SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                            For the fiscal year ended
                               September 30, 2001


                           Commission File No. 0-18399

                         FOUNTAIN PHARMACEUTICALS, INC.
                         ------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                    62-1386759
            --------                                    ----------
 (State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)

            505 South Westland Avenue, Suite D, Tampa, Florida 33606
            --------------------------------------------------------
                    (Address of Principal Executive Offices)

       Registrant's telephone number, including area code: (813) 248-0086
                                                           --------------

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

                          Common Stock, par value $.001
                          -----------------------------
                                (Title of Class)


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


         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 past 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.

                               (1) Yes [X] No [ ]

                               (2) Yes [X] No [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B 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. [ ]

<PAGE>

       Registrant's revenues for the year ended September 30, 2001: $666,754


         The aggregate market value of the Company's Common Stock held by
non-affiliates of the Registrant as of January 18, 2002 was approximately
$56,430 based upon the closing sales price of the Company's Common Stock as of
January 18, 2002 (see Footnote (1) below).


                     APPLICABLE ONLY TO REGISTRANTS INVOLVED
           IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

         Indicate by check mark whether the Registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                 Yes [ ] No [ ]


                    APPLICABLE ONLY TO CORPORATE REGISTRANTS:

         The number of shares outstanding of the Registrant's class of Common
Stock, par value $.001 per share, as of January 18, 2002, was 5,875,796.

         The number of shares outstanding of the Registrant's Class B Common
Stock, par value $.001 per share, as of January 18, 2002, was 104,505.


                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None

                 Transitional Small Business Disclosure Format:

                                    Yes [ ]  No [X]



------------------------------
(1)      The information provided shall in no way be construed as an admission
         that any person whose holdings are excluded from the figure is not an
         affiliate or that any person whose holdings are included is an
         affiliate and any such admission is hereby disclaimed. The information
         provided is included solely for recordkeeping purposes of the
         Securities and Exchange Commission.

                                       2
<PAGE>

PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
--------------------------------------------------------------

When used in this Annual Report on Form 10-KSB, the words "may," "will,"
"expect," "anticipate," "continue," "estimate," "intend," and similar
expressions are intended to identify forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 regarding events, conditions and financial
trends which may affect the Company's future plans of operations, business
strategy, operating results and financial position. Such statements are not
guarantees of future performance and are subject to risks and uncertainties and
actual results may differ materially from those included within the
forward-looking statements as a result of various factors. Such factors include,
among others: (i) the Company's ability to obtain additional sources of capital
to fund continuing operations in the immediate term; (ii) the Company's ability
to retain existing or obtain additional licensees who act as distributors of its
products; (iii) the Company's ability to obtain additional patent protection for
its encapsulation technology; and (iv) other economic, competitive and
governmental factors affecting the Company's operations, market, products and
services. Additional factors are described in the Company's other public reports
and filings with the Securities and Exchange Commission. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date made. The Company undertakes no obligation to publicly
release the result of any revision of these forward-looking statements to
reflect events or circumstances after the date they are made or to reflect the
occurrence of unanticipated events.

                                       3
<PAGE>

                                     PART I

ITEM 1   BUSINESS
------   --------

Background

         Fountain Pharmaceuticals, Inc. (the "Company"), incorporated in the
State of Delaware on March 23, 1989, was organized to develop and commercialize
certain proprietary compound encapsulation technologies for use in health care,
agricultural, veterinary and consumer market items using technologies developed
privately and assigned to the Company. These technologies involved development
of man-made spheres composed of soybean lipids that were engineered to entrap
pharmaceuticals or other biologically active molecules within the membranes of
the soybean lipids, hence a compound delivery encapsulation system known as
"Solvent Dilution Micro Carriers" ("SDMC's"). The SDMC's were principally
intended for use in connection with dermal applications, solubilization of
compounds, parenteral and oral formulations and non-pressurized aerosol
preparations. The Company developed a number of proprietary products utilizing
its SDMC technologies. These included non-regulated consumer goods and
dermatologic products consisting of sunscreens, lotions and moisturizers.
Following several years of continued developmental efforts, the Company was able
to secure patents on several aspects of its technologies in the United States
and Europe and initiate certain marketing programs.

         As a result of significant increases in marketing costs associated with
the expansion of existing product lines and the introduction of new products
during fiscal year ended September 30, 1998, which were not offset by sales
revenues during the period, the Company substantially utilized its working
capital resources. In order to provide working capital, the Company entered into
a secured credit arrangement ("Secured Credit Agreement") with Mr. Joseph S.
Schuchert, Jr. (a related party as discussed in the second succeeding paragraph)
as of December 31, 1998. The credit agreement provided for a two-year line of
credit of up to $1,500,000 subject to the Company satisfying certain agreed upon
quarterly operating budget guidelines.

         As a result of additional costs associated with the development and
marketing of two new product lines during fiscal year ended September 30, 1999,
the Company fully utilized the $1,500,000 line of credit. During fiscal years
ended September 30, 2000 and 2001 Mr. Schuchert made additional unsecured
advances to the Company, the terms of which were never finalized. As of
September 30, 2001 the outstanding principal balance of the unsecured loan was
approximately $1,255,000.

         The Company continued to incur losses and had a working capital deficit
at June 21, 2001. Through June 21, 2001 these losses had been principally funded
through sales of preferred stock ($2,500,000) to an entity controlled by the
Company's former Chairman of the Board (Mr. Joseph S. Schuchert, Jr.) and
advances of $2,716,500 from Mr. Schuchert which included the secured line of
credit of $1,500,000 ("Secured Credit Agreement"). On June 21, 2001, Mr.
Schuchert notified the Company that it was in default under the Secured Credit
Agreement dated December 31, 1998. Mr. Schuchert requested immediate payment of
the $1,500,000 principal and accrued interest due under the Secured Credit
Agreement and, in the event such payments were not forthcoming on or before

                                       4
<PAGE>

July 2, 2001, notice was given that Mr. Schuchert would take action to take
possession of the Company's assets and other collateral as defined in the
Secured Credit Agreement.

         The Company's Board of Directors voted on June 28, 2001 to comply with
the agreement and transfer the assets of the Company at the close of business on
July 6, 2001 to Mr. Schuchert, since the Company was not in a financial position
to make the required payment. As a result, the secured debt was satisfied
through this transfer of assets, although the unsecured facility remained
outstanding.

         On December 31, 2001 Park Street Acquisition Corporation ("Park
Street"), a Florida corporation, acquired 2,000,000 shares of Class A
Convertible Preferred Stock ("Preferred Stock") of the Company from Fountain
Holdings LLC ("Holdings") and all Common Stock Purchase Warrants (the
"Warrants") in the name of Holdings to purchase shares of the Company's Class A
Common Stock. The Preferred Stock converts into 1,264,151 shares of Class A
Common Stock. The aggregate purchase price paid to Holdings was Twenty Thousand
($20,000) Dollars ("Purchase Price"), allocated $8,000 towards the purchase of
the Preferred Stock and $12,000 towards the purchase of the Warrants.
Simultaneously with the closing, Park Street and the Company agreed to retire
the Warrants.

         Mr. Schuchert, the principal shareholder of Holdings, in consideration
of the Purchase Price, released and discharged the Company from its obligations
due to him and Fountain Holdings LLC pursuant to a Credit Agreement dated as of
December 31, 1998, and from any other debts or obligations owing Schuchert by
the Company. As of December 29, 2001 the Company owed Schuchert approximately
$1,454,733 of principal and interest.

         Simultaneously with the transactions described above, Park Street
acquired directly from the Company 3,500,000 shares of the Company's Class A
Common Stock and 100,000 shares of the Company's Class B Common Stock for an
aggregate purchase price of $180,000. The proceeds of this transaction were
utilized by the Company to retire all of its remaining liabilities. As a result
of the foregoing, Park Street became the "control person" of the Company as that
term is defined in the Securities Act of 1933, as amended.

         In connection with these transactions, the Board of Directors of the
Company nominated Brendon K. Rennert to the Board of Directors and all former
officers and directors delivered their letters of resignation to the Company.
Mr. Rennert was named CEO, President and Secretary of the Company. These
appointments are subject to compliance with the notice requirements of Rule
14f-1 under the Securities Act of 1934 ("Rule 14f-1"). Mr. Schuchert has agreed
to remain as the Company's sole director until the company has complied with
Rule 14f-1.

         The Board of Directors nominated Brendon K. Rennert as the sole
director of the Company. Mr. Rennert will not take office until at least ten
(10) days after the Information Statement is mailed or delivered to the
Company's shareholders of record in compliance with Section 14(f) of the
Securities Exchange Act of 1934 and Rule 14f-1 thereunder. The mailing was
completed on January 18, 2002. Accordingly, on January 28, 2002 Mr. Schuchert
will resign as the Company's sole director and Mr. Rennert will become the
Company's sole director. As a result of the transfer of the Company's assets to
Schuchert, the Company became a "blank check" or "shell" company.

                                       5
<PAGE>

Business Objectives

         The Company plans to seek one or more potential businesses that
Management believes warrant the Company's involvement. As a result of its
limited resources, the number of potential businesses available will be
extremely limited. The Company will not restrict its search to any particular
industry. Nevertheless, Management does not intend to become involved with a
company that is an investment company under the Investment Company Act of 1940;
with a company that is a broker or dealer of investment securities or
commodities; or with any company in which the officers, directors or
shareholders of the target company are officers or directors of the Company.
These business objectives are extremely general and are not intended to be
restrictive upon the discretion of Management. Except for the general
limitations contained above, management has not developed and does not intend to
develop specific criteria to be followed in the search for and selection of a
business acquisition. Shareholders will therefore have extremely limited
information as to Management's specific intentions and investors will be unable
to determine even the industries which management might consider.

         The target company may be (i) in its preliminary or developmental
stage, (ii) a financially troubled business or (iii) a going concern. It is
impossible to determine the capital requirements of the target business or
whether such business may require additional capital. Some target companies may
seek to establish a public trading market for their securities.

         The analysis of potential business endeavors will be undertaken by or
under the supervision of Management. Management will rely on its own business
judgment in evaluating businesses that the Company may acquire or participate.
See Item 9 - Directors, Executive Officers, Promoters and Control Persons.
Locating and investigating specific business proposals may take an extended
period of time. If a business is located, the negotiation, drafting, and
execution of relevant agreements, disclosure documents and other instruments
will require substantial time, effort, and expense. The time periods of these
subsequent steps cannot be determined. If a specific business endeavor cannot be
located the costs incurred in the investigation are not likely to be recovered.
The failure to consummate an attempted transaction would likely result in the
loss of the costs incurred.

