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, 1999

[ ]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(D)  OF  THE
      SECURITIES  EXCHANGE ACT OF 1934 FOR THE  TRANSITION  PERIOD FROM
                                  TO

                           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.... $4,036,822 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          2,995,495
                 Class              Outstanding at June 15, 1999


                  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.




<PAGE>


                                PART I


Item 1.  Description of Business.

General

Eldorado  Artesian  Springs,  Inc.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 208,333
shares of its $.001 par value common stock at $1.20 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
shareholders  received an aggregate of 2,340,000  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
emanates 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 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  products  have ozone added to comply
with FDA standards.

Sales and Distribution

The Company  sells its products in five gallon,  three 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 and three gallon sales and related  cooler  rentals  represented
approximately  79% of  revenues  and  the  smaller  sizes  accounted  for 18% 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
and three gallon sales, small package products, and brand name recognition.

The five  gallon and three  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  organizations 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 47  full-time  employees,  2  part-time  employees  and 14
seasonal employees during the summer resort months.

Item 2.  Description of Property.

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 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 June 15, 1999, there were 95 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 or Plan of Operation.

This 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 management for future operations,
including  plans and  objectives  relating  to  services  offered  by and future
economic performance of the Company.

The forward-looking statements included herein are based on current expectations
that involve a number of risks and uncertainties that might adversely affect the
Company's  operating  results in the future in a  material  way.  Such risks and
uncertainties  include  but are not  limited  to the  following:  interest  rate
fluctuations,  effects of regional  economic  and market  conditions,  labor and
marketing  costs,  operating costs,  packaging costs,  intensity of competition,
legal claims and the contingencies associated with year 2000 compliance.

Overview

Eldorado  Artesian  Springs,  Inc. is a Colorado based company that is primarily
involved in the bottling and marketing of "natural"  artesian spring water.  The
spring is  located in the  foothills  of the  Colorado  Rocky  Mountains  and is
surrounded  by thousands  of acres of state and city park land,  assuring a well
protected  source.  The  artesian  springs  located on the  Company's  property,
emanate from one of the most unique geologic  sources in the world. The water is
naturally purified as it rises up through many layers of sandstone under its own
artesian  pressure.  Eldorado  Artesian Spring water is bottled at the source in
its  natural  state  and is  not  chemically  treated  in  any  way.  Currently,
Eldorado's operations consist of its home/commercial delivery business (5 gallon
bottles)  and  the PET  (polyethylene  terephtalate,  a  premium  clear  plastic
container) consumer business.

Beverage  industry  analysts  reveal that bottled  water is the fastest  growing
major category in the entire industry.  The bottled water industry as whole is a
$3.9 billion business and is currently  growing at a rate of 9% to 10% per year.
The PET  segment of the bottled  water  industry  is  currently  a $600  million
business  and is growing at a much faster rate (at an  estimated  20% to 30% per
year) than the industry as a whole.  Analysts expect just the PET segment of the
industry to reach $3 billion in wholesale  sales over the next ten years,  which
is an indicated rate of growth of 17% annually.

The  Company is  currently  in the  process of  completing  a  secondary  public
offering of 700,000 shares of common stock. The anticipated offering price of $6
to $7 has been determined by Eldorado and the underwriter  based upon Eldorado's
financial  condition  and  prospects  and certain  other  information.  Eldorado
intends to use the proceeds from the public offering to acquire additional water
rights in order to provide for anticipated  growth in water sales; for the lease
or construction of a  warehouse/distribution  facility in Denver,  Colorado; and
for marketing of its products,  including the pursuit of distribution agreements
with distributors of bottled water.  Eldorado intends to file for listing on the
NASDAQ Small Cap Market at the completion of the proposed public offering.

Results of Operations

Revenues  for the year ended March 31, 1999  increased  21.3% from the  previous
year to $4,036,822.  This increase  resulted from increased  sales to Eldorado's
existing customer base as well as from sales to new customers.  In addition,  on
October  1,  1998,  Eldorado  increased  the  selling  price of the five  gallon
products.

The  costs of goods  sold  increased  9.1% for the year  ended  March  31,  1999
compared  to a year  earlier.  This  increase  in cost is  primarily  due to the
overall increase in volume.  Cost of goods sold  represented  13.6% of sales for
the year  ended  March 31,  1999  compared  to 15.1% of sales for the year ended
March 31, 1998.  The company has received more favorable  purchasing  agreements
because of the ability to buy goods in larger volumes.

