UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                 FORM 10-KSB/A-1

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                  For the fiscal year ended September 30, 1996
                            Ages Health Services Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


              Massachusetts                           04-3102249
--------------------------------------------------------------------------------
      (State or other jurisdiction                (I.R.S. Employer
    of incorporation or organization             Identification No.)


     800 Hingham Street, Suite 103S                     02370
--------------------------------------------------------------------------------
(Address of principal executive offices)             (Zip Code)


617-871-6550   (Registrant's telephone number, including area code)
------------


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

                                      None
                                      ----

                                (Title of Class)

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

<TABLE>
<CAPTION>

                                                         Name of exchange
            Title of each class                        on which registered
            -------------------                        -------------------

  <S>                                                         <C>
  Common Stock, without Par Value                             None
  Redeemable Common Stock Purchase Warrant                    None
</TABLE>


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                            Yes  [ ]      No  [X]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this form 10-KSB or any  amendment to
this Form 10-KSB                   [X]

The Company' revenues for the year ended September 30, 1996 were $7,214,781.

As of January 31, 1997 the  aggregate  market  value of the voting stock held by
non-affiliates  of the registrant  (computed by reference to the average bid and
asked prices of such stock) was $444,659.

As of January 31, 1997, there were 2,508,100  shares of the registrant's  common
stock outstanding.



      The purpose of this  Amendment is to include in  Registrant's  Form 10-KSB
for the fiscal year ended September 30, 1996 the Part III information  (Items 9,
10, 11, and 12) which was to be incorporated by reference to a definitive  proxy
statement  to be filed  within 120 days after the close of  Registrant's  fiscal
year. Such definitive proxy statement was not so filed.



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

Directors and Executive Officers

      The following are the directors and executive officers of the Company:

<TABLE>
<CAPTION>

         Name                  Age              Position with the Company
         ----                  ---              -------------------------

<S>                            <C>      <S>
Anders Laren                   37       President, Chief Executive Officer, Clerk
                                        (Secretary) and Director

Kuno Laren                     72       Director

Peter W. Clegg                 52       Director

Jonathan D. Lieff, M.D.        51       Medical Director

Robert A. Conway               49       Vice President of Operations
</TABLE>


      Anders Laren  joined the Company as Vice  President  and  Secretary in May
1991 and has been  Chairman of the Board and Chief  Executive  Officer since May
1992.  He was elected as a Director of the Company in June 1992.  Mr.  Laren was
appointed  President  of the Company in May 1993.  Prior to joining the Company,
Mr. Laren was an associate with the law firm of Shearman & Sterling from 1986 to
1991.  Mr.  Laren holds a J.D.  from Fordham  University  School of Law. He is a
member of the New York bar and the Massachusetts bar. Anders Laren is the son of
Kuno Laren.

      Kuno Laren has been a Director of the Company since  February 1991. He has
been engaged in investment  banking for more than ten years. He is a director of
several public and private  companies,  including Grant  Enterprise  Ltd., Kalex
Corp.,  and Tarlind Inc.,  each of which is a stockholder  of the Company.  Kuno
Laren is the father of Anders Laren.

      Peter W. Clegg has been a Director of the Company since  February 1993. He
is a business  consultant with The August Group. He is also a major general U.S.
Army Reserve and currently serves as Commanding  General,  94th Regional Support
Command, Fort Devens, Massachusetts.  Mr. Clegg was a Vice President of the Bank
of Boston from 1986 to 1989.

      Jonathan D. Lieff,  M.D., joined the Company as Medical Director and Chief
of Psychiatry  in October 1990. He currently  serves as a member of the hospital
staff of several hospitals in Massachusetts, including St. Elizabeth's Hospital,
Baptist Hospital, Arbour Hospital and Human Resource Institute, positions he has
held  since  1985.  Dr.  Lieff has  approximately  22 years of  experience  as a
practitioner and has published numerous articles in national journals. Dr. Lieff
founded and currently serves as the Consulting Editor to the American Journal of
Geriatric  Psychiatry.  Dr. Lieff holds a B.A.  from Yale College  (1966) and an
M.D. from Harvard  Medical School (1972).  He is board certified by the American
Board  of  Psychiatry  and  Neurology  with  added  qualification  in  Geriatric
Psychiatry.

