UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10 - KSB

[ X ]     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
          OF 1934

          For the fiscal year ended September 30, 1997

[   ]     TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

          Commission file number:   33-27230


                       FOUNTAIN COLONY HOLDING CORPORATION
                       -----------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                              95-4723110
            --------                                              ----------
(State or Other Jurisdiction of                                (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)


                 1621 Altivo Way, Los Angeles, California 90026
                 ----------------------------------------------
                    (Address of principal executive offices)

                                 (818) 980-0929
                                 --------------
                (Issuer's telephone number, including area code)

          Securities registered under Section 12(g) of the Exchange Act
                                      None
                                      ----
                               Title of each class

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15 (d) of the  Exchange  Act  during the past  twelve  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   No X

Transitional Small Business Disclosure Format (Check one): Yes   No X

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not  contained in this form and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. _____

        State the issuer's revenues for its most recent fiscal year. None

     State the aggregate  market value of the voting stock held by nonaffiliates
of the registrant.

              There is no market for the registrant's voting stock

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Date: September 30, 1997

Common Stock, par value $0.001 per share. Shares outstanding 900,000


<PAGE>

                       FOUNTAIN COLONY HOLDING CORPORATION

                                  FORM 10--KSB

                               SEPTEMBER 30, 1997


                                      INDEX

                                                                            Page
Part 1

   Item 1   Description of Business                                           3
   Item 2   Description of Property                                           9
   Item 3   Legal Proceedings                                                 9
   Item 4   Submission of Matters to a Vote of Security Holders               9

Part II

   Item 5   Market for Common Equity and Related Stockholder Matters          9
   Item 6   Plan of Operation                                                 9
   Item 7   Financial Statements                                             10
   Item 8   Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosures                                      11

Part III

   Item 9   Directors, Executive Officers, Promoters and Control Persons,
              Compliance with Section 16(a) of the Exchange Act              11
   Item 10  Executive Compensation                                           11
   Item 11  Security Ownership of Certain Beneficial Owners
              and Management                                                 12
   Item 12  Certain Relationships and Related Transactions.                  12

Part IV

   Item 13  Exhibits and Reports                                             13


                                        2
<PAGE>

                                     PART I


ITEM 1. DESCRIPTION OF BUSINESS

(a) and (b) Business Development and Business of Issuer


General
-------

     Fountain  Colony  Holding  Corporation  (the  "Company"),   is  a  Delaware
corporation organized on May 6, 1988. In May 1989, the Company sold 10,000 Units
of Common  Stock in an  Initial  Public  Offering,  pursuant  to a  Registration
Statement  on Form S-18 filed with the United  States  Securities  and  Exchange
Commission.  The Company's  stated  business  purpose was to "...seek  potential
business  ventures  which in the opinion of Management  will provide a profit to
the Company."

     On August 31,  1990,  the Company  entered  into an  agreement  whereby the
Company acquired Pursuit Capital Corporation, ("PCC") a Florida corporation, for
a consideration of 10,260,000  shares of the Company's Common Stock. At the date
of  that  transaction,  PCC's  principal  assets  consisted  of  cash  and  cash
equivalents of $138,577.

     On December  7, 1990,  the Company  organized  a  wholly-owned  subsidiary,
Pursuit Venture Corporation ("PVC") a Delaware  corporation.  PVC issued 270,000
"units" to its parent company for a consideration of $5,000. Each unit consisted
of one share of common  stock,  par value  $0.0001  and a warrant.  The  warrant
entitled its holder to purchase one share of PVC common stock. The warrants have
since expired unexercised.  Additionally,  the Company loaned PVC $30,000.  This
loan has since been written off.

     The Company organized PVC for the express purpose of distributing the units
to the Company's shareholders in order to create a publicly-owned  "blank-check"
company.  During May 1992,  the Company  distributed  257,844 units (and cash of
$1,216 in lieu of units in  certain  instances)  to the  Company's  stockholders
based on their  respective  pro-rata  ownership of the Company.  Since the stock
distribution in 1992, the Company  conducted only nominal  operations  until new
management was appointed in August 1997.

     The Company  proposes to seek,  investigate  and  participate in a business
combination.  Such a  combination  is  expected  to take the  form of a  merger,
consolidation,  asset  acquisition  or  some  other  form of  combination  which
Management  believes offers  potential  long-term  growth.  The Company does not
intend to become  involved in any business which would require it to register as
a securities  broker-dealer  under the  Securities  Exchange Act of 1934,  as an
investment  advisor  under  the  Investment  Advisor'  Act  of  1940;  or  as an
investment company under the Investment Company Act of 1940. Except as set forth
herein  under  BUSINESS  - Forms  of  Combination,  Management's  discretion  is
otherwise  unrestricted and it may participate in any business which may, in the
opinion of  Management,  meet the business  objectives  discussed  herein.  (See
"BUSINESS.")

     Management  believes that business  opportunities  will become available to
the Company due  primarily  to its status as a  publicly-held  company,  and its
flexibility in structuring  and  participating  in business  opportunities.  The
Company has no  agreement  or  understanding  to acquire or  participate  in any
business  opportunity,   nor  does  it  currently  have  any  opportunity  under
investigation. Decisions as to which business opportunity to pursue will be made
by  Management  of the Company,  which will in all  probability  act without the
consent, vote, or approval of the Company's stockholders. (See "BUSINESS".)

                                       3
<PAGE>


     The  Company's  offices  are  located  at 1621  Altivo  Way,  Los  Angeles,
California  90026. Its telephone number is (818) 980-0929 and telecopier  number
is (818) 980-8746.