Operating  expenses  for the year ended March 31,  1999  increased  22.3%.  This
overall  increase is  consistent  with the  increase  in revenues  for the year.
Salaries and related expenses increased 17.5% for the year ended March 31, 1999.
This  increase is due to the increase in sales for the year  resulting in higher
commissions  and  additional  employees.  Administrative  and  general  expenses
increased  20.3% for the year ended March 31, 1999  consistent with the increase
in revenues.  Selling and delivery  expenses  increased 45.8% for the year ended
March 31, 1999. Much of the increase in selling and delivery  expenses is due to
the increased expense for advertising and promotions.  Advertising and promotion
expenses increased  approximately 56% for the year ended March 31, 1999. For the
year ended March 31, 1999 advertising and promotion  expenses were 8.9% of sales
compared to 6.9% of sales for the year ended March 31,  1998.  Depreciation  and
amortization increased 13.3% for the year ended March 31, 1999. This increase is
due to the purchase of new equipment over the last year.

Interest  income for the year ended March 31,  1999  increased  to $16,242  from
$3,720 for the previous  year ended March 31, 1998.  This  increase is primarily
due to the  interest on the  proceeds  from the private  placement  completed in
April 1998.  Interest expense  increased 3.3% for the year ended March 31, 1999.
The increase in interest expense was due to the purchase of additional machinery
and equipment.

For the year ended  March 31,  1999,  income  before  taxes  increased  85.2% to
$217,850.  Income  taxes for the year were  $79,736  resulting in net income and
comprehensive income of $138,114.  Net income and comprehensive income increased
66.0% from the same period a year ago.

Liquidity and Capital Resource

Accounts  receivable for the year ended March 31, 1999 were 27.7% higher than at
year ended March 31, 1998. This resulted from the 21.3% increase in revenues for
the year ended March 31, 1999. Days sales  outstanding was approximately 56 days
for March 31, 1999. Days sales  outstanding was  approximately 55 days for March
31, 1998.  Management has implemented new credit policies to manage the accounts
more effectively.

On April 22, 1998 the company completed a private placement of 300,000 shares of
common stock at $2.75 per share. The company  received  proceeds net of offering
costs of approximately  $690,000 from the private placement.  In connection with
the offering, the company issued to Mills Financial Services,  Inc. a warrant to
purchase  30,000 shares of common stock at an exercise price of $3.30 per share.
In  addition,  the  company  issued a warrant to purchase  250,000  shares at an
exercise price of $11.00 per share.

The  company  utilized  the  proceeds  of the  offering to replace a five gallon
bottling line to increase  capacity from 160 bottles per hour to 600 bottles per
hour. By September 1998, 100% of the bottling  equipment was fully utilized.  In
addition,  the  company  utilized  the  proceeds  to  increase  advertising  and
promotional activities.

On May 19, 1998,  the company  registered  875,000 shares of common stock of the
company  pursuant to the 1997 stock option plan. The plan provides for the grant
of stock options to employees,  directors and consultants of the company.  As of
March 31, 1999,  493,000  options were  outstanding,  of which 111,000 are fully
vested.  343,000 of the options  were  issued on May 26,  1998 and 150,000  were
issued on December 7, 1998, with an option price of $2.75 per share, fair market
value at the date of the grant. Of the remaining 382,000 shares,  68,700 vest in
fiscal 2000,  71,900 in 2001,  75,100 in 2002,  79,300 in 2003,  45,000 in 2004,
13,000 in 2005,  14,000 in 2006 and 15,000 in 2007.  Options  will  terminate no
later  than the  expiration  of ten  years  from the date of grant,  subject  to
earlier termination due to termination of service.

Year 2000 Compliance

The Company is in the process of developing and finalizing  plans to address the
Year 2000 computer  problem and to begin converting their computer systems to be
Year 2000  compliant.  The Year 2000 problem is the result of computer  programs
being written using two digits rather than four to define the  applicable  year.
The Company  presently  believes  that with  upgrades to existing  software  and
possibly  some  replacement,  the Year 2000  problem  will not pose  significant
operational  problems for their computer systems.  However, if such upgrades and
replacements are not completed timely or effectively implemented,  the Year 2000
problem  could have a material  impact on the  operations  of the  Company.  The
Company  expects  to  incur  internal  staff  costs,  as well as the cost of the
software upgrades and replacement as a part of this effort.  However,  until the
Company's plans are finalized, management is not able to reasonably estimate the
costs of achieving Year 2000 compliance.

Item 7.  Financial Statements.



                    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











<PAGE>





                     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,  1999,  and  the  related   statements  of  operations,
stockholders' equity and cash flows for the years ended March 31, 1999 and 1998.
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, 1999,  and the results of its operations and its cash flows for the
years  ended  March 31,  1999 and 1998 in  conformity  with  generally  accepted
accounting principles.




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

May 5, 1999
Denver, Colorado





<PAGE>



                    ELDORADO ARTESIAN SPRINGS, INC.

