U.S.  SECURITIES  AND  EXCHANGE  COMMISSION
                               WASHINGTON,  D.C.    20549
                                    FORM  10-KSB
                                    ------------

(Mark  One)
[X]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
               EXCHANGE  ACT  OF  1934
               [FEE  REQUIRED]
               For  the  fiscal  year  ended  March  31,  1997

[  ]          TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
              SECURITIES  EXCHANGE  ACT  OF  1934
              [NO  FEE  REQUIRED]
              For  the  fiscal  year  ended  ___________________

              Commission  File  No.  0-18235
                                     -------

                            ELDORADO  ARTESIAN  SPRINGS, INC.
                              ----------------------------
             (Exact  name  of Registrant  as  specified  in  its  charter)

     Colorado
--------------------                                       84-0907853
                                                      --------------------
(State  or  other  jurisdiction  of              (I.R.S. Identification Number)
 incorporation  or  organization)

P.O.  Box  445,  Eldorado  Springs,  Colorado                       80025
---------------------------------------------                      -------
(Address  of  principal  executive  offices)                     (Zip  Code)

Registrant's  telephone  number,  including  area  code:     (303) 499-1316
                                                        ----------------------

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

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

                               Common  Stock, $.001  Par  Value  Per  Share
                                ------------------------------------------
                                             (Title  of  Class)

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

Yes      X        No  ___

Check  if  there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation  S-B  is  not  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.[X]

State  issuer's  revenues  for  its  most  recent  fiscal  year$2,644,521
                                                                ---------
State  the aggregate market value of the voting stock held by nonaffiliates of
the  Registrant.   The aggregate market value will be computed by reference to
the  price at which the stock was sold, or the average bid and asked prices of
such  stock,  as of a specified date within the past 60 days.  (See definition
of  affiliated  in  Rule  12b-2  of  the  Exchange  Act)



Not  available.

State  the  number  of  shares  outstanding of each of the issuer's classes of
common  stock,  as  of  the  latest  practicable  date.

     Common  Stock,  $.001  par  value                      32,344,948
     ---------------------------------                      ----------
                  Class                        Outstanding  at  June  26,  1997



                                         DOCUMENTS  INCORPORATED  BY REFERENCE

     (If  the  following  documents  are  incorporated  by  reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
etc.)  into  which  the  document  is  incorporated:  (1) any annual report to
security  holders;  (2)  any  proxy  or  information  statement:  and  (3) any
prospectus  filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933
("Securities  Act").    The  listed  documents should be clearly described for
identification  purposes.

     None.


PART  I
-------


Item  1.    Business.
-------     --------

General
-------

Eldorado  Artesian  Springs, Inc. (the "Company") was formed under the laws of
the  State  of  Colorado  on April 15, 1986, under the name Lexington Funding,
Inc.  ("Lexington").    Lexington  was  organized  for  the primary purpose of
seeking  selected  mergers  or  acquisitions  with  a small number of business
entities  expected  to  be  private  companies,  partnerships,  or  sole
proprietorships.  Prior to April 1987, the primary activity of the Company was
directed  to  organizational  efforts  and  obtaining  initial financing.  The
Company  sold 2,500,000 shares of its $.001 par value common stock at $.10 per
share  for  total  proceeds  of  $250,000 in a public offering which closed on
December  17,  1986.

Effective  April  10, 1987, the Company acquired all of the shares of Eldorado
Artesian  Springs, Inc. ("Eldorado") of Eldorado Springs, Colorado.  Eldorado,
a  Colorado corporation, was formed in 1983.  The acquisition was accomplished
by the exchange of Company stock for all of the outstanding shares of Eldorado
from  its  shareholders, Douglas A. Larson, Jeremy S. Martin, Kevin M. Sipple,
Raymond  Kerbaugh and Melvin Larson.  Pursuant to the acquisition of Eldorado,
Eldorado  share-holders  received  an  aggregate  of  28,080,000 shares of the
Company's  Common Stock, representing 90% of outstanding shares of the Company
after the acquisition.  The number of Company shares of stock exchanged in the
acquisition  was  determined  through arms-length negotiations.  In June 1988,
Eldorado  was  merged  into  Lexington  pursuant  to  a  statutory merger, and
Lexington  changed  its  name  to  Eldorado  Artesian  Springs,  Inc.

As  a  result  of  the Eldorado acquisition and subsequent merger, the primary
business  of  the  Company is the bottling and sale of pure spring water which
eman-ates  from springs located on property owned by the Company.  In addition
to  real  property  and  the  wells and springs thereon, and water rights, the
Company  owns  a  bottling  plant (including building and bottling equipment),
delivery  trucks,  associated  containers  and  equipment, resort buildings, a
mobile  home  park,  and  an  outdoor  swimming  pool which are located on the
property.

Products
--------

The  Company's  principal  business  is  bottling  and selling Artesian Spring
Water.  The Company also owns and operates a resort/spa on its property during
the summer months and rents four single-family homes and mobile home spaces on
the  property.    The Company's water bottling operations account for 95.6% of
revenues  of  the  Company's  revenues.

Bottling
--------

The  Company  owns and operates its bottling facilities.  Total production and
warehousing  space  is  approximately  12,000  square  feet.   There are three
separate  fill  lines  in  the  facility.