Business Plan
-------------

     The Company is a "shell" corporation which proposes to engage in the active
search for a business combination or merger opportunity which, in the opinion of
Management, will enhance stockholder value.

     Management  believes that business  opportunities  will become available to
the Company due  primarily  to its status as a  publicly-held  company,  and its
flexibility in structuring  and  participating  in business  opportunities.  The
proposed  corporate  structure  of the  Company  has not been the  subject  of a
feasibility study or market research nor is Management aware of statistical data
which  would  support  the  perceived   benefits  of  a  merger  or  acquisition
transaction  for  target  company  stockholders.  Therefore,  there  can  be  no
assurance that a market exists for such a corporate vehicle.  At present,  there
are  no  plans,  agreements,   understandings,  or  commitments  to  acquire  or
participate in any business opportunity nor has the Company solicited,  received
or considered any proposals regarding a possible combination or merger. Further,
there can be no  assurance  that the Company  will be  successful  in locating a
suitable  entity for a merger or that the Company  will be able to  consummate a
combination.


Forms of Combination
--------------------

     The manner in which the Company  participates in a business  opportunity is
predicated on the nature of the opportunity, the respective needs and desires of
the Company and the promoters of the combination,  and the relative  negotiating
strength of the Company and such promoters. It is likely that a combination will
take the form of a merger,  consolidation,  asset acquisition or some other form
of  combination.   The  "target"   entities  may  include   private   companies,
partnerships, or sole proprietorships.

     In transacting a combination,  a significant amount of additional shares of
the  Company's  Common Stock may be issued.  The Company is  authorized to issue
1,250,000  shares  of  Common  Stock of which  900,000  shares  are  issued  and
outstanding.  The Company  therefore has only 350,000 shares which may be issued
in  consideration  of a  business  acquisition.  At  such  time  as the  Company
considers a proposal  to  effectuate  a business  combination,  it will,  in all
likelihood,  reverse split its stock to enable a large percentage of the Company
to be acquired by the owners of the business  opportunity,  if the circumstances
of the transaction so dictate. In such an event,  present Management and current
stockholders  may not have  control  of a majority  of the voting  shares of the
Company.  Further,  as part  of such a  transaction,  all or a  majority  of the
Company's  Management  may be requested to  relinquish  their  positions and new
directors  and  officers  may  be  appointed  without  a vote  by  stockholders.
Moreover,  no assurance can be given as to the experience or  qualifications  of
such persons  either in the operation of the activities of the Company or in the
operation of the business, asset or property being combined.

     The  Company  does not  propose to  restrict  its  search  for  combination
opportunities  to  any  particular  industry,  and  may,  therefore,  engage  in
essentially any business.  Management contemplates that the Company will seek to
merge with or acquire a target company with either assets or earnings,  or both.
The Company has not  established  a specific  level of earnings or assets  below
which it would not consider a merger or acquisition with a target company.

                                        4
<PAGE>


     The Company intends to obtain, if possible,  audited  financial  statements
for the entity which it acquires.  It is expected that audited  financials  will
help Management to understand the financial  position of the company it acquires
and will  also  help the  Company  in  complying  with the  financial  reporting
requirements of the Securities  Exchange Act of 1934, if the  acquisition  would
fall within the ambit of such law.

     It is anticipated that business  opportunities will become available to the
Company from various sources, including its Officers and Directors, professional
advisors such as attorneys and accountants,  securities broker-dealers,  venture
capitalists,  members of the  financial  community,  and others who may  present
unsolicited proposals. The Company has no plans, understandings,  agreements, or
commitments with any individuals other than its Officers and Directors to act as
finders of opportunities for the Company.


Plan of Acquisition
-------------------

     The Officers and  Directors of the Company will  undertake  the analysis of
business  opportunities.   Management  will  have  unrestricted  flexibility  in
seeking, analyzing and participating in business opportunities.  In its efforts,
Management intends to follow a systematic approach to identify its most suitable
acquisition candidates.

     Management  intends to concentrate on identifying any number of preliminary
prospects which may be brought to its attention through present  associations or
unsolicited.   Management   will  then  apply  certain  broad  criteria  to  the
preliminary  prospects.   Essentially,  this  will  entail  a  determination  by
Management  whether  or not  the  prospects  are in an  industry  which  appears
promising  and whether or not the prospects  themselves  have  potential  within
their own industries.

     During this  initial  screening  process,  Management  will ask and receive
answers  to  questions  framed to  provide  appropriate  threshold  information,
depending upon the nature of the  prospect's  business.  Such  evaluation is not
expected to be an in-depth analysis of the target company's operations, although
it will  encompass a look at most,  if not all, of the same areas to be examined
once if and when a target  company  is  selected  for an  in-depth  review.  For
example,  at this stage,  Management may look at a prospect's  unaudited balance
sheet. However,  when a prospect is selected for an in-depth review,  Management
will  review  the  prospect's   audited  financial   statements.   Nevertheless,
Management  anticipates  this  evaluation  will  entail a broad  overview of the
business of the target  company and should  allow a  significant  percentage  of
preliminary prospects to be eliminated from further consideration.

     Management will conduct an in depth analysis of five major areas of concern
with respect to the target company as follows:

     1.  Managerial  and Financial  Stability.  Management  will review  audited
financial statements of the target company and will also research the background
of each  director  and member of  management  of the target  company in order to
discern  whether  the  stability  of the  target  company  is such that  further
negotiations are warranted.

