41
                                
             U.S. SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                           Form 10-KSB

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 [Fee Required] For the
     Fiscal Year Ended December 29, 1996
[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] FOR THE
     TRANSITION PERIOD FROM _______________ TO ____________

                 Commission File Number 0-24768

              INTERNATIONAL NURSING SERVICES, INC.
         (Name of small business issuer in its charter)

     Colorado                             84-1123311
(State or Other Jurisdiction of          (IRS Employer
Incorporation or Organization           Identification No.)
                                
              Suite 400, 360 South Garfield Street
                     Denver, Colorado 80209
            (Address of Principal Executive Offices)

          Issuer's Telephone  Number:  (303)  393-1515
 Securities Registered Under Section 12(b) of the Exchange Act:
                              None
 Securities Registered Under Section 12(g) of the Exchange Act:
                 Common Stock.  $.001 Par Value;
          12% Cumulative Convertible Preferred  Stock;
             1994 Warrants to purchase Common Stock;
             Units, each consisting of two shares of
          12% Cumulative Convertible Preferred  Stock,
                    one share of Common Stock
                     and three 1994 Warrants

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

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

State registrant's revenues for its most recent fiscal year:
$14,259,000

The aggregate market value of the registrant's Common Stock held
by non-affiliates of the registrant as of March 18, 1997 was
approximately $7,252,548 (for purposes of the foregoing
calculation only, each of the registrant's officers and directors
is deemed to be an affiliate).

There were 7,382,548 shares of registrant's Common Stock
outstanding as of March 18, 1997.

Documents incorporated by reference:  None.

          Transitional Small Business Disclosure Format (Check
          one): Yes [ ]  No [X]
              This document contains         pages
            The Exhibit Index is located at page    .
                                  
                                  
                                  
                          TABLE OF CONTENTS
                                  
                                  
PART I                                                             3

  ITEM 1. DESCRIPTION OF BUSINESS                                  3
  ITEM 2  DESCRIPTION OF PROPERTY                                 12
  ITEM 3. LEGAL PROCEEDINGS                                       12
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS     14

PART II                                                           15

  ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS                                    15
  ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
           OF OPERATION                                           15
  ITEM 7. FINANCIAL STATEMENTS                                    27
  ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
           ON ACCOUNTING AND FINANCIAL DISCLOSURE                 27

PART III                                                          28

  ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
           CONTROL PERSONS; COMPLIANCE WITH SECTION
           16(A) OF THE EXCHANGE ACT                              28
  ITEM 10.EXECUTIVE COMPENSATION                                  29
  ITEM 11.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND AGREEMENT                                           35
  ITEM 12.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS          35
  ITEM 13.EXHBITS AND REPORTS ON FORM 8-K                         36
                                  
                               PART I

ITEM 1.   DESCRIPTION OF BUSINESS

           International Nursing Services, Inc. and its  subsidiaries
(collectively,  the  "Company") , doing  business  as  Nurse  Source,
National  Care  Resources, STAT Health Care  Services,  Ellis  Health
Services,  TherAmerica,  Inc. and Paxxon Services,  provides  skilled
nursing,  therapists, rehabilitation and other medical personnel  for
supplemental staffing in home care and in a broad spectrum of  health
care and educational facilities.  The Company's supplemental staffing
services   are  provided  through  a  pool  of  approximately   2,200
caregivers  including licensed and registered nurses, rehabilitation,
physical,  respiratory, occupational and speech  therapists,  medical
social workers, home care aides and other unlicensed personnel.   The
Company's supplemental and home care staff currently serves over  900
hospitals, clinics, nursing homes, physician groups, assisted  living
facilities,  health maintenance organizations and other  health  care
institutions, a variety of educational facilities and individual home
care  clients.   The  Company  operates through  offices  located  in
Yonkers  and  the  Bronx, New York, Houston and San  Antonio,  Texas,
Emoryville  and  Ontario,  California,  and  Denver,  Colorado.   The
Company   currently  provides  supplemental  staffing  services   and
therapists  in  New  York, Texas, Colorado  and  California.   Travel
nurses  and therapists are provided in 13 other states.  The  Company
intends  to  expand  through a combination  of  providing  home  care
services at existing supplemental staffing facilities, implementing a
strategic  marketing  program directed to local and  national  health
care providers and acquisitions of additional home care, supplemental
staffing, and related businesses.

History of the Company

      The Company was incorporated in the State of Colorado under the
name  NUR-Staff West, Inc. on April 22, 1988.  On May 24,  1988,  the
Company's name was changed to Med-Temps, Incorporated and on February
16,  1990,  the  Company adopted the name under  which  it  currently
conducts business.  On August 12, 1988, the Company completed a self-
underwritten  public  offering pursuant  to  which  an  aggregate  of
150,100 units, each unit consisting of one share of common stock  and
one  redeemable warrant, were offered and sold.  The Company received
gross  proceeds of $150,100 from its initial public offering of  such
units.   On  September  19,  1994, the  Company  completed  a  public
offering  of  225,000 Units, each Unit consisting of  two  shares  of
preferred  stock, one share of common stock and three 1994  Warrants.
A portion of the proceeds of this public offering was used to finance
the  Company's  acquisitions in September, 1994 of  Paxxon  Services,
Inc.  ("Paxxon Services") and Mint Energy Corporation, doing business
as Nurse Connection ("Nurse Connection").

      In  April  1996, the Company acquired certain assets  of  Ellis
Health  Services, Inc. ("Ellis").  The purchase price for  the  Ellis
assets  was  $1,025,000.   The purchase price  was  paid  by  issuing
256,250  shares  of the Company's common stock and guaranteeing  that
the  former  owner  of  Ellis would receive at  least  $1,025,000  in
proceeds from the sale of the shares.  Ellis is an affiliated company
of  Paxxon  Services, Inc., which the Company acquired in  September,
1994.   Ellis had revenues of approximately $1,800,000, gross  profit
of  approximately $560,000 (31% gross profit margin), and net  income
before tax of $56,000 for the year ended December 31, 1995.

      In  August  1996, the Company acquired certain assets  of  STAT
Health  Care  Services,  Inc.  ("STAT")  for  a  purchase  price   of
approximately $2,145,000.  STAT is a home care company which provides
home  health  aides to its customers and operates in  New  York,  New
York.   STAT had gross revenues of approximately $5,625,000  for  the
fiscal  year  ended December 31, 1995.  The purchase price  was  paid
$1,550,000 in cash, approximately $468,500 worth of common  stock  of
the  Company and warrants to purchase 125,000 shares of common  stock
at $1.88 per share.
     In January 1997, the Company acquired certain assets of Colorado
Therapists   On  Call,  Inc.  ("CTOC")  and  Professional  Healthcare
Providers,  Inc.  ("PHP"), together doing  business  under  the  name
TherAmerica  ("TherAmerica).   TherAmerica  had  gross  revenues   of
approximately $8,378,000 and a net loss of $63,000 for the year ended
December 29, 1996.  The acquisition was effective January 1, 1997 and
the  Company paid $2,000,000 cash and assumed approximately  $175,000
in liabilities for the TherAmerica assets which will be treated as  a
purchase for accounting purposes.

     In addition to the Ellis, STAT and TherAmerica acquisitions, the
Company  intends to pursue other possible acquisitions, however,  the
Company  has  no  other  agreements,  understandings  or  commitments
regarding  any other acquisitions. All of the acquisitions  currently
being  considered  by the Company will be subject  to  entering  into
definitive   documentation  which  will   contain   certain   closing
conditions,  including  the  Company obtaining  necessary  financing.
There  can  be  no  assurance that the necessary  financing  will  be
obtained  or that all other conditions to closing will be  satisfied.
Consequently,  there  can  be  no assurance  that  the  Company  will
consummate  any  or  all  of  the  contemplated  acquisitions.    See
"MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION   -
Overview."

Pending Disposition

      In January 1997, the Company entered into a letter-of-intent to
dispose  of its Medicare/Medicaid home care and staffing business  in
Denver,  Colorado  for  a  sale  price  of  $300,000.   The  sale  is
contingent  on  the completion of the due diligence  process  by  the
buyer   and   other   closing   conditions.    Revenues   from    the
Medicare/Medicaid  home  care and staffing business  in  Denver  were
approximately  $1,598,000 in 1996.  There can be no  assurance  given
that  the necessary closing conditions will be satisfied and the sale
consummated.

Industry Overview

  The Company believes the size of the supplemental staffing industry
to be $45 billion and this segment of the market is growing at a 15%
per year rate.  Medical sSupplemental staffing is provided to health
care institutions in the form of either staffing done on a daily
basis or through travel nurse assignments that are generally thirteen
weeks or longer in length.

  Health care institutions use supplemental staffing for the
following reasons:

 Local and regional health care worker shortages;
 Episodic needs for specialty health care during specific disease
  epidemics
 Increased patient acuity mix within the hospital markets;
 Increases in labor intensive medical care technology;
 The aging of the population; and
 Hospital trends to contain costs by cutting back staff positions to
  a minimal level and supplementing increased occupancy rates with
  agency staff.
  Hospital occupancy has shifted towards more outpatient/hospital
  early discharge/home health care programs.  Numerous health care
  organizations have developed special or innovative arrangements for
  early discharges, including both pre- and post-admission services.

  The home health care market represents a $34 billion industry
growing at 10% per annum.  Health aides, nurses and therapists are
provided to health care agencies on a per visit or daily basis.  The
home health care industry is expected to reach the $50 billion mark
by the end of the decade.  Independent projections indicate that 1995
revenue for home health care was approximately $2836 billion with a
compounded annual growth rate between 1995 - 1999 of 15%.

  The rapid growth of home health care in the United States is due
to:

 The general aging of the United States population;
 The realization of cost savings through treatment at home as an
  alternative to hospitalization;
 The fixed amount of Medicare reimbursement to hospitals based upon
  a patient's diagnosis, regardless of the cost of service or length of
  stay.  Hospitals are incented to minimize the length of a patient's
  stay;
 Advances in medical technology which have enabled a growing number
  of treatments to be provided in the home rather than requiring
  hospitalization; and
 Patient preference to be cared for in the home rather than the
hospital when the alternative is medically possible.

  Several programs have been proposed to reform the United States
health care system.  Some of these programs contain proposals to
increase government involvement in health care, lower reimbursement
rates and otherwise change the operating environment for the
Company's customers.  Health care facilities may react to these
proposals and the uncertainty surrounding such proposals by
curtailing the use of flexible staff.  The Company cannot predict
with any certainty what impact, if any, proposals for health care
reforms might have on the Company's business.  As part of health care
reform, recent federal and certain state legislative proposals have
included provisions extending health insurance benefits to temporary
employees.  Due to the wide variety of national and state proposals
relating to health care presently under consideration, the impact of
such proposals cannot be predicted.  The health care industry is
subject to changing political, economic and regulatory influences
that may affect the procurement practices and operations of hospitals
and other health care facilities.  During the past several years, the
health care industry has been subject to an increase in government
regulation of, among other things, reimbursement rates and certain
capital expenditures.  In addition, major third party payers of
hospital services (insurance companies, Medicare and Medicaid) have
significantly revised payment procedures in an effort to contain
health care costs.  Recently, Congress has proposed modifications to
the budgets for Medicare and Medicaid.  These proposed budget
modifications were vetoed by President Clinton.  However, the Company
believes that if similar budget modifications were enacted in the
future, the budgets for Medicare and Medicaid would likely experience
a decrease in the rate of growth in the amount of budgeted funds
available for use under such programs.  The recent proposals did not
contemplate a decrease in the amount of budgeted funds available for
use under such programs which would have had a significant negative
impact on the Company's revenues derived from the home care services.
The Company expects that future legislative proposals affecting
Medicare and Medicaid may be introduced by Congress from time to
time.  The Company cannot predict in any meaningful way what such
proposals might entail or what effect any such proposals may have on
the Company's business.  However, if any such proposals resulted in a
reduction in the reimbursement rate available under Medicare and
Medicaid programs, the Company's revenue derived from home care
services could be adversely affected.  These and other factors
affecting the health care industry may have a significant impact on
the Company's operating results.

Business Strategy

  The Company's strategy is to provide comprehensive services to
clients located in hospitals, health care organizations, and homes.
Staffing is provided in homes, school settings, hospitals, clinics
and physician offices utilizing a supplemental diversified mix of
traditional nursing and other allied health care professionals such
as physical, occupational and respiratory therapists, home health
aides, and other nursing professionals.

  The services provided by the Company bridge the gap between
hospital and home. Often times the same professionals caring for
patients in the hospital setting are involved in the care at home.
Clients request that the Company provide the same trained
professional for both home and hospital health care.  This request
has driven the Company to provide supplemental staffing, travel nurse
and home health care in each of the geographical markets that the
Company operates.

  Other key elements of the Company's strategy include:

 Broaden customer relationships through enhanced contracting,
  marketing and obtaining certain key accreditations such as the Joint
  Commission Accreditation for Health Care Organizations (JCAHO);
 Expand services utilized by clients;
 Growth through acquisition; and
 Development of an integration philosophy and plan that defines the
  achievement of certain operating efficiencies.

  The foregoing business strategies include forward-looking
statements, the realization of which may be impacted by certain
important factors discussed elsewhere herein.  See "MANAGEMENTS
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - Overview".

Customers

  The Company's customers include, but are not limited to, patients,
hospitals, physicians, discharge planners, social workers, third
party payers including Medicare and Medicaid, educational facilities
and other types of health care organizations.  Approximately 6% of
the Company's revenues in 1996 were derived from third party payers,
including Medicare and Medicaid programs.  These programs require
that the Company meet and maintain standards of eligibility for
participation and reimbursement.  A certain portion of the Company's
future operating results are dependent on it's ability to keep
current on changes and modifications within the programs and to
incorporate these changes into its operations to continue to meet
eligibility standards.

  Billing, payment arrangements and staffing agreements with the
Company's customers are stipulated by contracts with the customer.
The contracts are not exclusive and do not obligate the customer to
utilize a certain amount of service for any specific period of time.
Customers often use several supplemental staffing agencies to meet
their needs and the Company competes with these agencies on the basis
of pricing, availability of caregivers, and quality of service.
Services

      The  Company offers a broad range of professional  and  support
services to meet medical and personal needs in the home or in  health
care  or  educational  facilities.  The following  provides  a  brief
description  of the services customarily provided by skilled  nursing
personnel and other caregivers placed with customers.

 Registered  Nurses provide a broad range of nursing care  services,
  including skilled observation and assessment, instruction of patients
  regarding   medical  and  technical  procedures,  direct   hands-on
  treatment,  and communication and coordination with  the  attending
  physician or other service agencies.

 Licensed  Practical  Nurses perform, under  the  supervision  of  a
  registered  nurse,  technical  nursing  procedures,  which  include
  injections, dressing changes, assistance with ambulation and catheter
  care.

 Physical and Rehabilitation Therapists provide services related  to
  the  reduction  of pain and improved rehabilitation of  joints  and
  muscles, including strengthening and range-of-motion exercises, heat
  lamp therapy and massage.

 Occupational Therapists assist patients in restoring their  ability
  to perform routine activities of daily living by offering instruction
  in  self  care,  discussing  techniques for  coping  with  physical
  disability  and  suggesting the use of assistant  devices  or  home
  adaption to make living at home easier.

 Speech Therapists retrain patients who have swallowing difficulties
  or  speech, language or hearing problems to improve their  physical
  capabilities or communication abilities.

 Social  Workers  help  patients and their families  deal  with  the
  emotional, social, financial and personal problems that may occur as
  a  result of illness or disability including the identification and
  coordination of services with other community resources.

 Home   Health  and  certified  Nurse  Aides,  working   under   the
  supervision of a registered nurse, provide health-related  services
  and personal care such as assistance with ambulation, limited range-
  of-motion exercises and monitoring of vital signs.

 Homemakers/Companions  provide personal care  and  assistance  with
  daily living activities, including bathing, dressing, grooming, meal
  preparation, light housekeeping and occasional shopping for essential
  items.

Recruiting

      The  Company is active in recruiting skilled nursing  personnel
and other caregivers in order to assure availability of personnel  as
customer  demand warrants.  Location of assignment, compensation  and
benefits  are generally the principal factors considered  by  medical
personnel  when  determining whether to contract  with  a  particular
flexible  staffing business. To date, the Company's  operations  have
not  been  adversely affected by the shortage of  nurses  in  certain
geographical regions or specialties.
      The  Company's ability to deliver quality nursing  services  is
dependent  upon  the Company's ability to recruit  qualified  skilled
nursing   personnel.   The  Company's  recruiting   efforts   include
advertising,   attendance  at  national  and  regional   conventions,
personal  and  professional  referrals  and  participation   by   the
Company's  officers  in  nursing and other trade  associations.   The
Company has recruited and continues to recruit medical personnel  and
has  entered into agreements with other staffing agencies whereby the
Company  can  use the other agency's personnel under  contract.   The
Company  has  compiled a listing of over 2,200 qualified  nurses  and
medical  personnel  who  are  classified by  skills,  experience  and
availability   for  assignment.   These  nurses  and  other   medical
personnel  generally do not work exclusively for  the  Company.   The
Company  has  in  the past been generally successful in  meeting  its
staffing  requirements from its existing pool of caregivers  and,  in
cases where a particular specialty or expertise was unavailable,  the
Company  has  been  successful in hiring personnel on  a  subcontract
basis from other flexible staffing companies.

Marketing and Sales

      The Company has developed distinct marketing strategies for its
services.   The Company's clientele currently consists  of  hospitals
and other health care and educational facilities located in New York,
Texas,  California and Colorado and its travel nursing and  therapist
clientele  consists of hospitals and other health care facilities  in
13  states.   The  Company  has secured non-exclusive  agreements  to
supply  supplemental  staff to these health  care  facilities  for  a
period  of  between  one  and  two  years.  The  Company  derives   a
significant portion of its business through its marketing efforts and
expects  to  expand  its  marketing efforts  to  local  and  regional
hospital  chains  as the expected consolidation in  the  health  care
industry is anticipated to result in an increasing number of regional
and national hospital chains.

       The   Company  markets  its  supplemental  staffing   services
principally  through  direct  contact with  hospitals,  direct  mail,
attendance  at  national and regional conventions  and  seminars  and
telephone solicitations.  In order to increase its penetration in the
supplemental  staffing  market, the  Company  has  also  initiated  a
program   to   include  rehabilitation,  physical   and   respiratory
therapists  for  placement in hospitals and  other  health  care  and
educational  facilities.  Management  anticipates  the  Company  will
continue to develop its marketing programs.