         Shareholders of the Company are relying totally upon the business
judgment of Management. Shareholders will not likely be consulted or provided
any disclosure documentation in connection with any acquisition engaged in by
the Company, unless required by state corporate law or the Federal securities
laws. Although Management does not anticipate a sale of their Company shares in
connection with an acquisition, in the event Management does enter into an
agreement to do so, the remaining shareholders of the Company may not be
afforded an equal opportunity to do so. As Management intends to offer a
controlling interest in the Company, it is probable that a change of control
will occur as a result of an acquisition engaged in by the Company. To the best
knowledge of the Company, there are no lock-up agreements or understandings
between the Company and its shareholders or among the shareholders which has the
effect of restricting the transferability of any shareholders stock holdings.
There are no arrangements, agreements, or understandings between non-management
shareholders and management under which non-management shareholders may directly
or indirectly participate in or influence the management of the Company's
affairs, and there are no agreements concerning the election of members of the
Board of Directors.

                                       6
<PAGE>

         It is not presently anticipated that the Company will acquire or merge
with a business or company in which the Company's promoters, management or their
affiliates or associates directly or indirectly have an ownership interest,
however there is no agreement, policy, or understanding to prevent such a
transaction. In the event of such a non-arm's length transaction, Management
would seek an independent appraisal of the transaction. Notwithstanding the
foregoing, there is the potential that a conflict of interest will arise between
the Company and its management in which case Management's fiduciary duties may
be compromised. Any remedy available under state corporate law would, in such an
event, most likely be prohibitively expensive and time consuming.

         A number of states have enacted statutes, rules and regulations
limiting the sale of securities of blank check companies in their respective
jurisdictions. Some states prohibit the initial offer and sale as well as any
subsequent resale of securities of shell companies to residents of their states.
In such an event, the shareholders of the Company, as well as the shareholders
of any target company, may be limited in their ability to resell shares of the
Company. To the best knowledge of the Company, the following states may have
such limitations (this list is not exhaustive and a significant number of other
states may also have such limitations): Connecticut, Georgia, Oregon,
Washington, and Florida.

Competition

         Inherent difficulties exist for any new company seeking to enter an
established field. The Company will remain an insignificant participant among
the firms which engage in mergers with and acquisitions of privately financed
entities.

         There are many established venture capital and financial concerns which
have significantly greater financial and personnel resources, technical
expertise and experience than the Company. The Company is also subject to
competition from numerous other recently formed public and private entities with
business objectives similar to those of the Company.

Regulation

         The Investment Company Act of 1940 (Investment Act) defines an
investment company as an issuer which is or holds itself out as being engaged
primarily in the business of investing, reinvesting or trading of securities.
The Company does not intend to engage primarily in the activities of purchasing,
trading or selling securities and intends to conduct its activities so as to
avoid being classified as an investment company under the Investment Act. The
Company could be expected to incur significant registration and compliance costs
if required under the Investment Act, and the regulations promulgated
thereunder. Section 3(a) of the Investment Act provides exclusions from its
application for companies which are not primarily engaged in the business of
investing, reinvesting or trading in investment securities. Management intends
to implement its business plan in a manner which will result in the availability
of this exception from the definition of investment company. Accordingly,
Management will continue to review the Company's activities from time to time
with a view toward reducing the likelihood that the Company could be classified
as an investment company.

                                       7
<PAGE>

         The Company's plan of business may involve changes in its capital
structure, management, control, and business, especially if it consummates its
plan to acquire or merge with another entity. Each of these areas are regulated
by the Investment Act, which regulations have the purported purpose of
protecting purchasers of investment company securities. Since the Company will
not register as an investment company, its shareholders will not be afforded
these purported protections.

         Even if the Company restricts its activities as described above, it is
possible that it may be classified as an inadvertent investment company. This
would be most likely to occur if significant delays are experienced in locating
a business opportunity.

         The Company intends to vigorously resist classification as an
investment company and to take advantage of any exemptions or exceptions from
application of the Investment Act, including an exception which allows an entity
a one-time option during any three (3) year period to claim an exemption as a
transient investment company. The necessity of asserting any such contention, or
making any other claim of exemption, could be time consuming, costly or even
prohibitive, given the Company's limited resources.

         The Company intends to structure a merger or acquisition in such a
manner as to minimize Federal and state tax consequences to the Company and its
shareholders, and to any target company and its shareholders. Under Section 368
of the Internal Revenue Code of 1986, as amended (the Code), a statutory merger
or consolidation is an exempt transaction and may be tax free to the companies
and their shareholders if effected in accordance with state law. A tax free
reorganization may require the Company to issue a substantial portion of its
securities in exchange for the securities or assets of a target firm.
Consequently, a tax free reorganization may result in substantial dilution of
the ownership interests of the present shareholders of the Company. Even if a
merger or consolidation is undertaken in accordance with the Code, there is no
assurance that tax regulations will not change and result in the Company or its
shareholders incurring a significant tax liability.

         The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. The Commission has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to certain exceptions.
Such exceptions include any equity security listed on Nasdaq and any equity
security issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operation for three years,
(ii) net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three years, or (iii) average annual revenue
of at least $6,000,000, if such issuer has been in continuous operation for less
than three years. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated therewith.

                                       8
<PAGE>

Employees

         The Company presently (at January 18, 2002) has no employees other than
its sole officer, Mr. Brendon Rennert. Mr. Rennert is employed in another
business and therefore allocates a minimal amount of time to the affairs of the
Company.

ITEM 2   PROPERTIES
------   ----------

         The Company owns no real property. The Company's facility leases were
terminated.

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

         None.

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

         None.

                                       9
<PAGE>

                                     PART II
                                     -------

ITEM 5   MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
------   ----------------------------------------------------------------------

         A.       Market Information
                  ------------------

         The Company's Common Stock presently trades on the OTC Bulletin Board
under the symbol "FPHI". Until May 31, 1994, the Company's Units, Common Stock,
Class A Warrants and Class B Warrants were listed on the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ").

         Effective May 31, 1994, the Company's securities were delisted from The
NASDAQ SmallCap MarketSM because, as a result of declining equity and assets,
the Company no longer satisfied the quantitative listing standards required for
continued listing. During May 1995, the Company's Units, and Class A and Class B
Warrants expired.

         The following table sets forth certain information with respect to the
high and low market prices of the Company's Common Stock for the fiscal years
ended September 30, 1999 and 2000, and for the first and second quarters of its
fiscal year ending September 30, 2001. No trading market exists for shares of
the Company's Class B Common Stock.

         Fiscal 2000                                 HIGH              LOW
         -----------                                 ----              ---

         First Quarter                               $1.00            $.25
         Second Quarter                               $.6875          $.25
         Third Quarter                                $.375           $.25
         Fourth Quarter                               $.3125          $.125

         Fiscal 2001                                 HIGH             LOW
         -----------                                 ----             ---

         First Quarter                               $.17            $.093
         Second Quarter                              $.07            $.05
         Third Quarter                               $.07            $.025
         Fourth Quarter                              $.045           $.02

         Fiscal 2002                                 HIGH             LOW
         -----------                                 ----             ---

         First Quarter                               $.05             $.01
         Second Quarter                              $.08             $.02
         (January 1 - January 18, 2002)

         The closing price of the Company's Common Stock on January 18, 2002 was
$ .05.

                                       10
<PAGE>

         The high and low prices (based on the average bid and ask prices) for
the Company's Common Stock, as reported by The NASDAQ SmallCap MarketSM and the
OTC Bulletin Board, as applicable. Such prices are inter-dealer prices without
retail mark-ups, mark-downs or commissions and may not represent actual
transactions.

         B.       Reverse Stock Split
                  -------------------

         In order to facilitate the conversion of the Company's Preferred Stock
and to enhance the market price and liquidity of the Company's Common Stock, the
Company effectuated a one for twenty reverse stock split, specifically, a
conversion of every twenty issued and outstanding shares into one share of the
same class of Common Stock as of December 11, 1997 (the "Reverse Stock Split").
As of December 31, 2001, the Company had 5.980,301 shares of Common Stock
outstanding including 104,505 shares of Class B Common Stock.

         C.       Holders
                  -------

         Records of the Company's stock transfer agent indicate that as of
January 18, 2002, the Company had 424 record holders of its Class B Common Stock
and Common Stock. Since a significant number of the shares of the Company are
held by financial institutions in "street name," it is likely that the Company
has significantly more stockholders than indicated above. The Company estimates
that it has approximately 2185 record holders, including such shares held in
"street name."

         D.       Dividends
                  ---------

         The Company has not paid any cash dividends, to date, and does not
anticipate or contemplate paying cash dividends in the foreseeable future. It is
the present intention of management to utilize all available funds for working
capital of the Company.

ITEM 6   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
------   ---------------------------------------------------------

Background
----------

         Fountain Pharmaceuticals, Inc. (the "Company"), incorporated in the
State of Delaware on March 23, 1989, was organized to develop and commercialize
certain proprietary compound encapsulation technologies for use in health care,
agricultural, veterinary and consumer market items using technologies developed
privately and assigned to the Company. These technologies involved development
of man-made spheres composed of soybean lipids that were engineered to entrap
pharmaceuticals or other biologically active molecules within the membranes of
the soybean lipids, hence a compound delivery encapsulation system known as
"Solvent Dilution Micro Carriers" ("SDMC's"). The SDMC's were principally
intended for use in connection with dermal applications, solubilization of
compounds, parenteral and oral formulations and non-pressurized aerosol
preparations. The Company developed a number of proprietary products utilizing
its SDMC technologies. These included non-regulated consumer goods and
dermatologic products consisting of sunscreens, lotions and moisturizers.
Following several years of continued developmental efforts, the Company was able
to secure patents on several aspects of its technologies in the United States
and Europe and initiate certain marketing programs.

                                       11
<PAGE>

         As a result of significant increases in marketing costs associated with
the expansion of existing product lines and the introduction of new products
during fiscal year ended September 30, 1998, which were not offset by sales
revenues during the period, the Company substantially utilized its working
capital resources. In order to provide working capital, the Company entered into
a secured credit arrangement ("Secured Credit Agreement") with Mr. Schuchert as
of December 31, 1998. The credit agreement provided for a two-year line of
credit of up to $1,500,000 subject to the Company satisfying certain agreed upon
quarterly operating budget guidelines.

         As a result of additional costs associated with the development and
marketing of two new product lines during fiscal year ended September 30, 1999,
the Company fully utilized the $1,500,000 line of credit. During fiscal years
ended September 30, 2000 and 2001 Mr. Schuchert made additional unsecured
advances to the Company, the terms of which have not been finalized. As of
September 30, 2001 the outstanding principal balance of the unsecured loan was
approximately $1,255,000.

         The Company continued to incur losses and had a working capital deficit
at June 21, 2001. Through June 21, 2001 these losses had been principally funded
through sales of preferred stock ($2,500,000) to an entity controlled by the
Company's current Chairman of the Board (Mr. Joseph S. Schuchert, Jr.) and
advances of $2,716,500 from Mr. Schuchert which included a secured line of
credit of $1,500,000 ("Secured Credit Agreement"). On June 21, 2001, Mr.
Schuchert notified the Company that it was in default under the Secured Credit
Agreement dated December 31, 1998. Mr. Schuchert requested immediate payment of
the $1,500,000 principal and accrued interest due under the Secured Credit
Agreement and, in the event such payments were not forthcoming on or before July
2, 2001, notice was given that Mr. Schuchert would take action to take
possession of the Company's assets and other collateral as defined in the
Secured Credit Agreement.

