UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C.  20549
                        

FORM 10-K
(Mark One)

 [ X ]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended 
December 31, 1997.

	OR
	
 [   ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) 
OF THE SECURITIES EXCHANGE ACT OF 1934 for the Transition 
Period From                 to               .

Commission file number		     No. 0-11881    
      					
	             INTERWEST MEDICAL CORPORATION            
	(Exact name of registrant as specified in its charter)

            Oklahoma           			     75-1864474    
(State or other jurisdiction of			(I. R. S. Employer
 incorporation or organization)			Identification No.)

3221 Hulen Street, Suite C
Fort Worth, Texas              			    76107-6193     

(Address of principal executive offices)	    (Zip Code)

Registrant's telephone number, including area code: (817) 731-2743


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

	NONE


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

	NONE

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.      Yes   X  		No     

F-1

Indicate by check mark if disclosure of delinquent filers pursuant to Item 
405 of Regulation S-K 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-K or any 
amendment to this Form 10-K.           

As of March 19, 1997, the aggregate market value of the 12,822,036 
shares of voting Common Stock held by non-affiliates of the Company 
was approximately $1,442,479 based on the average bid and asked price 
on that date.  


APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of each of registrant's classes 
of Common Stock, as of the latest practicable date.  

 Shares Outstanding
    Class    					as of March 31, 1998

Common Stock,						16,819,961
$0.001 Par Value


	DOCUMENTS INCORPORATED BY REFERENCE


(a)	Prospectus dated June 6, 1983 - incorporated by reference in Part I.

(b)	Exhibits to the Registration Statement No. 2-82655 on Form S-18 - 
Part IV.  

(c)	Form 8-K, dated July 2, 1990.

F-2

	FORM 10-K

	INTERWEST MEDICAL CORPORATION

	PART I

Item 1.	Business.

InterWest Medical Corporation (the "Company") was incorporated under 
the laws of the State of Oklahoma on March 3, 1983.  The principal office 
and place of business of the Company is located at Suite C, 322l Hulen 
Street, Fort Worth, Texas 76107-6193.  Its telephone number is 
(817) 731-2743.

The Company was organized to engage in the business of developing, 
operating and owning surgery centers itself and in association with 
others.  The Company did not, however, develop any surgery centers.

In April 1984, the Company commenced efforts to develop nursing homes 
in an effort to diversify its efforts.  The Company built and sold to an 
unrelated purchaser a 187-bed skilled nursing home in Vista, California.  
The Company presently owns and operates a 156-bed skilled nursing 
home in Colton, California.  The Company does not at this time have any 
plans to develop other nursing homes.

The Company has invested funds in nursing homes, in residential real 
estate developments and in the oil business.  

All of the industries in which the Company has invested are extremely 
competitive in all phases.  Many of its competitors, both public and 
private, possess and employ financial and personnel resources 
substantially greater than those which are currently available to the 
Company.

Item 2.	Properties.

Nursing Home Business

The Company owns and operates a 156-bed skilled nursing home located 
on a 9 acre parcel of land in Colton, California.  At December 31, 1997, 
the Company had a cost of $3,028,924 in such facility.  In 1997, the 
facility had an operating income of $987,934.

Residential Development

The Company developed residential lots in Modesto, California, Miami 
County, Kansas and Douglas County, Kansas.  This activity has been 
substantially completed and no further such development is presently 
planned.
F-3


Oil Business

The Company has acquired oil and gas leases and properties in the 
states of Texas, Oklahoma, Mississippi and Louisiana.  At December 31, 
1997, the Company had a cost of $477,276 in such properties.

(a)	Oil and Gas Revenues.

A description of the Company's net quantity of oil and gas reserves is 
contained in the unaudited Supplemental Information of the 
accompanying financial statements.  Estimates of reserves are not 
presented as being based on estimates prepared or reviewed by 
independent consultants.  All such estimates were made in accordance 
with regulations promulgated by the Securities and Exchange 
Commission.  The referenced reserve reports are available for 
examination at the corporate headquarters.

The Company has no long-term supply or similar agreements with foreign 
governments or authorities.  No major discovery or other favorable or 
adverse event has caused a significant change in the estimated proved 
reserves.  The Company has not filed with or included in reports to any 
federal authority or agency, other than the SEC, any estimate of total 
proved net oil and gas reserves.  All of the Company's production, 
acreage and drilling activity is located in the United States.

The changes in proved developed reserves for 1997, 1996 and 1995 
were as follows:
Petroleum	    Natural
 Liquids	       Gas
  (bbls) 	     (MCF)   

 Reserves at December 31, 1994		 30,680	664,690
Production						(   6,654)	  (  121,967)
Revision of estimates				(  19,086)	  (   97,677)

 Reserves at December 31, 1995		4,940	640,400
	Sales of reserves in place			(      30)	(    2,930)
Production						 (   1,070)	(  119,380)
Revision of estimates				(     480)	(  101,080)

 Reserves at December 31, 1996		3,360	417,010
	Sales of reserves in place			(      10)	(    7,348)
	Production						(   1,012)	(   80,016)
	Revision of estimates				48,661	209,050
	Discoveries						     132	   73,429

Reserves at December 31, 1997			  51,131	  612,125

The standardized measure of discounted estimated future net cash flows, 
and changes therein, related to proved oil and gas reserves are as 
follows (thousands of dollars) for 1997, 1996 and 1995:

F-4

	 1997 	 1996 	  1995  

Future cash inflows	$2,131	$  975	$1,251
Future development and 
production costs	1,255	587	621
Future income tax expense	  -   	  -   	  -    

Future net cash flows	876	587	621
10% annual discount	   275	    60	   159

Standardized measure of
discounted future cash flows	$  601	$  328	$  471

Primary changes in standardized 
measure of discounted future 
net cash flow:
	 1997 	 1996 	  1995  

Net changes in prices and
production costs	$   20	$  88	$   218
Extensions, discoveries and 
improved recovery	111	-  	-  
Sale of reserves-in-place	(    3)	(    1)	-  
Sales of oil and gas, net of 
production costs	(   80)	(   78)	(   118)
Revision of estimates	305	(  158)	(    12)
Accretion of discount	33	39	40
Other	(  113)	(   33)	(    55)

	$ 273	($ 143)	$   73

See the unaudited Supplemental Information in the accompanying 
financial statements for additional information.

(b)	Past Production and Average Sales Price.

Sales Price

(1)	Net oil and gas production (in barrels and MCF, respectively) from 
registrant's properties in the United States, was as follows:

  Oil	  Gas
Year Ended					    (  Bbls )	(  MCF  )

December 31, 1995	6,654	121,967

December 31, 1996	1,823	 97,034

December 31, 1997	1,012	80,016

F-5

(2)	Average sales price and production costs:

  Average		    Average
Sales Price	Production Costs
Year Ended			  ( Bbls ) ( MCF )  (Bbls)   ( MCF )

December 31, 1995		   $16.84	 $1.71	$13.60	$0.78

December 31, 1996		   $22.19	 $1.80	$12.01	$1.06

December 31, 1997		   $16.24	 $2.08	$13.42	$1.11

(c)	Productive Wells and Producing Acres.

Registrant's interest in gross and net productive wells located on its 
properties as of December 31, 1997, was as follows:

Developed Acres
Wells		Gross	Net		Gross	 Net  

Oil			  -0-	-0-         -0-  	  -0-  

Gas	18	2,066		8,645.9	796.8

(d)	Undeveloped Acreage.

Gross and net acres covered by registrant's undeveloped properties as of 
December 31, 1997, were as follows:

Acres:

Gross:	-0-	Net:	-0-

(e)	Productive and Dry Net Wells Drilled During 1997.

