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
                                   ACT OF 1934
                  For the fiscal year ended December 31, 2001

         [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURI-
                            TIES EXCHANGE ACT OF 1934
For the transition period from ___________________to ____________________

                        Commission file number 333-45419

                       Senior Retirement Communities, Inc.
Louisiana                                                            72-134159
(State or other jurisdiction of            (IRS Employer Identification Number)
incorporation or organization)
                               507 Trenton Street
                        West Monroe, Louisiana 71291-3033

                                 (318) 323-2115

Securities registered under Section 12(b) of the Exchange Act:

Title of each class                        Name of exchange on which registered
First Mortgage Bonds                                N/A

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

          ------------------------------------------------------------
                                (Title of class)
          ------------------------------------------------------------
                                (Title of class)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or such
shorter period that the registrant was required to file such report(s), 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 is not contained in this form, and no disclosure will be


<PAGE>



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 - $2,042,098

     State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.)


<PAGE>



Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.

     (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE
YEARS)

     Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes_____ No_____.

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. December 31, 2001 . Common
shares 16, 588,200 par value $.10 per share:
Preferred shares 425,000 par value $1.00 per share:

                       DOCUMENTS INCORPORATED BY REFERENCE

(1) Included by reference Prospectus dated June 23, 1998, I, II, III (2)
Included by reference 10-KSB dated December 31, 1999 I, II and December 31, 2000
I,II, Forms 10-QSB dated March 31, 2001, June 20, 2001 and September 30, 2001.






<PAGE>



<PAGE>



                       SENIOR RETIREMENT COMMUNITIES, INC.

                                   Form 10-KSB

                                      INDEX

Part     1                                                                 Page

Item     1.       Business                                                    1
Item     2.       Properties and method of Financing                          3
Item     3.       Legal Proceedings                                           4
Item     4.       Submission of Matters to a Vote of Security Holders         4

Part     II.

Item     5.       Market for Registrant's  Bonds                              4
Item     6.       Management's Discussion and Analysis of Results
                  of Operations                                               4
Item     7.       Financial Statements and Supplementary Data                 5
Item     8.       Changes in and Disagreements with Accountants               5

Part     III.

Item      9.      Directors and Executive Officers of the Registrant          6
Item     10.      Executive Compensation                                      8
Item     11.      Security Ownership of Certain Beneficial Owners
                  and Management                                              9
Item     12.      Certain Relationships and Related Transactions              9

Part     IV.

Item     13.      Exhibits, Financial Statement Schedules Reports on Form 8-K 9











<PAGE>















<PAGE>



Part I
Item     1.       Business

                                                     OVERVIEW

General

Senior Retirement Communities, Inc. (the Company or SRC) was organized as a
Corporation under the laws of the State of Louisiana on September 10, 1997. The
Corporate charter has been amended one time on November 6, 1997. The Company is
in the business of developing and owning housing for seniors. SRC primary
interests are in the development of assisted living facilities (ALFs). ALFs
contain one or more facilities for seniors who are independent, require some
assistance or suffer from dementia. Dementia units are primarily for the support
of individuals suffering from Alzheimers and related disorders.

Independent  Living

Independent Living facilities are anticipated to make up a small amount of the
Companys business. It is anticipated that, as the independent living group of
seniors age, they will convert to assisted living within the community thereby
reducing their impact upon the communities. The Company has maintained excess
land in each of the communities in order to meet the demands of seniors, no
matter which direction senior care evolves.

Assisted  Living

Assisted living will make up the largest impact upon the Company's success.
Assisted living continues to evolve with state and federal interest in this form


<PAGE>



of senior care. It is anticipated that political pressure will continue to grow,
because of the impact that assisted living is having on other forms of senior
care. In Louisiana the nursing home industry, which has strong political support
in the Louisiana legislature, has introduced a bill which would have a negative
impact upon the industry. SRC, along with other assisted living communities, is
aware of the proposed legislation. It is the Company's intent to resist these
efforts.

Dementia

Independent dementia facilities are fairly new in Louisiana. The Company built
the first independent dementia facility in Bossier City and Shreveport,
Louisiana. It used as a model The Terrace located in West Monroe, Louisiana
which was built by an affiliate of the Company. It is anticipated that dementia
facilities will have a growing impact on the company success. The same political
pressures discussed above will also impact dementia.

Adult Day Care

An item which is expected to contribute in a minor but noteworthy way to the
revenues of the Company is adult day care. Individuals who prefer to remain in
their homes or families who have no caregiver for the senior citizen during the
day can enroll in the adult day care program. Seniors in this program come to
the facility and are fed and housed during the day. They go back to their own
homes in the evenings.