                             Balance Sheet
                            March 31, 1999


                             Assets (Notes 3 and 4)
Current assets
   Cash ..................................................     $  361,439
   Accounts receivable (Note 2)
      Trade - net ........................................        615,969
      Other ..............................................         16,326
   Inventories ...........................................        205,264
   Prepaid expenses and other ............................         33,106
   Deferred income taxes (Note 5) ........................         18,169
                                                               ----------
        Total current assets .............................      1,250,273
                                                               ----------

Property, plant and equipment - net (Note 2) .............      1,773,327

Other assets
   Deferred offering costs ...............................        199,327
   Water rights - net (Note 2) ...........................        110,130
   Other - net (Note 2) ..................................         53,317
                                                               ----------
        Total other assets ...............................        362,774
                                                               ----------

                                                               $3,386,374
                                                               ==========

                      Liabilities and Stockholders' Equity
Current liabilities
   Accounts payable ......................................     $  152,557
   Accrued expenses (Note 2) .............................        134,005
   Deposits ..............................................         74,757
   Current maturities of long-term debt (Note 3) .........        167,385
                                                               ----------
        Total current liabilities ........................        528,704
                                                               ----------

Long-term liabilities
   Long-term debt (Note 3) ...............................      1,417,336
   Deferred income taxes (Note 5) ........................         61,219
                                                               ----------
        Total liabilities ................................      2,007,259
                                                               ----------

Commitments (Notes 3, 4 and 6)

Stockholders' equity (Note 7)
   Common stock, par value $.001 per share;
    50,000,000 shares authorized; 2,995,495 ..............          2,995
    issued and outstanding
   Additional paid-in capital ............................        984,656
   Retained earnings .....................................        391,464
                                                               ----------
                                                                1,379,115
                                                               ----------

                                                               $3,386,374
                                                               ==========

                       See notes to financial statements.

                                     F - 3

<PAGE>


                        ELDORADO ARTESIAN SPRINGS, INC.

                            Statements of Operations


                                                         Years Ended
                                                           March 31,
                                                   ------------------------
                                                       1999         1998
                                                   -----------   ----------

Revenue
   Water and related ........................     $ 3,901,836      $ 3,222,396
   Rentals ..................................          48,944           49,288
   Pool .....................................          99,435           68,349
   Returns and allowances ...................         (13,393)         (10,589)
                                                  -----------      -----------

   Net revenue ..............................       4,036,822        3,329,444

Cost of goods sold exclusive of depreciation
 and amortization ...........................         546,900          501,288
                                                  -----------      -----------

Gross profit ................................       3,489,922        2,828,156
                                                  -----------      -----------

Operating expenses
   Salaries and related .....................       1,539,275        1,310,303
   Administrative and general ...............         670,854          557,892
   Selling and delivery .....................         615,853          422,462
   Depreciation and amortization ............         314,800          277,914
                                                  -----------      -----------
                                                    3,140,782        2,568,571
                                                  -----------      -----------

Operating income ............................         349,140          259,585
                                                  -----------      -----------

Other income (expense)
   Interest income ..........................          16,242            3,720
   Loss on sale of asset ....................            --             (2,871)
   Interest expense .........................        (147,532)        (142,803)
                                                  -----------      -----------
                                                     (131,290)        (141,954)
                                                  -----------      -----------
Income before income taxes ..................         217,850          117,631
                                                  -----------      -----------

Provision for income taxes (Note 5)
   Current ..................................          72,778           19,683
   Deferred .................................           6,958           14,720
                                                  -----------      -----------
                                                       79,736           34,403

Net income ..................................     $   138,114      $    83,228
                                                  ===========      ===========

Basic earnings per common share .............     $       .05      $       .03
                                                  ===========      ===========

Weighted average number of shares outstanding       2,995,495        2,695,495
                                                  ===========      ===========


                       See notes to financial statements.

                                     F - 4

<PAGE>



                        ELDORADO ARTESIAN SPRINGS, INC.

                        Statement of Stockholders' Equity
                       Years Ended March 31, 1999 and 1998


<TABLE>
<CAPTION>



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

Balance - March 31, 1997      2,695,495     $    2,695     $  294,875     $  170,122     $  467,692

Net income for the year            --             --             --           83,228         83,228
                             ----------     ----------     ----------     ----------     ----------

Balance - March 31, 1998      2,695,495          2,695        294,875        253,350        550,920

Sale of common stock            300,000            300        689,781           --          690,081

Net income for the year            --             --             --          138,114        138,114
                             ----------     ----------     ----------     ----------     ----------

Balance - March 31, 1999      2,995,945     $    2,995     $  984,656     $  391,464     $1,379,115
                             ==========     ==========     ==========     ==========     ==========
</TABLE>


                       See notes to financial statements.

