
States. Subtitle D regulations ("Subtitle D") of the Resource Conservation
and Recovery Act ("RCRA") require landfill operators to upgrade existing
disposal facilities by imposing requirements in the areas of facility
design and operating criteria, closure and post-closure requirements,
financial assurance standards and groundwater monitoring as well as
corrective action standards. Trade group data indicate that the number
of municipal solid waste landfills decreased by 62% from 1988 to 1995
and that the remaining number of such landfills in 1995 was under 3,000.
<PAGE>
        As a result of these regulatory changes, a number of independent
landfill operators and municipalities are discontinuing or privatizing
landfill and collection operations. In some instances, industrial
companies that had previously operated landfills have decided to close
such landfills rather than bring them into compliance with the new, more
demanding regulations. The increasing requirements for capital, skilled
management and technical expertise are, for small operators who cannot
achieve economics of scale and integration, reducing margins and causing
them to sell or close existing landfills. As a result, the Company
expects continued availability of opportunities to acquire solid waste
collection and disposal businesses. However, there can be no assurance
of such continued availability or of the Company's ability to consummate
any such potential acquisitions.

The Atlanta Property

        The Company owns 229 acres of land in Fulton County, Georgia. The
land is located within the Atlanta city limits approximately 10 miles
southwest of downtown Atlanta. Fulton County is one of the nine
individual counties that comprise the "Atlanta Region" which includes
Fulton (City of Atlanta), Gwinnett, DeKalb, Rockdale, Henry, Clayton,
Fayette, Douglas, and Cobb. The Property is effectively at the
epicenter of the 9-county region. The 9-county region would be the
primary market for the Company's potential waste disposal services.
 
        Most local wastes would be transported to the Property via truck or
trailer. The strategic location of the Property is particularly
important in the Atlanta market where traffic congestion and distance
materially impact truck or trailer downtime to and from a landfill
facility, which, in turn, affect hauling efficiency and competitive
bidding practices. Waste transport beyond 50 miles is generally
considered economically unsound.

        A section of the westerly portion of the Property underwent granite
surface mining from 1966 to 1993. Approximately 20 acres have been
excavated to depths in excess of 500 feet (maximum depth of 641 feet). A
smaller excavation on the Property has been mined to a depth of
approximately 150 feet. Studies obtained by the Company indicate that
these excavations are suitable for landfill use. Soil borings evidence
significant amounts of overburden that can be used for cover material in
landfill operations, as well as large amounts of granite. Granite mining
activities are presently being evaluated as an income source from the
Property. The potential resumption of granite mining activities
represents a possible double benefit to the Company that may also
increase landfill capacity in the future.

        The Property is also particularly well suited to serve as a waste
transfer station for transfer of waste outside the nine county region
because a railroad line is located just outside of the Property's
boundary. The Company will seek to acquire a rail spur to the Property.
Although the Property's proximity to a major rail line provides for a
viable transfer station, complications exist with regard to interstate
transport (e.g., states trying to collect per ton confiscatory fees on
incoming waste, etc.). There is also an effort by some state
legislators to restrict the disposal of out-of-state wastes in their
state's landfills.  Although most legislative efforts to date have been
rejected by the courts, there is a possibility that these laws may
eventually pass.
<PAGE>
Marketing

        The Company would market its potential landfill and transfer
operations via direct sales and contractual arrangements for private
waste disposal using aggressive pricing structures to maximize daily
disposal and transfer volumes. The Company believes that the Property is
well positioned geographically to achieve marketing success. Within the
Atlanta region there are presently 10 permitted municipal solid waste
landfills, only two of which are located within the same general area of
southwestern Fulton County as the Property. Similarly, of the twelve
permitted construction and demolition debris landfills in the Atlanta
region, none are located in southwestern Fulton County. Furthermore, a
number of the currently permitted landfills may be unable to comply with
the more stringent regulatory requirements that have recently come into
effect. This may cause the closure of older landfills and landfills that
elect not to comply with these regulatory standards. Accordingly, the
total number of permitted and operating landfills is subject to change
almost daily as decisions are made by private owners and municipalities
as to whether or not closure of a landfill is warranted in light of these
regulations.

        The Company intends to concentrate its marketing efforts on
collection companies within a 50 mile radius of the Property, municipal
contracts, closed facility accounts, corporate and industrial accounts,
and out-of-state wastes. Based upon the study conducted by the Atlanta
Regional Commission (updated November, 1994), the nine county Atlanta
Region disposes of 12,000 tons per day of municipal solid waste and
construction and demolition debris (based on 314 "disposal" days per
year).

Pricing

        Pricing in the waste management industry has become increasingly
complex as wastes have been sub-divided/categorized by regulation changes,
and charges or "tipping fees" are being calculated as to specific transport
and disposal requirements. It is anticipated that industry prices will
increase from their present levels by approximately 3% to 5% per annum over
the coming years. Revenues are generated through charges or tipping fees to
the collection and hauling companies and are calculated by volume or weight.
Transfer stations consolidate and compact the waste for transport to distant
sites where tipping fees may be lower, while collecting a fee per ton for
consolidation, compaction, transportation and disposal.

        The prices that the Company would charge for disposal or transfer
of waste at its potential Atlanta landfill/transfer station would be
determined by the volume or weight, the type of waste disposed of and prices
charged for similar disposal services by competitors. Long term disposal
and collection contracts typically contain a formula, generally based on
published price indices, for automatic adjustment of fees to cover
increases in some, but not all, operating costs.

        Disposal prices, or tipping fees, in the Atlanta Region are varied,
depending on the location of the landfill, site ownership and type and
amount of waste disposed of. Diminishing solid waste landfill disposal
capacity and reductions in the rate of utilization of available capacity
<PAGE>
in some service areas, sometimes imposed by governmental action, are
causing changes in waste transportation and disposal practices and are
principal factors contributing to substantial increases in disposal
costs. Tipping fees charged in the Atlanta region are within the ranges
outlined below:

            Type Facility                             Range
    ----------------------------------        ------------------------
    Construction and Demolition Debris        $ 9.00 to $32.50 per ton
    Municipal Solid Waste                     $21.50 to $35.00 per ton
    Transfer Stations (inclusive of
      off-site disposal)                      $32.50 to $36.15 per ton

                     Source: Atlanta Regional Commission

  
Competition

        The solid waste industry is highly competitive and requires
substantial amounts of capital. The waste industry is currently
dominated by several large, national waste management companies such as
WMX Technologies, Inc., formerly Waste Management, Inc.("WMX"); Browning-
Ferris Industries, Inc.("BFI"); and U.S.A. Waste Services, Inc. ("USAS").
Additionally, there are a number of regional companies and numerous
local companies. All of these businesses have significantly larger
operations and greater financial resources than CICG. In the Atlanta
Region, BFI and WMX are the largest waste management companies and are
involved in collection, treatment, recycling, transfer, and disposal.

        CICG would compete for landfill and transfer business on the basis
of tipping fees, geographical location and quality of operations. The
Company's ability to obtain landfill business may be limited by the fact
that some major collection companies also own or operate landfills to
which they send waste they collect. From time to time, competitors may
reduce the price of their services in an effort to expand market share
or to win competitively bid contracts.

Municipal Solid Waste Disposal Business Risks

        There are potential, often unforeseen, business risks and certain
cost exposures associated with the establishment, ownership and
operation of solid waste landfill sites. Such risk factors include, but
are not limited to: a reduction in the volume of solid waste available
for landfill disposal resulting from legislative or regulatory action
focused on the reduction of waste volume; public concern regarding the
potential for adverse effects on public health, the environment, and
land property values attributable to wastes disposed of at landfills;
the difficulty of obtaining permits to expand or establish disposal
sites and public and private opposition to the location, expansion and
operation of landfills; expanding governmental actions attempting to
restrict the interstate movement of waste for disposal; costs associated
with liner requirements, groundwater monitoring, leachate and landfill
gas control, surface water control, post-closure monitoring, site clean-
up, site remedial work, maintenance and long-term care obligations; the
obligation to manage any adverse affects on the environment that may
materialize at the Property; possible judicial and administrative
proceedings regarding alleged adverse environmental and health effects
<PAGE>
occasioned by landfill operations; and potential regulations requiring a
landfill operator to demonstrate financial strength that would enable
compliance with prescribed or changing standards and methods of
operation, as well as closure and post-closure care requirements.