      Robert A. Conway has served as the Company's  Vice President of Operations
since   November,   1995.   Prior  to  that,  Mr.  Conway   provided   substance
abuse/counseling  services  through  Northeast  Health  Management  Services,  a
company he founded in 1989. From June,  1992 through  November 1994 he served as
the director of management and  development for Brookside  Hospital.  Mr. Conway
holds a BA from the University of  Massachusetts  (1970) and a masters degree in
education from Cambridge College (1983).

      Messrs.  Anders Laren, Kuno Laren and Peter Clegg have served as directors
during the fiscal year ended  September  30, 1996 and will  continue to serve as
such until the next meeting of shareholders  and until their successors are duly
elected and  qualified.  The  Company  expects to hold a  shareholders  meeting,
within 90 days, at which meeting directors will be elected.


Meetings of the Board of Directors

      There were 5 meetings of the Company's Board of Directors  during the 1996
fiscal year.  Anders  Laren,  Peter W. Clegg and Kuno Laren were present at such
meetings. The Company has one formal committee, the Audit Committee,  consisting
of Kuno Laren and Peter W. Clegg.


Director Compensation

      Outside directors may be paid an honorarium for attending  meetings of the
Board of  Directors in an amount which  management  anticipates  will not exceed
$500 per meeting of the Board of Directors of the  Company.  Mr. Clegg  received
$1,325 for fees and expenses related to attending meetings held in fiscal 1996.


Section 16(a) Reporting

      Under the securities laws of the United States,  the Company's  directors,
its  executive  and certain other  officers,  and any other persons  holding ten
percent or more of the Company's  Common Stock must report on their ownership of
the Company's  Common Stock and any changes in that  ownership to the Securities
and Exchange  Commission and to the National  Association of Securities Dealers,
Inc.'s  Automated  Quotation  System.  Specific due dates for these reports have
been  established.  During the year ended September 30, 1996 all reports for all
transactions were filed on a timely basis.


Item 10.  Executive Compensation.

Summary Compensation Table - Executives and Officers

      The following table sets forth all cash compensation for services rendered
in all capacities to the Company for the fiscal years ended  September 30, 1996,
1995, and 1994, paid to the Company's Chief  Executive  Officer,  the four other
most highly compensated  executive officers at the end of the above fiscal years
whose  total  compensation  exceeded  $100,000  during the above  fiscal  years,
although  they were not executive  officers at the end of such years.  In fiscal
1994,  1995,  and 1996,  the Company paid no bonus,  other annual  compensation,
restricted  stock  awards,  options,  stock  appreciation  rights  or long  term
incentive payments to officers or executives.

<TABLE>
<CAPTION>

                                              Annual Compensation
               Name and                       -------------------
          Principal Position                  Year         Salary
          ------------------                  ----         ------

<S>                                           <C>         <C>
Anders Laren                                  1994        $116,750
 President, Chief Executive Officer and       1995        $121,000
 Director                                     1996        $121,000

Kuno Laren                                    1994           -0-*
 Director                                     1995        $ 48,000
                                              1996        $ 48,000

Dr. Jonathan D. Lieff                         1994        $180,000
 Medical Director                             1995        $180,000
                                              1996        $180,000

Executives as a group (4 individuals in       1994        $409,250
 1994 and 6 individuals in 1995 and           1995        $481,417
 6 individuals in 1996).                      1996        $483,830

<FN>
-------------------
<F1>  *    The Company paid $42,000 to Kumala Corp.  for the  consulting  services of
           Kuno Laren in fiscal 1994. No such payments were made thereafter.
</FN>
</TABLE>

Employment Agreements

      The Company  entered  into an  employment  agreement  with Anders Laren on
January 1, 1994 to serve as Chief Executive  Officer through  December 31, 1997.
The  agreement  provides  for a base  annual  salary  of  $121,000  plus a bonus
entitling Mr. Laren to 30% of the Company's  profits before  interest and taxes,
as defined,  in excess of  $700,000,  and 10% of such excess over  $800,000.  No
bonus was earned in fiscal 1994, 1995, or 1996 under the agreement.  The Company
also entered into an agreement with Dr.  Jonathan D. Lieff on January 1, 1994 to
serve as the  Company's  Medical  Director.  The  agreement  provides for a base
annual  salary of $180,000 and is  terminable  upon six months notice after June
30, 1996.


