SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
                                    ----------
              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended     September 30, 1997
                                                --------------------------------

                                       OR
              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                 For the transition period from ______ to ______

                         Commission file number 0-27736


                         POINT WEST CAPITAL CORPORATION
                          -----------------------------
             (Exact name of registrant as specified in its charter)

                  Delaware                           94-3165263
                  --------                           ----------
          (State or other jurisdiction of           (I.R.S. Employer
          incorporation or organization)          Identification Number)

        1700 Montgomery Street, Suite 250
        ---------------------------------
           San Francisco, California                       94111
           -------------------------                       -------
        (Address of principal executive offices)          (Zip Code)

                                 (415) 394-9467
                                 --------------
              (Registrant's telephone number, including area code)




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


At October 31, 1997,  there were  3,253,324  shares of the  registrant's  Common
Stock outstanding.


<PAGE>





21




                     POINT WEST CAPITAL CORPORATION
                     ------------------------------

                                 INDEX
                                 -----
                                                                    Page #
Part I                                                              ------
------

Item 1. Consolidated Financial Statements:

         Consolidated Balance Sheets
            September 30, 1997 and December 31, 1996                  1

         Consolidated Statements of Operations for the
            Three Months and Nine Months Ended
            September 30, 1997 and 1996                               2

         Consolidated Statements of Cash Flows for the
            Nine Months Ended September 30, 1997 and 1996             3

         Condensed Notes to Consolidated Financial Statements        4-11

Item 2.  Management's Discussion and Analysis of Financial
               Condition and Results of Operations                   12-19


Part II
-------
Item 1.  Legal Proceedings                                            20

Item 2.  Change in Securities and Use of Proceeds                     20

Item 6.  Exhibits and Reports on Form 8-K                            20-21


Signatures                                                            21
----------





                                       (i)


<PAGE>



                                           CONSOLIDATED BALANCE SHEETS
                                     September 30, 1997 and December 31, 1996

<TABLE>
<CAPTION>



                                                                                September 30,          December 31,
                                 ASSETS                                             1997                   1996
                                                                             --------------------   --------------------
<S>                                                                                   <C>                      <C>


Cash and cash equivalents                                                  $          14,126,590  $           6,586,447
Restricted cash (note 6)                                                               4,120,847              4,625,663
Investment securities (note 2)
           Held-to-maturity                                                            2,477,500                     --
           Available-for-sale                                                          1,614,530                     --
Matured policies receivable (note 6)                                                     146,000              1,181,513
Assets held for sale (note 3)                                                            170,921             11,520,103
Purchased life insurance policies (note 4)                                            37,415,435             41,246,239
Investment in convertible preferred shares (note 5)                                    1,658,478              3,000,000
Deferred financing costs, net of accumulated amortization of
           $559,228 and $381,690, respectively (note 4 and 6)                            584,964                681,910
Other assets                                                                             139,890                102,598
                                                                             --------------------   --------------------


           Total assets                                                    $          62,455,155  $          68,944,473
                                                                             ====================   ====================

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Accrued expenses                                                           $             194,277  $             190,894
Accounts payable                                                                         470,225                320,577
Accrued compensation payable                                                             134,000                186,390
Payable for policies purchased                                                                --                427,553
Reserve for equity interest in wholly owned financing
           subsidiary (note 4)                                                         3,363,936              6,452,589
Long term notes payable  (note 6)                                                     38,804,107             41,218,205
Deferred income taxes  (note 7)                                                          264,097                  6,000
                                                                             --------------------   --------------------


           Total                                                                      43,230,642             48,802,208
           liabilities
                                                                             --------------------   --------------------

Minority interest (note 1)                                                                   112                     --
                                                                             --------------------   --------------------

Stockholders' equity:
           Common  stock,  $0.01  par  value;   15,000,000   authorized  shares,
                4,291,824 and 4,291,824 shares, respectively, issued
                3,253,324 and 4,146,824 shares, respectively, outstanding                 42,918                 42,918
           Additional paid-in-capital                                                 29,496,720             29,496,720
           Net unrealized investment gains (note 2 and 8)                                356,421                     --
                                          -
           Retained deficit                                                          (7,797,626)            (9,007,373)
           Treasury stock, 1,038,500 and 145,000 shares,
                respectively (note 8)                                                (2,874,032)              (390,000)
                                                                             --------------------   --------------------

           Total stockholders' equity                                                 19,224,401             20,142,265
                                                                             --------------------   --------------------

           Total liabilities and stockholders' equity                      $          62,455,155  $          68,944,473
                                                                             ====================   ====================
<FN>

See accompanying condensed notes to consolidated financial statements.

</FN>
</TABLE>
                                       1
<PAGE>



                         POINT WEST CAPITAL CORPORATION


                      CONSOLIDATED STATEMENTS OF OPERATIONS
         For the Three and Nine Months Ended September 30, 1997 and 1996

<TABLE>
<CAPTION>
                                                                      Three Months Ended                   Nine Months Ended
                                                                         September 30,                       September 30,
                                                                      1997            1996               1997             1996

                                                                  --------------  --------------     --------------   -------------
<S>                                                                     <C>            <C>                <C>            <C>
Income:
     Earned discounts on life insurance policies (note 9)       $            -- $            --    $            --  $     3,697,032
     Earned discounts on prior maturities (note 9)                           --         802,471                 --          802,471
     Earned discounts on matured policies (note 9)                       91,473         355,519            377,450          355,519
     Interest income                                                    338,191         181,670            883,401          638,583
     Net gain (loss) on sale of convertible
           preferred shares (note 5)                                   (20,000)              --            679,665               --
     Net gain (loss) on assets sold (note 3)                             98,128       (299,718)          1,460,986        (299,718)
     Other                                                               18,168         115,078             88,043          281,728

                                                                      --------------  --------------    --------------   ---------
           Total income                                                 525,960       1,155,020          3,489,545        5,475,615

Expenses:
     Interest expense                                                   896,771       1,065,486          2,721,030        3,040,424
     Compensation and benefits                                          289,244         318,976            843,352          943,629
     Other general and administrative expenses                           12,123         231,244          1,037,236          898,037
     Amortization                                                        60,392         211,786            177,538          391,352
     Depreciation                                                            --              --                 --           19,967
     Provision for loss on assets held for sale (note 3)                328,236       3,314,498            328,236        3,314,498
     Loss on investment in wholly owned financing
           subsidiary (note 4)                                               --       6,940,189                 --        6,940,189
                                                                  --------------  --------------     --------------   -------------
           Total expenses                                             1,586,766      12,082,179          5,107,392       15,548,096
                                                                  --------------  --------------     --------------   -------------

           Loss before income taxes and net loss in
              wholly owned financing subsidiary charged
              to reserve for equity interest                        (1,060,806)    (10,927,159)        (1,617,847)     (10,072,481)

Income tax expense (note 7)                                                  --         893,223                 --          525,711

Net loss in wholly owned financing subsidiary charged
     to reserve for equity interest (note 4)                            942,943              --          2,827,594               --

                                                                  --------------  --------------     --------------   -------------
           Net income (loss)                                    $     (117,863) $  (10,033,936)    $     1,209,747  $   (9,546,770)
                                                                  ==============  ==============     ==============   =============


Net income (loss) per share (note 8)                                     (0.04)          (2.34)               0.33           (2.49)

Weighted average number of shares of common stock
     and common stock equivalents outstanding (note 8)                3,324,449       4,291,824          3,671,700        3,838,548

<FN>

See accompanying condensed notes to consolidated financial statements.
</FN>
</TABLE>
                                       2
<PAGE>
                                             POINT WEST CAPITAL CORPORATION


                                         CONSOLIDATED  STATEMENTS  OF CASH FLOWS
                                               For the Nine Months Ended
                                              September 30, 1997 and 1996

<TABLE>
<CAPTION>

                                                                                          Nine Months Ended
                                                                                            September 30,
                                                                                    1997                    1996
                                                                             --------------------    --------------------
<S>                                                                                    <C>                   <C>