      Management also believes that the Company's ability  to  expand
its   business  will  depend  in part on  the  implementation  of  an
acquisition strategy which has been initiated by the acquisitions  of
Paxxon  Services,  Ellis,  STAT, TherAmerica  and  Nurse  Connection.
Management  believes that the daily staffing business is particularly
suited  to  a "growth by acquisition" strategy because hospitals  and
other  health  care  and  educational institutions  customarily  draw
supplemental   staff   from  local  providers.    Acquiring   ongoing
businesses  in  new  locations gives the  Company  the  advantage  of
building   on   existing   referral  relationships   and   customers.
Accordingly, the Company expects to continue to seek out acquisitions
in  the  daily  staffing  market  in order  to  increase  its  market
penetration.

      The  Company's marketing and sales strategy consists of working
to  increase  its  shift  count and improve its  gross  margins  with
existing   clients,  bidding  competitively  on  new  contracts   and
continuing to expand its opportunities to place its personnel at non-
traditional  facilities.   The Company has  expanded  its  geographic
presence  with  the recent acquisitions of STAT and  TherAmerica  and
intends to aggressively market its skilled nursing, nurse aides, home
health  aides and therapists to offices which currently  don't  staff
these  services.   In addition, the geographic expansion  allows  for
more  skilled nursing and therapist travel placements.   The  Company
intends to utilize the existing infrastructure in each of its  branch
offices to expand its service offerings in each branch office.

      The  Company's home care services are paid for by a variety  of
sources.    Payment  for  services  generally  comes  from  Medicare,
Medicaid, local government health care programs, commercial insurance
carriers  and private individuals.  In instances where patients  have
more  than  one  source  of reimbursement, the  portion  the  Company
charges that is not covered by a primary source may be covered  by  a
secondary  source  of  reimbursement.  The Company  also  obtains  an
assignment  of benefits from the patient that enables the Company  to
file  claims for its services with third-party payers.  As a  result,
such third-party payers pay the Company directly for the reimbursable
amount  of  its  charges.   The Company's experience  has  been  that
certain  policies  offered  by insurance  carriers  and  governmental
agencies contain reimbursement limitations.

      Medicare  reimburses  health care  providers,  on  a  cost-base
system,  up to certain limits.  To the extent Medicare limits  exceed
the provider's direct cost for a particular service, the provider can
seek  reimbursement for certain indirect costs, up  to  an  aggregate
amount  equal to the Medicare limits for that service.  In  order  to
receive Medicare reimbursement, the Company must provide services  in
states  which  have  certification  requirements  and  must   be   in
compliance  with  those  requirements.   The  Company  is   currently
certified in the State of Colorado and licensed in the State  of  New
York as a home health care agency.  In certain states which require a
certificate  of  need (a "CON"), the Company may be  required  to  be
certified   in  order  to  provide  home  care  services.    Although
certification is a requirement to receive a CON, the Company  is  not
prohibited   from  subcontracting its  personnel  to  CON  providers.
Because  CON's  are limited in a number of states and   may  only  be
obtained  by  acquiring a CON provider, the Company may  continue  to
subcontract to CON providers in those states.  In those states  where
CON's  become  available and Medicare and Medicaid  are  expected  to
constitute a material portion of the Company's revenues, the  Company
may  seek  to  obtain certification.  Each state  may  have  its  own
certification  standards with which the Company will be  required  to
comply in order to receive a CON.

Competition

      The  Company's  supplemental staffing businesses  compete  with
other  medical  recruitment and supplemental  staffing  organizations
which  offer  the same or similar services provided by  the  Company.
Many  of these competitors have greater financial and other resources
than  are  available to the Company.  Competition  for  hospital  and
other  health  care  clients is generally based  on  the  ability  to
provide qualified nurses and  medical personnel on a timely basis  in
a  cost-competitive manner.  The Company also experiences competition
in recruiting for professional nursing staff.
     The Company believes the key competitive factors in its industry
include  service,  price  and its ability to  deliver  staff  to  the
geographic  area  where  needed.  The range of  specialized  services
offered,  together with the price charged for the services, are  also
competitive factors in attracting clients.  There is limited, if any,
competition  in price with respect to Medicare and Medicaid  patients
because  the  revenue  for  services to  such  patients  is  strictly
controlled  and  based on fixed rates and uniform cost  reimbursement
principles.

Regulation

      Several programs have been proposed to reform the United States
health  care  system.  These programs include proposals  to  increase
governmental  involvement in health care, lower  reimbursement  rates
and  otherwise  change the operating environment  for  the  Company's
customers.  The objective of these programs is to expand health  care
coverage to every American while curtailing medical costs. There  can
be  no assurance the Company will be able to capitalize on the effect
of such legislation or that such legislation will not have a negative
impact on the Company's operations.

      The  federal  government and the states in  which  the  company
currently   operates  regulate  various  aspects  of  the   Company's
supplemental  staffing business.  Home care agency  certification  by
the  Health  Care Financing Administration ("HCFA")  is  required  to
enable the Company to receive reimbursement for nursing services  and
supplies   from   Medicare.   HCFA  requires,  as  a   condition   to
participation  as  a  home care agency in the Medicare  program,  the
satisfaction of certain standards with respect to personnel, services
and  supervision, appropriation of annual budgets, cost  reports  and
capital  expenditure' plans, and the establishment of a  professional
advisory  group.    The  Company's Denver office  presently  provides
services   covered   by   Medicare.   The   Company   has   received,
accreditation   from  the  Joint  Commission  on   Accreditation   of
Healthcare   Organizations  ("JCAHO")  to  evidence   the   Company's
commitment to high service standards in its Bronx and Yonkers offices
and  intends to seek such accreditation in its other offices  to  the
extent  deemed  beneficial.  Management believes  such  certification
provides  a  marketing  advantage to  the  Company's  home  care  and
rehabilitation   services,  although  there  is  no  assurance   such
certification will be received by all of its offices.  In the future,
it  is  possible that home care providers may be required  to  obtain
JCAHO or other certifications, the receipt of which by the Company in
all of its offices is not assured.

      In  many  of the states with regulations governing health  care
providers, the Company need only be licensed by the state.  In almost
half  the  states, home care providers must receive a  CON  from  the
state.  CON laws can limit or prohibit a company's ability to provide
certain  services and to establish or expand its operations within  a
state.   CON  laws  and  other regulations may  limit  to  designated
geographic  locations the services to be provided by the  Company  or
healthcare providers which utilize the Company's supplemental  staff.
CON  requirements and restrictions vary substantially from  state  to
state.   The Company's inability to obtain or renew any license,  CON
or certification could adversely affect the Company's operations.  If
the   Company  is  not  able  to  obtain  a  CON  in  any  particular
jurisdiction,  the  Company  may still  provide  services  which  are
reimbursed by payers other than Medicare by subcontracting to  a  CON
provider.

      Several states have enacted legislation requiring providers  of
supplemental staffing services to publicly post their billing  rates.
At  least  one  state  has  adopted  legislation  that  provides  for
regulatory  review  of such billing rates.  The adoption  of  similar
legislation  by  other  states could have an adverse  impact  on  the
supplemental staffing industry.

      The  Company  is  subject to various  city,  county  and  state
payroll,  occupational and professional licensing laws that apply  to
medical professionals.  Many states have statutes requiring training,
monitoring and regulating of medical professionals.

Employees

     Exclusive of medical personnel, the Company has 73 full-time and
4 part-time administrative employees.

      The  number of caregivers on assignment varies from day to day.
These medical personnel do not necessarily work full-time shifts  and
may  not  work exclusively for the Company.  The Company's  employees
are  not  represented  by  a  union and  the  Company  considers  its
relations with its employees to be good.

      The Company currently has in place a screening process for  all
prospective   medical  personnel.   The  Company  has  entered   into
agreements with other staffing agencies whereby the Company may place
medical  personnel  currently  under  contract  with  other  staffing
agents.




ITEM 2.    DESCRIPTION OF PROPERTY

      The  Company's executive offices are located at Suite 400,  360
South  Garfield Street, Denver, Colorado.  A summary of the Company's
facilities is provided below:

<TABLE>
<CAPTION>
                                  Square      Expiration        1996
                                  Footage        Date           Rent
<S>                                 <C>            <C>            <C>
                                                            
Houston, Texas                     2,626         8/14/97      $ 22,000
San Antonio, Texas                 1,270         4/30/98        13,000
Yonkers, New York                  2,006         6/30/97        18,000
Denver, Colorado                   6,613         9/30/00        91,000
Englewood, Colorado (1)            2,269        10/31/97        36,000
Phoenix, Arizona (1)                 704         4/30/97         6,000
Ontario, California (1)            1,513        12/31/98        25,000
                                                            
                                 $17,001                     $ 211,000
</TABLE>

(1)  Includes TherAmerica

      The  Company  believes these facilities,  which  are  used  for
administrative offices, will be suitable for the Company's needs  for
the  foreseeable  future.   The Company  believes  that  all  of  its
properties are adequately insured.

ITEM 3.    LEGAL PROCEEDINGS

      On  July  26,  1996, Staff Builders, Inc. filed a civil  action
against  the  Company  in  the US District  Court  for  the  Southern
District  of  New  York  demanding payment  of  an  outstanding  note
payable.   The  plaintiff alleged that the Company owed approximately
$145,000  in principal and $12,000 in accrued interest.  The  Company
entered  into  a  settlement agreement in January  1997  whereby  the
Company  will pay $166,122 in installments between February 15,  1997
and July 15, 1997 in exchange for a release of all claims.


      In  January 1997, the Company was named as a party in a lawsuit
filed  by  a  former  patient in San Antonio,  Texas.  The  complaint
alleges  that  a  respiratory therapist employed by the  Company  was
negligent  in  his  duties resulting in bodily  injuries  and  mental
anguish  suffered by the patient.  In a separate but related  matter,
the  client/hospital at which the alleged incident occurred has  paid
$100,000 to the plaintiff in exchange for being released as  a  party
to  the  lawsuit  and  has demanded that the  Company  indemnify  the
hospital  as  the  hospital  alleges is stipulated  in  the  contract
between the Company and the hospital.  The Company believes that  its
employee was not negligent in his duties and that the Company has  no
liability  in this matter.  The Company intends to vigorously  defend
itself in this matter.  In addition, the Company does not believe  it
has an obligation to indemnify its client hospital under its contract
as the Company was not a party to the settlement.

      The  Company's professional liability policy covers the defense
of  the  allegations  of negligence, but does not cover  settlements,
awards  or  damages.  The Company has accrued $100,000 in 1996  as  a
potential settlement and litigation expense.


  The  Company  purchased  Ellis Health  Services,  Inc.  by  issuing
256,250  shares  of the Company's common stock and guaranteeing  that
the former owner of Ellis would realize at least $4.25 per share upon
the  sale  of the first 12,000 shares each month and $4.00 per  share
thereafter.  The Company agreed to issue additional shares  or  stock
to  make  up  any shortfall and the Chairman and CEO of  the  Company
pledged  100,000 of his personal shares as collateral.   At  December
29,  1996, the former owner of Ellis had a shortfall of approximately
$500,000 from the sales of stock to that date.  In January 1997,  the
former  owner  of  Ellis exercised his right  to  take  the  security
pledged  by  the  Chairman  and CEO of the  Company.   The  Board  of
Directors  approved  the  issuance to the Chairman  and  CEO  100,000
shares  of  common  stock and options to purchase 250,000  shares  of
common  stock at $1.00 per share to compensate the Chairman  and  CEO
for the loss of his personal shares.  The $1.00 per share represented
the  fair  market value of the shares at the date of the  grant.   In
March  1997, the former owner of Ellis has presented a demand  letter
to  the  Company requesting immediate payment of the remaining amount
due of approximately $400,000 or if the Company is unable to pay, the
former  owner of Ellis is threatening to sue the Company.  The letter
also stated that if the Company is unable to pay such amount by April
7,  1997, legal action will be pursued with the former owner  seeking
recovery of the shortfall, interest, attorney fees, and other related
expenses  incurred.   The  Company has begun  negotiations  with  the
former owner in an attempt to resolve this matter.

  In  February  1997, the Company received a subpoena  in  connection
with  a grand jury investigation on organized crime influence of  the
securities markets.  The Company is in the process of fully complying
with  the subpoena.  The Company has been informed that it is  not  a
target of the investigation.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      The annual meeting of shareholders was held on November 4, 1996
in  Denver, Colorado (adjourned as to certain matters until  November
21, 1996) for the purpose of electing a board of directors, authorize
an  increase  in  the  authorized shares of the Corporation's  common
stock from 15,000,000 to 25,000,000, ratify and approve the Company's
1996  Stock Incentive Plan (the "1996 Plan"), approve an increase  in
shares  reserved  for issuance under the 1996 Plan  from  500,000  to
2,000,000  and  approving  the appointment of  independent  auditors.
Proxies  for the meeting were solicited pursuant to Section 14(a)  of
the Securities Exchange Act of 1934 and there was no solicitation  in
opposition to management's solicitations.

       Voting   results   for  the  nomination  of   each   director,
authorization of the increase in the authorized shares,  ratification
and  approval  of the 1996 Plan and the increase in shares  available
thereunder and approving the independent auditors were as follows:

<TABLE>
<CAPTION>
                      Shares     Shares     Shares     Shares     Shares
                       Voted      Voted      Voted      Voted       Not
                        For     Against    Withhold   Abstain     Voted
<S>                     <C>        <C>       <C>        <C>         <C>     
                                                                 
Election of directors
 John Yeros         3,569,625      -         64,860       -          -
 Colleen Dougherty- 3,572,499      -         61,626       -          -
  Gray                                     
 Tom Oberle         3,572,499      -         61,626       -          -
 Charlie Powell     3,572,499      -         61,626       -          -
                                                                 
Approval of increase
 in authorized
 shares             3,383,285    196,753       -         54,087      -
                                                                 
Approval of 1996                                                 
 Plan and amendment
 to 1996 Plan         821,938    249,098       -         92,242     2,481,047 
                                                                 
Approval of independent
 auditors           3,552,781     30,088-      -         51,256       -
</TABLE>

      Shareholders of record for purposes of this annual meeting were
determined as of September 18, 1996 and total shares able to be voted
were  4,631,567.   Therefore,  all proposals  were  approved  by  the
shareholders  except approval of the 1996 plan and amendment  to  the
1996 plan.

                               PART II


ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER  MATTERS

      The  Company's  common stock is traded on the  NASDAQ  SmallCap
Market  under the symbol "NURS."  The following table shows high  and
low  bid  price  information as quoted by  NASDAQ.   Such  quotations
reflect  inter-dealer prices, without retail mark-ups,  markdowns  or
commissions, and may not necessarily represent actual transactions.

<TABLE>
<CAPTION>
                         Common Stock Bid Price
                         High      Low
<S>                      <C>        <C>
1995 Fiscal Year
    First Quarter    $   3.75 $   2.00
    Second Quarter       2.88     1.06
    Third Quarter        2.19     1.13
    Fourth Quarter       5.97      .44

1996 Fiscal Year
    First Quarter       $7.94  $  3.00
    Second Quarter       3.69     1.88
    Third Quarter        3.15     1.69
    Fourth Quarter       2.63     1.00
</TABLE>

      There were approximately 313 holders of record of the Company's
common  stock as of March 3, 1997.  This number includes shareholders
of record who may hold stock for the benefit of others.

      The  Company does not expect to pay any dividends on its common
stock  in  the foreseeable future.  Management currently  intends  to
retain  all  available funds for the development of its business  and
for  use as working capital.  The payment of dividends on the  common
stock  is  subject to the Company's prior payment of all accrued  and
unpaid dividends on any preferred stock outstanding.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

      The  Company's  revenues are derived primarily  from  providing
supplemental   staff  for  hospitals  and  other  health   care   and
educational  institutions and individual patients restricted  to  the
home.  The Company believes the medical staffing market will continue
to  grow.   The  Company believes it is positioned to expand  in  the
rapidly growing health care industry.

      The  Company's  business strategy is  to  provide  a  range  of
flexible  staffing  services  to a diversified  mix  of  health  care
organizations in markets served by the Company.  The Company  expects
to  implement this strategy through internal growth achieved  through
strategic  marketing  programs and expansion of services  offered  at
existing locations, as well as acquisitions of businesses, which will
complement existing services.

      Historically,  the  Company chose  to  segregate  its  revenues
between  home care revenues and supplemental staffing revenues.   The
distinction  between the two being that home care revenues  generally
related  to revenues derived from patients cared for in the home  for
which the Company was the primary caregiver and party responsible for
billing the third party payer.  During 1996, with the acquisition  of
STAT  and  the  decision to sell the home care  business  in  Denver,
Colorado,  a  larger percentage of the Company's home  care  revenues
relate  to  staffing  of individuals in homes  for  other  home  care
agencies.    In   these  instances,  the  caregiver  is   effectively
supplemental staff for the home care agency.  The home care agency is
the  primary caregiver and is responsible for billing the third party
payer.   The Company bills the home care agency.  The characteristics
of  this  type of home care are similar to the Company's supplemental
staffing business and therefore, revenues are not broken out  between
home care and supplemental staffing in the current presentation.

1996 Private Placements

     In  July  and  September 1996, the Company completed  a  private
placement  of  244  units,  each  unit  consisting  of  a  share   of
convertible  preferred  stock, $10,000  par  value  ("1996  Preferred
Stock"),  a warrant to purchase 8,000 shares of the Company's  common
stock  at  $2.50 per share and a unit purchase option to purchase  an
additional unit at $10,000 per unit.  The convertible preferred stock
carries  a 10% dividend and is convertible at the lesser of $1.25  or
75%  of  the average sales price for the five trading days  prior  to
conversion.   The  private placement raised  gross  proceeds  to  the
Company of approximately $2,440,000.

     Approximately $1,550,000 of the proceeds raised was used to fund
the cash purchase portion of STAT.  A shareholder who participated in
the  placement  of  the private placement was paid  a  commission  of
$117,000  in 1996 and issued a warrant to purchase 100,000 shares  of
common  stock at $2.00 per share.  The warrant price was subsequently
reduced to $1.00 per share in January 1997.