Option Grants

      No stock  options  were  granted to the  executive  officers  named in the
foregoing compensation table during the fiscal year ended September 30, 1996.


Option Year End Values

      The following is certain  information  regarding  options exercised by the
executive  officers  named in the foregoing  compensation  table during the year
ended September 30, 1996 and the fiscal year end value of unexercised options as
such date:

<TABLE>
<CAPTION>

                                                             Number of               Value of
                                                         Unexercised Options       Unexercised
                                                             at 9/30/96        in-the-Money Options
                        Shares Acquired      Value          Exercisable/           Exercisable
        Name            on Exercise (#)   Realized ($)      Unexercisable         Unexercisable
        ----            ---------------   ------------   -------------------   --------------------

<S>                          <C>               <C>        <C>                         <C>
Anders Laren                 None              -          0/5,000 (Options)           $0/$0

Peter W.Clegg                None              -          0/5,000 (Options)           $0/$0

Dr. Jonathan D. Lieff        None              -          0/2,500 (Options)           $0/$0
</TABLE>


Stock Options and Stock Appreciation Rights


Stock Options Plans

      In June 1993, the Board of Directors and stockholders adopted and approved
the 1993 Employee Incentive Stock Option Plan (the "Employee Plan") and the 1993
Non-Employee  Directors' Stock Option Plan (the "Directors'  Plan," and with the
Employee Plan are collectively referred to herein as the "Plans"). The Plans are
administered by the Board of Directors or by a committee appointed by the Board.
Pursuant  to the Plans,  options to acquire an  aggregate  of 241,000  shares of
common stock may be granted  (181,000  shares  pursuant to the Employee Plan and
60,000 share pursuant to the Directors'  Plan).  The Plans provide for grants to
employers, consultants, and directors of the Company.

      The Employee Plan  authorizes the Board to issue  incentive  stock options
("ISOs"), as defined in Section 422A of the Internal Revenue Code. The Directors
Plan  authorizes  only stock options that do not conform to the  requirements of
the  Code  section  ("non-ISOs").  Consultants  and  directors  who are not also
employees of the Company may be granted  only  non-ISOs.  The exercise  price of
each ISO may not be less than 100% of the fair market  value of the common stock
at the time of grant, except that in the case of a grant to an employee who owns
10% or more of the outstanding stock of the Company or a subsidiary or parent of
the Company (a "10%  Stockholder"),  the  exercise  price shall not be less than
110% of the fair market value on the date of the grant.  The  exercise  price of
each non-ISO granted under the Director Plan shall be as determined by the Board
of Directors in its discretion and may be less than the fair market value of the
common stock on the date of the grant.

      In July 1994,  the Board of  Directors  granted  stock  options  under the
Employee Plan to purchase  25,000 shares of common stock at a price equal to the
fair  market  value  of the  shares  on the  date of grant  ($1.32  per  share).
Subsequently,  options to purchase 15,000 share were  terminated.  The remaining
options  become  exercisable  to purchase  2,000  shares  beginning  on or after
January 29, 2000.  No options  shall be  exercisable  unless at the time of such
exercise (i) the fair market  value of the common stock equals or exceeds  $3.50
per share and (ii) the individual is employed by the Company. No options granted
under the  Employee  Plan were  exercisable  in fiscal  1994,  1995 or 1996.  In
February 1995 the Board of Directors  granted stock options under the Directors'
Plan to  purchase  5,000  shares  of common  stock at a price  equal of the fair
market value of the shares on the date of grant ($.9375 per share).  The options
become  exercisable  to purchase  1,000 shares  beginning on or after August 17,
1997 with  additional  1,000  shares  becoming  available  each year  thereafter
through August 17, 2001. No options shall be  exercisable  unless at the time of
such  exercise  (1) the fair market  value of the common stock equals or exceeds
$3.50 per share and (ii) the individual is a Director of the Company. No options
granted under the Directors Plan were exercisable in fiscal 1994, 1995 or 1996.