Water  is  produced at two springs and eleven wells on the Company's property.
The  well  heads are in close proximity to the bottling operation.  The source
water  is bacteria-free as it emanates from the earth, and nothing is added to
or  removed  from the water during the bottling process.  As  safeguard to any
contamination,  the  water  passes  through  a  protective  filter  and  an
ultra-violet  light.    The  product is packaged only in glass or high quality
plastic  bottles,  and  each one is sealed with a tamper evident cap.  The PET
bottle  products  have  ozone  added  to  comply  with  FDA  standards.

Sales  and  Distribution
------------------------

The  Company  sells  its  products  in five gallon, one gallon, 1.5 liter, 1.0
liter,  and 0.5 liter bottles.  The Company operates its own fleet of delivery
vehicles  selling  all  sizes off truck in quantities of less than full pallet
configuration  to homes, offices, and retail outlets in the entire front range
area  of Colorado.  The Company also sells its products to major retail stores
directly  through their warehouses and to several independent distributors who
service  accounts  located  outside  the  area  serviced by the Company fleet.

The  five  gallon  sales  and related cooler rentals represented approximately
79.5% of revenues and the smaller sizes accounted for 14.0% of revenues during
the  most  recent fiscal year.  Of the five gallon accounts, approximately 80%
were  home  accounts  and  20%  were  commercial  establishments.

At  present the Company's products are available primarily in Colorado, with a
few  exceptions  in  regions  of  states  bordering  Colorado.   The Company's
products are the number one selling brand of Natural Spring Water in the state
of  Colorado.

Marketing
---------

The  Company  focuses  on  three  major  areas in marketing its products; five
gallon  sales,  small  package  products,  and  brand  name  recognition.

The  five  gallon  products  are primarily sold through the acquisition of new
accounts  attracted  by  personal  sales representatives strategically located
throughout  the area at local events.  The efforts of this staff are augmented
by  yellow  pages,  radio,  and  occasional  television  advertisements.

The smaller packages that are sold principally through retail chain stores are
effectively marketed by using point of purchase inducements to gain new trial,
usually  in  the  form  of  discounts  in  price  in conjunction with signage.

The  Company  attempts  to  build  brand  name  awareness  by  sponsoring  or
participating  in many local events.  Eldorado Artesian Springs is the sponsor
of  the Boulder, Colorado July 4th Fireworks celebration, the Eldorado Springs
Cancer  Research  Run,  and  participates  in part in many other local events.

Supplies
--------

Water  bottled  by  the  Company  comes  from springs located on the Company's
property which have been flowing for many years.  The Company does not foresee
any disruption of its operations as a result of supply problems.  Suppliers of
the  bottles  do  experience seasonal shortages resulting from resin shortages
which  may increase prices.  These shortages must be anticipated by management
and  inventory  safety  stocks  must  be  sufficient  so  as  not to interrupt
production.

Seasonality  of  Business
-------------------------

Sales  tend  to  be  mildly  seasonal in the bottled water business.  A ten to
fifteen percent differential in sales is normally experienced between the peak
summer  months  and  the  low  winter  months.

Competition
-----------

There  is  active  competition  in  the  bottled  water market.  The Company's
competitors include more diversified corporations having substantially greater
assets  and  larger  sales  organiza-tions  than the Company, as well as other
small  firms.   The Company competes on the basis of customer service, product
quality  and  price.    Management believes that the products' superior taste,
competitive  pricing  and  unique  packaging  are  significant  factors  in
maintaining  the  Company's  competitive  position.

Environment
-----------

The  Company's  bottling  operations are subject to regulation by the Food and
Drug  Administration  of  the  federal  government.    These  regulations  are
administered  by  the  Colorado  Department  of  Public Health and Environment
Consumer Protection Division.  Weekly product and source bacteriological tests
are  required  and  annual  inspections  are  performed.

The  Company is also subject to regulation under the Colorado Primary Drinking
Water  Regulations  and  the  United  States  Safe  Drinking Water Act.  These
regulations  pertain to the operation of the water utility system owned by the
Company  that  services  the  town of Eldorado Springs.  These regulations are
also  administered  by  the State of Colorado Health Department Drinking Water
Division.    Regular  periodic  testing  is  also required for this operation.

Additionally,  the  Company  operates  the springs swimming pool which is also
subject  to  regulation  by  the  State  of  Colorado.   These regulations are
administered  by  the  Boulder  County  Health Department and require periodic
daily  testing  and  agency  inspections.

It  is  the  Company's  understanding  that  it  is  in  compliance with these
regulations  as  communicated  by  representatives  of  the  responsible local
agencies.

Employees
---------

The  Company  employs  39  full-time employees and 10 to 11 seasonal employees
during  the  summer  resort  months.


Item  2.    Properties.
-------     ----------

The Company owns approximately 26 acres of land in Eldorado Springs, Colorado.
In  addition  to  real  property  and the wells and springs thereon, and water
rights,  the  Company  owns  a bottling plant (including building and bottling
equipment),  delivery  trucks,  associated  containers  and  equipment, resort
buildings,  a mobile home park, and an outdoor swimming pool which are located
on  the  property.    Total  production and warehousing space is approximately
12,000  square  feet.


Item  3.    Legal  Proceedings.
-------     ------------------

None.


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

No  matters were submitted to a vote of security holders of the Company during
the  fourth  quarter  of  the  fiscal  year  covered  by  this  report.



PART  II
--------

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

The  outstanding  registered securities of the Company are currently quoted in
the  "Pink  Sheets"  maintained  by  members  of  the  National Association of
Securities  Dealers,  Inc.,  and  are  traded  in the over-the-counter market.