     2. Industry  Status.  Management  will research the potential of the target
company's  industry.  The concern  here is whether the  industry is in a growth,
stagnant or declining stage.

     3.  Production  of  Product.  If  the  target  company  is a  manufacturer,
Management  will review whether it has the necessary  resources or access to the
necessary  resources  and  supplies  to  produce a quality  product  in a timely
manner.

                                       5
<PAGE>


     4.  Acceptance  and  Potential  of  Product.  Management  will  review  the
acceptance of the target company's product in the market place.  Management will
also determine  whether or not there is potential for the product to be workable
and to fulfill its intended purpose.

     5.  Development  of Target  Company.  Management  will  review  the  target
company's state of development (examples:  start-up stage,  established company,
etc.).

     The  foregoing is an outline of the areas of concern which most often arise
and merit careful scrutiny by Management.  Because of the possible  varieties of
target  companies  which may come to the  attention  of  Management,  additional
factors  will  most  likely  be  considered  in any given  analysis.  Also,  the
procedures  used in such a review are expected to vary depending upon the target
company  being  analyzed.  Management  may select a target  company  for further
negotiations  even though the target may not receive a favorable  evaluation  in
one or more of the five primary areas of concern.

     Management  expects to enter into further  negotiations with various target
company managements following successful conclusion of the initial financial and
evaluation studies. Negotiations with target company management will be expected
to focus on the  percentage  of the Company  which target  company  stockholders
would  acquire  in  exchange  for their  shareholdings  in the  target  company.
Depending upon, among other things, the target company's assets and liabilities.

     The  Company's  stockholders  will,  in  all  likelihood,   hold  a  lesser
percentage   ownership   interest  in  the  Company   following  any  merger  or
acquisition. The percentage ownership may be subject to significant reduction in
the event the Company  acquires a target company with  substantial  assets.  Any
merger  or  acquisition  effected  by the  Company  can be  expected  to  have a
significant  dilutive  effect on the  percentage of shares held by the Company's
stockholders.

     Management does not intend to force an active  participation in the affairs
of the acquired  company.  However,  Management  will  evaluate any  opportunity
offered for such participation if such participation was a necessary  ingredient
of a merger.  It is not the intention of Management to seek such  participation.
Management  will in all likelihood be requested to relinquish any voting control
it may  exercise  prior to a merger to the present  management  of the  business
which is acquired.

     Current   Management  would  clearly  not  control  the  surviving  company
following  such a  dilution  and will not be in a  position  to demand an active
participation and therefore would not participate unless invited to do so.

     The final stage of any merger or  acquisition to be effected by the Company
will  require  the  Company to retain the  services  of counsel  and a qualified
accounting  firm in order to  properly  effect  the merger or  acquisition.  The
Company may be expected to incur  significant  legal fees and  accounting  costs
during the final stages of a merger or acquisition. Management intends to retain
legal and accounting services only on an as-needed basis in the latter stages of
a proposed merger or acquisition.

     The interest of Management is to increase  stockholder value. If successful
all the stockholders, including Management, will benefit. Management's objective
is to issue restricted  shares of the Company to acquire a private company which
is a going concern.  If Management is requested to sell a portion of its shares,
give away a portion  of its  shares or cancel a portion  of its shares to obtain
such a merger,  then  Management  will face a conflict of  interest.  Presently,
Management has no plan on how to deal with this conflict and believes no general
plan can be  formulated at this time;  this may  adversely  affect the Company's
ability to successfully  conclude a subsequent  merger or acquisition.  Conflict
resolutions  will otherwise be handled on a case-by-case  basis. If the conflict
cannot be resolved,  litigation could therefore occur, which would likely damage
the Company's prospects.

                                       6
<PAGE>


     There are no corporate  policies,  board  resolutions  or bylaws which deal
with  conflicts of interest  with respect to the sale of shares of the company's
shares by Management and none are anticipated to be placed into effect.

     Management cannot commit at this time as to whether a stockholder will have
the  right  to  vote to  complete  a  merger/acquisition  as the  nature  of the
transaction,  and the needs of the candidate will dictate the legal requirements
of the transaction.

     In connection with the acquisition of a private  business,  the Company may
not obtain an independent appraisal of the value of the acquired business.  Such
omission by the Company could result in  overvaluation  or other related  errors
which then could adversely  effect the price paid by the Company for the private
business.  It is probable  that an existing  stockholder's  future  share values
would be  adversely  effected  by factors  including  but not  limited to excess
dilution, reduced dividends, if any, and a lack of market for shares.

     Should a  stockholder  wish to challenge  the Company in Court to reverse a
merger or otherwise assert damages against the Company's  Management for neglect
of fiduciary  duties in the  construction of a merger or acquisition,  the legal
remedy available to that stockholder  under state corporate law will most likely
be prohibitively expensive and time consuming.

     The  Company  has  in  effect  no  bylaws  understandings,   agreements  or
resolutions which prevent related party transactions. Such bylaws or resolutions
could be changed by Management  initiative.  No such changes are presently being
considered.

     There are no present plans,  proposals,  or  arrangements  to sell or issue
additional shares of the Company prior to an acquisition or a merger.

Competition
-----------

     The Company will remain an insignificant  participant among the firms which
engage in mergers with and acquisitions of  privately-held  entities.  There are
many established venture capital and financial concerns which have significantly
greater  financial and personnel  resources  and  technical  expertise  than the
Company.  In view of the Company's lack of working capital resources and limited
management  availability,  the  Company  will  continue  to be at a  significant
competitive disadvantage compared to its competitors.