Cash flows for operating activities:
    Net income (loss)                                                     $            1,209,747 $           (9,546,770)
    Adjustments to reconcile net income (loss) to net cash
         provided by operating activities:
          Depreciation and amortization                                                  177,538                 411,319
          Write-off of furniture and equipment                                                --                  12,303
          Net gain on assets sold                                                    (1,460,986)                      --
          Net gain on sale of convertible preferred shares                             (679,665)                      --
          Provisions for loss on sale of assets                                          328,236               3,614,217
          Valuation provision for purchased life insurance policies                           --               6,940,189
          Earned discounts on policies                                                 (377,450)             (4,855,023)
          Purchase of life insurance policies                                          (966,275)            (23,914,937)
          Collections on matured life insurance policies                               5,317,170              13,478,494
          Increase in unearned income                                                         --               (715,883)
          Increase in other assets                                                      (37,292)                (53,205)
          Decrease in deferred taxes                                                          --               (525,711)
          Increase (decrease) in accrued expenses                                          3,383               (121,556)
          Increase (decrease) in accounts payable                                        149,648               (134,627)
          Decrease in IPO financing costs payable                                             --               (306,900)
          Decrease in payable to related party                                                --             (1,482,170)
          Decrease in accrued compensation payable                                      (52,390)               (684,948)
          Decrease in reserve for equity interest in wholly
                    owned financing subsidiary                                       (2,827,594)                      --
          Increase in minority interest                                                      100                      --

                                                                             --------------------    --------------------
                    Net cash provided by (used in) operating activities                  784,170            (17,885,208)
                                                                             --------------------    --------------------

Cash flows from investing activities:
    Proceeds from sale of assets held for sale                                        12,686,192               4,266,249
    Purchase of furniture and equipment                                                       --                 (6,776)
    Decrease (increase) in restricted cash                                               504,816               (193,799)
    Increase in investment securities                                                (3,477,500)             (2,090,871)
    Proceeds from sale of convertible preferred shares                                 2,021,187                      --
                                                                             --------------------    --------------------
                    Net cash provided by investing activities                         11,734,695               1,974,803
                                                                             --------------------    --------------------

Cash flows from financing activities:
    Proceeds from long term notes payable                                                     --               6,375,000
    Principal payments on long term notes payable                                    (2,414,098)             (3,083,919)
    Proceeds from other long term debt                                                        --               5,540,132
    Principal payments on other long term debt                                                --             (6,984,402)
    Distribution to limited partners                                                          --               (783,313)
    Purchase of limited partners' interest in investment partnership                          --             (5,081,184)
    Principal payment on loan from stockholder                                                --             (1,162,170)
    Proceeds from issuances of common stock                                                   --              25,273,968
    Purchase of treasury stock                                                       (2,484,032)                      --
    Increase in financing costs                                                         (80,592)                (88,000)
    Reimbursement of IPO financing costs                                                      --                 750,000
                                                                             --------------------    --------------------

                    Net cash provided by (used in) financing activities              (4,978,722)              20,756,112
                                                                             --------------------    --------------------

                    Net increase in cash and cash equivalents                          7,540,143               4,845,707

Cash and cash equivalents, beginning of period                                         6,586,447               1,056,611
                                                                             --------------------    --------------------

Cash and cash equivalents, end of period                                  $           14,126,590 $             5,902,318
                                                                             ====================    ====================


Supplemental disclosures:
Supplemental disclosure of non-cash activities:
    Unrealized gain (loss) on securities available for sale, net of taxes $              356,421 $                    --
                                                                             ====================    ====================
Supplemental disclosure of cash flow information:
    State taxes paid                                                      $               35,823 $                 6,066
                                                                             ====================    ====================
    Cash paid for interest                                                $            2,717,647 $             3,161,981
<FN>
                                                                             ====================    ====================
See accompanying condensed notes to consolidated financial statements.
</FN>
</TABLE>
                                       3



<PAGE>




                     POINT WEST CAPITAL CORPORATION
                     ------------------------------

          CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          ----------------------------------------------------

1.       General Description
--       --------------------

         The unaudited  consolidated  financial statements of Point West Capital
Corporation  (formerly  known as Dignity  Partners,  Inc.) and its  consolidated
entities  ("Point  West" or the  "Company") as of September 30, 1997 and for the
three  and nine  month  periods  ended  September  30,  1997 and 1996  have been
prepared in accordance with generally accepted accounting principles for interim
financial  information,  in  accordance  with  Rule  10-01  of  Regulation  S-X.
Accordingly,  such  statements do not include all of the  information  and notes
thereto that are included in the annual consolidated  financial  statements.  In
the opinion of  management,  all  adjustments  considered  necessary  for a fair
presentation have been included.  Operating results for the three and nine month
periods ended  September 30, 1997 are not  indicative of the results that may be
expected for the year ending December 31, 1997. The balance sheet as of December
31, 1996 has been derived from the audited consolidated  financial statements of
the Company.  The statements  included herein should be read in conjunction with
the audited consolidated  financial statements and notes thereto included in the
Company's  Annual Report on Form 10-K for the year ended  December 31, 1996 (the
"Form 10-K").

         Point West is a specialty  financial  services  company.  The Company's
financial  statements  consolidate  the assets,  liabilities  and  operations of
Dignity  Partners  Funding  Corp.  I ("DPFC"),  Fourteen  Hill  Management,  LLC
("Fourteen  Hill  Management"),  Fourteen Hill  Capital,  L.P.  ("Fourteen  Hill
Capital") and Allegiance Capital, LLC ("Allegiance").

         Until  February  1997 the Company  provided  viatical  settlements  for
terminally ill persons.  See "Management's  Discussion and Analysis of Financial
Condition  and  Results  of  Operations  --  Cessation  of  Viatical  Settlement
Business;  Sale of  Assets."  Subsequently,  the  Company has sought to become a
broad-based  specialty  financial services company. To that end, the Company has
expanded its financial services business through the formation and investment in
other entities,  including  Fourteen Hill Management,  Fourteen Hill Capital and
Allegiance.  The  Company  is  currently  evaluating  other  strategic  business
opportunities.  Fourteen  Hill  Capital and  Allegiance, whose planned business
activities are described below, are indicative of the types of business
opportunities the Company intends to pursue.

         The Company  continues to service the policies held by its wholly-owned
special  purpose  subsidiary,  DPFC. See Notes 4 and 6.


         On June 3,  1997  the  Company  formed  a  limited  partnership  called
Fourteen  Hill  Capital and a  wholly-owned  limited  liability  company  called
Fourteen Hill Management.  Fourteen Hill Capital commenced  operations in August
1997 by consummating two financings with unaffiliated  entities in the aggregate
principal  amount of $1.25  million.  Fourteen  Hill  Management  is the general
partner of Fourteen Hill Capital and owns 99.978% of the partnership  interests.
Point West is one of two  limited  partners of  Fourteen  Hill  Capital and owns
0.02% of the  partnership  interests.  Fourteen Hill  Management has invested $5
million in initial  capital in Fourteen  Hill  Capital.  Fourteen  Hill  Capital
received a license from the Small Business  Administration (the "SBA") to become
a small  business  investment  company  effective  September 26, 1997.  Minority
interest on the balance sheet  represents the interest in the assets of Fourteen
Hill Capital of the one unaffiliated limited partner. At present,  Fourteen Hill
Capital does not have any outstanding debt from the SBA.

                                       4
<PAGE>

          On September 5, 1997 the Company  formed a limited  liability  company
called  Allegiance to provide  senior secured loans to funeral home and cemetery
owners.  Allegiance  commenced  operations  on  October  13,  1997 by  issuing a
commitment  letter to make a senior secured loan to an  unaffiliated  entity for
$2.1  million.  Point West has a 51% equity  interest and 95% voting  control in
Allegiance and will serve as the managing  member of  Allegiance.  The President
and Vice  President of  Marketing,  each of whom  Allegiance  hired in September
1997,  have the balance of such  interests.  Net profits of Allegiance  for each
calendar  year will be  allocated  first to Point  West in an amount  equal to a
return of 10% per  annum,  compounded  monthly,  on the  amount  of its  capital
contribution,  but not in  excess of such net  profits.  Any  shortfall  will be
carried  forward  indefinitely  to the next  calendar year or years in which net
profits are sufficient to make such allocation. An additional 5% return for each
calendar  year will be allocated  first to Point West to the extent that in each
year sufficient  profits are available with no carry forward provided.  See Note
10 for further information regarding Allegiance.

         Recent Accounting Developments

         During the middle of 1997 the FASB issued Financial Accounting Standard
No. 130 (SFAS 130), "Reporting Comprehensive Income." SFAS 130 is effective with
the year-end 1998 financial statements;  however, the total comprehensive income
is required in the financial  statements for interim periods  beginning in 1998.
FASB also  issued  Financial  Accounting  Standard  No.  131, "Disclosure  About
Segments of An Enterprise  and Related Information."  SFAS 131 is effective with
the year-end 1998 financial statements. Management believes that the adoption of
these  standards  will not have a  material  impact on the  Company's  financial
statements.

2.       Investment Securities
--       ---------------------

         In compliance with the Statement of Financial  Accounting Standards No.
115 (FAS No.  115),  "Accounting  for  Certain  Instruments  in Debt and  Equity
Securities,"   the  Company   classifies   marketable  debt  and  equities  into
held-to-maturity and  available-for-sale  categories.  Securities  classified as
held-to-maturity   are  reported  at  amortized   cost  and   available-for-sale
securities  are reported at fair market value with  unrealized  gains and losses
included in  stockholders'  equity.  Any realized gains and losses,  declines in
value of securities judged to be  other-than-temporary  and accrued interest and
dividends on all securities will be reported in interest income and other income
as recognized.

         The amortized  costs and estimated fair value of investment  securities
as of September 30, 1997 are as follows:
<TABLE>
<CAPTION>


                                                          Gross Unrealized       Gross
                                            Amortized            Gain           Unrealized
                                              Cost                                Loss         Fair Value
            <S>                               <C>                <C>             <C>            <C>


          Held-to-maturity
            Corporate bonds                  $2,227,500         $  62,500      $ (625)          $2,289,375
            Other corporate debt             $  250,000         $      --      $    --          $   250,000
                                             -----------        ------------   -------------   -----------
          Total held-to-maturity             $2,477,500         $  62,500      $ (625)          $2,539,375

          Available-for-sale
            Common stock                     $   903,181        $   355,153    $    --          $1,258,334
            Warrants                         $    96,819        $   259,377    $    --          $   356,196
                                            ------------        -----------   -------------     -----------
          Total available-for-sale           $ 1,000,000        $   614,530    $    --          $1,614,530

</TABLE>

         The Company  classifies  debt  securities for which it has the positive
intent and ability to hold to maturity as  held-to-maturity.  All investments in
bond and debt securities  classified as  held-to-maturity

                                       5
<PAGE>

at September 30, 1997 have  maturity  dates  ranging from one to five years.
Warrants  classified  as available-for-sale also have expiration dates ranging
from one to five years.

         Unrealized  gains  on   available-for-sale   securities   (representing
differences  between cost and market of $615,000 less deferred taxes of $258,000
and  minority  interest  of  $12)  were  credited  to a  separate  component  of
stockholders' equity called "Net Unrealized Investment Gains."

3.       Assets Held for Sale and Related Sale Agreements
--       ------------------------------------------------

         As a  result  of  the  Company's  decision  in  1996  to  sell  all  or
substantially  all of its assets,  it  reclassified  all assets owned as of such
date, other than the assets of DPFC, to a "held-for-sale" category. Accordingly,
such  assets are  recorded  on the balance  sheet as of  September  30, 1997 and
December  31, 1996 at the lower of carrying  value or fair value less  estimated
cost to sell.  In  connection  with the  decision  to sell  assets,  the Company
established  a  reserve  for  loss on sale  of  assets  in  September  1996  and
reevaluates  such reserve each quarter.  During the third  quarter of 1997,  the
Company recorded an additional  reserve in the amount of $328,000 as a result of
difficulties   encountered  with  insurance  companies  as  described  below  in
transferring the ownership of policies  remaining  unsold.  Assets held for sale
consist of:
<TABLE>

                              Assets Held for Sale
                              ====================
<CAPTION>

                                                        September 30, 1997        December 31, 1996
                                                        ------------------        -----------------
       <S>                                                  <C>                          <C>

      Capitalized costs on life insurance policies         $ 593,947                  14,089,124
      Earned discounts on life insurance policies              3,000                     380,692
      Reserve for loss on sale                              (426,026)                 (2,949,713)
                                                           ------------------         --------------
      Assets held for sale                                 $ 170,921                  11,520,103
                                                           =================          ==============

</TABLE>


         The calculation of reserve for loss on sale was calculated based on the
life  expectancy of the insured under each policy in relation to prices obtained
by the Company in  connection  with other  sales,  management's  estimate of the
current  saleability  of such policy,  the type of policy  (e.g.,  term or whole
life), the age of the insured and the premiums on such policy.  Any gain or loss
due to the difference  between actual proceeds (less any back end sourcing fees)
and the carrying  value after  giving  effect to the reserve for loss on sale of
assets will be  reported  as a realized  gain or loss on assets sold at the time
sale proceeds are received.

         On September 27, 1996  the Company  entered into an agreement  with an
unaffiliated  viatical settlement company to sell 197 policies with an aggregate
face value of $14.2 million for an aggregate consideration of approximately $8.7
million. Such policies, which were not sold in 1996, were carried on the balance
sheet at December 31, 1996 at approximately  $6.9 million after giving effect to
the reserve for loss on sale of assets. The Company established a reserve in the
third quarter of 1996 of $1,792,087 in connection  with policies  covered by the
sale agreement.  Through September 30, 1997, 187 policies with an aggregate face
value of $13.6  million had been sold,  of which 46 policies  with an  aggregate
face value of $1.9 million were sold in the fourth quarter of 1996 (resulting in
a realized gain of $120,000), 136 policies with an aggregate face value of $11.4
million were sold in the first quarter of 1997  (resulting in a realized gain of
$426,000),  4 policies with an aggregate face value of $175,000 were sold in the
second  quarter of 1997  (resulting  in a realized  loss of $5,000) and 1 policy
with an  aggregate  face value of $58,000 was sold in the third  quarter of 1997
(resulting  in no realized  gain or loss).  Seven  policies  covered by the sale
agreement were not sold because the insured died prior to the issuing  insurance
company's  acknowledgment of transfer of ownership of the policy and the Company


                                       6


<PAGE>


collected the death benefit instead of selling those  policies.  As of September
30, 1997,  the remaining  three  policies  (with a face value of $187,000)  were
pending acknowledgment of transfer of ownership.

         On January 16,  1997 the  Company  entered  into an  agreement  with an
unaffiliated  viatical  settlement company to sell 18 policies with an aggregate
face value of $1.0  million  for  approximately  $710,000.  Such  policies  were
carried on the balance  sheet at December  31,  1996 at  approximately  $590,000
after  giving  effect to the  reserve  for loss on sale of assets.  In the first
quarter of 1997, the Company completed the sale of 17 policies with an aggregate
face value of $990,000  and  realized a gain of $121,000  associated  with these
policies.  As of September 30, 1997,  the remaining  policy with a face value of
$25,000 was pending acknowledgment of transfer of ownership.

          On February 10, 1997 the Company  entered  into an  agreement  with an
unaffiliated  viatical  settlement company to sell 67 policies with an aggregate
face value of $4.5 million for  approximately  $3.0 million.  Such policies were
carried on the balance sheet at December 31, 1996 at approximately  $2.2 million
after giving effect to the reserve for loss on sale of assets. Through September
30,  1997,  62 policies  with an  aggregate  face value of $4.1 million had been
sold,  of which 35 policies  with an  aggregate  face value of $1.7 million were
sold in the first quarter of 1997 (resulting in a realized gain of $295,000), 25
policies  with an  aggregate  face value of $2.1 million were sold in the second
quarter of 1997  (resulting  in a realized gain of $343,000) and 2 policies with
an  aggregate  face  value of  $270,000  were sold in the third  quarter of 1997
(resulting  in a realized  gain of  $33,000).  As of  September  30,  1997,  the
remaining 5 policies with a face value of $414,000  were pending  acknowledgment
of transfer of ownership.

         On March  24,  1997  the  Company  entered  into an  agreement  with an
unaffiliated  viatical  settlement company to sell 31 policies with a face value
of $2.9 million for  approximately  $1.7 million.  Such policies were carried on
the balance sheet at March 31, 1997 at  approximately  $1.5 million after giving
effect to the reserve for loss on sale of assets. Through September 30, 1997, 23
policies with an aggregate face value of $2.3 million had been sold, of which 22
policies  with an  aggregate  face value of $2.1 million were sold in the second
quarter of 1997  (resulting in a realized gain of $133,000) and 1 policy with an
aggregate  face  value  of  $213,000  was  sold  in the  third  quarter  of 1997
(resulting  in a realized  loss of  $5,950).  Two  policies  covered by the sale
agreement were not sold because the insured died prior to the issuing  insurance
company's  acknowledgment of transfer of ownership of the policy and the Company
collected the death benefit instead of selling these  policies.  As of September
30, 1997, 4 policies with a face value of $247,000  were pending  acknowledgment
of transfer of ownership.

         The  policies  representing  "assets  held  for  sale"  consist  of the
policies  under the  aforementioned  sales  agreements  for which the Company is
awaiting the acknowledgment of transfer of ownership by the applicable insurance
company and the payment  therefor by the  applicable  purchaser.  The Company is
experiencing  delays or difficulties  in  transferring  the ownership of certain
policies,  and  believes  that it will not be  successful  in  transferring  the
ownership of such policies. In such event, due to contractual  provisions in the
related sales agreements the sales will not be consummated. However, the Company
continues its efforts to sell such policies.

4.       Purchased Life Insurance Policies
--       ---------------------------------

         Effective July 1996,  purchased life insurance  policies consisted only
of those  policies held by DPFC. Any sale of policies held by DPFC, all of which
are pledged  under the  indenture  pursuant to which the  Securitized  Notes (as
defined in Note 6) were  issued,  requires  the consent of all of the holders of
the Securitized Notes ("Noteholders") and the Company. The Company has discussed
potential  sales of DPFC policies  with the  Noteholders;  however,  the Company
cannot  determine  whether the

                                       7

<PAGE>

Noteholders and the Company will decide to sell such policies or whether such a
sale is feasible.  A reserve was recorded in the third quarter of 1996 to
reflect the  estimated  loss of the  Company's  equity interest in DPFC.  As of
September  30, 1997 the reserve was $3.4  million.  The reserve  provides  for
the write-off  of  deferred  financing  costs  and  the unrealized residual
value associated with DPFC.

5.       Investment In Convertible Preferred Shares
--       ------------------------------------------

          On November  4, 1996,  the Company  purchased  21,517,100  convertible
preferred shares for $3.0 million  (representing  approximately 30% of the fully
converted  common  equity  interest)  in  American  Information  Company,   Inc.
("American  Information"),  a privately held company which,  among other things,
provides information  services to individuals owning or purchasing  automobiles.
On March 18, 1997,  the Company,  following  conversion of 8.2 million shares of
convertible  preferred stock into 8.2 million shares of common stock of American
Information,  sold such shares  (approximately  38% of the  Company's 30% equity
investment in American  Information)  to an  unaffiliated  third party for $1.83
million.  The Company  recognized a $700,000 pre-tax gain on this transaction in
the first quarter of 1997. The Company had an option that expired on October 26,
1997 to purchase for approximately $1.1 million 8.2 million additional shares of
common stock of American  Information.  Since the Company did not exercise  this
option,  a $20,000  pre-tax loss was recognized in the third quarter of 1997. At
September  30,  1997 the  Company  owned  approximately  13.2% of the  equity of
American  Information.  The Company  accounts for its investment  using the cost
method.  If the equity  method had been applied Point West would have recorded a
loss  associated with the investment in the nine months ended September 30, 1997
of $722,000,  which is  equivalent  to the  Company's pro rata share on an as if
converted  basis  in  American  Information's  loss for the  nine  months  ended
September 30, 1997.  At September 30, 1997 the Company held 12.0 million  shares
of American  Information  with a cost of $0.14 per share.  The Company  sold 8.2
million shares to an  unaffiliated  third party for $0.22 per share in the March
18, 1997 sale  mentioned  above.  On the same date,  American  Information  sold
convertible  preferred shares and warrants to such unaffiliated  third party for
$7.5 million.  If such shares were  converted and such warrants  exercised  they
would represent approximately 25.8 million shares of common stock with a cost of
$0.29 per share.  In light of such sale by American Information, notwithstanding
the extent of losses experienced  by  American  Information,  management of the
Company  does not  believe  that  the  investment  is  permanently  impaired at
September 30, 1997.  However,  management  will continue to monitor the carrying
value.

6.       Long Term Notes Payable
--       -----------------------

         The Senior Viatical  Settlement Notes,  Series 1995-A,  Stated Maturity
March 10, 2005 (the "Securitized Notes") issued by DPFC initially provided for a
maximum lending commitment of $50 million.  As a result of an early amortization
event in June 1996,  the  maximum  lending  commitment  was  reduced to the then
outstanding  principal  amount  ($45.5  million) and  principal  payments on the
Securitized  Notes began in July 1996.  Principal  and interest  payments on the
Securitized  Notes are payable solely from  collections on pledged  policies and
deposited funds. The Securitized Notes are reported on the balance sheet as long
term notes payable.  The  Securitized  Notes bear a fixed interest rate of 9.17%
per annum.

         The Securitized  Notes  represent the  obligations  solely of DPFC. The
Company's consolidated financial statements include the assets,  liabilities and
operations  of  DPFC;  however,  the  assets  of DPFC are not  available  to pay
creditors  of  Point  West  Capital  Corporation.  The  assets  of DPFC  are the
beneficial  ownership  interests in the life insurance  policies and funds which
secure the  Securitized  Notes.  To the extent  that the book value of assets of
DPFC  becomes  less  than the  outstanding  balance  of the  Securitized  Notes,
generally accepted accounting principles  nonetheless would require a loss to

                                       8

<PAGE>

be recorded.  Upon the retirement or maturity of the Securitized  Notes,  under
generally  accepted  accounting  principles  the Company would  recognize a gain
equal to any such losses  previously  recognized.  At September  30,  1997,  the
carrying  value of the assets of DPFC were $41.5  million  (consisting  of $37.4
million in purchased life insurance policies, $4.0 million in restricted cash on
deposit  with a trustee  for the  benefit of the  Noteholders  and  $146,000  in
matured policies receivable).

         Point West is the servicer of the policies  pledged under the indenture
pursuant  to which the  Securitized  Notes  were  issued  and  incurs  servicing
expenses  (which  are  reimbursed,  subject  to certain  priority  payments)  in
connection therewith.

7.       Deferred Income Taxes
--       ---------------------

         Prior to  September  30,  1996,  the Company had  provided for deferred
income taxes related to income  accrued on purchased  life  insurance  policies.
Because these policies have been sold, or are anticipated to be sold, at a loss,
the Company  determined  that the deferred tax liability  associated  with these
policies is not  required.  The Company has  provided  for  miscellaneous  state
income tax liabilities expected to be incurred.  For the year ended December 31,
1996,  the Company had a deferred  tax asset  resulting  primarily  from tax net
operating loss  carryforwards.  A valuation  allowance was established to reduce
the amount of the gross  deferred  tax asset to that  amount  deemed more likely
than not to be utilized.

         In the first nine months of 1997,  the  Company's  provision for income
taxes for Point West Capital  Corporation and DPFC were offset by a reduction in
the valuation allowance previously established. The valuation allowance has been
reduced to reflect that portion of the deferred tax asset which will more likely
than not be utilized based on anticipated  earnings for the year ending December
31, 1997.

         A deferred tax  liability has been recorded as of September 30, 1997 in
connection  with the unrealized  investment  gains in the third quarter of 1997.
Using a combined  state and federal tax rate of 42%, a deferred tax liability of
$258,000 has been estimated on unrealized gains of $615,000. See Note 2.

8.       Common Stock
--       ------------

         Changes in  stockholders'  equity  during the first nine months of 1997
reflected the following:

              Stockholders' equity, beginning of period           $ 20,142,265
                Net unrealized investment gains                        356,421
                Net income                                           1,209,747
                Treasury stock                                      (2,484,032)
                                                                    -----------
              Stockholders' equity, end of period                $  19,224,401




         Net  unrealized  investment  gains  represent  the net  increase in the
Company's  investment  securities  in common  stock and warrants  classified  as
available-for-sale  and represent  differences between cost and estimated market
of $615,000 less deferred taxes of $258,000 and minority interest of $12.

         In October 1996, the Board of Directors of the Company approved a share
repurchase program pursuant to which the Company was authorized to purchase from
time to time up to 1 million shares of Common Stock at prevailing market prices.
In June 1997, such  authority  was  increased  to 1.04  million

                                       9

<PAGE>

shares of Common Stock. In June 1997, the Company completed the share repurchase
program,  having repurchased an aggregate of 1.04 million  shares at a weighted
average price of $2.77 per share.

          The Company will  implement  the  provisions of Statement of Financial
Accounting  Standards No. 128, Earnings per Share ("Statement  128"), which will
be  effective  for interim and annual  financial  statements  issued for periods
ending after December 15, 1997.  Statement 128 simplifies the previous standards
for computing earnings per share ("EPS"),  replacing the presentation of primary
EPS with a  presentation  of basic EPS. It also  requires dual  presentation  of
basic and diluted EPS on the face of the income  statement for all entities with
complex capital structures, which applies to the Company. For the three and nine
months ended  September 30, 1997 and 1996, the effect of applying this statement
would not have been material.

9.       Earned Discounts
--       ----------------

         Earned  discounts  on life  insurance  policies  reflect the amount of
accretion  recorded in the first half of 1996.  With the decision to sell all or
substantially  all of the  Company's  assets,  unearned  income  recorded on the
balance  sheet at June 30, 1996  relating to early  maturities on or before June
30, 1996 has now been  recorded as earned  discounts  on prior  maturities.  Any
income since the third quarter of 1996 has been recorded as earned  discounts on
matured  policies  only and  recorded  upon  receipt  of  proceeds  of  policies
(pursuant to the death of the insured).

10.      Commitments
--       -----------

          Allegiance is a limited  liability company formed on September 5, 1997
as a specialty  finance company to operate a  securitization-based  loan program
targeted to funeral home and cemetery owners.Allegiance  commenced operations on
October 13, 1997 by issuing a commitment letter to make a senior secured loan to
an  unaffiliated  entity for $2.1 million.  Point West has a 51% equity interest
and 95% voting  control in the new entity and will serve as the managing  member
of  Allegiance.  The  President and Vice  President of  Marketing,  each of whom
Allegiance  hired in September  1997,  have the balance of such  interests.  The
Company  invested $50,000 at the formation of Allegiance and agreed from time to
time  thereafter,  as needed,  to contribute up to an additional  $450,000 to be
used as working  capital.  The Company has also agreed to provide  approximately
$1.5 million to support  warehousing  and equity  components  of the loans to be
funded  in  connection  with  an  initial   securitization.   At  the  Company's
discretion,  after the  completion of an initial  securitization,  an additional
commitment up to approximately  $1.5 million may be made to support  warehousing
and equity components of a second securitization.

11.      Litigation
--       ----------

         On  December  19,  1996,  a  complaint  was filed in the United  States
District  Court,  Northern  District of  California  (the  "Court")  (Docket No.
C96-4558)  against  Dignity  Partners,  Inc. and each of its  directors by three
individuals  purporting  to act on behalf of  themselves  and an  alleged  class
consisting of all  purchasers  of the  Company's  common stock during the period
February 14, 1996 to July 16, 1996.  The complaint  alleged that the  defendants
violated  Section  10(b) of the  Securities  Exchange Act of 1934 and Rule 10b-5
thereunder and Section 11 of the  Securities Act of 1933 and seeks,  among other
things,  compensatory  damages,  interest,  fees and costs. The allegations were
based  on  alleged  misrepresentations  in  and  omissions  from  the  Company's
registration statement and prospectus related to its initial public offering and
certain documents filed by the Company under the Exchange Act. On July 18, 1997,
the Court granted the defendants' motion to dismiss the complaint.  However, the
Court  gave  the  plaintiffs  permission  to  file  an  amended  complaint.  The
plaintiffs  filed an


                                       10

<PAGE>

amended  complaint  on  September 8, 1997 and on October 8, 1997 the Company and
other defendants filed a motion to dismiss the complaint. A hearing on the
motion to dismiss is scheduled for December 5, 1997.  The Company and each of
the defendants intend to continue to defend the action vigorously.

         On February 13, 1997,  a complaint  was filed in the Superior  Court of
California, City and County of San Francisco (Docket No. 984643) against Dignity
Partners,  Inc.,  and  each of its  executive  officers  and New  Echelon  by an
individual  purporting  to  act on  behalf  of  himself  and  an  alleged  class
consisting of all  purchasers  of the  Company's  common stock during the period
February 14, 1996 to July 16, 1996.  The complaint  alleges that the  defendants
violated  section 25400 of the  California  Corporate  Code and seeks to recover
damages. The allegations are based on alleged misstatements,  concealment and/or
misrepresentations and omissions of allegedly material information in connection
with the Company's  initial  public  offering and  subsequent  disclosures.  The
Company and each of the defendants intend to defend the action vigorously.

                                       11
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           -------------------------------------------------
                  CONDITION AND RESULTS OF OPERATIONS
                  -----------------------------------

         The  following  is  a  discussion  and  analysis  of  the  consolidated
financial  condition of the Company as of September  30, 1997 and of the results
of operations for the Company for the three and nine months ended  September 30,
1997 and 1996, and of certain factors that may affect the Company's  prospective
financial  condition and results of operations.  The following should be read in
conjunction  with the unaudited  consolidated  financial  statements and related
notes appearing elsewhere herein. For the reasons set forth below (including the
reclassification  into  "assets held for sale" of a  substantial  portion of the
Company's  assets in 1996 and related  accounting  consequences),  the Company's
results  of  operations  and cash  flows  for the three  and nine  months  ended
September  30,  1997 are not  comparable  to those for the three and nine months
ended September 30, 1996.


Overview
--------

         Point West is a specialty  financial  services  company.  The Company's
financial  statements  consolidate  the assets,  liabilities  and  operations of
Dignity  Partners  Funding  Corp.  I ("DPFC"),  Fourteen  Hill  Management,  LLC
("Fourteen  Hill  Management"),  Fourteen Hill  Capital,  L.P.  ("Fourteen  Hill
Capital") and  Allegiance  Capital,  LLC  ("Allegiance").  See the Form 10-K and
Notes 1, 4, 6 and 10 of the Condensed Notes to Consolidated Financial Statements
(contained herein) for further information regarding these entities.

          Until  February 1997 the Company  provided  viatical  settlements  for
terminally ill persons. See "Cessation of Viatical Settlement Business;  Sale of
Assets." Subsequently,  the Company has sought to become a broad-based specialty
financial services company.  To that end, the Company has expanded its financial
services  business  through the  formation  and  investment  in other  entities,
including  Fourteen Hill Management,  Fourteen Hill Capital and Allegiance.  The
Company is currently evaluating other strategic business opportunities. Fourteen
Hill Capital and  Allegiance,  whose planned  business  activities are described
below, are indicative of the types of business opportunities the Company intends
to  pursue.  See  "Fourteen  Hill  Management,"   "Fourteen  Hill  Capital"  and
"Allegiance."  However,  no  assurance  can be given  that the  Company  will be
successful in becoming a broad-based  specialty  financial  services  company or
that such company will be successful.


Fourteen Hill Management
------------------------

         Fourteen  Hill  Management,  LLC is a  wholly-owned  limited  liability
company of Point West  formed on June 3, 1997  solely for the purpose of serving
as the  general  partner of one or more  small  business  investment  companies.
Fourteen Hill  Management  is the sole general  partner of Fourteen Hill Capital
owning  99.978% of the  partnership  interests  and has  invested  $5 million of
initial  capital  in this  partnership.  Fourteen  Hill  Management  receives  a
management fee for its services on behalf of Fourteen Hill Capital.


Fourteen Hill Capital
---------------------

         Fourteen Hill Capital,  L.P. is a limited partnership formed on June 3,
1997 solely for the purpose of operating as a small business  investment company
("SBIC").   Fourteen  Hill  Capital  commenced  operations  in  August  1997  by
consummating  two  financings  with  unaffiliated   entities  in  the

                                       12

<PAGE>

aggregate principal amount of $1.25 million.  Point West is one of the two 
limited partners of Fourteen Hill Capital, with a 0.02% partnership interest.  
Fourteen Hill Capital received its SBIC license from the Small Business 
Administration effective September 26, 1997.  Fourteen Hill Capital will provide
debt and/or equity capital to small companies (i.e., companies with a net worth
less than $18 million and average net income less than $6 million for the last 
two years).  See Note 1 of the Condensed Notes to Consolidated Financial 
Statements (contained herein) for further information regarding Fourteen Hill 
Capital.



Allegiance
----------

          Allegiance  Capital,  LLC is a  limited  liability  company  formed on
September   5,   1997   as  a   specialty   finance   company   to   operate   a
securitization-based  loan  program  targeted to the  nation's  funeral home and
cemetery owners.  Allegiance commenced operations on October 13, 1997 by issuing
a commitment letter to make a senior secured loan to an unaffiliated  entity for
$2.1  million.  Point West has a 51% equity  interest and 95% voting  control in
Allegiance and will serve as the managing  member of  Allegiance.  The President
and Vice  President of  Marketing,  each of whom  Allegiance  hired in September
1997,  have the balance of such  interests.  Net profits of Allegiance  for each
calendar  year will be  allocated  first to Point  West in an amount  equal to a
return of 10% per  annum,  compounded  monthly,  on the  amount  of its  capital
contribution,  but not in  excess of such net  profits.  Any  shortfall  will be
carried  forward  indefinitely  to the next  calendar year or years in which net
profits are sufficient to make such allocation. An additional 5% return for each
calendar  year will be allocated  first to Point West to the extent that in each
year sufficient  profits are available with no carry forward provided.  See Note
10 of the  Condensed  Notes  to  Consolidated  Financial  Statements  (contained
herein) for further information regarding Allegiance.