Since  the  Securities  and  Exchange  Commission's rules applicable to "penny
stocks"  went  into  effect  in  1990, there have been no market makers in the
Company's  stock,  so no quotes are available.  Management is actively seeking
market  makers  for  its  stock, but the rules which restrict trading in "Pink
Sheet"  stocks  have had the effect of diminishing market makers in the stock.

As  of  May  31,  1997,  there were 154 holders of the Company's common stock.

No  dividends  have  been  declared or paid by the Company since inception and
none  are  contemplated  at  any  time  in  the  foreseeable  future.

Item  6.       Management's Discussion and Analysis of Financial Condition and
--------       ---------------------------------------------------------------
Results  of  Operations.
------------------------

Financial  Condition  -  Liquidity  and  Capital  Resources
-----------------------------------------------------------

The cash flow position of the Company improved significantly during the fiscal
year  ended  March 31, 1997.  Year end cash position totaled $244,765 compared
to $89,289 at year end in 1996.  More significantly, the cash increase was the
direct result of operations as opposed to increases in debt as was the case in
the  year  end  March  31,  1996.

The  Company  has  certain  financial covenants related to its bank borrowing,
which  the  Company  is  in  compliance  with.

Revenues  for  the  year  ended  March  31,  1997  increased by 23.5% from the
previous  year, to $2,644,521.  Consensus industry averages are being reported
by  trade  analysts  as  ranging  from  8%  to  10%  for  the  year  1996.

The  costs  of  goods  sold  increased 39.9% for the year ended March 31, 1997
compared  to a year earlier.  In addition to increases expected to accommodate
the  growth  experienced  by  the  Company, management believes the additional
increases  were  incurred  due  to  increases  in  the  percentage of revenues
generated  by  the  higher  cost  PET  bottle  products.    As  these products
contribute  more  to  the  Company's portfolio, it is expected that to restore
margins  and  remain  competitive,  the  Company  will  have  to invest in the
construction  of  a  bottle  production  plant to manufacture its own bottles.

Operating  expenses  increased by 18.7% compared to a year ago. An amount that
is  significantly  lower  than  the  growth  in revenues.  There were no price
increases  during  the  year,  therefore all revenue increases were the direct
result  of  increased volume.  Increases in wages and salaries were only 18.5%
in  spite  of  an  across the board pay increase for all employees that became
effective on July 1, 1996.  This is a result of improved production procedures
that  increased  line speeds thus lowering the labor cost on a per case basis.
These  improvements  in  labor  efficiency  helped  to  offset  above  average
increases  in  the  general  and  administrative  expense  and the selling and
delivery  expense.  These increases reflect overall increased expenditures for
advertising  and  promotions,  insurance  increases in proportion to volume on
product liability coverage and related vehicles, and increased charges for bad
debts  written  off  during the year.  The Company maintains as its target for
credit  policy  management a goal of 0.5% of revenues for bad debts.  Bad debt
expense  for  the  year  ending March 31, 1997 were 1.03% of revenues, however
losses  of  this  nature  were influenced dramatically by an $11,734 loss to a
single company that went out of business.  Management has taken steps in terms
of  new  credit  policies to prevent this type of loss in the future.  Without
this  one  large  loss,  bad  debts would have been 0.59% of revenues, or very
close  to  the  target  goal.

Accounts  receivable increased by 18.0% from year to year and totaled $282,346
at  year end.  This represents a total of 39.6 days sales in receivables based
upon  sales  made  in  the  month of March 1997.  The Company's goal or target
number  is  38  days  sales in receivables, less than that management believes
would  indicate  too  stringent  of  a  credit  policy and could result in the
Company  not  achieving  desired  sales  growth.

Management  believes the restrictive covenants contained in its loan agreement
with  its  bank are not flexible enough to allow the Company to take advantage
of  the  growth  opportunities  that  exist today in the bottled water market.
Therefore,  the  Company  is  currently  engaged  in  negotiations  which  if
successful would remove the expenditure limit and provide additional funds for
capital  improvements  in  the bottling plant and associated equipment.  These
improvements  are  expected to cost $300,000.  It is hoped that the funds will
be  available so that the improvements can be completed before the end of July
1997.

Results  of  Operations
-----------------------

For  the  year  ended  March  31, 1997, income before taxes increased 94.0% to
$187,214.    Income taxes for the year were $63,062 resulting in net income of
$124,152, up 69.3% from a year ago.  Management is pleased with the results in
so  much  as the improved performance and resulting cash available should help
the  Company  continue  to  grow  and  compete  in  the  marketplace.

Item  7.    Financial  Statements  and  Supplemental  Data.
-------     ----------------------------------------------

Please  see  pages  F-1  through  F-14.

Item  8.    Changes  in  and  Disagreements with Accountants on Accounting and
-------     ------------------------------------------------------------------
Financial  Disclosure.
---------------------

There  have  been  no  disagreements  between  the Company and its independent
accountants  on any matter of accounting princi-ples or practices or financial
statement  disclosure  since  the  Company's  inception.

PART  III

Item  9.    Directors  and  Executive  Officers  of  the  Registrant.
-------     --------------------------------------------------------

The  following  table  sets  forth  information  with  respect  to  directors,
executive officers, and significant employees of the Company.  Directors serve
for one year terms.  Each director is also a nominee for election to the Board
of  Directors.