Regulation and Taxation
-----------------------

     The Company could be subject to regulation under the Investment Company Act
of 1940 in the  event the  Company  obtains  and  continues  to hold a  minority
interest in a number of entities.  However,  Management  intends to seek at most
one or two mergers or acquisitions and  Management's  plan of operation is based
on the Company  obtaining a  controlling  interest in any merger or  acquisition
target company and, accordingly,  the Company may be required to discontinue any
prospective merger or acquisition of any company in which a controlling interest
will not be obtained.

     The Company could also be required to register under the Investment Company
Act of  1940  in the  event  the  Company  comes  within  the  definition  of an
Investment   Company  contained  in  that  Act  due  to  its  assets  consisting
principally  of  shareholdings  held in a  number  of  subsidiaries.  Management
intends to seek at most one or two mergers or acquisitions,  which  transactions
will result in the Company holding only majority interest in subsidiaries.

                                       7
<PAGE>


     Any securities  which the Company acquires in exchange for its Common Stock
will be "restricted securities" within the meaning of the Securities Act of 1933
(the "1933 Act").  If the Company elected to resell such  securities,  such sale
could not proceed unless the  Securities and Exchange  Commission had declared a
Registration   Statement   effective  or  an  exemption  from  registration  was
available.  Section 4(2) of the 1933 Act,  which exempts sales of securities not
involving a public  offering,  would in all likelihood be available  since it is
likely  that any such sale would be a block sale to a private  investor to raise
additional capital. Although Management's plan of operation does not contemplate
resale of  securities  acquired,  in the event such a sale were  necessary,  the
Company would be required to comply with the provisions of the 1933 Act.

     As a condition to a merger or  acquisition,  it is possible that the target
company's  management may request  registration of the Company's Common Stock to
be received by target  company  stockholders.  In such event,  the Company could
incur significant  registration costs.  Management intends to require the target
company  to  bear  most,  if not  all,  of the  cost of any  such  registration.
Alternatively,  the Company may issue  "restricted  securities" to a prospective
target company, which securities may be subsequently registered for sale or sold
in accordance with Rule 144 of the Securities Act of 1933.

     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 any target
company.

     In the course of a merger or  acquisition  the  Company  may  undertake,  a
substantial  amount of  attention  will be focused  upon  federal  and state tax
consequences  to both the Company and the target company.  Presently,  under the
provisions  of federal and various  state tax laws,  a qualified  reorganization
between  business  entities will generally  result in tax-free  treatment to the
parties of the reorganization. This generally requires the company to acquire at
least 80% of the combined voting power of the acquired company plus at least 80%
of the total number of shares of all other  classes of stock in exchange for the
voting stock of the acquiring company.

     While the  Company  expects to  structure  any merger or  acquisition  in a
manner  which  will  minimize  federal  and state tax  consequences  to both the
Company  and the  target  company,  there is no  assurance  that such a business
combination will meet the statutory  requirements of a  re-organization  or that
the parties will obtain the intended tax-free treatment upon a transfer of stock
or assets.  A  non-qualifying  reorganization  could result in the imposition of
both federal and state taxes which may have a substantial  adverse effect on the
Company.  Further, there is no assurance that federal and state tax laws may not
be amended in the foreseeable future to preclude the Company, as well as others,
from  availing  itself of the tax-free  treatment  presently  afforded  business
entities engaged in mergers and acquisitions.

     As of the date hereof no arrangements  for merger or acquisition  have been
made.


Employees
---------

     The Company is a development stage operation and currently has no employees
other than its sole Officer and Director.  Current Management dose not intend to
devote its full-time efforts to the business of the Company.  Current Management
is not  compensated  by the  Company;  however,  it is  anticipated  that,  upon
completion  of an  acquisition,  the  Company  may  engage  full  and  part-time
employees  which may  include the  Company's  present  management.  The need for
employees and their availability will be addressed as circumstances warrant.

                                       8
<PAGE>



Facilities
----------

     The Company utilizes the offices of its sole Officer and Director,  Patrick
C. Brooks, on a month-to-month basis at no charge. The services provided include
the usage of telephone, telecopier, computers, office fixtures and fittings, and
secretarial services.  Management does not foresee the need for separate offices
until business circumstances dictate otherwise.


ITEM 2. DECSRIPTION OF PROPERTY

     None


ITEM 3. LEGAL PROCEEDINGS

     None


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

     None


                                     PART II


ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Not  applicable  - the  Company's  stock  is  not  traded  publicly  and no
dividends have been paid.


ITEM 6. PLAN OF OPERATION

     Commencing  in August  1997,  the  Company  resumed its efforts to identify
business  opportunities  consistent with its objectives.  However, the Company's
ability to operate was  significantly  and adversely  impacted by the absence of
operating  funds.  Against  this  background,  the Company was  unsuccessful  in
identifying  established  and  profitable  operating  companies  which desired a
public listing through a "reverse-merger".

     The  Company  intends  to  continue  its  efforts  to  achieve  its  stated
objectives.  And, Management will continue to use all available resources in its
endeavor to successfully complete a business  combination.  However, in light of
the foregoing  reasons,  the Company's ability to continue to operate or achieve
its  objectives  at the  current  time is, at best,  tenuous.  In the absence of
operating  funds,  Management  may find it necessary to liquidate the Company in
which event there will be a total loss of stockholder funds.