        The Company currently intends to purchase and maintain an
environmental impairment liability insurance policy on its potential
landfill that provides coverage against clean-up costs and bodily injury
to non-employees and property damage caused by off-site pollution emanating
from the landfill. However, if the Company should be unable to obtain
adequate insurance, or decides to operate without insurance, a partially
or completely uninsured claim against the Company, if successfully
prosecuted and of sufficient magnitude, could have a material adverse
effect upon the Company's business or financial condition. Difficulty in
obtaining insurance could also impair the Company's ability to secure
future contracts, which may be conditioned upon the availability of
adequate coverage.

        Municipal and governmental waste management contracts typically
require performance bonds or bank letters of credit to secure
performance. In addition, the Company would be required to demonstrate
satisfactory financial assurances to secure its closure and post-closure
care obligations with respect to each landfill cell, some of which may
be in the form of a surety bond or letter of credit. If the Company is
unable to obtain surety bonds or letters or credit in sufficient amounts
or at acceptable rates, it may be precluded from entering into disposal
contracts or obtaining or retaining landfill operating permits.

Environmental and Other Regulations

        Authority to issue Georgia permits for construction and operation
of municipal solid waste landfills, provided they are issued subject to
facility compliance with Subtitle D of The Federal Resource Conservation
and Recovery Act of 1976 (the "RCRA"), rests with the EPD. The Company
will prepare an application that meets the requirements of the EPD and
that demonstrates facility compliance with RCRA, Subtitle D requirements.
Locally, the City of Atlanta will be requested to issue a Special Use
Permit granting the Company authority to operate a landfill on the Property.

        In the event that the Company's applications are granted,
construction of the landfill will be required to comply with RCRA,
Subtitle D standards. Further, in granting a Special Use Permit, the
city of Atlanta may require other operating protocols with which the
Company will be required to comply. Once in operation, both the city and
the state may inspect the landfill on an unannounced basis to investigate
for regulatory and permit compliance. Once the landfill is full, post-
closure care operations and maintenance will be required for 30 years.

        The Company will be subject to comprehensive federal, state and local
environmental, health and safety laws and regulations. These regulations are
administered by various federal, state and local environmental, zoning,
health and safety agencies. All of these agencies are empowered to monitor
Company compliance with such laws and regulations via periodic and
unannounced inspections.
<PAGE>
        Operation of the potential landfill will require that costs be
incurred, some significant, related to liner requirements, groundwater
monitoring, leachate and landfill gas control, surface water control,
post-closure monitoring, site clean-up, site remedial work, maintenance
and post-closure care obligations. These costs may adversely impact the
profit potential of the Company's potential landfill operations by
increasing the cost to construct and operate the landfill over the short
and long term. The Company will require substantial additional financing
to develop the Property. There can be no assurance that such financing
will be available.

        Resource Conservation and Recovery Act ("RCRA"), Subtitle D
regulations require landfill operators to demonstrate financial
responsibility enabling the operator to comply with landfill
construction and operation standards, as well as closure and post-
closure care requirements. The Company will be required to obtain
insurance and performance bonds at potentially high cost to meet this
requirement.

        Governmental agencies have the power to enforce compliance with
landfill regulations and permit conditions and to obtain injunctions or
impose fines in the event violations are evidenced. During the ordinary
course of its operation, the Company may from time to time receive
citations or notices from such governmental agencies that its facility
is not in full compliance with applicable environmental or health and
safety regulations. Upon receipt of such citations or notices, the
Company will work with agency representatives to attempt resolution of
the matters cited. Failure to correct the problems to the satisfaction
of the agencies could lead to monetary penalties, curtailed operations,
criminal prosecution, facility closure, or the inability to obtain
further permits.

        The Company would also be subject to liability for any nuisance or
trespass resulting from the operation of its potential landfill. A person
bringing a nuisance or trespass action against the Company may seek an
injunction to curtail or limit the Company's operations at the Property.
Further, any person pursuing a nuisance or trespass cause of action may
petition for actual and punitive damages. The awarding of such damages
could negatively impact the Company's financial condition and business
operations.

        Recycling and other waste minimization efforts can be expected to
reduce waste generation rates not only as more recyclables are
regulated, but as manufacturers take more responsibility for the
recyclability of the packaging that they use. Recycling regulations and
procurement requirements for recycled goods will continue to create
business opportunities in the recycling field while simultaneously
serving to diminish the volume of waste available for disposal in
landfills.

        The waste disposal industry is subject to extensive and evolving
environmental laws and regulations that have been enacted in response to
technical advances and the public's increased concern over environmental
issues. These regulations are administered by the United States
Environmental Protection Agency and various other federal, state and
local environmental, health and safety agencies. The Company believes
<PAGE>
that there will be increased regulation and legislation related to the
solid waste collection and disposal industry. In light of these
developments, the Company will attempt to anticipate future regulatory
requirements that might be imposed and plan accordingly to remain in
compliance with the regulatory framework.

        In order to operate a landfill or transfer station, the Company
typically will have to go through several governmental review processes
and obtain one or more operating permits and often zoning and other land
use approvals. These permits and zoning or land use approvals are
difficult and time consuming to obtain and are usually opposed by
various local elected officials and citizens' groups. Once obtained, in
some states (but not in Georgia), operating permits generally must be
periodically renewed and are subject to modification and revocation by
the issuing agency.

        The Company's potential landfill business would subject it to
certain operational, monitoring, site maintenance, closure and post-
closure and financial assurance obligations which change from time to
time and could give rise to increased costs for monitoring and
corrective measures. In connection with the Company's possible
acquisition of existing landfills, it will often be necessary to expend
considerable time, effort and money in complying with the governmental
review and permitting process necessary to maintain or increase the
capacity of these landfills.  Governmental authorities have the power to
enforce compliance with these laws and regulations and to obtain
injunctions or impose civil or criminal penalties in case of violations.
The Company's proposed operations will be subject to regulation,
principally under the following federal statutes:

        The Solid Waste Disposal Act ("SWDA"), as amended by the
        Resource Conservation and Recovery Act of 1976,
        as amended ("RCRA")

        The SWDA and its implementing regulations establish a framework for
regulating the handling, transportation, treatment, and disposal of
hazardous and non-hazardous wastes. They also require states to develop
programs to ensure the safe disposal of solid wastes in landfills.

        Subtitle D of RCRA establishes a framework for federal, state, and
local government cooperation in controlling the management of non-
hazardous solid wastes. While the role of the EPA is to provide overall
regulatory direction, the actual planning and implementation of solid
waste programs under Subtitle D are largely state and local functions.
In October 1993, the EPA adopted regulations under Subtitle D with
respect to solid waste disposal facility criteria, which include
location standards, hydrogeological investigations, facility design
requirements (including liners and leachate collection systems),
enhanced operating and control criteria, groundwater and methane gas
monitoring, corrective action standards, closure and extended post-
closure requirements, and financial assurance standards, many of which
have not commonly been in place or enforced at landfills. All Subtitle D
regulations are in effect, except for financial responsibility requirements,
which were to take effect in April 1997 although many states have already
implemented financial assurance programs. These federal regulations must
be implemented by the states, although states may impose requirements
<PAGE>
for landfill sites that are more stringent than the federal Subtitle D
standards. Once a state has an approved program, it will review all
existing landfill permits to ensure that they comply with the new
regulations. Although the states were required to submit proposed
permitting programs designed to implement the Subtitle D regulations to
the EPA by April 1993, some states have not submitted their programs to
the EPA and others have not fully completed their implementation.
Because the new regulations did not take effect until late 1993 and have
not been fully implemented by the states, their full impact may not be
apparent for several years. The Company could incur significant costs in
complying with such regulations; however, the Company does not believe
that such enhanced standards will have a material adverse effect on its
potential operations. All of the Company's potential landfills would be
engineered to meet or exceed these requirements.

        The Federal Water Pollution Control Act of 1972
        ("The Clean Water Act")
       
        This Act establishes rules regulating the discharge of pollutants
from a variety of sources, including solid waste disposal sites, into
streams, groundwater or other surface or subsurface waters. If runoff
from the Company's potential landfill or transfer station is discharged
into surface waters, the Act would require the Company to apply for and
obtain a discharge permit, conduct sampling and monitoring and, under
certain circumstances, reduce the quantity of pollutants in such
discharge. Also, virtually all landfills are required to comply with the
new federal storm water regulations, which are designed to prevent
possibly contaminated storm water from flowing into surface waters. The
Company will work with the appropriate regulatory agencies to ensure
that its facilities are in compliance with Clean Water Act requirements,
particularly as they apply to treatment and discharge of leachate and
storm water. In addition, where development may alter or affect
"wetlands," a permit must be obtained before such development may be
commenced. This requirement is likely to affect the construction or
expansion of many solid waste disposal sites. The Act provides for
civil, criminal and administrative penalties for violations of specified
sections of the Act.