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

      The following table sets forth certain  information as of January 31, 1997
with  respect  to each  beneficial  owner  of five  percent  (5%) or more of the
outstanding  shares of Common Stock and Series A Preferred Stock of the Company,
each officer and  director of the Company and all  officers  and  directors as a
group. Unless otherwise indicated,  the address of each such person or entity is
c/o Ages Health  Services Inc., 800 Hingham  Street,  Suite 103S,  Rockland,  MA
02370.

<TABLE>
<CAPTION>

Common Stock (no par value):
----------------------------

   Name and Address             Number of Shares          Percentage
   ----------------             ----------------          ----------

<S>                                <C>                      <C>
Grant Enterprise Ltd.                 796,000               30.85%
320 Lexington Avenue
New York, NY 10016

Kalex Corp.                           140,000                5.43%
320 Lexington Avenue
New York, NY 100016

Tarlind Inc.                           76,000                2.94%
320 Lexington Avenue
New York, NY 10016

Kuno Laren* **                      1,012,000               39.22%
320 Lexington Avenue
New York, NY 10016

Anders Laren**                         70,300                2.72

Peter W. Clegg                           --                  --

Dr. Jonathan D. Lieff                    --                  --

Robert A. Conway                         --                  --

All officers and directors
 as a group (5 persons)             1,082,300               41.95%

<CAPTION>

Series A Preferred Stock (no par value):
----------------------------------------

    Name and Address            Number of Shares          Percentage
    ----------------            ----------------          ----------

<S>                                 <C>                     <C>
Grant Enterprises                          87               35%
320 Lexington Avenue
New York, NY 10016

Kalex Corp.                                70               28%
320 Lexington Avenue
New York, NY 10016

Kuno Laren* **                             93               37%
320 Lexington Avenue
New York, NY 10016

<FN>
-------------------
<F1>  *    Kuno  Laren,  a  director  of the  Company,  is a director  and  principal
           shareholder of Tarlind,  Inc., Kalex Corp. and Grant Enterprises Ltd., and
           thus is presumed to be the  beneficial  owner of all shares of the Company
           owned by such companies.

<F2>  **   Anders  Laren is the son of Kuno Laren.  Both Anders  Laren and Kuno Laren
           disclaim beneficial  ownership of the shares of Common Stock attributed to
           the other.
</FN>
</TABLE>


Item 12.  Certain Relationships and Related Transactions

      The Company  has an  aggregate  of 250 shares of Series A Preferred  Stock
issued and outstanding. Until June 24, 1996, all of the Series A Preferred Stock
was owned by Grant Enterprises Ltd.  ("Grant"),  a principal  stockholder of the
Company.  On June 24, 1996, Grant made distributions of Preferred Stock to Kalex
Corporation (70 shares) and to Kuno Laren (93 shares).  Grant retained 87 shares
of Preferred  Stock.  The Series A Preferred  Stock pays a  cumulative  dividend
equal to 12% per annum of the liquidation value ($1,000 per share).  The Company
has also  borrowed  money from Grant at various times for working  capital.  The
Company  repaid a note for  $198,000  to Grant in  accordance  with its terms in
fiscal  1995.  Interest at the rate of 1% per month on the  outstanding  balance
under the note was paid to Grand, aggregating $25,060 and $5,940 for fiscal 1994
and 1995, respectively.  Kuno Laren, a director and principal stockholder of the
Company is a director and  principal  stockholder  of Grant and is the father of
Anders  Laren.  Kuno  Laren was made an  employee  of the  Company  and was paid
$48,000 in each of fiscal  1995 and 1996 to  provide  services  with  respect to
potential acquisitions, institutional financing and stockholder relations.



                                   SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant cause
this  Amendment  No. 1 to its Annual  Report on Form  10-KSB to be signed on its
behalf by the undersigned, thereunto duly authorized.

Ages Health Services Inc.


By: /s/ ANDERS LAREN                         Dated:  February 14, 1997
    ------------------------------------
    Anders Laren, President,
    Chief Executive Officer and Director