                                       9
<PAGE>


ITEM 7. FINANCIAL STATEMENTS

     See Audited Financial Statements attached hereto.










                       THIS SPACE LEFT BLANK INTENTIONALLY






                                       10

<PAGE>


                       FOUNTAIN COLONY HOLDING CORPORATION
                     (Formerly Argyle Funding, Incorporated)

                              FINANCIAL STATEMENTS

                       SEPTEMBER 30, 1997, 1996, AND 1995


Accountant's Report ..........................................................F1

Financial Statements

 Balance Sheets -

    Assets, Liabilities and Stockholders' Equity..............................F2

    Income Statements ........................................................F3

    Statement of Cash Flows ..................................................F4

    Statements of Stockholders' Equity .......................................F5

Notes to Financial Statements ................................................F7


<PAGE>

                               ACCOUNTANT'S REPORT


To The Board of Directors and Stockholders
Fountain Colony Holding Corporation

I have  audited  the  accompanying  balance  sheets of Fountain  Colony  Holding
Corporation  (Formerly  Argyle  Funding,  Incorporated)  at September  30, 1997,
September 30, 1996 and September 30, 1995 and the related  statements of income,
stockholders'  equity and cash flows for the years then ended.  These  financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I 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.
I believe my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material aspects,  the financial position of Fountain Colony Holding Corporation
at September 30, 1997, September 30, 1996 and September 30, 1995 and the results
of its operations, stockholders' equity and cash flows for the years then ended,
in conformity with generally accepted accounting principles.




/s/ Henry Schiffer
------------------
Henry Schiffer
Certified Public Accountant

                                       F1
<PAGE>
<TABLE>
<CAPTION>


                       FOUNTAIN COLONY HOLDING CORPORATION
                     (Formerly Argyle Funding, Incorporated)

                                 BALANCE SHEETS


                                     ASSETS
                                     ------

                                                              September 30,
                                                    --------------------------------
Current Assets:                                       1997        1996        1995
---------------                                       ----        ----        ----
<S>                                                 <C>         <C>         <C>
Cash                                                       0           0           0
                                                    --------    --------    --------

     Total  Current Assets                                 0           0           0
                                                    --------    --------    --------
Investment (note 1e and 2)                                 0           0           0
                                                    --------    --------    --------

Total Assets                                               0           0           0
                                                    ========    ========    ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities:

Accrued expenses                                       5,000      30,000      25,000
                                                    --------    --------    --------

Total Liabilities                                      5,000      30,000      25,000
                                                    --------    --------    --------

Stockholders' Equity:

Preferred stock - 1,000,000 shares
    Authorized; issued and outstanding
    none; $.01 par value                                --          --          --
Common stock - 1,250,000 shares authorized;
    issued and outstanding 900,000 shares at
    September 30, 1997, 270,000 shares
    at September 30, 1996 and 1995;
    @ $.001 par value (Notes 3, 4, 7 and 8)              900         270         270
Paid in capital                                      232,677     203,307     203,307
Deficit accumulated during the
     development stage                              (238,577)   (233,577)   (228,577)
                                                    --------    --------    --------
     Total Stockholders' Equity (deficit)             (5,000)    (30,000)    (25,000)
                                                    --------    --------    --------

       Total Liabilities and Stockholders' Equity          0           0           0
                                                    ========    ========    ========


   The accompanying notes are an integral part of these financial statements.

                                       F2
</TABLE>

<PAGE>


                       FOUNTAIN COLONY HOLDING CORPORATION
                     (Formerly Argyle Funding, Incorporated)

                            STATEMENTS OF OPERATIONS



                                                          September 30,
                                               --------------------------------
                                                 1997        1996        1995
                                                 ----        ----        ----
Operating Expenses:

  Selling, G and A                                5,000       5,000       5,000
                                               --------    --------    --------

     Total operating expenses                     5,000       5,000       5,000
                                               --------    --------    --------

Net (loss)                                       (5,000)     (5,000)     (5,000)
                                               ========    ========    ========



Weighted number of shares outstanding:          322,500     270,000     270,000
                                               ========    ========    ========


Net (loss) per share                               (.02)       (.02)       (.02)
                                               ========    ========    ========



   The accompanying notes are an integral part of these financial statements.


                                       F3
<PAGE>


                       FOUNTAIN COLONY HOLDING CORPORATION
                     (Formerly Argyle Funding, Incorporated)

                            STATEMENTS OF CASH FLOWS



                                                           September 30,
                                                   ----------------------------
                                                    1997       1996       1995
                                                    ----       ----       ----
CASH FLOWS FROM OPERATING
      ACTIVITIES

Net (loss)  for the year                           (5,000)    (5,000)    (5,000)

Adjustments to reconcile net income to net
     cash provided by operating activities

    Increase in accrued expenses                    5,000      5,000      5,000
                                                   ------     ------     ------

NET CASH PROVIDED BY OPERATING ACTIVITIES               0          0          0
                                                   ------     ------     ------

NET INCREASE (DECREASE) IN CASH                         0          0          0

CASH BALANCE, BEGINNING OF PERIOD                       0          0          0
                                                   ------     ------     ------

CASH BALANCE, END OF PERIOD                             0          0          0
                                                   ======     ======     ======




   The accompanying notes are an integral part of these financial statements.

                                       F4

<PAGE>
<TABLE>
<CAPTION>


                                   FOUNTAIN COLONY HOLDING CORPORATION
                                 (Formerly Argyle Funding, Incorporated)

                                    STATEMENT OF SHAREHOLDERS' EQUITY
                                     INCEPTION TO SEPTEMBER 30, 1997


                                         Common Shares            Paid In      Accumulated   Stockholders'
                                     Shares         Amount        Capital        Deficit        Equity
                                     ------         ------        -------        -------        ------
<S>                                  <C>            <C>           <C>            <C>            <C>
May 6, 1988 to Sept
   30, 1988                                                                           (101)          (101)

Sale of common stock
   Feb 16, 1989                        520,000            520          4,480                        5,000

    Oct. 1, 1998 to Sept
    30, 1989                           120,000            120         59,880                       60,000

Net (loss) Oct. 1, 1988
   to Sept. 30, 1989                                                               (16,390)       (16,390)

Net (loss) Oct. 1, 1989
   to Sept. 30, 1990                                                               (38,667)       (38,667)
                                   -----------    -----------    -----------   -----------    -----------

Balance Sept. 30, 1990                 640,000            640         64,360       (55,158)         9,842

Surrender of shares by
   Shareholder                        (100,000)          (100)           100                            0

Issuance of common stock
   for acquisition of Pursuit
   Capital Corporation              10,260,000         10,260        128,317                      138,577
   October 25, 1990

December 17, 1990
    40:1 reverse stock split       (10,530,000)       (10,530)        10,530                            0

Net (loss) Oct. 1, 1990
   to Sept. 30, 1991                                                               (26,205)       (26,205)
                                   -----------    -----------    -----------   -----------    -----------

   Balance Sept. 30, 1991              270,000            270        203,307       (81,363)       122,214

Cash dividend in lieu
    of stock of Pursuit Ventures                                                    (1,216)        (1,216)

Net (loss) Oct. 1, 1991
   to Sept. 30, 1992                                                              (127,076)      (127,076)
                                   -----------    -----------    -----------   -----------    -----------

   Balance Sept. 30, 1992              270,000            270        203,307      (209,655)        (6,078)




               The accompanying notes are an integral part of these financial statements.

                                                   F5
<PAGE>

                          FOUNTAIN COLONY HOLDING CORPORATION
                        (Formerly Argyle Funding, Incorporated)

                           STATEMENT OF SHAREHOLDERS' EQUITY
                            INCEPTION TO SEPTEMBER 30, 1997


                                    Common Shares        Paid In  Accumulated  Stockholders'
                                  Shares     Amount      Capital    Deficit     Equity
                                  ------     ------      -------    -------     ------


Balance Sept. 30, 1992           270,000         270     203,307   (209,655)     (6,078)

Net (loss) Oct. 1, 1992
   to Sept. 30, 1993                                                 (7,960)     (7,960)
                                --------    --------    --------   --------    --------

Balance Sept. 30, 1993           270,000         270     203,307   (215,615)    (14,038)

Net (loss) Oct. 1, 1993
   to Sept. 30, 1994                                                 (5,962)     (5,962)
                                --------    --------    --------   --------    --------

     Balance Sept.30, 1994       270,000         270     203,307   (223,577)    (20,000)

Net (loss) Oct. 1, 1994
   to Sept. 30, 1995                                                 (5,000)     (5,000)
                                --------    --------    --------   --------    --------

     Balance Sept. 30, 1995      270,000         270     203,307   (228,577)    (25,000)

Net (loss) Oct. 1, 1995
   to Sept. 30, 1996                                                 (5,000)     (5,000)
                                --------    --------    --------   --------    --------

     Balance Sept. 30, 1996      270,000         270     203,307   (233,577)    (30,000)

Issuance of common stock
   for payment of liabilities    630,000         630      29,370                 30,000
     Note 8

Net (loss) Oct. 1, 1996
   to Sept. 30, 1997                                                 (5,000)     (5,000)
                                --------    --------    --------   --------    --------

Balance Sept. 30, 1997           900,000         900     232,677   (238,577)     (5,000)
                                ========    ========    ========   ========    ========



      The accompanying notes are an integral part of these financial statements.

                                       F6
</TABLE>

<PAGE>


                       FOUNTAIN COLONY HOLDING CORPORATION
                     (Formerly Argyle Funding, Incorporated)

                          NOTES TO FINANCIAL STATEMENTS
                       SEPTEMBER 30, 1997, 1996, AND 1995




Note 1 Summary of Significant Accounting Policies
-------------------------------------------------

     This summary of significant  accounting policies of Fountain Colony Holding
     Corporation is presented to assist in understanding the Company's financial
     statements.  The financial  statements and notes are representations of the
     Company's  management,   which  is  responsible  for  their  integrity  and
     objectivity.  These  accounting  policies  conform  to  generally  accepted
     accounting principles and have been consistently applied in the preparation
     of the financial statements.

     (a)  Organization and Business Activities:

          The  Company  was  incorporated  on May 6, 1988  under the laws of the
          State of Delaware  under the name Argyle  Funding,  Incorporated.  The
          Company  changed  its  name to  Fountain  Colony  Holding  Corporation
          effective January 2, 1991.

          The Company's business purpose is to seek out business  opportunities,
          including   acquisitions,   that  the  Board  of  Directors,   in  its
          discretion, believes to be good opportunities.

     (b)  Depreciation:

          Depreciation  is  provided  by  the  straight-line   method  at  rated
          calculated  to  amortize  cost  over  the  estimated  useful  lives of
          respective  assets.  Upon sale or retirement of the respective assets,
          the related cost and accumulated  depreciation are eliminated from the
          accounts,  and gains or losses are  reflected  in  income.  Repair and
          maintenance  expenditures,  not  anticipated to extend  original asset
          lives, are charged to income as incurred.

     (c)  Fiscal Year:

          The Company operates on a September 30 fiscal year end.

     (d)  Basis of Operation:

          The Company prepares its financial statements and federal income taxes
          on the accrual basis of accounting.

     (e)  Principles  of   previously   reported   Consolidation   of  financial
          statements:

          The accompanying financial statements include the accounts of Fountain
          Colony Holding Corporation and previous  subsidiaries as listed below.
          All  significant  inter company  balances and  transactions  have been
          eliminated.

                                       F7
<PAGE>


                       FOUNTAIN COLONY HOLDING CORPORATION
                     (Formerly Argyle Funding, Incorporated)

                          NOTES TO FINANCIAL STATEMENTS
                       SEPTEMBER 30, 1997, 1996, AND 1995



     (e)  Principles of Consolidation: (continued)

          a.   Pursuit Capital  Corporation was acquired on October 25, 1990 for
               10,260,000  shares of common  stock  (retroactively  reflected at
               255,500  shares  after the 40 for 1  reverse  stock  split).  The
               acquired   Company  was  in  the  business  of  venture   capital
               activities.  Pursuit  Capital was  voluntarily  dissolved  by the
               Company effective August 5, 1994.

          b.   Pursuit  Venture  Corporation was formed on December 7, 1990 as a
               wholly owned  subsidiary of Fountain Colony Holding  Corporation.
               The Company  purchased  270,000  shares with a par value of $.001
               and paid $5,000 for the stock. Pursuit Venture was a wholly owned
               subsidiary  through  September  30,  1991.  In 1992  the  Company
               distributed 257,844 shares of the common stock of Pursuit Venture
               Corporation to the existing  shareholders  of the Company and the
               Company carries the investment in Pursuit Venture  remaining held
               stock of 12,156 shares at $0.

          c.   Effective  September  30, 1995 the  Company has no  consolidating
               subsidiaries  as Pursuit  Capital was  voluntarily  dissolved and
               substantially all the shares of Pursuit Venture  Corporation have
               been distributed.

Note 2 Capitalization of the Company
------------------------------------

     On February 16, 1989, the Company issued 520,000 shares of common stock for
     a total  consideration of $5,000.  These shares were restricted  securities
     under Rule 144 of the  Securities  Act of 1933. As such,  these shares were
     not available to be sold or traded for a period of two years which ended on
     February 16, 1991.

Note 3 Public Offering
----------------------

     The  Company  filed a Form S-18 public  offering  with the  Securities  and
     Exchange Commission.  The Company sold 10,000 units at a price of $6.00 per
     unit.  Each unit  consists of 12 shares of its publicly  registered  common
     stock, 12 Class A redeemable  common stock warrants,  12 Class B redeemable
     common  stock  purchase  warrants  and 12 Class C  redeemable  common stock
     purchase  warrants.  As of  September  30, 1989 all 10,000  units  (120,000
     shares) were sold and the gross  proceeds of the  offering,  $60,000,  were
     received by the Company.

Note 4 Acquisition and Formation of Subsidiary
----------------------------------------------

     Pursuit Capital Corporation was acquired on October 25, 1990 for 10,260,000
     shares of common stock (retroactively reflected at 255,500 shares after the
     40 for 1 reverse stock split).  The Company was acquired under the purchase
     method of  accounting.  The sole asset of the Company  reflected  as of the
     date of acquisition was cash and certificates of deposit totaling $138,577.

                                       F8
<PAGE>

                       FOUNTAIN COLONY HOLDING CORPORATION
                     (Formerly Argyle Funding, Incorporated)

                          NOTES TO FINANCIAL STATEMENTS
                       SEPTEMBER 30, 1997, 1996, AND 1995



Note 4 Acquisition and Formation of Subsidiary (continued):
-----------------------------------------------------------

     Pursuit  Venture  Corporation  was formed on December 7, 1990.  The initial
     capitalization  of Pursuit  Venture  was based on the  issuance  of 270,000
     shares of common stock to the Company for a purchase  price of $5,000.  The
     Company then loaned the newly formed subsidiary  $30,000.  This $30,000 was
     spent by the subsidiary and accordingly  was reflected in the  consolidated
     financials as operating expenses of the Company in fiscal 1991. However, in
     1992 the Company distributed 257,844 of Pursuit Venture's common stock that
     terminated the parent company-subsidiary relationship.

Note 5 Income Taxes
-------------------

     At  September  30,  1997,   the  Company  has  a  federal   operating  loss
     carryforward  of $238,577 for financial  accounting  and federal income tax
     purposes.  Utilization of the net operating loss in any taxable year during
     the carryforward  period may be subject to an annual  limitation due to the
     ownership change limitations imposed by the tax law.

     The net  operating  losses will expire at various  dates  commencing in the
     year 2004 through 2009.

     The deferred tax asset consists of the future benefit of net operating loss
     carryforwards.  A valuation allowance limits the recognition of the benefit
     of deferred tax assets until  realization  is reasonable  assured by future
     profitability.

     The following is a summary of deferred taxes:

                        Deferred asset        $ 76,000
                        Valuation allowance    (76,000)
                                              --------
                                                     0
                                              ========

Note 6 Options & Warrants
-------------------------

     The  Company  has  not  adopted  a  stock  option  plan  and  there  are no
     outstanding warrants.