     During  1996, 88.5 units (with accrued dividends) were converted
to  923,111  shares of common stock.  In addition, a Unit holder  who
held  17  units was allowed to reduce their purchase price  on  their
warrants to $1.00 per share from $2.50 per share, resulting in  gross
proceeds to the Company of $136,000 in November 1996.  Subsequent  to
year  end, an additional 100 units have been converted through  March
3,  1997 resulting in the issuance of an additional 1,388,723  shares
of  common  stock in 1997.  Also in 1997, a Unit Holder who  held  20
Units  exercised  their  Unit  purchase  option  resulting  in  gross
proceeds  to  the  Company of $200,000.  The Unit holder  immediately
converted  the  preferred  to common resulting  in  the  issuance  of
257,028 shares of common stock in January 1997.

1997 Private Placement

     In  January and February 1997, the Company completed  a  private
placement  of  167.15 Units, each unit consisting  of  one  share  of
convertible  preferred  stock, $10,000  par  value,  "1997  Preferred
Stock",  and a warrant to purchase 10,000 shares of common  stock  at
$1.00 per share.  The convertible preferred stock carries no dividend
if   the   underlying  common  stock  is  included  in  an  effective
registration  statement within 90 days of the date of the  agreement.
After  90  days,  if  the underlying shares are not  included  in  an
effective registration statement, the dividend rate becomes 18%.   In
addition,  the preferred stock contains a redemption feature  whereby
if  the  underlying  common  stock which  the  preferred  shares  are
convertible  into  is  not  effectively  registered  by  the   second
anniversary date of each respective unit placed, the holder at  their
option  may  redeem the preferred shares for $10,000  each  plus  all
accrued  unpaid  dividends.  The Company  raised  gross  proceeds  of
$1,671,500 from this private placement.  Commissions of $99,540  were
paid  to  individuals who assisted in the private placement  who  are
also  shareholders of the Company.  Substantially all of the proceeds
were  used  to  purchase  TherAmerica (See  Note  2  to  the  audited
financial statements).

Acquisitions

     In September 1994, with a portion of the proceeds from the above-
described public offering, the Company acquired substantially all  of
the  assets,  excepting accounts receivable, of two businesses  which
provide supplemental staffing.  Paxxon Services,  located in Yonkers,
New  York, provides daily staffing and rehabilitation services to the
acute  and  long-term pediatric and geriatric patient  population  in
health  care  and  educational  facilities  in  a  five-county   area
including  a portion of New York City.  Nurse Connection, located  in
Houston, Texas, provides daily staffing services of licensed  medical
personnel  in  Houston and San Antonio, Texas and  travel  nurses  in
Texas and several other states.

      In  connection  with its acquisition of the  assets  of  Paxxon
Services,  Inc.  in 1994, the Company executed and delivered  to  the
seller  a  promissory note in the principal amount of  $937,500  (the
"Paxxon  Note").   The outstanding principal balance  of  the  Paxxon
Note,  net  of  certain credits was $434,202 as  of  March  1,  1996.
Accrued and unpaid interest on the Paxxon Note totaled $9,149  as  of
March 1, 1996.  The Paxxon Note was payable in quarterly installments
of  $78,125 each with the last installment being due in 1998.  In  an
effort to improve the balance sheet and cash flow of the Company, the
Company paid $312,500 of the principal balance of the Paxxon Note and
issued  to  the  holder  of  the Paxxon Note  28,203  shares  of  the
Company's Common Stock in full satisfaction of the remaining  balance
of the Paxxon Note.

      Additionally, the Company entered into an agreement in 1994  to
acquire substantially all of the assets of Ellis, which is located in
Yonkers,  New  York  and had common ownership with  Paxxon  Services.
Ellis  provides  home care services in the same five county  area  as
Paxxon Services.  Completion of the Ellis acquisition was subject  to
regulatory  requirements, including the Company obtaining  a  license
from,  and the approval of, the Department of Health of the State  of
New  York.   The  Company received approval from  the  Department  of
Health of the State of New York in January 1996 and received issuance
of  the  license.   The  Company and Ellis  terminated  the  original
agreement  and  entered into a new agreement pursuant  to  which  the
purchase price of the assets was paid through the issuance of 256,250
shares of the Company's Common Stock.

     In connection with the purchase of Ellis Health Services and the
issuance  of  28,203 shares of common stock to pay off the  remaining
amount due under the Paxxon note payable, the Company guaranteed that
the former owner of Ellis would realize at least $4.25 per share upon
the  sale  of the first 12,000 shares each month and $4.00 per  share
thereafter.  The Company agreed to issue additional shares  or  stock
to  make  up  any shortfall and the Chairman and CEO of  the  Company
pledged  100,000 of his personal shares as collateral.   At  December
29,  1996, the former owner of Ellis had a shortfall of approximately
$500,000 from the sales of stock to that date.  In January 1997,  the
former  owner  of  Ellis exercised his right  to  take  the  security
pledged  by  the  Chairman  and CEO of the  Company.   The  Board  of
Directors  of the Company issued the Chairman and CEO 100,000  shares
of  common  stock  and options to purchase 250,000 shares  of  common
stock  at $1.00 per share to compensate the Chairman and CEO for  the
loss  of  his  personal shares.  The $1.00 per share represented  the
fair  market value of the shares at the date of the grant.  In  March
1997, the former owner of Ellis has presented a demand letter to  the
Company requesting immediate payment of the remaining amount  due  of
approximately $400,000 or if the Company is unable to pay, the former
owner of Ellis is threatening to sue the Company.

      In  July, 1996, the Company and its wholly-owned subsidiary  JJ
Care Resources, Inc. ("JJ Care") completed the acquisition of certain
assets  of  STAT Health Care Services, Inc. for a purchase  price  of
$2,145,000,   payable  with  $1,550,000  in  cash  and  approximately
$468,000 worth of common stock and warrants.

      STAT  provides nurse and home health care staffing services  in
the   metropolitan  New  York  area.   Based  on  audited   financial
information, STAT had revenues of $5.7 million and pre-tax net income
of $514,000 for its fiscal year ending December 31, 1995.

     In addition to the Ellis, STAT and TherAmerica acquisitions, the
Company also intends to pursue other possible acquisitions.   All  of
the  acquisitions  currently being considered  by  the  Company,  are
subject  to  entering into definitive agreements which  will  contain
certain conditions, which may include the Company obtaining necessary
financing.  There can be no assurance that financing will be obtained
or  that all other conditions will be satisfied.  Consequently, there
can  be  no assurance the Company will consummate any or all  of  the
acquisitions it is pursuing.  See "DESCRIPTION OF BUSINESS -  Pending
Acquisitions."

Forward-Looking Statements and Associated Risks

      Management believes that Tthis filing contains certain forward-
looking  statements   within  the  meaning  of  Section  27A  of  the
Securities Act of 1933 and Section 21E of the Securities Exchange Act
of  1934 and the Company intends that such forward-looking statements
be  subject  to  the  safe harbors created thereby.   These  forward-
looking statements include the plans and objectives of the management
for  future  operations, including plans and objectives  relating  to
services  offered by and future economic performance of the  Company.
The forward-looking statements and associated risks set forth in this
filing  relate  to  the  Company's business  strategies  to  increase
revenues  from  providing services to existing and future  customers,
implementing  a  strategic marketing program directed  to  local  and
national   health   care  providers,  the  broadening   of   customer
relationships   through  enhanced  contracting,  expanding   services
utilized by existing and future customers and clients; development of
an integrated philosophy and plan defining the achievement of greater
operating   efficiencies,   cutting   operating   costs,   recruiting
additional  health  care professionals, obtaining  improved  accounts
receivable  financing,  funding current and  future  operations,  the
ability  to  raise additional debt or equity capital, the ability  of
the  Company  to  avoid  certain "extraordinary"  or  "non-recurring"
charges  and the Company's expressed desire and plan to grow  through
acquisitions.

      The  forward-looking statements included herein  are  based  on
current   expectations   that  involve  a   number   of   risks   and
uncertainties.   These  forward-looking  statements  are   based   on
assumptions that the Company will continue to be able to provide on a
cost  effective  and competitive basis quality home health  care  and
supplementalinterim   staffing   services,   that   the    regulatory
environment governing the Company's industry will not change in  ways
that  are materially adverse to the Company and its operations,  that
the  Company  will  be  able  to continue to  fund  operations,  that
improved  receivables financing will be obtainable by the Company  on
terms  acceptable to the Company, that the Company will  be  able  to
raise  additional equity capital if required to fund  operations  and
acquisitions,  that  the Company will be able  to  achieve  operating
efficiencies  resulting in cost reductions, that a sufficient  supply
of  qualified health care personnel will be available to the  Company
for  deployment in the health care industry on a competitive and cost
effective basis and that there will be no material adverse change  in
the  demand for the Company's services or in the Company's operations
or business.  Assumptions relating to the foregoing involve judgments
with respect to, among other things, future economic, competitive and
market  conditions, and future business decisions, all of  which  are
difficult  or impossible to predict accurately and many of which  are
beyond the control of the Company.  Although the Company believes the
assumptions underlying the forward-looking statements are reasonable,
any  of the assumptions could prove inaccurate, and therefore,  there
can  be  no  assurance that the results contemplated in the  forward-
looking  statements will be realized.  In addition, the business  and
operations  of  the  Company are subject to substantial  risks  which
increase the uncertainty inherent in such forward-looking statements.

      Important factors to be considered in connection with  forward-
looking statements include, without limitation, (a) the fact that the
Company reported net losses in fiscal 1995 and fiscal 1996 and had an
accumulated deficit and a working capital deficit in fiscal 1996; (b)
the  Company's  lack of working capital may require  the  Company  to
raise additional equity or debt financing in order to fund operations
and  the  cash portion of purchase prices payable in connection  with
acquisitions  and  the Company may be unable to raise  such  debt  or
equity  financing;  (c) the Company may not  be  able  to  obtain  an
improved  credit  facility  for  its  current  receivables  financing
arrangement  or  may  not be able to obtain such credit  facility  on
terms  acceptable to the company; (d) the current uncertainty in  the
health  care  industry  and government health care  reform  proposals
considered  from  time  to time may adversely affect  the  regulatory
environment in which the Company operates and specifically affect the
reimbursement rate payable under government programs such as Medicare
and  Medicaid, potentially resulting in decreased revenues from  home
care services; (e) the Company's dependence on customer relationships
makes  the  Company vulnerable to consolidation in  the  health  care
industry,  changes in customer personnel and other factors  that  may
impact  customer relationships; (f) the Company's ability  to  obtain
needed  licenses,  permits and governmental approvals  will  directly
affect  the  Company's economic performance and  operation;  (g)  the
Company's  ability to compete in the highly competitive  supplemental
staffing   services  market  will  directly  impact   the   Company's
profitability  and operations; the Company depends on  key-management
personnel, especially John P. Yeros to manage and direct the business
and  operations  of  the  Company;  (h)  hospital  budgetary  cycles,
increased  competition  for  qualified  medical  personnel,   patient
admission   fluctuations  and  seasonality  will  also   impact   the
profitability of the Company and cash flow may fluctuate due  to  the
adoption  by  hospitals  and third party payers  of  new  or  revised
reimbursement  policies;  (j)  the  Company's  operations  would   be
adversely affected by the expansion of more favorable credit terms in
order  to  keep existing customers; (k) Company's ability  to  manage
growth,  particularly through acquisitions, will directly impact  the
Company's   profitability  and  operations;   (l)   uninsured   risks
associated with providing home care and supplementalinterim  staffing
services will also impact the Company's profitability and operations;
and  (m)  various  other  factors may cause actual  results  to  vary
materially  from  the  results contemplated  in  any  forward-looking
statements included in this filing.  No assurances can be given  that
the foregoing factors will not result in a material adverse effect on
the  Company  and  its  operations.  Any of these  important  factors
discussed above or elsewhere in this filing could cause the Company's
revenues  or  net  income, or growth in revenues or  net  income,  to
differ  materially  from  prior  results.   In  addition,  growth  in
absolute  amounts of selling, general and administrative expenses  or
the occurrence of extraordinary events could cause actual results  to
vary  materially from the results contemplated by the forward-looking
statements.  Budgeting and other management decisions are  subjective
in many respects and thus susceptible to interpretations and periodic
revisions  based on actual experience and business developments,  the
impact of which may cause the Company to alter its marketing, capital
expenditures  or  other  budgets, which  may,  in  turn,  affect  the
Company's results of operation.

      In  light  of  the significant uncertainties  inherent  in  the
forward-looking  information included herein, the inclusion  of  such
information should not be regarded as a representation by the Company
or  any other person that the objectives or plans of the Company will
be achieved.

Results of Operation

Comparison of Years Ended December 29, 1996 and December 31, 1995

      Historically,  the  Company chose  to  segregate  its  revenues
between  home care revenues and supplemental staffing revenues.   The
distinction  between the two being that home care revenues  generally
related  to revenues derived from patients cared for in the home  for
which the Company was the primary caregiver and party responsible for
billing the third party payer.  During 1996, with the acquisition  of
STAT  and  the  decision to sell the home care  business  in  Denver,
Colorado,  a  larger percentage of the Company's home  care  revenues
relate  to  staffing  of individuals in homes  for  other  home  care
agencies.    In   these  instances,  the  caregiver  is   effectively
supplemental staff for the home care agency.  The home care agency is
the  primary caregiver and is responsible for billing the third party
payer.   The Company bills the home care agency.  The characteristics
of  this  type of home care are similar to the Company's supplemental
staffing business and therefore, revenues are not broken out  between
home care and supplemental staffing in the current presentation.

       Total   nNet  revenues  increased  approximately  1092%   from
$12,978,000  for the year ended December 31, 1995 (the  "1995  Fiscal
Year") to $14,259,00013,169,000 for the year ended December 29,  1996
(the  "1996  Fiscal Year").  The increase was mainly attributable  to
the  acquisitions of STAT and Ellis.  The STAT and Ellis acquisitions
were   accounted  for  under  the  purchase  method  of   accounting.
Accordingly,  revenues from these acquisitions are  included  in  the
consolidated financial statements of the Company from the date of the
acquisitions,  April 1996 for Ellis and July 1996 for STAT.  Revenues
from  these two entities included in the statement of operations  for
the  1996  fiscal  year were $2,395,000 for STAT and  $1,185,000  for
Ellis.  These increases were offset by revenue losses in Colorado and
Texas.

     The Company's total gross margin increased from 21% for the 1995
Fiscal Year to 242% for the 1996 Fiscal Year.  The total gross margin
increase reflects the higher gross margins from its recently acquired
STAT and Ellis divisions.

      See Footnote 2 of the consolidated financial statements for the
unaudited results of operations of the Company after giving effect to
the  Ellis,  STAT and TherAmerica acquisitions as if  they  had  been
acquired as of January 1, 1995.

       Selling,   general,  and  administrative  expenses   decreased
approximately $1,213,000 or 23195% from $5,296,000 in the 1995 Fiscal
Year  to  $4,083140,000  in the 1996 Fiscal Year.   The  decrease  in
selling  general  and  administrative  expenses  relates  to  several
factors:

 The  Company  engaged  certain financial  consultants  in  1995  to
  provide financial consulting services for which the consultants were
  issued 500,000 shares of common stock valued at $2.00 per share.  The
  $1,000,000 consulting expense was included in 1995 with no  related
  expense in 1996.

 The  Company reduced managerial and administrative staff at several
  of its branches.

 Legal  and  accounting costs were nearly $200,000 higher in  fiscal
  1995  versus  fiscal 1996 due to two failed merger transactions  in
  1995.
      These decreases were offset by additional selling, general  and
administrative  expenses incurred in connection with STAT  ($495,000)
and  Ellis ($145,000) and additional amortization expense related  to
the STAT and Ellis acquisitions of $102,000.

      Loss from operations decreased $3,241506,000 from $3,896,000 in
the  1995 Fiscal Year to a loss from operations of ($655,000) in  the
1996  Fiscal Year.  The decrease reflects increases in gross  margins
from 21% to 242% and items discussed in the preceding paragraphs.

     Interest expense decreased 233% from $715,000 in the 1995 Fiscal
Year to $552698,000 in the 1996 Fiscal Year.  The decrease relates to
a  renegotiated financing agreement with its lender which reduced the
Company's effective interest rate from over 30% to approximately 12%.
This decreased interest rate was partially offset by the increase  in
funding  costs on the additional accounts receivable due to the  STAT
and  Ellis acquisitions.  . See "MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION -- Liquidity of Capital Resources" and Note 5 to
the Consolidated Financial Statements.

      Net  loss  applicable  to  common stockholders  decreased  from
($5,487,000)  in the 1995 Fiscal Year to ($858,0004,994,000)  in  the
1996 Fiscal Year.

Comparison of Years Ended December 31, 1995 and 1994

       Total   nNet  revenues  increased  approximately  8992%   from
$6,867,000  for  the year ended December 31, 1994 (the  "1994  Fiscal
Year") to $12,978,00013,169,000 for the year ended December 31,  1995
(the  "1995  Fiscal Year").  The increase was mainly attributable  to
the acquisitions of Paxxon Services and Nurse Connection.  The Paxxon
Services  and Nurse Connection acquisitions were accounted for  under
the  purchase method of accounting.  Accordingly, revenues from these
acquisitions are included in the consolidated financial statements of
the  Company from the date of the acquisitions, September  19,  1994.
Revenues  from  these  two  entities included  in  the  statement  of
operations increased from $2,614,000 in 1994 to $9,421,000 in 1995.

      Supplemental  staffing services increased  from  $4,787,000  to
$11,647,000 from the 1994 Fiscal Year to the 1995 Fiscal Year.   This
increase  is due largely to the inclusion of a full year of  revenues
from the Paxxson Services and Nurse Connection acquisitions which are
both supplemental staffing services operations.

      Home  care  services  revenues  decreased  from  $2,080,000  to
$1,331,000  from  the 1994 Fiscal Year to the 1995 Fiscal  Year.   In
October 1994, the Company's Executive Vice President resigned.   This
individual  had  built and managed a large Medicaid  based  pediatric
home  care practice in rural Colorado.  When this executive left  the
Company,  many of the nurses which worked in this program  left  with
the  executive to work with a competitor.  The Company was unable  to
replace this business in 1995.