<TABLE>
<CAPTION>
                                                                   Tenure  as
                                                                   Officer  or
   Name                   Age             Position(s)                Director
--------                 -----            -----------             ------------
<S>                        <C>                <C>                      <C>
Douglas A. Larson         41            President, Treasurer and
                                        Director                 1983 to present

Kevin  M.  Sipple         41            Vice-President, Secretary
                                        and  Director            1983 to present

Jeremy  S.  Martin        42            Vice-President and 
                                        Director                 1983 to present

Business  Experience
--------------------

Douglas A. Larson was a co-founder of Eldorado Artesian Springs, Inc. in 1983.
He  served  as Secretary and Treasurer of the Company from 1983 until 1991, at
which  time  he  became  the President and Treasurer and continues to serve in
those  capacities.   Mr. Larson has been a member of the Board of Directors of
the  Company  since  its  founding.    He  is responsible for the oversight of
financing  and  accounting matters, corporate strategy, and corporate reports.

Kevin  M.  Sipple was a co-founder of Eldorado Artesian Springs, Inc. in 1983.
Mr.  Sipple  has  served  as Vice President and Secretary of the Company since
1991.    Prior  thereto, he was President from 1985 to 1991 and Vice President
from  1985  to 1991 and Vice President from 1983 - 1985.  He has served on the
Board  of  Directors of the Company since 1983.  Mr. Sipple is responsible for
advertising  and  marketing  of  the  "PET"  bottled  water  products.

Jeremy  S. Martin was a co-founder of Eldorado Artesian Springs, Inc. in 1983.
He served as President of the Company from Company's founding until June 1985.
He  has served as Vice-President since June, 1985 and has been a member of the
Board  of  Directors  since the Company's founding.  Mr. Martin is responsible
for  overseeing  service  and deliveries of the Company's products, promotions
and  public  relations.

Family  Relationships
---------------------

There  are no family relationships between any directors or executive officers
of  the  Company.

Item  10.    Executive  Compensation.
--------     ------------------------

In  the  fiscal year ended March 31, 1997, no executive officer of the Company
received  compensation exceeding $100,000.  Jeremy Martin received a salary of
$63,775,  and  Kevin Sipple received a salary of $63,260 for fiscal year ended
March  31,  1997.  The Company paid no comp-ensation other than salaries.  The
Company's  President,  Douglas A. Larson, received compensation of $71,524 for
the  fiscal  year  ended  March  31,  1997.   Directors of the Company are not
compensated  for  their  services  as  such.

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

The  following  table sets forth certain data with respect to the only persons
known  by  the  Company  to be the beneficial owners of more than five percent
(5%)  of the outstanding shares of common stock of the Company as of March 31,
1997 and for all Officers and Directors as a group.  The persons indicated are
the sole beneficial owners of the stock and possess sole voting and investment
power  with  respect  to  the  shares  indicated.


</TABLE>
<TABLE>
<CAPTION>

Title                                                               Percent
 of          Name and Address of      Amount and Nature of             of
Class         Beneficial Owners       Beneficial Ownership            Class
<S>                <C>                         <C>                     <C>

Common       Kevin  M.  Sipple              8,588,642(1)               26.7%
             43  Fowler  Lane
             Eldorado  Springs,  CO  80025

             Douglas  A.  Larson            8,588,642(1)               26.7%
             12  Baldwin  Circle
             Eldorado  Springs,  CO  80025

             Jeremy  S.  Martin             8,588,642(1)               26.7%
             2707  -  4th  Street
             Boulder,  CO  80302

             All  Officers  and
             Directors  as  a
             Group  (three  persons)       25,765,926(2)                80.1%
</TABLE>
____________________
(1)       Does not include 575,404 shares held in escrow which are the subject
of  a  Stock  Purchase  Agreement  with  a  principal  shareholder.
(2)     Does not include 1,726,213 shares held in escrow which are the subject
of  a  Stock  Purchase  Agreement  with  a  principal  shareholder.


Item  12.    Certain  Relationships  and  Related  Transactions.
--------     --------------------------------------------------

During  the period covered by this Report, there were no transactions in which
the  amount  involved exceeded $60,000 between the Company and any director or
executive  officer  or any security holder known to own more than five percent
of the Company's stock, or any immediate family member of any of the foregoing
persons,  and  no  such  transactions  are  currently  proposed.

                                    PART IV

Item  13.    Exhibits  and  Reports  on  Form  8-K.
--------     --------------------------------------

     (a)          Documents  filed  as  a  part  of  this  Report.
                  -----------------------------------------------

The following Exhibits and financial statement schedules are filed as exhibits
to  this  Report:

<TABLE>
<CAPTION>

Exhibit
  No.              Description                               Location
 ----             -------------                             ----------
<S>                     <C>                                    <C>
2.1               Agreement and Plan of Reorganization 
                  dated April  10, 1987,
                  among Lexington Funding, Inc.,
                  Eldorado  Artesian  Springs,  Inc.,  Incorporated by reference
                  and the  shareholders  of  Eldorado  to Exhibit No. 2 to Form
                  Artesian Springs,  Inc.              8-K dated April 10, 1987
                                                       

2.2               Articles of Merger dated June 11,
                  1988, between Lexington  Funding,    Incorporated by reference
                  Inc.,  and  Eldorado  Artesian       to Exhibit No. 10.2 to 
                  Springs,  Inc.                       Form 8-K dated March 31,
                                                       1988

3                 Articles of Incorporation and 
                  Bylaws                               Incorporated by reference
                                                       to Exhibit No. 3 to the 
                                                       Registration Statement
                                                       (No.33-6738-D)

10.1              Stock  Purchase  Agreement dated     Incorporated by reference
                  November, 1991 by and among          to Exhibit No. 2 to Form
                  Douglas  A.  Larson,  Kevin  M.      8-K dated April 10, 1987
                  Sipple, Jeremy  S.  Martin 
                  (collectively "Purchasers") 
                  Raymond  W.  Kerbaugh
                  ("Seller")  and  Eldorado
                  Artesian Springs,  Inc.
                  ("Company")

</TABLE>


     (b)              Reports  on  Form  8-K.
        ------------------------------------

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

                                     SIGNATURES
                                      ----------

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

                                           ELDORADO  ARTESIAN  SPRINGS,  INC.



                                           By: /s/ Douglas A. Larson
                                               Douglas  A.  Larson,
                                               President  and  Principal
                                               Executive  Officer

Dated:    June  27,  1997

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report  is  signed  below by the following persons on behalf of the Company in
the  capacities  and  on  the  dates  indicated.

     Name  and  Capacity                                     Date
     -------------------                                    ------
                                                     June  27,  1997
Douglas  A.  Larson,  President,
Treasurer  and  Director


                                                     June  27,  1997
Kevin  M.  Sipple,  Vice-President,
Secretary  and  Director


                                                     June  27,  1997
Jeremy  S.  Martin,  Vice-President  and  Director





                        ELDORADO ARTESIAN SPRINGS, INC.

                             FINANCIAL STATEMENTS
                            MARCH 31, 1997 AND 1996







                        ELDORADO ARTESIAN SPRINGS, INC.





                               TABLE OF CONTENTS
                               -----------------


                                                                      Page
                                                                      ----

Independent  Auditors'  Report                                      F  -  2

Financial  Statements

            Balance  Sheet                                          F  -  3

            Statements  of  Operations                              F  -  4

            Statement  of  Stockholders'  Equity                    F  -  5

            Statements  of  Cash  Flows                             F  -  6

Notes  to  Financial  Statements                                    F  -  7



                         INDEPENDENT AUDITORS' REPORT


The  Board  of  Directors  and  Stockholders
Eldorado  Artesian  Springs,  Inc.
Eldorado  Springs,  Colorado


We  have  audited the accompanying balance sheet of Eldorado Artesian Springs,
Inc.  as  of  March  31,  1997,  and  the  related  statements  of operations,
stockholders'  equity  and  cash  flows for the years ended March 31, 1997 and
1996.    These  financial  statements  are the responsibility of the Company's
management.    Our  responsibility is to express an opinion on these 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 financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting  the amounts and disclosures in the financial statements.  An audit
also  includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management,  as  well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for  our  opinion.

In our opinion, the  financial statements referred to above present fairly, in
all  material  respects,  the financial position of Eldorado Artesian Springs,
Inc.  at  March 31, 1997, and the results of its operations and its cash flows
for  the  years  ended  March  31,  1997 and 1996 in conformity with generally
accepted  accounting  principles.





                                   /s/Ehrhardt  Keefe  Steiner  &  Hottman  PC
                                      Ehrhardt  Keefe  Steiner  &  Hottman  PC

May  2,  1997
Denver,  Colorado




                        ELDORADO ARTESIAN SPRINGS, INC.

                                 BALANCE SHEET
                                MARCH 31, 1997


                                    ASSETS
Current assets

<TABLE>
<CAPTION>

<S>                                                           <C>
  Cash                                                        $  244,765
   Accounts receivable (Notes 2 and 3)
    Trade - net                                                  278,421
    Employee                                                         400
    Other                                                          3,525
    Inventories (Note 3)                                          92,548
    Prepaid expenses and other                                    10,893
    Deferred income taxes (Note 4)                                11,845
                                                              ----------
       Total current assets                                      642,397
                                                              ----------

Property, plant and equipment - net (Notes 2 and 3)            1,212,535
                                                              ----------

Other assets (Notes 2 and 3)
 Water rights - net                                              119,106
 Other - net                                                      50,376
                                                              ----------
        Total other assets                                       169,482
                                                              ----------

Total                                                         $2,024,414
                                                              ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
 Accounts payable                                             $   97,803
 Accrued expenses (Note 2)                                        82,230
 Deposits                                                         33,558
 Current maturities of long-term debt (Note 3)                    78,680
                                                              ----------
          Total current liabilities                              292,271

Long-term liabilities
 Long-term debt (Note 3)                                       1,223,569
 Deferred income taxes (Note 4)                                   40,882
                                                              ----------
           Total liabilities                                   1,556,722
                                                              ----------

Commitments (Notes 3 and 5)

Stockholders' equity (Note 6)
 Common stock, par value $.001 per share; 50,000,000 shares
  authorized; 32,344,948 issued and outstanding
 Additional paid-in capital                                      265,225
 Retained earnings                                               170,122
                                                              ----------
                                                                 467,692
                                                              ----------

Total                                                         $2,024,414
                                                              ==========
                         See notes to financial statements.
                                        F-3
</TABLE>                                   





                          ELDORADO ARTESIAN SPRINGS, INC.
                             STATEMENTS OF OPERATIONS




<TABLE>
<CAPTION>

                                                            Years Ended
                                                              March 31,
                                                           -------------        
                                                       1997           1996
                                                   -------------  ------------
<S>                                                <C>            <C>
Revenue
 Water and related                                 $  2,527,866   $ 2,028,239 
 Rentals                                                 47,460        39,397 
 Pool                                                    75,419        78,420 
 Returns and allowances                                  (6,224)       (5,427)
                                                   -------------  ------------

    Net revenue                                       2,644,521     2,140,629 

Cost of goods sold exclusive of depreciation and
 amortization                                           415,263       296,703 
                                                   -------------  ------------

Gross profit                                          2,229,258     1,843,926 
                                                   -------------  ------------

Operating expenses
 Salaries and related                                   987,703       833,158 
 Administrative and general                             437,375       340,245 
 Selling and delivery                                   288,681       217,254 
 Depreciation and amortization                          217,977       236,489 
                                                   -------------  ------------
                                                      1,931,736     1,627,146 
                                                   -------------  ------------

Operating income                                        297,522       216,780 
                                                   -------------  ------------

Other income (expense)
 Interest income                                          1,000         2,967 
 Other income                                                 -        11,060 
 Interest expense                                      (111,308)     (134,326)
                                                   -------------  ------------
                                                       (110,308)     (120,299)
                                                   -------------  ------------
Income before income taxes                              187,214        96,481 
                                                   -------------  ------------

Provision (benefit) for income taxes (Note 4)
 Current                                                 46,133        27,801 
 Deferred                                                16,929        (4,647)
                                                   -------------  ------------
                                                         63,062        23,154 
                                                   -------------  ------------

Net income                                         $    124,152   $    73,327 
                                                   =============  ============

Net income per common share                        $          -   $         - 
                                                   =============  ============

Weighted average number of shares outstanding        32,344,948    32,179,948 
                                                   =============  ============

                                    See notes to financial statements.
                                                    F-4
</TABLE>


                            ELDORADO ARTESIAN SPRINGS, INC.

                           Statement of Stockholders' Equity
                          Years Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>

                                         Additional
                      Common Stock        Paid-in          Retained
                  Shares       Amount     Capital          Earnings      Total
                ---------    ---------  -----------     ------------   ---------
<S>                  <C>          <C>       <C>              <C>           <C>

Balance - March
 31,  1995     32,164,948    $  32,165   $  254,108     $  (27,357)    $ 258,916

Common stock
 issued for
 cash (Note 6)    180,000          180       11,117             -         11,297

Net income 
 for the year         -             -            -          73,327        73,327
                ----------      -------     --------       --------     --------

Balance - March
 31, 1996      32,344,948        32,345     265,225         45,970       343,540

Net income
 for the year         -              -           -         124,152       124,152
                ----------      -------    --------        --------     --------

Balance - March
  31, 1997     32,344,948       $32,345     $265,225      $170,122      $467,692
                ==========      =======    ========        ========     ========

</TABLE>

                                 See notes to financial statements.
                                              F-5
 




                                 ELDORADO ARTESIAN SPRINGS, INC.

                                     Statements of Cash Flows

<TABLE>
<CAPTION>

                                                             Years Ended
                                                               March 31,
                                                    ---------------------------
<S>                                                       <C>            <C>
Cash flows from operating activities
 Net income                                         $    124,152   $    73,327 
   Adjustments to reconcile net income to net
    cash provided by
     operating activities -
       Depreciation and amortization                     217,977       236,489 
       Deferred income taxes                              16,929        16,559 
       Changes in certain assets and liabilities -
          Accounts receivable                            (42,994)      (38,601)
          Inventories                                      3,662        (4,738)
          Prepaid expenses and other                       5,890          (348)
          Accounts payable                                44,205        12,558 
          Accrued expenses                                 8,942        20,059 
          Deposits                                         9,695        11,595 
                                                      -------------  -----------
                                                         264,306       253,573 
                                                      -------------  -----------
            Net cash provided by operating activities    388,458       326,900 
                                                      -------------  -----------

Cash flows from investing activities
 Purchase of property and equipment                     (176,207)     (419,136)
 Payments of note receivable - stockholder                   -          40,088 
                                                       -------------  ----------
                Net cash flows used in investing
                 activities                             (176,207)     (379,048)
                                                       -------------  ----------

Cash flows from financing activities
 Issuance of common stock                                    -          11,297 
 Additions to long-term debt                                 -       1,382,624 
 Loan fees and other assets                                  -          19,091 
 Payments on long-term debt                             (56,775)    (1,315,695)
                                                      -------------  -----------
                 Net cash flows (used in) provided by financing
                   activities                           (56,775)        97,317 
                                                      -------------  -----------

Net increase in cash                                    155,476         45,169 

Cash - beginning of year                                 89,289         44,120 
                                                      -------------  -----------

Cash - end of year                                 $    244,765    $    89,289 
                                                      =============  ===========
</TABLE>

Supplemental disclosures of cash flow information:
 Cash paid during the year for interest was $111,308 (1997) and $123,266 (1996).
 Cash paid during the year for income taxes was $44,445 (1997) and $5,111 
 (1996).

Supplemental disclosure of noncash investing activity:
 During the year ended 1997, equipment was acquired through a capital lease for
  $101,909.
                                See notes to financial statements.
                                            F-6




                          ELDORADO ARTESIAN SPRINGS, INC.

                          NOTES TO FINANCIAL STATEMENTS

NOTE  1  -  ORGANIZATION  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
-----------------------------------------------------------------------------

Organization
------------

Eldorado Artesian Springs Inc. (the "Company") is a Colorado corporation which
primarily  sells  bottled  artesian  spring  water and rents water dispensers.
Eldorado  also  rents  housing,  and  during  the summer months, it operates a
natural  artesian  spring  pool.   The Company grants credit to its customers,
substantially  all  of  whom  are  located  in  Colorado.