Note 7 Dividend Policy
----------------------

     The Company has not yet adopted a policy regarding dividends. However, as a
     result  of  the  stock  distribution  of  Pursuit  Venture  Corporation  to
     shareholders  of the Company,  cash in the amount of $1,216 was distributed
     as a dividend in lieu of the stock of Pursuit  Venture at the option of the
     shareholders in fiscal year 1992.

Note 8 Issuance of Stock
------------------------

     Effective  August 28, 1997,  the Company  issued  630,000  shares of common
     stock as consideration  for the payment of liabilities  totaling $30,000 as
     of the fiscal year ended September 30, 1996. Of the share issuance, 330,000
     shares were issued to an  officer/director  in consideration for satisfying
     $15,000  of those  liabilities  and  300,000  shares  were  issued to other
     parties in consideration for satisfying $15,000 of those liabilities.


                                       F9
<PAGE>



ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUTING AND FINANCIAL
        DISCLOSURE

     None.

                                    PART III



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


                                   MANAGEMENT


     The following sets forth information  concerning the Directors and Officers
of the Company:

           Name            Age         Positions
           ----            ---         ---------

     Patrick C. Brooks     51          Director, President, Chief Financial
                                       Officer and Secretary

     The following sets forth certain biographical information pertaining to the
Directors and Officers of the Company:

Patrick C. Brooks
-----------------

     Mr.  Brooks was the  Company's  founder and served as its  President  and a
Director  from  inception  in May 1988 to August  1990.  He was  appointed  sole
Officer and Director in August 1997.

     Since  1988  Mr.   Brooks  has  served  as  President  of  Home   Indemnity
Incorporated,  a  company  he  founded.  Formerly,  he served  as  Chairman  and
President of Bio-Dental Technologies Corporation, a publicly-held company traded
on the NASDAQ Stock  Exchange.  Additionally,  he served as joint  principal and
owner of Thunderbird Securities Corporation and Meridian Securities,  Inc., both
companies  being  securities-broker  dealers  licensed  by  the  Securities  and
Exchange Commission and the N.A.S.D.

     From  1987 to 1990,  Mr.  Brooks  was the  promoter  and  sponsor  of three
publicly-held Business Investment Companies.  In the fifteen years prior to 1987
he  served  in  the  casualty  insurance  industry  in  successively   advancing
underwriting  positions  with major European and American  insurance  companies.
Since August 1997,  Mr.  Brooks has served of President  and Director of Pursuit
Venture Corporation, a publicly-held "shell".


ITEM 10. EXECUTIVE COMPENSATION

     None of the Company's  present  executive  officers are  compensated by the
Company.


                                       11
<PAGE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table sets forth  information  regarding  ownership  of the
Company's  Common Stock by each person known by the Company to be the beneficial
owner of more than 5% of the  outstanding  Common Stock, by each director and by
each executive  officer of the Company.  All shares are held beneficially and of
record,  and  each  recorded   stockholder  has  sole  voting,   investment  and
dispositive power.

                                                 Shares         Percentage of
                                              Beneficially         Shares
Name                                             Owned             Owned
----                                             -----             -----

Patrick C. Brooks (1)                           330,000             36.7

Directors and Officers as a Group               330,000             36.7

 (1) Director and/or Officer of the Company


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     As at September 30, 1996,  the Company had accrued  liabilities of $30,000.
In August 1997,  the Company  issued  330,000  shares of its Common Stock to Mr.
Patrick  C.  Brooks,  its  sole  Officer  and  Director,  as  consideration  for
satisfying $15,000 of those  liabilities.  This transaction was not conducted at
arm's length.

     The Company does not compensate its Officers and  Directors.  However,  the
Company's Officers and Directors may, after an acquisition  transaction has been
competed, be compensated for services rendered thereafter should same be desired
by the Company.  In such event,  a conflict of interest may arise as to the type
and amount of  compensation to be paid. A conflict of interest may also arise as
Officers and Directors offer business opportunities to the Company or assist the
Company in the selection
of a business opportunity.

     The Company has established the following  procedures which may be followed
in the resolution of any future conflict of interest between the Company and any
of its officers, directors, or stockholders:

     1.   No  officer,   director,   or  stockholder  shall  have  any  duty  or
          responsibility   to  make   any   business   opportunity,   investment
          opportunity or transaction available to the Company;

     2.   The  existence  of a conflict of interest  shall be  disclosed  to the
          Board of Directors;

     3.   The Board of Directors, with the interested Director being counted for
          purposes of the establishment of a quorum,  but abstaining from voting
          on  all  matters  in  which  he  has  an   interest,   shall   approve
          transactions;

     4.   Conflicts  of  interest  shall  not be  required  to be  submitted  to
          stockholders  for approval nor shall notice be required to be given to
          the stockholder; and

     5.   No  independent  studies,  reports or  opinions  shall be  required in
          connection  with the  resolution  of a conflict of interest;  however,
          should the Board of Directors, in the exercise of its sole discretion,
          determine to obtain an independent study, report or opinion, the Board
          of Directors shall be entitled to solely rely thereon.  In addition to
          the  foregoing,  the law of the state of Delaware  permits  additional
          procedures  which may be  followed  by the  Company in  resolving  any
          conflict of interest.


                                       12
<PAGE>

                                     PART IV


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     None



                                       13
<PAGE>

                                   SIGNATURES


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


                                           FOUNTAIN COLONY HOLDING CORPORATION



                                           /s/ Patrick C. Brooks
                                           ---------------------
                                           Patrick C. Brooks
                                           Director, President and Secretary


Date: December 16, 1997


                                       14