                                        1

<PAGE>



Employees

The Company has seventy seven full time and eleven part time employees in three
locations in north Louisiana. It is anticipated that, as occupancy increases,
the number of employees will increase.

Source of  Business

The Companys business is designed to provide a secure, comfortable, and healthy
living environment for seniors ages 72 and up who have a disposable income of
approximately $25,000 and up. Independent living and dementia residents may be
younger than the assisted living demographic.



<PAGE>



Method of Operation

The Companys ALFs are managed by The Forsythe Group, Inc. (Forsythe) which is
owned by Joanne M. Caldwell Bayles, President of the Company. The ALF management
staff consists of five individuals including Ms. Bayles. Two members of the
staff have Master's degrees in Gerontology. They have over 20 years of
experience in hospitals, nursing homes, and the assisted living industry and
have direct supervisory responsibility for the administrators of each ALF.

Even prior to the formation of the Company, Forsythe kept a close relationship
with the Department of Social Services for the State of Louisiana, which is the
authority responsible for regulating ALFs in Louisiana. In 1996 Social Service
began developing new minimum standards for ALFs. When a decision was made by the
Company to develop ALFs, the Forsythe staff recommended the Company adopt the
proposed new minimum standards for all of its projects. As a result, the staff
of Forsythe designed all of the ALFs which the Company owns to meet the new,
stricter requirements. The Company also adopted the new standards for its
personnel. The Adult Residential Care Minimum Standards were adopted and became
effective on March 31, 1999. As a result, the Company is in compliance with all
requirements including those regulating buildings, staffing, and education
requirements.

The Forsythe ALF management staff performs the roles of central purchasing,
accounting and payroll, and programming. All menus are planned with the
assistance with a registered dietitian.

Administrators are required to meet the standards set forth in the new
regulations. Employees are required to submit to drug testing prior to
employment as well as random drug tests during employment. All employees are
required to submit to a background check by the State Police prior to
employment.

Competition

Competition in ALFs has leveled off. To the best of our knowledge, no new units
were built in any of our markets in the last year and nursing homes are in
decline. Government regulation continues to increase.


                                        2

<PAGE>





<PAGE>



Property Environmental

The Company's ALFs are in compliance with all environmental laws. Prior to
building each site was inspected and an environmental engineer studied past
history. None of the sites were subject to any environmental problems.

Item     2.       Properties and Methods of Financing

As of December 31, 2001 the Company had three ALFs open for business. The
Ruston, Louisiana ALFs assisted living units (assisted and independent living
units) opened for business in October 1998. The Ruston ALF contains 37
assisted/independent and 15 dementia units as a result of increased demand for
Alzheimer's facilities in the area and an increase in competition in assisted
living facilities. As of December 31, 2001, the Arbor (assisted/independent
units) was 76% occupied and the Terrace (dementia) was 53% occupied.

The Bossier City facility contains The Arbor of Bossier consisting of 36
assisted /independent living units and The Terrace of Bossier, a 24-unit
dementia facility. As of December 31, 2001, the Arbor was 100% occupied. The
Terrace occupancy was 50%. Competition in the Shreveport-Bossier market has
leveled off. The Arbor is competing well, but the Terrace has been slow in
reaching its target occupancy. Increased marketing efforts have brought about
increased occupancy. The Terrace is expected to reach full occupancy by June,
2002.

The final facility is The Terrace of Shreveport located in Shreveport,
Louisiana, consisting of a 24- unit dementia facility. The Shreveport facility
opened for business on January 22, 1999. The occupancy of the Terrace on
December 31, 2001 was 96%.

The construction of the facilities was financed through the sale of Co-First
Mortgage bonds as set forth in the prospectus dated June 23, 1998 with
construction loans provided by Church Loans and Investment Trust. All of the
construction loans have been paid in full.

We also own approximately 26 acres of land located in Ruston (20 acres),
Shreveport (2 acres), and Minden (4 acres), Louisiana for future construction.

We have continued to finance the expansion and development by a combination of
private placement of common and preferred stock as well as the public offering
of First Mortgage Bonds. In March 1999 the company purchased approximately 6
acres of land for $525,000 paying $100,000 in cash and the issuing 425,000
shares of $1.00 par value Preferred stock. The property is the location of the
Bossier City, Louisiana facility. The Preferred stock is paying dividends at a
rate of 4% for the first two years, 6% for the second two years, and 8% for the


<PAGE>



final two years. The Preferred stock shall be redeemed in full at the end of the
fifth year for the total sum including accrued dividends. It is recallable at
anytime at the option of the company.