Exploratory Wells	  Development Wells
    Production     Dry	  Productive   Dry

1997			  -0-	    -0-	     -0-		-0-

(f)	Wells drilling at December 31, 1997:

Gross:	-0-	Net:	   -0-

Item 3.	Legal Proceedings.

In the opinion of management, all litigation pertaining to the Company's 
long-term health care operations is considered to be ordinary routine 
litigation incidental to its business and that the disposition of all 
outstanding legal actions will not have a material adverse effect on the 
Company.

F-6

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

No matters were submitted to a vote of security holders during the fourth 
quarter of 1997, except for the election of directors.

F-7

	PART II

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

The Company's Common Stock is traded in the national over-the-counter 
market and is listed in the pink sheets.  The high and low bid prices 
quoted for each quarter in the past two calendar years were as follows:  

      Period     		Low Bid 			High Bid
1st Quarter, 1996		$0.10000			$0.1250
2nd Quarter, 1996		 0.10000			 0.1250
3rd Quarter, 1996		 0.10000			 0.1250
4th Quarter, 1996		 0.10000			 0.1250

1st Quarter, 1997		 0.10000			 0.1250
2nd Quarter, 1997		 0.10000			 0.1250
3rd Quarter, 1997		 0.10000			 0.1250
4th Quarter, 1997		 0.10000 			 0.1250

As of March 31, 1998, the approximate number of holders of Common 
Stock was 1,992.  No cash dividends had been paid as of December 31, 
1997, and the Company does not currently anticipate paying cash 
dividends in the foreseeable future.  

Item 6.	Selected Financial Data.  

The following table sets forth certain summary financial information 
concerning the Company.

                      Year Ended December 31,                 	
	   1997   	   1996   	   1995   	   1994   	   1993    
Operating
revenues	$10,123,168	$9,283,774	$9,102,349	$8,505,792	$8,105,469
Net income 
(loss)	609,112	(    49,282)	(    47,877)	(    53,452)	(   458,122)

Total assets	9,522,248	8,333,614	8,580,878	8,690,373	9,417,999

Long-term debt	4,530,234	4,545,653	4,559,472	4,571,857	4,582,958

Per common share:   $0.04

Net income
(loss)	$0.00	($0.00)	($0.00)	($  0.00)	($     0.02)
Cash
dividends
	declared	$0.00	$0.00  	$0.00	$  0.00	$     0.00

F-8

Item 7.	Management's Discussion and Analysis of Financial 
Condition and Results of Operations.  

(a)	Liquidity and Capital Resources:  


	During the year 1995, the Company's cash increased from 
$1,807,951 at the beginning of the period to $2,096,886 at the end of the 
period.  Accordingly, there was a net increase in cash of $288,935.  This 
was attributable to an increase in cash provided by operating activities.

	During the year 1996, the Company's cash decreased from 
$2,096,886 at the beginning of the period to $2,094,563 at the end of the 
period.  Accordingly, there was a net decrease in cash of ($2,323).  This 
was attributable to a decrease in net cash provided by operating 
activities.  

	During the year 1997, the Company's cash decreased from 
$2,096,886 at the beginning of the period to $2,094,563 at the end of the 
period.  Accordingly, there was a net decrease in cash of ($2,323).  This 
was attributable to an increase in net cash used in investing activities.  

	The Company is not aware of any known trends or any known 
demands, commitments, events or uncertainties that will result in or that 
are reasonably likely to result in the registrant's liquidity increasing or 
decreasing in any material way.   

	In the Company's view, its short-term liquidity and short-term 
capital resources will be sufficient to cover its cash needs up to 12 
months into the future.  The Company does not presently anticipate 
material capital expenditures.  The Company does not have any 
significant balloon payments.  The Company's long-term debt consists of 
a mortgage loan bearing interest at the rate of 11% and is payable in 
monthly installments of $42,890.  It is anticipated that these payments will 
be made from revenues received by the operation of the Company's 
nursing home.

	During 1997, the Company purchased as treasury shares a total of 
297,075 shares of its stock at an aggregate purchase price of $36,571.

(b)	Results of Operations:  

	Operating profit for 1995 was $353,246, as compared to an 
operating profit of $268,766 for 1994.  The increase in profit was 
attributed to larger revenues from the Company's long-term health care 
facility.  Net loss was ($47,877) as compared to ($53,452) for 1994.


	Operating profit for 1996 was $360,059, as compared to an 
operating profit of $353,246 for 1995.  The increase in profit was 
attributed to larger revenues from the Company's long-term 

F-9

health care facility.  Net loss was ($49,282) in 1997 as compared to a loss
 of ($47,877) in 1995.  

	Operating profit for 1997 was $987,934, as compared to an 
operating profit of $360,059 for 1996.  The increase in profit was 
attributable to larger revenues from the Company's long-term health care 
facility.  Net income was $609,112 in 1997 as compared to a net loss of 
($49,282) in 1996.  

	The revenues derived from each segment of the Company's 
businesses are as follows:  Long-term health care - $9,773,756; real 
estate development and construction - $87,606 and oil and gas - 
$261,806.

(c)	Effects of Inflation:   

	The Company is of the view that inflation did not affect its 
operations in 1996 and should not in 1997.

Item 8.	Financial Statements and Supplementary Data.  

		Page No.

Independent Auditor's Report	12

Consolidated Balance Sheets December 31, 1997 and 1996	14

Consolidated Statements of Operations for Years Ended December 31, 
1997, 1996 and 1995	16

Consolidated Statements of Stockholders Equity for Years Ended 
December 31, 1997, 1996 and 1995	17

Consolidated Statements of Cash Flows for Years Ended December 31, 
1997, 1996 and 1995	18

Notes to Consolidated
Financial Statements	20

Supplementary Information	31

F-10

Item 9.	Changes in and Disagreements with Accountants on 
Accounting and Financial Disclosure.  


There have been no disagreements with accountants on any matter of 
accounting principles or practices or financial statement disclosures 
during the twenty-four (24) month period ended December 31, 1997.

F-11


	INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Shareholders
InterWest Medical Corporation

We have audited the accompanying consolidated balance sheets of 
InterWest Medical Corporation and subsidiaries as of December 31, 1997 
and 1996, and the related consolidated statements of operations, 
stockholders' equity and cash flows for each of the years in the three year 
period ended December 31, 1997.  Our audits also included the financial 
statement schedule II for each of the years in the three year period ended 
December 31, 1997.  These consolidated financial statements and the 
financial statement schedule are the responsibility of the Company's 
management.  Our responsibility is to express an opinion on these 
consolidated financial statements and the financial statement schedule 
based on our audits. 

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

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of InterWest 
Medical Corporation and subsidiaries as of December 31, 1997 and 1996, 
and the consolidated results of their operations and their cash flows for 
each of the years in the three year period ended December 31, 1997 in 
conformity with generally accepted accounting principles.  Also, in our 
opinion, the financial statement schedule II when considered in relation to 
the basic financial statements taken as a whole, presents fairly, in all 
material respects, the information set forth therein.  



WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
March 10, 1998

3038

F-12

	INTERWEST MEDICAL CORPORATION	(1 of 2)
	CONSOLIDATED BALANCE SHEETS
	DECEMBER 31, 1997 AND 1996



	     1997     	     1996      
                                ASSETS

CURRENT ASSETS
Cash, including interest bearing accounts, 
1997 - $1,090,686 ; 1996 - $1,954,527	$1,458,281	$2,094,563
Accounts receivable - trade, net of
allowance for doubtful accounts,
1997 - $54,844; 1996 - $51,178	2,225,183	1,631,439
Investments available for sale	1,955,961	-     
Prepaid expenses and other receivables	       60,165	       73,335

Total current assets	5,699,590	  3,799,337

REAL ESTATE DEVELOPMENT 
AND CONSTRUCTION COSTS	33,582	121,582

PROPERTY AND EQUIPMENT, at cost
Land			191,442	176,442
Buildings and improvements	3,789,419	3,786,294
Equipment and furniture	827,302	645,876
Oil and gas properties (successful
efforts method of accounting)	     477,276	     997,083

	5,285,439	5,605,695
Less accumulated depreciation and depletion	  1,779,239	  1,501,730

	3,506,200	  4,103,965
OTHER ASSETS
Cash escrow accounts 	17,293	34,975
Deferred financing costs, net	     265,583	     273,755

	     282,876	     308,730

TOTAL ASSETS	$9,522,248	$8,333,614

F-13

	INTERWEST MEDICAL CORPORATION	(2 of 2)
	CONSOLIDATED BALANCE SHEETS
	DECEMBER 31, 1997 AND 1996



	     1997     	     1996      
      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Current maturities of long-term debt	$     15,418	$     13,818
Accounts payable	1,196,289	508,621
Accrued salaries	633,144	543,697
Other accrued liabilities	     142,019	     142,032

Total current liabilities	1,986,870	1,208,168

LONG-TERM DEBT 	4,530,234	4,545,653

STOCKHOLDERS' EQUITY
Common stock, par value $0.001, 
authorized 50,000,000 shares; 
issued 20,000,000 shares	20,000	20,000
Additional paid-in capital	4,798,745	4,798,745
Retained deficit	(  1,297,316)	(  1,906,428)
Net unrealized depreciation on 
	securities available for sale	(     147,190)	           -     	

	3,374,239	2,912,317
Less cost of shares held in the treasury, 
1997 - 3,180,039 shares;
1996 - 2,882,964 shares	     369,095	     332,524

	  3,005,144	  2,579,793

TOTAL LIABILITIES 
AND STOCKHOLDERS' EQUITY	$9,522,248	$8,333,614

F-14

	INTERWEST MEDICAL CORPORATION
	CONSOLIDATED STATEMENTS OF OPERATIONS
	YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



	      1997      	     1996     	     1995     

REVENUES
	Net patient service revenue	$  9,773,756	$8,903,359	$8,758,711
	Other revenue	       349,412	     380,415	     343,638

Total revenue	10,123,168	9,283,774	9,102,349

COSTS AND EXPENSES
Professional care of patients	5,413,364	4,796,723	4,497,782
General services	1,822,532	1,783,758	1,578,723
Administrative services	1,352,709	1,320,204	1,550,293
Other costs	220,938	731,981	737,377
Depreciation, depletion 
and amortization	       325,691	     291,049	     384,928

Income from operations	987,934	360,059	353,246

OTHER INCOME (EXPENSES)
Equity in joint venture operations	-     	12,313	28,530
Interest income	122,045	80,638	73,705
Interest expense	(       500,867)	(     502,292)	(     503,358)

Income (loss) before 
	taxes on income	609,112	(       49,282)	(       47,877)

Provision for income taxes 	             -     	            -     	            

Net income (loss)	$     609,112	($     49,282)	($     47,877)


Weighted average shares outstanding	   16,954,926	  17,385,664	  18,462,536

Earnings per common share	$              .04	($          -     )	($           )

F-15

	INTERWEST MEDICAL CORPORATION
	CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
	YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



					Net        
					Unrealized  
					Depreciation
					on        
	       Common Stock    	Additional		Securities  
	Number of 	Par    	Paid-in  	Retained  	Available   	Treasury  
	   Shares    	  Value  	   Capital  	    Deficit    	    for Sale    	   Stock

Balance, 
December 31, 1994	20,000,000	$20,000	$4,798,745	($1,809,269)	
$           -      	($151,574)

Net loss				(       47,877)

Purchase of 
217,000 shares 
of common stock	                  	              	                   
	                   	             -      	(    26,508)


Balance, 
December 31, 1995	20,000,000	20,000	4,798,745	(  1,857,146)
	-      	(  178,082)

Net loss				(       49,282)

Purchase of 
1,237,000 shares 
of common stock	            -      	      -      	           -      	    
        -     	             -      	(  154,442)


Balance, 
December 31, 1996	20,000,000	20,000	4,798,745	(  1,906,428)
	-      	(  332,524)

	Net income				609,112

	Purchase of 
		297,075 shares
		of common stock						(    36,571)

	Change in 
		unrealized 
		depreciation on 
		securities 
		available for sale	            -     	      -      	           -      	
            -     	(     147,190)	        -      

Balance, 
	December 31, 1997	20,000,000	$20,000	$4,798,745	($1,297,316)	($   147,190)	
($369,095)

F-16

INTERWEST MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


	     1997     	     1996      	     1995       
CASH FLOWS FROM 
OPERATING ACTIVITIES:
Cash received from 
customers/patients	$9,450,649	$9,045,079	$9,244,777
Interest received	122,045	80,638	73,705
Cash paid to suppliers 
and employees	(  7,916,683)	(  8,220,967)	(  7,975,413)
Interest paid	(     500,880)	(     502,292)	(     503,358)

Net cash provided by 
operating activities	1,155,131	402,458	839,711


CASH FLOWS FROM 
INVESTING ACTIVITIES:
Purchase of property 
and equipment	(     315,427)	(     352,675)	(     586,159)
Proceeds from sale of property	659,873	55,595	-      
Purchase of investments	(  2,103,151)	-     	-      
Mortgage escrow deposits, net	17,682	854	(       13,808)
Receipts from joint ventures	           -      	       58,273	       86,799

Net cash used 
in investing activities	(  1,741,023)	(     237,953)	(     513,168)


CASH FLOWS FROM 
FINANCING ACTIVITIES:
Payments on debt	(       13,819)	(       12,386)	(       11,100)
Purchase of treasury stock	(       36,571)	(     154,442)	(       26,508)

Net cash used 
in financing activities	(       50,390)	(     166,828)	(       37,608)

Net (decrease) increase in cash	(     636,282)	(         2,323)	288,935

CASH, beginning of period	  2,094,563	  2,096,886	  1,807,951

CASH, end of period	$1,458,281	$2,094,563	$2,096,886

F-17

	INTERWEST MEDICAL CORPORATION
	CONSOLIDATED STATEMENTS OF CASH FLOWS
	YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



	      1997     	    1996     	    1995      

RECONCILIATION OF NET INCOME
(LOSS) TO NET CASH PROVIDED BY 
OPERATING ACTIVITIES:

Net income (loss)	$   609,112	($  49,282)	($  47,877)

Adjustments to reconcile net income 
(loss) to net cash provided by 
operating activities:

Gain on sale of property	(       78,775)	(    36,034)	-     
Depreciation and amortization	325,691	291,049	384,928
Abandonments	14,575	332,027	394,319
Equity in joint venture operations	-     	(    12,313)	(    28,530)
Changes in assets and liabilities:
Accounts receivable	(     593,744)	(  202,661)	142,428
Prepaid expenses and 
	other receivables	13,170	5,749	(    15,127)
Real estate development costs	88,000	105,077	23,580
	Other investments	-     	-     	10,000
	Accounts payable	687,668	(  109,253)	(  139,631)
Accrued liabilities	       89,434	    78,099	  115,621

Net cash provided by
operating activities	$1,155,131	$402,458	$839,711



NONCASH INVESTING
AND FINANCING ACTIVITIES:

Included in prepaid expenses and other receivables at December 31, 1996 is 
$28,750 due from the president of the Company on the sale of common stock 
investments.  