                                     F - 5

<PAGE>



                    ELDORADO ARTESIAN SPRINGS, INC.

                       Statements of Cash Flows
<TABLE>
<CAPTION>


                                                            Years Ended
                                                              March 31,
                                                    ----------------------------
                                                        1999             1998
                                                    -----------      -----------
<S>                                                 <C>              <C>

Cash flows from operating activities
  Net income ..................................     $   138,114      $    83,228
                                                    -----------      -----------
  Adjustments to reconcile net income to net
    cash provided by operating activities -
    Depreciation and amortization .............         314,800          277,914
    Loss on sale of asset .....................            --              2,871
    Deferred income taxes .....................           6,958           14,720
    Changes in certain assets and liabilities -
      Accounts receivable .....................        (128,469)        (221,480)
      Inventories .............................         (82,563)         (30,153)
      Prepaid expenses and other ..............          15,207          (37,420)
      Accounts payable ........................          22,810           31,944
      Accrued expenses ........................          54,875          (10,765)
      Deposits ................................          25,579           15,620
                                                    -----------      -----------
                                                        229,197           43,251
                                                    -----------      -----------
        Net cash provided by operating ........         367,311          126,479
                                                    -----------      -----------
activities

Cash flows from investing activities
  Purchase of property, plant and equipment ...        (388,161)        (535,578)
  Proceeds from sale of asset .................            --              2,750
  Purchase of other assets ....................          (4,221)            --
                                                    -----------      -----------
        Net cash flows used in investing
         activities ...........................        (392,382)        (532,828)
                                                    -----------      -----------

Cash flows from financing activities
  Net (payments) proceeds from line-of-credit .         (40,000)          40,000
  Additions to long-term debt .................            --          1,500,000
  Payments on long-term debt ..................        (134,410)      (1,288,474)
  Loan fees and origination cost ..............            --            (19,776)
  Proceeds from sale of common stock ..........         825,000             --
  Costs related to issuance of common stock ...        (134,919)            --
  Deferred offering costs .....................        (199,327)            --
                                                    -----------      -----------
        Net cash flows provided by financing
         activities ...........................         316,344          231,750
                                                    -----------      -----------

Net increase (decrease) in cash ...............         291,273         (174,599)

Cash - beginning of year ......................          70,166          244,765
                                                    -----------      -----------

Cash - end of year ............................     $   361,439      $    70,166
                                                    ===========      ===========
</TABLE>

Supplemental disclosures of cash flow information:
          Cash  paid  during  the year for  interest  was  $147,532  (1999)  and
          $142,803 (1998).

          Cash paid  during the year for  income  taxes was  $34,426  (1999) and
          $33,844 (1998).

Supplemental  disclosure of noncash investing  activity:  During the years ended
          1999 and 1998,  equipment  was  acquired  through  capital  leases for
          $164,306 and $41,050, respectively.

                       See notes to financial statements.

                                     F - 6

<PAGE>


                        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.  The
Company 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.

Cash

The Company places its cash with high credit quality financial institutions.  On
occasion,  the  amount in the bank may  exceed  the  Federal  Deposit  Insurance
Corporation's (FDIC) insurance limit.

Inventories

Inventories  consist  primarily of water bottles and packaging 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 which range from three to seven  years.  Buildings  and
improvements are depreciated using the straight-line method over their estimated
useful lives which range from fifteen to thirty-nine years.

Deferred Offering Costs

As of March 31, 1999, the Company was attempting to complete a secondary  public
offering.  Expenses related to this offering have been accounted for as deferred
offering  costs.  If the  offering  is  successful,  such  costs will be charged
against the gross proceeds received. If at any time it becomes probable that the
offering will not be consummated  or after an  unreasonable  postponement,  such
costs will be expensed.

Other Assets

Other assets  consisting of water  rights,  customer  list,  loan fees and plate
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.

Stock Based Compensation

The Company has adopted SFAS 123 "Accounting for Stock-Based Compensation" (SFAS
123), which requires  disclosure of the fair value and other  characteristics of
stock options (Note 7). The Company has chosen under the  provisions of SFAS 123
to  continue  using  the  intrinsic-value  method  of  accounting  for  employee
stock-based  compensation in accordance with Accounting Principles Board Opinion
No. 25 "Accounting for Stock Issued to Employees" (APB 25).