                                        3

<PAGE>



The holders of the Preferred stock shall also have the right to purchase common
stock at a 20% discount if and when the company issues additional common stock
in the form of a public offering if done so within 8 years of date issued for
preferred stock.

Item     3.       Legal Proceedings

The Company is not involved in any material legal proceedings at this time

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

None.

Part II.

Item     5.       Market for Registrant's Bonds

The Bonds were offered by MMR Investment Bankers, Inc. (the "Underwriter") on a
best-efforts basis as agent for the Company. The bonds are offered subject to
prior sale. The Underwriter does not intend to make a market in the Bonds. There
is no quoted market for the Bonds and there is no assurance a market will
develop.

Item     6.       Managements Discussion and Analysis of Results of Operations

This commentary should be read the following documents for a full understanding
of Senior Retirement Communities, Inc. financial condition and the status of the
Company which reflect start up operations; the entire Prospectus dated June 23,
1998; forms 10-K dated December 31, 1999 and 2000, and forms 10-QSB for the
periods ending March 31, 2001; June 30, 2001; and September 30, 2001 and the
unaudited financial statement presented therein along with all of the footnotes
thereto.




<PAGE>



Major changes in Financial Conditions

The major changes in financial condition between December 31, 2000 and December
31, 2001 were as follows: Current assets consisted primarily of cash in the
amount of $ 24,697. Net Property, Plant, and Equipment decreased from $9,427,383
as of December 31,2000 to $9,210,280 as of December 31, 2001. The decrease is
the result of depreciation of the assets. Total current liabilities increased
from $ 51,338 as of December 31, 2000 to $ 76,163 as of December 31, 2001.
Long-term debt increased from $ 8,984,734 as of December 31, 2000 to $10,036,268
as of December 31, 2001, which consisted of bond payables. Liabilities due
stockholders and affiliates decreased from $1,113,989 as of December 31, 2000 to
$1,012,793 as of December 31, 2001. Total Stockholders Equity decreased from
($650,277) as of December 31, 2000 to ($1,875,252) as of December 31, 2001. The
decrease is the primarily the result of the net operating loss of $ 1,226, 975.


                                                         4

<PAGE>



Liquidity and Financial Position

The Company receives significant operating funds from its affiliate The Forsythe
Group, Inc. through short-term loans. The ability of The Forsythe Group to
continue to make available loans is necessary for the continuing success of the
company. If future conditions would create problems in Forsythe's ability to
advance funds to the Company, the Company's future success would be in doubt.

On February 27, 2001, due to continuing operating losses as a result of not
achieving desired occupancy levels, the Company filed a request with Colonial
Trust Company, the acting agent for the bondholders, to extend all principal and
interest for four years, including amounts already past due and amounts that
would have become due on February 1, 2002. The request was submitted to the
bondholders and approved by a majority. Of the $8,150,000 in bonds outstanding,
bondholders representing $122,250 voted to reject the plan. This proposal is
intended to provide the Company additional time to achieve full occupancy,
allowing future payments to be paid as they come due. Should the Company fail to
achieve its target occupancy levels, additional measures would be come necessary
to remain a going concern.

As a continuing part of the Company's effort to improve cash flow and provide
working capital for its operations, the Company has adopted a plan to refinance
the debt on the Ruston facility by selling the facility to a related party who


<PAGE>



would obtain permanent financing and liquidate the bond debt on that facility.
In contemplation of this move, the Company transferred the operations of the
Ruston facility to the related entity effective January 1, 2002. We hope to have
the sale completed in the early summer of 2002.

Forward- Looking Statements:

Statements that are not historical facts, including statements about (I)
operating profits or losses as those discussed in results of operations; (II)
Impact of political decisions and new laws from the State and Federal
Government. The Company wishes to caution the reader that factors below, along
with the factors set forth in the Company's June 30, 1999 form 10QSB, September
30, 1999 form 10 QSB, and the prospectus along with the Company's other
documents filed with the SEC, have affected and could affect the Company's
actual results causing results to differ materially from those in any
forward-looking statement. These factors include: the acceptance of the Assisted
Living Concept by each of the communities in which they are located, increased
competition in each of the communities, economic outlook whether the economy
improves or slips into recession, technological changes in dealing with seniors,
change in government regulation, the success of strategic decisions to improve
financial performance, the ability of the Company to contain cost, and the
continued increase in the market acceptance of ALF's.

Item     7.       Financial Statements and Supplementary Data

The financial statements for the Company and independent auditors report
incorporated herein by reference and is filed herewith as Exhibit A

Item     8.       Changes in and Disagreements with Accountants

                                                         5

<PAGE>



None


Part     III.