F-18

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.   SIGNIFICANT ACCOUNTING POLICIES

The accounting policy relative to property and equipment is shown on the 
accompanying balance sheets.  Other significant accounting policies are as
follows:

Basis of Presentation

The consolidated financial statements include the accounts of InterWest 
Medical Corporation and its wholly-owned subsidiaries.  All significant 
intercompany transactions and balances have been eliminated.  Investments in 
joint ventures are accounted for on the equity basis of accounting. 

Reclassifications

Certain reclassifications have been made to 1996 and 1995 captions to 
conform to the 1997 presentation.  

Depreciation

Depreciation of long-term health care property and equipment is provided 
principally on the straight-line method over the estimated useful lives of 
the depreciable assets.  Estimated useful lives of depreciable assets are
 as follows:

Buildings and improvements	31 years
Equipment and furniture	7 years

	Investments in Securities

The Company has adopted Statement No. 115, Accounting for Certain 
Investments in Debt and Equity Securities, issued by the Financial 
Accounting Standards Board.  In accordance with Statement No. 115, the 
Company's investments in securities are classified as follows:

Trading Securities - Investments in debt and equity securities held 
principally for resale in the near term are classified as trading securities
 and recorded at their fair values.  Unrealized gains and losses on trading 
securities are included in other income.  The Company does not, nor does
 it intend to, trade investments that it owns.

F-19

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.   SIGNIFICANT ACCOUNTING POLICIES - continued

	Investments in Securities - continued

Securities to be Held to Maturity - Debt securities for which the Company 
has the positive intent and ability to hold to maturity are reported at 
cost, adjusted for amortization of premiums and accretion of discounts 
which are recognized in interest income using the interest method over the 
period to maturity.

Securities Available for Sale - Securities available for sale consist of 
its debt and equity securities not classified as trading securities nor as 
securities to be held to maturity.

Unrealized holding gains and losses on securities available for sale are 
reported as a net amount in a separate component of stockholders' equity 
until realized.

Gains and losses on the sale of securities available for sale are 
determined using the specific identification method.

Oil and Gas Property and Equipment

The Company utilizes the "successful efforts" method of accounting for 
costs incurred in the exploration and development of oil and gas 
properties. Accordingly, costs incurred in the acquisition and exploratory 
drilling of oil and gas properties are accumulated and subsequently either 
expensed, if the properties are determined not to have proved reserves or 
capitalized as a depletable asset if proved reserves are discovered.  Costs
 of drilling development wells are capitalized.  Geological, geophysical and 
carrying costs are charged to expenses as incurred.  Acquisition costs 
relating to producing oil and gas properties are amortized on a prospect by 
prospect basis using the units-of-production method based on engineers' 
estimates of proven oil and gas reserves. Depletion and depreciation of 
producing oil and gas properties (other than acquisition costs) are amortized
 by prospect using the units-of-production method based on estimated proved 
developed reserves.  

F-20

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.   SIGNIFICANT ACCOUNTING POLICIES - continued

Use of Estimates

The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the 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 these estimates.

Financial Instruments

Financial instruments of the Company consist of cash, accounts receivable, 
investments and debt.  Recorded values of cash and accounts receivable 
approximate fair values due to the short maturities of the instruments.  For 
information on the fair value of investments, see Note 2.  

The fair value of debt is estimated as its carrying value at December 31, 
1997 plus refinancing costs paid in February 1998.  See Note 6.  

	Carrying   	Fair      
	   Amount   	     Value    

Long-term debt - 1997	$4,545,652	$4,689,652

Long-term debt - 1996	$4,559,471	$5,198,252

Revenue

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

Revenue under third-party payor agreements is subject to audit and 
retroactive adjustment.  Provisions for estimated third-party payor 
settlements are provided in the period the related services are rendered.  
Differences between the estimated amounts accrued and interim and final 
settlements are reported in operations in the year of settlement.  

F-21

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.   SIGNIFICANT ACCOUNTING POLICIES - continued

Income Taxes

The Company provides for deferred taxes resulting from temporary differences 
between the basis of assets and liabilities for financial and tax reporting 
purposes. Such differences result principally from the use of the direct 
write-off method for bad debts for tax reporting purposes and nondeductible
 write-downs of real estate development costs to net realizable value.  

Earnings Per Common Share

The Company has adopted Statement No. 128, Earnings Per Share, issued by 
the Financial Standards Accounting Board.  Adoption of Statement No. 128 
had no effect upon 1997, 1996 or 1995 earnings per share computations.  

Basic earnings per common share was computed based on the weighted average 
number of common shares outstanding for the period.  Diluted earnings per 
share have not been presented since the inclusion of common stock 
equivalents would be antidilutive.  

Cash Flows Presentation

For purposes of the statement of cash flows, the Company considers cash to 
include unrestricted cash and all highly liquid investments with initial
 maturities of ninety days or less from the date of purchase. 

Amortization

Costs of obtaining financing are amortized over the term of the financing. 

Credit Risk

The Company regularly maintains cash in bank deposit and brokerage accounts 
which exceed FDIC/SPIC insured limits.  The Company has not experienced any 
losses in such accounts and believes it is not exposed to any significant 
credit risk on cash and cash equivalents.  

F-22

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.   SIGNIFICANT ACCOUNTING POLICIES - continued

Stock-based Compensation

The Company recognizes compensation costs for stock-based compensation 
plans based on the difference, if any, between the quoted market price of 
the stock and the amount an employee must pay to acquire the stock.  Dates 
that quoted market prices are determined may vary depending on whether the 
terms of an award are fixed or variable.  

The Financial Accounting Standards Board has issued Statement No. 123 
establishing a fair value based method of accounting for stock-based 
compensation plans.  As permitted under Statement No. 123, the Company does 
not intend to adopt the recognition or accounting requirements of the 
statement.  No awards have been granted in 1997, 1996 or 1995.  

	Accounting Changes

The Financial Accounting Standards Board has issued the following Statements
 of Financial Accounting Standards effective for fiscal years beginning after 
December 15, 1997:

No. 130 - Reporting Comprehensive Income

Requires that all items are required to be recognized under accounting 
standards as components of comprehensive income be reported in a financial 
statement that is displayed with the same prominence as other financial 
statements.  

No. 131 - Disclosures About Segments of an Enterprise
			 and Related Information

Requires disclosure of operating segments based upon information used 
internally for evaluating segment performance and allocating resources.  

No. 132 - Employers' Disclosures About Pensions
			and Other Post-retirement Benefits

Revises employers' disclosures about pensions and other post-retirement 
plans.

The Company will adopt the above standards effective January 1, 1998.  
Adoption is not expected to have a significant effect upon current financial 
statements.  

F-23

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 2.   INVESTMENT SECURITIES

Investment securities consist entirely of equity securities.  The cost and 
market values of investment securities available for sale at December 31, 
1997 were:

	Market value		$1,955,961
	Amortized cost		  2,103,151

	Unrealized loss		($   147,190)

Unrealized appreciation (depreciation) in investment securities available 
for sale are included in stockholders' equity, net of income tax effect.  

There were no sales of securities in 1997.  

The Company had no investment securities at December 31, 1996.  


NOTE 3.   CAPITAL STOCK 

The Company has adopted a Stock Option Plan which provides for the granting
 of options to officers and other key employees for the purchase of common 
stock of the Company.  

The Plan reserves 1,500,000 shares of common stock for the granting of such 
options.  Options are subjected to adjustment upon any change in the 
capital structure of the Company such as a stock dividend, stock split or 
other similar events. 