Basic Earnings Per Share

During the year ended March 31,  1998,  the Company  adopted the  provisions  of
Statement of Financial  Accounting  Standards No. 128,  Earnings Per Share (SFAS
No. 128).  SFAS 128  established  new definitions for calculating and disclosing
basic and diluted earnings per share. Basic earnings per share is based upon the
weighted average number of shares outstanding as defined in SFAS 128. No diluted
earnings per share is presented  as no there are no  potential  dilutive  common
shares.  As required by SFAS 128,  disclosure of  subsequent  events which would
have had an effect on the number of shares outstanding is contained in Note 7.

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.

Concentration of Credit Risk

The Company  maintains  cash in bank  accounts  which,  at times may exceed FDIC
insurance limits. Financial instruments which potentially subject the Company to
concentrations  of credit risk  consist  primarily of accounts  receivable.  The
Company grants credit to customers  located  primarily in Colorado.  The Company
periodically  performs credit  analysis and monitors the financial  condition of
its clients in order to minimize credit risk.

Fair Value of Financial Instruments

The  carrying  amounts  of  financial   instruments   including  cash,  accounts
receivable,  line-of-credit,  accounts  payable,  deposits and accrued  expenses
approximated  fair value as of March 31, 1998  because of the  relatively  short
maturity of these instruments.

Due to rates  currently  available  to the Company for debt which are similar to
terms on the remaining maturities,  the fair value of existing debt approximates
carrying value.

Advertising Costs

Advertising costs are expensed as incurred.


Note 2 - Selected Balance Sheet Information

                                             March 31,
                                               1999
                                            -----------
Accounts receivable
   Trade ..............................     $   645,969
   Less allowance for doubtful accounts         (30,000)
                                            -----------

                                            $   615,969
                                            ===========

Property, plant and equipment
   Land ...............................     $   225,194
   Buildings and improvements .........       1,166,289
   Machinery and equipment ............       2,128,575
   Vehicles ...........................          19,831
   Office furniture and fixtures ......         150,061
                                            -----------
                                              3,689,950
   Less accumulated depreciation ......      (1,916,623)
                                            -----------

                                            $ 1,773,327
                                            ===========
Other assets
   Water rights .......................     $   179,500
   Less accumulated amortization ......         (69,370)
                                            -----------

                                            $   110,130
                                            ===========



                                            March 31,
                                              1999
                                           ---------

   Customer lists, loan fees and other     $  70,892
   Less accumulated amortization .....       (17,575)
                                           ---------

                                           $  53,317
                                           =========

Accrued expenses
   Property taxes ....................     $  17,194
   Sales tax .........................        12,217
   Income taxes ......................        54,946
   Payroll and payroll taxes .........        49,648
                                           ---------

                                           $ 134,005
                                           =========

Note 3 - Long-Term Debt

                                                                   March 31,
Notes Payable                                                        1999
                                                                 -----------

Note payable to bank due June 20, 2012,  interest at
 bank prime (8% at March 31, 1999) adjusted bi-annually.
 Monthly principal and interest payments of $12,244
 with all unpaid  principal  and  interest due at
 maturity.  Collateralized  by $1,126,050 substantially
 all assets of the Company.                                      $1,126,050

Note payable to bank due June 20, 2002, interest at bank
 prime plus 1.25% (9% at March 31, 1999).  Monthly
 principal  and interest  payments of $6,346 with all
 unpaid  principal  and  interest  due at  maturity.
 Collateralized  by 211,208 substantially all assets
 of the Company.                                                    211,208

Capital Leases

Capital lease for  equipment.  Monthly  minimum lease
 payments of $3,159, due April 1, 2002.                             102,633

Capital leases for equipment.  Combined  monthly minimum lease
 payments  of  approximately  $5,000,  maturing  over  various
 dates from June 2001 through April 2002.                           144,830
                                                                -----------

                                                                 $1,584,721
                                                                ===========


The cost of equipment  under  capital  lease at March 31, 1999 was $307,612 with
accumulated depreciation of $24,180.

Future maturities of long-term debt at March 31, 1999 are:

                                       Notes        Capital
      Year Ending March 31,           Payable        Leases        Total
      ----------------------        ----------     ---------    ----------


             2000                    $  105,928    $  100,339   $  206,267
             2001                       116,341       100,339      216,680
             2002                       127,778        81,270      209,048
             2003                        80,564        15,286       95,850
             2004                        68,289            -        68,289
             Thereafter                 838,358            -       838,358
                                     ----------    ----------   ----------
                                      1,337,258       297,234    1,634,492
             Less amount
             representing interest           -        (49,771)     (49,771)
                                     ----------    ----------   ----------
             Total principal          1,337,258       247,463    1,584,721
             Less current portion      (105,928)      (61,457)    (167,385)
                                     ----------    ----------   ----------

                                     $1,231,330    $  186,006   $1,417,336
                                     ==========    ==========   ==========


Note 4 - Line-of-Credit

The  Company  entered  into an  agreement  with a bank for a  line-of-credit  of
$500,000 due November 3, 1999.  The interest  rate is  calculated  at prime plus
0.5% which was 8.25% at March 31, 1999. Interest is payable monthly and the line
is collateralized  by substantially all of the assets of the Company.  There was
no outstanding balance at March 31, 1999.