     The Company's total gross margin decreased from 27% for the 1994
Fiscal Year to 212% for the 1995 Fiscal Year.  The total gross margin
decrease   reflects  the  lower  proportion  of  home  care  services
performed by the Company in the 1995 Fiscal Year as compared  to  the
1994  Fiscal Year (home care services revenues were 10% of total  net
revenues  in 1995 versus 30% in 1994) which generated a higher  gross
margin  than  supplemental  staffing  services.   The  Company's  net
revenues  and  gross margin for fiscal year 1995 do not  include  any
amounts  from Ellis, an entity that the Company is under contract  to
purchase  upon  receipt  of  the license  recently  approved  by  the
Department of Health of the State of New York.
      The  Company's  total  gross margin from supplemental  staffing
services decreased from 26% in 1994 Fiscal Year to 20% in 1995 Fiscal
Year.   Direct  cost of services are substantially all  employee  and
independent  contractor related and consist of wages, payroll  taxes,
transportation  and housing costs and other personnel related  costs.
The  reduced margins in 1995 are largely the result of the  Company's
decision to convert its independent contractors in Texas to employees
which  resulted  in  the Company paying additional  employer  related
payroll  taxes.  This reduced margin is also attributable to  a  more
competitive   environment  in  the  Texas   market   which   included
significant consolidation amongst potential clients, more  aggressive
pricing   from   the   Company's  competitors   and   reduced   staff
availability.

      The  Company's  gross margin from home care services  decreased
from 29% in 1994 Fiscal Year to 25% in 1995 Fiscal Year.  Direct cost
of  services in the home care area are similar to those listed  above
for  supplemental  staffing.  This reduction in  margin  is  directly
attributable  to  a decrease in the pediatric home care  business  in
Colorado.   This business allowed for hourly billing  which  in  some
instances   required  24  hour  care  and  was  not   standard   cost
reimbursement limitations which allowed for higher gross margins.  As
this  business was decreased in 1995 due to reasons discussed  above,
the gross margin decreased accordingly.

     Medicare and Medicaid reimburse the Company at a negotiated rate
which  is  expected to equate to the Company's cost of  administering
the  program.   At the end of the year, the Company  submits  a  cost
report  to Medicare and Medicaid which is used to assess whether  the
Company  has been over or under reimbursed by Medicare and  Medicaid.
During  1995 Fiscal Year and 1994 Fiscal Year, the Company  has  been
over-reimbursed due to the reimbursement rate as set by Medicare  and
Medicaid  exceeding  actual  costs.  These  over-payments  have  been
recorded as liabilities and reductions of revenue.  This amounted  to
$453,000  in 1995 and $150,000 in 1994.  Of the $453,000 recorded  in
1995, $98,000 related to revenues recorded in 1994.  The Company  has
prepared  a preliminary cost report for the cost report period  ended
December  31, 1995 indicating that the liability as recorded  by  the
Company is reasonable.  This over-reimbursement was caused in part as
the  Company  suffered through cash flow problems, it was  forced  to
reduce  the  staff administering the Medicare and Medicaid  programs.
This  staff reduction and efficiencies of operation were not reviewed
in  connection with their impact of reducing the reimbursement  rate.
The  Company  has  remedied  this  situation  and  is  reviewing  its
reimbursement are compared to its costs of administering the  program
on  a  quarterly  basis  and  making the appropriate  adjustments  to
revenue.

     If the Company had closed the Ellis acquisition on September 19,
1994, the date it closed its acquisition of Paxxon Services and Nurse
Connection,  the Company's revenues and gross margin for Fiscal  Year
1995  would  have  been  increased by  approximately  $1,800,000  and
$571,000,  respectively  and  gross  margin  percentage  would   have
improved from 21% to 22%.  Accordingly, the Company's operations were
negatively impacted by the fact that regulatory approval had not  yet
been  obtained and the closing of the Ellis acquisition had  not  yet
occurred.   See  Footnote 2 of the consolidated financial  statements
for  the unaudited results of operations of the Company after  giving
effect  to  the  Ellis acquisition as if it had been acquired  as  of
January 1, 1994.

       Selling,   general   and  administrative  expenses   increased
approximately  204%  from  $1,741,000 in  the  1994  Fiscal  Year  to
$5,296,000  in  the  1995  Fiscal Year.  Approximately  half  of  the
increase  in selling, general and administrative expenses corresponds
with  the  increase  in net revenues and reflects increased  selling,
general  and  administrative  expenses  associated  with  the  above-
described   acquisitions  and  increased  revenues  from  home   care
services.  As explained further below, the remaining increase is  due
to  the financial consulting fees, acquisition, legal, and accounting
fees, and increased financing costs.
      During  fiscal 1995, the Company incurred certain  expenditures
that are not expected to be incurred in fiscal 1996 as follows:

 Financial  consultants  were engaged in December  1995  to  provide
  financial consulting services.  The Company issued 500,000 shares of
  its  Common Stock to the consultants which were valued at $2.00 per
  share  which represented the fair market value at the time  of  the
  issuance.   The  $1,000,000 included in consulting expense  is  not
  expected to be incurred in fiscal 1996.
 The  Company attempted to acquire two different entities in  fiscal
  1995  which  were  not completed and two mergers  which  were  also
  abandoned.  The Company incurred approximately $250,000  legal  and
  accounting costs in connection with these failed transactions which
  are expected to be incurred in fiscal 1996.
 Due to the difficult financial situation that the Company faced  in
  fiscal 1994 and fiscal 1995, the Company was forced to finance  its
  accounts receivable through a factoring arrangement.  The terms  of
  this  type of financing are significantly more expensive  than  the
  Company  hopes  to obtain in fiscal 1996.  A more  attractive  non-
  factoring  receivables  financing  arrangement  should  reduce  the
  Company's interest expense.  The Company is currently in negotiations
  with  two  different financing companies which  have  expressed  an
  intention to finance the Company's accounts receivable balances.  The
  Company has been informed by one of the financing companies that if
  the Company's March 31, 1996 balance sheet approximates its projected
  balance sheet and no other significant material adverse events occur,
  an agreement should be able to be reached.  In addition, the Company
  is holding discussions with an investment bank regarding a secondary
  offering  of  securities.  No assurances can be  given  that  these
  conditions will be met or that all the terms and conditions of  the
  final  agreement will be satisfactory to the Company  or  that  any
  alternative financing agreement will be consummated by the Company.
 The  Company's preferred stock automatically converted into  common
  stock in January 1996.  Preferred dividends are not expected to  be
  paid in fiscal 1996.  While preferred dividends are not charged  to
  expense  in the Statement of Operations and do not impact that  Net
  Loss,  these dividends increase the net loss applicable  to  common
  shareholders.
 The  Company  impaired $1,300,000 of its goodwill in  fiscal  1995.
  This  goodwill  was  originally recorded  in  connection  with  two
  acquisitions completed in fiscal 1994.
 The  Company reduced its administrative personnel from 42 employees
  in March 1995 to 39 in March 1996, while doubting its revenue base.
  In addition, several higher paid management employees were terminated
  during 1995 and will either not be replaced or will be replaced with
  lower salaried employees.

      Income  from operations decreased $3,982,000 from  income  from
operations  of  $86,000  in  the 1994 Fiscal  Year  to  a  loss  from
operations  of  ($3,896,000) in the 1995 Fiscal Year.   The  decrease
reflects  decreases  in  gross margins from  27%  to  21%  and  items
discussed in the preceding paragraph.

     During 1995, the Company adopted the provisions the SFAS 121 and
the company evaluated the amounts recorded as goodwill for the Paxxon
Services  and  Nurse Connection acquisitions.  The  Company  analyzed
future  expected  undiscounted  cash  flow  and  determined  it   was
necessary  to  write  down the assets as they had been  significantly
impaired due to future cash flow being less than projected.  This was
recognized  in  the  4th quarter when the Company prepared  its  1996
business  plan  after reviewing 1995 operations for the  first  three
quarters.   The  Company  spent  the  1995  year  integrating   these
businesses  which  included  replacing  employees,  identifying   new
markets and stabilizing client relationships.  The Company wrote down
the  Paxxon Services goodwill by approximately $758,000 and the Nurse
Connection goodwill by approximately $542,000.  After the writedowns,
the  remaining unamortized asset balances were approximately $934,000
for Paxxon Services and $525,000 for Nurse Connection.
     Interest expense increased 179% from $256,000 in the 1994 Fiscal
Year  to  $715,000 in the 1995 Fiscal Year.  The increase  represents
additional  interest  expense  incurred  to  finance  the   Company's
acquisitions and the change in the Company's funding of its  accounts
receivable.   The Company began utilizing a factoring agent  in  late
1994  and  continued  using  this receivables  financing  arrangement
throughout  1995.  The 1995 Statement of Operations  include  a  full
year  of  this  additional interest cost.  In addition,  the  Company
closed two acquisitions in September 1994 in which debt was issued to
finance part of the cost of the acquisitions.  In the Paxxon Services
acquisition,  the Company issued a promissory note for $937,500  with
an  interest rate of 7% which was outstanding for approximately  four
months  in  1994 and twelve months in 1995.  In the Nurse  Connection
acquisition,  the  Company issued a non-interest  bearing  promissory
note for $35,000.

      Net  loss  applicable  to common stock holders  increased  from
($335,000) in the 1994 Fiscal Year to ($5,487,000) in the 1995 Fiscal
Year.

Going Concern Issues

      The  Company has suffered recurring losses for the past several
years and incurred a net loss for the year ended December 29, 1996 of
$858,000.  In addition, the Company had a working capital deficit  of
$1,338,000.   These factors, among others, raise a substantial  doubt
about the ability of the Company to continue as a going concern.  The
accompanying  financial  statements do not  include  any  adjustments
relating  to the recoverability and classification of asset  carrying
amounts  or the amount and classification  of liabilities that  might
result should the Company be unable to continue as a going concern.

      The Company is pursuing a number of alternatives for additional
financing  which  include  a public and/or private  offering  of  the
Company's  securities, attempting to obtain an asset  based  line  of
credit  to  replace its current accountsacounts receivable  factoring
arrangement,   considering   calling  for   redemption   of   certain
outstanding warrants or the making of an offer to reduce the exercise
price  of  its  outstanding warrants for a period of time  to  induce
exercise  and raise cash for the Company.  There can be no  assurance
that  the Company will undertake such financings, or that the Company
will  be  able to obtain any additional financing on terms acceptable
to the Company.

Liquidity and Capital Resources

       Management  of  the  Company  believes  that  cash  flow  from
operations should be sufficient to fund the Company's working capital
needs through fiscal 1997.  However, if the Company is unable to meet
its  revenue  projections, or costs exceed the Company's projections,
or  its  receivables  financing arrangement  is  terminated  and  the
Company  is unable to replace the facility with a comparable line  of
credit,  the  Company's cash flow from operations may be insufficient
to  meet  its  working capital needs.  In the past, the  Company  has
successfully  met  its  funding needs  by  issuing  debt  and  equity
instruments  in private placements or public offerings.   Should  the
Company's cash flow from operations be insufficient to meet its  cash
needs, the Company will pursue a private placement or public offering
of  debt or equity securities, will consider a reduced exercise price
warrant  offering and/or will reduce operations to a level  at  which
cash  flow  from operations can meet the cash needs of  the  Company.
There   can   be   no  assurances  that  any  such  capital   raising
alternatives, if pursued, will be consummated.
      The Company has historically released certain of its checks  in
anticipation of receiving cash proceeds from its receivable financing
agreement.  The Company does not have an arrangement with  its  banks
to  cover  checks presented in excess of its collected cash  balance;
however, this situation has not occurred as the Company releases  its
checks as close as possible to its funding date.

1996 Private Placement

  In  July  and  September  1996,  the Company  completed  a  private
placement  of  244  units,  each  unit  consisting  of  a  share   of
convertible  preferred  stock, $10,000  par  value  ("1996  Preferred
Stock"),  a warrant to purchase 8,000 shares of the Company's  common
stock  at  $2.50 per share and a unit purchase option to purchase  an
additional unit at $10,000 per unit.  The convertible preferred stock
carries  a 10% dividend and is convertible at the lesser of $1.25  or
75%  of  the average sales price for the five trading days  prior  to
conversion.   The  private placement raised  gross  proceeds  to  the
Company of approximately $2,440,000.

  Approximately $1,550,000 of the proceeds raised was  used  to  fund
the cash purchase portion of STAT.  A shareholder who participated in
the  placement  of  the private placement was paid  a  commission  of
$117,000  in 1996 and issued a warrant to purchase 100,000 shares  of
common  stock at $2.00 per share.  The warrant price was subsequently
reduced to $1.00 per share in January 1997.

  During 1996, 88.5 units (with accrued dividends) were converted  to
923,111 shares of common stock.  In addition, a Unit holder who  held
17 units was allowed to reduce their purchase price on their warrants
to  $1.00 per share from $2.50 per share, resulting in gross proceeds
to the Company of $136,000 in November 1996.  Subsequent to year end,
an  additional  100 units have been converted through March  3,  1997
resulting in the issuance of an additional 1,388,723 shares of common
stock  in  1997.   Also  in 1997, a Unit Holder  who  held  20  Units
exercised  their Unit purchase option resulting in gross proceeds  to
the  Company of $200,000.  The Unit holder immediately converted  the
preferred  to common resulting in the issuance of 257,028  shares  of
common stock in January 1997.

1997 Private Placement

      In  January and February 1997, the Company completed a  private
placement  of  167.15 Units, each unit consisting  of  one  share  of
convertible  preferred  stock, $10,000  par  value,  "1997  Preferred
Stock",  and a warrant to purchase 10,000 shares of common  stock  at
$1.00 per share.  The convertible preferred stock carries no dividend
if   the   underlying  common  stock  is  included  in  an  effective
registration  statement within 90 days of the date of the  agreement.
After  90  days,  if  the underlying shares are not  included  in  an
effective registration statement, the dividend rate becomes 18%.  The
Company  raised  gross  proceeds  of  $1,671,500  from  this  private
placement.   Commissions  of $99,540 were  paid  to  individuals  who
assisted  in the private placement who are also shareholders  of  the
Company.   Substantially all of the proceeds were  used  to  purchase
TherAmerica.

      Management  of the Company intends to pursue other acquisitions
in   the   future  and  anticipates  needing  cash  to  fund   future
acquisitions.   Cash  for future acquisitions is  anticipated  to  be
provided from warrant exercises and additional equity offerings.

ITEM 7.   FINANCIAL STATEMENTS

      Attached hereto and filed as a part of this Form 10-KSB are the
Consolidated Financial Statements of the Company.

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE

     None

                              PART III

ITEM 9.   DIRECTORS,   EXECUTIVE  OFFICERS,  PROMOTERS  AND   CONTROL
          PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Directors and Executive Officers

      The  directors  and executive officers of the Company  are  set
forth below:

<TABLE>
<CAPTION>
           Name               Age                 Position
            <S>               <C>                   <C>
                              
John P. Yeros                 46             Chairman of the Board and Chief 
                                              Executive Officer

Robin M. Bradbury             40             Chief Financial Officer, Treasurer
                                              and Secretary

Barry J. McDonald             39             Medical Division President and
                                              President of TherAmerica

Thomas J. Oberle(2)           51             Director

Charles Powell(1)(2)          41             Director
</TABLE>

_______________
(1) Member of the Audit Committee
(2) Member of the Compensation Committee

      Each  director is serving a term of office which will  continue
until  the next annual meeting of shareholders and until the election
and  qualification of his respective successor.  All of the Company's
officers devote full-time to the Company's business and affairs.

     John P. Yeros.  Mr. Yeros, the founder of the Company, served as
President   and  a  Director  of  the  Company  from  the   Company's
incorporation  in April 1988 through September 1993.  Mr.  Yeros  has
since served as Chairman of the Board and Chief Executive Officer  of
the Company.

      Robin  M. Bradbury.  Mr. Bradbury has served as Chief Financial
Officer  of the Company since February 1996 and as its Treasurer  and
Secretary  since  January 1997.  From 1991  to  September  1995,  Mr.
Bradbury   served   as  the  Chief  Financial  Officer   of   InfoNow
Corporation,  a  publicly-traded  internet  provider  of  multi-media
solutions in Denver, Colorado.  From 1987 to 1991, Mr. Bradbury owned
and  operated  an interim Chief Financial Officer/Controller  service
which  served private and public companies.  During this period,  Mr.
Bradbury served as the Chief Financial Officer of Top Source, Inc., a
publicly-traded automotive accessory distributor in  Colorado.   From
1980 to 1987, Mr. Bradbury was an audit manager with Deloitte Haskins
& Sells (Deloitte Touche) in Denver and Colorado Springs, Colorado.

      Barry  J.  McDonald  Mr. McDonald has served as  the  Company's
Medical  Division President since February 1997.  From 1994 to  1996,
Mr.  McDonald  served as Senior Vice President of TherAmerica.   From
1991  to  1993,  Mr.  McDonald served as  the  managing  partner  for
Colorado  Therapists  On  Call,  Inc.  and  Colorado  Orthopedic  and
Rehabilitation Equipment, Inc.  Prior experience also includes  three
years as an area manager for Olsten Healthcare Services.
     Thomas J. Oberle.  Mr. Oberle has been a Director of the Company
since  its  inception.  Since January 1993, Mr. Oberle has  been  the
director  of the Colorado Dental Association.  From January  1991  to
January  1993, he served as an independent insurance agent in Denver,
Colorado.   From  October 1989 to December 1991, Mr. Oberle  was  the
vice  president of Equicor, a health maintenance organization.   From
May  1987  to  October 1989, he served as president of  RMS  Inc.,  a
corporation involved in organizing various companies associated  with
the Childrens Hospital.  Mr. Oberle devotes only such time as may  be
necessary to the business of the Company.

      Charles  Powell.  Mr. Powell has served as a  Director  of  the
Company  since September 1994.  Mr. Powell co-founded KAPRE Software,
Inc.,  Boulder, Colorado in 1992 and served as its Vice President  of
Finance  and Vice President of International Operations.  From  March
1992  through  June 1993, Mr. Powell also served as  Chief  Executive
Officer of Generation 5 Technology, Inc., Denver, Colorado, a  public
software  development company.  Mr. Powell devoted approximately  50%
of  his  time  to  each  of KAPRE Software,  Inc.  and  Generation  5
Technology,  Inc. from March 1992 through March 1993.   From  January
1989  to  March  1992,  Mr. Powell served  as  a  vice  President  of
International operations for J.D. Edwards, Inc., Englewood,  Colorado
a  software applications developer for the mainframe computer market.
Mr.  Powell  currently serves on the Board of Directors of  Milestone
Capital,  Inc.  and  Kinetics-Com both public  companies  located  in
Denver,  Colorado,  and  the Rockies Fund,  Inc.,  a  public  company
headquartered in Colorado Springs, Colorado.  Mr. Powell devotes only
such time as may be necessary to the Company's business.