        The Comprehensive Environmental Response, Compensation
        and Liability Act of 1980, as amended ("Superfund" or "CERCLA")

        CERCLA established a regulatory and remedial program intended to
provide for the investigation and cleanup of facilities from which there
has been, or is threatened, a release of any hazardous substance into
the environment. CERCLA's primary mechanism for remedying such programs
is to impose strict joint and several liability for cleanup of
facilities on current owners and operators of the land, former owners and
operators of the land at the time of the disposal of the hazardous
substances, as well as the generators of the hazardous substances and the
transporters who arranged for disposal or transportation of the hazardous
substances. The costs of CERCLA investigation and cleanup can be very
substantial. Liability under CERCLA does not depend upon the existence or
disposal of "hazardous waste" but can also be founded upon the existence of
even very small amounts of the more than 700 "hazardous substances" listed
by the EPA, many of which can be found in household waste. If the Company
were found to be a responsible party for a CERCLA cleanup, the enforcing
<PAGE>
agency could hold the Company completely responsible for all investigative
and remedial costs even if others may also be liable. CERCLA also authorized
the imposition of a lien in favor of the United States upon all real
property subject to or affected by a remedial action for all costs for
which a party is liable. The Company's ability to obtain reimbursement
from others for their allocable share of such costs would be limited by
the Company's ability to find other responsible parties and prove the
extent of their responsibility and by the financial resources of such
other parties. In the past, legislation has been introduced in Congress
to limit the liability of municipalities and others under CERCLA as
generators and transporters of municipal solid waste. Although such
legislation has not been enacted, if it were to pass it would limit the
Company's ability to seek full contribution from municipalities for
CERCLA cleanup costs even if hazardous substances that were released and
caused the need for cleanup at the Company's potential landfill were
generated by or transported to the landfill by a municipality.
Depending upon whether and how Congress acts, it is possible that each
of these laws may be changed in ways that may significantly affect the
Company's potential waste disposal business.

        The Occupational Safety and Health Act of 1970 (the "OSHA Act")
       
        The OSHA Act authorizes the Occupational Safety and Health
Administration to promulgate occupational safety and health standards.
Various of these standards, including standards for notices of hazards,
safety in excavation and demolition work, and the handling of asbestos,
may apply to the Company's operations.

        The Clean Air Act

        The Clean Air Act provides for regulation, through state
implementation of federal requirements, of the emission of air
pollutants from certain landfills based upon the date of the landfill
construction and volume per year of emissions of regulated pollutants.
The EPA proposed a New Source Performance Standard and Emission
Guidelines for municipal solid waste landfills. Current regulations
impose limits on air emissions from municipal solid waste landfills. The
New Source Performance Standard will apply to all municipal solid waste
landfills that commence construction after the date of the proposal. The
Emission Guidelines are a set of standards that must be adopted by the
states and will apply to all municipal solid waste landfills that
received waste after November 8, 1987. The EPA may also issue
regulations controlling the emissions of particular regulated air
pollutants from municipal solid waste landfills. Landfills located in
areas with air pollution problems may be subject to even more extensive
air pollution controls and emission limitations.

        Proposed Federal Legislation

        In the future, the Company's potential collection, transfer and
landfill operations may also be affected by legislation currently
pending before Congress that would authorize the states to enact
discriminatory legislation governing waste shipments. The Company
believes that if any such federal legislation is enacted, it may have a
material adverse effect on the Company's potential operations.
<PAGE>
        State and Local Regulation

        Each state in which the Company may operate in the future has laws
and regulations governing the generation, storage, treatment, handling,
transportation and disposal of solid waste, water and air pollution and,
in most cases, siting, design, operation, maintenance, closure and post-
closure of landfills and transfer stations. There has also been an
increasing trend in various states seeking to regulate the disposal of
out-of-state waste in their landfills. Legislative and regulatory
measures to mandate or encourage waste reduction at the source and waste
recycling have been adopted by many states and are also under
consideration by Congress and the EPA.

        The Company's potential collection and landfill operations may be
affected by the trend toward laws requiring the development of waste
reduction and recycling programs. For example, California, Georgia, Florida
Illinois, Indiana, Kentucky, Pennsylvania, Ohio, South Carolina and West
Virginia have enacted laws that will require counties to adopt comprehensive
plans to reduce the volume of solid waste deposited in landfills, through
waste planning, composting and recycling or other programs, within the
next few years. A number of states have taken, or are considering, steps
to ban the landfilling of certain wastes, such as yard wastes, beverage
containers, newspapers, unshredded tires, lead-acid batteries and "white
goods," such as refrigerators. The enactment of regulations reducing the
volume and types of wastes available for transport to and disposal in
landfills could adversely affect the Company's ability to operate its
potential facilities at their full capacity.

        Many municipalities also have ordinances, local laws and
regulations affecting the waste disposal industry. These include zoning
and health measures that limit solid waste management activities to
specified sites or activities, flow control provisions that direct the
delivery of solid wastes to specified facilities, and bans or other
restrictions on the movement of solid wastes into a municipality.

        The permits or other land use approvals with respect to a landfill,
as well as state or local regulations, may (i) limit a landfill to
accepting waste that originates from a specified geographic area and/or
(ii) specify the quantity of waste that may be accepted at a landfill
during a given time period and/or (iii) specify the types of waste that
may be accepted at the landfill.

        Proposed Atlanta MSWLs must file for a Special Use Permit ("SUP")
with the city of Atlanta, and a Permit to Construct and Operate a
Landfill ("PCO") with the Environmental Protection Division of The State
of Georgia Department of Natural Resources ("EPD"). Notice of such 
applications must be filed with counties lying contiguous to the county
within which the Property is located. These permits, if granted, would give
the Company authority to accept municipal solid waste as well as inert
waste, and construction and demolition debris. Although there are presently
no known insurmountable impediments to the approval of these permit
applications, opposition may arise from City of Atlanta and surrounding
county residents regarding environmental and quality of life issues. It is
anticipated that the city of Atlanta may impose operating protocols on which
the SUP permits are contingent. Once in operation, both the city and state
are at liberty to inspect the Property, without notification to the
<PAGE>
operator, to investigate regulatory and permit compliance. Compliance issues
covered in the required permits include liner installation, leachate
collection system installation, periodic cover requirements and groundwater
monitoring systems. Landfill operators may also petition the various
permitting authorities, provided that there is sufficient justification, for
regulatory variances that eliminate or reduce some requirements outlined in
the petitions. In the case of the Property, this would include petitioning
to diminish/lessen the liner requirement, as based on water levels, there
will be little or no groundwater seepage/contamination. A variance would
significantly reduce costs associated with the construction of the landfill.

Disclosure Regarding Forward Looking Statements
-----------------------------------------------

        This Annual Report on Form 10-KSB includes forward looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended ("Forward Looking Statements"). All statements other than
statements of historical fact included in this report are Forward
Looking Statements. In the normal course of its business, the Company,
in an effort to help keep its shareholders and the public informed about
the Company's operations, may from time-to-time issue certain
statements, either in writing or orally, that contain or may contain
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 have been correct. Generally, these statements relate to business
plans or strategies, projected or anticipated benefits or other
consequences of such plans or strategies, past and possible future, of
acquisitions and projected or anticipated benefits from acquisitions
made by or to be made by the Company, or projections involving
anticipated revenues, earnings, levels of capital expenditures or other
aspects of operating results. All phases of the Company operations are
subject to a number of uncertainties, risks and other influences, many
of which are outside the control of the Company and any one of which, or
a combination of which, could materially affect the results of the
Company's proposed operations and whether Forward Looking Statements
made by the Company ultimately prove to be accurate. Such important
factors ("Important Factors") and other factors could cause actual results
to differ materially from the Company's expectations are disclosed in this
report. All subsequent written and oral Forward Looking Statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the Important Factors described below that
could cause actual results to differ materially from the Company's
expectations as set forth in any Forward Looking Statement made by or on
behalf of the Company.

        Competition: The waste collection/disposal business and the fabric
care business are both highly competitive and require substantial
amounts of capital. If permitted and operational, the Company's facilities 
would compete with numerous enterprises, many of which have significantly
larger operations and greater resources than the Company. The Company would
also compete with those counties and municipalities that maintain their
own waste collection and disposal operations. Forward Looking Statements
assume that the Company will be able to effectively compete with these other
entities.
<PAGE>
        Availability of Acquisition Targets: The Company's planned
acquisition program is a key element of its expansion strategy. In
addition, obtaining landfill permits has become increasingly difficult,
time consuming and expensive. There can be no assurance, however, that
the Company will succeed in obtaining landfill permits or locating
appropriate acquisition candidates that can be acquired at price levels
that the Company considers appropriate.

        Ongoing Capital Requirements: In order to satisfy the liquidity
needs of the Company for the following twelve months, the Company will
be primarily dependent upon proceeds from the sale of the Company's
stock and, to a lesser extent, revenues generated from the operation of
its fabric care business. Historically, revenues from the fabric care
operation have not been adequate to fund the operations of the Company.
The Company raised $5,500,000 through private sales of newly issued
restricted shares of its common stock during fiscal 1996. If the Company
is unable to obtain adequate funds from the sale of its stock in public
offerings, private placements or alternative financing arrangements, it
may be necessary to delay the potential permitting and development of its
Atlanta Property as a municipal solid waste landfill. Should this delay
occur, the Company may pursue one or more of its potential alternative
plans to produce revenues from the Atlanta Property, which include possibly
re-opening the Property as a granite quarry, and/or using the Property for
the disposal of inert debris and/or the storage of recyclable materials.
Because of potential political, legal, bureaucratic, and other factors,
there can be no assurance that the Company will be able to accomplish any of
its goals for the Property within a reasonable period of time.

        Economic Conditions: The Company's potential waste
collection/disposal business would be affected by general economic
conditions. There can be no assurance that an economic downturn will not
result in a reduction in the potential volume of waste that might be
disposed of at the Company's potential facilities and/or the price that
the Company would charge for its services. Additionally, the demand for
FIBER-SEAL's services may be adversely affected by an economic downturn.

        Weather Conditions: Protracted periods of inclement weather may
adversely affect the Company's potential operations by interfering with
collection and landfill operations, delaying the development of landfill
capacity and/or reducing the volume of waste generated by the Company's
potential customers. In addition, particularly harsh weather conditions
may result in the temporary suspension of certain of the Company's
potential operations. The Forward Looking Statements do not assume that
such weather conditions will occur.

        Dependence on Senior Management: The Company is highly dependent
upon its senior management team. In addition, as the Company continues
to grow, its requirements for operations management with franchising and
waste industry experience will also increase. The future availability of
such experienced management cannot be predicted. The Forward Looking
Statements assume that experienced management will be available when needed
by the Company at compensation levels that are within industry norms. The
loss of the services of any member of senior management or the inability to
hire experienced operations management could have a material adverse effect
on the Company.
<PAGE>
        Influence of Government Regulation: The Company's potential
operations would be subject to and substantially affected by extensive
federal, state and local laws, regulations, orders and permits, which
govern environmental protection, health and safety, zoning and other
matters. These regulations may impose restrictions on operations that
could adversely affect the Company's results, such as limitations on the
expansion of disposal facilities, limitations on or the banning of
disposal of out-of-state waste or certain categories of waste or
mandates regarding the disposal of solid waste. Because of heightened
public concern, companies in the waste management business may become
subject to judicial and administrative proceedings involving federal,
state or local agencies. These governmental agencies may seek to impose
fines or to revoke or deny renewal of operating permits or licenses for
violations of environmental laws or regulations or to require
remediation of environmental problems at sites or nearby properties, or
resulting from transportation or predecessors' transportation and
collection operations, all of which could have a material adverse effect
on the Company. Liability may also arise from actions brought by
individuals or community groups in connection with the permitting or
licensing of operations, any alleged violations of such permits and
licenses or other matters. The Forward Looking Statements assume that
there will be no materially negative impact on its operations due to
governmental regulation.

        Potential Environmental Liability: The Company may incur
liabilities for the deterioration of the environment as a result of its
potential operations. Any substantial liability for environmental damage
could materially adversely affect the operating results and financial
condition of the Company. Due to the limited nature of insurance
coverage of environmental liability, if the Company were to incur
liability for environmental damage, its business and financial condition
could be materially adversely affected.

Inflation and Prevailing Economic Conditions
--------------------------------------------

        To date, inflation has not had a significant impact on the
Company's operations. Consistent with industry practice, most of the
Company's contracts will provide for a pass through of certain costs,
including increases in landfill tipping fees and, in some cases, fuel
costs. The Company therefore believes it should be able to implement
price increases sufficient to offset most cost increases resulting from
inflation. However, competitive factors may require the Company to
absorb cost increases, resulting from inflation. The Company is unable
to determine the future impact of a sustained economic slowdown.

Employees

        As of December 27, 1996, the Company employed a total of 14
persons, none of whom are subject to a collective bargaining agreement.
The Company considers its relations with its employees to be satisfactory.
<PAGE>
ITEM 2. PROPERTIES.
------------------

        The principal fixed asset of the Company is the Atlanta Property
described in Item 1. that the Company plans to develop into a landfill. The
Company also owns 283.5 acres of real estate located in Ellis County,
Texas. This property is held for future development or resale.

        The Company leases approximately 8,481 square feet of office and
warehouse space in Dallas, Texas.


ITEM 3. LEGAL PROCEEDINGS.
-------------------------

        The Company is, from time to time, engaged in litigation matters
arising in the ordinary course of business. Management believes that the
ultimate resolution of these matters will not have a material adverse
impact on the Company's financial condition.


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

        No matters were submitted to a vote of the Company's security
holders during the fourth quarter of the fiscal year.


                                  PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK.
---------------------------------------------

        The Company's Common Stock is registered with the United States
Securities and Exchange Commission  under Section 12(g) of the
Securities Exchange Act of 1934 but is not quoted on a national or
regional securities exchange or on the National Association of
Securities Dealers, Inc. Automated Quotation System. The Common Stock is
traded on the Over-the-Counter Bulletin Board.

        The following table sets forth the quarterly high and low closing
bid prices per share for the Company's Common Stock for the periods
indicated. These prices represent prices between dealers, do not
include retail mark-up, mark-down or commissions and may not necessarily
represent actual transactions.

                          Year Ended            Year Ended
                       September 30, 1996    September 30, 1995
                       ------------------    ------------------
                          High    Low         High       Low
                         ------  ------      ------     ----- 
       4th Quarter       $30.50  $16.50       $6.00     $4.00
       3rd Quarter       $34.00  $ 3.50       $6.25     $2.88
       2nd Quarter       $ 5.00  $ 4.13       $5.63     $2.88
       1st Quarter       $ 5.13  $ 4.00       $6.00     $4.00
<PAGE>
        There were 1,222 holders of record of the Common Stock as of
December 27, 1996. This number does not include an indeterminate number
of shareholders whose shares are held by brokers in "street name." The
Company has not declared any cash dividends on its Common Stock during
its fiscal years ended September 30, 1996 and 1995. The Board of
Directors of the Company has made no determination to date to declare
cash dividends during the foreseeable future. There are no restrictions
on the Company's present or future ability to pay cash dividends other
than those restrictions imposed by law on all Georgia corporations.


ITEM 6. SELECTED FINANCIAL DATA.
-------------------------------

        The following table sets forth selected consolidated financial
information derived from the audited consolidated financial statements
of the Company for the years indicated.

                 Consolidated Summary Selected Financial Data
                For (or as of the end of) the Periods Indicated

                                            Year Ended     Year Ended
                                           September 30,  September 30,
                                               1996 *         1995 *
                                           ------------   ------------
         Operating Revenues                $   818,978    $  903,028

         Net Loss                             (998,794)     (616,684)

         Loss Per Common Share                    (.10)         (.08)

         Total Assets                       12,323,097     3,308,135

         Long-Term Obligations               1,667,000       747,000

         Cash                                2,763,129        18,165

         Stockholders' Equity               10,181,913     1,895,587

         Cash Dividends Per Share                    0             0

         * See Note B to the Financial Statements which discusses the
           acquisition by the Company of the operating assets and
           liabilities of FIBER-SEAL of Dallas and FIBER-SEAL Services
           International, Inc.

ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------------        
        CONDITION AND RESULTS OF OPERATIONS.
        -----------------------------------

        Results of Operations

        Revenues of the Company are currently derived solely from the
FIBER-SEAL fabric care and treatment business. Revenues consist of: (1)
licensee fees based upon annual sales, (2) product sales to licensees,
and (3) direct product and service sales from the Dallas, Texas
territory (which is owned by CICG).
<PAGE>
        Operating revenues decreased by $84,050 in fiscal 1996 as compared
with the fiscal 1995. Such decrease was due to a $30,002 non-recurring
sale of mined rock from the Atlanta quarry site in fiscal year 1995, and
to a decline in revenue from FIBER-SEAL of Dallas as a result of
management changes. The decline in fabric care revenues is expected to
be a temporary situation as a result of expected improvements in
performance at FIBER-SEAL of Dallas as well as the Company's strategic
decision to convert its fabric care business from a licensing mode to a
potentially far more lucrative franchising operation.

        Selling, general and administrative (SG&A) expenses increased
$307,599 during fiscal 1996 as compared to fiscal 1995. The increase was
caused by a variety of factors including consulting fees related to the
potential use of the Atlanta Property as a waste disposal site, other
consulting fees, increased legal fees, increased public relations expenses,
and increased management expenses.

        The net loss for fiscal 1996 was $382,110 higher than the loss for
fiscal 1995. Such increase was due primarily to the aforementioned lower
revenues and higher SG&A expenses in fiscal 1996 as compared with fiscal
1995.

        Liquidity and Capital Resources

        The company had working capital of $3,224,268 at the end of fiscal
year 1996 and a current ratio of 7.8 to 1.

        The primary source of capital during fiscal 1996 was provided by
the sale of shares of common stock of the Company in private sales.
Capital resources continue to be utilized primarily to (1) fund the
operating losses of the Company, which have been created primarily by
costs associated with planning for the development of the Company's
Property in Atlanta, Georgia as a waste disposal landfill and (2) to
acquire additional land adjacent to the Property. The Company invested
$5,352,691 during fiscal 1996 in additional land adjacent to the Property
in Atlanta. None of the Company's real estate holdings are encumbered by
any debt.

        In order to satisfy the liquidity needs of the Company for the
following twelve months, the Company will be primarily dependent upon
proceeds from the sale of the Company's stock and, to a lesser extent,
revenues generated from the operation of its fabric care business.
Historically, revenues from the fabric care operation have not been
adequate to fund the operations of the Company. The Company raised
$5,500,000 through private sales of newly issued restricted shares of
its common stock during fiscal 1996. If the Company is unable to obtain
adequate funds from the sale of its stock in public offerings, private
placements or alternative financing arrangements, it may be necessary to
delay the potential permitting and development of its Atlanta Property
as a municipal solid waste landfill. Should this delay occur, the Company
may pursue one or more of its potential alternative plans to produce
revenues from the Atlanta Property, which include possibly re-opening
the Property as a granite quarry, and/or using the Property for the disposal
of inert debris and/or the storage of recyclable materials. Because of
potential political, legal, bureaucratic, and other factors, there can be
no assurance that the Company will be able to accomplish any of its goals
for the Property within a reasonable period of time.
<PAGE>
        The Company has issued shares of its Common Stock from time to time
in the past to satisfy certain obligations, and expects in the future to
also acquire certain services, satisfy indebtedness and/or make
acquisitions utilizing authorized shares of stock of the Company.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
---------------------------------------------------

                      INDEX TO FINANCIAL STATEMENTS

                                                                  Page

Report of Independent Certified Public Accountants                 F-1

Consolidated Balance Sheet as of September 30, 1996                F-3

Consolidated Statements of Operations for the years
  ended September 30, 1996 and 1995                                F-4

Consolidated Statement of Stockholders' Equity
  for the years ended September 30, 1996 and 1995                  F-5

Consolidated Statements of Cash Flows for the years
  ended September 30, 1996 and 1995                                F-6

Notes to Financial Statements                                      F-8

<PAGE>

               Report of Independent Certified Public Accountants

Board of Directors and Stockholders
Continental Investment Corporation

We have audited the accompanying consolidated balance sheet of
Continental Investment Corporation (a Georgia corporation) and
Subsidiaries as of September 30, 1996, and the related consolidated
statements of operations, stockholders' equity and cash flows for each
of the two years in the period then ended. These financial statements
are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. 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 financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Continental Investment Corporation and Subsidiaries as of September 30,
1996, and the consolidated results of their operations and their
consolidated cash flows for each of the two years in the period then
ended, in conformity with generally accepted accounting principles.


GRANT THORNTON LLP

Dallas, Texas
November 27, 1996

<PAGE>
             Continental Investment Corporation and Subsidiaries

                         CONSOLIDATED BALANCE SHEET

                             September 30, 1996

             ASSETS

CURRENT ASSETS
       Cash                                          $ 2,763,129
       Note receivable                                   880,000
       Accounts receivable                                12,832
       Inventories                                        42,491
                                                     -----------
            Total current assets                       3,698,452

PROPERTY, at cost                                      8,564,582

OTHER ASSETS
     Intangibles, net of accumulated 
       amortization of $8,361                             26,639
     Other                                                33,424
                                                     -----------
               
               Total assets                          $12,323,097
                                                     ===========


     The accompanying notes are an integral part of this statement.

<PAGE>
             Continental Investment Corporation and Subsidiaries

                    CONSOLIDATED BALANCE SHEET - CONTINUED

                             September 30, 1996


   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable - trade                        $   161,185
     Accrued expenses                                     15,000
     Amounts due to related parties                       67,999
     Current portion of long-term
       note payable                                      230,000
                                                     -----------
               Total current liabilities                 474,184

LONG-TERM LIABILITIES
     Note payable                                        920,000
     Deferred income taxes                               747,000
                                                     -----------  
                                                       1,667,000
                                                     -----------
               Total liabilities                       2,141,184

COMMITMENTS                                                  -  

STOCKHOLDERS' EQUITY
     Preferred stock, $1.00 par value;
       1,000,000 shares authorized; no
       shares issued or outstanding                          -  
     Common stock, $.50 par value;
       25,000,000 shares authorized;
       11,310,058 issued and outstanding               2,781,029
     Additional contributed capital                   10,569,794
     Accumulated deficit                              (3,168,910)
                                                     -----------
               Total stockholders' equity             10,181,913
                                                     -----------
               Total liabilities and
                 stockholders' equity                $12,323,097
                                                     ===========

     The accompanying notes are an integral part of this statement.

<PAGE>
            Continental Investment Corporation and Subsidiaries

                   CONSOLIDATED STATEMENTS OF OPERATIONS

                         Year ended September 30,

                                                   1996          1995     
                                                ----------    ----------
Revenues                                        $  818,978    $  903,028

Costs and expenses
     Cost of revenues                              369,435       411,415
     Selling, general and administrative
       expenses                                  1,358,719     1,051,120
                                                ----------     ----------
                                                 1,728,154     1,462,535
                                                ----------     ----------
          Operating loss                          (909,176)     (559,507)

Other income (expense)
   Interest income                                   8,946           -  
   Interest expense                                (98,564)      (95,102)
                                                ----------     ---------
                                                   (89,618)      (95,102)

          Loss before income taxes                (998,794)     (654,609)

Deferred income tax expense                            -           1,321
                                                ----------     ----------
          Loss before extraordinary credit        (998,794)     (655,930)

Extraordinary credit - gain on debt
  forgiveness                                          -          39,246
                                                ----------     ---------
          NET LOSS                              $ (998,794)   $ (616,684)
                                                ==========    ==========
Per share data
   Loss before extraordinary credit per
     common share                                    $(.10)        $(.08)
                                                     =====         =====
   Loss per common share                             $(.10)        $(.08)
                                                     =====         =====
   Weighted average number of common
     and common equivalent shares
     outstanding                                 9,746,092     8,181,482
                                                ==========    ==========

The accompanying notes are an integral part of this statement.

<PAGE>
<TABLE>
             Continental Investment Corporation and Subsidiaries

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                    Year ended September 30, 1996 and 1995

<CAPTION>
                                Common Stock          Additional      Treasury stock
                            ----------------------    contributed     ----------------    Accumulated
                             Shares      Par value      capital       Shares    Amount      deficit          Total                
                            ---------   ----------    ----------      ------  --------    -----------      -----------
<S>                        <C>          <C>           <C>             <C>     <C>         <C>              <C>
Balances at
  October 1, 1994 -
  as previously reported    7,027,327   $  639,664    $  238,930      7,209   $(26,771)   $  (387,827)     $   463,996

Accumulated deficit of                                                       
  acquired businesses             -            -             -          -          -         (188,731)        (188,731)
Distribution to             
stockholder                       -            -             -          -          -         (976,874)        (976,874)
                            ---------                 ----------      -----    -------    -----------      -----------
Balances at
  October 1, 1994 -
  as restated               7,027,327      639,664       238,930      7,209    (26,771)    (1,553,432)        (701,609)

Conversion of debt
  to stock                  1,600,000      800,000           100        -          -              -            800,100
Sale of stock in
  private placement            80,000       40,000       360,000        -          -              -            400,000
Purchase of land
  for stock                   150,000       75,000       675,000        -          -              -            750,000
Issuance of stock
  for services                 16,200        8,100        77,899        -          -              -             85,999
Stock issued for
  debt forgiveness             10,000        5,000        45,000        -          -              -             50,000
Net loss                          -            -             -          -          -         (616,684)        (616,684)
                            ---------   ----------   -----------     ------    -------    -----------      -----------
Balances at
September 30, 1995          8,883,527    1,567,764     1,396,929      7,209    (26,771)    (2,170,116)         767,806

Retirement of
  treasury stock               (7,209)      (3,604)      (23,167)    (7,209)    26,771            -               -  
Sale of stock
  in private placement        955,000      477,500     5,022,500        -          -              -          5,500,000
Issuance of stock
  for services                 50,800       25,400       228,680        -          -              -            254,080
Issuance of stock
  for land                  1,427,940      713,969     3,944,852        -          -              -          4,658,821
Net loss                          -            -             -          -          -         (998,794)        (998,794)
                           ----------   ----------   -----------     ------   --------    -----------      -----------
Balances at
  September 30, 1996       11,310,058   $2,781,029   $10,569,794        -     $    -      $(3,168,910)     $10,181,913
                           ==========   ==========   ===========     ======   ========    ===========      ===========             
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
<PAGE>
             Continental Investment Corporation and Subsidiaries

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                            Year ended September 30,

                                                        1996        1995     
                                                     ----------   ---------
Cash flows from operating activities:
     Net loss                                        $ (998,794)  $(616,864)
     Adjustments to reconcile net loss to
       net cash used in
          operating activities:
               Amortization and depreciation expense      2,333       2,334
               Common stock issued as consideration
                 for services                           254,080      85,999
               Imputed interest on note payable          90,092      83,034
               Deferred income taxes                        -         1,321
               Change in operating assets and
                 liabilities
                    Accounts receivable - trade         (12,832)        -  
                    Other current assets                (67,711)    (24,792)
                    Accounts payable - trade            (39,264)     58,760
                    Accrued expenses                    (67,091)     48,705
                    Income taxes payable                    -       (23,921)
                    Accrued expenses to related
                      parties                          (274,106)    165,908
                    Deferred rent                           -        (8,807)
                    Other                               (67,873)   (120,678)
                                                      ---------   ---------
                         Net cash used in operating
                           activities                (1,181,166)   (349,001)

Cash flows from investing activities:
     Issuance of note receivable                       (880,000)        -  
     Purchases of property                             (693,870)     (9,473)
                                                     ----------   ---------
                      Net cash used in investing
                        activities                   (1,573,870)     (9,473)

Cash flows from financing activities:
     Proceeds from sale of stock                      5,500,000     400,000
     Debt repayments                                        -       (25,676)
     Other                                                  -           100
                                                     ----------   ---------
                      Net cash provided by
                        financing activities          5,500,000     374,424
                                                     ----------   ---------
Increase in cash                                      2,744,964      15,950

Cash at beginning of year                                18,165       2,215
                                                     ----------   ---------
Cash at end of year                                  $2,763,129   $  18,165
                                                     ==========   =========

     The accompanying notes are an integral part of this statement.

<PAGE>
              Continental Investment Corporation and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                    Years ended September 30, 1996 and 1995

During fiscal year ending September 30, 1995, liabilities were settled
and land was purchased in exchange for stock as follows:

   *  $800,000 debt retired in exchange for 1,600,000 shares
      of common stock.

   *  $75,675 note payable retired for cash of $25,675 and 10,000
      shares of common stock.

   *  Land was acquired for 150,000 shares of common stock valued at
      $750,000.

During fiscal year ending September 30, 1996, liabilities were settled
and land was purchased in exchange for stock as follows:

   *  Land was acquired by issuing 1,427,940 shares of common stock
      valued at $4,658,821 and cash of $693,870, for a total purchase
      price of approximately $5,352,691.


     The accompanying notes are an integral part of this statement.

<PAGE>
             Continental Investment Corporation and Subsidiaries

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                       September 30, 1996 and 1995

NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
         POLICIES

     Basis of Presentation and Principles of Consolidation
     -----------------------------------------------------
     The accompanying consolidated financial statements include the accounts
  of Continental Investment Corporation (CICG or the Company) and its
  subsidiaries. All significant intercompany transactions and balances
  have been eliminated.

     Nature of Operations
     --------------------
  The Company operates in two principal segments: property development,
  primarily its potential landfill site in Atlanta, Georgia, and its Fiber-
  Seal fabric care and service protection business.

     Property
     --------
  Property is recorded at cost. Expenditures for major additions and
  improvements are capitalized, while minor replacements, maintenance and
  repairs are charged to expense as incurred. When property is retired or
  otherwise disposed of, the cost and accumulated depreciation and
  depletion are removed from the accounts and any resulting gain or loss
  is reflected in current operations.

  Landfill and certain treatment facility costs will be depleted using the
  units of production method, which is calculated using the total units of
  airspace filled during the year in relation to total estimated permitted
  airspace capacity. Depreciation on the remaining assets will be provided
  over the estimated useful lives of such assets using the straight-line
  method.

  Landfill improvements include direct costs incurred to obtain a landfill
  permit and direct costs incurred to construct and improve the site.
  These costs will also be depleted based on consumed airspace. No general
  and administrative costs are capitalized as landfill and landfill
  improvements.

     Income Taxes
     ------------
  Deferred income taxes are provided under the liability method in which
  deferred assets and liabilities are determined based on the differences
  between the tax basis of assets and liabilities and the amounts reported
  in the financial statements. Deferred tax assets and liabilities at the
  end of each period are determined using the currently enacted tax rates.

     Reclassifications
     -----------------
  Certain 1995 balances have been reclassified to conform to the 1996
  presentations.
<PAGE>
              Continental Investment Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                         September 30, 1996 and 1995

     Intangibles
     -----------
  Intangibles are amortized over fifteen years, on a straight-line basis.
  Intangibles represent licensing and marketing rights to the intellectual
  property of a system for fabric care treatment and protection. The
  Company periodically reviews intangibles to assess recoverability, and
  impairment is recognized in results of operations when recoverability is
  not probable.

     Loss Per Share
     --------------
  Loss per common share is based on the weighted average number of
  outstanding common shares during the period and, if their effect is
  dilutive, common stock equivalents consisting of stock options.

     Use of Estimates
     ----------------
  In preparing financial statements in conformity with generally accepted
  accounting principles, management is required to make estimates and
  assumptions that affect the reported amounts of assets and liabilities
  at the date of the financial statements and revenues and expenses during
  the reporting period. Actual results could differ from those estimates.

NOTE B - ACQUISITION

  On September 30, 1996, the Company acquired all of the operating assets
  and liabilities of Fiber-Seal of Dallas (FSD) and Fiber-Seal Services
  International, Inc. (FSSI) from the majority stockholder of the Company
  in exchange for a $1,150,000 note payable. Due to the common ownership
  of the Company, FSD and FSSI, the transaction has been accounted for in
  a manner similar to a pooling of interests and, accordingly, the
  consolidated financial statements for all periods presented have been
  restated to include the accounts of FSD and FSSI.  The note payable
  exchanged in the acquisition has been discounted and interest imputed at
  the stated rate of 8-1/2% per annum as if the transaction had occurred
  on October 1, 1994. The excess of the carrying value of the note
  payable over the historical cost basis of the net assets acquired has
  been reflected as a distribution to stockholders.

<PAGE>
              Continental Investment Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                        September 30, 1996 and 1995

  Net sales and net earnings of the separate companies for the periods
  preceding the acquisition were as follows:
<TABLE>
<CAPTION>
                                                                              Imputed  
                                 CICG       FSD       FSSI     Eliminations   interest     Combined  
                              ---------   --------   --------  ------------   --------    -----------
  <S>                        <C>          <C>        <C>        <C>           <C>           <C>
  Year ended
    September 30, 1996
      Revenues                 $ 60,000   $247,606   $539,381   $(28,009)     $    -        $818,978

      Net earnings (loss)    (1,040,199)      (311)   137,187     (5,379)      (90,092)     (998,794)

  Year ended
    September 30, 1995
      Revenues                 $134,002   $326,683   $491,262   $(48,919)     $    -        $903,028
      Net earnings (loss)      (654,508)    23,112     97,746        -         (83,034)     (616,684)
</TABLE>

NOTE C - NOTE RECEIVABLE

  The note receivable bears interest at 10% and is due in two installments
  in January and May 1997. The note receivable is collateralized by
  150,000 shares of common stock of the Company.


NOTE D - PROPERTY

  The Company's property consists of the following at September 30, 1996:

       229 acres in Atlanta, Georgia
            Former Granite Quarry                $  564,222
            Unimproved land                       7,135,360
                                                 ----------
                                                  7,699,582
       253.5 acres, Ellis County, Texas
            Unimproved land                         750,000

       30 acres, Ellis County, Texas
            Unimproved land                         115,000
                                                 ----------
                                                 $8,564,582
                                                 ==========

NOTE E - AMOUNTS DUE TO RELATED PARTIES

  Amounts due to related parties consist of $67,999 due the majority
  stockholder.