Note 5 - 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  statement 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 in the  accompanying  balance sheet
includes the following deferred tax assets and liabilities.

                                                    March 31,
                                                      1999
                                                    ---------


Current deferred tax asset                          $ 18,169
Current deferred tax liability                            -
                                                    --------

Net current deferred tax asset                      $ 18,169
                                                    ========

Long-term deferred tax asset                        $     -
Long-term deferred tax liability                      61,219
                                                    --------

Net long-term deferred tax liability                $ 61,219
                                                    ========

The provision for income taxes is summarized as follows:

                                                     For the Years Ended
                                                          March 31,
                                                     ---------------------
                                                      1999          1998
                                                     ---------    --------


   Current                                          $ 72,778      $ 19,683

   Deferred                                            6,958        14,720
                                                    --------      --------

                                                    $ 79,736      $ 34,403
                                                    ========      ========

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

                                                     For the Years Ended
                                                          March 31,
                                                     ---------------------
                                                      1999          1998
                                                     ---------    --------

Computed income taxes at statutory rate - net       $ 73,036      $ 31,503
of surtax
State income taxes, net of Federal income tax
 benefit and other                                     6,700         2,900
                                                    --------      --------

                                                    $ 79,736      $ 34,403
                                                    ========      ========


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:

                                                                  March 31,
                                                                    1999
                                                                  --------


   Differences related to fixed assets                            $(56,624)
   Differences related to other assets                              (4,595)
   Allowance for doubtful accounts                                  10,899
   Alternative minimum tax and ITC credit carryforward               7,270
                                                                  --------

                                                                  $(43,050)
                                                                  ========

Note 6 - Commitments

The Company has various long-term leases for delivery trucks, vehicles equipment
and property.  The following is a schedule by year of approximate future minimum
lease payments as of March 31, 1999.

      Year Ending March 31,

             2000                                                 $199,000
             2001                                                  144,000
             2002                                                  105,000
             2003                                                   95,000
             2004                                                   85,000
             Thereafter                                             93,000
                                                                  --------

                                                                  $721,000
                                                                  ========

Total rental expense for 1999 and 1998 was approximately  $222,000 and $134,000,
respectively.


Note 7 - Stockholders' Equity

Reverse Stock Split

On April 1, 1998,  the  Company  filed with the state to amend its  articles  of
incorporation  to  reflect a 12 to 1 reverse  stock  split  that was  previously
approved by a vote of the shareholders.  Accordingly, all weighted average share
and per share information  throughout the financial statements has been restated
for periods prior to the reverse split.

Private Placement

On April 22, 1998, the Company  completed a private  placement of 300,000 shares
of  common  stock at $2.75 per  share.  The  Company  received  proceeds  net of
offering costs of approximately $690,000 from the private placement.

In  connection  with the  private  placement,  the  Company  issued a warrant to
purchase  30,000  and  250,000  shares of common  stock at $3.30 and  $11.00 per
share,  respectively.  Both warrants are exercisable beginning on April 22, 1999
and expire on April 22, 2003.

Stock Option Plan

On May 19, 1998,  the Company  registered  875,000 shares of common stock of the
Company pursuant to the 1997 stock option plan (the Plan). The Plan provides for
the grant of stock  options  to  employees,  directors  and  consultants  of the
Company.  From time to time, the board may grant options to advance the interest
of the Company.

As of March 31, 1999,  493,000  options were  outstanding,  of which 111,000 are
fully  vested.  343,000 of the  options  were issued on May 26, 1998 and 150,000
were issued on December 7, 1998,  with an option price of $2.75 per share,  fair
market value at the date of grant. Of the remaining 382,000 options, 68,700 vest
in fiscal 2000,  71,900 in 2001, 75,100 in 2002, 79,300 in 2003, 45,000 in 2004,
13,000 in 2005,  14,000 in 2006 and 15,000 in 2007.  Options will  terminate not
later  than the  expiration  of ten  years  from the date of grant,  subject  to
earlier termination due to termination of service. The weighted average exercise
price and  remaining  contractual  life of the options and warrants is $8.03 per
share and 110 months, respectively.