Section 16.  Compliance

     During fiscal 1995, John P. Yeros did not file on a timely basis
a  Form 4 concerning the grant of certain options, Colleen Dougherty-
Gray  did  not file a Form 4 concerning the grant of certain  options
and Robin Bradbury did not file on a timely basis a Form 4 concerning
the grant of certain options.

ITEM 10.  EXECUTIVE COMPENSATION

     Summary Compensation Table.  The following table sets forth the
annual and long-term compensation for services in all capacities to
the Company for, the three years ended December 29, 1996 of Mr.
Yeros, the Chief Executive officer of the Company and Ms. Dougherty-
Gray, the former Chief Operating Officer of the Company, (the "Named
officers").  No officer of the Company other than Mr. Yeros and Ms.
Dougherty-Gray received annual salary and bonus exceeding $100,000 in
1996.

<TABLE>
<CAPTION>
                                                              
                                                              Long-Term
                                                            Compensation(1)
                              Annual Compensation(1)          Awards
                      Fiscal                                 Securities
                                                             Underlying
Name and Principal                                             Options/        
    Position          Year        Salary       Bonus          (Shares)
<S>                    <C>         <C>         <C>              <C>         
John P. Yeros         1996      $154,000    $       -         116,187(4)
Chief Executive
 Officer and Chairman
 of the Board         1995       130,000        10,000        300,000(3)
                      1994       109,000(2)         -         403,813         
Colleen Dougherty-    
 Gray                 1996       108,000    $       -         100,000
Former Chief
 Operating Officer and
 Former Director      1995        96,000         5,000        100,000(3)
                      1994         9,230            -          15,000
</TABLE>

(1)  With  respect  to  each Named Officer, the aggregate  amount  of
     perquisites and other personal benefits, securities or  property
     received  was less than either $50,000 or 10% of the salary  and
     bonus reported.
(2)  Notwithstanding  the  terms  of his  employment  agreement,  Mr.
     Yeros agreed to reduce his annual salary for Fiscal Year 1994 to
     $109,000 rather than $120,000.
(3)  The  options to purchase 400,000 shares of common stock  granted
     to  Mr. Yeros and Ms. DoughertyDoughtery-Gray were granted  with
     an  exercise price of $.63 per share which represented the  fair
     market value of the common stock at the time of the issuance.
(4)  The  options to purchase 116,187 shares of common stock  granted
     to  Mr.  Yeros  at  $1.88 per share which represented  the  fair
     market  value  of  the common stock at the date  of  grant  were
     replacing  previously  granted options to  purchase  36,363  and
     79,824 shares of common stock at $2.75 and $2.50, respectively.


     Option Grants Table.  The following table sets forth information
on grants of stock options pursuant to the Company's 1996 Plan to the
Named Officers.
<TABLE>
<CAPTION>
                                    Percent of
                                  total options/
               Options/             warrants         Exercise
               Warrants            granted to        or base
                granted              employees        price      Expiration
     Name      (shares)             in 1996(1)      ($/share)       Date
<S>              <C>                    <C>            <C>           <C>
John  P. Yeros 116,187(2)               28%         $   1.88     August 2006

Colleen 
 Dougherty-
 Gray          100,000(2)               24%             1.88     August 2006
</TABLE>
(1)  The  Company issued options to acquire a total of 416,187 shares
     of its common stock to employees in 1996.
(2)  Such  options  were granted pursuant to the 1996  Plan  and  are
     exerciseableexercisable immediately.  See "Stock Option Plans."

Fiscal Year-End Options & Warrants - Option/Warrant Value Table.  The
following  table sets forth information on year-end values  of  stock
options and warrants for the Named Officers.

<TABLE>
<CAPTION>
              Number of securities under-            Value of unexercised
              lying unexercised options/              in-the-money options
Name         warrants at fiscal year-end              at fiscal year-end
           Exercisable         Unexercisable     Exercisable    Unexercisable(1)
<S>            <C>                  <C>              <C>             <C>
John P. 
 Yeros        736,313                              $111,000

Colleen 
 Dougherty
 -Gray        215,000                                37,000
</TABLE>

(1)  The  dollar  values are calculated by determining the difference
     between  $1.00  per share, the fair market value of  the  common
     stock  at  December  29,  1996, and the exercise  price  of  the
     options.

      No  employee-director  of the Company receives  any  additional
compensation  for  services as a director.   Nonmanagement  directors
receive  no salary for their services as such, but receive a  fee  of
$500 per Board of Directors or committee meeting attended.  The Board
of  Directors  has  also authorized payment of reasonable  travel  or
other out-of-pocket expenses incurred by non-management directors for
attending meetings of the Board of Directors or committee thereof.

     The Company has no retirement, pension or profit sharing program
for  the  benefit of its directors, officers or other employees,  but
the  Board  of Directors may recommend one or more such programs  for
adoption in the future.

     Employment Agreements.  Mr. Yeros initially entered into a three-
year  employment  agreement with the Company  effective  October  15,
1993.   On  January  7,  1997, Mr. Yeros  entered  into  a  five-year
employment agreement with the Company effective January 1, 1997.  The
current  agreement provides a salary of $165,000  per  year  for  the
first  year adjusted upward at a minimum of 10% annually after  1997.
The  agreement may be terminated by Mr. Yeros with 90 days notice and
the  agreement  may be terminated by the Company "for Cause"  at  any
time  after  the  first year.  In January 1997, Mr. Yeros  agreed  to
reduce his salary to an annual rate of approximately $102,000 for the
first quarter of 1997.

      Ms. Dougherty-Gray initially entered into a two-year employment
agreement  with  the Company effective November 21,  1994  which  was
canceled  and replaced with a two-year employment agreement effective
March  1, 1996.  Ms. Doughtery-Gray's agreement provided for a salary
of  $108,000 per year.  Ms. Dougherty-Gray resigned from the  Company
effective  December 29, 1996 and in exchange for  a  release  of  all
claims against the Company was given severance of six months pay.

      Mr.  Bradbury entered into a two-year employment agreement with
the  Company effective February 13, 1996.  The agreement provides for
a  base  salary of $110,000.  The agreement may be terminated by  Mr.
Bradbury  with 90 days notice and the agreement may be terminated  by
the Company "for Cause" at any time after the first year.  In January
1997,  Mr. Bradbury agreed to reduce his salary to an annual rate  of
approximately $88,000 for the first quarter of 1997.
     In November 1996, the Company entered into a one-year employment
agreement  with  Art  Shiffey, who was hired as the  National  Travel
Manager.  The agreement provides for a $70,000 annual salary and  the
grant  of options to purchase 50,000 shares of common stock at  $1.00
per share.

      In connection with the purchase of TherAmerica, Inc., Mr. Barry
McDonald  entered  into  a  two-year employment  agreement  with  the
Company  effective February 1, 1997.  The agreement  provides  for  a
$100,000  annual  salary  and  the issuance  of  100,000  options  to
purchase common stock at $1.00 per share vesting over three years.

      Each  employment  agreement contains provisions  which  provide
that, upon the occurrence of a "Triggering Event" (defined to include
a  non-negotiated change in ownership of between 50% and 80% of  more
of  the  outstanding shares of the Company or a non-negotiated merger
of  the Company into another corporation) during the period that such
persons  are  acting as officers or directors for  the  Company,  the
executive  will receive a lump sum payment equal to between  1  times
the  previous year's base pay and the remaining amount due under  the
contract in the event of termination other than for just cause.  Each
employment  agreement  also  contains a non-compete  agreement  which
extends for a period of one year after termination or resignation  of
the employee, and confidentiality provisions.

Stock Option Plans

      The Company adopted an Incentive Stock Option Plan in 1988 (the
"Incentive Plan").  The Incentive Plan covers an aggregate of 100,000
shares  of common stock.  The Incentive Plan is administered  by  the
Compensation  Committee of the Board of Directors, of  which  Messrs.
Oberle  and Powell are members.  The Incentive Plan provides that  no
options may be granted at an exercise price less than the fair market
value  of  the  common stock of the Company on  the  date  of  grant.
Unless  otherwise specified, the options expire ten  years  from  the
date  of  grant and may not be exercised during the initial  one-year
period  from  the  date of grant.  Thereafter,  the  options  may  be
exercised  in whole or in part, depending on terms of the  particular
option.   As of March 1997, 77,500 options were outstanding  pursuant
to  the Incentive Plan at exercise prices ranging from $.63 to $2.50.
None  of  such options have been exercised.  The Company  intends  to
continue  to grant options under the Incentive Plan to the extent  of
the shares reserved thereunder.

      The 1994 Omnibus Stock Plan (the "Omnibus Plan") was adopted by
the  Company's Board of Directors effective January 1, 1994,  subject
to shareholder approval which must be received within one year of the
date  the  Company's  Board adopted such plan.  The  purpose  of  the
Omnibus Plan is to provide a vehicle under which a variety of  equity
based  awards may be granted to employees, nonaffiliated  individuals
(as  defined in the Omnibus Plan), and nonemployee directors  of  the
Company  in  order to promote the Company's development and  success.
The  Omnibus  Plan permits the award of non-qualified stock  options,
incentive  stock  options,  restricted  shares,  performance   units,
performance  shares, share appreciation rights, and  other  forms  of
awards,  including  deferrals of earned awards, as  approved  by  the
Compensation  Committee  of the Board of  Directors.   A  maximum  of
500,000 shares of common stock are reserved and available for  grants
of  any  kind  under  the Omnibus Plan.  As of  March  1997,  316,188
options  were  outstanding under the Omnibus Plan at exercise  prices
ranging from $1.34 to $6.00.

      The 1996 Stock Incentive Plan (the "1996 Plan") was adopted  by
the  Company's Board of Directors effective November 22,  1995.   The
purpose  of  the  1996  Plan is to provide a vehicle  under  which  a
variety  of  equity  based awards may be granted  to  employees,  non
affiliated individuals (as defined in the 1996 Plan), and nonemployee
directors   of  the  Company  in  order  to  promote  the   Company's
development  and success.  The 1996 Plan permits the  award  of  non-
qualified  stock options, incentive stock options, stock  awards  and
purchases, as approved by the Compensation Committee of the Board  of
Directors.   A  maximum  of  3,000,000 shares  of  common  stock  are
reserved  and available for grants of any kind under the  1996  Plan.
As  of March 1997, 1,393,185 options were outstanding under the  1996
Plan at exercise prices of between $.63 and $1.88.

Warrant Issuances

      In  November  1994, the Board of Directors issued  warrants  to
Messrs. Yeros and Hendricks entitling each of them to acquire 287,626
shares  of  common  stock.  The warrants have an  exercise  price  of
$1.75, the fair market value at the date of grant.  The warrants vest
immediately  and  are  exerciseableexercisable  when  the   Company's
consolidated  revenues,  on a proforma basis,  equal  or  exceed  $20
million,  or at the end of seven years, whichever comes  first.   The
warrants  expire  at  the end of seven years if not  exercised.   The
Compensation  Committee  of  the  Board  of  Directors  approved  the
granting  of  these  warrants.   In  connection  with  Mr.  Hendricks
termination of employment, his warrant was canceledcancelled.

In July 1996, the Company issued the following warrants:

<TABLE>
<CAPTION>
                         Number of      Exercise      Expiration          
Warrant Holder            Shares          Price          Date            Reason
<S>                        <C>             <C>           <C>              <C>  
STAT Health Care         125,000         $1.88      July 17, 1997    Purchase of
                                                                      STAT
Private placement      1,952,000         $2.50      July 18, 1999    Private 
                                                                      placement
Private placement
 participants          1,952,000(1)      $1.25      December 31, 1997 Private
                                                                       placement

David Klugman            100,000(2)      $1.88      July 18, 1999     Private
                                                                      placement
                                                                      commission

David Watamull            20,000         $1.88      August 21, 1999   Consultant

Jim Gumina                20,000         $1.88      August 21, 1999   Consultant
</TABLE>

(1)  Represents option to purchase an additional unit identical to the
  Unit  issued in the July/September private placement.  Each $10,000
  unit consists of one share of convertible preferred (convertible at
  the lesser of $1.25 or 75% of the closing price on the five trading
  days prior to conversion) and a warrant to purchase 8,000 shares of
  common stock at $2.50 per share for three years.

(2)   Subsequent  to year-end, the exercise price of this warrant  was
  reduced to $1.00 per share.
Subsequent  to  December 31, 1996, the Company issued  the  following
warrants:

<TABLE>
<CAPTION>
                         Number of    Exercise    Expiration          
Warrant Holder             Shares       Price        Date             Reason
<S>                          <C>         <C>          <C>              <C>
                                                              
Private placement
 participants            1,671,500       $1.00   January 15, 2000-    Private
                                                  February 21, 2000    placement

Bridge loan participant    200,000       $1.19   July 31, 1999         Bridge
                                                                        loan
</TABLE>

Conflicts of Interest

      The  Company  has  adopted a policy that any transactions  with
directors,  officers or entities of which they are also  officers  or
directors or in which they have a financial interest, will only be on
terms   which   would  be  reached  in  an  arms-length  transaction,
consistent with industry standards and approved by a majority of  the
disinterested  directors of the Company's Board of  Directors.   This
policy,  which is set forth in the minutes of the Board of Directors,
provides that no such transaction by the Company shall be either void
or  voidable  solely  because  of such relationship  or  interest  of
directors or officers or solely because such directors are present at
the  meeting of the Board of Directors of the Company or a  committee
thereof which approves such transaction or solely because their votes
are  counted for such purpose.  In addition, interested directors may
be  counted  in determining the presence of a quorum at a meeting  of
the  Board  of Directors of the Company or a committee thereof  which
approves  such  a transaction.  No such transactions, other  than  as
described under "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS," are
currently contemplated.

Limitation of Liability and Indemnification

      Colorado  law provides that a corporation may not  indemnify  a
director in connection with any proceeding charging improper personal
benefit to the director or in connection with a proceeding by  or  in
the  right  of  the  corporation in which the director  was  adjudged
liable  to the corporation.  Additionally, a director shall be liable
in  certain  circumstances unless he complies with the standards  set
forth in the Colorado Business Corporation Act.

     The Company's Articles of Incorporation provide that the Company
shall  indemnify its officers, directors, employees and other  agents
to  the  fullest extent permitted by law.  The Company believes  that
indemnification  under its Articles of Incorporation is  sufficiently
broad  to  permit  indemnification under  certain  circumstances  for
liabilities arising under the Securities Act of 1933, as amended (the
"Act").   At  present, there is no pending litigation  or  proceeding
involving  any  director, officer, employee or agent of  the  Company
where indemnification will be required or permitted.  The Company  is
not aware of any threatened litigation or proceeding which may result
in a claim for such indemnification.

     Insofar as indemnification for liabilities arising under the Act
may  be  permitted to directors, officers and controlling persons  of
the  Company pursuant to the foregoing provisions, or otherwise,  the
Company  has  been  advised  that in the opinion  of  the  SEC,  such
indemnification is against public policy as expressed in the Act  and
is, therefore, unenforceable.

ITEM 11.  SECURITY   OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS   AND
          MANAGEMENT

      The  following  table sets forth certain information  regarding
beneficial ownership of common stock as of March 1, 1997 by (i)  each
person  known by the Company to own beneficially more than 5% of  the
outstanding common stock, (ii) each director and each Named  Officer,
and  (iii)  all executive officers and directors as a group.   Shares
not  outstanding but deemed beneficially owned by virtue of the right
of  any  individual to acquire them within sixty days are treated  as
outstanding only when determining the amount and percentage of common
stock owned by such individual.  Each person has sole voting and sole
investment power with respect to the shares shown except as noted.

<TABLE>
<CAPTION>
                                                        March 1, 1997
                                                   Number of      Percent of
                                                    Shares           Class
<S>                                                   <C>             <C>  
John P. Yeros (1)                                 1,139,768(2)       13.7%
Colleen Dougherty-Gray (1)                          215,000(3)        2.8%    
Robin Bradbury (1)                                  260,154(3)        3.4%  
Barry McDonald                                       34,000            .5%
Thomas J. Oberle(1)                                 113,250(3)        1.5%    
Charles Powell(1)                                   110,000(3)        1.5%
All directors and officers as a group
  (six persons)                                   1,872,172(4)       20.6%  
Laura Huberfeld(5)                                  755,342           9.5%
Naomi Bodner(5)                                     859,342          10.8%
Newark Sales Corp.(5)                               750,604           9.1%
</TABLE>

(1)  The address for the named individual is Suite 400, 360 South
     Garfield Street, Denver, Colorado 80209.
(2)  Includes 1,009,768 shares subject to currently
     exerciseableexercisable options or options
     exerciseableexercisable within sixty days.
(3)  Represents shares subject to currently exerciseableexercisable
     options or options exerciseableexercisable within sixty days.
(4)  Includes 1,742,172 shares subject to currently
exerciseableexercisable options or options exerciseableexercisable
within sixty days.
(5)  The address for the named individual is c/o Broad Capital, 152
     West 57th Street, 54th Floor, NY, NY  10019

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The  Company  has adopted policies that any loans to  officers,
directors  and 5% or more shareholders ("Affiliates") are subject  to
approval by a majority of the disinterested directors and that future
transactions with Affiliates will be on terms no less favorable  than
could  be  obtained  from  unaffiliated parties  and  approved  by  a
majority of the disinterested directors.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Except as otherwise noted, the Exhibits listed below have
previously  been  filed  as an exhibit to the Company's  Registration
Statement  on  Form  SB-2  File  No.  33-81582-D  (the  "Registration
Statement"),  and  is  incorporated  herein  by  reference  to   such
exhibits.   The exhibit numbers shown below for such items correspond
to those shown in the Registration Statement.

Exhibit No.    Description

3.1.1           Articles of incorporation of the Company as filed  on
          April 22, 1988 with the Secretary of State of the State  of
          Colorado.

3.1.2           Articles of Amendment to Articles of Incorporation of
          the Company as filed on May 24, 1988 with the Secretary  of
          State of the State of Colorado.