Item      9.      Directors and Executive Officers of the Registrant

OFFICERS, DIRECTORS AND MANAGEMENT OF THE COMPANY.



<PAGE>



The members of the Board of Directors of the Company are elected annually and
hold office until their successors are elected and qualify. The Company's
officers are chosen to serve at the pleasure of the Stockholders. The management
of the Company has a combined total of over 75 years of experience in finance,
construction, property development, and property management.

The Facilities management staff consists of five individuals including the
President. Two members of the staff have Master's degrees in Gerontology. They
have over 20 years of experience in hospitals, nursing homes, and assisted
living facilities. They have direct supervision for each administrator of each
ALF.

The Company owns three facilities located in Ruston, Bossier City, and
Shreveport, Louisiana, which are managed by The Forsythe Group, Inc. Other
facilities managed by Forsythe which are affiliates of the Company are assisted
living centers, independent living centers, and dementia centers in West Monroe,
Bastrop, Farmerville, Natchitoches and Minden, Louisiana.

Forsythe and the individual owners of each facility maintain close relations
with the Department of Social Services for the State of Louisiana, which is the
authority responsible for regulating assisted living in Louisiana. The
management of Forsythe is active in both state and national Assisted Living
organizations.

The Company's management staff performs the central purchasing, payroll and
accounting, menu planning and programming functions. All menus are planned with
the assistance with a registered dietitian.

Administrators are required to meet the standards set forth in applicable state
and federal regulations. Employees are required to submit to drug testing prior
to employment as well as random drug tests during employment. All employees are
required to submit to a background check by the State Police prior to
employment.



                                                         6

<PAGE>



The names of the directors and executive officers of the Company, there
respective ages and their positions and office with the Company are as follows:



<PAGE>



Name                            Age                ositions and Offices Held
Joanne M. Caldwell-Bayles       42             Chairperson of the Board, Chief
                                               Executive Officer, President and
                                               Director
Sherry Kenney                   45             Vice President, Director,
                                               Director of Operations
Raymond L. Nelson               65             Vice-President, Director
Jean Gaffney-Nelson             63             Assistant Secretary, Director
Richard H. Neely, Jr.           46             Chief Financial Officer, Director

Joanne M. Caldwell-Bayles, 42 years old. In 1996, Joanne M. Caldwell-Bayles
formed The Forsythe Group, an unincorporated holding company specializing in the
purchase and collection of FDIC notes from failed financial institutions.
Forsythe purchased over $10,000,000 in face value of notes at a discount and was
successful in collecting amounts sufficient to produce profits from their
efforts. Some of the notes were secured. As a result, Forsythe obtained property
which was sold or financed at a profit. In 1996 Ms. Caldwell-Bayles incorporated
The Forsythe Group, Inc. She has been the President and Chief Executive Officer
of the company since its inception. Mrs. Caldwell-Bayles has senior executive
experience in the development and operation of assisted living and memory
disorder facilities as well as hotel management, personnel, finance and
commercial and residential development. In addition to her duties with the
company she is serving as Chairperson of the Board of Directors of the Louisiana
Assisted Living Association. She also serves on the Council of States
representing Louisiana in the Assisted Living Federation of America.

Sherry Kenny, 45 years old. She served as the Administrator of The Oaks Nursing
Home in Monroe, Louisiana from 1988 - 1994 and was responsible for the strategic
planning, marketing and maintenance of all plans/records relating to the
facility. In 1995 she became the Manager of the Azalea Estates assisted living
facility, Monroe, Louisiana. Ms. Kenny also conducted a night class at Northeast
Louisiana University, Monroe, Louisiana teaching "Perspectives on Aging" to
occupational therapy, gerontology, and social work students. In 1997, she joined
Senior Retirement Communities, Inc., as Director of Operations. She is
responsible for strategic planning and marketing for the company and has direct
supervision over the administrators of each of the failities. Ms. Kenny also
maintains and keeps track of all state guidelines in accordance with the
Department of Social Services. In May 1999, she was elected to the Board of
Directors and appointed Vice- President of the Company. Ms. Kenny has a Bachelor
of Business Administration, major in Accounting and a Master of Arts. She also
has a Masters degree in Gerontology from the University of Louisiana, Monroe
(formerly Northeast Louisiana University), Monroe, Louisiana.





<PAGE>



                                                         7

<PAGE>



Raymond L. Nelson,  65 years old. Mr. Nelson attended the University of Houston.
He is the President and CEO of Town & Country Insurance Agency,  Inc. He manages
forty employees in three locations in the Houston-Galveston,  Texas metropolitan
area. Mr. Nelson is the past President of the Houston Council of the Navy League
of the United States and is currently a national director. He is a past director
of the Independent Insurance Agency of Houston, Texas.