         The Company's Board of Directors voted on June 28, 2001 to comply with
the agreement and transfer the assets of the Company at the close of business on
July 6, 2001 to Mr. Schuchert, since the Company was not in a financial position
to make the required payment. As a result, the secured debt was satisfied
through this transfer of assets, although the unsecured facility remains
outstanding. On December 31, 2001, in connection with the sale by Mr. Schuchert
of all his securities in the Company, Mr. Schuchert released and discharged the
Company from all of its obligations due him and Fountain Holdings. As of
December 29, 2001, the outstanding principal balance due Mr. Schuchert was
$1,254,571 plus estimated accrued interest of $230,000 as of that date.

         Since the Company no longer has any significant assets subsequent to
July 6, 2001, it no longer has the ability to generate revenue to pay its
unsecured liabilities; therefore, the Company was not in the position to
continue as a going concern. The Company's Board of Directors accordingly,
suspended operations. Through December 30, 2001, the Company's Board of
Director's retained only one employee, the Interim Chief Financial
Officer/Director of Finance and Administration, who assisted in the transfer of
assets to Mr. Schuchert.

                                       12
<PAGE>

         On December 31, 2001, Park Street Acquisition Corporation, a Florida
corporation, acquired 3,500,000 shares of the Company's Class A common stock,
100,000 shares of Class B common stock from the Company for $180,000. The
proceeds of this sale were utilized to pay all of the Company's outstanding
liabilities at December 31, 2001. Simultaneously, Park Street acquired 2,000,000
shares of Class A Preferred Stock from Fountain Holdings, LLC. As a result of
these transactions, Park Street became the "control person" of Fountain
Pharmaceuticals as that term is defined in the Securities Act of 1933, as
amended. Simultaneously with these transactions, the Board of Directors of
Fountain Pharmaceuticals appointed Brendon K. Rennert President, Secretary and
Treasurer of Fountain and nominated him to be the sole director of the Company
subject to Rule 14f-1 of the Securities Exchange Act of 1934, as amended.

Results of Operations
---------------------

         Year ended September 30, 2001 compared to year ended
September 30, 2000:

         During the fiscal year ended September 30, 2001, the Company realized
net income of $761,413 on revenues of $666,754, compared to a net loss of
$1,523,142 on revenues of $1,163,310 for the fiscal year ended September 30,
2000. This decrease in net losses is attributable primarily to an extraordinary
gain of $1,531,721 realized from the extinguishment of debt associated with the
satisfaction of the secured line of credit (through transfer of all assets of
the Company in lieu of foreclosure) during the year ended September 30, 2001.
Losses before extraordinary items also decreased from $1,523,142 in 2000 to
$770,308 in 2001. This decrease in losses was attributable to the Company's
decision to suspend operations on July 6, 2001.

         Revenues for fiscal year ended September 30, 2001 of $666,754
represented a decrease of $496,556 or 43% from revenues of $1,163,310 during
fiscal year ended September 30, 2000. The decrease in revenues was a result,
primarily, of the decline of $387,000 in revenues earned due to the loss of the
Company's European licensee in Switzerland coupled with the suspension of
operations in July 2001.

         During the fiscal year ended September 30, 2001, the Company incurred
operating expenses of $1,068,899, representing a decrease of $1,033,654 or 49%
over operating expenses of $2,102,553 for the prior fiscal year ending September
30, 2000. This decrease in operating expenses was primarily due to reduction in
personnel, legal fees, clinical research studies, and sales and marketing
expenses, coupled with the suspension of operations in July 2001.

         During the fiscal year ended September 30, 2001, the Company incurred
interest expense of $269,061, an 8% increase over interest expense of $249,212
for the prior fiscal year ending September 30, 2000. This increase in interest
expense is associated with the secured line of credit arrangement and the
unsecured loan the Company had with Mr. Schuchert. (See "Liquidity and Capital
Resources.")

Liquidity and Capital Resources

         As a result of significant increases in marketing costs and legal fees,
which were not offset by sales revenues, the Company had substantially utilized
its working capital resources by December 1998. In order to provide working
capital, the Company entered into a secured credit arrangement with Mr.
Schuchert as of December 31, 1998. The Credit Agreement (the "Credit Agreement")

                                       13
<PAGE>

provided for a secured line of credit of up to $1,500,000, the principal and
unpaid interest of which was due on December 31, 2000, 180 days from written
demand of Mr. Schuchert as lender or upon an event of default under the
agreement. The line of credit bore interest at an adjustable monthly rate equal
to the greater of (i) the prime rate quoted in the Wall Street Journal, plus 1
1/2% or (ii) 9%, which is payable monthly or may be accrued. The facility was
secured by all of the assets of the Company (subject to any existing liens).
Additional funds were advanced in 1999, 2000 and 2001 on an unsecured basis.
Under the terms of the warrant granted in connection with the Credit Agreement,
Mr. Schuchert was entitled to purchase 1.6 shares of Common Stock for each
dollar advanced under the facility and 1.6 shares of Common Stock for each
dollar of accrued interest that is unpaid when due under the facility at an
exercise price of $.65 per share with an expiration date of December 31, 2003.
(As of December 29, 2001, Mr. Schuchert was entitled to purchase an aggregate of
2,993,595 shares of Common Stock upon the exercise of such warrant. Mr.
Schuchert sold these warrants to Park Street Acquisition Corporation for
$12,000. Simultaneously therewith, the Company and Park Street agreed to retire
these warrants).

         On June 21, 2001, Mr. Schuchert notified the Company that it was in
default under the Secured Credit Agreement dated December 31, 1998. Mr.
Schuchert requested immediate payment of the $1,500,000 principal and accrued
interest due under the Secured Credit Agreement and, in the event such payments
were not forthcoming on or before July 2, 2001, notice was given that Mr.
Schuchert would take action to take possession of the Company's assets and other
collateral as defined in the Secured Credit Agreement.

         The Company's Board of Directors voted on June 28, 2001 to comply with
the agreement and transfer the assets of the Company at the close of business on
July 6, 2001 to Mr. Schuchert, since the Company was not in a financial position
to make the required payment. As a result, the secured debt was satisfied
through this transfer of assets, although the unsecured facility remains
outstanding.

         As of September 30, 2001, the Company had a working capital deficit of
$1,613,575, a decrease in the working capital deficit of $1,024,787 from the
working capital deficit of $2,638,362 as of September 30, 2000. The decrease in
working capital is primarily attributable to the gain on extinguishment of debt
associated with the transfer of substantially all assets of the company in
satisfaction of the secured line of credit. Since the Company no longer has any
significant assets subsequent to July 6, 2001, it no longer has the ability to
generate revenue to pay its unsecured liabilities; therefore, the Company was
not in the position to continue as a going concern. The Company's Board of
Directors accordingly, suspended operations.

         During fiscal years ended September 30, 2000 and 2001, Mr. Schuchert
made advances to the Company as an additional unsecured loan. As of December 29,
2001, the outstanding principal balance of this unsecured loan was $1,254,571
plus estimated accrued interest of $230,000 as of December 29, 2001. In
connection with the acquisitions by Park Street, Mr. Schuchert released and
discharged the Company from its obligations due him and Fountain Holdings
pursuant to the Credit Agreement dated as of December 31, 1998, and from any
other debt or obligation owing Schuchert or Fountain Holdings by the Company.

                                       14
<PAGE>

         On December 31, 2001, Park Street Acquisition Corporation, a Florida
corporation, acquired 3,500,000 shares of the Company's Class A common stock and
100,000 shares of Class B common stock from the Company for $180,000. The
proceeds of this sale were utilized to pay all of the Company's outstanding
liabilities at December 31, 2001. Simultaneously, Park Street acquired 2,000,000
shares of Class A Preferred Stock from Fountain Holdings, LLC. As a result of
these transactions, Park Street became the "control person" of Fountain
Pharmaceuticals as that term is defined in the Securities Act of 1933, as
amended. Simultaneously with these transactions, the Board of Directors of
Fountain Pharmaceuticals appointed Brendon K. Rennert President, Secretary and
Treasurer of Fountain and nominated him to be the sole director of the Company.

         As of December 29, 2001, Mr. Schuchert was entitled to purchase an
aggregate of 2,993,395 shares of common stock upon exercise of a warrant. Mr.
Schuchert sold these warrants to Park Street Acquisition Corporation for
$12,000. Simultaneously therewith, the Company and Park Street agreed to retire
these warrants.

         In connection with the acquisitions by Park Street, Mr. Schuchert
released and discharged the company from its obligations due to him pursuant to
the credit agreement dated as of December 31, 1998, and from any other debt or
obligation owed Mr. Schuchert or his affiliates by the Company.

         At December 31, 2001, the Company remains a "shell" company. The
Company plans to seek one or more potential businesses that Management believes
warrant the Company's involvement. As a result of its limited resources, the
number of potential businesses available will be extremely limited. The Company
will not restrict its search to any particular industry. Management has not
developed and does not intend to develop specific criteria to be followed in the
search for and selection of a business acquisition.

         The target company may be (i) in its preliminary or developmental
stage, (ii) a financially troubled business or (iii) a going concern. It is
impossible to determine the capital requirements of the target business or
whether such business may require additional capital. Some target companies may
seek to establish a public trading market for their securities.

         It is not presently anticipated that the Company will acquire or merge
with a business or company in which the Company's promoters, management or their
affiliates or associates directly or indirectly have an ownership interest;
however there is no agreement, policy, or understanding to prevent such a
transaction. In the event of such a non-arm's length transaction, Management
would seek an independent appraisal of the transaction.

ITEM 7   FINANCIAL STATEMENTS
------   --------------------

         Financial statements are included under Item 13(A) and may be found at
pages F-1 through F-15.

                                       15
<PAGE>

ITEM 8   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING AND
------   FINANCIAL DISCLOSURE
         ----------------------------------------------------------------

         None.

                                       16
<PAGE>

                                    PART III
                                    --------

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

         A.       Identification of Executive Officers and Directors
                  --------------------------------------------------

         The following table sets forth certain information with respect to each
of the executive officers and directors of the Company. Each of the directors
named below will serve until the next annual meeting of the stockholders or
until their successors are elected or appointed and qualified.

         Name                         Age     Position(s) Held
         ----                         ---     ----------------
         Brendon K. Rennert           33      President, Secretary, Treasurer
                                              and Director Nominee

         Joseph S. Schuchert, Jr.     71      Chairman and Director


         B.       Business Experience
                  -------------------

Brendon K. Rennert

         Mr. Rennert was appointed CEO, President and Secretary of Fountain
Pharmaceuticals, Inc. ("Fountain") on December 31, 2001. Mr. Rennert will become
the sole director of Fountain on January 28, 2002. From December 2001 until
present Mr. Rennert also serves as President, sole director and sole shareholder
of Park Street Acquisition Corporation, a private Florida Corporation. From
October 2001 until present Mr. Rennert also serves as Senior Account Executive
for Qwest Communications International, Inc., an internet broadband
telecommunications company with offices in Tampa, Florida. From January 1998
until December 1998 Mr. Rennert served as President, Secretary, Treasurer and
director of Ybor City Shuttle Service, Inc. a public company based in Tampa,
Florida. From 1998 until present Mr. Rennert also serves as President,
Secretary, Treasurer and sole director of BKR Investments, Inc. a Florida
Corporation which provides independent financial consulting for public and
private companies. Mr. Rennert previously served as Vice President of Finance
and Director of Operations for Bielski Management, Inc. a New York corporation,
operating a multi-million dollar taxicab company operating in New York City,
primarily in Manhattan, from January 1995 until November 1997. Bielski
Management owns and operates a fleet of over one hundred taxis. From May 1991 to
January 1995, Mr. Rennert served as Marketing Director for Lintronics
Technologies, Inc. of Tampa, Florida, a research and development company
specializing in medical devices. Mr. Rennert is a graduate of the State
University College of New York at Fredonia with a BS degree in Business
Administration.