3.1.3           Articles of Amendment to Articles of Incorporation of
          the  Company  as  filed  on  February  16,  1990  with  the
          Secretary of State of the State of Colorado.

3.1.4           Articles of Amendment to Articles of Incorporation of
          the  Company as filed on August 12, 1994 with the Secretary
          of State of the State of Colorado.

3.1.5           Articles of Amendment to Articles of Incorporation of
          the  company  as  filed  on September  12,  1994  with  the
          Secretary of State of the State of Colorado.

3.1.6            Articles   of  Designation  of  1996.    Convertible
          Preferred Stock incorporated by reference to Form S-3 filed
          October 10, 1996.

3.1.7           Articles  to  Amendment to Articles of  Incorporation
          filed October 10, 1996 incorporated by reference to Form S-
          3 filed October 10, 1996.

3.1.8            Articles   of  Amendment  containing   Articles   of
          Designation of 1997 Convertible Preferred Stock.*

3.2.1          By-Laws of the Company.

3.2.2          Amendment and Restated By-Laws of the Company.

4.1.1           Form of specimen certificate for common stock of  the
          Company.

4.1.2           Form  of specimen certificate for preferred stock  of
          the Company.

4.2             Form  of  Representative`s  Warrants  issued  by  the
          Company  to  the underwriters' representative in connection
          with the Company's 1994 public offering.

4.3.1           Form  of 1992 Warrant issued by the Company  to  1992
          private placement purchasers.

4.3.2           Form  of  Conversion Agreement granting  registration
          rights to holders of 1992 Warrants.

4.4             Form  of  Warrant issued by the Company in  the  1994
          private placement.

4.5             Form of Sales Agent Warrant issued by the Company  in
          the 1994 private placement.

4.6             Form  of  Note and Unit Warrant issued in  connection
          :with  the  bridge financing undertaken by the  Company  in
          June, 1994.

4.7.1           Warrant dated December 22, 1992 issued by the Company
          to Staff Builders, Inc.

4.8            Form of 1996 Unit Warrant incorporated by reference to
          Form S-3 filed October 10, 1997.

4.9            Warrant issued January 28, 1997 to Millenco, L.P.*

4.10  Convertible Note made January 28, 1997 to Millenco, L.P.*

4.11      Form of 1997 Unit Warrant.*

7.         Opinion  and consent of LeBoeuf, Lamb, Greene,  &  MacRae,
L.L.P. regarding the
            liquidation preference of the 12% Cumulative  Convertible
Preferred Stock.

10.1.6          Employment Agreement, dated November 21, 1994, by and
          between Colleen Dougherty-Gray and the Company.

10.1.7    Employment  Agreement, dated February  13,  1996,  by  and
between Robin
    Bradbury and the Company.

10.1.9    Employment Agreement, dated March 1, 1996, by and  between
Colleen
          Dougherty-Gray and the Company.

10.1.10  Employment  Agreement, dated March 1, 1996, by and  between
          John Yeros and the Company.

10.2.1          Incentive  Stock Option Plan, adopted  May  5,  1988,
          authorizing  100,000 shares of common  stock  for  issuance
          pursuant to the Plan.

10.2.2          Omnibus Stock option Plan, adopted effective  January
          1,  1994,  authorizing 500,000 shares of common  stock  for
          issuance pursuant to the Plan.

10.3.1          Office  Lease, dated February 20, 1991 by and between
          POCOL Investments, a Delaware partnership, as landlord, and
          the Company, as tenant.

10.3.2          First Amendment to office Lease, dated September  21,
          1992   by   and  between  POCOL  Investments,  a   Delaware
          partnership, at landlord, and the Company, as tenant.

10.3.3         Second Amendment to Office Lease, dated August 9, 1993
          by  and  between POCOL Investments, a Delaware partnership,
          as landlord, and the Company, as tenant.

10.5           Lease, dated June 7, 1992, and amendment dated June 7,
          1992, by and between State Mutual Life Assurance Company of
          America and Nurse Connection.

10.6       Lease,  dated May 27, 1994, by and between  Koger  Equity,
Inc. and Nurse Connection.

10.7           Lease, executed October 6, 1988 and First Amendment to
          Lease  dated  April 7, 1993, by and between  Robert  Martin
          Company and Paxxon Services, Inc.

10.8.1          Series  1990  Note, dated June 21, 1991,  payable  to
          Leslee Boss.
10.8.2          Royalty Agreement, dated May 8, 1990, by and  between
          Leslee Boss and the Company.

10.10          Forms of contract with health care providers.

10.11           Asset Purchase and Sale Agreement, dated May 2,  1994
          and as amended June 1, 1994, by and between the Company and
          Paxxon Services, Inc. (Schedules and attachments are listed
          in  the  index to the Agreement.  Schedules and attachments
          omitted  from  this  filing  will  be  furnished   to   the
          Commission  upon  request.)  Incorporated by  reference  to
          Exhibit 2.2 to the Registration Statement.

10.12           Asset Purchase and Sale Agreement, dated May 2,  1994
          and as amended June 1, 1994, by and between the Company and
          Ellis  Home  Care,  Inc.  (Schedules  and  attachments  are
          listed  in  the  index  to  the Agreement.   Schedules  and
          attachments  omitted from this filing will be furnished  to
          the Commission upon request.)  Incorporated by reference to
          Exhibit 2.3 to the Registration Statement.

10.13          Asset Purchase and Sale Agreement dated April 15, 1994
          and as amended June 1, 1994, by and between the Company and
          Mint   Energy  Corporation,  d/b/a  the  Nurse  Connection.
          (Schedules and attachments areattachments,are listed in the
          index  to the Agreement.  Schedules and attachments omitted
          from  this filing will be furnished to the commission  upon
          request.) Incorporated by reference to Exhibit 2.4  to  the
          Registration Statement.

10.14           Agreement and Plan of Reorganization dated October 6,
          1995  entered  into  by and among NuMED Home  Health  Care,
          Inc.,  NuMED  Acquisition, Inc. and  International  Nursing
          Services, Inc.

10.15           Management and Consulting Agreement with PWG  Trading
          Corp. dated as of December 8, 1995.

10.16           Consulting Agreement with James LaBate  dated  as  of
December 8, 1995.

10.17           Consulting Agreement with The Paris Group, Ltd. dated
as of December 8, 1995.

18  Asset Purchase Agreement between the Company and STAT Home Health
          Services, Inc. dated January 10, 1996.

19  Form of  Registration Rights/Purchase Agreement relating to  1996
          Unit Offering incorporated by reference to Form S-3 filed October 10,
          1996.

10.20          TherAmerica Asset Purchase Agreement.  Incorporated by
          reference to Form 8-K filed February 14, 1997.

10.21            Form   of  Registration  Rights/Purchase   agreement
relating to 1997 unit offering.*

10.22           Employment agreement, dated January 7, 1997,  by  and
between John Yeros and the Company.*

21.            Subsidiaries of the Company.*

27.       Financial Data Schedule


*Filed herewith

                    (b)  Reports on Form 8-K.

               None.
                                  
                              SIGNATURES


     In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant caused this report to be signed
on behalf by the undersigned, thereunto duly authorized on March 31,
1997.

                         INTERNATIONAL NURSING SERVICES,  INC.



                         By:  /s/ John P. Yeros
                              John P. Yeros,
                              Chairman   of  the  Board   and   Chief
                              Executive Officer


In  accordance with 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  and  on  the   dates
indicated.

     Signature                Title                    Date


     /s/ John P. Yeros                                 March 31, 1997
     John P. Yeros       Chairman of the Board
                         and Chief Executive
                         Officer (Principal
                         Executive Officer)

     /s/ Robin M. Bradbury                             March 31, 1997
     Robin M. Bradbury   Chief Financial Officer
                         (Principal Financial and
                         Accounting Officer)

     /s/ Barry J. McDonald                             March 31, 1997
     Barry J. McDonald   Chief Operating Officer


     /s/ Thomas J. Oberle                              March 31, 1997
     Thomas J. Oberle    Director

     /s/ Charles Powell                                March 31, 1997
     Charles Powell      Director




                        INTERNATIONAL NURSING
                   SERVICES, INC. AND SUBSIDIARIES
                                  
                        Financial Statements
                          December 29, 1996




                          Table of Contents



                                                                Page

Independent Auditors' Report                                     F-1

Financial Statements

   Balance Sheet                                                 F-2

   Consolidated Statements of Operations                         F-3

   Consolidated Statements of Stockholders' Equity               F-4

   Consolidated Statements of Cash Flows                         F-5

Notes to Financial Statements                                    F-6






                    INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
International Nursing Services, Inc.
Denver, Colorado


We  have  audited  the  accompanying consolidated  balance  sheet  of
International Nursing Services, Inc. and Subsidiaries, as of December
29,  1996, and the related consolidated statements of operations  and
changes  in stockholders' equity, and cash flows for the years  ended
December   29,  1996  and  December  31,  1995.   These  consolidated
financial  statements  are the responsibility of  the  management  of
International   Nursing   Services,  Inc.  and   Subsidiaries.    Our
responsibility  is  to  express  an  opinion  on  these  consolidated
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally  accepted
auditing standards.  Those standards require that we plan and perform
the   audit   to  obtain  reasonable  assurance  about  whether   the
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 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  consolidated
financial  position  of  International  Nursing  Services,  Inc.  and
Subsidiaries,  as  of  December 29, 1996, and the  results  of  their
operations and their cash flows for the years December 29,  1996  and
December  31,  1995 in conformity with generally accepted  accounting
principles.

The accompanying consolidated financial statements have been prepared
assuming  that  the  Company will continue as a  going  concern.   As
further discussed in Note 1 to the consolidated financial statements,
the  Company has incurred operating losses for the past several years
and  has a deficit in working capital which raises substantial  doubt
about   its  ability  to  continue  as  a  going  concern.    Current
management's  plans in regards to this matter are also  discussed  in
Note  1.   The  consolidated financial statements do not include  any
adjustments that might result from this uncertainty.




                              /s/Ehrhardt Keefe Steiner & Hottman PC
                                 Ehrhardt Keefe Steiner & Hottman PC
March 21, 1997
Denver, Colorado




         INTERNATIONAL NURSING SERVICES, INC. AND SUBSIDIARIES
                     Consolidated Balance Sheet
                          December 29, 1996

<TABLE>
<CAPTION>
                               Assets
<S>                                                           <C>
Current assets                                              
 Accounts receivable, net of allowance of $152,000        $4,458,000
 Prepaid expenses and other                                   19,000
    Total current assets                                   4,477,000
                                                            
                                                            
Property and equipment, net                                  355,000
                                                            
Other assets                                                
 Intangible assets, net                                    4,080,000
                                                            
Total                                                     $8,912,000
                                                            
                Liabilities and Stockholders' Equity
Current liabilities                                         
  Checks written in excess of bank balance                $   65,000
  Current portion of long-term debt                          145,000
 Current portion of capital lease obligation                  50,000
 Advances under financing agreement                        3,318,000
 Accounts payable                                            617,000
 Accrued expenses                                          1,620,000
    Total current liabilities                              5,815,000
                                                            
Long-term debt                                              
 Long-term portion of capital lease obligation                50,000
                                                           5,865,000
                                                            
Commitments and contingency                                 
                                                            
Stockholders' equity                                        
  Preferred stock, 10% cumulative convertible, $10,000        
par value 488 shares authorized, 155 issued and             
outstanding, liquidation preference $1,555,000             1,234,000
  Common stock, $.001 par value, 25,000,000 shares            
authorized, 5,688,292 issued and outstanding                
                                                               6,000
 Dividends payable with common stock                        
                                                              66,000
 Additional paid-in capital                                 
                                                           8,965,000
 Accumulated deficit                                        
                                                          (7,224,000)
    Total stockholders' equity                              
                                                           3,047,000
                                                            
Total                                                     $8,912,000

</TABLE>



       INTERNATIONAL NURSING SERVICES, INC. AND SUBSIDIARIES
                Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                               For the        For the
                                              Year Ended     Year Ended
                                             December 29,   December 31,
                                                 1996           1995
<S>                                              <C>             <C>        
                                                             
Revenues                                   $  14,259,000    $12,978,000
                                                             
Direct costs of services                      10,831,000     10,278,000
                                                             
Gross margin                                   3,428,000      2,700,000
                                                             
Selling, general, and administrative           4,083,000      5,296,000
 expenses
                                                             
Impairment of goodwill                             -          1,300,000
                                                             
Loss from operations                            (655,000)    (3,896,000)
                                                             
Interest expense                                 552,000        715,000
                                                             
Net loss                                      (1,207,000)    (4,611,000)
                                                             
Preferred stock dividends (Note 9)               349,000       (876,000)
                                                             
Net loss applicable to common                $  (858,000)   $(5,487,000)
 stockholders
                                                             
Loss per common share                        $      (.19)   $     (5.05)
                                                             
Weighted average common shares                 4,517,111      1,086,147
 outstanding
</TABLE>


             INTERNATIONAL NURSING SERVICES, INC. AND SUBSIDIARIES
            Consolidated Statement Of Changes In Stockholders' Equity
          For the Years Ending December 29, 1996 and December 31, 1995


<TABLE>
<CAPTION>
                         Common Stock              Common Stock
                      Number of               Number of               Paid-in
                        Shares    Amount       Shares     Amount      Capital
<S>                     <C>        <C>        <C>         <C>           <C>  
Balance, December   1,002,287    $1,000       492,552   $  493,000   $4,674,000  
 31, 1994                                                        
                                                                                           
Regulation S 
 offering           1,000,000     1,000            -            -       499,000
                                                                                           
Issuance of common stock
 Preferred stock
  dividend            259,736       -              -            -       435,000
 Stock issued for
  services            500,000     1,000            -            -     1,030,000
 Stock issued for
  services             75,000       -              -            -        94,000

Conversion of
 preferred stock       57,750       -          (23,100)     (23,000)     23,000
                                                                                           
Net loss                 -          -              -            -           -  
                                                                                           
Dividends                -          -              -            -      (876,000)
                                                                                           
Balance December
 31, 1995           2,894,773     3,000        469,452      470,000   5,879,000
                                                                                           
Automatic conversion
 of preferred stock 1,173,631     1,000       (469,452)    (470,000)    469,000
                                                                                           
Acquisition of
 assets (Ellis)       256,250     1,000            -             -    1,058,000
                                                                                           
Guaranteed value
 of common stock 
 issued in Ellis
 acquisition             -           -             -             -     (560,000)
                                                                                           
Conversion of
 notes payable to
 common stock           41,903       -             -             -      151,000
                                                                                           
Preferred stock          -           -            244      2,440,000         -
                                                                                           
Common stock
 options issued in
 connection with finder
 on preferred stock      -           -             -             -      125,000
                                                                                           
Acquisitions of
 assets (STAT)         220,133       -             -             -      467,000
                                                                                           
Conversion of
 preferred stock and
 accrued dividends of
 $26,000               923,111     1,000          (89)       (885,000)  910,000
                                                                                           
Common stock
 options issued for
 services                -           -             -              -      48,000
                                                                                           
Exercise of
 warrants              178,491       -             -              -     255,000
                                                                                           
Offering costs
 related to 1996
 preferred and common
 stock issued            -           -             -         (321,000) (186,000)
                                                                                           
Net loss                 -           -             -              -         -   
                                                                                           
Dividends                -           -             -              -     349,000
                                                                                           
Balance December
 29, 1996            5,688,292    $6,000         155      $1,234,000  $8,965,000

Continued Below:

                                    Dividend
                                  Payable With       Accumulated
                                  Common Stock         Deficit          Total
Balance, December
 31, 1994                            $      -        $(1,406,000)    $3,762,000

Regulation S
 offering                                   -                -          500,000

Issuance of common
 stock
  Preferred stock
   dividend                                 -                -          435,000
  Stock issued
   for services                             -                -        1,031,000 
  Stock issued
   for services                             -                -           94,000

Conversion of
 preferred stock                            -                -               -

Net loss                                    -           (4,611,000)  (4,611,000)

Dividends                               441,000              -         (435,000)

Balance, December
 31, 1995                               441,000         (6,017,000)     776,000

Automatic conversion
 of preferred stock                    (441,000)             -         (441,000)

Acquisition of assets
 (Ellis)                                    -                -        1,059,000

Guaranteed value of
 common stock issued
 in Ellis acquisition                       -                -         (560,000)

Conversion of notes
 payable to common
 stock                                      -                -          151,000

Preferred stock                             -                -        2,440,000

Common stock options
 issued in connection
 with finder on 
 preferred stock                            -                -          125,000

Acquisitions of assets
 (STAT)                                     -                -          467,000

Conversion of preferred
 stock and accrued
 dividends of $26,000                       -                -           26,000

Common stock options issued
 for services                               -                -           48,000

Exercise of warrants                        -                -          255,000

Offering costs related
 to 1996 preferred and
 common stock issued                        -                -         (507,000)

Net loss                                    -          (1,207,000)   (1,207,000)

Dividends                                66,000              -          415,000

Balance, December
 29, 1996                                66,000        (7,224,000)    3,047,000

</TABLE>

     INTERNATIONAL NURSING SERVICES, INC. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                               For the          For the
                                              Year Ended       Year Ended
                                             December 29,     December 31,
                                                 1996             1995
<S>                                                <C>            <C>
Cash flows from operating activities                         
  Net loss                                   $(1,207,000)       $(4,611,000)
   Adjustments to reconcile net loss to net                     
    cash from operating activities -
     Depreciation and amortization               371,000            370,000
     Common stock issued for services             48,000          1,124,000
     Impairment of goodwill                          -            1,300,000
     Checks written in excess of bank
      balance                                   (179,000)           244,000
     Change in assets and liabilities -                      
       Accounts receivable, net               (1,960,000)         1,119,000
       Prepaid expenses and other                (33,000)            30,000
       Accounts payable and accrued              591,000            609,000
        expenses
                                              (1,162,000)         5,074,000
          Net cash (used in) provided by
           operating activities               (2,369,000)           463,000
                                                             
Cash flows from investing activities                         
  Business acquisition                        (1,618,000)               -
  Purchase of property and equipment            (112,000)           (52,000)
  Deposits                                          -               176,000
  Acquisition costs of intangible assets          (5,000)               -
          Net cash (used in) provided by
           investing activities               (1,735,000)           124,000
                                                             
Cash flows from financing activities                         
  Proceeds from issuance of debt and
   notes payable                                     -              104,000
  Advances under financing agreement          11,618,000         10,906,000
  Payments under financing agreement          (9,478,000)       (11,681,000)
  Principal payments on debt and notes 
   payable                                      (588,000)          (397,000)
  Issuance of preferred and common stock,
   net of offering costs                       2,593,000            500,000
  Dividends paid                                 (60,000)                -
          Net cash provided by (used in)
           financing activities                4,085,000           (568,000)
                                                             
Net increase (decrease) in cash                  (19,000)            19,000
                                                             
Cash, beginning of period                         19,000                -
                                                             
Cash, end of period                           $       -           $  19,000
</TABLE>

Supplemental disclosure of cash flow information:
   Cash  paid during the year for interest was $655,000 and  $686,000
   for December 29, 1996 and December 31, 1995, respectively.