The Company 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 Company's stock option plan been determined based
on the fair value at the grant date for awards consistent with the provisions of
SFAS No.  123,  the  Company's  net income and income per share  would have been
decreased to the pro forma amounts indicated below:

                                                    For the Nine
                                                    Months Ended
                                                    December 31
                                                        1998
                                                   --------------

Net income - as reported                               138,114
Net income - pro forma                                  16,470
Basic income per share - as reported                       .05
Basic loss per share - pro forma                           .01

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
assumption:  dividend yield of 0%;  expected  volatility of 1%; discount rate of
5.0% and expected lives of 10 years.


Note 8 - Profit Sharing Plan

The  Company  has  adopted  a 401(k)  profit  sharing  plan  for its  employees.
Employees  become  eligible to  participate in the plan once they have completed
one year of  service  and have  reached  21 years of age.  Contributions  by the
Company and employees vest  immediately.  The Company  matches 100% of employees
contributions  up to 3% of the employees gross pay. During the years ended March
31,  1999 and 1998,  the Company  matched  approximately  $24,000  and  $13,000,
respectively.  No profit  sharing  contributions  were  approved by the Board of
Directors for the years ended March 31, 1999 and 1998.




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  principles  or practices or financial
statement disclosure since the Company's inception.

                               PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.

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.

                                                      Tenure as
          Name       Age       Position(s)        Officer or Director
     ------------  ------     --------------      -------------------

     Douglas A.       44      President and           1986 to present
      Larson*                  Director

     Kevin M. Sipple  43      Vice President,         1986 to present
                               Secretary and
                               Director

     Jeremy S.        44      Vice President and      1986 to present
      Martin                   Director

     Robert E.        53      Vice President          1998 to present
      Weidler

     Cathleen M.      30      Chief Financial         1998 to present
      Collins                  Officer

     George J.        67      Director                1998 to present
      Schmitt*

     Don P. Van       42      Director                1998 to present
      Winkle*


     * Audit Committee

Douglas  A.  Larson was a  co-founder  of  Eldorado  and has been  President  of
Eldorado since 1991. Mr. Larson's  responsibilities  include corporate  strategy
and  administration  of  all  operating  activities  at  Eldorado.   Before  his
association   with   Eldorado,   Mr.  Larson  worked  as  a  stock  broker  with
Richey-Frankel  and Co. from 1981 to 1983 and with B.J. Leonard,  Inc. from 1980
to 1981. Mr. Larson holds a Bachelor of Science Degree in Business  Finance from
the University of Colorado.

Kevin M. Sipple was a co-founder  of Eldorado  and has served as Vice  President
and Secretary of Eldorado  since 1991.  Mr.  Sipple's  responsibilities  include
management  of  the  wholesale  products  division.  In  addition,  he  is  also
responsible for quality control,  testing,  source  protection and is a licensed
Water Plant operator and manages the utility productions. Before his association
with  Eldorado,  Mr.  Sipple  worked for King  Soopers,  Inc. from 1972 to 1983,
serving in a variety of positions including inventory ordering and control.  Mr.
Sipple attended the University of Colorado from 1973 to 1977.

Jeremy S. Martin was a co-founder  of Eldorado and has served as Vice  President
since 1985. Mr.  Martin's  responsibilities  include  management of the 5 gallon
sales and service  business.  In addition,  he is also  responsible  for special
event promotions and public relations. Before his association with Eldorado, Mr.
Martin was an independent  distributor for Sunasu  International,  a nutritional
products manufacturer. Mr. Martin holds a Bachelor of Science Degree in Business
from the University of Colorado.

Robert E. Weidler joined  Eldorado in 1990 and has served as Production  Manager
from  1991  to  1998.   Currently,   Mr.  Weidler  is  Vice  President  and  his
responsibilities  include  inventory  management,  daily operations for finished
goods and conforming to safety standards,  health department standards and other
governmental  requirements.  Mr.  Weidler holds a Bachelor of Science  Degree in
Sociology from Michigan State University. Cathleen M. Collins joined Eldorado in
1990 and has served as Assistant  Treasurer  from 1991 to 1998.  Currently,  Ms.
Collins  is  Chief  Financial  Officer  and  her  responsibilities  include  the
procurement  of  financing  for  growth of  operations  of  Eldorado  as well as
overseeing the accounting  functions for Eldorado including the annual audit and
corporate reporting. Ms. Collins holds a Bachelor of Science Degree in Economics
and a Masters of Business Administration from the University of Colorado.

George J. Schmitt has been a director of Eldorado since December 1998. From 1968
to 1996, Mr.  Schmitt was CEO and President of Hinckley & Schmitt  Bottled Water
Group.  Mr.  Schmitt  was a  founding  member  of  the  American  Bottled  Water
Association, now called the International Bottled Water Association, in 1959 and
was inducted into the Industry Hall of Fame in 1991.  Mr.  Schmitt is a director
of Eureka Bottled Water Co. and National Fuel  Corporation.  Mr. Schmitt holds a
Bachelor of Arts degree from Dartmouth.