                                       17
<PAGE>

Joseph S. Schuchert, Jr.

         Mr. Schuchert has been a member of the Company's Board of Directors
since July 1997 and was appointed Chairman in June, 1999. Mr. Schuchert has
tendered to the Company his resignation as Chairman, which will become effective
on January 28, 2002. He is Chairman and co-founder of Kelso & Company, Inc., one
of the oldest and most established firms specializing in private equity
investing and in leveraged acquisitions. Mr. Schuchert received a BS in
electrical engineering from Carnegie Mellon University and an LLB from the
University of Pittsburgh Law School. Mr. Schuchert serves as a Trustee at
Carnegie Mellon University of Pittsburgh Law School. Mr. Schuchert serves as a
Trustee at Carnegie Mellon University and is a member of the Board of Directors
of American Standard, Inc., Earle M. Jorgensen Company and the United States
Chamber of Commerce.

Board of Directors; Audit Committee
-----------------------------------

         The Board of Directors held four meetings during fiscal 2001. The
Company had an Audit Committee of the Board of Directors which was created at a
meeting of the Board of Directors on October 9, 1997. The Committee consisted of
Mr. Fuchs, Mr. Schuchert and Ms. Rae. The Audit Committee is the Company's
principal liaison with the Company's independent auditors and is primarily
responsible for the review of accounting procedures and methods employed in
connection with the Company's audit programs and related management policies.
During fiscal 2001 the Audit Committee held one meeting. As a result of the
resignation of Mr. Fuchs and Ms. Rae and the pending resignation of Mr.
Schuchert, the Company's audit committee was disbanded. The Board of Directors
has no other committees.

         Directors' Compensation
         -----------------------

         The Company has a policy of not granting fees to directors who attend a
regularly scheduled or special meeting of its Board of Directors. However, the
Company may reimburse out-of-state directors for their cost of travel and
lodging to attend such meetings.

         Involvement in Certain Legal Proceedings
         ----------------------------------------

         None.

         Compliance with Section 16(a) of the Exchange Act
         -------------------------------------------------

         Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires directors and certain officers of the Company, as well as persons who
own more than 10% of a registered class of the Company's equity securities
("Reporting Persons"), to file reports with the Securities and Exchange
Commission. The Company believes that during fiscal 2001, all Reporting Persons
timely complied with all filing requirements applicable to them.

                                       18
<PAGE>

ITEM 10  EXECUTIVE COMPENSATION
-------  ----------------------

Executive Officers and Directors
--------------------------------

         We currently do not pay any cash salaries to any officers or directors.

Summary Compensation Table
--------------------------

         The Summary Compensation Table shows certain compensation information
for services rendered in all capacities for the fiscal years ended December 31,
1999, 2000 and 2001. Other than as set forth herein, no executive officer's
salary and bonus exceeded $100,000 in any of the applicable years. The following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.
<TABLE>
<CAPTION>
                                                     SUMMARY COMPENSATION TABLE
         ===============================================================================================================
                                                                                                           Long Term
                                             Annual Compensation                                          Compensation
         ------------------------------------------ ------------------- ------------- -------------- --------------------
                                                        Fiscal Year
                                                            Ended
         Name and Principal Position                    September 30      Salary ($)     Bonus ($)       Options/SARS (#)
         ------------------------------------------ ------------------- ------------- -------------- --------------------
         <S>                                              <C>             <C>            <C>               <C>
         Gerald T. Simmons(1)                              2001           $ 19,630         -0-                -0-
         Former Chief Executive Officer and                2000           $ 77,782         -0-               4,636(5)
         President                                         1999           $104,500       $5,000            344,744(5)

         Christopher J. Whitaker(2)                        2001           $100,000         -0-                -0-
         Former Interim Chief Executive Officer and Vice   2000           $124,442         -0-                -0-
         President of Operations                           1999           $110,962       $25,000           37,500(6)

         Francis J. Werner(3)                              2001           $97,750          -0-                -0-
         Interim Chief Executive & Financial Officer and   2000           $97,991          -0-                -0-
         Director of Finance and Administration            1999           $86,912          -0-                -0-

         John C. Walsh(4)                                  2001             -0-            -0-                -0-
         Director, Former Chairman, Chief                  2000             -0-            -0-                -0-
         Executive Officer and President                   1999           $130,962         -0-             24,000(7)
         ========================================== =================== ============= ==============   ==================
----------------------------
</TABLE>
(1)    Mr. Simmons resigned from his position as Chief Executive Officer and
       President on November 30, 2000. Mr. Simmons did not receive a severance
       arrangement. See Employment Arrangements and Change of Control.

(2)    Mr. Whitaker was hired on March 30, 1998 as Director of Marketing. On
       August 3, 1998, Mr. Whitaker was appointed Vice President of Operations.
       Effective February 1, 2001 assumed the position as Interim Chief
       Executive Officer and Vice President of Operations. Effective July 6,
       2001, Mr. Whitaker was terminated.

(3)    Mr. Werner was hired on May 21, 1990 as Controller. On July 1, 1992 Mr.
       Werner was appointed Director of Finance and Administration. Effective
       February 1, 2001 assumed the position as Interim Chief Financial Officer
       and Director of Finance and Administration. Effective July 6, 2001 he
       assumed the position of Acting Chief Executive Officer. Effective
       December 31, 2001 Mr. Werner was terminated.

                                       19
<PAGE>

(4)    Mr. Walsh resigned from his position as Chief Executive Officer and
       President on December 1, 1998. As part of his severance arrangement, Mr.
       Walsh received full salary and accompanying benefits through August 3,
       1999. Mr. Walsh resigned from his position as a Director on December 31,
       2001.

(5)    Represents options to purchase Common Stock granted as of December 8,
       1998, as adjusted as of September 30, 1999 for certain anti-dilution
       provisions pursuant to Mr. Simmons' employment agreement. The options
       have an exercise price of $.56 per share and a term expiring on December
       8, 2003. The options vested 20% as of the date of grant with the balance
       vesting 20% on each anniversary of the date of grant.

(6)    Represents option to purchase Common Stock granted as of December 8,
       1998. The options have an exercise price of $.56 per share. 25,000
       options vest 1/3 per year over a period of three years starting December
       8, 1998 and expire on December 8, 2003. 12,500 options vest 1/3 per year
       over a period of three years starting December 8, 1999 and expire on
       December 8, 2003.

(7)    Represents options to purchase Common Stock granted as of September 23,
       1999. The options have an exercise price of $.625 per share. The options
       vest 25% per year over a period of 4 years, and expire on September 23,
       2004.
<TABLE>
<CAPTION>
                                        OPTION/SAR GRANTS TABLE

                                 Option/SAR Grants in the Last Fiscal Year
=============================================================================================================
                                Individual Grants
--------------------------------------------------------------------------------------------------------------
                                                                   % of Total
                                                                   Options/SARs
                                                                   Granted to       Exercise or
                                    Fiscal     Options/SARs        Employees in     Base Price    Expiration
Name                                Year       Granted (#)         Fiscal Year      ($/Sh)        Date
----------------------------------- ---------- ------------------- ---------------- ------------- ------------
<S>                                   <C>            <C>               <C>            <C>             <C>
Gerald T. Simmons                     2001           -0-(1)             0.0%           -0-             -
Former Chief Executive Officer
and President

Christopher J. Whitaker               2001           -0-(1)             0.0%           -0-             -
Interim Chief Executive Officer
and Vice President of Operations

Francis J. Werner                     2001           -0-(1)             0.0%           -0-             -
Interim Chief Financial Officer
and Director of Finance and
Administration

John C. Walsh                         2001           -0-(1)             0.0%           -0-             -
Director, Former Chairman,
Chief Executive Officer and
President
=============================================================================================================
--------------------
(1)    No options were granted during fiscal year 2001.

                                       20
<PAGE>
<CAPTION>
                                      OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE

========================================================================================================================
                              Aggregated Options/SAR Exercises in Last Fiscal Year
                                          and FY-End Option/SAR Value
------------------------------------------------------------------------------------------------------------------------
                                                                                                      Value of
                                                                                                      Unexercised
                                                                             Number of Unexercised    In-the-Money
                                                                             Options/SARs at          Options/SARs at
                                                                                FY-End (#)             FY-End ($)(1)
----------------------------------- --------- ----------------- ------------ ------------------------ ------------------
                                  Shares Value
                                    Fiscal    Acquired on       Realized     Exercisable/             Exercisable/
Name                                Year      Exercise (#)      ($)          Unexercisable            Unexercisable
----------------------------------- --------- ----------------- ------------ ------------------------ ------------------
<S>                                 <C>             <C>            <C>       <C>                       <C>
Gerald T. Simmons                   2001            -0-             -0-      (E)-0-/(U)-0-             E)$0/(U)$0
Former Chief Executive Officer
and President

Christopher J. Whitaker             2001            -0-             -0-      (E)20,832/(U)16,668      (E)$0/(U)$0
Interim Chief Executive Officer
and Vice President of Operations

Francis J. Werner                   2001            -0-             -0-      (E)37,500/(U)-0-         (E)$0/(U)$0
Interim Chief Financial Officer
and Director of Finance and
Administration

John C. Walsh                       2001            -0-             -0-      (E)12,000/(U)12,000       (E)$0/(U)$0
Director, Former Chairman, Chief
Executive Officer and President
=================================== ========= ================= ============ ======================== ==================
</TABLE>
-------------------------
(1)    Based upon the closing price of the Company's Common Stock of $.02 per
       share as reported on the NASDAQ OTC Bulletin Board as of September 30,
       2001.


                 Employment Arrangements and Change of Control
                 ---------------------------------------------

         As of December 1, 1998, the Company entered into an Employment
Agreement with Mr. Gerald T. Simmons to serve as Chief Executive Officer and
President of the Company. Mr. Simmons is provided with an annual salary of
$130,000. The Agreement provides for a term of one year with successive
year-to-year renewals unless either party shall elect not to renew upon thirty
days prior written notice. The Agreement contains a non-competition and
non-solicitation provision that survives his actual employment for a term of two
years. Mr. Simmons was also granted options to purchase 173,121 shares of Common
Stock (5% of the outstanding Common Stock of the Company including outstanding
options, warrants and convertible securities) at an exercise price of $.56 per
share. As of February 12, 2001, Mr. Simmons had options to purchase 349,380
shares of Common Stock of which approximately 40% have vested. Subsequent to his
resignation from the Company, Mr. Simmons had until February 28, 2001 to
exercise 138,787 options that have vested.

                                 Stock Options
                                 -------------

         As of December 8, 1998, the Company adopted the Fountain
Pharmaceuticals, Inc. 1998 Stock Option Plan (the 1998 Plan). Nonqualified and
incentive stock options may be granted under the 1998 Plan. The term of options
granted under the 1998 Plan are fixed by the plan administrator provided,
however, that the maximum option term may not exceed ten (10) years from the
grant date and the exercise price per share may not be less than the fair market
value per share of the Common Stock on the grant date. Under the 1998 Plan, all
full-time employees of the Company or its subsidiaries, including those who are
officers and directors, non-employee directors and consultants are eligible to
receive options pursuant to the 1998 Plan, if selected. Directors and

                                       21
<PAGE>

consultants are also eligible. The 1998 Plan provides for the authority to issue
options covering up to 750,000 shares of the Company's Common Stock; provided,
however, that option to purchase no more than 500,000 shares shall be granted to
any one participant.

         The 1998 Option Plan is administered by a committee of the Board of
Directors or the full Board of Directors. The Board of Directors may modify,
amend, or terminate the 1998 Plan at any time except that, to the extent then
required by applicable law, rule, or regulation, approval of the holders of a
majority of the Common Stock represented in person or by proxy at a meeting of
the shareholders will be required to increase the maximum number of shares of
Common Stock available for grant under the 1998 Plan (other than increases due
to adjustments in accordance with the 1998 Plan). No modification, amendment, or
termination of the 1998 Plan shall adversely affect the rights of a participant
under a grant previously made to him without the consent of such participant.

         As of December 29, 2001, the Company had options to purchase 230,500
shares of Common Stock outstanding under the 1998 Plan to directors and
employees at exercise prices of $.56 to .625 per share.

ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-------  --------------------------------------------------------------

         The following table sets forth, as of January 18, 2002, information
with respect to the securities holdings of all persons which the Company,
pursuant to filings with the Securities and Exchange Commission, has reason to
believe may be deemed the beneficial owners of more than 5% of the Company's
outstanding Common Stock and Class B Common Stock. The following table indicates
the beneficial ownership of such individuals numerically calculated based upon
the total number of shares of Common Stock and Class B Common Stock outstanding
and alternatively calculated based upon the percentage voting power allocated to
such share ownership taking into account the disproportionate voting rights
attributed to the Class B Common Stock. Also set forth in the table is the
beneficial ownership of all shares of the Company's outstanding stock, as of
such date, of all officers and directors, individually and as a group.

                                       22
<PAGE>
<TABLE>
<CAPTION>
                                                 Amount of             Percent of             Percent of
Name and Address                         Beneficial Ownership(1)       Beneficial       Ownership Voting Power(2)
-----------------                        -------------------------     -----------      ------------------------
<S>                                         <C>                          <C>                    <C>
Park Street Acquisition Corporation         4,866,403(3)                   67.2%                  68.7%(5)
P.O. Box 530246
St. Petersburg, FL  33747

Brendon K. Rennert                          4,866,403(3)                   67.2%                  68.7%(5)
P.O. Box 530246
St. Petersburg, FL  33747

John C. Walsh                               1,257,100(4)                   21.0%                  19.6%
9 North Pelican Drive
Avalon, NJ  08202

Joseph S. Schuchert, Jr.                        -0-                         -0-                    -0-
Fountain Holdings, LLC
c/o Eaglestone Capital Services, Inc.
400 Oaceangate, Suite 1125
Long Beach, CA  90802

All Directors and Officers as a Group       4,866,403(3)                   67.2%                  68.7%(5)
(1 Persons)
-----------------------
</TABLE>
(1)    Except as otherwise indicated, includes total number of shares
       outstanding and the number of shares which each person has the right to
       acquire within 60 days through the exercise of warrants or the conversion
       of Preferred Stock pursuant to Item 403 of Regulation S-B and Rule
       13d-3(d)(1), promulgated under the Securities Exchange Act of 1934. Also
       reflects 5,980,301 shares of the Company's Common Stock (including Class
       B Common Stock) outstanding as of January 8, 2001.

(2)    This column takes into account the disproportionate voting rights granted
       to the holders of the Class B Common Stock. Holders of Class B Common
       Stock are entitled to five (5) votes for every share held.

(3)    Includes 1,264,151 shares of Common Stock and 2,252 shares of Class B
       Common Stock issuable upon conversion of the Preferred Stock held by Park
       Street Acquisition Corporation.

(4)    Includes 6,000 shares of Common Stock issuable upon the exercise of
       options at an exercise price of $.625 per share. Does not include Common
       Stock options to purchase 18,000 shares at an exercise price of $.625 per
       share which were granted September 23, 1999 and which have not vested.

(5)    Assumes the conversion of the Preferred Stock into shares of Common Stock
       and Class B Common Stock. See Voting Rights of Preferred Stock.

                        Voting Rights of Preferred Stock
                        --------------------------------

         As of January 18, 2002, there are 2,000,000 shares of Preferred Stock,
$.001 par value per share, authorized and outstanding, all of which is held by
Park Street Acquisition Corporation. Prior to the conversion of the Preferred
Stock, the holders of the Preferred Stock are entitled to the number of votes to
be cast by the holders of all of the then issued and outstanding Common Stock
and Class B Common Stock plus seven (7) votes in all elections of directors,
which enables such holders to elect a majority of the Board of Directors. In all
other matters presented to stockholders for a vote, whether required by
applicable corporate law or otherwise, the holders of Preferred Stock vote as a
class and no vote of the stockholders will be effective without the approval of
the holders of a majority of the shares of the Preferred Stock. As of January
18, 2002, the shares of Preferred Stock are convertible into approximately
1,264,151 shares of Common Stock and 2,252 shares of Class B Common Stock.

                                       23
<PAGE>

ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------  ----------------------------------------------

                 Line of Credit Agreement and Grant of Warrant
                 ---------------------------------------------

         As of December 31, 1998, the Company entered into a credit arrangement
with Mr. Schuchert. The Credit Agreement provided for a secured line of credit
of up to $1,500,000, the principal and unpaid interest of which were due on the
earlier of December 31, 2000, 180 days from written demand of the lender or upon
an event of default under the agreement. On June 21, 2001, Mr. Schuchert called
the secured line of credit. Under the terms of the warrant granted to Mr.
Schuchert in connection with the Credit Agreement, Mr. Schuchert was entitled to
purchase 1.6 shares of Common Stock for each dollar advanced under the facility
at a purchase price of $.65 per share with an expiration date of December 31,
2003. As of December 29, 2001, Mr. Schuchert was entitled to purchase an
aggregate of 2,993,595 shares of Common Stock upon the exercise of such warrant.
The warrant was purchased by Park Street Acquisition Corporation from Mr.
Schuchert for $12,000. Simultaneously therewith the Company and Park Street
agreed to retire the warrants. See ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION - Liquidity and Capital Resources.

                             Purchase of Securities
                             ----------------------

         On July 17, 1997, the Company completed the sale of 2,000,000 shares of
Series A Convertible Preferred Stock in a private transaction. The Preferred
Stock was sold for $2.5 million in a private transaction to Fountain Holdings,
LLC, a Wyoming limited liability company controlled by Mr. Joseph S. Schuchert,
Jr. Mr. Schuchert joined the Company's Board of Directors in connection with
this transaction. The Preferred Stock was sold pursuant to the terms of a Stock
Purchase and Subscription Agreement dated July 11, 1997 (the Stock Purchase
Agreement).

         Under the terms of the Stock Purchase Agreement, the holders of the
Preferred Stock may convert their Preferred Stock into shares of the Company's
Common Stock and Class B Common Stock, representing one-half of the
approximately 50,656,149 (pre-split) issued and outstanding shares of stock as
of July 17, 1997 (which included for that purpose 3,050,000 (pre-split) shares
reserved for issuance pursuant to certain outstanding Common Stock purchase
warrants). On a post-split basis, the Preferred Stock is currently convertible
into 1,264,151 shares of Common Stock and 2,252 shares of Class B Common Stock.
The conversion rate of the Preferred Stock is adjustable for certain events such
as a reclassification, reorganization, combination and stock-split. On December
31, 2001 all 2,000,000 shares of Preferred Stock were acquired by Park Street
for an aggregate purchase price of $8,000.

         Simultaneously with the transactions described above, Park Street
acquired directly from the Company 3,500,000 shares of the Company's Class A
Common Stock and 100,000 shares of the Company's Class B Common Stock for an
aggregate purchase price of $180,000. The proceeds of this transaction were
utilized by the Company to retire all of its remaining liabilities. As a result
of the foregoing, Park Street became the "control person" of the Company as that
term is defined in the Securities Act of 1933, as amended.

                                       24
<PAGE>

                             Loans From Affiliates
                             ---------------------

         During fiscal years ended September 30, 2000 and 2001, Mr. Schuchert
made advances to the Company as an additional unsecured loan. As of December 29,
2001, the outstanding principal balance of this unsecured loan was $1,254,571
plus estimated accrued interest of $230,000 as of December 29, 2001. In
connection with the acquisitions by Park Street, Mr. Schuchert released and
discharged the Company from its obligations due him and Fountain Holdings
pursuant to the Credit Agreement dated as of December 31, 1998, and from any
other debt or obligation owing Schuchert or Fountain Holdings by the Company.
(See ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION -
Liquidity and Capital Resources.

ITEM 13  EXHIBITS, LIST AND REPORTS ON FORM 8-K
-------  --------------------------------------


         A.       Financial Statements filed as part of this Report:

                                                                  Page Reference

                  Report of Independent Auditors on Financial
                  Statements of Fountain Pharmaceuticals, Inc.         F-1

                  Balance Sheet as of September 30, 2001               F-2

                  Statements of Operations for the years ended
                  September 30, 2001 and 2000                          F-3

                  Statements of Stockholders' Deficit for the
                  years ended September 30, 2001 and 2000              F-4

                  Statements of Cash Flows for the years ended
                  September 30, 2001 and 2000                          F-5

                  Notes to Financial Statements of Fountain
                  Pharmaceuticals, Inc. for the years ended
                  September 30, 2001 and 2000                      F-6 thru F-15

         B.       Financial Statement Schedules:

                  None.

