U.S. SECURITIES AND EXCHANGE COMMISSION
                  WASHINGTON, D.C.  20549
                        FORM 10-KSB
(Mark One)
[X]  Annual report under section 13 or 15(d) of the Securities Exchange Act 
of 
1934 for the fiscal year ended 12/31/97.

[ ] Transition report under section 13 or 15(d) of the Securities Exchange 
Act 
of 1934 for the transition period from ________ to ________.

Commission File Number 333-5278-NY

                                 ARCA CORP.
                                 ----------
                (Name of small business issuer in its charter)

            New Jersey                            22-3417547
            ----------                            ----------
     (State or other jurisdiction                (IRS Employer
         of incorporation)                   Identification number)

    215 West Main Street, Maple Shade, New Jersey   08052
    ---------------------------------------------- -------
    (Address of principal executive offices)     (Zip code)

    (609) 667-0600
    --------------
    (Issuer's telephone number)

Securities registered under Section 12(b) of the Act: none

Securities registered under Section 12(g) of the Act: none

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 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) [X]


Check if there is no 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. [X]


State issuer's revenues for its most recent fiscal year: $744,586.

The estimated aggregate market value of the voting stock held by 
non-affiliates of the registrant as of December 31, 1997 was $250,000.  Since 
no bid or offer had been submitted by any market maker as of the date of this 
Form 10-KSB, the market value is based upon the offering price of the Common 
Stock of $1.00 per share pursuant to the Company's registration statement 
number 333-5278-NY which became effective on November 4, 1996.

The Company had 2,060,000 shares of common stock, par value $.0001 per share,
outstanding as of December 31, 1997.

Documents incorporated by reference: The Company incorporates by reference 
various exhibits from the Company's Registration Statement on Form SB-2, file 
No. 33-5278-NY, which became effective on November 4, 1996.

Transitional Small Business Disclosure:     Yes       No  XX
                                                ----     -----

<PAGE>
PART I

Item 1.  Description of Business
------   ----------------------

General
-------

The Company was incorporated on December 22, 1995 in the State of New Jersey  
for the purpose of acquiring, developing and selling residential real 
estate.   The Company simultaneously formed Spring Village Holdings, Inc. a 
New Jersey  corporation, as a wholly owned subsidiary.  The discussion of the 
business of  the Company set forth herein includes the business of Spring 
Village Holdings,  Inc.

The Company acquired from its President, and companies affiliated with him, 
an  80.0% partnership interest in SVG Properties, L.P., a New Jersey limited  
partnership, which owns a 124 unit apartment building in Sharon Hill,  
Pennsylvania.  The Partnership interest consists of a 4.5% general 
partnership  interest and a 75.5% limited partnership interest (see "Related 
Party  Transactions").  The remaining 20% of the partnership is owned by 
limited  partners who are independent of and are not affiliates of the 
Company.  The  Company refinanced the property on September 18, 1997, and 
intends to hold it for investment.

The Company intends to utilize its contacts and business expertise to locate  
and acquire additional properties, primarily apartments, preferably those 
that  are undervalued or which can be acquired at less than fair value due to 
the  financial difficulties of their owners.  There is no assurance that such  
properties can be obtained under terms and conditions that are favorable to  
the Company.


Initial Acquisition
-------------------

The Company acquired a 4.5% general partnership interest and a 75.5% limited 
partnership interest (80% total) in SVG Properties, L.P. which owns the Spring 
Village Apartments complex in Sharon Hill, Pennsylvania from Harry J. Santoro 
and companies affiliated with him (Santoro), the Company's President, for 
$50,000. SVG Properties, L.P. (the "Partnership") is a limited partnership 
organized under the laws of the State of New Jersey on May 12, 1987. In 1987 
the Partnership acquired for $2,450,000 the Mill Spring Apartments 
(subsequently renamed the Spring Village Apartments). At the time of the 
acquisition the property was severely in need of rehabilitation. The 
Partnership invested over $1,000,000 into the property using capital 
contributed by its partners and the net proceeds from a $3,250,000 mortgage 
guaranteed by the Federal Housing Administration. Though the physical aspects 
and the net income of the property were significantly improved, the net income 
from operations was not sufficient to make the principal and interest payments 
due on the first mortgage. The Partnership attributes this to the high 
effective interest rate on the mortgage of 10 1/2%, plus 1/2% for insurance.  
In January, 1992, the Partnership defaulted on its mortgage. In August, 1992, 
Santoro acquired a controlling interest in the Partnership, along with other 
assets, in exchange for $125,000. At the time of the acquisition in 1992, Mr. 
Santoro owned a 7.14% limited partnership interest in SVG Properties, L.P. Mr. 
Santoro also was the chief executive officer and a 16.7% owner of Santoro, 
VanDervort & Gordon, Inc., the corporate general partner, which owned 14.70% 
of S.V.G. Properties, L.P. Santoro then entered into negotiations with the 
U.S. Department of Housing and Urban Development (HUD) to renegotiate the 
terms of the first mortgage. A Provisional Workout Agreement (the "Agreement") 
was agreed to and became effective on January 1, 1994, whereby HUD agreed not 
to take any action as a result of the default, provided that the mortgagor 
remits the minimum monthly payment and satisfactorily performed the other 
requirements of the agreement. The agreement provided for a minimum monthly 
payment of $24,000 ($288,000/yr.) in 1994 increasing to $34,000 per month 
($408,000/yr.) in 2002. 

During March of 1994, HUD announced that it planned to sell the large backlog 
of mortgage loans that reverted to the Federal Housing Administration (FHA) 
when borrowers defaulted on FHA insured mortgages.  

On September 18, 1996, the Company was notified that the mortgage on the 
Property was sold to Resource Properties XXIII, Inc. ("RPI").  Shortly 
thereafter, the Company commenced negotiations with RPI whereby RPI agreed to 
recast the existing debt to RPI, currently $3,490,419, under the following 
terms:

     (a)  RPI agreed lend to the Company, pursuant to the terms of a 
Promissory 
Note (the "Note"), up to $110,000 for the removal of the underground oil 
tanks 
in order to permit the Company to refinance the Property.

     (b) The Company agreed to deliver to RPI such data, reports, statements, 
financials, and the like, as RPI may request, including monthly financial
statements certified to be correct by Harry J. Santoro, and annual financial 
statements certified by independent public accountants.

     (c) If, prior to the earlier of: (i) one year from the date that a 
closure report acceptable to most lenders is received by SVG from the 
engineering firm retained to remove the oil tanks and perform the remedial 
work, if any, or (ii) June 30, 1998, SVG was successful in finding a lender 
to make a first mortgage loan secured by the Property in an amount 
sufficient to provide Resource with net proceeds (after all fees, costs and 
expenses of the transaction) of at least Two Million Three Hundred Thousand 
Dollars ($2,300,000), then Resource would:

           (i) subordinate both the mortgage securing the Mortgage Note and 
any mortgage securing the Note to the mortgage of the new lender;

           (ii) agree to modify the payment terms of the Mortgage Note and 
the Note as follows:

               (a) interest would accrue at a rate of 150 basis points above 
the interest rate on the new first mortgage on a deemed total principal 
amount equal to Three Million Three Hundred Fifty Thousand Dollars
($3,350,000), less the original principal amount of the new first mortgage.

              (b) payments of interest and principal (based on the deemed 
principal amount described in Paragraph 8(ii)(a)) would be payable monthly 
based on a twenty-five year amortization.  However, to the extent the 
Net Cash Flow from the Property is insufficient to make the scheduled payments 
of interest and principal in full, SVG shall pay over to Resource, until such 
time as the scheduled payments are current, one hundred percent (100%) of the 
Net Cash Flow from the Property as defined in the agreement.

           (iii) agree to special provisions in the obligations of SVG 
retained by Resource as may be required by the new first mortgage lender.

           (iv) after it has received all of the interest and principal 
required under Paragraph 8(ii), assign its interest in the Mortgage Note and 
the Note to Harry J. Santoro for no additional consideration.