Options may be granted at not less than 100% of the fair market value of the 
Company stock at the date of grant, and are exercisable during a term of ten 
years from the date of grant at any time in whole or in part, and are subject
 to continued employment and other conditions as set forth in the option 
agreement. 

Options are exercisable only by the participants and are not assignable 
during their lifetime and must be exercised within one year of the death of 
the participant by his legal representatives.  

Nine hundred, seventy-five thousand (975,000) shares exercisable at $0.15 per 
share were granted under the Plan.  All options expired unexercised in 1997.  

F-24

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 4.   RELATED PARTY TRANSACTIONS

During the years ended December 31, 1997, 1996 and 1995 Arch B. Gilbert, a 
Professional Corporation, whose sole stockholder is president of the Company,
 was paid $5,000, $9,000 and $21,500, respectively, for legal services 
rendered.  

During the years ended December 31, 1997, 1996 and 1995, the above 
corporation was reimbursed $37,126, $47,068, and $56,056, respectively, for 
expenses incurred on behalf of the Company. 

Included in other receivables at December 31, 1996 is $28,750 due from the 
Company's president from the sale of common stock investments to the 
president. No gain or loss was recognized from the sale.  Included in 
accounts payable at December 31, 1997 is approximately $36,000 of advances 
from the Company's president.  


NOTE 5.   FEDERAL INCOME TAXES

The Company adopted the provisions of Statement of Financial Accounting 
Standards No. 109, "Accounting for Income Taxes," effective January 1, 1996. 
Adoption of this standard did not materially impact the Company's 
consolidated financial statements.  

The Company had no income tax provision in 1997, 1996 or 1995, and no 
significant differences between the tax provisions and the amounts computed
 using statutory rates.  

At December 31, 1997, the Company had unused operating loss carryforwards 
available to offset future income for tax reporting purposes of approximately 
$1,235,000 which ultimately expires in 2012.  

All income (loss) since inception relates to domestic activity. 

F-25

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 5.   FEDERAL INCOME TAXES - continued

The tax effects of net operating loss carryforwards and temporary differences
 at December 31, 1997 and 1996 that give rise to significant portions of 
deferred tax assets and deferred tax liabilities are as follows:

	    1997   	    1996    
Deferred tax assets
Net operating loss carryforwards	$419,399	$610,386
Unrealized loss on marketable securities	50,045	-     
Real estate valuations	-     	17,480
Other	    18,646	    17,400

	488,090	645,266
Deferred tax liabilities	-     	-     
Valuation allowance	(  488,090)	(  645,266)

Total deferred taxes, net	$      -     	$      -      	

During 1997 and 1996, the valuation allowance (decreased) increased
($157,176) and $16,401, respectively.   


NOTE 6.   LONG-TERM DEBT

Long-term debt consisted of the following at December 31:

	     1997     	     1996      
Mortgage loan for financing of a nursing home 
constructed in Colton, California.  The mortgage 
loan bears interest at 11%, is due in monthly 
installments of $42,890 (principal and interest), 
matures in June, 2030 and is secured by real 
estate	$4,545,652	$4,559,471

Less current maturities	       15,418	       13,818

	$4,530,234	$4,545,653

F-26

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 6.   LONG-TERM DEBT - continued

Aggregate maturities of long-term debt for each of the succeeding five years
and thereafter is as follows:

1998		$     15,418
1999		17,202
2000		19,192
2001		21,413
2002		23,891
Thereafter		4,448,536

In February 1998, the above mortgage loan was restructured to reduce the 
mortgage interest rate to 7.375% effective February 1, 1998.  In connection 
with the restructuring, the Company paid approximately $144,000 of debt issue
 costs in 1998.


NOTE 7.   SEGMENTED INFORMATION 

The Company's operations are classified into three principal industry segments:

Long-term Health Care	-	Operation of convalescent centers involving 
skilled nursing care in southern California

Real Estate Development
and Construction	-	Construction and sale of single family housing

Oil and Gas	-	Oil and gas exploration and development

Following is a summary of segmented information for 1997, 1996 and 1995:  

	                                             1997                           
		Real Estate  
	Long-term 	Development 
	Health    	and        	Oil and  	
	     Care     	 Construction 	     Gas    	Consolidated

Sales to unaffiliated customers	$9,773,756	$         87,606	$261,806	$10,123,168

Operating income (loss)	$1,173,269	($             394)	$  48,571	$  1,221,446
Other income				122,045
General corporate expenses				(     233,512)
Interest expenses				(     500,867)

Income before income taxes				$   609,112

F-27

NOTE 7.   SEGMENTED INFORMATION  - continued

	                                             1997                          
                 
		Real Estate  
	Long-term 	Development 
	Health    	and        	Oil and  	
	     Care     	 Construction 	     Gas    	Consolidated

Identifiable assets	$5,829,421	$        49,725	$180,361	$6,059,507
Corporate assets				  3,462,741

Total Assets at 12/31/97				$9,522,248

Capital expenditures	$   199,551	$            -     	$115,876	$   315,427

Depreciation, depletion
and amortization	$   245,394	$            -     	$  80,297	$   325,691


		                                               1996                  
                         	
		Real Estate  
	Long-term  	Development 
	Health     	and        	Oil and  	
	     Care      	 Construction 	     Gas    	Consolidated

Sales to unaffiliated customers	$8,903,359	$      104,533	$275,882	$  9,283,774

Operating income (loss)	$1,003,417	($        40,375)	($387,787)	$     575,255
Other income				92,951
General corporate expenses				(       215,196)
Interest expenses				(       502,292)

Loss before income taxes				($       49,282)

Identifiable assets	$5,356,666	$      121,582	$731,961	$  6,210,209
Corporate assets				    2,123,405

Total Assets at 12/31/96				$  8,333,614

Capital expenditures	$     85,867	$            -      	$266,808	$     352,675

Depreciation, depletion 
and amortization	$   222,625	$            -      	$  68,424	$     291,049

F-28

	INTERWEST MEDICAL CORPORATION
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 7.   SEGMENTED INFORMATION  - continued

		                                               1995                    
                       	
		Real Estate  
	Long-term  	Development 
	Health    	and      	Oil and  	
	      Care     	 Construction 	     Gas    	Consolidated

Sales to unaffiliated customers	$8,758,711	$    22,091	$321,547	$  9,102,349

Operating income (loss)	$1,143,251	($           9,844)	($549,500)	 $ 583,907
Other income				102,235
General corporate expenses				(       230,661)
Interest expenses				(       503,358)

Loss before income taxes				($       47,877)

Identifiable assets	$5,318,673	$      272,619	$863,795	$  6,455,087
Corporate assets				    2,125,791

Total Assets at 12/31/95				$  8,580,878

Capital expenditures	$     33,865	$            -      	$552,294	$     586,159

Depreciation, depletion
and amortization	$   219,323	$            -      	$165,605	$     384,928

The Company did not have any intersegment sales.  Operating loss is total 
revenues less operating expenses for each segment and excludes general 
corporate expenses, interest expense and other income of a corporate 
nature.  Identifiable assets by segment are those assets that are used in 
the Company's operations within that industry.  Corporate assets consist 
principally of cash.  


NOTE 8.   CONTINGENCIES

The Company is involved in litigation pertaining to its long-term health 
care operations.  It is the Company's opinion that any loss incurred would
 be adequately covered by insurance and the ultimate liability, if any, 
should not have a material adverse effect on the Company's consolidated 
financial position.  


NOTE 9.   EMPLOYEES RETIREMENT PLAN

The Company has a retirement plan, established in 1996, covering 
substantially all of its employees.  Contributions to the plan in 1997 and 
1996 totaled $35,440 and $21,216, respectively.  