Non-cash investing and financing activities:
   Acquisition  of  equipment and vehicle under a capital  lease  was
   $90,000 during 1995.
   Dividend declared was $66,000 and $435,000 for December  29,  1996
and December 31, 1995, respectively.
   Conversion of preferred stock into common stock for $23,000 during
1995.
  Acquisition of equipment under capital lease was $56,000 in 1996.

  During  1996,  $400,000 of receivables and $10,000 of fixed  assets
  were  acquired  in  business combination through  the  issuance  of
  476,383  shares  of  common  stock  with  an  equivalent  value  of
  $1,526,000.   The  excess of purchase price over  the  identifiable
  assets of $1,116,000 has been allocated to goodwill.

  During  1996, all shares of the 12% preferred stock outstanding  at
  December  31,  1995  were  automatically converted  into  1,173,631
  shares of common stock.

  In  conjunction with the automatic conversion of the 12%  preferred
  stock accrued dividends outstanding of 441,000 were recaptured.

  In  1996,  89 shares of the 10% convertible preferred stock  issued
  plus  $26,000  of  accrued dividends were  converted  into  923,111
  share of common stock.

  During  1996, $151,000 in notes payable were converted into  41,903
  shares  of  common stock to cover the guaranteed value  of  certain
  shares issued in a business acquisition during the year.

  During  1996,  the  Company recorded a liability  of  approximately
  $500,000 to cover the guaranteed value of certain shares issued  in
  a business acquisition during the year.

  Options  with an imputed value of $125,000 were issued as a finders
  fee for preferred stock placements in 1996.

    INTERNATIONAL NURSING SERVICES, INC. AND SUBSIDIARIES

                  Notes to Financial Statements

Note 1 - Organization and Significant Accounting Policies

Organization

International  Nursing Services, Inc. and subsidiaries (the  Company)
provide  temporary  nurses (registered and/or licensed),  therapists,
nurse  assistants, and other caregivers to nursing homes, other long-
term health-care facilities, hospitals, and private residences.

During  1996,  the  Company  adopted a 52-53  week  fiscal  year  for
financial reporting purposes.

Principles of Consolidation

The   accompanying  consolidated  financial  statements  include  the
accounts of International Nursing Services, Inc. and its wholly-owned
subsidiaries, National Care Resources - Colorado, Inc. National  Care
Resources - New York, Inc., National Care Resources - Texas, Inc. and
JJ  Care  Resources,  Inc.  All intercompany transactions  have  been
eliminated.

Checks Issued in Excess of Bank Balance

As  disclosed  in  Note 5, the Company assigns its  receivables  with
recourse  to financial institutions.  These assignments are done  and
cash is received weekly.  The Company in anticipation of this funding
issues  checks which are in excess of recorded deposits.  Checks  are
never issued in excess of the expected funding amounts.

Use of Estimates

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

Concentration of Credit Risk

The  Company maintains cash in depository accounts which,  at  times,
may  exceed FDIC insurance limits.  At December 29, 1996 balances  in
excess of FDIC limits were approximately $102,000.

Financial  instruments  which  potentially  subject  the  Company  to
concentrations   of  credit  risk  consist  primarily   of   accounts
receivable.   The  Company  grants credit to  health-care  facilities
primarily  in  Colorado, New York, and Texas; however, travel  nurses
are  made  available  throughout  the  United  States.   The  Company
periodically  performs  credit analysis and  monitors  the  financial
condition of its clients in order to minimize credit risk.

Both  the  supplemental  staffing services  and  home  care  staffing
services are subject to third party reimbursement arrangements.  Such
third-party payers maintain standards which providers must satisfy to
remain  eligible for participation and reimbursement; thus a  certain
portion  of  the Company's future operating results are dependent  on
its  ability to remain eligible for participation in such third-party
payer  programs.  Approximately 6% and 12% of the Company's  revenues
are  dependent  upon  the  Medicare and Medicaid  third-party  payers
programs for the years ended December 29, 1996 and December 31, 1995,
respectively.

Financial Instruments

The  carrying  value  of the Company's accounts receivable,  accounts
payable and accrued expenses approximate their fair values due to the
short-term nature of the financial instruments.

Due to current interest rates available to the Company for debt being
similar  to  rates  on the Company's remaining maturities,  the  fair
value of existing debt approximates its carrying value.

Revenue Recognition

Revenue  is  recognized  when  services  are  rendered  at  the   net
realizable amounts expected to be received from payers, patients  and
others.   Amounts reimbursed by certain payers of healthcare services
are  subject  to  examination and adjustment.  These adjustments  are
accrued  throughout the year and adjusted in future  periods  as  the
final  settlements are determined.  At December 29, 1996, the Company
has  recorded  a  liability of $535,000 for the amount  due  for  the
difference  between  actual costs and costs to be  reimbursed.   This
liability was recorded as a reduction in revenue.

Income Taxes

The  Company recognizes deferred tax liabilities and assets based  on
the  differences between the tax basis of assets and liabilities  and
their  reported amounts in the financial statements that will  result
in  taxable  or  deductible amounts in future years.   The  Company's
temporary  differences  result primarily from  the  cash  to  accrual
transition  adjustment  due to a required change  from  the  cash  to
accrual basis and depreciation and amortization.

Loss Per Common Share

Loss  per  common share is based upon the weighted average number  of
shares  outstanding during each of the respective years.  The  common
stock equivalents are not included in the computation as their effect
would be anti-dilutive.

Property and Equipment

Property   and  equipment  are  stated  at  cost.   Depreciation   is
calculated  using the straight-line method over the estimated  useful
lives of the related assets which range from five to seven years.

Intangible Assets

Intangible  assets are stated at cost, and consist of goodwill,  non-
compete  agreements and acquisition costs.  Goodwill and  non-compete
agreements are amortized using the straight-line method over  fifteen
and three years, respectively.

Acquisition  costs represents costs incurred in connection  with  the
Company's proposed acquisitions.  Acquisition costs will be  included
in  the purchase price of the acquisitions if successful, or expensed
in operations if the acquisitions are unsuccessful.

The  Company adopted the provisions of SFAS 121 in 1995.  Under  SFAS
121,  the  Company  reviews  its  long-lived  assets  for  impairment
whenever  events  or  changes  in  circumstances  indicate  that  the
carrying amount of the asset may not be recovered.  The Company looks
primarily to the undiscounted future cash flows of its acquisition in
its  assessment  of  whether or not goodwill has been  impaired.   At
December  31, 1995, the Company determined an impairment of  goodwill
was  appropriate  (Note  2).  The impairment was  computed  based  on
future discounted cash flows.

Reclassifications

Certain  amounts  in the 1995 consolidated financial statements  have
been reclassified to conform to the 1996 presentation.

Continued Existence

The  Company has suffered recurring losses for the past several years
and  incurred  a  net loss for the year ended December  29,  1996  of
$1,207,000.   In addition, the Company had a working capital  deficit
of  $1,338,000.  These factors, among others, raise substantial doubt
about the ability of the Company to continue as a going concern.

Management's  plans  in regard to these matters  include  pursuing  a
number  of alternatives for additional financing which may include  a
public  and/or  private  offering of the Company's  securities.   The
Company is currently holding discussions with investment bankers  and
financial institutions related to an offering of securities  and  new
debt financing.  No agreements have been reached to date.  There  can
be  no  assurance that the Company will undertake such financings  or
that  the Company will be able to obtain any additional financing  on
terms acceptable to the Company.

The accompanying consolidated financial statements do not include any
adjustments  relating  to the recoverability  and  classification  of
assets   carrying  amounts  or  the  amount  and  classification   of
liabilities that might be necessary should the Company be  unable  to
continue as a going concern.


Note 2 - Acquisitions

Ellis Health Services, Inc.

In  April 1996, the Company signed an amended Asset Purchase and Sale
Agreement  to  acquire certain assets of Ellis Health Services,  Inc.
("Ellis").  The purchase price for the Ellis assets was paid  through
the  issuance of 256,250 shares of the Company's common  stock.   The
Company  agreed to guarantee the value of the stock issued  at  $4.25
per share on the first 12,000 shares sold each month and $4 per share
thereafter.  If the price at which the former owner of Ellis sold the
common  stock was less than the guaranteed value, the Company  agreed
to issue additional stock or cash to make up the difference.  Through
December  29, 1996, the former owner of Ellis sold 284,453 shares  of
the  Company's  common stock for proceeds of approximately  $600,000.
Additionally,  the Company paid $60,000 in cash to the former  owner.
Due  to  the  deficiency in realized value, the Company  has  accrued
$500,000  as a liability at December 29, 1996 which will be  paid  to
the  former  owner  of Ellis in either stock or  cash.   An  officer,
director and shareholder of the Company transferred 100,000 shares of
common  stock  to  the former owner of Ellis to cover  a  portion  of
deficiency.   The  shares were sold in 1997 by the former  owner  for
proceeds  of  approximately  $100,000  which  will  be  recorded   as
additional  paid in capital in 1997.  The acquisition  was  accounted
for  as  a purchase with the result of operations included since  the
date  of  acquisition.  The purchase of $1,059,000 was  allocated  to
Goodwill and is being amortized over fifteen years.

STAT Health Care Services, Inc.

The  Company  acquired certain assets of STAT Health  Care  Services,
Inc.  ("STAT") in July 1996.  The purchase price was paid  $1,550,000
in cash, 125,000 warrants to purchase common stock at $1.88 per share
with  an  imputed value of $92,500 using the black scholes  valuation
method,  and 200,000 shares of common stock of the Company valued  at
$1.88 of the date of acquisition.  The acquisition was accounted  for
by  purchase with the result of operations included since August 1996
(date  of  acquisition).   The  purchase  price  of  $2,145,000   was
allocated to goodwill.

A  shareholder  who  participated  in  the  preferred  stock  private
placement in which the proceeds were used to fund the cash portion of
the  STAT  acquisition was paid a commission of $117,000 in 1996  and
issued a warrant to purchase 100,000 shares of common stock at  $2.00
per  share.  The warrant price was subsequently reduced to $1.00  per
share in January 1997.

TherAmerica

In  January  1997,  the Company acquired certain assets  of  Colorado
Therapists   On  Call,  Inc.  ("CTOC")  and  Professional  Healthcare
Providers,  Inc.  ("PHP"), together doing  business  under  the  name
Theramerica.    The   Company  paid  $2,000,000  cash   and   assumed
approximately $175,000 of liabilities for the acquisition  which  was
effective January 1, 1997.  The Company accounted for the transaction
as a purchase.

The  purchase  price  was  allocated to the  assets  based  upon  the
following estimated fair values at the acquisition date:

<TABLE>
<CAPTION>

<S>                                             <C>
  Net tangible assets                       $ 160,000
  Non compete                                  50,000
  Excess of cost over net assets acquired     
   (goodwill)                               1,965,000
                                              
                                           $2,175,000
</TABLE>

The  following table depicts the unaudited historical and  pro  forma
results of the Company's 1996 and 1997 acquisitions.


                             (Unaudited)
<TABLE>
<CAPTION>                                                               Consol-
             Recorded                                     Adjustments   idated
             Amounts       Ellis      STAT    TherAmerica      (4)     Balances
<S>               <C>       <C>       <C>        <C>          <C>             <C>
Year Ended                                         
 December 31,
 1995
                                                                  
Revenues    $12,978,000 $1,802,000 $5,625,000 $9,653,000 $       -  $30,058,000
                                                                  
Net                                                               
 income
 (loss)     $(4,611,000)$   56,000 $  514,000 $  (71,000)$  233,000 $(3,879,000)
                                                                  
Preferred
 stock 
 dividends     (876,000)       -         -           -     (190,000) (1,066,000)
                                                                  
Net                                                               
 income (loss)
 applicable to
 common share-
 holders    $(5,487,000) $   56,000 $ 514,000 $   (71,000) $ 43,000 $(4,945,000)
                                                                  
Net income                                                               
 (loss) per
 common share      (5.05)       .05       .47         (.06)     .04       (4.55)
</TABLE>


<TABLE>
<CAPTION>
                             (Unaudited)
                                                                           Cons-
               Recorded                                      Adjustments  idated
              Amounts(1)    Ellis(2)    STAT(3)  TherAmerica     (4)    Balances
<S>               <C>          <C>         <C>        <C>         <C>       <C>
Year ended
 December 29,
 1996                                                            
                                                                  
Revenues     $14,259,000   $600,000   $2,658,000 $8,378,000   $   -  $25,895,000
                                                                  
Net income
 (loss)      $(1,207,000)  $     -    $  133,000 $  (62,000) $247,000 $(829,000)
                                                                  
Preferred
 stock
 dividends       349,000         -            -          -         -    349,000
                                                                  
Net income
 (loss) applicable
 to common share-
 holders        (858,000)     60,000     133,000    (62,000)  247,000  (480,000)
                                                                  
Net income
 (loss) per
 common share       (.19)        .01         .03       (.01)      .05      (.11)
</TABLE>

(1)   Includes the results of operations for Ellis from April 1, 1996
  and for STAT from August 1, 1996.
(2)   Represents activity for three months ended March 31, 1996.
(3)   Represents activity for the seven months ended July 31, 1996.
(4)    Adjustments  relate to amortization of goodwill  and  interest
  expense on acquisition debt which would have been required had  the
  Company completed the acquisition at the beginning of the period, and
  the  elimination of certain corporate expenses which would not have
  been incurred.


Note 3 - Balance Sheet Disclosures

Property and equipment consists of the following:

<TABLE>
<CAPTION>
<S>                                            <C>
  Furniture and fixtures                     $ 51,000
  Computer hardware and software              560,000
                                              611,000
  Less accumulated depreciation              (256,000)

                                             $355,000
</TABLE>

Depreciation  expense was $105,000 and $90,000 for  the  years  ended
December 29, 1996 and December 31, 1995, respectively.

Intangible assets consist of the following:

<TABLE>
<CAPTION>
<S>                                             <C>
  Goodwill                                   $5,687,000
  Non-compete agreements                        200,000
  Acquisition costs                              20,000
                                              5,907,000
  Less accumulated amortization and
   impairment                                (1,827,000)
                                                                                            
                                              4,080,000
</TABLE>

Amortization  expense was $266,000 and $190,000 for the  years  ended
December  29,  1996  and December 31, 1995, respectively.   In  1995,
management  of  the  Company  assessed several  factors  relating  to
goodwill  recorded  on two acquisitions made in 1994  and  determined
that an impairment of $1,300,000 was appropriate.

Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
<S>                                            <C>
Amount due under Ellis acquisition           $   500,000
Amounts due Medicare                             535,000
Other                                            585,000
                                                           
                                              $1,620,000
</TABLE>


Note 4 - Notes Payable and Long-Term Debt

Notes payable for December 29, 1996 consists of the following:

<TABLE>
<CAPTION>
<S>                                                         <C>
Note payable, interest at 8%, interest payable monthly.     
Principal   and  interest  are  due  monthly  beginning     
February  15, 1997 through final payment  on  July  15,     
1997.  Collateralized by certain intangibles.  The note            
is personally guaranteed by a stockholder, officer, and  
director.                                                   $ 145,000
Less current portion                                         (145,000)
                                                            
Total long-term debt                                        $      -
</TABLE>



Note 5 - Advances Under Financing Agreements

The   Company  has  entered  into  an  agreement  with  a   financial
institution   whereby  all  of  the  Company's  subsidiaries   assign
substantially  all  of  the subsidiaries' accounts  receivable  (with
recourse)  to  the  financial  institution.   The  Company   receives
advances  of 85% on eligible receivables and pays a fee of  3%  above
the  bank's  prime rate (11.5% at December 29, 1996)  on  outstanding
advances limited to $5,000,000.  The outstanding balance owed to this
financial   institution  at  December  29,  1996,  was  approximately
$3,318,000.   Fees paid to this financial institution  for  the  year
ended  December 29, 1996 and December 31, 1995, approximated $441,000
and  $401,000, respectively.  This agreement can be terminated by the
financial institution upon thirty days notice to the Company.

The  Company is unable to reasonably estimate the accounts  that  are
ultimately  charged  back to the Company and therefore,  the  Company
presents the advance arrangements as debt.


Note 6 - Capital Leases

The  Company  leases  a  portion of their  computer  equipment.   the
Company leases the equipment under various leases all that have a  36
month  term  and  contain a bargain purchase  option.   Property  and
equipment  includes approximately $150,000 of leased equipment.   The
future minimum lease payment as of December 29, 1996 are as follows:

<TABLE>
<CAPTION>
<S>                                            <C>
  1997                                     $   66,000
  1998                                         50,000
  1999                                          5,000
                                              121,000
  Interest                                     21,000
                                              100,000
  Current portion                              50,000
                                                           
  Long-term portion                        $   50,000
</TABLE>


Net  book value of the leased equipment was $114,000 at December  29,
1996.


Note 7 - Commitments and Contingencies

Operating Leases

The  Company  leases  office  facilities  and  equipment  under  non-
cancelable  operating leases.  One of the office leases is personally
guaranteed  by an officer, director, and stockholder.   Rent  expense
for  the  years  ended December 29, 1996 and December  31,  1995  was
$188,000 and $140,000,  respectively.