     As part of the proposed refinancing it was agreed that Harry J. 
Santoro ("Santoro") and/or H. James Santoro, Inc. ("HJS") would do the 
following:

     (a)  certify certain financial reports as true and correct;


     (b)  defer compensation for any service rendered to SVG until such time 
as the proposed refinancing was completed; and thereafter, should the cash 
flow from the property be insufficient to make all payments due on the 
proposed new mortgage and the new promissory note due to Resource, 

     (c)  to personally guarantee certain carve-out obligations of SVG 
pursuant to the proposed new first mortgage and the new promissory note to 
Resource; specifically mentioned during the course of the negotiations with 
Resource were:  (i) certain environmental indemnifications, and a guarantee 
to refund any shortage in the tenant security deposit accounts; and SVG agreed 
to:

     1.  Indemnify Santoro for any losses incurred as a result of the proposed 
guarantees;

     2.  Extend the existing management agreement between SVG and HJS until 
such time as Santoro has no further obligations pursuant to the Agreement;

     3.  At closing of the refinancing, issue to Santoro a promissory note for 
the difference between  the amount due to Resource pursuant to the terms of 
the existing mortgage note and $3,350,000, with the same terms and conditions 
as the proposed new note to Resource as outlined in the Agreement.

On September 18, 1997, S.V.G. Properties, L.P., 80% of which is owned by ARCA 
Corp. through its wholly owned subsidiary Spring Village Holdings, Inc., 
completed the refinancing of its long term debt.  The refinancing completes 
the first objective of the Company's long term business plan.  Below is a 
summary of the significant financial terms of the refinancing (rounded to the 
nearest $1,000):


                                                Before             After
                                             Refinancing        Refinancing
                                             -----------        -----------
Total long term debt                          3,595,000         3,578,000
Annual debt service (1998)                      342,000           326,000
Annual interest expense (1998)                  331,000           296,000
Funded expense escrows                           10,000            99,000
Effective interest rate                            9.2%              8.3%
Maturity                                         7 years         10 years+/-

As a result of the refinancing, long term debt decreased by $17,000, annual 
debt service decreased by $19,000, annual interest expense decreased by 
$35,000, and funded cash reserves to cover anticipated future expenses such as 
taxes, capital replacements and insurance increased by $89,000.  Below is a 
more detailed analysis of long term debt.

                                  Principal     Annual           Annual
                                                Debt Service     Interest
                                                Principal
                                                plus interest
                                  -----------------------------------------
New first Mortgage (Merrill)
  (7.78%) (10 years)              2,500,000     215,544          194,500
New second mortgage (RPI)
  (9.28%) (25 years)                927,672      95,568           86,088
New subordinate debt (Santoro)
   (10.0%)(2 years)                 150,000      15,000           15,000
                                  ---------     -------          --------
                                  3,577,672     326,112          295,588


Debt forgiveness/gain on extinguishment          162,926

For more information, see Notes to Financial Statements

Now that the refinancing has been completed, the Company plans to seek new 
capital to reduce total debt and to seek strategic acquisitions to enhance 
shareholder value.



The Complex
-----------

The Spring Village Apartment complex is a garden-type apartment complex 
consisting of seven buildings containing 60 one-bedroom units, 49 two-bedroom 
units and 15 studio units, located in Sharon Hill, Delaware County, 
Pennsylvania. Construction features include brick veneer over concrete block 
exterior walls, wood frame, asphalt shingle gable roofs, aluminum frame 
windows and sliding patio doors. Each unit is heated by gas fired hot water 
baseboard heat. All units have wall mounted air conditioners. The buildings 
were built in 1966. The quality of construction and current physical condition 
of the units is believed by the Company to be average. The Company is not 
aware of any material adverse environmental attributes of the property.  There 
were seven inactive underground storage tanks formerly used to store heating 
oil for the complex. The tanks were not regulated by the State of 
Pennsylvania, and were removed during 1997 by a qualified environmental 
engineering firm. 

The current real estate tax assessment equates to a market value of 
$3,190,000. The assessed value for real estate taxes is $98,890 (based on a 
presumed value of $3,190,000) and the real estate taxes paid for 1997 were 
$90,550. The tax basis as of December 31, 1996 of the Partnership's buildings 
and equipment was $3,588,764 and $121,206 respectively, with $1,163,716 in 
accumulated depreciation.  The land has a tax basis of $263,727. Buildings and 
improvements are depreciated using the straight line method over a 40 year 
life. Equipment is depreciated using the 150% declining balance method over a 
10 year life. The Company owns an 80% partnership interest in the Partnership 
which owns the property. The Property has been substantially renovated and the 
Company does not anticipate the need for substantial future renovations other 
than routine replacements. The Company believes it has adequate insurance 
coverage.


The Company plans to make the following capital expenditures during the next 
twelve months:

Replace appliances and equipment                $ 15,000
Replace roof                                       4,000
Replace soffits and fascia, painting               6,000
Grounds, landscaping, etc.                         5,000
                                                --------
Total                                           $ 30,000

All of the above capital expenditures are funded on an ongoing basis by 
scheduled additions to and withdrawals from escrow accounts held by the first 
mortgage holder.


Future Acquisitions
-------------------

The Company intends to acquire additional single family and multi-family 
residential properties in the future, as well as undeveloped acreage.  The 
target price per apartment unit is $28,000 and the geographic area shall be 
Eastern Pennsylvania, Delaware, and Southern New Jersey.  There is no 
assurance that properties meeting such criteria can be acquired by the
Company or that such acquisitions will be profitable.  Also, investments may 
be made in properties which do not meet the above criteria upon what the 
Company believes to be favorable investment opportunities, such as purchasing 
properties that are distressed, at sheriff sales and/or tax sales, and the 
like.

The Company intends to finance its future acquisitions through the use of its 
own equity and initial acquisition debt up to 100% of the cost of the 
property, including anticipated improvements.  It is the Company's stated long 
term goal to reduce overall debt to no greater than 50% of the market value of 
the Company's real estate holdings.

The Company's policy is to acquire assets for income, with capital 
appreciation being anticipated, but secondary to current income.

The Company has no limit as to the percentage of its assets which may be 
invested in any particular property, except that the Company will not invest 
in a transaction or a series of transactions which will require registration 
as an Investment Company under the Investment Company Act of 1940.

The Company may invest in mortgages or other debt securities, including real 
estate tax liens, and there are no restrictions on such investments except 
that such debt securities or liens shall be secured by residential real estate 
or unimproved acreage.

The Company may invest in direct or indirect interests in residential real 
estate and unimproved land, including fee simple ownership, general or limited 
partnership interests, listed or not listed common or preferred stock in real 
estate companies or REITS which invest in residential real estate.  The 
Company does not intend to originate or warehouse mortgages, for purposes of 
sale or servicing.

The Company, at the discretion of the Board of Directors, may change the 
investment objectives and criteria as it deems appropriate and in the best 
interests of the Company.


Industry Overview
-----------------

The Company's primary focus is to own and operate apartment complexes.  The 
industry is dominated by numerous small operators.  There are several large 
apartment operators in the area, including the Korman Organization, which 
operates a 1,500+ unit apartment complex, International City, which competes 
with the Company's existing complex.  The Company believes the industry is 
highly competitive.


Apartment complexes in the area similar to the one owned by the Company have 
the following profiles:



    Rents per month, 12/31/97      Typical        Company
    -------------------------      -------        -------

    One bedroom                   $475 - $600        $510
    Two bedroom                   $585 - $695        $625

    Annual rent increase 1997      1% - 2%          1% - 2%

    Average occupancy 1997        94% - 97%        92% - 95%

The Company believes that the general market is stable and that its units at 
current rental rates are in line with competitive complexes in the area.

Because it costs more to build a new apartment unit than to acquire an 
existing unit and due to lack of suitable construction sites in the area, 
competition is limited to existing apartment complexes and should be 
manageable.

Employees
---------

In addition to Harry J. Santoro, the President, and Stephen M. Robinson, the 
Vice President and Secretary, the Company, through subcontracts, employs four 
other people on a regular basis who manage and maintain the apartment complex.


Facilities
----------

The Company currently shares its principal executive offices with Santoro  
Realty, Inc. in approximately 500 square feet of leased office space at 215  
West Main Street, Maple Shade, New Jersey, 08052.  Monthly rent under the  
lease, which terminates in March 1998, is $500, of which one half will be 
paid  by the Company.  The building is owned by Harry J. Santoro, President of 
the  Company; however, the Company believes the terms of the lease are at 
least as  favorable as terms available from non-affiliated third parties.


Item 2.  Description of Property
--------------------------------

See Item 1 "Description of Business" and Item 6 "Management Discussion and 
Analysis or Plan of Operation".



Item 3. Legal Proceedings.
--------------------------

There are no pending material legal proceedings to which the Company or any of 
its properties is subject.

Item 4.  Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------

None.


PART II.

Item 5.  Market for Common Equity and Related Stockholder Matters.
------------------------------------------------------------------

The Company's common stock was approved for quotation on the OTC  Bulletin 
Board under the symbol "ARCA".  As of the date of this Form 10-KSB,  no 
quotations had been submitted by any market makers and no public trading  
market had commenced.

As of December 31, 1997, there were 2,060,000 shares of common stock
outstanding held by approximately 435 shareholders of record.  
There have been and are expected to be no dividends declared on the
common stock.


Item 6. Management Discussion and Analysis or Plan of Operation
---------------------------------------------------------------


The Company intends to target its marketing and business activity to renting 
apartment units to moderate income people who are not in a position to acquire 
a home.  The Company believes that well maintained, affordable rental units 
will be in great demand as a result of slow wage growth in the future.  This 
should provide a stable rental income base and allow for future revenue growth 
through modest rental increases near the rate of inflation.

The Company's long range plan is to reduce debt to around fifty percent of a 
property's value.  To accomplish this, the Company plans to raise additional 
capital through the sale of its securities in the future.

The Company advertises its units in local newspapers, by direct mail and 
through promotional programs designed to maintain occupancy at or above 95%.


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

The following discussion and analysis should be read in conjunction with the  
Consolidated Financial Statements and Notes thereto appearing elsewhere in  
this Form 10-KSB.  The Company was incorporated on December 22, 1995.  On 
December 31, 1995, the Company acquired from its President an 80% partnership 
interest in S.V.G. Properties, L.P. (the "Partnership") which owns  a 124 unit 
apartment complex.  The 80% partnership interest consists of a 4.5%  general 
partnership interest plus a 75.5% limited partnership interest.  The financial 
information contained herein includes the results of operations of the 
Partnership.


The Company reported total revenues of $738,863 and $744,586 in 1996 and  1997 
respectively.  Occupancy was approximately 93% and 93% respectively. Operating
expenses increased from $551,601 in 1996 to $663,703 in 1997 primarily due to 
fees paid related to the Company's acquisition program..   Net loss increased 
from $139,412 in 1996 to $162,567 in 1997.  See "Selected Financial  Data" and 
"Financial  Statements, December 31, 1997 and 1996."  The Company believes 
that overall  the Company and the industry will realize modest increases in 
net rental  income and net operating income in the foreseeable future.

The prior five year rental history is summarized as follows:

          Gross Potential Rents    Occupancy        Average Annual Rent
Year       and Other Income        Percentage        per square foot
----      ---------------------    ----------       --------------------
1993       $740,272                 98                 $9.45
1994       $753,379                 96                 $9.61
1995       $763,181                 95                 $9.74
1996       $775,730                 93                 $9.90
1997       $783,367                 93                $10.00


No tenant occupies more than 10% of the leased space.  Substantially all  
leases are for one year or less, and are for residential dwelling units.  A  
sixty day notice is required for termination.  Substantially all of the 
leases  expire within one year as is typical for apartment leases.

The Company is taxed as a C-corporation for federal and state income tax 
purposes.  As such, the Company will pay taxes on its net income as defined by 
the Internal Revenue Code.  No tax attributes of the Company flow through to 
the shareholders except for the regular taxation of dividends paid, if any.

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

At December 31, 1997 and 1996, the Company had a deficit in working capital of 
$50,418 and $10,868, respectively, including cash held in escrow for 
anticipated future expenses.

On December 31, 1995, the Company had $54,952 in cash.  During the year ended 
December 31, 1996, the  Company collected $70,000 in stock subscriptions which 
were receivable as of  December 31, 1995.  The Company used $42,848 in 
operating activities and  purchased $17,758 in property and equipment.  The 
Company also repaid $41,500  in notes payable - stockholder (Harry J. Santoro, 
President).  The net  decrease in cash was $22,106. The Company had $32,846 in 
cash on December 31,  1996, exclusive of cash held in the escrow accounts.

On December 31, 1996, the Company had $32,846 in cash.  During the year ending 
December 31, 1997, the Company received proceeds of $25,000 from the issuance 
of common stock and $27,000 from notes payable to stockholders and related 
parties.  Operations provided an additional $22,875 in cash.  The Company used 
$41,066 to purchase property and equipment and reduces mortgage indebtedness 
by $5,105.  The net increase in cash for the year was $28,704.  The Company 
had $61,550 in cash on December 31, 1997, exclusive of $77,669 cash held in 
escrow accounts.

The Company's balance sheet is highly leveraged.  As discussed previously in  
this Form 10-KSB, the Company plans to reduce this leverage through the 
current and future equity offerings as well as by funds generated from 
operations.  The Company  believes it can support operations and planned 
capital expenditures for at least twelve months.  Thereafter, the Company's 
continued success will be dependant upon its ability to maintain occupancy at 
93% or above and to keep costs under control.

In the event that the Company's plans change or its assumptions change or 
prove to be inaccurate, the Company may be required to seek additional 
financing sooner than currently anticipated.  The Company has not identified 
any potential sources of debt or equity financing and there can be no 
assurance that the Company will be able to obtain additional financing if and 
when needed or that, if available, financing will be on terms acceptable to 
the Company.  As a result of the refinancing which occurred on September 18, 
1997, the Company anticipates breakeven net cash flow after all scheduled debt 
service in 1998, including principal payments totalling $32,139 on long term 
debt.


Planned Capital Expenditures
----------------------------

Replace appliances and equipment                $ 15,000
Replace roof                                       4,000
Replace soffits and fascia, painting               6,000
Grounds, landscaping, etc.                         5,000
                                                --------
Total                                           $ 30,000


All of the above capital expenditures are funded on an ongoing basis by 
scheduled additions to and withdrawals from escrow accounts held by the first 
mortgage holder.


Selected Financial Data
-----------------------

The following selected financial data has been derived from the Company's 
financial statements included elsewhere in this Form 10-KSB, and should be 
read in conjunction with the financial statements and notes thereto.

Statement of Operations Data

                                  12/31/97                   12/31/96
                                  --------                   --------
Total Revenues                    744,586                    735,863
Operating Expenses              1,070,079                    883,937
Loss before extraordinary item
and minority interest            (325,493)                  (148,074)
Extraordinary item                162,926                          0
Loss before minority interest    (162,567)                  (148,074)
Minority Interest                       0                   (  8,662)
Net income (loss)                (162,567)                  (139,412)
Net (Loss) per share                ($.10)                  (    .33)


Weighted average number of 
shares outstanding               1,662,500                   425,000



Balance Sheet Data            December 31, 1997         December 31, 1996
------------------            -----------------         -----------------
Working capital (deficit)         $  (50,418)                ($10,868)
Total Assets                      $3,664,601               $3,569,410
Total Liabilities                 $3,822,480               $3,636,322
Stockholders' Equity 
       (Deficit)                  $ (157,879)              $  (66,912)

Other
-----
The Company was notified that HUD sold the mortgage on the Property to 
Resource Properties XXIII, Inc.  Negotiations to refinance and/or restructure 
the debt have been completed.

The Company issued 1,485,000 shares, for a total consideration of $89,100, to 
two consultants that provided services in connection with the Company's 
acquisition program.  All 1,485,000 shares were issued subject to repurchase 
by the Company for nominal consideration if certain conditions precedent were 
not fulfilled.  Additionally, voting rights to 1,250,000 of such shares were 
granted to Harry J. Santoro, President of the Company, until such time as the 
conditions precedent were fulfilled.

On September 19, 1997, the Company completed the refinance of its long term 
debt.  This Form 10-QSB should be read in conjunction with the Form 8-K which 
was filed by the Company on September 24, 1997.  See also "Description of 
Business - Initial Acquisition".

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

The Company is making this statement in order to satisfy the "safe harbor" 
provisions contained in the Private Securities Litigation Reform Act of 1995.  
The foregoing discussion includes forward-looking statements relating to the 
business of the Company.  Forward-looking statements contained herein or in 
other statements made by the Company are made based on management's 
expectations and beliefs concerning future events impacting the Company and 
are subject to uncertainties and factors relating to the Company's operations 
and business environment, all of which are difficult to predict and many of 
which are beyond the control of the Company, that could cause actual results 
of the Company to differ materially from those matters expressed in or implied 
by forward-looking statements.  The Company believes that the following 
factors, among others, could affect its future performance and cause actual 
results of the Company to differ materially from those expressed in or implied 
by forward-looking statements made by or on behalf of the Company:  (a) the 
effect of changes in interest rates; (b) the rental rate and demand for 
apartment rental units; (c) fluctuations in the costs to operate the 
properties owned by the Company; (d) uninsurable risks; and (e) general 
economic conditions.


Item 7.  Financial Statements.
------------------------------

The consolidated financial statements included in this Form 10-KSB for the  
years ended December 31, 1997 and 1996 have been audited by Haefele, Flanagan 
& Co., P.C., independent certified public accountants, as indicated in their  
report with respect thereto, and are included in reliance upon such report 
given upon the authority of said firm as experts in auditing and accounting.

Please see pages F-1 through F-19 attached as an exhibit hereto.




Item 8.  Changes In and Disagreements With Accountants on 
         Accounting and Financial Disclosure
----------------------------------------------------------

None.



PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons; 
         Compliance with Section 16(a) of the Exchange Act
----------------------------------------------------------------------

The following table sets forth information with respect to the executive 
officers, key personnel, directors and nominees to become directors of the 
Company:

                              Age               Title
                              ----              ------ 

Harry J. Santoro, CPA          44               President, Treasurer and 
                                                Director

Stephen M. Robinson, Esq.      55               Vice President, Secretary
                                                and Director


Harry J. Santoro.   Mr. Santoro is 44 years old and holds a Bachelor of  
Science Degree in Accounting from Drexel University, Philadelphia, PA, where  
he graduated Summa Cum Laude.  He began work in 1975 with Haefele, Van Sciver  
& Co., a local certified Public Accounting firm.  Three years later he became  
a Certified Public Accountant and was made a partner in the firm.  The firm's  
name was changed to Haefele, Van Sciver, Santoro & Co.  While at the firm he  
provided tax and financial planning services to individuals and businesses in  
a wide range of industries, including real estate development.  He left the  
firm in 1982 to form a company to invest in real estate.  He is currently  
engaged in real estate development and apartment management as principal and  
President of H. James Santoro, Inc. as well as the Company. 

Stephen M. Robinson.  Mr. Robinson, who is 55 years old, is admitted to  
practice law in the State of New Jersey, and maintains a full time legal  
practice concentrating on corporations, securities and associated general  
practice matters.  He received a B.A. from Rutgers University in 1964 and a  
J.D. from Rutgers Law School in 1967.  From 1970 to 1973, Mr. Robinson was an  
assistant county prosecutor for Camden County, New Jersey, and from 1973 to  
1978, he was an attorney with the United States Securities and Exchange  
Commission.  He returned to private practice in 1978, and has been  
continuously involved in the legal aspects of public and private offerings of  
securities, other '33 Act filings,'34 Act filings for public companies and  
securities-oriented litigation.  During the period from 1986 through 1992, 
Mr.  Robinson was a shareholder of the law firm of Robinson & Sacharow, P.C.,  
located in Maple Shade, New Jersey.   Mr. Robinson left such firm in 1992, and 
opened an office at 172 Tuckerton Road, Medford, New Jersey where he continues 
his securities practice.

All directors hold office until the next annual meeting of stockholders or the 
election and qualification of their successors.  Directors of the Company do 
not receive any compensation for their services as members of the Board of 
Directors, but are entitled to reimbursement for expenses incurred in 
connection with their attendance at Board of Directors' meetings.  Officers 
are appointed by the Board of Directors and serve at the discretion of the 
Board.

Item 10.  Executive Compensation.


Summary Compensation Table
                                                 Annual Compensation
                                                        
Name and                                                    Other Annual
Principal Position     Year   Salary           Bonus        Compensation
------------------     ----   ------           ------       ------------
Harry J. Santoro,      1996   116,000 Shares      0           0        *
President, Treasurer   1997    15,000 shares      0           $17,500  *

Stephen M. Robinson,   1996   150,000 Shares      0           0
VP, Secretary          1997    50,000 shares      0           $25,000


*SVG Properties, L.P. entered into a management agreement with H. James 
Santoro, Inc., effective August 1, 1992, whereby H. James Santoro, Inc. 
agreed  to manage the Spring Village Apartment complex for a fee equal to 5% 
of the  gross rent of the complex.  Such agreement is currently in effect on a 
month  to month basis, and shall terminate when Mr. Santoro and H. James 
Santoro, Inc. have no remaining obligation or liability related to the 
agreement with  RPI.  H. James Santoro, Inc. received in 1997 and 1996, 
respectively, 37,197 and 36,770 pursuant to such agreement. Mr. Santoro owns 
100% of H. James Santoro, Inc.


Employment and Consulting Agreements
------------------------------------

The employment agreements of the officers terminated on December 22, 1996, 
and have not been renewed.


Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of December 31, 1997 and 
1996,  with respect to the beneficial ownership of the common stock by each  
beneficial owner of more than 5% of the outstanding shares thereof, by each  
director, each nominee to become a director and each executive officer named  
in the Summary Compensation Table and by all executive officers, directors 
and  nominees to become directors of the Company as a group, both before and 
after  giving effect to the offering.
<PAGE>
<TABLE>
<CAPTION>
<S>                  <C>               <C>                       <C>              <C>

                                          1996                                            1997
                          ----------------------------------------------  ---------------------------------
                      #  Shares of                                # Shares of
Name and Address of   Common Stock       % Outstanding            Common Stock         % Outstanding
Beneficial Owner      Beneficially     Common Stock               Beneficially           Common Stock
                        Owned <F1>     Beneficially Owned <F2>     Owned <F1>     Beneficially Owned <F2>
------------------    ---------------  -----------------------   --------------   -------------------------
Stephen M. Robinson
172 Tuckerton Road
Medford, NJ   08055          150,000                   30.0%         200,000                9.7%

Harry J. Santoro
215 West Main Street
Maple Shade, NJ 08052        116,000                   23.2%         125,000                6.7%

WCM Investments, Inc.
Central Park Tower
2350 Airport Freeway,
    Suite 660
Bedford, TX   76022                0                      0        1,250,000 <F3>          60.7%

William N. Levy
Plaza 1000, Suite 309
Main Street
Voorhees, NJ   08043               0                      0          235,000               11.4%

All Directors and 
Officers as a
group (2 persons)            266,000                   53.2%       1,575,000 <F4>)         87,9%

<FN>
<F1>
  Under the rules of the Commission, a person is deemed to be the beneficial 
owner of a security if such person has or shares the power to vote or direct 
the voting of such security or the power to dispose or direct the disposition 
of such security.  A person is also deemed to be a beneficial owner of any 
securities of that person has the right to acquire beneficial ownership within 
60 days.  Accordingly, more than one person may be deemed to be a beneficial 
owner of the same securities.  Unless otherwise indicated by footnote, the 
named entities or individuals have sole voting and investment power with 
respect to the shares of common stock beneficially owned.

<F2>  Represents the number of shares of Common Stock beneficially owned as of 
the date of this Form 10-KSB by each named person or group, expressed as a 
percentage of the sum of all of the shares of such class outstanding as of 
such date and the number of shares not outstanding but beneficially owned by 
such named person or group.

<F3>  Voting rights granted to Harry J. Santoro, President of the Company, 
pursuant to an agreement related to the Company's acquisition program.

<F4>  Includes 1,250,000 shares owned by WCM Investments, Inc. over which 
Harry J. Santoro, President of the Company, has voting rights.
</FN>
</TABLE>


<PAGE>
Item 12.  Certain Relationships and Related Party Transactions
--------------------------------------------------------------

Pursuant to an agreement between the Company and Harry J. Santoro and 
companies affiliated with him, the Company acquired on December 31, 1996 for 
$50,000 from Mr. Santoro, and companies affiliated with him, an 80% 
partnership interest in SVG Properties, L.P., representing all of Mr. 
Santoro's ownership in the Partnership.  The purchase is summarized below.

The Sellers were the owners of an aggregate of 80% of the limited or general 
partnership interests of S.V.G. Properties, L.P. (SVG), as follows:


      Sellers                              Percentage            Type
      -------                              ----------            ----
      Harry J. Santoro                      15.00                Limited
      H.J.S. Venture Capital Co., Inc.*     44.00                Limited
      H. James Santoro, Inc.*               16.50                Limited
      H. James Santoro, Inc.*                4.50                General

      The partnership interests in SVG were paid for as follows:

 Partner                             Interest Sold            Consideration
 -------                             -------------            -------------
 Harry J. Santoro                        15.00%                 $  9,375.00
 H.J.S. Venture Capital Co., Inc.*       44.00%                   27,500.00
 H. James Santoro, Inc.                  21.00%                   13,125.00
 Total                                   80.00%                  $50,000.00

 *Owned 100% by Harry J. Santoro


SVG Properties, L.P. entered into a management agreement with H. James  
Santoro, Inc., effective August 1, 1992, whereby H. James Santoro, Inc. 
agreed  to manage the Spring Village Apartment complex for a fee equal to 5% 
of the gross rent of the complex.  Such agreement is currently in effect on a 
month to month basis, and shall terminate when Mr. Santoro and H. James 
Santoro, Inc. have no  remaining obligation or liability related to the 
agreement with RPI. H. James Santoro, Inc. received in 1997 and 1996, 
respectively, $37,197 and $36,770, pursuant to such agreement.  Mr. Santoro 
owns 100% of H. James Santoro, Inc.

The Company currently shares its principal executive offices with Santoro  
Realty, Inc. in approximately 500 square feet of leased office space at 215  
West Main Street, Maple Shade, New Jersey, 08052.  Monthly rent under the  
lease, which terminates in March 1998, is $500, of which one half will be 
paid  by the Company.  The building is owned by Harry J. Santoro, President of 
the  Company; however, the Company believes the terms of the lease are at 
least as  favorable as terms available from non-affiliated third parties.

During the years ended December 31, 1997 and 1996, the Company incurred 
$65,488 and $-0- of legal fees payable to a stockholder/director, of which 
$15,488 was incurred in connection with the refinancing and is included in 
deferred financing costs.  The Company also incurred $25,000 and $-0- of 
consulting fees payable to a stockholder/director during the years ended 
December 31, 1997 and 1996.  As of December 31, 1997 and 1996, $27,500 of 
these fees are in accrued expenses.  A portion of these fees were paid by the 
issuance of the Company's common stock.  See next paragraph.

Sixteen thousand (16,000) shares of common stock were issued to the President 
of the Company, and twenty four thousand (24,000) shares were issued to a 
consultant for services rendered in connection with the preparation of the 
registration statement and prospectus for the 140,000 shares of stock issued 
on May 31, 1996.

Sixty five thousand (65,000) shares of common stock were issued to officers of 
the Company for services provided during the year ended December 31, 1997.


Item 13.  Exhibits and Reports on Form 8-K
------------------------------------------ 

(a) Exhibits
    --------

 3.1*    Articles of Incorporation of Registrant filed                  (A)
         on December 22, 1995

 3.2*    By-Laws of the Registrant

10.2*    Employment Agreement between the Registrant and                 (A)
         Harry J. Santoro dated December 29, 1995

10.3*    Employment Agreement between the Registrant and                 (A)
         Stephen M. Robinson dated December 29, 1995 

10.4*    Promissory Note between the Registrant and Eastern              (A)
         States Energy, Inc. dated May 31, 1996

10.5*    Subscription Agreement between the Registrant and               (A)
         Eastern States Energy, Inc. dated May 31, 1996

10.6*    Provisional Workout Agreement between S.V.G. Properties,        (A)
         L.P. and the Department of Housing and Urban Development, 
         dated January 1, 1994

10.7*    Mortgage Note between SVG Properties, L.P. and                  (A)
         Brennan-Indio, Inc. covering the Spring Village 
         Apartments in the amount of $3,200,000

10.8*    Mortgage between SVG Properties, L.P. and                       (A)
         Brennan-Indio, Inc. covering the Spring Village 
         Apartments in the amount of $3,200,000

10.9*    Loan Agreement between Resource Properties XXIII, Inc.          (B)
         and SVG Properties, L.P. in the amount of $110,000.

10.10*   Multifamily Mortgage, Assignment of Rents and Security          (C)
         Agreement between SVG Properties, L.P. and 
         Merrill Lynch Credit Corporation, covering the Spring 
         Village Apartments in the amount of $2,500,000.

10.11*   Promissory Note between SVG Properties, L.P.                    (C)
         and Merrill Lynch Credit Corporation, covering 
         the Spring Village Apartments in the amount of $2,500,000.

10.12*   Mortgage and Security Agreement between                         (C)
         SVG Properties, L.P. and Resource Properties XXIII, Inc. 
         covering the Spring Village Apartments 
         in the amount of $927,672.78.

10.13*   Amendment to Note between SVG Properties, L.P. and              (C)
         Resource Properties XXIII, Inc. covering the Spring 
         Village Apartments in the amount of $927,672,78.

10.14*   Promissory Note between SVG Properties, L.P. and                (C)
         Harry J. Santoro in the amount of $150,000

11.1    Statement re computation of per-share earnings

21.1*   List of subsidiaries of the Registrant                           (A)

27.1    Financial Data Schedule


(b) Reports on Form 8-K
    ------------------- 

The following report on Form 8-K were filed during the period January 1, 1997 
through December 31, 1997:

Report on Form 8-K filed September 24, 1997


--------- 

The exhibits designed above with an asterisk (*) have previously been filed 
with the Commission and, pursuant to 17 C.F.R. Secs. 201.24 and 240.12b-32, 
are incorporated by reference to the documents as indicated below:

(A)  Incorporated by reference to the Registrant's Registration Statement on 
Form SB-2 number 333-5278-NY, effective November 4, 1996.

(B)  Incorporated by reference to the Registrant's Form 10-KSB dated December 
31, 1996.

(C)  Incorporated by reference to the Registrant's Form 8-K dated September 
18, 1997, filed September 24, 1997.

<PAGE>
                                   SIGNATURES

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

                                            ARCA CORP.
                                            (Registrant)

Date: February 23, 1998

                                            /S/  Harry J. Santoro
                                       -----------------------------------
                                         Harry J. Santoro, President,
                                         Chief Executive Officer


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

                                            ARCA CORP.
                                            (Registrant)

Date: February 23, 1998

                                            /S/  Harry J. Santoro
                                        -------------------------------------
                                           Harry J. Santoro, Director


                                            /S/  Stephen M. Robinson
                                        -------------------------------------
                                           Stephen M. Robinson,  Director


     
     <PAGE>

                        EARNINGS PER SHARE SCHEDULE
                               Exhibit 11.1



            Calculation of Net Income                   12/31/97

Net Income (loss)                                       (162,567)
  Assumed interest expense reduction                           0
  Assumed interest income increase                             0
                                                       ---------- 
                                                        (162,567)
                                                       ========== 

            Calculation of weighted average number of shares

  Weighted average shares outstanding                   1,662,500
  Common stock equivalents                                     0
                                                       ---------- 
                                                        1,662,500
                                                       ========== 

            Net income (loss) per share                     (.10)
                                                       ========== 



<PAGE>












                    ARCA CORP. AND SUBSIDIARY

                CONSOLIDATED FINANCIAL STATEMENTS

                    DECEMBER 31, 1997 AND 1996


































<PAGE>


                    ARCA CORP. AND SUBSIDIARY
                CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996



                        TABLE OF CONTENTS


                                                          Page


Independent Auditors' Report                               F-1

Consolidated Financial Statements

  Consolidated Balance Sheets                              F-2

  Consolidated Statements of Operations                    F-3

  Consolidated Statements of Changes in
   Stockholders' Deficit                                   F-4

  Consolidated Statements of Cash Flows                F-5 - F-6

Notes to Consolidated Financial Statements             F-7 - F-15



<PAGE>






                   INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
of ARCA Corp. and Subsidiary

     We have audited the accompanying consolidated balance sheets of ARCA 
CORP. AND SUBSIDIARY as of December 31, 1997 and 1996, and the related 
consolidated statements of operations, changes in stockholders' deficit, and 
cash flows for the years then ended.  These consolidated financial statements 
are the responsibility of the Company's management.  Our responsibility is to 
express an opinion on these consolidated financial statements based on our 
audits.

     We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the consolidated financial 
statements are free of material misstatement.  An audit includes examining, on 
a test basis, evidence supporting the amounts and disclosures in the 
consolidated financial statements.  An audit also includes assessing the 
accounting principles used and significant estimates made by management, as 
well as evaluating the overall financial statement presentation.  We believe 
that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of ARCA CORP. 
AND SUBSIDIARY as of December 31, 1997 and 1996, and the results of their 
operations and their cash flows for the years then ended in conformity with 
generally accepted accounting principles.


                                   HAEFELE, FLANAGAN & CO., P.C.



Moorestown, New Jersey
January 30, 1998
                                                              F-1

<PAGE>
                    ARCA CORP. AND SUBSIDIARY
                   CONSOLIDATED BALANCE SHEETS
                    DECEMBER 31, 1997 AND 1996

                              ASSETS

                                              1997          1996

Rental property, net (Notes 2 & 3)         $3,376,436     $3,428,375
Cash (Note 2)                                  61,550         32,846
Cash held in escrow (Notes 2 & 4)              77,669         32,366
Accounts receivable                             8,740         15,581
Prepaid expenses                               51,535         54,242
Deferred financing costs, net (Note 2)         84,171            -0-
Organization costs, net (Note 2)                4,500          6,000
                                            ---------      ---------
     Total Assets                          $3,664,601     $3,569,410
                                           ==========     ==========

                 LIABILITIES AND STOCKHOLDERS' DEFICIT

Liabilities
 Mortgage notes payable (Note 5)           $3,422,568     $3,154,949
 Accrued interest                              27,197        335,470
 Notes payable (Note 6)                       197,000         20,000
 Accounts payable                              19,228         14,106
 Accrued expenses                              97,302         59,096
 Security deposits payable (Note 2)            55,484         52,701
 Other liabilities                              3,701            -0-
                                            ---------      ---------
     Total Liabilities                      3,822,480      3,636,322

Minority interest                                 -0-            -0-

Commitments and contingencies (Note 10)

Stockholders' Deficit (Note 7)
  Common stock, $.0001 par value,
   50,000,000 shares authorized,
   2,060,000 shares and 500,000 shares in
   1997 and 1996 issued and outstanding           206             50      
Additional paid in capital                    343,894        212,450
  Accumulated deficit                     (   301,979)   (   139,412)
                                          -----------    -----------
                                               42,121         73,088
  Stock subscriptions receivable          (   200,000)   (   140,000)
                                          -----------    -----------
     Total Stockholders' Deficit          (   157,879)   (    66,912)
                                          -----------    -----------
     Total Liabilities and Stockholders'
      Deficit                              $3,664,601     $3,569,410
                                          ===========    ===========


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

                                                                   F-2
<PAGE>
                       ARCA CORP AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF OPERATIONS 
                 FOR THE YEARS ENDED DECEMBER 31, 1997


                                           1997           1996
Revenues
  Rental income                         $  729,510      $ 721,583
  Tenant fees and other income              14,425         13,107
  Interest income                              651          1,173
                                        ----------      ---------
     Total revenues                        744,586        735,863

Operating Expenses
  Administrative expenses                  179,439        102,788
  Utilities expense                         88,027        101,799
  Operating and maintenance                135,057        109,551
  Taxes and insurance                      134,515        147,203
  Depreciation and amortization             96,665         90,260
                                        ----------      ---------
     Total operating expenses              633,703        551,601
                                        ----------      ---------
Operating income                           110,883        184,262

Other expense
  Interest expense                     (   324,402)    (  332,336)
  Environmental remediation expense    (   111,974)           -0- 
                                        ----------      ---------
     Total other expense               (   436,376)    (  332,336)
                                        ----------      ---------
Loss before extraordinary item and
  minority interest                    (   325,493)    (  148,074) 

Extraordinary item
  Net gain on extinguishment of debt       162,926            -0-
                                        ----------      ----------
Loss before minority interest          (   162,567)    (  148,074)

Minority interest                              -0-     (    8,662)
                                        ----------     ----------
Net loss                               ($  162,567)    ($ 139,412)
                                        ==========     ==========

Net loss per common share - Basic
  Loss before extraordinary item
   and minority interest               ($      .20)    ($     .35)
  Extraordinary item                           .10            -0-
  Minority interest                            -0-            .02
                                        -----------    ----------
  Net loss per common share - Basic    ($      .10)    ($     .33)
                                        ===========    ==========
Average number of common shares
  outstanding - Basic                    1,662,500        425,000
                                        ===========    ==========
The accompanying notes are an integral part of these financial statements.
                                                                   F-3

<PAGE>
                               ARCA CORP. AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                   FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<S>                               <C>          <C>         <C>                <C>             <C>           <C>
                                                            Additional            Stock                          Total
                                       Common Stock          Paid-in           Subscriptions   Accumulated  Stockholders'
                                   Shares       Amount       Capital            Receivable       Deficit       Deficit   
                                  -------      -------      -----------        --------------  ------------

Balance, January 1, 1996          320,000      $     32     $ 72,468          ($ 70,000)         $    -0-     $  2,500

Collection of stock subscription
 in February 1996                     -0-           -0-          -0-             70,000               -0-       70,000

Issuance of common stock,
 net of related costs             180,000            18      139,982          ( 140,000)              -0-          -0-

Net loss                              -0-           -0-          -0-                -0-         ( 139,412)   ( 139,412)
                                  -------       -------     ------------       --------------   ----------   ----------
Balance, December 31,
 1996                             500,000            50      212,450          ( 140,000)        ( 139,412)   (  66,912)   

Issuance of shares of common
 stock to management               65,000             7       32,493                -0-               -0-       32,500

Issuance of shares of common
 stock                          1,250,000           125       74,875          (  60,000)              -0-       15,000

Issuance of shares of common
 stock                            235,000            23       14,077                -0-               -0-       14,100

Issuance of shares of common
 stock                             10,000             1        9,999                -0-               -0-       10,000
                                ----------       -------    ---------       -------------       ----------   ----------
Net loss                              -0-           -0-          -0-                -0-         ( 162,567)   ( 162,567)

Balance, December 31, 1997      2,060,000      $    206     $343,894          ($200,000)        ($301,979)   ($157,879)
                                =========       ========    =========       =============       ==========   ==========
</TABLE>

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

                                                                 F-4
<PAGE>
                       ARCA CORP. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

                                                   1997         1996
                                                   ----         ----
Cash Flows From Operating Activities:
  Net loss                                   ($  162,567) ($  139,412)
  Adjustments to reconcile net loss to
   net cash provided by (used in) operating
    activities:
    Minority interest in net loss of
     consolidated subsidiary                         -0-  (     8,662)
    Stock compensation expense                    46,600          -0-
    Environmental remediation expense            101,081          -0-
    Depreciation and amortization                 96,665       90,260
    Gain on extinguishment of debt           (   162,926)         -0-
    (Increase) decrease in:
      Accounts receivable                          6,841  (     7,621)
      Prepaid expenses                            26,907  (     4,428)
      Cash held in escrow                          3,740        9,353
    Increase (decrease) in:
      Accounts payable                             5,122  (     5,006)
      Accrued interest                            16,722          -0-
      Accrued expenses                            38,206       17,693
      Other liabilities                            3,701  (     1,095)
      Security deposits payable                    2,783        6,070
                                              ----------  -----------
Net cash provided by (used in) operating
 activities                                       22,875  (    42,848)
                                              ----------  -----------
Cash Flows From Investing Activities:
  Collection of stock subscription receivable        -0-       70,000
  Purchases of property and equipment        (    41,066) (    17,758)
                                              -----------  -----------
Net cash provided by (used in)investing 
 activities                                  (    41,066)      52,242
                                              -----------  -----------
Cash Flows from Financing Activities:
  Repayment of mortgage notes payable        (     5,105)         -0-
  Proceeds from notes payable                     27,000       10,000
  Repayment of notes payable                         -0-  (    41,500)
  Proceeds from issuance of common stock          25,000          -0-
                                              -----------  -----------
Net cash provided by (used in) financing
 activities                                       46,895  (    31,500)
                                              -----------  -----------
Increase (decrease) in cash                       28,704  (    22,106)   
Cash, beginning                                   32,846       54,952
                                              -----------  -----------
Cash, ending                                  $   61,550   $   32,846
                                              ===========  ===========

See accompanying notes are an integral part of these financial statements.
                                                                   F-5

<PAGE>
                      ARCA CORP. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
            FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


                                                    1997         1996
                                                    ----         ----
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for interest                        $  307,680   $  364,078
                                              ==========   ==========
Cash paid for income taxes                    $      305   $      700
                                              ==========   ==========
Non-cash investing and financing activities:

  Issuance of 1,260,000 and 180,000 shares 
   of common stock, respectively                  85,000      140,000
  Stock subscription promissory notes
   receivable                                (    60,000) (   140,000)
                                             -----------   ----------
  Proceeds from issuance of common stock      $   25,000   $      -0-
                                             ===========   ==========
  Issuance of 300,000 shares of common
   stock as partial payment of legal
   and professional fees                      $   46,600   $      -0-
                                             ===========   ==========
  Debt incurred for environmental
   remediation expenses                       $  101,081   $      -0-
                                             ===========   ==========

     During the year ended December 31, 1997, the Company refinanced their 
existing debt as follows:

     Proceeds from new first mortgage note    $2,500,000
     Partial repayment of original first
      mortgage note                          ( 2,227,276)
     Deposits into escrow                    (    49,043)
     Increase in prepaid expense             (    24,200)
     Payment of deferred financing costs     (    86,331)
     Repayment of accrued interest           (   324,995)
     Repayment of note payable - RPI         (   101,081)
     Increase in note payable - stockholder      150,000
                                             -----------
     Gain on extinguishment of debt          ($  162,926)
                                             ===========






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

                                                                   F-6

<PAGE>
                   ARCA CORP. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996


Note 1 - Organization and Business Activity

     ARCA Corp., a real estate holding company was incorporated in the State 
of New Jersey on December 22, 1995.  The Company commenced operations on 
December 31, 1995 with the acquisition of an 80% partnership interest in SVG 
Properties, L.P. (T/A Spring Village Apartments) through its wholly owned 
subsidiary, Spring Village Holdings, Inc.  The Company's 80% partnership 
interest is comprised of a 4.5% general partnership interest and 75.5% limited 
partnership interests.  The remaining 20% limited partnership interests are 
held by unrelated individuals.

     Spring Village Apartments leases 124 residential apartment units to the 
general public in Sharon Hill, Pennsylvania.

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation

     The consolidated financial statements include the accounts of ARCA Corp., 
Spring Village Holdings, Inc. and SVG Properties, L.P.  All significant 
intercompany transactions and accounts have been eliminated.

Use of Estimates

     The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the amounts reported in the financial statements and 
accompanying notes.  Actual results could differ from those estimates.

Revenues

     The Company earns rental income under operating leases with tenants.  
Rental income is recognized on a straight-line basis over the applicable lease 
term.

Rental Property

     Rental property is recorded at cost.  Depreciation is provided using the 
straight-line method over its estimated useful life.  Maintenance and repairs 
are charged to expense as incurred; major renewals and betterments are 
capitalized.  When items of property are sold or retired, the related cost and 
accumulated depreciation are removed from the accounts and any gain or loss is 
reflected in operations.

                                                              F-7

<PAGE>
                   ARCA CORP. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996


Note 2 - Summary of Significant Accounting Policies (continued)

Rental Property (continued)

     The estimated useful lives of the major classes of rental property, as 
determined by the Company's management, are as follows:

          Buildings and improvements    -    40 years
          Building equipment            -    10 years
          Other equipment               -     5 years


Cash Held in Escrow

     Cash held in escrow includes amounts held by the lender to provide funds 
necessary for the payment of taxes, insurance, repairs and maintenance and 
other specified capital expenditures of the Spring Village Apartment complex.


Deferred Financing Costs

     Deferred financing costs are amortized on a straight-line basis over ten 
years.  Amortization expense for the years ended December 31, 1997 and 1996 
was $2,160 and $-0-.  Accumulated amortization as of December 31, 1997 and 
1996 was $2,160 and $-0-.


Organization Costs

     Organization costs are amortized on a straight-line basis over five 
years.  Amortization expense for the years ended December 31, 1997 and 1996 
was $1,500 and $1,500.  Accumulated amortization as of December 31, 1997 and 
1996 was $3,000 and $1,500.


Security Deposits Payable

     Security deposits payable represent amounts received from tenants and are 
included in cash on the accompanying balance sheet.  As of December 31, 1996, 
the tenant security deposits payable was underfunded by $22,721.  As of 
December 31, 1997, the tenant security deposits are fully funded.  Tenant 
security deposits are guaranteed by a stockholder.



                                                              F-8

<PAGE>
                   ARCA CORP. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996


Note 2 - Summary of Significant Accounting Policies (continued)

Advertising

     The Company expenses all advertising as incurred.  Direct response 
advertising for which future economic benefits are probable and specifically 
attributable to the advertising is not material.  Advertising expense for the 
periods ended December 31, 1997 and 1996 was $7,089 and $5,579.


Income Taxes

     Tax provisions and credits are recorded at statutory rates for taxable 
items regardless of the period for which such items are reported for tax 
purposes.  Deferred income taxes are provided for the temporary differences 
between the carrying values of the Company's assets and liabilities for 
financial reporting purposes and their corresponding income tax bases.  
Deferred tax assets are reduced by a valuation allowance when the 
determination can be made that it is more likely than not that some portion or 
all of the deferred tax assets will not be realized.


Net Loss Per Share of Common Stock

     In 1997, the Company adopted the requirements of Statement of Financial 
Accounting Standards No. 128, "Earnings Per Share".  SFAS No. 128 replaced the 
calculation of primary and fully diluted earnings per share with basic and 
diluted earnings per share.  Unlike primary earnings per share, basic earnings 
per share exclude any dilutive effects of options, warrants, and convertible 
securities.  Diluted earnings per share is very similar to the previously 
reported fully diluted earnings per share.  Earnings per share amounts for 
1996 have been presented under the requirements of SFAS No. 128.


Stock Based Compensation

     The requirements of SFAS No. 123, "Accounting for Stock-Based 
Compensation," became effective in 1996.  The statement encourages, but does 
not require, a fair value-based method of accounting for stock-based 
compensation.  The Company elected to continue the use of the intrinsic 
value-based method of accounting; however, implementation of SFAS No. 123 
would not have a material effect on the Company's results of operations or 
earnings per share.

                                                              F-9

<PAGE>
                   ARCA CORP. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996


Note 2 - Summary of Significant Accounting Policies (continued)

Fair Value of Financial Instruments

     Statement of Financial Accounting Standards No. 107, "Disclosure About 
Fair Value of Financial Instruments" requires disclosure of the fair value of 
financial instruments, both assets and liabilities, recognized and not 
recognized in the balance sheets of the Company, for which it is practical to 
estimate fair value.  There are no significant differences in the carrying 
amount and the fair market value of the financial instruments reported on the 
balance sheets presented.

Statement of Cash Flows

     For purposes of the statements of cash flows, the Company considers all 
highly liquid investments purchased with a term to maturity of three (3) 
months or less at the time of acquisition to be cash equivalents.

Note 3 - Rental Property

      Rental property at December 31, 1997 and 1996 consisted of the 
following:
                                               1997         1996
                                               ----         ----
     Land                                $  292,792   $  292,792
     Buildings and improvements           3,150,051    3,127,770
     Building equipment                     104,906       87,548
     Office equipment                        10,452        9,025
                                         ----------   ----------
                                          3,558,201    3,517,135
     Less accumulated depreciation      (   181,765) (    88,760)
                                         ----------   ----------
          Rental property, net           $3,376,436   $3,428,375
                                         ==========   ==========

     Depreciation expense for the periods ended December 31, 1997 and 1996 was 
$93,005 and $88,760.