Cessation of Viatical Settlement Business; Sale of Assets
---------------------------------------------------------

        The principal business activity of the Company through February 1997 was
to  provide  viatical   settlements  for  terminally  ill  persons.  A  viatical
settlement  is the payment of cash in return for an  ownership  interest in, and
right to receive the death benefit (face value) from, a life insurance policy.

         On July  16,  1996 the  Company  announced  that,  in light of the data
regarding new treatments  involving  combinations  of various drugs presented at
the  International  AIDS Conference held in Vancouver,  British Columbia in July
1996 (the "AIDS Conference"), the Company was temporarily ceasing processing new
applications for policies insuring individuals afflicted with AIDS and HIV while
it further analyzed the effects of such research results on its business and its
strategic options. See the Form 10-K for further information  regarding the AIDS
Conference.

         The  Company  decided  in the  third  quarter  of 1996  to sell  all or
substantially  all of its  assets.  As a result of such  decision,  the  Company
reclassified  all of its  assets  (other  than the  policies  held by DPFC) to a
"held-for-sale"  category  during the third quarter of 1996.  Accordingly,  such
assets are accounted for at the lower of carrying  value or fair value less cost
to sell.

         The Company sought and received in December 1996  stockholder  approval
to sell all or substantially all of its assets.

                                       13

<PAGE>


         Based  on the  Company's  evaluation  of the  effects  of the  research
results  reported  at the AIDS  Conference  and  subsequent  reports  and  other
information,  the Board of Directors in February  1997 approved the cessation of
the  viatical  settlement  business  and the sale by the Company of its non-AIDS
policies,  consisting  of  approximately  31 policies  with a face value of $2.9
million.

          Through  September  30,  1997 the  Company  had sold or  entered  into
agreements to sell 373 policies,  representing  $29.2 million in aggregate  face
value,  for an aggregate  purchase price of $19.5 million.  As a result of these
sales,  the  Company  reported a pre-tax  loss of $180,000 in 1996 and a pre-tax
gain  of $1.5  million  in the  first  nine  months  of 1997  (see  "Results  of
Operations  -- Three and Nine Months Ended  September 30, 1997 Compared to Three
and Nine Months Ended  September  30, 1996 -- Net Gain (Loss) on Assets  Sold").
The Company has experienced delays or difficulties in transferring the ownership
of certain policies.  As of September 30, 1997 the Company retained ownership of
17 policies with an aggregate face value of $1.0 million that are the subject of
sales agreements.  The Company continues to pursue other options for the sale of
these  remaining  policies,  however,  due to the limited market the Company has
reevaluated  the fair value of these policies and has therefore  recorded in the
third quarter of 1997 an  additional  reserve of $328,000 on the loss on sale of
these assets.  The fair value is based on management's best estimate in light of
the limited market and in relation to current prices  recorded by the Company in
connection with alternative bids. As of September 30, 1997 the carrying value of
the  remaining  policies  was  $171,000.  See Note 3 of the  Condensed  Notes to
Consolidated Financial Statements.

 Name Change Amendment
----------------------

         Since  the  Company  no  longer  engages  in  the  viatical  settlement
business,  the Board of Directors determined that a change in the Company's name
was  appropriate.  The  Company  sought and  received  in June 1997  stockholder
approval to amend the Company's  certificate of incorporation to change its name
from Dignity Partners,  Inc. to Point West Capital Corporation.  The name change
was effective August 1, 1997.


Method of Accounting
--------------------

         Through  June  30,  1996,  the  Company   recognized   income  ("earned
discount") on each  purchased  policy by accruing,  over the period  between the
acquisition date of the policy and the Company's estimated date of collection of
the policy's face value (the "Accrual  Period"),  the difference  (the "unearned
discount")  between (a) the face value of the policy less the amount of fees, if
any, payable to a referral source upon collection of the face value, and (b) the
carrying  value of the policy.  The carrying value for each policy was reflected
on the Company's  consolidated  balance sheet under  "purchased  life  insurance
policies" and consisted of the purchase price,  other  capitalized costs and the
earned  discount on the policy  accrued to the balance sheet date.  See the Form
10-K  for  further   information   regarding   capitalized  costs  of  policies,
determination of Accrual Periods and changes thereto over time.

         As a result of the Company's  decision to sell all or substantially all
of its  assets,  the Company  established  a reserve in 1996 for loss on sale of
assets. This reserve was reevaluated and increased in the third quarter of 1997.
The Company also established a reserve for loss of the Company's equity interest
in DPFC during 1996 because of the  uncertainties  created by the data presented
at the AIDS Conference and subsequent  reports of the efficacy of new treatments
for  AIDS/HIV.  As of September  30, 1997,  such reserves were $426,000 and $3.4
million,  respectively. In addition, beginning in the

                                       14

<PAGE>

third  quarter  of 1996,  the  Company  began  generally  recognizing  income on
policies only upon receipt of proceeds on policies  (either  pursuant to sale or
the death of the insured).  Such income is equal to the difference  between such
proceeds  (less  any  back-end  sourcing  fees) and the  carrying  value of such
policies  after  giving  effect  to any  reserve  for  loss on the  sale of such
policies or any reserve for loss of the Company's  equity  interest in DPFC. See
the Form 10-K and Notes 4 and 6 of the Condensed Notes to Consolidated Financial
Statements  for further  information  regarding  the reserve for loss on sale of
assets.

         In accordance with the Statement of Financial  Accounting Standards No.
115 (FAS No.  115),  "Accounting  for  Certain  Instruments  in Debt and  Equity
Securities,"   the  Company   classifies   marketable  debt  and  equities  into
held-to-maturity and  available-for-sale  categories.  Securities  classified as
held-to-maturity   are  reported  at  amortized   cost  and   available-for-sale
securities are reported at estimated fair market value with unrealized gains and
losses included in Stockholders' Equity. Any realized gains and losses, declines
in value of securities  judged to be  other-than-temporary  and accrued interest
and dividends on all  securities  will be reported in interest  income and other
income  as  recognized.  See  Note  2 of the  Condensed  Notes  to  Consolidated
Financial Statements.


Certain Accounting Implications for DPFC
----------------------------------------

         Under generally accepted accounting principles,  to the extent that the
carrying  value of the  assets of DPFC are less than the  carrying  value of its
liabilities,  the Company  would be  required  to  recognize a loss equal to the
amount  of such  difference,  notwithstanding  the  non-recourse  nature  of the
Securitized  Notes.  At September 30, 1997,  the carrying value of the assets of
DPFC were $41.5  million  (consisting  of  purchased  life  insurance  policies,
restricted  cash  and  a  portion  of  matured  policies   receivable)  and  its
liabilities were $38.8 million (consisting of long term notes payable,  i.e. the
Securitized Notes).

         Although the  Securitized  Notes had an expected life of 2.1 years when
the aggregate  maximum  principal amount of the Securitized  Notes was increased
from $35 million to $50 million in September  1995, the  Securitized  Notes were
not retired through  collections by October 1997.   The Company reported in its
Form 10-Q for the quarterly  period ended March 31, 1997, that in the event that
the collection experience for DPFC policies is substantially delayed, the assets
of DPFC may become less than its liabilities before late 2001. Because of recent
delays and variability in collections,  the Company cannot predict at what point
in time the assets of DPFC may become less than its liabilities.

         Additionally,  if the  collection  experience  for the DPFC policies is
substantially  delayed,  the value of the assets of DPFC may erode  further  for
some of the following reasons.  First, a decision to discontinue paying premiums
on some  policies  may be made.  Second,  the face  value  of  certain  policies
(especially  group  term) may begin to  decrease  as the people  whose lives are
insured thereunder reach specified age levels (often 65). Finally,  policies for
which  the  insurance  was  continued  under  a  disability   provision  may  be
uneconomical  to convert  given the  insured's  age and life  expectancy if such
insured person is no longer considered disabled. The Company cannot determine at
present how many, if any, policies held by DPFC would be so affected.

         In light of the  foregoing,  the Company  believes  that it is possible
that  the  Company  may  in  the  future  under  generally  accepted  accounting
principles  be  required  to  recognize  further  losses to the extent  that the
carrying value of the assets of DPFC is less than its liabilities. However, when
the  Securitized  Notes are finally  discharged  or mature,  the  Company  under
generally  accepted  accounting  principles  would recognize a gain in an amount
equal to the aggregate  amount of any such losses  recognized.  The

                                       15

<PAGE>

Securitized Notes represent the obligations  solely of DPFC. The Company did not
guarantee  repayment  of the  Securitized  Notes and is not required to fund any
principal or interest deficiencies thereunder.