Future minimum lease payments under these leases are as follows:

<TABLE>
<CAPTION>
<S>                                            <C>
  Fiscal Year Ended December                  
                                              Amount
                                              
             1997                           $295,000
             1998                            226,000
             1999                            180,000
             2000                            138,000
             2001                             34,000

                                            $873,000
</TABLE>

Litigation

In  1997,  a  former patient filed a complaint in Texas  against  the
Company  alleging  that  an employee/therapist  of  the  Company  was
negligent.   The Company believes that there was no wrong  doing  and
intends  to  defend  itself  vigorously  against  the  charges.   The
client/hospital  where the employee was working at the  time  of  the
alleged  incident  paid  the  plaintiff $100,000  in  settlement  and
release  from  further claims.  The client/hospital has now  demanded
that   the   Company  indemnify  them  for  the   $100,000   as   the
client/hospital alleges this is stipulated in a contract between  the
Company  and the client/hospital.  The Company does not believe  that
it  has a contractual obligation to indemnify the client/hospital  in
this  situation and intends to vigorously defend against this demand.
The  Company believes that it will not incur any material  losses  in
excess of accrued amounts.

Ellis Guarantee

The  Company purchased Ellis Health Services, Inc. by issuing 256,250
shares of the Company's common stock and guaranteeing that the former
owner  of Ellis would realize at least $4.25 per share upon the  sale
of  the first 12,000 shares each month and 4.00 per share thereafter.
The Company agreed to issue additional shares or stock to make up any
shortfall and the Chairman and CEO of the Company pledged 100,000  of
his  personal shares as collateral.  At December 29, 1996, the former
owner  of  Ellis had a shortfall of approximately $500,000  from  the
sales  of  stock to that date.  In January 1997, the former owner  of
Ellis  exercised  his  right  to take the  security  pledged  by  the
Chairman  and  CEO  of the Company.  The Board of  Directors  of  the
Company approved the issuance to the Chairman and CEO 100,000  shares
of  common  stock  and options to purchase 250,000 shares  of  common
stock  at $1.00 per share to compensate the Chairman and CEO for  the
loss  of  his  personal shares.  The $1.00 per share represented  the
fair  market value of the shares at the date of the grant.  In  March
1997,  the  former owner of Ellis presented a demand  letter  to  the
Company  requesting immediate payment of the remaining short fall  of
approximately $400,000.  The letter also stated that if  the  Company
is  unable to pay such amount by April 7, 1997 legal action  will  be
pursued  with  the  former owner seeking recovery of  the  shortfall,
interest,  attorney fees, and other related expenses  incurred.   The
Company has begun negotiations with the former owner in an attempt to
resolve this matter.


Note 8 - Stockholders' Equity

Public Offering

In  September 1994, the Company completed an equity offering  whereby
the  Company  sold  225,000  units at $23.50   per  unit,  each  unit
consisting  of  two  shares of 12%  cumulative convertible  preferred
stock,  one  share  of  common stock, and three warrants  (the  "1994
Warrants")   to   purchase  common  stock.   The   Company   received
approximately $4,034,000,  net of offering costs of $1,253,000.   The
preferred  stock  is convertible into 2.5  shares  of  the  Company's
common  stock  at  any time and will convert automatically  into  the
Company's  common stock if the closing bid price of the common  stock
equals   or   exceeds  $6.00   for  10   consecutive  trading   days.
Subsequent  to  December  31, 1995, all of the  preferred  stock  and
interest  automatically  converted into 1,173,631  shares  of  common
stock.

The  1994 Warrants entitle the holder to purchase one share of common
stock  at  an  exercise price of $5.00 and expire in September  1999.
The  1994   Warrants  may be redeemed by the  Company  for  $.25  per
warrant  upon  30  day's  written notice at  any  time  on  or  after
September  12,  1995, or earlier if the closing  bid  price  for  the
common  stock  equals  or exceeds $7.50  for ten consecutive  trading
days.

1996 Private Placement

In July and September 1996, the Company completed a private placement
of  244  units,  each  unit  consisting of  a  share  of  convertible
preferred  stock,  $10,000  par value  ("1996  Preferred  Stock"),  a
warrant  to  purchase 8,000 shares of the Company's common  stock  at
$2.50  per share and a unit purchase option to purchase an additional
unit at $10,000 per unit.  The convertible preferred stock carries  a
10%  dividend and is convertible at the lesser of $1.25 or 75% of the
average  sales  price for the five trading days prior to  conversion.
The  private  placement  raised gross  proceeds  to  the  Company  of
approximately $2,440,000.

Approximately $1,550,000 of the proceeds raised was used to fund  the
cash purchase portion of STAT.  A shareholder who participated in the
placement of the private placement was paid a commission of  $117,000
in  1996  and issued a warrant to purchase 100,000 shares  of  common
stock at $2.00 per share.  The warrant price was subsequently reduced
to $1.00 per share in January 1997.

During  1996,  88.5 units (with accrued dividends) were converted  to
923,111 shares of common stock.  In addition, a Unit holder who  held
17 units was allowed to reduce their purchase price on their warrants
to  $1.00 per share from $2.50 per share, resulting in gross proceeds
to the Company of $136,000 in November 1996.  Subsequent to year end,
an  additional  100 units have been converted through March  3,  1997
resulting in the issuance of an additional 1,388,723 shares of common
stock  in  1997.   Also  in 1997, a Unit Holder  who  held  20  Units
exercised  their Unit purchase option resulting in gross proceeds  to
the  Company of $200,000.  The Unit holder immediately converted  the
preferred  to common resulting in the issuance of 257,028  shares  of
common stock in January 1997.

1997 Private Placement

In  January  and  February  1997, the  Company  completed  a  private
placement  of  167.15 Units, each unit consisting  of  one  share  of
convertible  preferred  stock, $10,000  par  value,  "1997  Preferred
Stock",  and a warrant to purchase 10,000 shares of common  stock  at
$1.00 per share.  The convertible preferred stock carries no dividend
if   the   underlying  common  stock  is  included  in  an  effective
registration  statement within 90 days of the date of the  agreement.
After  90  days,  if  the underlying shares are not  included  in  an
effective registration statement, the dividend rate becomes 18%.   In
addition,  the preferred stock contains a redemption feature  whereby
if  the  underlying  common  stock which  the  preferred  shares  are
convertible  into  is  not  effectively  registered  by  the   second
anniversary date of each respective unit, the holder at their  option
may  redeem  the preferred shares for $10,000 back plus  all  accrued
unpaid  dividends.  The Company raised gross proceeds  of  $1,671,500
from  this  private placement.  Commissions of $99,540 were  paid  to
individuals  who  assisted  in the private  placement  who  are  also
shareholders of the Company.  Substantially all of the proceeds  were
used to purchase TherAmerica (Note 2).

Stock Options and Warrants

In  May  1988,  the  Company adopted an incentive stock  option  plan
(ISO),  which  provides for the grant of options representing  up  to
100,000   shares  of  the  Company's common  stock  to  officers  and
employees of the Company upon terms and conditions determined by  the
Board  of  Directors.  Options granted under the plan  are  generally
exercisable immediately and expire up to ten years after the date  of
grant.   Options are granted at a price equal to the market value  at
the  date of grants, or in the case of a stockholder who owns greater
than  10%  of  the outstanding stock of the Company, the options  are
granted  at  110%  of the fair market value.  At  December  29,  1996
options  to  purchase 50,000 shares of common stock at between  $1.20
and  $2.50 remain outstanding.  These options expire between 2002 and
2004.

In  1994, the Board of Directors established, the Omnibus Stock  Plan
of  1994  (1994  Plan) and reserved 500,000  shares of the  Company's
common stock for grant under terms which could extend through January
2004.  All  options  and warrants issued under  this  plan  are  non-
qualified.   Grants  under the 1994 Plan may be  to  employees,  non-
employee directors, and selected consultants to the Company, and  may
take  the form of non-qualified or incentive stock options, not lower
than  50% of fair market value.  To date, the Company has not  issued
any  options below fair market value at the date of grant.  Incentive
stock  options and options to directors may be granted only  at  fair
market  value,  except  that  incentive  stock  options  granted   to
employees  who  are  also  owners of 10% or  more  of  the  Company's
outstanding common stock must be at prices no lower than 110% of fair
market value.

In November 1994,  the Board of Directors issued 575,252  warrants to
two  officers,  directors, and stockholders.  The  warrants  have  an
exercise price of $1.75,  the fair market value at the date of grant.
The  warrants vest immediately and are exercisable when the Company's
consolidated  revenues,  on a proforma basis,  equal  or  exceed  $20
million,  or  at the end of seven years, whichever comes  first.   In
1995, 287,626 of the warrants were canceled.

In  1996,  the  Board of Directors established the 1996 Stock  Option
Plan  (the "1996 Plan") with terms similar to the 1994 Plan.   During
1996,  the  Company issued 300,000 options to purchase the  Company's
common  stock  at $1.88 expiring in 2006.  The Board of Directors  of
the  Company  reserved 3,000,000 shares of common stock for  issuance
under the 1996 Plan.

Also  during 1996, the Company canceled and reissued certain  options
to  certain  officers  and  directors of  the  Company.   Options  to
purchase  224,187 shares of common stock at exercise  prices  ranging
from  $1.20  to  $2.75  which were issued  to  certain  officers  and
directors  under  the 1994 Plan were canceled.  Options  to  purchase
239,437  shares of common stock at $1.88 (which represented the  fair
market value of the common stock at the time of grant) were issued as
replacement for the canceled options.  The additional 15,250  options
were issued to replace the loss in value for those option holders who
held options at exercise prices which were less than $1.88.

Stock Options and Warrants

In  addition,  in  January 1997, the Company  canceled  and  reissued
150,000  options to purchase the Company's common stock to an officer
of  the  Company.  The options were originally exercisable  at  $1.88
(100,000  options) and $3.25 (50,000 options).  The  option  exercise
price  was reset to $1.00 which represented the fair market value  of
the options at the time of the grant.

Subsequent  to  year  end,  the Company granted  443,748  options  to
purchase  common  stock  at $1.00 per share under  the  "1996  Plan",
133,609 of which were granted to officers and directors.

The  following  is summary of options and warrants  granted,  all  of
which expire at various times through 2004.

<TABLE>
<CAPTION>
                  Number of Options
                                        Exercise                     Exercise
                                        Price Per     Number of      Price Per
                 ISO        Non-Plan      Share        Warrants        Share 
<S>               <C>         <C>         <C>           <C>              <C>
                                                                 
Outstanding
 December 31,
 1994          527,375     15,500      $1.00-$2.75     1,887,356    $1.75-$5.00
                                                                 
Options/warrants
 granted       600,000        -        $0.63-$6.00           -                -
Warrants 
 canceled          -          -              -          (372,752)   $1.75-$6.00
Options 
 canceled       (6,000)       -              -               -              -
                                                                 
Outstanding
 December 31,
 1995        1,121,375      15,500      $0.63-$6.00     1,514,604    $1.75-$5.00
                                                                 
Option/warrants
 granted       539,437        -         $1.88            2,217,000   $1.00-$2.50
Warrants
 canceled          -          -              -                -               20
Unit options
 granted (1)       -          -              -           1,952,000           -
Options 
 canceled     (317,687)     (8,000)     $0.63-$6.00       (178,491)       $1.49
Options/warrants                   
 canceled          -          -              -            (180,450   $1.00-$4.00
                                                                 
Outstanding
 December 29,
 1996        1,343,125       7,500      $0.63-$6.00      5,324,663   $1.00-$5.00
</TABLE>

(1)    Represents option to purchase an additional unit identical  to
  the  Unit  issued  in the July/September private  placement.   Each
  $10.000  unit  consists  of  one  share  of  convertible  preferred
  (convertible at the lesser of $1.25 or 75% of the closing price  on
  the five trading days prior to conversion) and a warrant to purchase
  8,000 shares of common stock at $2.50 per share for three years.

The  Corporation  has  adopted  the  disclosure-only  provisions   of
Statement of Financial Accounting Standards No. 123, "Accounting  for
Stock-Based  Compensation."  Accordingly, no  compensation  cost  has
been  recognized  for the stock option plans.  Had compensation  cost
for the Corporation's two stock option plans been determined based on
the  fair value at the grant date for awards in 1995 consistent  with
the  provisions of SFAS No. 123, the Corporation's net  earnings  and
earnings  per share would have been reduced to the pro forma  amounts
indicated below:

<TABLE>
<CAPTION>
<S>                                         <C>              <C>            
                                            1996            1995
                                                           
Net loss - as reported                     $  (858,000)   $(5,487,000)
Net loss - pro forma                        (1,792,000)    (5,836,000)     
Loss per share - as reported                      (.19)         (5.05)
Loss per share - pro forma                        (.40)         (5.37)
</TABLE>

The fair value of each option grant is estimated on the date of grant
using  the  Black-Scholes  option-pricing model  with  the  following
weighted-average assumptions used for grants: dividend yield  of  0%;
expected  volatility  of 93%; discount rate of  11.5%;  and  expected
lives of 10 years.

Dividends

In  1995,  the  Board of Directors declared a stock dividend  on  the
preferred stock to be paid in common stock.  Under the terms  of  the
preferred stock, if the Company does not have $750,000 cash  or  cash
equivalents then the dividend may be paid by issuing common stock  at
the  rate  of  $1.80  per  share  annualized.   The  Company  accrued
dividends  at  the $1.80 level for 1995 as the Company did  not  have
$750,000  in  cash  and  cash  equivalents.   The  dividends  on  the
preferred stock for the year ended December 31, 1995 were $876,000 of
which  $435,000  was  paid  in common  stock  of  the  Company.   The
remaining dividends of $441,000 were accrued at year end and recorded
as a dividend payable in common stock.

During  January 1996, the outstanding 12% preferred stock at December
31,  1995 was automatically converted into common stock.  All  unpaid
dividends  on  that preferred stock were void and no longer  payable.
Since  the  dividends were previously reflected in the  statement  of
operations  as  a  component  of the net loss  applicable  to  common
stockholders,  the  recovery  of  the  accrued  dividends  has   been
reflected  as  a  credit in determining the net  loss  applicable  to
common  stockholders in 1996 on the statement of  operations  in  the
accompanying financial statements.

The  following is a summary of dividends reflected in  the  net  loss
applicable to common stockholders.

<TABLE>
<CAPTION)
<S>                                             <C>
  Dividends previously accrued and
   recaptured related to the preferred
   stock conversion                             $441,000     
  Accrued dividends on 1996 preferred stock
   issuances                                     (92,000)
                                              
                                                $349,000
</TABLE>

Regulation S Offering

On  November 22, 1995, the Board of Directors of the Company approved
the  issuance  of  one  million shares of Common  Stock  to  non-U.S.
persons  at  a cash purchase price of $.50 per share in  an  offering
made  pursuant to Regulation S under the 1933 Act.  $200,000 of these
subscriptions  were  paid  on December 15, 1995  and,  after  certain
wiring delays, $300,000 on January 3, 1996.

Stock for Services

As  of  December 8, 1995, the Company engaged the services  of  three
consultants  to  provide the Company with various  business  services
related   to   the  expansion  of  the  Company's  business.    These
consultants  were  issued an aggregate of 500,000  shares  of  Common
Stock   pursuant   to  transactions  exempt  from  the   registration
requirements  of the Act for services rendered prior to  December  8,
1995.   The  consultants  were also issued warrants  to  purchase  an
aggregate  of 100,000 shares of Common Stock at a price of $6.00  per
share  for  services  to  be rendered after December  8,  1995.   The
warrants expire twenty-four months from the date of issuance or  upon
termination  or breach of the consulting agreements.  The  stock  was
valued at $2 which was the bid at the date of the agreement issuance.

In  July  1995 the Company issued 75,000 shares of stock for services
to  an  individual for consulting related services.   The  stock  was
valued  at  $1.24  which represented the bid price  at  the  date  of
issuance.

Stock Payoff of Note Payable

In  February 1996, the Company paid off a note payable consisting  of
principal  of  $25,000 and accrued interest payable of  approximately
$23,000  with issuance of 13,700 shares of common stock.  The  common
stock was valued at $3.50 which represented the fair market value  of
the common stock at the time of the payoff.

Settlement of Stock for Services

In  September  1996,  the Company settled a  dispute  with  a  former
investment  banker who claimed that the Company owed  the  investment
banker  approximately $53,000.  The Company settled  the  dispute  by
issuing 20,133 shares of common stock.


Note 9 - Significant Fourth Quarter Adjustments

During the fourth quarter of 1996, the Company recorded the following
adjustments:

<TABLE>
<CAPTION>
<S>                                              <C>
  Termination, vacation and other payroll
   adjustments                               $ 156,000
  Litigation accrual                           100,000
  Medicare adjustments                         100,000
  Eleventh Hour acquisition costs written
   off                                          86,000
  Warrants issued for services                  48,000
  Increase in allowance for uncollectible 
   accounts receivable                          83,000
                                              
                                              $573,000
</TABLE>


Note 10 - Income Taxes

The  temporary differences between the tax basis of assets and  their
financial  reporting amounts that give rise to a deferred  tax  asset
are  primarily due to a cash to accrual transition adjustment due  to
the  Company being required to adopt the accrual basis for income tax
filing purposes.

The  components of deferred tax assets (liabilities) in  the  balance
sheet,  which  are  fully limited by a valuation  allowance,  are  as
follows:

<TABLE>
<CAPTURE>
<S>                                           <C>
  Accounting method differences             $  281,000
  Net operating loss carryforward            1,676,000
                                             1,957,000
  Less valuation allowance                  (1,957,000)
                                              
  Net deferred tax asset                    $   -
</TABLE>

The  deferred tax asset valuation allowance decreased $34,000  during
1996.

The  Company  has  incurred  net losses  for  federal  tax  reporting
purposes  since inception of approximately $4,934,000.  The  tax  net
operating  loss  (NOL) carryforwards expire in  years  2003   through
2010.   The  utilization  of $4,718,000 of the  NOL  carryforward  is
limited to $469,000 on an annual basis due to an effective change  in
control  which  occurred as a result of the 1996  private  placement.
Due  to the existence of net operating losses incurred by the Company
which raise substantial doubt about the Company's ability to continue
as  a going concern, the Company has concluded it is more likely than
not  that  it will not realize its deferred tax asset and accordingly
has established a valuation allowance of $1,957,000.


Note 11 - Subsequent Events

On  January  28,  1997,  the  Company  executed  a  convertible  note
receiving  proceeds of $1,000,000 from a shareholder of the  Company.
Interest accrues on the note at 12.5% and the note matures on January
27,  1998.   If  the note is not paid off by May 28, 1997,  the  note
becomes  convertible to common stock until January 27,  1998  at  the
lower of $1.50 or 65% of prior five trading days closing price of the
common  stock.   The  proceeds of the note  were  used  to  fund  the
acquisition costs related to TherAmerica.