Don P. Van Winkle has been a director of Eldorado since December 1998. From 1996
to present,  Mr. Van Winkle has served as President and CEO of Van Winkle's IGA,
a family owned six store retail  supermarket  chain in New Mexico.  From 1991 to
1996, he resided in Colorado where he provided  contract chief financial officer
and advisory services to a wide range of companies which included Eldorado. From
1980 to 1991,  Mr.  Van  Winkle  was a  corporate  banker  with the two  largest
Colorado based bank holding companies,  formerly United Banks and First National
Bancorporation. Mr. Van Winkle is a director of The Great Divide Brewing Company
in Denver,  CO and Fresh  Produce  Sportswear,  Inc. in Boulder,  CO. He holds a
Bachelor of Science Degree in Finance from New Mexico State University.

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,  1999,  no  executive  officer of the Company
received compensation  exceeding $100,000.  The Company's President,  Douglas A.
Larson,  received  compensation  of $77,759  plus other annual  compensation  of
$13,107 for the fiscal  year ended March 31,  1999.  Other  annual  compensation
includes  $5,616 for annual health care premiums,  $2,333 for a 3% match for all
contributions to the 401(k) plan and $5,158 for a car allowance.



<PAGE>


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, 1999
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.



<PAGE>




                                                 Number
 Name and Address of Beneficial Owners             of          Percent
                                                 Shares         Owned
----------------------------------------        ---------      -------
 Kevin M. Sipple                                 763,674        25.5%
  43 Fowler Lane
  Eldorado Springs, CO 80025

Douglas A. Larson                                772,873 (1)    25.8%
 12 Baldwin Circle
 Eldorado Springs, CO 80025

Jeremy S. Martin                                 771,060        25.7%
 2707 - 4th Street
 Boulder, CO 80302

George J. Schmitt                                      0         ---
 11 Castle Pines N.
 Castle Rock, CO 80104

Don P. Van Winkle                                      0         ---
 1600 Indian Wells
 Alamogordo, NM 88310

All Officers and Directors as a Group,         2,377,607        79.4%
 7 persons





(1)  Mr.  Larsons's  shares  include  options  to buy 7,000  shares  held by Mr.
     Larson's spouse.  The shares owned by all officers and directors as a group
     include options to buy 35,000 shares each held by Ms. Collins and Mr.
     Weidler.

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.




<PAGE>


                                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:

Exhibit
  No.        Description                    Location
-------    ---------------------------    ----------------

2.1        Agreement and Plan of          Incorporated by
           Reorganization dated April     referenced to Exhibit
           10, 1987, among Lexington      No. 2 to Form 8-K dated
           Funding,                       April 10, 1987
           Inc., Eldorado Artesian
           Springs, Inc., and the
           shareholders of Eldorado
           Artesian Springs, Inc.

2.2        Articles of Merger dated June  Incorporated by reference
           11, 1988, between Lexington    to Exhibit No. 10.2 to
           Funding, Inc., and Eldorado    Form 10-K dated March 31, 1988
           Artesian Springs, Inc.

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

3.1        Amended Articles of            Incorporated by
           Incorporation                  reference to Exhibit 3.1
                                          filed with Eldorado's
                                          Form 10-KSB for the
                                          fiscal year ended March
                                          31, 1998

10.1       1997 Stock Option Plan         Incorporated by
                                          reference to Exhibit
                                          10.1 to Registration
                                          Statement No. 333-68553

10.2       Promissory Note with First     Incorporated by
           National Bank of Boulder       reference to Exhibit No.
           County dated June 27, 1997     10.2 to Registration
                                          Statement No. 333-68553

10.3       Deed of Trust dated June 27,   Incorporated by
           1997                           reference to Exhibit No.
                                          10.3 to Registration
                                          Statement No. 333-68553

27.1       Financial Data Schedule

    (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.




<PAGE>


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 21, 1999

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

/s/ Douglas A. Larson                                 June 21, 1999
    Douglas A. Larson, President
    and Director

/s/ Kevin M. Sipple                                   June 21, 1999
    Kevin M. Sipple, Vice-President,
    Secretary and Director


/s/ Jeremy S. Martin                                  June 21, 1999
    Jeremy S. Martin, Vice-President
    and Director

/s/ George J. Schmitt                                 June 21, 1999
    George J. Schmitt, Director


/s/ Don P. Van Winkle                                 June 21, 1999
    Don P. Van Winkle, Director


/s/ Cathleen Collins                                  June 21, 1999
    Cathleen Collins, Chief Financial Officer