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                 U. S. SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549
   
                               FORM 10-KSB/A
    
           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

                 For the Fiscal Year ended:  May 31, 1998

                       Commission File No. 0-22155

   
                       PERENNIAL HEALTH SYSTEMS, INC.
                    (Formerly In-House Rehab Corporation)
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    (Exact Name of Small Business Issuer as Specified in its Charter)
    
            Colorado                                  84-0987697
-------------------------------       ---------------------------------------
(State or Other Jurisdiction of       (I.R.S. Employer Identification Number)
Incorporation or Organization)

      325 West Main Street, Suite 1400B, Louisville, Kentucky 40202
      --------------------------------------------------------------
       (Address of Principal Executive Offices, Including Zip Code)

Issuer's telephone number, including area code:  (502) 568-8923

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

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

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 the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes [X]   No [  ]

As of August 20, 1998, 13,391,072 Shares of the Registrant's No Par Value
Common Stock were outstanding.  The aggregate market value of voting stock
held by nonaffiliates of the Registrant on that date was approximately
$14,951,000.

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [   ]

State Issuer's revenues for its most recent fiscal year:  $18,687,000.

Documents incorporated by reference:  None

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                                    PART IV

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

    (a)  Exhibits.  The following exhibits are filed as part of this Report:

EXHIBIT
NUMBER      DESCRIPTION                     LOCATION
-------     -----------                     --------
  3.1       Articles of Incorporation,      Incorporated by reference to
            as amended                      Exhibit 3.1 to Registrant's
                                            Registration Statement on
                                            Form 10SB

  3.2       Bylaws                          Incorporated by reference to
                                            Exhibit 3.2 to Registrant's
                                            Registration Statement on
                                            Form 10SB

 10.1       1996 Stock Option Plan          Incorporated by reference to
                                            Exhibit 10.1 to Registrant's
                                            Registration Statement on
                                            Form 10SB
   
 10.2       Employment Agreement with       Previously filed
            David V. Hall

 10.3       Employment Agreement with       Previously filed
            Robert J. Babine
    
 10.4       Lease Agreement on Office       Incorporated by reference to
            Space                           Exhibit 10.4 to Registrant's
                                            Registration Statement on
                                            Form 10SB

 10.5       Contracts for Therapy           Incorporated by reference to
            Program Services with           Exhibit 10.5 to Registrant's
            Affiliates                      Form 10-KSB for the year ended
                                            May 31, 1997

 
 10.6       Credit Facility Agreement with  Incorporated by reference to
            Great Financial Bank and        Exhibit 10.7 to Registrant's
            related Security Agreement and  Form 10-KSB for the year ended
            Promissory Note                 May 31, 1997
   
 10.7       Loan and Security Agreement     Filed herewith electronically
            with Daiwa Healthco-3 LLC
            and related Guaranty of
            David V. Hall

 10.8       Employment Agreement with       Previously filed
            Rebecca Krueger

 10.9       Employment Agreement with       Previously filed
            Michael Kitchen

 10.10      Employment Agreement with       Previously filed
            Nicole Perry

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 21         Subsidiaries of the             Previously filed
            Registrant

 23         Consent of Strothman &          Previously filed
            Company PSC

 27         Financial Data Schedule         Previously filed.
    

    (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.


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

                                PERENNIAL HEALTH SYSTEMS, INC.
                                 (Formerly "In-House Rehab Corporation")


Dated: January 21, 1999         By:/s/ David V. Hall
                                   David V. Hall, President

    

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