Jean  Gaffney  Nelson,  63 years old,  Mrs.  Nelson  has 27 years in  management
experience  in diagnostic  and  interventional  cardiology  in a large  hospital
environment.  Mrs. Nelson was employed as the Manager of Cardiology Services and
Nuclear  Medicine  at the  Methodist  Hospital in  Houston,  Texas.  She studied
biology and took courses in computer  science,  accounting and management at the
University  of Houston in Houston,  Texas.  Mrs.  Nelson is  registered in adult
echocardiography by the American Registry of Diagnostic Medical Sonographers and
is a member of the American College of Cardiovascular Administrators.

Richard Hunter Neely, Jr., CPA, 46 years old. Mr. Neely has 25 years experience
in business, the majority of those years in management. He is a CPA with
thorough knowledge and understanding of accounting and financial concepts,
principles, and applications. Mr. Neely has extensive experience with all phases
of Human Resources management, including hiring, promotion, and termination. He
maintains liaison between management and regulatory bodies and officials. He is
responsible for the entire accounting system and has direct responsibility for
payroll, accounts payable, accounts receivable and general ledger functions. Mr.
Neely has a B.A. degree from the University of Louisiana at Monroe, Monroe,
Louisiana. He also took postgraduate courses in accounting, completing his
accounting course work in December 1994. He passed the CPA exam in May 1995. He
has been the principal organist at First United Methodist Church, Monroe,
Louisiana since April 1986.

The members of the Board of Directors of The Company are elected annually and
hold office until their successors are elected and qualified. The Company's
officers are chosen to serve at the pleasure of the Board of Directors. The
management of The Company has a combined total of over 75 years of experience in
finance, construction, property development, and property management.

Item 10.      Executive Compensation

Joanne M. Caldwell-Bayles               $80,000 per year


<PAGE>



The company pays no other Executive, officer or director. Directors and officers
are employed and paid by The Forsythe Group, Inc., the management company for
the Company's properties.



                                        8

<PAGE>



Item 11.      Security Ownership of Certain Beneficial Owners and Management
                                                                      Percent of
Name & Address of Beneficial Owner       Title of Class             Class Owned
Joanne M. Caldwell Bayles                  Common Stock                   16.7%
507 Trenton Street, West Monroe, LA 71291

Raymond and Jean Nelson                    Common Stock                    9.0%
1075 Katy Freeway, Suite 150, Houston, TX 77024

The Forsythe Group, Inc. (1)               Common Stock                   55.4%
507 Trenton Street, West Monroe, LA 71291

The Arbor Group,  L.L.C. (2) Common Stock 18.9% 507 Trenton Street, West Monroe,
LA 71291

Note 1: Joanne M. Caldwell-Bayles owns 100% of the capital stock of the Forsythe
Group, Inc.

Note 2: Joanne M. Caldwell-Bayles owns 50%, Raymond and Jean Nelson own 15% and
The Forsythe Group, Inc. owns 35% of the capital stock of The Arbor Group,
L.L.C. The executive officers and directors of the Company as a group are the
beneficial owners of 100% of the common stock of the Company.

Item 12.      Certain Relationships and Related Transactions

See Prospectus dated June 23, 1998, included herein by reference.


Part IV.

Item 13. Exhibits, Financial Statement schedules and Reports on Form 8-K

1.   Exhibits, Financial Statement Schedules


<PAGE>



     a.       Exhibit A, Financial Statement and Schedules

2.   Reports on Form 8-K

No reports on Form 8-K were filed during the last quarter of 1999



                                                         9

<PAGE>


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, in the City of West
Monroe, State of Louisiana, on March 29, 2002.

Senior Retirement Communities, Inc.

/s/ Joanne M. Caldwell-Bayles
--------------------------
By: Joanne M. Caldwell-Bayles
President, Finance and Treasurer, Director

Pursuant to the requirements of 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 indicated on March 29, 2002.

Signature                              Title

/s/ Joanne M. Caldwell-Bayles
-------------------------
Joanne M. Caldwell-Bayles    Chairperson of the Board, Chief Executive Officer,
                             President, Finance and Treasurer - Director

/s/ Raymond L. Nelson
-------------------------
Raymond L. Nelson            Vice-President, Director

/s/ Jean Gaffney Nelson
-------------------------
Jean Gaffney Nelson          Assistant Secretary, Director

/s/ Sherry Kenney


<PAGE>



-------------------------
Sherry Kenney                Vice President, Secretary, Director of Operations,
                             Director
/s/ Richard H. Neely, Jr.
--------------------------
Richard H. Neely, Jr.        Chief Financial Officer, Director


                                       10

<PAGE>





<PAGE>



                       SENIOR RETIREMENT COMMUNITIES, INC.