Inventories
-----------

Inventories  consist  primarily  of water bottles and crates and are stated at
the  lower  of  cost  or  market,  on  a  first-in,  first-out  basis.

Property,  Plant  and  Equipment
--------------------------------

Property,  plant  and  equipment  are  stated  at cost.  Machinery, equipment,
furniture  and  fixtures  are  depreciated  using  various  methods over their
estimated  useful  lives  of three to seven years.  Buildings and improvements
are  depreciated  using  the  straight-line method over their estimated useful
lives  of  fifteen  to  thirty-nine  and  a  half  years.

Other  Assets
-------------

Other  assets  consisting  of  water  rights,  customer  list,  loan  fees and
organization  costs  are  carried  at  cost  and  are  being  amortized on the
straight-line  basis  over  five  to  forty  years.

Deposits
--------

Deposits  consist  primarily  of  deposits  on  bottles.

Revenue  and  Expense
---------------------

Revenue  is  recognized  on the sale of its products as customer shipments are
made.  Returns are recognized when the product is received.  Rental revenue is
recognized  on  a  monthly  basis  upon  commencement  of the lease agreement.

Income  Per  Common  Share
--------------------------

Income per common share is computed by dividing the net income by the weighted
average  number  of  shares  of  common  stock  outstanding during the period.

Reclassification  of  Prior  Year  Amounts
------------------------------------------

Certain  reclassifications  have  been made to the balances for the year ended
March  31,  1996 to make them comparable to those presented for the year ended
March  31,  1997,  none  of which change the previously reported net income or
total  assets.

Concentration  of  Credit  Risk
-------------------------------

The  Company places its cash with a high credit quality financial institution.
At  March  31,  1997,  the amounts deposited with the institution exceeded the
federally  insured  limit  by  approximately  $142,000.

Use  of  Estimates
------------------

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

Fair  Value  of  Financial  Instruments
---------------------------------------

The  carrying  amounts  of  financial  instruments  included  cash,  accounts
receivable, accounts payable, deposits and accrued expenses and long-term debt
approximated  fair  value as of March 31, 1997 because of the relatively short
maturity  of  these  instruments.


NOTE  2  -  SELECTED  BALANCE  SHEET  INFORMATION
-------------------------------------------------

Accounts receivable

<TABLE>
<CAPTION>

<S>                                                      <C>
 Trade                                                   $   288,421 
 Less allowance for doubtful accounts                        (10,000)
                                                         ------------

                                                         $   278,421 
                                                         ============
Property, plant and equipment
 Land                                                    $   225,194 
 Buildings and improvements                                  937,581 
 Machinery and equipment                                   1,327,915 
 Vehicles                                                     17,830 
 Office furniture and fixtures                                64,772 
                                                         ------------
                                                           2,573,292 
 Less accumulated depreciation                            (1,360,757)
                                                         ------------

                                                         $ 1,212,535 
                                                         ============

</TABLE>

<TABLE>
<CAPTION>
<S>                                                         <C>

Other assets
 Water rights                                            $   179,500 
 Less accumulated amortization                               (60,394)
                                                         ------------

                                                         $   119,106 
                                                         ============

Other                                                    $    57,914 
 Less accumulated amortization                                (7,538)
                                                         ------------

                                                         $    50,376 
                                                         ============
Accrued expenses
 Property taxes                                          $    26,236 
 Sales tax                                                     6,953 
 Income taxes                                                 23,093 
 Payroll and payroll taxes                                    25,948 
                                                         ------------

                                                         $    82,230 
                                                         ============
</TABLE>

NOTE  3  -  LONG-TERM  DEBT
---------------------------

Note  Payable  to  Bank
-----------------------

<TABLE>
<CAPTION>
<S>                                                                        <C>
Note  payable  to  bank  due  March  8,  2001,  interest  at  9%.
 Monthly  principal  and  interest  payments  of  $12,602  with
 all  unpaid  principal  and  interest  due  at  maturity.    Secured
 by  substantially  all  assets  of  the  Company.                   $1,046,259 


Mortgage  Note  Payable
-----------------------
Mortgage  note  payable  due  November  30,  1998,  interest  at
 8.5%,  monthly  principal  and  interest  payments  of  $1,211
 with  all  unpaid  principal  and  interest  due  at  maturity.
 Secured  by  the  deed  of  trust  on  rental  property.              155,890

Capital  Lease
--------------

Capital  lease  for  equipment.    Monthly  principal  and  interest
 payments  are  due  in  the  amount  of  $1,992,  due  February
 2002.    The  cost  of  leased  equipment  at  March  31,  1997
 was  $101,905  under  depreciation  of  $3,397.                        100,100
                                                                      ---------
                                                                      1,302,249
Less current portion                                                    (78,680)
                                                                      ---------

                                                                     $1,223,569
                                                                     ==========
</TABLE>


Future maturities of long-term debt at March 31, 1997 are:

<TABLE>
<CAPTION>
                                               Notes       Capital
     Year Ending March 31,                    Payable      Leases       Total
-----------------------------                ----------  -----------  --------
<S>                                              <C>           <C>         <C>