<PAGE>
            Continental Investment Corporation and Subsidiaries

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                          September 30, 1996 and 1995

NOTE F - INCOME TAXES

  The Company and its subsidiaries file a consolidated tax return. At
  September 30, 1996 and 1995, the Company has, for Federal income tax
  purposes, operating loss carryforwards of approximately $3,600,000 and
  $2,900,000, respectively, expiring through 2011 and capital loss
  carryforwards of approximately $310,000 expiring through 1999. Tax laws
  limit the utilization of the net operating loss carryforwards and
  capital loss carryforwards to approximately $250,000 per year.
  Therefore, CICG may be required to pay income taxes in future years even
  though significant loss carryforwards exist.

  Reconciliation of income taxes computed at the Federal statutory rate
  and income tax expense is as follows:
                                                  Year ended September 30,      
                                                  ------------------------
                                                     1996           1995     
                                                  ---------      ---------

       Tax benefit at statutory rate              $(340,000)     $(223,000)
       Change in valuation allowance                307,000        223,000
       Other                                         33,000          1,321
                                                  ---------      ---------
                                                  $     -        $   1,321
                                                  =========      =========

  Consolidated deferred tax assets and liabilities consist of the
  following at September 30, 1996:

  Deferred tax assets
       Net operating loss and capital
         loss carryforwards                                   $  1,300,000
       Valuation allowance                                      (1,300,000)
                                                              ------------
                                                                       -    
Deferred tax liabilities
       Property                                                    747,000
                                                              ------------
            Net deferred tax liability                        $    747,000
                                                              ============
<PAGE>
              Continental Investment Corporation and Subsidiaries

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                         September 30, 1996 and 1995

  
  At September 30, 1996, the Company had capital and net operating loss
  carryforwards for Federal tax purposes expiring as follows:

                                          Year of   
                                         expiration       Amount  
                                         ----------    ----------

       Capital losses                       2006       $  313,568
                                                       ==========

       Net operating loss carryforwards     2005       $  245,018
                                            2006          286,359
                                            2007          682,391
                                            2008          152,727
                                            2009          710,373
                                            2010          644,163
                                            2011          902,484
                                                       ----------
                                                       $3,623,515
                                                       ==========
NOTE G - NOTE PAYABLE

  The note payable bears interest at 8.5% and is due in annual
  installments of $230,000 commencing on January 15, 1997, with interest
  due quarterly. The future minimum payments under this long-term note at
  September 30, 1996 are as follows:

                    1998         $230,000
                    1999          230,000
                    2000          230,000
                    2001          230,000
                                 --------
                                 $920,000
                                 ========
NOTE H - LEASES

  The Company leases office and warehouse space under an agreement
  expiring in 1999. This lease, which has been classified for accounting
  purposes as an operating lease, is subject to customary escalation
  clauses for executory costs and operating expenses. The future minimum
  lease payments under the noncancellable lease at September 30, 1996, are
  as follows:
<PAGE>
           Continental Investment Corporation and Subsidiaries

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                              September 30, 1996
 
         Year ending
         September 30,
         ------------
            1997                  $ 36,044
            1998                    36,044
            1999                    36,044
                                  --------
                                  $108,132
                                  ========


NOTE I - COMMON STOCK AND STOCK OPTIONS

  Common stock is stated at the lower of par value or consideration
  received, as permitted by state law.

  The following information relates to stock options.

                                                   Number
                                                     of
                                                   shares      Option price 
                                                 ---------     --------------

     Options outstanding - October 1, 1994         144,000     $5.00 - $18.00
          Granted during the year                  210,000     $4.25 - $ 5.00
                                                 ---------

     Options outstanding - September 30, 1995      354,000     $4.25 - $18.00
          Granted during the period              3,622,500     $4.00 - $35.00
          Exercised during the year               (462,500)    $4.00 - $10.00
                                                 ---------

     Options outstanding - September 30, 1996    3,404,000     $4.00 - $35.00
                                                 =========

     Options exercisable - September 30, 1996    3,404,000     $4.00 - $35.00
                                                 =========
<PAGE>

              Continental Investment Corporation and Subsidiaries

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                          September 30, 1996 and 1995

NOTE J - SEGMENTS

  The Company operates in two principal segments: property development,
  primarily its potential landfill site in Atlanta, Georgia, its Fiber-
  Seal fabric care and surface protection business.
<TABLE>
<CAPTION>
                                            Property          Fabric  
       September 30, 1996                  Development         Care      Corporate     Consolidated
       ------------------                  -----------     ----------    ----------    ------------
       <S>                                 <C>             <C>           <C>           <C>
       Revenues                            $      -        $  818,978    $     -       $   818,978
       Operating profit (loss)             (1,014,144)         15,760         (410)       (998,794)
       Identifiable assets                 12,229,202          93,895          -        12,323,097 
       Depreciation and amortization              -            13,284          -            13,284
       Capital expenditures                   693,870             -            -           693,870

       September 30, 1995
       ------------------

       Revenues                            $   30,002      $  873,026    $     -       $   903,028
       Operating profit (loss)               (379,255)        103,100     (378,454)       (654,609)
       Identifiable assets                  3,282,321          25,814         -          3,308,135
       Depreciation and amortization              -             2,334           -            2,334
       Capital expenditures                     9,473             -          -               9,473
</TABLE>

NOTE K - FAIR VALUE OF FINANCIAL INSTRUMENTS

  The Company's financial instruments include cash and debt. The fair
  value of all instruments approximates the carrying value.


NOTE L - CONTINGENCIES

  The Company is defendant in various matters in litigation which have
  arisen in the normal course of business. In the opinion of management,
  such litigation will not have a material effect on the Company's
  financial position or results of operations.

<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
-------------------------------------------------------------------
        AND FINANCIAL DISCLOSURE.
        ------------------------

        NONE


                                 PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
-----------------------------------------------------------

Executive Officers of the Registrant
------------------------------------

        Set forth below is certain information concerning the Directors and
Executive Officers of the Company as of December 27, 1996.

               Name             Age     Current Position with Company
        --------------------    ---     -----------------------------
        R. Dale Sterritt, Jr.    40      Director, Chairman and CEO
        Thomas F. Snodgrass      66      Director, President and Treasurer
        Robert D. Luna           43      Director, Secretary
        Martin G. Blahitka       59      Director
        J. B. Morris             57      Director


        Mr. R. Dale Sterritt, Jr. has served as Chairman, CEO and as a
Director since July 1, 1991. From 1980 to the present he has served as
Chairman of the Board of Sterritt Energy, Inc., a Company involved in
oil and gas production and as President of Sterritt Investments, Inc.,
an investment Company. During the past five years, he has also been
actively involved in mergers and acquisitions. From 1980 to 1986, he
was Chairman of the Board of Auburn-Sterritt Partners, a multi-million
dollar real-estate company involved in the acquisition, development and
management of shopping centers, apartments, and office buildings within
the US sunbelt area. From 1978 to 1980, he was vice president of
acquisitions for the Robert A. McNeil Corporation, a real estate
investment and management group. In addition, Mr. Sterritt has served on
the boards of various manufacturing, service and distribution companies.

        Mr. Thomas F. Snodgrass has served as a Director, President and
Treasurer since July 1991. From March 1990 to July 1992 he also served
as President of Thermal Corporation; from June 1, 1987 to December 31,
1989 as Chief Financial Officer of Republic Gypsum; and as Executive
Vice President of M-X Oil and Gas Corporation from January 1, 1982 to
May 31, 1987. Mr. Snodgrass has a background in accounting and finance.

        Mr. Martin G. Blahitka has served as a director of the Company
since September 7, 1993. From 1989 to the present, he served as Vice
President of Rescue Capital Corporation, a firm that specializes in
providing transitional management supervision and/or financial
restructuring to troubled companies. From 1989 to 1991 he was Vice
President of Operations for Legal Econometrics, Inc., a crisis
management firm.
<PAGE>
        Mr. Robert D. Luna has served as a Director since September 7,
1993 and currently serves as Secretary of the Company. From 1982 to the
present, he has served as President and CEO of Luna Investments, Inc., a
privately-held real estate development, investment and brokerage
company. In 1990, Luna Investments expanded into direct investments
involving oil and gas producing properties and venture capital.

       Mr. J. B. Morris has served as a Director since April 1990. From
1986 to 1991, he served as Chairman of the Board of Chancellor Capital
Corporation, an investment banking firm. From 1982 to 1991, he was
President of MGA Securities Corporation, a retail NASD general
securities firm.