Note 4 - Cash Held in Escrow

     Cash held in escrow at December 31, 1997 and 1996 consisted of the 
following:
                                             1997         1996
                                             ----         ----
     Mortgage escrow deposits            $   52,324   $   32,099
     Reserve fund for replacements            2,304          -0-
     Capital expense escrow                     -0-          267
     Specified work escrow                   23,041          -0-
                                          ---------   ----------
                                         $   77,669   $   32,366
                                          =========   ==========

                                                             F-10

<PAGE>
                   ARCA CORP. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996

Note 5 - Mortgage Notes Payable

     Mortgage notes payable at December 31, 1997 and 1996 consisted of:

                                                1997        1996
                                                ----        ----
Mortgage note payable to Resource 
 Properties XXIII, Inc. ("RPI") in monthly
 installments of $28,740 (including
 principal and interest at 10 1/2%),
 due November 2022,collateralized by
 land, buildings, improvements and
 equipment, secured by an assignment
 of the management agreement. The mortgage 
 note was amended in 1997 to reduce the
 outstanding principal to $927,673 (see
 below)                                     $      -0-   $3,154,949      
Mortgage note payable to Merrill
 Lynch Credit Corporation in monthly
 installments of $17,962 including
 interest at 7.78%, due October 2007,
 secured by first mortgage on rental
 property, assignment of leases, rents
 and security deposits, substantially
 all assets of a subsidiary, and
 the payment and performance guaranty
 of a stockholder                            2,496,481          -0-

Mortgage note payable to RPI
 in monthly installments of $7,964 
 including interest at 9.28%, (or 100% 
 of the subsidiary's net cash flow, as 
 defined in the agreement, if less), due 
 October 2022, secured by second mortgage 
 on rental property and the common stock 
 of a subsidiary                               926,087          -0-
                                            ----------   ----------
                                            $3,422,568   $3,154,949
                                            ==========   ==========

     In 1995, the mortgage note was payable to the Department of Housing and 
Urban Development (HUD) under the provision of Section 207, pursuant to 
Section 223 (f) and Section 244 of the National Housing Act, and was subject 
to the terms of a Provisional Workout Arrangement.  In September 1996, HUD 
sold the mortgage on the Property to Resource Properties XXIII, Inc. (RPI) 
subject to the same terms of the Arrangement.
                                          

                                                             F-11

<PAGE>
                   ARCA CORP. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996


Note 5 - Mortgage Notes Payable (continued)

     On September 17, 1997, the Company refinanced its existing debt as 
permitted by RPI in an agreement dated November 22, 1996.  As a condition of 
the refinancing, RPI was granted an option to purchase the rental property for 
$1.00 subject to the first and second mortgages in the event of default. 

     In accordance with the Agreement, RPI lent the Company up to $101,081 for 
the removal of the underground oil tanks (Note 10) in order to permit the 
Company to refinance its existing mortgage note payable.  

     Since prior to the earlier of:  (i) one year from the date of the 
successful removal of the underground oil tanks, or (ii) June 30, 1998, the 
Company secured a first mortgage loan (New Note) of at least $2,300,000, RPI 
agreed to retain a subordinate position in the promissory note payable, the 
mortgage note payable and the accrued interest thereon, up to the difference 
between the New Note ($2,500,000) and $3,350,000 at 1.5% above the New Note's 
interest rate payable.  The promissory note and certain other debt were 
ultimately extinguished by RPI as part of the refinancing (Note 11). After 
payment of all of the aforementioned debt, the residual amount of $150,000 was 
assigned to a stockholder subject to certain covenants and restrictions. (Note 
6)  

     Maturities of mortgage notes payable as of December 31, 1997 are as 
follows:

               1998                     $   32,140
               1999                         34,893
               2000                         37,886
               2001                         41,136
               2002                         44,669
               Thereafter                3,231,844
                                         ---------
                                        $3,422,568
                                         =========
Note 6 - Notes Payable

     Notes payable at December 31, 1997 and 1996 consists of the following:

                                             1997       1996
                                             ----       ----
Notes payable to stockholders with
 interest at 10% and 8% in 1997 and
 1996, due on demand, unsecured         $   22,500    $ 10,000

                                                             F-12

<PAGE>
                   ARCA CORP. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996


Note 6 - Notes Payable (continued)

                                             1997        1996
                                             ----        ----

Notes payable to related parties
 with interest at 10%, due on
 demand, unsecured                          24,500      10,000

Note payable to stockholder in 
 monthly payments of interest only
 of $1,250 (or net cash flow after all
 debt service of a subsidiary, if less), 
 due January 1, 2000, unsecured 
 (See Note 5)                              150,000         -0-
                                           -------    --------
                                          $197,000    $ 20,000
                                           =======    ========

     Interest expense payable to stockholders and related parties in 1997 and 
1996 was $6,100 and $1,066, of which $5,100 and $-0- was in accrued interest 
at December 31, 1997 and 1996.


Note 7 - Equity and Stock Subscriptions Receivable

     On May 31, 1996, subscriptions for one hundred forty thousand (140,000) 
shares of common stock at $1 per share were received from Eastern States 
Energy, Inc. (Eastern) in the form of a promissory note receivable.  The note 
is to be collected solely from the net cash proceeds realized from the sale or 
liquidation of the assets of Eastern. On November 15, 1996, the 140,000 shares 
of Eastern were reissued to the stockholders of Eastern pursuant to a Plan of 
Liquidation of Eastern.

     Sixteen thousand (16,000) shares of common stock were issued to the 
President of the Company and twenty-four thousand (24,000) shares were issued 
to a consultant for services rendered in connection with the preparation of 
the registration statement and prospectus for the 140,000 shares of stock 
issued on May 31, 1996.

     Sixty-five thousand (65,000) shares of common stock were issued to 
officers of the Company for services provided during the year ended December 
31, 1997.




                                                             F-13
<PAGE>                   ARCA CORP. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996


Note 7 - Equity and Stock Subscriptions Receivable (continued)

     On March 31, 1997, one million four hundred eighty-five thousand 
(1,485,000) shares of common stock were issued to two consultants, in 
connection with the Company's proposed acquisition of another company, for a 
total consideration of $89,100, $60,000 of which is in the form of a 
promissory note receivable.  The proposed acquisition was contingent upon the 
closing of a bridge loan of not less than $3,500,000. In the event that the 
bridge loan did not close by September 30, 1997, all 1,485,000 shares would be 
subject to repurchase by the Company for nominal consideration.  Should the 
proposed acquisition occur, all of the assets and liabilities of the Company 
will be transferred to a new company formed for such purpose as part of the 
proposed acquisition, and the stockholders of record prior to the closing of 
such acquisition will receive shares in such new company.  However, the 
1,485,000 shares were issued "ex-dividend" with respect to such reorganization 
and as a result, the stockholders will not be entitled to shares in such new 
company.  Additionally, voting rights of such shares were granted to the 
President of the Company, until such time as the closing had occurred. The 
promissory note receivable was to be collected within six months and is 
currently in default; however, the note is secured by the shares of common 
stock issued.  As of December 31, 1997, the proposed acquisition has not 
occurred; however, the Company has not yet exercised their option to 
repurchase the shares.

Note 8 - Income Taxes

     The Company has deferred tax assets of $76,000 and $39,000 at December 
31, 1997 and 1996 which represent the tax effects of net operating loss 
carryforwards.  The deferred tax assets have been reduced in their entirety by 
a valuation allowance in each period.  At December 31, 1997, the Company has 
approximately $316,000 of net operating loss carryforwards to offset future 
taxable income for both federal and state income tax purposes.

Note 9 - Related Party Transactions

Management of Rental Property

     The rental property is managed by a company which is owned by a 
stockholder.  The current management agreement provides for a management fee 
of 5% of gross income, which is typical for the industry.  Management fees for 
the years ended December 31, 1997 and 1996 were $37,197 and $36,770.

     Included in accrued expenses are management fees payable of $37,197 and 
$12,227 at December 31, 1997 and 1996.


                                                          F-14
<PAGE>                   ARCA CORP. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1997 AND 1996


Note 9 - Related Party Transactions (continued)


Leases

     The Company leases its office space from a company which is owned by a 
stockholder.  Monthly rental payments are $250 per month.  Rent expense for 
the years ended December 31, 1997 and 1996 were $3,000 and $3,000.


Other Payments

     During the year ended December 31, 1997, the Company incurred $65,488 of 
legal fees payable to a stockholder/director, of which $15,488 was incurred in 
connection with the refinancing and is included in deferred financing costs.  
The Company also incurred $25,000 of consulting fees payable to a 
stockholder/director during the year ended December 31, 1997.  As of December 
31, 1997, $27,500 of these fees are included in accrued expenses.


Note 10 - Environmental Remediation Expense

     Located beneath the Spring Village Apartment complex were seven inactive 
underground storage tanks formerly used to store heating oil for the complex.  
The tanks were not regulated by the State of Pennsylvania.  During the year 
ended December 31, 1997, the tanks were successfully removed at a cost of 
$111,974 , of which $101,081 was funded by the lender (RPI). (See Note 5)


Note 11 - Extraordinary Item

     In September 1997, the Company refinanced its existing debt with RPI.  In 
connection with the refinancing, certain debt was forgiven by the lender which 
resulted in an extraordinary gain of $162,926, net of related income taxes of 
$-0-. (See Note 5)










                                                          F-15