          1998                             $   60,866  $   23,909   $   84,775
          1999                                219,675      23,909      243,584
          2000                                 71,226      23,909       95,135
          2001                                850,382      23,909      874,291
          2002                                      -      21,913       21,913
                                            ----------  -----------  ----------
                                            1,202,149     117,549    1,319,698
          Less amount representing
          interest                                  -     (17,449)     (17,449)
                                            ----------  -----------  ----------
 Total principal                            1,202,149     100,100    1,302,249
 Less current portion                          60,866      17,814       78,680
                                            ----------  -----------  ----------

                                           $1,141,283  $   82,286   $1,223,569
                                            ==========  ===========  ==========
</TABLE>


NOTE  4  -  INCOME  TAXES
-------------------------

The  Company  recognizes  deferred tax liabilities and assets for the expected
future  tax  consequences  of  events that have been included in the financial
statements or tax returns.  Deferred tax liabilities and assets are determined
based  on  the  difference  between  the financial statements and tax basis of
assets  and  liabilities using the enacted tax rates in effect for the year in
which  the  differences  are expected to reverse.  The measurement of deferred
tax  assets  is reduced, if necessary, by the amount of any tax benefits that,
based  on  available  evidence,  are  not  expected  to  be  realized.

The  net current and long-term deferred tax assets in the accompanying balance
sheet  includes  the  following  deferred  tax  assets  and  liabilities.

<TABLE>
<CAPTION>

                                       March 31,
                                         1997
                                      -----------

<S>                                   <C>
Current deferred tax asset            $   11,845 
Current deferred tax liability                 - 
                                      -----------

Net current deferred tax asset        $   11,845 
                                      ===========

Long-term deferred tax asset          $      879 
Long-term deferred tax liability         (41,761)
                                      -----------

Net long-term deferred tax liability  $  (40,882)
                                      ===========

</TABLE>

The  principal  temporary  differences that result in a deferred tax asset and
liability  are  due  to  the  method  of  recording the allowance for doubtful
accounts,  depreciation  and  amortization  expense  and  leases.

The  provision  for  income  taxes  is  summarized  as  follows:

<TABLE>
<CAPTION>
                                                     For the Years Ended
                                                          March 31,
                                                     -------------------
                                                     1997           1996
                                                     ----           ----
<S>                                                  <C>             <C>
 Current -
  Federal                                          $38,486      $24,935
  State                                              7,647        2,866
                                                   -------      -------

                                                   $46,133      $27,801
                                                   =======      =======

 Deferred -
  Federal                                          $14,123      $(4,051)
  State                                              2,806         (596)
                                                   -------      -------

                                                   $16,929      $(4,647)
                                                   =======      =======

</TABLE>

The following is a reconciliation of income taxes at the Federal Statutory
rate with income taxes recorded by the Company.

<TABLE>
<CAPTION>
                                                         Years Ended
                                                          March 31,
                                                      -----------------
                                                      1997         1996
                                                      ----         ----
<S>                                                    <C>           <C>
Computed income taxes at statutory rate              $52,610     $20,186
State income taxes, net of Federal income 
 tax benefit                                          10,452       2,968 
                                                     -------     -------

                                                      $63,062    $23,154
                                                      =======    =======
</TABLE>

Deferred  taxes  are  recorded  based  upon  differences between the financial
statement  and  tax  basis  of assets and liabilities and available tax credit
carryforwards.    Temporary differences and carryforwards which give rise to a
significant  portion  of  deferred  tax assets and liabilities are as follows:

<TABLE>
<CAPTION>

                                                       March 31,
                                                         1997
                                                      -----------

<S>                                                   <C>
 Differences related to fixed assets                  $   89,287 
 Differences related to other assets                      25,663 
 Allowance for doubtful accounts                         (10,000)
 Alternative minimum tax and ITC credit carryforward      (9,091)
                                                      -----------

                                                      $  (95,859)
                                                      ===========

</TABLE>

A  reconciliation  of  the  provision for income taxes by applying the Federal
statutory  rate  to  the  financial statement provision for income taxes is as
follows:

<TABLE>
<CAPTION>

                                                             Years Ended
                                                               March 31,
                                                             ------------     
                                                            1997       1996
                                                        ------------  ------

<S>                                                     <C>           <C>
 Federal statutory rate                                        34.0%   34.0%
 State tax on income net of federal income tax benefit          3.3     3.3 
 Federal surtax exemption                                      (3.6)  (13.3)
                                                        ------------  ------

 Financial statement tax provision rate                        33.7%   24.0%
                                                        ============  ======

</TABLE>

NOTE 5 - COMMITMENTS
------------------------------------------------------                      

The  Company  has various long-term leases for delivery trucks.  The following
is  a  schedule by year of future minimum lease payments as of March 31, 1997.

<TABLE>
<CAPTION>

           Year  Ending  March  31,
           ------------------------


<S>                                             <C>
                      1998                  $ 95,028
                      1999                    95,028
                      2000                    74,418
                      2001                    30,845
                      2002                    21,550
                      Thereafter              15,210
                                            --------
                                            $332,079
                                            ========
</TABLE>
                                             

Total rental expense for 1997 and 1996 was $96,800 and $105,007, respectively.


NOTE 6 - RELATED PARTIES
------------------------

During the year ended March 31, 1996, proceeds from the bank note were used to
pay  off  the  note  payable  of $158,000 to a relative of a stockholder.  The
relative  of  the  stockholder  used  the payment received on the note to gift
$90,485  back  to  the  stockholders' to pay off notes payable to the Company.
Additionally,  the  relative  purchased  180,000  shares  of  common stock for
$11,297.