F-29

	INTERWEST MEDICAL CORPORATION
	SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS




           Column A           	 Column B 		          Column C           
	 Column E 	   Column F   
			          Additions             
		Charged 	
	Balance at	to Costs 	Charged 
	Beginning 	and   	to Other 		Balance at  
	 of Period  	Expenses	Accounts	Deductions	End of Period

Allowance for 
doubtful accounts

Year ended
December 31, 1995	$   40,273	$  40,496	$     -     	$  37,131	
$        43,638


Year ended
December 31, 1996	$   43,638	$  14,348	$     -     	$    6,808	
$        51,178

	Year ended
		December 31, 1997	$   51,178	$  27,458	$     -     	$  23,792	
$        54,844

F-30

INTERWEST MEDICAL CORPORATION
SUPPLEMENTAL INFORMATION
(unaudited)



The SEC defines proved oil and gas reserves as those estimated quantities of 
crude oil, natural gas, and natural gas liquids which geological and 
engineering data demonstrate with reasonable certainty to be recoverable in 
future years from known reservoirs under existing economic and operating 
conditions.  Proved developed oil and gas reserves are reserves that can be 
expected to be recovered through existing wells with existing equipment and 
operating methods.  

Estimates of petroleum reserves have been made by independent engineers.  
The valuation of proved reserves may be revised in the future on the basis 
of new information as it becomes available.  Estimates of proved reserves 
are inherently imprecise.  

All of the reserves of the Company represent proved developed reserves.  
Estimated quantities of oil and gas reserves of the Company (all of which 
are located in the United States) are as follows:

	Petroleum	Natural  
	Liquids  	Gas     
	   (bbls)   	    (MCF)   

December 31, 1995 - proved developed reserves	4,940	640,400

December 31, 1996 - proved developed reserves	3,360	417,010

	December 31, 1997 - proved developed reserves	51,131	612,125

F-31

INTERWEST MEDICAL CORPORATION
SUPPLEMENTAL INFORMATION
(unaudited)



The changes in proved developed reserves for 1995, 1996 and 1997 were as
follows:

	Petroleum	Natural  
	Liquids  	Gas     
	   (bbls)   	    (MCF)   

Reserves at December 31, 1994	30,680	664,690

Production	(    6,654)	(   121,967)
Revision of estimates	(  19,086)	     97,677

Reserves at December 31, 1995	    4,940	   640,400

		Sales of reserves-in-place	(         30)	(       2,930)
		Production	(    1,070)	(   119,380)
		Revision of estimates	(       480)	(   101,080)

Reserves at December 31, 1996	    3,360	   417,010

	Sales of reserves-in-place	(         10)	(      7,348)
	Production	(    1,012)	(    80,016)
	Revision of estimates	48,661	209,050
	Discoveries	       132	    73,429

Reserves at December 31, 1997	  51,131	  612,125

The standardized measure of discounted estimated future net cash flows, and 
changes therein, related to proved oil and gas reserves (thousands of 
dollars) for 1997, 1996 and 1995 are as follows:

	  1997  	  1996  	  1995	

Future cash inflows	$ 2,131	$    975	$1,251
Future development and production costs	   1,255	587	621
Future income tax expense	      -     	     -     	     -     	

Future net cash flows	876	388	630
10% annual discount	      275	       60	     159

Standardized measure of 
discounted future cash flows	$    601	$   328	$   471

F-32

INTERWEST MEDICAL CORPORATION
SUPPLEMENTAL INFORMATION
(unaudited)



Primary changes in standardized measure of discounted future net cash flow:

	  1997  	  1996  	  1995   

Net changes in prices and production costs	$    20	$    88	$  218
Extensions, discoveries 
and improved recovery	111	-    	-    
Sale of reserves-in-place	(        3)	(        1)	-    
Sales of oil and gas, 
net of production costs	(      80)	(      78)	(    118)
Revision of estimates	305	(    158)	(      12)
Accretion of discount	33	39	40
Other	(    113)	(      33)	(      55)

	$  273	($  143)	$    73

Estimated future cash inflows are computed by applying year end prices of 
oil and gas to year end quantities of proved developed reserves.  Estimated 
future development and production costs are determined by estimating the 
expenditures to be incurred in developing and producing the proved oil and 
gas reserves in future years, based on year end costs and assuming 
continuation of existing economic conditions.  Estimated future income tax 
expenses are calculated by applying year end statutory tax rates (adjusted 
for permanent differences, tax credits and tax carryforwards) to estimated 
future pretax net cash flows related to proved oil and gas reserves, less 
the tax basis of the properties involved.  

These estimates are furnished and calculated in accordance with requirements
 of the Financial Accounting Standards Board and the SEC.  Because of 
unpredictable variances in expenses and capital forecasts, crude oil and 
natural gas price changes, and the fact that the bases for such estimates 
vary significantly, management believes the usefulness of these projections
 is limited.  Estimates of future net cash flows do not necessarily represent 
management's assessment of future profitability or future cash flow to the 
Company.  

F-33

	INTERWEST MEDICAL CORPORATION
	SUPPLEMENTAL INFORMATION
(unaudited)



The aggregate amounts of capitalized costs relating to oil and gas producing 
activities and the related accumulated depletion and depreciation as of 
December 31, 1997, 1996 and 1995 were as follows (thousands of dollars):

	   1997  	   1996  	  1995  	

Proved properties	$   477	$   488	$   656
Unproved properties, including wells in progress	-   	509	576
Accumulated depletion and depreciation	(     340)	(     301)	(     406)

    Net capitalized costs	$   137	$   696	$   826


The costs, both capitalized and expensed, incurred in oil and gas producing 
activities during the three years ended December 31, 1997, 1996 and 1995 
were as follows (thousands of dollars):

	  1997  	  1996  	  1995   

Property acquisition costs	$      83	$   240	$   431
Exploration costs	32	43	170
Development costs	-    	-    	-    

Results of oil and gas operations in the aggregate for the three years ended 
December 31, 1997, 1996 and 1995 were as follows:

	   1997    	    1996   	   1995     

Revenues	$261,806	$216,072	$321,547

Production costs	102,828	138,120	203,803
Exploration expense	30,110	332,027	501,639
Depreciation and depletion	80,297	68,424	165,605
Income taxes	-     	-     	-      
Other	        -     	    65,288	        -      	

	  213,235	  603,859	  871,047

Net oil and gas income (loss)	$  48,571	($387,787)	($549,500)

F-34

INTERWEST MEDICAL CORPORATION
SUPPLEMENTAL INFORMATION
(unaudited)



Past Production and Average Sales Price:

(a)	Net oil and gas production (in barrels and MCF, respectively) from 
Registrant's properties in the United States was as follows:

	Oil    	Gas    
	   (Bbls)  	  (MCF)  
      Year Ended      

December 31, 1995		6,654	121,967

December 31, 1996		1,823	97,034

December 31, 1997		1,012	80,016


(b)	Average sales price and production costs:

		       Average		        Average    
		     Sales Price       		  Production Costs    
	 (Bbls) 	(MCF)	 (Bbls) 	(MCF)
      Year Ended      

December 31, 1995	$16.84	$1.71	$13.60	$  .78

December 31, 1996	$22.19	$1.80	$12.01	$1.06

		December 31, 1997	$16.24	$2.08	$13.42	$1.11

F-35


INTERWEST MEDICAL CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS



  Column A  	 Column B 	    Column C     	 Column E	Column F 
		     Additions    
		Charged 			Balance
	Balance at	to Costs 	Charged 		 at End	Beginning 	and   	to Other 		  of
	of Period	Expenses	Accounts	Deductions	Period  

Allowance 
	for 
	doubtful 
	accounts


Year ended
December 31, 
1995	$  40,273	$ 40,496	$  -   	$  37,131	$  43,638


Year ended
December 31, 
1996	$  43,638	$ 14,348	$  -   	$   6,808	$  51,178


Year ended
December 31,
1995	$  59,600	$ 19,499	$  -   	$  38,826	$  40,273

F-36

INTERWEST MEDICAL CORPORATION
SUPPLEMENTAL INFORMATION



The SEC defines proved oil and gas reserves as those estimated quantities of 
crude oil, natural gas, and natural gas liquids which geological and 
engineering data demonstrate with reasonable certainty to be recoverable 
in future years from known reservoirs under existing economic and operating 
conditions.  Proved developed oil and gas reserves are reserves that can be 
expected to be recovered through existing wells with existing equipment and 
operating methods.  