                                       25
<PAGE>

         C.       The following Exhibits are filed as part of this Report:

         Exhibit No.                          Description
         -----------                          -----------
            2.1         Amended Plan of Reorganization dated August 14, 1995
                        (Incorporated by reference to the Company's Current
                        Report on Form 8-K filed on March 28, 1996 (March 1996
                        Form 8-K))

            2.2         Amended Disclosure Statement dated August 14, 1995
                        (Incorporated by reference to the March 1996 Form 8-K)

            3.1         Certificate of Incorporation of the Registrant, filed
                        March 23, 1989 (Incorporated by reference to Exhibit 3.1
                        of the Registration Statement on Form S-1 filed on
                        January 4, 1990, Registration Number 33-32824 (the Form
                        S-1))

            3.2         Certificate of Amendment of Certificate of
                        Incorporation, filed April 10, 1989 (Incorporated by
                        reference to Exhibit 3.2 of the Form S-1)

            3.3         Restated Certificate of Incorporation of the Registrant,
                        filed November 13, 1989 (Incorporated by reference to
                        Exhibit 3.3 of the Form S-1)

            3.4         By-Laws of the Registrant (Incorporated by reference to
                        Exhibit 3.4 of the Form S-1)

            3.5         Certificate of Designation, Preference and Rights of
                        Series A Preferred Stock (Incorporated by reference to
                        Exhibit 3.5 of the Company's Current Report on Form 8-K
                        filed on July 31, 1997 (July 1997 Form 8-K))

            4.1         Copy of Specimen Stock Certificate (Incorporated by
                        reference to Exhibit 4.1 of the Form S-1)

            4.2         Form of Warrant Agreement granted to James Goddard,
                        Weldon Crow, Francis Werner, James Fuchs and James
                        Vatell (Incorporated by reference to Exhibit 4.2 to the
                        July 1997 Form 8-K)

            4.3         Copy of Specimen Stock Certificate of Series A Preferred
                        Stock (Incorporated by reference to Exhibit 4.3 to the
                        July 1997 Form 8-K)

            4.4         Warrant Agreement dated December 31, 1998 between the
                        Registrant and Joseph S. Schuchert, Jr. (incorporated by
                        reference to Exhibit 4.6 to the Registrant's Annual
                        Report on Form 10-KSB for the fiscal year ended
                        September 30, 1998 (1998 10-KSB))

                                       26
<PAGE>

            10.1        Transfer of Technology Agreement (Incorporated by
                        reference to Exhibit 10.3 of the Form S-1)

            10.2        Fountain Pharmaceuticals, Inc. 1998 Stock Option Plan
                        (Incorporated by reference to the Registrant's
                        Information Statement filed with the Securities and
                        Exchange Commission as of July 1, 1999)

            10.3        Stock Purchase and Subscription Agreement between the
                        Registrant and Fountain Holdings, LLC, dated July 11,
                        1997 (Incorporated by reference to Exhibit 10.4 to the
                        July 1997 Form 8-K)

            10.4        Employment Agreement by and between the Registrant and
                        Gerald T. Simmons dated December 1, 1998 (Incorporated
                        by reference to Exhibit 10.5 to the Registrant's 1998
                        10-KSB)

            10.5        Credit and Security Agreement dated December 31, 1998
                        between the Registrant and Joseph S. Schuchert, Jr.
                        (Incorporated by reference to Exhibit 10.6 to the
                        Registrant's 1998 10-KSB)

            10.6        Promissory Note dated December 31, 1998 between the
                        Registrant and Joseph S. Schuchert, Jr. (Incorporated by
                        reference to Exhibit 10.7 to the Registrant's 1998
                        10-KSB)

            10.7        Patent, Trademark and License Mortgage Agreement dated
                        December 31, 1998 between the Registrant and Joseph S.
                        Schuchert, Jr. (Incorporated by reference to Exhibit
                        10.8 to the Registrant's 1998 10-KSB)

            10.8        Capital Stock Purchase Agreement between Fountain
                        Holdings LLC, Joseph S. Schuchert, Jr. and Park Street
                        Acquisition Corporation dated December 31, 2001.
                        (Incorporated by reference to Exhibit 1.1 to the
                        Registrant's Form 8-K Report dated December 31, 2001)

            10.9        Capital Stock Purchase Agreement between Fountain
                        Pharmaceuticals, Inc. and Park Street Acquisition Corp.
                        dated December 31, 2001. (Incorporated by reference to
                        Exhibit 1.2 to the Registrant's Form 8-K Report dated
                        December 31, 2001)

                                       27
<PAGE>

         D.       Reports on Form 8-K

            1.          A Current Report on Form 8-K was filed on July 31, 2001
                        to report (1) the transfer of substantially all of the
                        Company's assets to Mr. Joseph S. Schuchert, Jr. as a
                        result of a default by the Company under a certain
                        Credit Agreement between the Company and Mr. Schuchert
                        dated December 31, 1998 and (2) the suspension of the
                        Company's operations as a result of the default and
                        transfer of assets.

            2.          A Current Report on Form 8-K was filed on January 11,
                        2002 to report the Change of Control of the Company
                        whereby Brendon K. Rennert and Park Street Acquisition
                        Corporation became "control persons of the Company.


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant certifies that it has reasonable grounds to
believe that it meets all the requirements of filing on Form 10-KSB, and has
duly caused this Form 10-KSB to be signed on its behalf by the undersigned,
thereunto duly authorized on the 29th day of January, 2002.

                                        FOUNTAIN PHARMACEUTICALS, INC.


                                        By:  /s/ Brendon K. Rennert
                                            ----------------------------------
                                            Brendon K. Rennert
                                            President, Secretary and Treasurer


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Form 10-KSB has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


Principal Executive                           Title                    Date
-------------------                           -----                    ----

/s/ Brendon K. Rennert                President, Secretary      January 29, 2002
-----------------------------          and Treasurer
Brendon K. Rennert

Directors
---------

/s/ Joseph S. Schuchert, Jr.          Director                  January 29, 2002
-----------------------------
Joseph S. Schuchert, Jr.

                                       28
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

                                                                         Page

         Report of Independent Auditors on Financial Statements
         of Fountain Pharmaceuticals, Inc.                               F-1

         Balance Sheet as of September 30, 2001                          F-2

         Statements of Operations for the years ended
         September 30, 2001 and 2000                                     F-3

         Statements of Stockholders' Deficit for the years ended
         September 30, 2001 and 2000                                     F-4

         Statements of Cash Flows for the years ended
         September 30, 2001 and 2000                                     F-5

         Notes to Financial Statements of Fountain
         Pharmaceuticals, Inc. for the years ended
         September 30, 2001 and 2000                                     F-6


                                       29
<PAGE>

                          Independent Auditors' Report

Board of Directors
Fountain Pharmaceuticals, Inc.
Largo, Florida

We have audited the accompanying balance sheet of Fountain Pharmaceuticals, Inc.
(the "Company"), as of September 30, 2001, and the related statements of
operations, stockholders' deficit and cash flows for each of the years in the
two-year 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 standards generally accepted in the
United States of America. 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 financial position of Fountain Pharmaceuticals, Inc.,
as of September 30, 2001, and the results of its operations and its cash flows
for each of the years in the two-year period then ended in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company transferred substantially all of its assets to
a related party secured lender in lieu of foreclosure in July 2001 and
subsequently ceased operations. These conditions raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

                                               /s/ Aidman, Piser & Company, P.A.

December 12, 2001,
except for Footnote 8 for which
the date is December 31, 2001
Tampa, Florida

                                       F-1
<PAGE>
<TABLE>
<CAPTION>
                                         FOUNTAIN PHARMACEUTICALS, INC.
                                                  BALANCE SHEET
                                               SEPTEMBER 30, 2001

                                                     ASSETS

<S>                                                                                              <C>
Current assets:
   Cash                                                                                          $             3,333
   Prepaid expenses                                                                                            3,659
                                                                                                 --------------------
     Total current assets                                                                                      6,992

                                                                                                 $             6,992
                                                                                                 ====================

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Accounts payable and accrued expenses                                                         $           165,834
   Due to related party:
     Unsecured amounts due to related party                                                                1,254,571
     Accrued interest thereon                                                                                200,162
                                                                                                 --------------------

     Total current liabilities                                                                             1,620,567
                                                                                                 --------------------

     Total liabilities                                                                                     1,620,567
                                                                                                 --------------------

Stockholders' deficit:
   Series A preferred stock, par value $.001, 2,000,000 shares authorized,
     issued and outstanding (liquidation preference
     $2,498,000 in excess of par)                                                                              2,000
   Common stock, par value $.001, 50,000,000 shares authorized;
     2,375,796 shares issued and outstanding                                                                   2,376
   Class B common stock; par value $.001, 50,000,000 shares
     authorized; 4,505 shares issued and outstanding                                                               5
   Additional paid-in capital                                                                             17,094,106
   Accumulated deficit                                                                                   (18,712,062)
                                                                                                  -------------------
     Total stockholders' deficit                                                                          (1,613,575)
                                                                                                 --------------------

                                                                                                 $             6,992
                                                                                                 ====================
</TABLE>
                                       See notes to financial statements.

                                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                                         FOUNTAIN PHARMACEUTICALS, INC.
                                            STATEMENTS OF OPERATIONS
                                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000

                                                                                      2001                  2000
                                                                                -----------------    ------------------
<S>                                                                             <C>                  <C>
Revenue                                                                         $        666,754     $       1,163,310
                                                                                -----------------    -----------------

Cost of sales                                                                            120,185               178,295
Write down of inventory to market                                                              -               143,506
                                                                                -----------------    ------------------
                                                                                         120,185               321,801
                                                                                -----------------    ------------------

Gross profit                                                                             546,569               841,509
                                                                                -----------------    ------------------

Operating expenses:
   Research and development                                                              157,000               368,469
   General and administrative (including rent of
     $22,000 and $131,000 in 2001 and 2000)                                              290,826               495,535
   Selling                                                                               426,686             1,181,818
   Depreciation and amortization                                                         194,387                56,731
                                                                                -----------------    ------------------

                                                                                       1,068,899            2,102,553
                                                                                -----------------    ------------------

Loss from operations                                                                    (522,330)           (1,261,044)
                                                                                -----------------    ------------------

Other income (expenses):
   Interest income                                                                         7,000                 3,953
   Interest expense                                                                     (269,061)             (249,212)
   Other income (expense)                                                                 14,083               (16,839)
                                                                                -----------------    ------------------
                                                                                        (247,978)             (262,098)
                                                                                -----------------    ------------------

Loss before income taxes and extraordinary item                                         (770,308)           (1,523,142)
Income taxes                                                                                   -                     -
                                                                                -----------------    ------------------
Loss before extraordinary item                                                          (770,308)           (1,523,142)
Extraordinary gain from extinguishment of debt
   (no applicable income taxes)                                                        1,531,721                     -
                                                                                -----------------    ------------------
Net income (loss)                                                               $        761,413     $      (1,523,142)
                                                                                =================    ==================

Basic net income (loss) per common share
   Income (loss) before income taxes and extraordinary item                     $           (.32)    $            (.64)
   Extraordinary gain                                                                        .64                     -
                                                                                -----------------    ------------------
   Net income (loss)                                                            $            .32     $            (.64)
                                                                                =================    ==================

Diluted net income (loss) per share
   Income (loss) before income taxes and extraordinary item                     $           (.21)    $            (.64)
   Extraordinary gain                                                                        .42                     -
                                                                                -----------------    ------------------
   Net income (loss)                                                            $            .21     $            (.64)
                                                                                =================    ==================

Weighted average basic number of shares outstanding                                    2,380,301             2,380,301
                                                                                =================    ==================
Weighted average diluted number of shares outstanding                                  3,642,199             2,380,301
                                                                                =================    ==================
</TABLE>
                                       See notes to financial statements.