                               FINANCIAL STATEMENT

                                December 31, 2001


































Senior Retirement Communities, Inc.
Financial Statement
December 31, 2001





<PAGE>



Table of Contents

FINANCIAL STATEMENTS                                                       Page

   Report                                                                    1
   Balance Sheet                                                             2
   Statement of Income                                                       4
   Statement of Retained Earnings (Deficit)                                  6
   Statement of Cash Flows                                                   7
   Notes to Financial Statements                                             9





































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W. L. ALBRITTON
CERTIFIED PUBLIC ACCOUNTANT
1500 STUBBS AVENUE
MONROE, LOUISIANA  71201

PHONE: (318) 410_9767
FAX: (318) 362_9993


Senior Retirement Communities, Inc.
507 Trenton Street
West Monroe, Louisiana

I have audited the accompanying balance sheets of Senior Retirement Communities,
Inc. as of December 31, 2001 and 2000 and the related statements of income,
retained earnings (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

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

In my opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Senior retirement Communities, inc.
at December 31, 2001 and 2000 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in note 5, the Company
has suffered continued recurring losses from operations and has a net capital
deficiency that raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in note 5. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

March 28, 2002



<PAGE>




W. L. Albritton
Certified Public Accountant




<PAGE>



Senior Retirement Communities, Inc.                                      _ 2 _
Balance Sheet
December 31, 2001

                                              2001                   2000
                                      ---------------        -----------------
ASSETS

Current assets

  Cash                                $           24,697              $  68,635
  Prepaid Expenses                                14,995                  3,766
                                         ---------------        ---------------
  Total current assets                            39,692                 72,401

Property, plant and equipment
  Buildings                                    8,115,371              8,115,371
  Furniture and fixtures                         243,943                231,122
  Land                                         1,508,820              1,508,820
                                         ---------------        ---------------
                                               9,868,134              9,855,313
  Less:  Accumulated depreciation                657,854                427,930
                                         ---------------        ---------------
                                         ---------------        ---------------
  Net property and equipment                   9,210,280              9,427,383
                                         ---------------        ---------------


                                   $           9,249,972           $  9,499,784
                                         ===============        ===============








<PAGE>


See accompanying notes


Senior Retirement Communities, Inc.                                      _ 3 _
Balance Sheet
December 31, 2001

                                                2001                   2000
                                          ---------------        --------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

  Accounts payable                    $           76,163              $  51,338
                                         ---------------        ---------------

Long_term debt
  Bonds payable                               10,036,268              8,984,734
                                         ---------------        ---------------

Other liabilities
  Due to stockholders and affiliates           1,012,793              1,113,989
                                         ---------------        ---------------

Stockholders' equity
 Common stock, No par value, 90,000,000
 shares authorized, 16,588,200 shares
 issued and outstanding                        1,658,820              1,658,820
 Preferred stock, $ 1 par value,
 20,000,000 shares authorized, 425,000
 shares issued and outstanding                   425,000                425,000
  Retained earnings (deficit)                 (3,959,072)            (2,734,097)
  Total stockholders equity                   (1,875,252)              (650,277)


<PAGE>




                                   $           9,249,972           $  9,499,784
                                         ===============        ===============










See accompanying notes


Senior Retirement Communities, Inc.                                      _ 4 _
Statements of Income
For the years  ended  December  31,  2001 and
2000

                                                   2001                   2000

Revenues                           $           2,042,098           $  1,449,806

Expenses
Accounting Fee                                    48,026                 48,000
Activities                                        11,597                  5,296
Advertising                                        2,420                 23,094
Automobile Expense                                 1,735                    233
Bank Service Charges                                 241                    541
Bond Fees                                          4,156                      0
Cable Expense                                        509                      0
Carpet Cleaning                                        0                    246
Casual Labor                                         531                    956
China,Glass Silver expense                           442                      0
Commissions                                          221                      0
Consulting                                         2,500                  5,500
Contributions                                        110                      0
Decorations                                        6,028                  2,567
Depreciation Expense                             229,924                226,708
Dues                                               1,172                  1,361
Employee Incentives                                3,554                  3,922
Employee Screening                                 3,358                  3,779
Equipment Rental                                  18,439                  9,585


<PAGE>



Food Costs                                       187,376                130,642
Furniture & Equipment Expense                     13,227                      0
Gloves                                             3,735                  2,015
Grease Trap                                        1,075                      0
HouseKeeping                                      11,448                  8,574
Insurance                                         95,144                112,134
Interest Expense                               1,178,929              1,026,782
Kitchen Supplies                                   2,437                  1,617
Laundry                                            3,596                  2,814
Lawn Care                                         18,002                 16,159
Licenses and Permits                               5,813                  2,646
Light Bulbs                                        1,022                    537
Linens                                               787                    285
Management Fees                                  146,244                 99,875
Miscellaneous                                        694                    534
Office Supplies                                    7,055                  5,643
Paper Goods                                        4,878                  3,571
Payroll Expenses                                 917,428                724,646
Pest Control                                       3,416                  3,020

Continue income statement

See accompanying notes


Senior Retirement Communities, Inc.                                       _ 5 _
Statements of Income
For the years ended December 31, 2001 and 2000

                                                   2001                   2000

Pet Supplies                             $           564                 $  444
Postage and Delivery                               7,579                  3,895
Printing and Reproduction                         14,947                 13,509
Professional Fees                                  5,570                 13,528
Promotion                                         11,591                  8,482
Rental Bonus                                       1,511                  3,113
Repairs                                           23,641                 12,479
Resident Gifts                                       912                  1,013
Taxes                                             49,448                 39,534
Telephone                                         18,275                 15,279
Training & Education                               2,189                  1,358
Travel and Entertainment                           7,831                  6,899
Uniforms                                           1,224                  1,856
Utilities                                        151,235                134,074


<PAGE>



Van Expense                                       24,396                 18,998
Waste Removal                                      4,087                  3,522
Wellness                                           1,152                    439
Workers Comp                                       3,651                      0
                                         ---------------        ---------------
Total expenses                                 3,269,073              2,753,709


Net Income (Loss)                 $           (1,226,975)         $  (1,303,903)
                                         ===============        ===============


Earnings (Loss) per share              $           (0.07)              $  (0.08)
                                         ===============        ===============



See accompanying notes


Senior Retirement Communities, Inc.                                      _ 6 _
Statement of Retained Earnings (Deficit)
For the years ended December 31, 2001 and 2000

                                                  2001                   2000


Beginning retained earnings (deficit)  $      (2,734,097)         $  (1,432,199)

Net income (loss)                             (1,226,975)            (1,301,898)


Ending retained earnings (deficit)     $      (3,961,072)         $  (2,734,097)
                                          ===============        ===============













<PAGE>



See accompanying notes


Senior Retirement Communities, Inc.                                    _ 7 _
Statement of Cash Flows
For the years ended December 31, 2001 and 2000

                                                 2001                   2000

Cash flows from operating activities:

  Revenues                                $    2,042,098           $  1,449,806
  Cash paid to suppliers and employees        (3,025,553)            (2,524,693)
                                          ---------------        --------------
Net cash provided (used) by operations          (983,455)            (1,074,887)

Cash flows from investing activities:
  Purchases of fixtures and equipment            (10,821)               (24,150)
  Payments toward construction                         0                (27,072)
                                          ---------------        --------------
Net cash  provided by (applied to)  investing
activities                                       (10,821)               (51,222)

Cash flows from financing activities:
  Accrual of interest on bonds                 1,051,534                931,434
  Payments on bonds                                    0               (602,250)
  Loans from stockholders and affiliates        (101,196)               241,914
                                         ---------------        ---------------
Net cash  provided by (applied to)  financing


<PAGE>



activities                                       950,338                571,098

Net increase (decrease) in cash                  (43,938)              (555,011)

Cash at the beginning of the period               68,635                623,646


Cash at the end of the period         $           24,697              $  68,635
                                         ===============        ===============










See accompanying notes


Senior Retirement Communities, Inc.                                     _ 8 _
Statement of Cash Flows
For the years ended December 31, 2001 and 2000

                                                    2001                   2000

Reconciliation of net income to net cash provided by operations:


Net income (loss) from operations         $   (1,226,975)         $  (1,301,898)

Adjustments to reconcile net income to cash provided by operations:
  Depreciation                                   229,924                226,708
  Decrease (increase) in prepaid expenses        (11,229)                (3,766)
  Increase (decrease) in accounts payable         24,825                  4,069


Net cash provided (used) by operations     $    (983,455)         $  (1,074,887)
                                          ===============        ==============






<PAGE>




See accompanying notes




<PAGE>



                                                                               9
                       Senior Retirement Communities, Inc.

                          Notes to Financial Statements


Note 1 _ Summary of Significant Accounting Policies

Nature of Business

The Company is a Louisiana corporation established to develop assisted living
Centers and dementia facilities for the housing and care of senior citizens in
Ruston, Bossier City and Shreveport, Louisiana.