Estimates of petroleum reserves have not been made by independent engineers.
  The valuation of proved reserves may be revised in the future on the basis
 of new information as it becomes available.  Estimates of proved reserves 
are inherently imprecise.  

All of the reserves of the Company represent proved developed reserves.  
Estimated quantities of oil and gas reserves of the Company (all of which
 are located in the United States) are as follows:

	Petroleum	Natural 
	Liquids  	Gas   
	  (bbls)  	 (MCF)  
December 31, 1995 - 
	proved developed reserves	4,940	640,400

December 31, 1996 - 
	proved developed reserves	3,360	417,010

December 31, 1997 - 
	proved developed reserves

F-37

INTERWEST MEDICAL CORPORATION
SUPPLEMENTAL INFORMATION



The changes in proved developed reserves for 1995, 1996 and 1997 were as
follows:

	Petroleum	Natural  
	Liquids  	Gas     
	  (bbls)  	  (MCF)  

Reserves at December 31, 1994	30,680	664,690

Production	(    6,654)	(  121,967)
Revision of estimates	(   19,086)	   97,677

Reserves at December 31, 1995	    4,940	  640,400

		Sales of reserves-in-place	(       30)	(    2,930)
		Production	(    1,070)	(  119,380)
		Revision of estimates	(      480)	(  101,080)

Reserves at December 31, 1996	    3,360	  417,010
Extensions and discoveries	225	12,662
Purchases of reserves-in-place	26,345	-   
Sale of reserves-in-place	(      131)	(    3,616)
Production	(    3,525)	(  180,696)
Revision of estimates	(    1,331)	(  207,800)

	Reserves at December 31, 1997

The standardized measure of discounted estimated future net cash flows, 
and changes therein, related to proved oil and gas reserves (thousands of 
dollars) for 1997, 1996 and 1995 are as follows:

	  1997  	  1996  	  1995  

Future cash inflows		$   975	$1,251
Future development and 
	production costs		587	621
Future income tax expense		   -   	   -   

Future net cash flows		388	630
10% annual discount		     60	    159

Standardized measure of 
discounted future cash flows		$   328	$   471

F-38

INTERWEST MEDICAL CORPORATION
SUPPLEMENTAL INFORMATION



Primary changes in standardized measure of discounted future net cash flow:

	 1997 	 1996 	 1995  

Net changes in prices 
	and production costs		$  88	$  218
Extensions, discoveries 
and improved recovery		-  	-   
Purchases of reserves-in-place		-  	-   
Sale of reserves-in-place		(    1)	-   
Sales of oil and gas, 
net of production costs		(   78)	(  118)
Net change in income taxes			-   
Revision of estimates		(  158)	(   12)
Accretion of discount		39	40
Other		(   33)	(   55)

		($ 143)	$  73

Estimated future cash inflows are computed by applying year end prices of 
oil and gas to year end quantities of proved developed reserves.  Estimated 
future development and production costs are determined by estimating the 
expenditures to be incurred in developing and producing the proved oil and 
gas reserves in future years, based on year end costs and assuming 
continuation of existing economic conditions.  Estimated future income tax 
expenses are calculated by applying year end statutory tax rates (adjusted 
for permanent differences, tax credits and tax carryforwards) to estimated 
future pretax net cash flows related to proved oil and gas reserves, less 
the tax basis of the properties involved.  

These estimates are furnished and calculated in accordance with requirements
 of the Financial Accounting Standards Board and the SEC.  Because of 
unpredictable variances in expenses and capital forecasts, crude oil and 
natural gas price changes, and the fact that the bases for such estimates 
vary significantly, management believes the usefulness of these projections 
is limited.  Estimates of future net cash flows do not necessarily represent 
management's assessment of future profitability or future cash flow to the 
Company.  

F-39

INTERWEST MEDICAL CORPORATION
SUPPLEMENTAL INFORMATION



The aggregate amounts of capitalized costs relating to oil and gas producing 
activities and the related accumulated depletion and depreciation as of 
December 31, 1997, 1996 and 1995 were as follows (thousands of dollars):

	 1997 	 1996 	 1995   

Proved properties		$   488	$  656
Unproved properties, 
including wells in progress		509	576
Accumulated depletion
and depreciaton		(    301)	(   406)

    Net capitalized costs		$   696	$   826


The costs, both capitalized and expensed, incurred in oil and gas producing 
activities during the three years ended December 31, 1997, 1996 and 1995 
were as follows (thousands of dollars):

		 1997 	 1996 	 1995  

Property acquisition costs		$  240	$  431
Exploration costs		43	170
Development costs		-   	-   

Results of oil and gas operations in the aggregate for the three years ended 
December 31, 1997, 1996 and 1995 were as follows:

		  1997  	  1996  	  1995   

Revenues		$216,072	$321,547

Production costs		138,120	203,803
Exploration expense		332,027	501,639
Depreciation and depletion		68,424	165,605
Income taxes		-   	-   
Other		  65,288	     -   

			 603,859	 871,047

Net oil and gas loss		($387,787)	($549,500)

F-40

INTERWEST MEDICAL CORPORATION
SUPPLEMENTAL INFORMATION



Past Production and Average Sales Price:

(a)	Net oil and gas production (in barrels and MCF, respectively) from 
Registrant's properties in the United States was as follows:

		Oil    	Gas    
		   (Bbls)  	  (MCF)  
      Year Ended      

December 31, 1995		6,654	121,967

December 31, 1996		1,823	97,034

December 31, 1997


(b)	Average sales price and production costs:

		     Average	      Average
		   Sales Price  		Production Costs  
	 (Bbls) 	(MCF)	 (Bbls) 	(MCF)

      Year Ended      

December 31, 1995	$16.84	$1.71	$13.60	$  .78

December 31, 1996	$22.19	$1.80	$12.01	$1.06

December 31, 1997

F-41

PART III

Item 10.	Directors and Executive Officers of the Registrant.
 
(a)	Identification of Directors:  

The directors of the Company are elected annually to serve until the next
 Annual Meeting and until their successors are elected and qualified.  

Year First Became
  a Director of 
Name					Age	     Company     	Position

Arch B. Gilbert		64		1983 (1)	President,
Secretary,
Treasurer &
Director
  
Terry M. Gallagher, M.D.	59		1983 (1)	Director

	(1) Date of incorporation

(b)	Identification of Executive Officers:  

Name					Position		Age

Arch B. Gilbert		President,		64
Secretary,
Treasurer
    	
Officers serve at the discretion of the Board of Directors.