                                                       F-3
<PAGE>
<TABLE>
<CAPTION>
                                                 FOUNTAIN PHARMACEUTICALS, INC.
                                               STATEMENTS OF STOCKHOLDERS' DEFICIT
                                             YEARS ENDED SEPTEMBER 30, 2001 AND 2000


                                                                             Class B
                                Preferred Stock         Common Stock      Common Stock      Additional
                            ---------------------  -------------------- -----------------    Paid-in     Accumulated
                              Shares      Amount     Shares     Amount   Shares    Amount     Capital      Deficit        Total
                            ----------  ---------  ---------  --------- --------  -------  ------------- ------------  ------------
<S>                          <C>        <C>        <C>        <C>         <C>    <C>      <C>           <C>             <C>
Balances,
   October 1, 1999           2,000,000  $   2,000  2,375,796  $   2,376   4,505  $     5  $ 17,077,128  $(17,950,333)   $ (868,824)
                             ---------  ---------  ---------  ---------   -----  -------  ------------  ------------   -----------
Options and warrants issued
   to directors for services        -          -          -          -       -        -          9,554            -          9,554

Net loss for the year               -          -          -          -       -        -             -     (1,523,142)   (1,523,142)
                             ---------  ---------  ---------  ---------   -----  -------  ------------  ------------   -----------

Balances,
   September 30, 2000        2,000,000      2,000  2,375,796      2,376   4,505        5    17,086,682   (19,473,475)   (2,382,412)
                             ---------  ---------  ---------  ---------   -----  -------  ------------  ------------   -----------

Options and warrants issued
   to directors for services                                                                     7,424                       7,424

Net income for the year                                                                             -        761,413       761,413
                             ---------  ---------  ---------  ---------   -----  -------  ------------  ------------   -----------

Balances,
   September 30, 2001        2,000,000  $   2,000  2,375,796  $   2,376   4,505  $     5  $ 17,094,106  $(18,712,062)  $(1,613,575)
                            ==========  =========  =========  ========= =======  =======  ============  ============   ===========
</TABLE>
                                              See notes to financial statements.

                                                             F-4
<PAGE>
<TABLE>
<CAPTION>
                                         FOUNTAIN PHARMACEUTICALS, INC.
                                            STATEMENTS OF CASH FLOWS
                                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000

                                                                                      2001                  2000
                                                                                -----------------    ------------------
<S>                                                                             <C>                  <C>
Cash flows from operating activities:
   Net income (loss)                                                            $        761,413     $      (1,523,142)
   Adjustments to reconcile net income (loss) to
     net cash used in operating activities:
       Expenses funded by issuance of options and warrants                                 7,424                 9,554
       Depreciation                                                                       36,503                47,315
       Amortization                                                                      157,884                 9,416
       Gain on disposal of property and equipment                                         (8,950)                    -
       Extraordinary gain on extinguishment of debt                                   (1,531,721)                    -
       Increase (decrease) in cash due to changes in:
         Accounts receivable                                                              50,409                46,809
         Inventories                                                                     (68,564)              194,447
         Prepaid expenses                                                                  2,525                69,222
         Other assets                                                                     10,046                  (400)
         Accounts payable and other accrued expenses                                     176,449               147,295
                                                                                ------------------   ------------------
Net cash used in operating activities                                                   (406,582)             (999,484)
                                                                                -----------------    ------------------

Cash flows from investing activities:
   Deferred patent costs incurred                                                              -               (22,904)
   Proceeds from disposal of property and equipment                                       74,266                     -
   Acquisition of property and equipment                                                       -               (25,855)
                                                                                -----------------    ------------------

Net cash provided by (used in) investing activities                                       74,266               (48,759)
                                                                                -----------------    ------------------

Cash flows from financing activities:
   Related party advances                                                                278,571               976,000
   Payments on long-term debt                                                            (31,609)              (16,068)
                                                                                -----------------    ------------------
Net cash provided by financing activities                                                246,962               959,932
                                                                                -----------------    ------------------

Decrease in cash and cash equivalents                                                    (85,354)              (88,311)

Cash, beginning of year                                                                   88,687               176,998
                                                                                -----------------    ------------------

Cash, end of year                                                               $          3,333     $          88,687
                                                                                =================    ==================
</TABLE>

                 Supplemental schedule of cash flow information

Interest paid was $1,789 and $4,747 for the years ended September 30, 2001 and
2000, respectively.

Non-cash financing activity:
In July 2001, the Company transferred substantially all assets with a book value
of $369,569 to a related party secured lender in satisfaction of $1,870,997 of
secured borrowings and interest thereon.

                                       See notes to financial statements.

                                                       F-5
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


1.     Nature of business, basis of presentation and summary of significant
       accounting policies:

       Nature of business prior to July 6, 2001:

       Fountain Pharmaceuticals, Inc. (the "Company"), incorporated in the State
       of Delaware on March 23, 1989, was organized to develop and commercialize
       certain proprietary compound encapsulation technologies for use in health
       care, agricultural, veterinary and consumer market items using
       technologies developed privately and assigned to the Company. These
       technologies involved development of man-made spheres composed of soybean
       lipids that were engineered to entrap pharmaceuticals or other
       biologically active molecules within the membranes of the soybean lipids,
       hence a compound delivery encapsulation system known as "Solvent Dilution
       Micro Carriers" ("SDMC's"). The SDMC's were principally intended for use
       in connection with dermal applications, solubilization of compounds,
       parenteral and oral formulations and non-pressurized aerosol
       preparations. The Company developed a number of proprietary products
       utilizing its SDMC technologies. These included non-regulated consumer
       goods and dermatologic products consisting of sunscreens, lotions and
       moisturizers. Following several years of continued developmental efforts,
       the Company was able to secure patents on several aspects of its
       technologies in the United States and Europe and initiate certain
       marketing programs.

       Discontinuance of all operations:

       The Company has incurred recurring losses and had a working capital
       deficit at June 21, 2001. Through June 21, 2001 these losses had been
       principally funded through sales of preferred stock ($2,500,000) to
       Fountain Holdings, LLC, an entity controlled by the Company's current
       Chairman of the Board (Mr. Joseph S. Schuchert, Jr.) and advances of
       $2,716,500 from Mr. Schuchert which included a secured line of credit of
       $1,500,000 ("Secured Credit Agreement"). On June 21, 2001, Mr. Schuchert
       notified the Company that it was in default under the Secured Credit
       Agreement dated December 31, 1998. Mr. Schuchert requested immediate
       payment of the $1,500,000 principal and accrued interest due under the
       Secured Credit Agreement and, in the event such payments were not
       forthcoming on or before July 2, 2001, notice was given that Mr.
       Schuchert would take action to take possession of the Company's assets
       and other collateral as defined in the Secured Credit Agreement.

                                      F-6
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


1.     Nature of business, basis of presentation and summary of significant
       accounting policies (continued):

       The Company's Board of Directors voted on June 28, 2001 to comply with
       the agreement and transfer the assets of the Company to Mr. Schuchert at
       the close of business on July 6, 2001, since the Company was not in a
       financial position to make the required payment. As a result, the Company
       has recognized a $1,531,721 extraordinary gain on extinguishment of this
       related party debt in the accompanying 2001 statement of operations.

       Since the Company no longer has any significant assets subsequent to July
       6, 2001, it no longer has the ability to generate revenue to pay its
       unsecured liabilities; therefore, the Company was not in the position to
       continue as a going concern. The Company's Board of Directors
       accordingly, suspended operations. The Company's Board of Director's
       retained only one employee, the Interim Chief Financial Officer/Director
       of Finance and Administration, who assisted in the transfer of assets to
       Mr. Schuchert. See Note 8 for subsequent events.

       Advertising costs:

       The costs associated with producing and communicating advertising are
       expensed in the period incurred. Advertising costs were approximately
       $4,300 and $81,000 during 2001 and 2000, respectively.

       Use of estimates:

       Preparation of these financial statements in conformity with accounting
       principles generally accepted in the United States of America requires
       management to make estimates and assumptions that affect the reported
       amounts of assets and liabilities and disclosure of contingent assets and
       liabilities at the dates of the financial statements and the reported
       amounts of revenues and expenses during the reporting periods. Actual
       results could differ from those estimates.

       Stock-based compensation:

       The Company accounts for compensation costs associated with stock options
       and warrants issued to employees under the provisions of Accounting
       Principles Board Opinion No. 25 ("APB 25") whereby compensation is
       recognized to the extent the market price of the underlying stock exceeds
       the exercise price of the option granted. Stock-based compensation to
       non-employees is accounted for using the fair value based method
       prescribed by Financial Accounting Standard No. 123 (Accounting for Stock
       Based Compensation).

                                      F-7
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


1.     Nature of business, basis of presentation and summary of significant
       accounting policies (continued):

       Net income (loss) per share:

       Net income (loss) per share was computed based on the weighted average
       number of shares outstanding during the periods presented.

       Diluted earnings per share in 2001 is computed assuming conversion of all
       preferred stock and potentially dilutive stock options and warrants.
       Potential common shares outstanding are excluded from the computation if
       their effect is antidilutive.

       Diluted net loss per share in 2000 is considered to be the same as basic
       net loss per share since the effect of the issuance of common stock
       options is anti-dilutive.


2.     Major customer information and fair value of financial instruments:

       Major customer information:

       During the years ended September 30, 2001 and 2000, the Company derived
       revenues from two customers which individually exceeded 10% of total
       revenues as follows:
<TABLE>
<CAPTION>
                                                                                    2001                  2000
                                                                             ------------------    ------------------
         <S>                                                                 <C>                   <C>
         Customer 1 (European)                                               $          138,000    $          525,000
         Customer 2 (European)                                               $          174,000    $          217,000

<CAPTION>
       Total export revenues were approximately as follows:

                                                                                    2001                  2000
                                                                             ------------------    ------------------
              <S>                                                            <C>                   <C>
              Europe                                                         $          415,200    $          755,000
              South America                                                              19,000                26,000
                                                                             ------------------    ------------------
                                                                             $          434,200    $          781,000
                                                                             ==================    ==================
</TABLE>

       Fair value of financial instruments:

       All financial instruments are held or issued for purposes other than
       trading. The carrying amount of accounts payable approximates fair value
       because of the short maturity of those investments. The carrying amount
       of the unsecured amounts due related party approximates the fair value
       based on current market rates offered to the Company.

                                      F-8
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


3.     Business segment information:

       The Company had operations classified as two business segments: 1)
       domestic sales of dermatologic products, and 2) international sales of
       dermatologic products to distributors and the sale of the rights to the
       Company's technology. The "domestic" category is an aggregation of the
       LyphaZome(R) and Celazome(R) product lines for 2000. There were no
       significant intersegment sales or transfers during 2001 or 2000.