Basis of Accounting

The Company uses the accrual basis of accounting and will utilize a calendar
year for all reporting purposes.

Income Taxes

The Company is treated as a corporation for federal income tax purposes.

Property, Buildings, Equipment, and Depreciation

Buildings and equipment are stated at cost and are to be depreciated by the
straight line method over their estimated economic lives. Buildings include
capitalized construction period interest which will be treated as a component
cost of the building and depreciated over the same economic life as the
building.

Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affects certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

Advertising

The Company follows the policy of charging the costs of advertising to expense
as incurred.





<PAGE>



                     Senior Retirement Communities, Inc.                   10

                          Notes to Financial Statements


Note 1 _ Summary of Significant Accounting Policies _ (continued)
-----------------------------------------------------------------

Deferred Charges

Deferred charges represent the costs associated with obtaining long_term
financing for the care facilities of the Company. These costs are being
amortized over the life of the bonds using the effective interest rate method.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles and with instructions to From 10 KSB
and Article 10 of Regulation S X. in managements opinion, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation of the financial statements have been included. Operating results
for the interim periods are not always indicative of the results that may be
expected for a full fiscal year. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10 KSB.

Certain reclassifications have been made to previously reported amounts to
conform with the current presentation.

Note 2 _ Related Party Transactions

Due to stockholders and affiliates consists of amounts advanced by the
stockholders and other related entities. This amount accrues interest at the
current market rate.



<PAGE>



                   Senior Retirement Communities, Inc.                 11

                          Notes to Financial Statements



<PAGE>



Note 3 _ Preferred Stock

The Preferred Stock issued accrues dividends at the rate of four percent per
year for each of the first two years, then six percent per year for the next two
years then at eight percent per year for the final two years. The Preferred
Stock is callable at the Company's option and shall be redeemed at the end of
the sixth year, if still outstanding. The preferred shareholders have an option
to purchase common stock at a twenty percent discount at any time within eight
years of the Preferred stock issue dates, if the Company issues additional
common stock through a public offering.

Note 4 _ Bonds Payable

On June 23, 1998, the Company's issue of $ 9,000,000 of bonds became effective.
These bonds are to become the permanent financing for the projects reflected in
this financial statement. As of December 31, 2001, the status of these bonds is
as follows:

                                                                        Original
                                        Amount                  Amount
                     Location         Authorized              Outstanding

                      Ruston          $3,685,000              $3,291,750
                   Bossier City        3,470,000               3,023,750
                    Shreveport         1,845,000               1,834,500
                                       ---------               ---------

                      Totals          $9,000,000              $8,150,000
                                      ----------              ----------


These bonds have varying interest rates from 7.5 percent per to 11 percent per
annum. The maturity of these bonds is from one to twenty years. Bonds payable on
the balance sheet reflects the accrued interest due and is reflected net after
the deferred charges incurred is issuing and selling the bonds

During 2001, the Company incurred $ 1,178,929 of interest expense all of which
has been charged to operations.


                   Senior Retirement Communities, Inc.                    12

                          Notes to Financial Statements

Note 5 _ Going concern and subsequent events


<PAGE>


As a result of continuing operating losses as a result of not achieving desired
occupancy levels, the Company filed a request on February 27, 2001 with Colonial
Trust Company, who acts as agent for the bondholders, a request to extend all
principal and interest for four years. This request includes amounts which were
already past due and amounts which would have become due by February 1, 2002. In
accordance with the trust indenture, the request was submitted to the
bondholders for a vote on the proposed extension. The votes were due to be
returned by March 27, 2001. As of March 27, 2001, bondholders representing $
122,250 of bonds out of the total of $ 8,150,000 bonds outstanding voted to
reject the plan. As a result of this vote, the request to postpone certain
payments for a period of four years was approved. This proposal is intended to
provide the Company additional time to achieve full occupancy which should allow
for the future payments to be paid as they become due. Should the Company fail
to increase its occupancy levels, additional measures would become necessary for
the Company to remain a going concern.

As a continuing part of the Company's effort to improve cash flow and provide
working capital for its operations, the Company has adopted a plan to refinance
the debt on the Ruston facility by selling the facility to a related party who
would obtain permanent financing and liquidate the bond debt on that facility.
In contemplation of this move, the Company transferred the operations of the
Ruston facility to the related entity effective January 1, 2002. The Company
hopes that this sale can be completed in the early summer of 2002.




<PAGE>