Share Repurchase Program
------------------------

         In October 1996, the Board of Directors of the Company approved a share
repurchase program pursuant to which the Company was authorized to purchase from
time to time up to 1 million shares of Common Stock at prevailing market prices.
In June 1997, such authority  was  increased  to 1.04  million  shares of Common
Stock. In June 1997, the Company completed the share repurchase program,  having
repurchased an aggregate of 1.04 million  shares at a weighted  average price of
$2.77 per share.


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

Three and Nine Months Ended September 30, 1997 Compared to Three and Nine Months
-------------------------------------------------------------------------------
Ended September 30, 1996
-----------------------

         Earned Discounts.The Company currently recognizes earned discounts only
upon  receipt of proceeds on policies  (pursuant  to the death of the  insured).
Consequently,  the  Company  did not  recognize  any  earned  discounts  on life
insurance  policies during the first nine months of 1997, but instead recognized
$91,500 and $377,000 of earned  discounts on matured  policies for the three and
nine months ended September 30, 1997, respectively.  Such income is equal to the
difference  between the proceeds the Company  received on the policies (less any
back end sourcing  fees) and the carrying  value of such  policies  after giving
effect  to any  reserve  for  loss  on sale of such  policies.  See  "Method  of
Accounting."

          In the first six months of 1996 the Company recognized earned discount
on each purchased  policy by accruing,  over the Accrual Period,  the difference
between  (a) the face  value of the  policy  less the  amount  of fees,  if any,
payable to a referral  source upon  collection  of the face  value,  and (b) the
carrying value of the policy.  Earned  discounts on life insurance  policies was
$3.7  million for the six months ended June 30,  1996.  In the third  quarter of
1996 the  Company  began  recognizing  earned  discounts  only upon  receipt  of
proceeds  on  policies  (pursuant  to the  death of the  insured).  The  Company
recognized  $356,000 of earned discounts on matured policies in the three months
ended September 30, 1996. In addition, the Company recognized $802,000 of earned
discounts on prior maturities. Such earned discounts were carried on the balance
sheet at June 30, 1996 as unearned  income  which  related to policies for which
the Company had collected the proceeds  prior to the expected  collection  date.
The Company will not have any earned  discounts on prior maturities in any other
period. See "Method of Accounting."

         The Company purchased only four policies (outstanding commitments as of
December  31, 1996) with an  aggregate  face value of $155,000  during the first
nine months of 1997  compared to the purchase of 460 policies  with an aggregate
face value of $31.9 million during the first nine months of 1996. See "Cessation
of Viatical Settlement Business; Sales of Assets."

         Interest  Income.  Interest income increased 86.2% in the third quarter
of 1997 over the third  quarter  of 1996 and 38.3% in the first  nine  months of
1997 over the first  nine  months of 1996 as a result of the  investment  of the
proceeds  from the sale of  policies  in short term  securities  and  marketable
securities.  Interest  income  generated  in the first  nine  months of 1996 was
primarily the result of the investment of the Company's  initial public offering
proceeds.

                                       16

<PAGE>


         Gain on Sale of Convertible  Preferred  Shares. In the first quarter of
1997 the  Company  recognized  a  $700,000  gain on the sale of a portion of its
investment  in American  Information.  In March 1997 the Company  converted  8.2
million shares of convertible  preferred stock into 8.2 million shares of common
stock of  American  Information  and sold such shares to an  unaffiliated  third
party for $1.8 million.  The carrying value of such shares was $1.1 million.  In
addition, the Company had an option that expired on October 26, 1997 to purchase
for approximately  $1.1 million 8.2 million additional shares of common stock of
American Information.  Since the Company did not exercise this option, a $20,000
pre-tax  loss was  recognized  in the third  quarter of 1997.  See Note 5 of the
Condensed Notes to Consolidated Financial Statements.

         Net Gain  (Loss)  on  Assets  Sold.  The  Company  collected  the sales
proceeds on 6 policies  during the third quarter of 1997 and 245 policies during
the first nine months of 1997. See Note 3 of the Condensed Notes to Consolidated
Financial Statements. The total net gain recorded in the third quarter and first
nine months of 1997 in connection with these sales was $98,000 and $1.5 million,
respectively.  The total net loss  recorded in the third  quarter and first nine
months of 1996 was $300,000 in both periods as a result of the sale on August 2,
1996 of 60 policies to an unaffiliated third party. The realized gain (loss) was
calculated  based on the  difference  between the sale proceeds and the carrying
value  after  giving  effect  to the  reserve  for loss on sale of  assets.  See
"Cessation of Viatical Settlement Business; Sale of Assets."

         Other  Income.  Components  of  other  income  include  collections  on
policies of dividends, interest, paid-up cash values, increases in face value of
matured  policies,  refunds of premiums on matured policies and realized capital
gains on  investments  securities.  Other  income  decreased  84.2% in the third
quarter of 1997 over the third  quarter of 1996 and 68.7%  during the first nine
months of 1997  compared  to the first nine  months of 1996 due  primarily  to a
decrease in the number of matured  policies.  Other  income was also  relatively
high in 1996 due to an $80,000 aggregate increase in face value on two policies
which was recorded during the first nine months of 1996.

         Interest Expense. Interest expense decreased 15.8% in the third quarter
of 1997 compared to the third quarter of 1996 and 10.5% in the first nine months
of 1997 compared to the first nine months of 1996 due mainly to the repayment of
indebtedness.  There were no  borrowings  under the Company's  revolving  credit
facility in the first nine months of 1997 compared to average borrowings of $1.1
million in the first nine months of 1996.  The  revolving  credit  facility  was
repaid and terminated in August 1996.  Average  borrowings under the Securitized
Notes were $39.3  million in the first  nine  months of 1997  compared  to $43.0
million in the first nine months of 1996.  The interest rate on the  Securitized
Notes was 9.17% in all periods.

         Compensation and Benefits.  Compensation and benefits decreased 9.3% in
the third quarter of 1997 compared to the third quarter of 1996 and 10.6% in the
first  nine  months of 1997  compared  to the first  nine  months of 1996.  This
decrease was due mainly to the  reduction in staff from 17 on September 30, 1996
to 12 on September 30, 1997 with the cessation of application  processing of new
policies.   Partially  offsetting  the  staff  reduction  was  the  increase  in
compensation and benefits for remaining employees (including executive officers)
in 1997.

         Other   General  and   Administrative   Expenses.   Other  general  and
administrative expenses decreased 94.8% in the third quarter of 1997 compared to
the third  quarter of 1996.  This  decrease  is the result of the  reduction  of
professional fees in the amount of $75,000 due to the expiration of a consulting
contract  and the  reduction of estimated  legal  expenses  based on actual cost
incurred. Other general and administrative expenses increased 15.5% in the first
nine months of 1997  compared to the 

                                       17

<PAGE>


first nine  months of 1996.  The  increase  in the first nine  months of 1997 is
primarily  the result of a $361,000  legal  reserve  recorded  in the first nine
months of 1997 in  connection  with  federal  and  state  alleged  class  action
lawsuits filed against the Company and its officers and directors.

        Amortization.  Because the Company prepaid its revolving credit facility
in August 1996,  the Company  incurred a charge in the third  quarter of 1996 of
$130,000  as a result of the  Company's  writing off the  unamortized  financing
charges  related to that  facility.  All  periods  include the  amortization  of
deferred financing costs for DPFC.

        Provision for Loss on Assets Held for Sale. The Company  recorded in the
third  quarter  of 1996 a  provision  for loss on sale of assets  totaling  $3.3
million  based on  management's  estimate of proceeds from the sale of policies.
The provision equaled the difference  between the carrying value of policies and
those  estimates.  The  estimates  were  based on the life  expectancies  of the
insureds  covered by the  policies,  the  estimated  sale  period and the prices
obtained by the Company in  connection  with other  sales of  policies.  For the
quarter ended September 30, 1997, the Company  recorded an additional  provision
in the amount of $328,000 in  connection  with the  remaining  policies  not yet
sold,  based on management's  revised best estimate of proceeds from the sale of
such policies.

        Loss on Investment in Wholly Owned Financing  Subsidiary.  A reserve was
recorded in the third  quarter of 1996 in the amount of $6.9  million to reflect
the estimated loss of the Company's  entire equity interest in DPFC. The Company
had an  initial  capital  investment  in  DPFC  of  $2.9  million  and,  through
consolidation,  an additional $3.3 million of increased  equity  attributable to
the earnings of DPFC. This reserve includes the write-off of deferred  financing
costs in an amount equal to approximately  $740,000.  See "-- Certain Accounting
Implications for DPFC."

         Income Tax  Expense.  In the first nine  months of 1997 the Company did
not record an income tax expense on the income  statement  because the  deferred
tax asset of $3,225,130 was available to offset any tax  liability.  The Company
adjusted its deferred tax asset,  liability and related allowance to reflect the
tax effect on the earnings for the nine months ended September 30, 1997.

         Net loss in Wholly Owned  Financing  Subsidiary  Charged to Reserve for
Equity Interest.  At December 31, 1996 the reserve to reflect the estimated loss
of the Company's  entire equity interest in DPFC was $6.5 million.  The DPFC net
loss of $943,000  and $2.8  million  recorded in the three and nine months ended
September 30, 1997, respectively,  was included in the Company's net loss before
income  taxes and net loss in  wholly  owned  financing  subsidiary  charged  to
reserve  for equity  interest.  This loss was  charged  against  the reserve for
equity interest in wholly owned financing subsidiary.


Liquidity and Capital Resources
-------------------------------

          Other than debt that may be available to Fourteen Hill Capital through
the SBIC  program,  the Company  does not  currently  have an  external  funding
source.  The  Securitized  Notes  do  not  provide  funds  with  which  to  fund
operations.  At September 30, 1997, cash and cash  equivalents was $14.1 million
and investment securities was $4.1 million. The Company continues to analyze its
current and future needs for financing, which will be dependent on its strategic
direction.  There can be no  assurance  that the Company will be  successful  in
obtaining  external  financing on  satisfactory  terms assuming it determines it
needs  additional  funds.  However,  the Company at present  anticipates  having
sufficient  liquidity to meet its capital  commitments  and working  capital and
operational  needs  through the first half of 1998,  using current cash and cash
equivalents  and investment  securities and any additional cash generated by the
sale of  policies.  Such needs may change  significantly  depending on strategic
options 

                                       18

<PAGE>

selected. The Company has agreed to provide to  Allegiance  $500,000 of working
capital  and  approximately  $1.5  million  to  support  warehousing  and equity
components   of  the  loans  to  be  funded  in   connection   with  an  initial
securitization.  In addition, at the Company's discretion,  after the completion
of an initial securitization,  an additional commitment up to approximately $1.5
million may be made to support  warehousing  and equity  components  of a second
securitization. Allegiance is in the process of securing an external warehousing
facility to support its loan activity prior to securitization.  No assurance can
be given that Allegiance will be successful in obtaining  external  financing on
satisfactory  terms.  Allegiance  issued a  commitment  letter  to make a senior
secured loan for $2.1 million to an unaffiliated entity on October 13, 1997.

         As of  September  30, 1997,  the  outstanding  principal  amount of the
Securitized  Notes was $38.8 million.  Principal  repayments on the  Securitized
Notes began in July 1996.  Principal  and interest  payments on the  Securitized
Notes are payable  solely  from  collections  on policies  pledged to secure the
payment  thereof  and do not  require  the  Company  to  expend  cash or  obtain
financing to satisfy such principal and interest obligations.  See Notes 4 and 6
of the Condensed Notes to Consolidated Financial Statements.


Forward Looking Statements
--------------------------

          This report includes forward looking  statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements made herein
which are not based on historical  facts are forward  looking and,  accordingly,
involve  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those discussed.  Such forward looking  statements include those
under  "Management's  Discussion and Analysis Of Financial Condition and Results
of Operations"  relating to (i) face and carrying values of policies expected to
continue to be owned by the Company, (ii) expectations regarding whether and the
time at which  the  carrying  value of the  assets of DPFC will be less than the
carrying value of its  liabilities  (see "Certain  Accounting  Implications  for
DPFC"),  and (iii) sufficiency of the Company's  liquidity and capital resources
(see  "Liquidity  and  Capital   Resources").   Such  statements  are  based  on
management's  belief,  judgment and analysis as well as assumptions  made by and
information  available  to  management  at the date  hereof.  In addition to any
assumptions  and cautionary  factors  referred to specifically in this report in
connection with such forward looking statements, factors that could cause actual
results to differ  materially  from those  contemplated  by the forward  looking
statements  include  (i) the ability of the  Company to  transfer  ownership  of
policies,  (ii) the  amount and timing of actual  collections  of DPFC  policies
following  the  death  of the  insured,  (iii)  the  results  of  the  Company's
consideration  of  strategic  options  and any  costs  associated  with a chosen
option, and (iv) availability and cost of capital.



                                       19



<PAGE>


PART II.  OTHER INFORMATION
---------------------------

Item 1.  Legal Proceedings
--------------------------

         On  December  19,  1996,  a  complaint  was filed in the United  States
         District Court,  Northern  District of California (the "Court") (Docket
         No. C96-4558) against Dignity Partners,  Inc. and each of its directors
         by three  individuals  purporting to act on behalf of themselves and an
         alleged  class  consisting of all  purchasers  of the Company's  common
         stock  during  the  period  February  14,  1996 to July 16,  1996.  The
         complaint  alleged that the  defendants  violated  Section 10(b) of the
         Securities  Exchange Act of 1934 and Rule 10b-5  thereunder and Section
         11 of the  Securities  Act of  1933  and  seeks,  among  other  things,
         compensatory  damages,  interest,  fees and costs. The allegations were
         based on alleged misrepresentations in and omissions from the Company's
         registration  statement and  prospectus  related to its initial  public
         offering and certain  documents filed by the Company under the Exchange
         Act. On July 18,  1997,  the Court  granted the  defendants'  motion to
         dismiss  the  complaint.   However,   the  Court  gave  the  plaintiffs
         permission  to file an  amended  complaint.  The  plaintiffs  filed  an
         amended  complaint  on  September  8, 1997 and on  October  8, 1997 the
         Company and the other defendants  filed a motion to dismiss.  A hearing
         on the motion to dismiss is  scheduled  for  December  5,  1997.  The 
         Company and each of the defendants intend to continue to defend the 
         action vigorously.

         On February 13, 1997,  a complaint  was filed in the Superior  Court of
         California,  City and  County  of San  Francisco  (Docket  No.  984643)
         against Dignity Partners,  Inc., and each of its executive officers and
         New Echelon by an individual purporting to act on behalf of himself and
         an alleged class  consisting of all purchasers of the Company's  common
         stock  during  the  period  February  14,  1996 to July 16,  1996.  The
         complaint  alleges that the  defendants  violated  section 25400 of the
         California Corporate Code and seeks to recover damages. The allegations
         are    based   on    alleged    misstatements,    concealment    and/or
         misrepresentations  and omissions of allegedly material  information in
         connection  with the Company's  initial public  offering and subsequent
         disclosures.  The Company and each of the  defendants  intend to defend
         the action vigorously.

Item 2.  Changes in Securities and Use of Proceeds
--------------------------------------------------

         Effective  August 1, 1997,  the Company's  Second  Amended and Restated
         Certificate of  Incorporation  was amended to change the Company's name
         to Point West Capital Corporation from Dignity Partners, Inc.

Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

      (a)  Exhibits.

         Number          Description
         -----           ------------

         10.1            Limited Liability Company Agreement of Allegiance 
                         Capital, LLC 

         10.2            Fourteen Hill Capital, L.P. Agreement of Limited
                         Partnership

         10.3            Fourteen Hill Management, LLC Operating Agreement by 
                         Point West Capital Corporation and Fourteen Hill 
                         Management, LLC as of June 9, 1997

         27              Financial Data Schedule
 

                                      20


<PAGE>


     (b)  Reports on Form 8-K.

        Date          Item Reported      Matter Reported
        ----          -------------      ---------------
        8/7/97              5            The Company issued a press release 
                                         regarding its results of operations for
                                         the second quarter of 1997.




                               SIGNATURES
                               ==========

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                                POINT WEST CAPITAL CORPORATION





DATED:  November 13, 1997                      /S/ ALAN B. PERPER
                                              -------------------------------
                                              ALAN B. PERPER
                                              President
                                              (Duly Authorized Officer)


DATED:  November 13, 1997                      /S/ JOHN WARD ROTTER
                                               ------------------------------
                                               JOHN WARD ROTTER
                                               Executive Vice President and
                                               Chief Financial Officer
                                               (Principal Financial and
                                               Accounting Officer)


                                       21