       Summarized financial information by business segment for 2001 and 2000 is
       as follows:
<TABLE>
<CAPTION>
                                                          2001
                           ----------------------------------------------------------------------
                             Corporate       Domestic        International          Total
                           -------------  -------------   -------------------   -----------------

       <S>                 <C>            <C>             <C>                   <C>
       Total revenue       $          -   $     251,541   $           415,213   $         666,754
                                                                                =================

       Cost of sales                  -          99,243                20,942   $         120,185
                                                                                =================
<CAPTION>
                                                          2000
                           ----------------------------------------------------------------------
                             Corporate       Domestic        International            Total
                           -------------  -------------   -------------------   -----------------

       <S>                 <C>            <C>             <C>                   <C>
       Total revenue       $    25,000    $    383,099    $           755,211   $      1,163,310
                                                                                =================

       Cost of sales                 -         299,093                 22,708   $        321,801
                                                                                =================
</TABLE>

4.     Related party transactions:

       Amounts due to related party bear interest at the greater of prime plus
       1 1/2% or 9% and are due on demand.

       Borrowings under a former Secured Credit Agreement with a related party
       (see Note 1 Discontinuance of all operations) bore interest at the
       greater of 9% or the prime rate plus 1 1/2%.

       Interest expense on these related party borrowings was approximately
       $267,000 and $244,000 for the years ended September 30, 2001 and 2000,
       respectively.

                                      F-9
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


5.     Stockholders' deficit:

       Series A preferred stock:

       In 1997, the Company issued 2,000,000 shares of voting convertible
       participating preferred stock for $2,500,000 to Fountain Holdings, LLC.
       The preferred stock has a liquidation preference of $1.25 per share (this
       equates to a potential restriction of retained earnings resulting from
       the involuntary liquidation preference of $2,498,000 in excess of par
       value of such preferred stock). The preferred shares may be converted
       into 1,264,151 shares of common stock and 2,252 shares of Class B common
       stock, which equates to a conversion price of approximately $.10 per
       share, the market value per share of the common stock at the date of
       issuance of the preferred stock.

       Voting rights:

       Shareholders of common stock and Class B common stock are entitled to one
       and five votes per share, respectively. Holders of shares of Series A
       preferred stock are entitled to a number of votes in total that equal the
       total number of votes able to be cast by holders of all then issued and
       outstanding shares of common stock and Class B common stock, plus seven
       votes in all elections of directors.

       Stock option plan:

       In December 1998, the Company adopted the "Fountain Pharmaceuticals, Inc.
       1998 Stock Option Plan" (the "Plan"). Nonqualified and incentive stock
       options may be granted under the Plan. The term of options granted under
       the Plan will be fixed by the Plan Administrator provided, however, that
       the maximum option term may not exceed 10 years from the grant date and
       the exercise price per share may not be less than the fair market value
       per share of the common stock on the grant date. Under the 1998 Plan, all
       full-time employees of the Company, including those who are officers and
       directors, are eligible to receive options pursuant to the Plan, if
       selected. Non-employee directors, and consultants will also be eligible.
       The Plan will provide for the authority to issue options covering up to
       750,000 shares of the Company's common stock; provided, however, that
       options to purchase no more than 500,000 shares shall be granted to any
       one participant.

                                      F-10
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


5.     Stockholders' deficit (continued):

       Common stock options and warrants:

       The Company recognized compensation expense to non-employee directors of
       approximately $7,500 in 2001 and $9,500 in 2000 associated with the
       issuance of options and warrants. There were no options or warrants
       issued to employees in 2001 or 2000.

       The "Black-Scholes" option-pricing model assumptions used in valuing
       options issued to directors are as follows:

           Underlying stock price at grant date             $.150 - .625
           Exercise price                                    $.56 - .65
           Dividend yield                                         0%
           Risk free interest rate                                6%
           Volatility                                            40%


                                      F-11
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


5.     Stockholders' deficit (continued):

       Common stock options and warrants (continued):

       Common stock options and warrants issued, redeemed and outstanding during
       the years ended September 30, 2001 and 2000 are as follows:
<TABLE>
<CAPTION>
                                                                                                              Weighted Avg.
                                                                                  Number of                     Exercise
                                Description                                 Options and Warrants               Price/Share
       -----------------------------------------------------------       ---------------------------   -------------------------
         <S>                                                                     <C>                   <C>
         Issued and outstanding at October 1, 1999                                3,248,181             $           .63

         Issued in 2000                                                            314,507                          .65

         Expired in 2000                                                          (33,000)                          .58
                                                                         ---------------------------    ------------------------

         Issued and outstanding at September 30, 2000                             3,529,688                         .63

         Issued in 2001                                                            221,621                          .65

         Expired in 2001                                                          (474,714)                         .64
                                                                         ---------------------------    ------------------------

         Issued and outstanding at September 30, 2001                             3,276,595             $           .65
                                                                         ===========================    ========================
<CAPTION>

       These common stock options and warrants were issued to current or former
       officers, directors, shareholders and employees. Those that remain
       outstanding and exercisable (except as noted) at September 30, 2001 are
       as follows:

                            Vesting Period    Exercise       Expiration       Remaining       Number
             Issue Date           Yrs          Price           Date             Life        Outstanding
         ------------------ ---------------  ----------    ----------------  ------------  ---------------
         <S>                    <C>          <C>            <C>               <C>           <C>
         July 1996                0          $   .56        December 2003     2.25 Yrs          62,500

         December 1998            0-3        $   .56        December 2003     2.25 Yrs.         52,500(2)

         January 1999             0          $   .65        December 2003     2.25 Yrs       2,993,595

         September 1999           0-3        $   .625       September 2004       3 Yrs         144,000(1)

         December 1999            0          $   .625       September 2004       3 Yrs          24,000
                                                                                            ----------
                                                                                             3,276,595
</TABLE>

       184,000 vested at September 30, 2001
       243,442 vested at September 30, 2001; all surrendered subsequently

                                      F-12
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


6.     Employee benefit plan:

       The Company had implemented a 401(k) profit sharing plan covering
       substantially all employees. The plan does not provide for employer
       contributions. The plan was terminated in July 2001.

7.     Income taxes:
<TABLE>
<CAPTION>
       Deferred tax assets consist of the following at September 30, 2001:

         <S>                                                                                         <C>
         Net operating loss carryover                                                                $       2,088,000
         Accrued interest not currently deductible                                                              75,000
         Valuation allowance                                                                                (2,163,000)
                                                                                                     ------------------
                                                                                                     $               -
                                                                                                     ==================
<CAPTION>

       Income tax (expense) benefit consists of the following:
                                                                                            2001             2000
                                                                                      ---------------   ---------------
         <S>                                                                          <C>               <C>
         Current:
           Federal                                                                    $            -    $            -
                                                                                      ---------------   ---------------

         Deferred:
           Deferred                                                                          121,000          (168,000)
           Benefit of net operating loss carryover (a)                                       165,000          (418,000)
           Change in valuation allowance                                                    (286,000)          586,000
                                                                                      ---------------   ---------------
                                                                                                   -                 -
                                                                                      ---------------   ---------------
                                                                                      $            -    $            -
                                                                                      ===============   ===============
<CAPTION>

       The expected income tax benefit at the statutory tax rate differed from
       income taxes in the accompanying statements of operations as follows:

                                                                                     Percentage of loss before
                                                                                           income taxes
                                                                           --------------------------------------------
                                                                                   2001                    2000
                                                                           --------------------    --------------------
         <S>                                                                           <C>                    <C>
         Statutory tax rate                                                               34.0%                  34.0%
         State tax                                                                         3.5%                   3.5%
         Change in deferred tax asset
           valuation allowance                                                          (37.5%)                 (37.5%)
                                                                           --------------------    --------------------
         Effective tax rate in accompanying
           statement of operations                                                           0%                     0%
                                                                           ====================    ====================
</TABLE>

                                      F-13
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


7.     Income taxes (continued):


       (a)    Under Section 382 and 383 of the Internal Revenue Code of 1986, if
              an ownership change occurs with respect to a "loss corporation",
              as defined, there are annual limitations on the amount of net
              operating loss and research and development tax credit carryovers
              which are available to the Company. The taxable income of a loss
              corporation for any tax year ending after an ownership change may
              be offset by pre-change loss carryovers only to the extent of the
              section 382 and 383 limitation for that year. Events occurred in
              1996 which created an ownership change in excess of fifty percent
              for income tax purposes; therefore, the Company believes that the
              availability of the pre-change net operating loss carryover
              ($12,700,000) and research and development credit carryover
              ($250,000) will be substantially limited in the future and, as
              such, the Company has previously accounted for the loss of such
              carryover by reducing the deferred tax asset and associated
              valuation allowance. The post-change net operating loss carryover
              of $5,400,000 will expire 2012-2020.

8.     Subsequent events:

       On December 31, 2001, Park Street Acquisition Corporation, a Florida
       corporation, acquired 3,500,000 shares of the Company's Class A common
       stock and 100,000 shares of Class B common stock from the Company for
       $180,000. The proceeds of this sale were utilized to pay all of the
       Company's outstanding liabilities at December 31, 2001. Simultaneously,
       Park Street acquired 2,000,000 shares of Class A Preferred Stock from
       Fountain Holdings, LLC. As a result of these transactions, Park Street
       became the "control person" of Fountain Pharmaceuticals as that term is
       defined in the Securities Act of 1933, as amended. Simultaneously with
       these transactions, the Board of Directors of Fountain Pharmaceuticals
       appointed Brendon K. Rennert President, Secretary and Treasurer of
       Fountain and nominated him to be the sole director of the Company. As of
       December 29, 2001, Mr. Schuchert was entitled to purchase an aggregate of
       2,993,395 shares of common stock upon exercise of a warrant. Mr.
       Schuchert sold these warrants to Park Street Acquisition Corporation for
       $12,000. Simultaneously therewith, the Company and Park Street agreed to
       retire these warrants.

       In connection with the acquisitions by Park Street, Mr. Schuchert
       released and discharged the company from its obligations due to him
       pursuant to the credit agreement dated as of December 31, 1998, and from
       any other debt or obligation owed Mr. Schuchert or his affiliates by the
       Company.

                                      F-14
<PAGE>

                         FOUNTAIN PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


8.     Subsequent events (continued):

       At December 31, 2001, the Company remains a "shell" company. The Company
       plans to seek one or more potential businesses that Management believes
       warrant the Company's involvement. As a result of its limited resources,
       the number of potential businesses available will be extremely limited.
       The Company will not restrict its search to any particular industry.
       Management has not developed and does not intend to develop specific
       criteria to be followed in the search for and selection of a business
       acquisition.

       The target company may be (i) in its preliminary or developmental stage,
       (ii) a financially troubled business or (iii) a going concern. It is
       impossible to determine the capital requirements of the target business
       or whether such business may require additional capital. Some target
       companies may seek to establish a public trading market for their
       securities.

       It is not presently anticipated that the Company will acquire or merge
       with a business or company in which the Company's promoters, management
       or their affiliates or associates directly or indirectly have an
       ownership interest; however there is no agreement, policy, or
       understanding to prevent such a transaction. In the event of such a
       non-arm's length transaction, Management would seek an independent
       appraisal of the transaction.

                                      F-15
<PAGE>