Arch B. Gilbert received his B.A. and LL.B. degrees from the University of 
Oklahoma in 1955 and 1957 respectively.  He also received his LL.M. degree
 from Southern Methodist University in 1963.  Since August 1, 1979, Mr. 
Gilbert has been a member of the law firm of Arch B. Gilbert, A Professional 
Corporation.  From February 1, 1962 to August 1, 1979, Mr. Gilbert was a 
member of the law firm of Brooks, Tarlton, Gilbert, Douglas & Kressler, 
Fort Worth, Texas. 

Terry M. Gallagher, M.D. received his M.D. degree from the University of 
Michigan Medical School in 1964 and his Master of Science degree from 
Rackham Graduate School in 1969.  He did his residency at the University 
of Michigan Hospital in 1970.  From 1970 to 1972, he was a medical officer 
in the Air Force.  In 1971, he received his Board Certification from the 
American Board-Otolaryngology.  From 1972-1974, he was an Assistant 
Professor of Surgery (Otolaryngology) at the University of Missouri Medical 
School, Columbia, Missouri.  Since 1974, he has been in private practice 
(Otolaryngology) in Fort Worth, Texas. He is a diplomat of American Board-
Otolaryngology, Head and Neck Surgery, a Fellow of American 

F-42

College of Surgeons and a Clinical Assistant Professor of Surgery 
(Otolaryngology) at the University of Texas Medical School, San Antonio,
 Texas.  He is a member of the Tarrant County Medical Association, Texas 
Medical Association and American Medical Association.  He is an organizer 
and member of the Fort Worth Day Surgery Center.  

There is no family relationship between any director or executive officer 
of the Company.  

No personal meetings of the directors took place in 1997. All resolutions 
of the directors were taken by written consent.

(c)	Compliance With Section 16(a) of The Exchange Act.

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's 
directors, executive officers and persons who own more than 10% of the 
Company's outstanding Common Stock to file with the Securities and Exchange 
Commission reports of changes in ownership of the Common Stock of the 
Company held by such persons.  Officers, directors and greater than 10% 
shareholders are also required to furnish the Company with copies of all 
forms they file under this regulation.  To the Company's knowledge, based 
solely on a review of the copies of such reports furnished to the Company, 
during the two fiscal years ended December 31, 1996, all Section 16(a) 
filing requirements applicable to its officers, directors and greater than 
10% shareholders were complied with. 

Item 11.	Executive Compensation.  

During the fiscal year ended December 31, 1997, Arch B. Gilbert received cash 
compensation of $80,000.

All executive officers as a group (2 persons) received cash remuneration in 
fiscal year 1997 of $80,000.  This does not include legal fees paid to the 
law firm of the President or reimbursement of expenses paid to it.  See Item 
13.  Directors do not receive any compensation for their services as directors.
  
The Company has established an Incentive Stock Option Plan (the "Plan") which 
reserved 1,500,000 shares of Common Stock for the exercise of options which 
may be granted to directors, officers, employees and others.  No options are 
presently outstanding.  

F-43

Item 12.	Security Ownership of Certain Beneficial Owners and Management.

(a)  The following table sets forth, as of March 19, 1997, certain 
information regarding all persons known to the Company to be the beneficial 
owners (as determined in accordance with the Rules under the Securities 
Exchange Act of 1934) of more than 5% of the Company's Common Stock:


Name and Address			   Shares
 of					Beneficially
Beneficial Owner			   Owned    		Percent

Arch B. Gilbert			4,295,000 (1)		 25.54%
3221 Hulen Street, Suite C
Fort Worth, Texas  76107

(1)	Includes 100,000 shares owned by Arch B. Gilbert, A Professional 
Corporation.  Includes 6,000 shares owned by Jo Anne Gilbert, Mr. Gilbert's 
wife.  Does not include 252,000 shares owned by Shannon Gilbert, Mr. 
Gilbert's adult daughter and 252,000 shares owned by Devon Gilbert, Mr. 
Gilbert's adult daughter, which beneficial ownership Mr. Gilbert disclaims. 

(b)  The following table sets forth as of March 31, 1998 certain information 
concerning shares beneficially owned by all directors and all directors and 
officers of the registrant as a group:  

	Amount and
    Name of	Nature of
    Beneficial	Beneficial	Percent 
 Title of Class 	        Owner          	Ownership 	of Class

Common Stock	Arch B. Gilbert	4,295,000	25.54%
$0.001 Par Value

Common Stock	Terry M. Gallagher, M.D.	-0-	0.00%
$0.001 
Par Value

Common Stock	All Officers and	4,295,000	25.54%
$0.001 Par Value	Directors as a Group
(2 persons)


Item 13.	Certain Relationships and Related Transactions.


The Registrant shares the offices of Arch B. Gilbert, consisting of 
approximately 1,400 square feet, for which it paid total rent in the year 
1997 of $15,600.  The Registrant also reimbursed Mr. Gilbert for 50% of his 
office and administrative expenses for the year ending December 31, 1997 
and for direct out-of-pocket expenses incurred on behalf of 

F-44

the Company.  The total amount of such reimbursement was $37,126.  For the 
year 1997, Arch B. Gilbert, A Professional Corporation, whose sole 
stockholder is the President of the Company, was paid $5,000 for legal 
services rendered.  

In 1998, Mr. Gilbert may perform legal services on behalf of the Registrant 
although there are no present plans, agreements or understandings in regard 
to any such legal services.  If any such legal services are performed by 
Mr. Gilbert on behalf of the Company, he will be compensated at his usual 
hourly rates.

In 1997, Mr. Gilbert's wife performed consulting services for the Company 
for which she received total cash compensation of $36,000.  

The Company is not informed as to whether payments made to Mr. Gilbert and 
his wife were on terms as favorable as the Registrant might have obtained 
from unaffiliated parties.

F-45

PART IV

Item 14.	Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a)  1.	Financial Statements.

     The following financial statements of the Company are included in Part II,
Item 8:

Independent Auditor's Report

Consolidated Balance Sheets December 31, 1997 and 1996

Consolidated Statements of Operations for the Years Ended December 31, 1997, 
1996 and 1995

Consolidated Statements of Stockholders' Equity for the Years Ended 
December 31, 1997, 1996 and 1995

Consolidated Statements of Cash Flows for the Years Ended December 31, 1997,
 1996, and 1995

Notes to Consolidated Financial Statements

Supporting Schedules

2.	Financial Statement Schedules.  

Financial Statement Schedule II is included in Part II, Item 8.  All other 
schedules are omitted because they are not applicable, not required or 
because the required information is included in the financial statements 
or the notes thereto.  

3.   Exhibits.

The exhibits listed in the accompanying index to exhibits on Page 10 are 
filed as part of this report.  


(b)  Reports on Form 8-K.

No reports on Form 8-K were filed during the last quarter of the period 
covered by this report.

F-46

INTERWEST MEDICAL CORPORATION
INDEX TO EXHIBITS
ITEM 14(a)  


Exhibit	Description	Page

   3	Articles of Incorporation, Bylaws	  *

   4	Instruments defining the right of
  securities holders, including
  debentures	  *

  10	Material contracts	  *


*Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, the 
Registrant hereby incorporates by reference its Registration Statement No.
 2-82655 on Form S-18 and Exhibits to such Registration Statement, and which 
contains these documents which are also required to be filed as Exhibits to 
this Form 10-K.

F-47

SIGNATURES

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

INTERWEST MEDICAL CORPORATION



By:                                                                      
Arch B. Gilbert, President,
Chief Executive Officer,
Chief Financial Officer and
Chief Accounting Officer


Date:                                   


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 and on the dates indicated.  



By:                                        
Arch B. Gilbert, Director


Date:                                      



By:                                        
Terry M. Gallagher, Director


Date: