UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                       Washington, D.C.  20549


                            Form 10-KSB


                Annual Report Under Section 13 or 15(d)

                 of the Securities Exchange Act of 1934


                For the fiscal year ended March 31, 1997


                     Commission File Number 0-18727




                             CARC, Inc.

            (Name of small business issuer in its charter)

South Carolina                            57-0641693
(State or other jurisdiction             (I.R.S. Employer Identification No.)
 of incorporation of organization)

500 Downs Loop, Clemson, South Carolina   29631
(Address of principal executive offices)  (Zip Code)

Issuer's telephone number, including 
 area code:                               (864) 654-1155            
 


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


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


                                Common Stock
                              (Title of class)

Check whether the issuer (1) has filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or 
for such shorter period that the registrant was required to file such 
reports), and (2) has been subject to such filing requirements for the past 
90 days.

Yes   x                                 No      


Check if there is no disclosure of delinquent filers in response to Item 405 
of Regulation S-B 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 [x]

State issuer's revenues for its most recent fiscal year:     $3,177,176

The aggregate market value of the voting stock held by non-affiliates of the 
registrant is unknown and the stock is not currently being traded.

The number of shares outstanding at March 31, 1997 is :

                     Common stock, $1 par value  536,000


Documents Incorporated by Reference

Portions of registrant's definitive proxy statement (to be filed pursuant to 
Regulation 14A) or definitive information statement (to be filed pursuant to 
Regulation 14C) for registrant's 1997 annual meeting are incorporated by 
reference in Part III.



                                   PART 1

Item 1.     Business.

CARC, Inc., the registrant, was organized under the laws of the State of 
South Carolina on December 20, 1976 to plan, develop, construct and operate a 
retirement community ("Clemson Downs") in the Clemson, South Carolina area to 
include residential apartments, an accredited health care center and related 
recreational and social facilities.  The Company's present office is located 
at 500 Downs Loop, Clemson, South Carolina  29631, and its telephone number 
is (864) 654-1155.

The principal services rendered by the registrant are retirement community 
services.  They include the operation of a health care center, apartment 
rentals and providing recreational and other associated services.  For the 
last two fiscal years, the percentage of total revenue contributed by each of 
these services which provided 15% or more of consolidated revenue are as 
follows:


                                               1997             1996

1.     Health care center -                    50.3%            47.9%


2.     Apartment rentals -                     47.7%            49.3%



The apartment buildings at Clemson Downs provide a choice of seven floor 
plans.  The apartments rent for between $834 and $1,665 per month, depending 
on which floor plan is chosen and whether the apartment is rented by one 
person or a couple.  One meal per day for each resident is included in the 
rental fee.  In addition, residents may select a catered living program.  
Apartment rates for the catered living program range between $1,544 and 
$3,214 per month, depending on the floor plan chosen and number of occupants 
per apartment.  The catered living program provides special services and 
three meals per day to residents in the program.  Each apartment has a patio 
deck, and each floor of each building has its own washer and dryer room.  All 
buildings have entrances at ground level.  Some buildings are also served by 
elevators.  Doors are electric with wheelchair level door openers.  There are 
thermal-pane windows in patio doors.  All halls have assist rails and wide 
doorways.  Each apartment unit has individual heating and air-conditioning 
systems and an individual hot water heater.  All the apartments and public 
areas in the apartment wings are carpeted, with the exception of the kitchen 
and bathroom areas.  The kitchens are fully equipped with a range and oven, 
refrigerator, dishwasher and disposal.  There is an emergency response call 
system to the health care center in each apartment and smoke and heat 
detectors are located throughout the property.





Item 1.     Business. (continued)

The health care center provides convalescent and rehabilitative treatment to 
inpatient adults, including those who are admitted after hospitalization and 
before returning to their homes, and is designed to supplement general 
hospital care, rather than compete directly with general hospitals. The 
services furnished by the health care center include room, board, nursing 
care, drugs, supplies, medical equipment, other medical services, social 
activities and physical, speech and recreational therapy.  The health care 
center contains private and semi-private rooms.  It also has laundry 
facilities and a reception area.  The admission, treatment and discharge of 
each health care center resident are under the direction of the resident's 
attending physician.  Although no full-time staff physicians are retained, 
the health care center has a part time-medical director as well as consulting 
and on-call physicians as required.

The health care center receives payments for resident care directly on a 
private pay basis, including payments from private health insurance, and from 
governmental reimbursement programs such as the federal Medicare program.  
Within the statutory framework of the Medicare program, there are substantial 
areas subject to administrative rulings, interpretations and discretion which 
affect payments made under those programs.  

Health care facility operations are subject to federal, state and local 
government regulations. Health care facilities are subject to periodic 
inspection by state licensing agencies to determine whether the standards 
necessary for continued licensure are maintained.  In granting and renewing 
licenses, the state agencies consider, among other things, the buildings, 
furniture and equipment; the qualifications of the administrative personnel 
and staff; the quality of care; and the compliance with the laws and 
regulations relating to operation of the facilities.  State licensure of a 
health care facility is a prerequisite to certification for participation in 
the Medicare program.  Management believes that the health care center at 
Clemson Downs is presently in substantial compliance with all applicable 
federal, state and local regulations with respect to licensure requirements.  
However, because those standards are subject to change, there can be no 
assurance that the health care center will be able to maintain its licenses 
upon a change in standards, and future changes in those standards could 
necessitate substantial expenditures by the registrant to comply with them.

Clemson Downs competes with other local and regional retirement communities 
on the basis of reputation and physical appearance and in the case of its 
health care center on the basis of the quality of care provided.  The 
primary, secondary and tertiary service areas for Clemson Downs are as 
follows:

Primary Service Area - the City of Clemson;

Secondary Service Area - an 18 mile radius extending from the City of 
Clemson; and

Tertiary Service Area - All other areas.


Item 1.     Business. (continued)

Approximately 60% of the current patients in the health care center resided 
in the Primary Service Area immediately before being admitted to the health 
care center.  The Secondary Service Area accounted for almost 30% of the 
current patients last residence and the remaining 10% of the patients at the 
health care center were from areas outside of the 18 mile radius, or the 
Tertiary Service Area.

There are many health care institutions and corporations that furnish 
services similar to those offered by the registrant.  Some competitors 
operate nationally and have substantially greater resources than the 
registrant.

The registrant also experiences competition in the search for nurses, 
technicians, aides and other high-quality professional and non-professional 
employees.

The registrant maintains professional liability, comprehensive general 
liability and other typical insurance coverage on all its facilities.  The 
registrant believes that its insurance is adequate in amount and coverage.

The registrant employees approximately 75 persons in its business and 
believes its relations with its employees are good.

Item 2.     Properties.

The only property owned by the registrant is Clemson Downs, a retirement 
community located in Clemson, South Carolina, which consists of 96 
apartments, 52 nursing home beds and a community center which includes a 
dining room, library, recreation areas and administrative offices.  The 
buildings are suitable and adequate for which they were designed and are in 
good state of repair.

There is a mortgage balance of $2,558,031 at March 31, 1997 that is 
collateralized by land and buildings.

Item 3.     Legal Proceedings.

Registrant is not currently engaged in legal proceedings of material 
consequence other than ordinary routine litigation incidental to its 
business.

Item 4.     Submission of Matters to a Vote of Shareholders.

No matters were submitted to a vote of shareholders during the fourth quarter 
of 1997.



                                 PART II


Item 5.     Market for the Registrant's Common Equity and Related 
            Stockholder Matters.

There is no established public trading market for the registrant's common 
stock.  The Center has served as agent in transferring shares from 
stockholders to new residents interested in obtaining shares and has received 
fees for these services.   At March 31, 1997, there are approximately 536 
holders of the registrant's common stock.  There have been no cash dividends 
declared or paid during the past two fiscal years to the holders of the 
registrant's common stock.

Item 6.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations.

The discussion and analysis that follow discusses the financial condition, 
results of operations, liquidity and capital resources of the registrant.

Financial Condition

At March 31, 1997 and 1996, assets were $4.7 million and $4.8 million, 
respectively.  The decrease of $100,000 is a result of depreciation of fixed 
assets of $284,000 which was offset by additional operating income of 
$192,000. During the second quarter of the current year, the Center exercised 
an option stated in its mortgage with a bank to make a $150,000 payment 
against the outstanding principal without penalty.  All other assets and 
liabilities remained relatively unchanged.

Results of Operations

Net income for the year ended March 31, 1997 and 1996 was $241,000 and 
$250,000, respectively.

Operating Revenues

Operating revenues for the year ended March 31, 1997 and 1996 were $3.2 
million and $3.0 million, respectively.  The overall increase in operating 
revenues of $192,000 is due primarily to an increase in health care center 
revenues and apartment revenues offset by decrease in residential services.  
Health care center revenues increased approximately $167,000 due to an 
increase in apartment occupancy and a five percent rate increase. Apartment 
revenues increase approximately $44,000 due to a five percent rate increase 
and more residents paying for additional services such as catered living.  
Residential services revenue decreased $24,000 due to a change in the billing 
procedures for beauty shop services from a percentage of total fees billed to 
a standard fee.




Item 6.      Management's Discussion and Analysis of Financial Condition and
             Results of Operations. (continued)

Operating Expenses

Operating expenses for the years ended March 31, 1997 and 1996 were $2.9 
million and $2.8 million, respectively.  The net increase was primarily 
attributable to increases in apartment, health care center, dietary, 
administrative and general, and housekeeping expenses which were offset by 
decreases in residential services and interest expenses.  Apartment expenses 
increased $16,000 due to an increase in salary and maintenance costs.  Health 
care center costs increased $103,000 due to an increase in the use of 
temporary employees and salary increases. Housekeeping expenses increased 
approximately $25,000 due to additional employees and an increase in salary 
and supply costs.  Dietary expenses increased approximately $54,000 due to an 
increase in food and beverage costs, and administrative and general expenses 
increased approximately $19,000 due primarily to increase in wages and 
professional fees.  Residential services decreased approximately $24,000 due 
to the change in the billing procedures for beauty shop services from a 
percentage of total fees billed to a standard fee.  Interest expense 
decreased $29,000 due to a reduction of the principal balance of the 
mortgage.  Other operating expenses remained relatively stable.

Nonoperating revenue

Nonoperating revenue for the year ended March 31, 1997 decreased 
approximately $29,000 over the same period in 1996 primarily due to a loss on 
disposal of assets for the year ended March 31, 1997.

Liquidity

The Center generated $646,958 in cash flows from operating activities.  The 
operating cash flows were used to fund $211,489 in investing activities and 
$424,942 in financing activities, which were primarily purchases of 
investments and payments of long-term debt.

Future Commitments for Capital Expenditures

Subsequent to March 31, 1997, the Center entered into a contract with a 
construction company for the construction of a twenty unit two-bedroom 
apartment building and an activity center at an estimated cost of $2,598,694. 


The Center received a maximum construction loan of $2,800,000 from Wachovia 
Bank. This loan is secured by the real estate and apartment rents.  Interest 
is at prime less .25% and payments of interest only are due through October 
1998.  Beginning in November 1998, monthly principal and interest payments 
will be made through April 2007.  The monthly payment and applicable interest 
rate will be determined at a later date.



                              PART II (continued)

Item 7.     Financial Statements.


The financial statements required to be filed here under are attached hereto 
following the signature page.

Item 8.     Changes in and Disagreement with Accountants on Accounting and
            Financial Disclosure. - None.


                                 PART III

Item 9.     Directors and Executive Officers of the Registrant.

Item 10.    Executive Compensation.

Item 11.    Security Ownership of Certain Beneficial Owners and Management.

Item 12.    Certain Relationships and Related Transactions.

The information called for by Items 9, 10, 11, and 12 has been omitted 
because the registrant will file with the SEC no later than 120 days after 
the close of its fiscal year a definitive proxy pursuant to Regulation 14A.  
Such information is hereby incorporated by reference from registrants 
definitive proxy statement.

                                  PART IV

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

Following is a list of exhibits filed with this form 10KSB:

A.  Exhibit 27 - Financial Data schedule

B.  Reports on Form 8-K - None filed in the fourth quarter.





SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant 
caused this report to be signed on its behalf by the undersigned, thereunto 
duly authorized.

                                                 Registrant      CARC, INC. 







Date:  June 17, 1997                             /s/ Anita M. Davis
                                                     Anita M. Davis
                                                     Administrator











<TABLE>
<CAPTION>



                                                                   Exhibit 27
                         Financial Data Schedule
<S>                                                                    <C>

Period type                                                              Year
Fiscal year end                                                March 31, 1997
Period - start                                                  April 1, 1996
Period - end                                                   March 31, 1997
Cash                                                                 $236,236
Securities                                                           $207,344
Receivables                                                          $123,349
Allowables                                                           $(5,000)
Inventory                                                             $10,799
Current assets                                                       $599,863
Property, plant and equipment                                      $7,549,333
Depreciation                                                       $3,691,582
Total assets                                                       $4,669,030
Current liabilities                                                  $475,906
Bonds                                                                       0
Preferred - mandatory                                                       0
Preferred                                                                   0
Common                                                               $536,000
Other - SE                                                         $1,799,739
Total liabilities and equity                                       $4,669,030
Sales                                                                       0
Total revenues                                                     $3,177,176
Cost of goods sold                                                          0
Total costs                                                        $2,928,830
Other - expenses                                                            0
Loss-provision                                                              0
Interest-expense                                                     $209,998
Income-pretax                                                        $241,073
Income-tax                                                                  0
Income-continuing                                                    $241,073
Discontinued                                                                0
Extraordinary                                                               0
Changes                                                                     0
Net - income                                                         $241,073
EPS - primary                                                          20.00%
EPS - dilutes                                                          0.00% 

</TABLE>











                       Independent Auditors' Report


The Board of Directors
CARC, Inc.
Clemson, South Carolina

We have audited the accompanying balance sheets of CARC, Inc. (the Center) as 
of March 31, 1997 and 1996, and the related statements of operations, 
stockholders' equity and cash flows for the years then ended. These financial 
statements are the responsibility of the Center's management.  Our 
responsibility is to express an opinion on these financial statements based 
on our audits.   

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of CARC, Inc. as of March 31, 
1997 and 1996 and the results of its operations and its cash flows for the 
years then ended, in conformity with generally accepted accounting 
principles.



Greenville, South Carolina
May 8, 1997



<TABLE>
<CAPTION>

                                 CARC, INC.

                               Balance Sheets

                          March 31, 1997 and 1996

                                   Assets

<S>                                                   <C>               <C>
                                                     1997              1996

Current assets
  Cash and cash equivalents                  $      236,236     $     225,709
  Investments                                       207,344           112,926
  Accounts receivable, net of allowance
    for doubtful accounts of $5,000 in 
    1997 and 1996                                   118,349           117,133
  Accrued interest receivable                        15,343             7,230
  Prepaid insurance                                  11,792            20,613
  Inventory                                          10,799            14,924

    Total current assets                            599,863           498,535



Assets whose use is limited:
 By stockholders for expansion of facilities            -             109,336



Property, buildings, and equipment, net           3,857,751         3,943,841
Entrance fees in escrow                             105,918            99,063
Other assets - principally loan 
 refinancing costs                                  105,498           114,998


                                               $   4,669,030    $   4,765,773



                   Liabilities and Stockholders' Equity


Current liabilities
 Current installments of long-term debt        $     270,564    $     252,021
 Accounts payable                                     53,965            5,881
 Accrued payroll                                      48,463           42,022
 Accrued payroll and property taxes                   20,559           27,752
 Accrued interest                                     16,503           19,265
 Other accrued liabilities                            39,332            9,067
 Unearned revene                                      26,520           21,084


   Total current liabilities                         475,906          377,092


Refundable entrance fees                             105,918           99,063
Long-term debt, excluding current installments     2,287,467        2,730,952


   Total liabilities                               2,869,291        3,207,107


Stockholders' equity:
 Common stock, $1 par value.  Authorized 
  600,000 shares; issued and outstanding
  536,000 shares                                     536,000          536,000
 Additional paid-in capital                        2,111,886        2,111,886
 Accumulated deficit                                (848,147)     (1,089,220)


Total stockholders' equity                         1,799,739        1,558,666


                                               $   4,669,030    $   4,765,773

</TABLE>


<TABLE>
<CAPTION>

                                   CARC, INC.

                           Statements of Operations
                     Years Ended March 31, 1997 and 1996

<S>                                                     <C>            <C>
                                                       1997           1996

Operating revenues:
  Apartments                                   $   1,517,084    $   1,472,650
  Health care center                               1,597,757        1,430,410
  Dietary                                             45,881           46,815
  Residential services                                 6,860           30,956
  Miscellaneous                                        9,594            3,855
    Net operating revenues                         3,177,176        2,984,686


Operating expenses:
  Apartments                                         217,189          201,049
  Health care center                                 826,168          722,674
  Dietary                                            614,780          560,532
  Residential services                                 6,100           29,888
  Maintenance and repair                             107,076          104,978
  Housekeeping                                       126,272          100,955
  Administrative and general                         286,629          268,037
  Depreciation and amortization                      283,784          278,903
  Utilities                                          168,569          172,443
  Interest                                           209,998          238,935
  Property and taxes                                  82,265           78,201
    Total operating expenses                       2,928,830        2,756,595


    Income from operations                           248,346          228,091


Nonoperating revenues (expenses):
  Interest and investment income                      26,585           28,808
  Loss on sale of equipment                          (33,858)         (7,105)
    Nonoperating revenues (expenses)                  (7,273)          21,703


    Net income                                 $     241,073    $     249,794


Per share information:
  Net income                                   $         .45    $         .47


Weighted average number of shares
  outstanding during the year                        536,000          536,000

</TABLE>


<TABLE>
<CAPTION>

                                   CARC, INC.
                      Statements of Stockholders' Equity
                      Years Ended March 31, 1997 and 1996

<S>                            <C>          <C>         <C>          <C>
                                         Additional                 Total
                             Common      Paid-In    Accumulated Stockholders'
                              Stock      Capital      Deficit      Equity

Balances at March 31, 1995   $ 536,000  $ 2,111,886 $ (1,339,014) $ 1,308,872


Net income                       -            -           249,794     249,794


Balances at March 31, 1996     536,000    2,111,886    (1,089,220)  1,558,666


Net income                       -            -           241,073     241,073


Balances at March 31, 1997   $ 536,000  $ 2,111,886  $  (848,147) $ 1,799,739


</TABLE>









<TABLE>
<CAPTION>


                                  CARC, INC.
                           Statements of Cash Flows
                    Years Ended March 31, 1997 and 1996

<S>                                                      <C>           <C>
                                                        1997          1996

Cash flows from operating activities:
  Net income                                       $  241,073      $  249,794
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
     Depreciation and amortization                    283,784         278,903
     Loss on sale of equipment                         33,858           7,105
     Decrease (increase) in:
       Accounts receivable, net                        (1,216)         11,335
       Accrued interest receivable                     (8,113)            270
       Prepaid insurance                                8,821         (4,290)
       Inventory                                        4,125            -   
       Other assets                                    (2,500)           -   
     Increase (decrease) in:
       Accounts payable                                48,084         (4,323)
       Accrued payroll                                  6,441           5,140
       Accrued payroll and property taxes              (7,193)        (1,220)
       Accrued interest payable                        (2,762)        (5,221)
       Other accrued liabilities                       30,265           2,067
       Unearned revenue                                 5,436        (42,782)
       Entrance fee proceeds                            6,855           9,353


         Net cash provided by
           operating activities                       646,958         506,131

                                                                  (continued)



                                  CARC, INC.
                     Statements of Cash Flows (continued)
                      Years Ended March 31, 1997 and 1996


                                                       1997            1996

Cash flows from investing activities:
  Purchases of investments                       $  (313,262)    $  (321,325)
  Maturities of investments                          321,325         330,876
  Proceeds from sale of equipment                         50            -    
  Capital expenditures                              (219,602)       (118,241)


          Net cash used in 
           investing activities                     (211,489)       (108,690)


Cash flows from financing activities:
  Principal payments of long-term debt              (424,942)       (393,359)


       Net increase in cash                           10,527            4,082


Cash and cash equivalents,
  at beginning of year                               225,709          221,627


Cash and cash equivalents,
  at end of year                                  $  236,236       $  225,709

</TABLE>



                                 CARC, INC.
                      Notes to Financial Statements
                            March 31, 1997 and 1996



1.   Summary of Significant Accounting Policies

CARC, Inc. (the "Center") is a corporation existing for the purpose of 
operating a retirement community in the Clemson, South Carolina area with an 
accredited health care facility, residential apartments and other 
facilities.  The following are the significant accounting policies used in 
preparation of the accompanying financial statements.

Operating Revenues - Apartment revenues consist of rental, meals and 
miscellaneous other income. Health Care Center revenues consist primarily of 
room and board fees, and also include fees for medical supplies and physical 
therapy.  Dietary revenues consist of fees charged for meals and catered 
functions. 

Resident Revenue - Resident revenue is reported at the estimated net 
realizable amounts from residents, third-party payors, and others for service 
rendered.

Revenue received under the South Carolina Medicare program is subject to 
audit and retroactive adjustment.  Settlements, if any, are included as 
contractual revenue adjustments in the year of determination.

Refundable Fees and Deposits - Refundable application fees are refunded upon 
demand by the original applicant.  Refundable security deposits are refunded 
upon termination of the rental agreement less the cost of repairs.

Investment Securities - The Center accounts for investments according to 
Statement of Financial Accounting Standards No. 115 "Accounting for Certain 
Investment in Debt and Equity Securities (SFAS 115).  Under SFAS 115, 
investment securities held for investment are stated at amortized cost since 
the Center has both the ability and intent to hold such securities to 
maturity.  Premiums and discounts on the investments are amortized into 
income over the contractual terms of the security using a level yield 
interest method.  Gains and losses on the sale of these securities would be 
calculated on the specific identification method.

Other Assets - Other assets consist primarily of loan refinancing cost and 
are amortized over the life of the loan, which is twelve years.




Assets Whose Use Is Limited - Assets whose use is limited consist of funds 
that have been set aside by the Center's stockholders for the expansion of 
facilities. The body which placed the limitations retains control over the 
funds and may, at its discretion, subsequently use such funds for other 
purposes.  Since the amount is designated for noncurrent assets, it has been 
excluded from current assets in the accompanying balance sheets.  

Property, Buildings, and Equipment - Property, buildings, and equipment are 
stated at cost or, if donated, at fair market value at date of receipt.  
Depreciation on buildings and equipment is calculated on the straight-line 
method over the estimated useful lives of the assets.  Equipment held under 
capital leases is amortized using the straight-line method over the shorter 
of the lease term or estimated useful life of the asset.

Inventory - Inventory consists of food and medical supplies and is carried at 
cost (first-in, first-out).

Accounts Receivable - Accounts receivable consist of unsecured balances from 
residents and patients for monthly apartment and health care center charges.  
The Center uses the allowance method to account for uncollectible accounts 
receivable.  The allowance for bad debt accounts is based upon prior years' 
experience and management's analysis of possible bad debts.

Income Taxes - The Center accounts for income taxes according to Statement of 
Financial Accounting Standards No. 109 "Accounting for Income Taxes" (SFAS 
109).  Under SFAS 109, deferred income taxes are recognized for the tax 
consequences of "temporary differences" by applying enacted statutory rates 
applicable for future years to differences between the financial statement 
carrying amounts and the tax basis of existing assets and liabilities.

Statements of Cash Flows - For purposes of the statements of cash flows, the 
Center considers unrestricted highly liquid investments with an original 
maturity of three months or less when purchased to be cash or cash 
equivalents.

As supplemental disclosure to the statements of cash flows, the Center paid 
interest amounting to $212,760 in 1997 and $215,348 in 1996.  The Center paid 
no income taxes in 1997 or 1996.

Unearned Revenue - Unearned revenue represents advance payment of gross room 
rates.



Estimates - The presentation of financial statements in conformity with 
generally accepted accounting principles requires management to make 
estimates and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the date 
of the financial statements and the reported amounts of revenues and expenses 
during the reporting period.  Actual results could differ from those 
estimates.


Reclassifications - Certain prior year amounts have been reclassified to 
conform to current year presentation.

2.     Health Care Center Revenues

A portion of Health Care Center revenue is generated by patients who qualify 
for the Medicare program.  The approximate percentage of such revenue was 3% 
in 1997 and 1% in 1996.   The remainder of the revenues are from private 
paying patients.  Patient service revenue is recorded at established rates 
with provisions made for differences between patient service revenue at the 
Center's established rates and the related Medicare reimbursement. Such 
adjustments are accrued on an estimated basis in the period the related 
services are rendered.  

3.     Cash, Cash Equivalents and Investments

A summary of the Center's cash, cash equivalents and investments at March 31 
follows:


                                                       1997            1996

Cash                                              $   236,236     $   225,709
Investments:
  U. S. Treasury obligations                          313,262         321,325


                                                  $   549,498     $   547,034


The carrying amounts and approximate market value of investment securities 
are:


                                          Amortized     Unrealized     Market
                                            Cost           Gain         Value


March 31, 1997                           $  313,262    $  15,343   $  328,605


March 31, 1996                           $  321,325    $   7,229   $  328,554


There were no unrealized losses on securities or realized gains or losses on 
securities in 1996 or 1997.

The aggregate of these funds is classified as assets in the accompanying 
balance sheets as follows:


                                                     1997             1996


Investments                                     $   207,344       $   112,926
Assets whose use is limited                            -              109,336
Entrance fees in escrow                             105,918            99,063

                                                $   313,262       $   321,325


The Company has on deposit with a financial institution a cash balance of 
$202,788 and $256,776 at March 31, 1997 and 1996, respectively.  Amounts 
exceeding $100,000 are not guaranteed by the Federal Deposit Insurance 
Corporation.


4.     Property, Building, and Equipment

A summary of property, buildings, and equipment at March 31 follows:


                                                    1997            1996

Land and land improvements                   $    550,220        $    539,119
Buildings                                        6,308,892          6,233,075
Equipment                                          538,168            533,545
Vehicles                                            53,079             53,079
Construction in progress                            98,974             16,000
                                                 7,549,333          7,374,818
Less accumulated depreciation                    3,691,582          3,430,977

  Property, buildings and equipment, net      $  3,857,751       $  3,943,841



5.     Long-Term Debt

Long-term debt consists of a mortgage note due in October 2005.   Monthly 
payments of $40,626, including interest at 7.5% are to be made during the 
first six years of the loan period.  During the second six years, the 
interest rate will equal the yield of the bank's cost of issuing a large 
certificate of deposit in the secondary market and having a maturity most 
proximate to six years plus 2.5% per annum.  The note had an outstanding 
balance of $2,558,031 at March 31, 1997 and $2,982,973 at March 31, 1996.  
The note is collateralized by land and buildings with a depreciated cost of 
approximately $3,637,000 at March 31, 1997.

The mortgage note has certain restrictive covenants pertaining to its current 
ratio, working capital, cash flow coverage ratio, and tangible worth.  The 
Center is also limited as to property and equipment purchases.  As of March 
31, 1997, the Center was in compliance with such covenants or on May 28, 
1997, received a waiver for events of noncompliance.

The aggregate annual maturities of long-term debt for each of the five years 
subsequent to March 31, 1997 are as follows:  

     1998                                                      $      270,564
     1999                                                             288,825
     2000                                                             282,450
     2001                                                             246,222
     2002                                                             267,986
     Thereafter                                                     1,201,984


                                                               $    2,558,031


6.     Income Taxes

As of March 31, 1997, the Center has net operating loss carryforwards of 
approximately $945,000 available to offset future taxable income which expire 
as follows:  2002, $32,000; 2004, $146,000; 2005, $371,000; 2006, $269,000; 
and 2007, $127,000.


The Center records income taxes in accordance with Financial Accounting 
Standards Board Statement No. 109 ("SFAS No. 109"), "Accounting for Income 
Taxes".  SFAS No. 109 requires the recognition of deferred tax assets and 
liabilities for the expected future tax consequences of events that have been 
recognized in the Center's financial statement or tax returns.  Under SFAS 
No. 109, the deferred tax assets that resulted from the net operating loss 
carryforwards and from the use of different depreciation methods for book and 
tax purposes, have been fully reserved as of March 31, 1997 and 1996.

The components of the net deferred income tax assets are as follows:


                                                     1997             1996

Deferred income tax asset:
  Net operating loss carryovers                  $  368,700        $  472,400
  Accrued expense not currently
   deductible for tax purposes                        8,600              -   
  Valuation allowance                              (340,000)        (437,900)


Deferred income tax liability:
  Tax depreciation greater than 
   book depreciation                                (27,000)         (26,300)
  Accrued revenue not currently
   recognized for tax purposes                      (10,300)          (8,200)


Net deferred income tax asset                    $     -            $    -
       

7.     Retirement Plan

The Center has a 401(k) Retirement Plan for all employees who have completed 
one year of service.  Active participants may elect to have the Center make 
salary reduction contributions on their behalf based on a percentage of their 
earnings, not to exceed 15%.  The Center has the option of making an annual 
discretionary contribution and can also match each employees' contribution to 
the plan up to a predetermined limit.  The Center's combined contribution 
totaled $26,290 and $23,182 for the years ended March 31, 1997 and 1996, 
respectively.


8.     Subsequent Events

The Center entered into a contract with a construction company in April 1997 
for the construction of a new apartment building and an activity center at an 
estimated cost of $2,598,694. 

The Center received a maximum construction loan of $2,800,000 from Wachovia 
Bank. This loan is secured by the real estate and apartment rents.  Interest 
is at prime less .25% and payments of interest only are due through October 
1998.  Beginning in November 1998, monthly principal and interest payments 
will be made through April 2007.  The monthly payment and applicable interest 
rate will be determined at a later date.


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