Key Subsidiary Executive
------------------------

       Steven A. Lytle, in October 1996, was named Executive Vice
President and Chief Operating Officer of a wholly-owned subsidiary,
Continental Technologies Corporation, a Georgia corporation based in
Atlanta. He will direct the development of Continental's proposed solid
waste disposal and hauling operations. Mr. Lytle, 43, has had 11 years
experience in the solid waste industry, including extensive involvement
in developing and managing solid waste facilities. Among other
accomplishments, he designed and obtained the permit for a 300-acre,
50 million cubic yard disposal facility in Georgia and continued on to
manage this facility as the District Manager for his former employer.
Mr. Lytle holds a degree in civil engineering from the University of
Cincinnati.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
-------------------------------

        The following table sets forth the compensation earned by the
Company's Chief Executive Officer during the last three fiscal years. No
other  executive officer received compensation in excess of $100,000
during any of the three fiscal years.
<TABLE>
<CAPTION>
                                  Summary Compensation Table

                                                      Long Term Compensation
                                                |---------------------|----------|
                        Annual Compensation     |    Awards           |  Payouts |
                     ---------------------------|---------------------|----------|
<S>           <C>   <C>        <C>     <C>        <C>         <C>       <C>         <C>
  (a)         (b)    (c)       (d)       (e)    |    (f)       (g)    |  (h)     |   (i)
                                        Other   |                     |          |   All
   Name                                 Annual  | Restricted          |          |  Other
   and                                  Compen- |   Stock             |  LTIP    |  Compen-
 Principal                              sation  |  Award(s)   Options/| Payouts  |  sation
 Postion      Year  Salary($)  Bonus($)  ($)    |   ($)        SARs(#)|   ($)    |   ($)
------------------------------------------------|---------------------|----------|----------
R. Dale       1996                     $234,750 |                     |          |
Sterritt,     1995                     $161,575 |                     |          |
Jr.,          1994                     $142,125 |                     |          |
Chairman                                        |                     |          |
and CEO                                         |                     |          |

</TABLE>        
        
        The Company does not have any employment agreements with any of the
executive officers of the parent Company. The only compensation paid to
executive officers and directors of the parent Company is for services
rendered to the Company on a per diem basis at rates prescribed by the Board:
$750 per day for the Chairman, Chief Executive Officer and President;
and $400 per day for all other executive officers. By resolution of the
Board of Directors, directors are entitled to a fee of $200 per meeting;
however, all such fees were waived during fiscal 1996.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
------------------------------------------------------------         
         MANAGEMENT.
         ----------
         The following table sets forth, to the best knowledge of the
Company as of December 27, 1996, certain information with respect to (i)
beneficial owners of more than five percent (5%) of the outstanding
Common Stock, (ii) beneficial ownership of shares of the Company's
Common Stock by each director, and (iii) beneficial ownership of shares
of the Company's Common Stock by all officers and directors as a group.

    Name and Address              Amount and Nature         Percent of
   of Beneficial Owner          of Beneficial Ownership       Class
  --------------------          -----------------------     ----------
  Martin G. Blahitka                     10,000                (3)
    Route 1, Box 918
    Big Sandy, TX 75755

  Robert D. Luna                            -                   -
    Miller Road
    Dallas, TX 75238

  J. B. Morris                          170,699                1.5%
    10254 Miller Road
    Dallas, TX 75238

  Stewart Rahr                          870,700                7.7%
    152-35 10th Avenue
    Whitestone, NY 11357
                                      
  Thomas F. Snodgrass                    15,000                (3)
    10254 Miller Road
    Dallas, TX 75238

  R. Dale Sterritt, Jr.
    10254 Miller Road                       -
    Dallas, TX 75238

  Sterritt Properties, Inc. (1)       5,750,444               50.8%
    10254 Miller Road
    Dallas, TX 75238

  Business Ventures, Inc. (2)         1,600,000               14.1%
    50 Lincolns Inn Fields
    3rd Floor
    London, WC 2A 3PF
    England
  --------------------------
  All Officers and Directors            195,699                1.7%
  as a Group (5 persons)
  --------------------------
<PAGE>  
  (1) Sterritt Properties, Inc. is owned 100%  by a Family Limited
      Partnership. Richard D. Sterritt, Sr., the President of Sterritt
      Properties, Inc., is the father of the Chairman and CEO, R. Dale
      Sterritt, Jr.

  (2) The beneficial ownership of these shares is contested. The Company
      does not take a position as to the true beneficial ownership of such
      shares, but has indicated the name at the time of issue for the
      purpose of this disclosure item.

  (3) Less than 1%.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
-------------------------------------------------------

        During the 1996 fiscal year, Richard D. Sterritt, Sr. and entities
controlled by him made loans to the Company for working capital
purposes, which were repaid in whole or in part at various times during
the year. As of the end of the 1996 fiscal year, the amount of
outstanding loans payable to Mr. Sterritt and such entities was $67,999.

        On September 20, 1996, the Company entered into an agreement with
the 20th Century Group, an entity comprised of Sterritt Properties, Inc.
("SPI"), FIBER-SEAL Services International, Inc. ("FSSI"), 20th Century
Partners, Inc. and 20th Century Holdings, Inc. This agreement called for
the transfer of certain rights and assets owned by 20th Century Group.
The consideration for the transfer was a $1,150,000 note payable. The
property transferred consisted of assets related to the FIBER-SEAL
business. This included all operations formerly carried out by FSSI, all
operations of the Dallas, Texas licensee of FIBER-SEAL and all
trademarks, servicemarks, logos, and tradenames of or related to FIBER-
SEAL. As a result of this transaction, the Sterritt Family has
transferred all of their FIBER-SEAL-related holdings to CICG. The
effective date of the agreement was September 30, 1996.

<PAGE>
                                  PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
-------------------------------------------------------------          
          ON FORM 8-K.
          -----------

(a)  Following are documents filed as part of this report:

     1.   Consolidated Financial Statements of Continental Investment
            Corporation and Subsidiaries.

          See Item 8 of this report - Financial Statements and
            Supplementary Data.

     2.   Financial statement schedules.

          There are no financial statement schedules required to be filed.

     3.   Exhibits.
          
  Exhibit
  Number                         Exhibit Index
  -------   -----------------------------------------------------------------
    3.1     -  Certified copy of the Company's Articles of Incorporation
               and amendments thereto. 1/

    3.2     -  Amended and Restated Bylaws of the Company, as of August
               8, 1989. 1/

    3.3     -  Amendment to the Company's Articles of Incorporation
               dated March 24, 1994. 2/

    21 *    -  List of the Company's Subsidiaries.
----------------------------
* Filed herewith.

       1/   -  Incorporated by reference to the exhibit with the same
               description to the Company's Current Report on Form 8-K filed
               on August 11, 1989.

       2/  -   Incorporated by reference to the exhibit with the same
               description to the Company's Current Report on Form 8-K
               dated as of January 5, 1994.

(b)  Reports on Form 8-K.

     Reports filed on Form 8-K during the last quarter are as follows:

     1.   Report dated September 25, 1996. This Report contained an Item
          5 event - "Changes in Accounting Period."

     2.   Report dated September 30, 1996. This report contained an Item
          5 event - "Purchase of assets from FIBER-SEAL Services
          International, Inc. and FIBER-SEAL of Dallas."
<PAGE>
Exhibit 21

As of December 27, 1996, the Company had the following subsidiaries:

(a) Continental Technologies, Inc.
(b) Continental Technologies Corporation of Georgia
(c) FIBER-SEAL Franchise Corporation
(d) FIBER-SEAL Holdings, Inc.
<PAGE>
                                SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                               CONTINENTAL INVESTMENT CORPORATION


                               By: /S/ R. Dale Sterritt, Jr.
                                   -----------------------------------
                                   R. Dale Sterritt, Jr.
                                   Chairman and Chief Executive Officer


Dated: December 30, 1996


        Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.

                 NAME                                    DATE

       /S/ R. Dale Sterritt, Jr.                   December 30, 1996
       -------------------------------
       R. Dale Sterritt, Jr., Director
       Chairman and Chief Executive Officer


       /S/ Thomas F. Snodgrass                     December 30, 1996
       -------------------------------
       Thomas F. Snodgrass, Director
       President and Treasurer


       /S/Robert D. Luna                           December 30, 1996
       -------------------------------
       Robert D. Luna, Director
       and Secretary


       /S/Martin G. Blahitka                       December 30, 1996
       -------------------------------
       Martin G. Blahitka, Director


       Signature not available at
       time of publication         
       -------------------------------
       J. B. Morris, Director