U.S. SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                FORM 10-QSB

[X] Quarterly Report Under Section 13 or 15(d)of the Securities
Exchange Act of 1934
    For the quarterly period ended March 31, 1998

Commission File Number 33-6859-D

                             ZEON Corporation        
          (Exact name of registrant as specified in its charter)


        Colorado                                 84-0827610      
(State or other jurisdiction of              (I.R.S. Employer
 incorporation or organization)            Identification Number) 


 1500 Cherry Street           Louisville, CO      80027          
(Address of principal executive offices)      (Zip Code)

        (303) 666-9400                                           
(Registrant's telephone number including area code)

                                                                 
(Former name, former address and former fiscal year if changed
since last reported)


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

                                   [x] Yes      [ ] No    

Number of shares of Common Stock Outstanding at May 1, 1998

          Common Stock, No Par Value          349,205    
                    (Class)               (Number of Shares)

Transitional  Small Business Disclosure Format (check one):
[ ]Yes      [x] No

<PAGE>




                             ZEON Corporation

<TABLE>
<CAPTION>
                                   INDEX


<S>                                                        <C>
                                                            Page

Part I - Financial Information                                

Balance Sheet March 31, 1998 and December 31, 1997            3

Statement of Operations - Three Months Ended
          March 31, 1998 and 1997                             5

Statements of Cash Flows - Three Months Ended
          March 31, 1998 and 1997                             6

Notes to Financial Statements                                 7

Management's Discussion and Analysis of Financial 
     Condition and Results of Operations                     10   
                      
Part II - Other Information                                  12

Signature Page                                               13

</TABLE>

<PAGE>

<TABLE>
                                ZEON Corporation
                                 BALANCE SHEETS

<CAPTION>
                                        March 31, 1998      December 31, 1997
                                          (unaudited)
<S>                                     <C>                  <C>
CURRENT ASSETS
Cash                                      $ 224,460           $ 181,533
Trade Receivables, Net of Allowance         
     for Doubtful Accounts                  337,933             320,900
Inventories                                 275,932             288,613
Prepaid Expenses and Other                   32,145              36,664

     TOTAL CURRENT ASSETS                   870,470             827,710


Property and Equipment (net of              
     accumulated depreciation and
     amortization)                          122,032              82,169
Other                                        48,185              33,785

     TOTAL NON-CURRENT ASSETS               170,217             115,954


     TOTAL ASSETS                       $ 1,040,687           $ 943,664
                                         
</TABLE>


<PAGE>
<TABLE>
                                ZEON Corporation
                           BALANCE SHEETS (Continued)
<CAPTION>
                                        March 31, 1998      December 31, 1997
                                          (unaudited)

<S>                                     <C>                 <C>
CURRENT LIABILITIES
Accounts Payable                         $ 173,815              $161,040
Accrued Expenses                            45,549                67,305 
Current Portion of Long-Term Debt            6,138                   -0-
     TOTAL CURRENT LIABILITIES             225,502               228,345

Long-Term Debt (net of current
     portion)                               29,290                   -0-

     TOTAL LIABILITIES                     254,792               228,345

Shareholders Equity:
Common stock, no par, $.10 stated
value; authorized 100,000,000; 
issued 349,205 March 31, 1998 
and December 31, 1997                       34,920                34,920

Capital in Excess of Stated Value          938,426               938,426
Deficit                                   (187,451)             (258,027)

     TOTAL SHAREHOLDERS EQUITY             785,895               715,319 

TOTAL LIABILITIES AND 
     SHAREHOLDERS EQUITY               $ 1,040,687             $ 943,664
</TABLE>
                                        
<PAGE>
<TABLE>
                                ZEON Corporation
                            STATEMENT OF OPERATIONS
                                  (UNAUDITED)
<CAPTION>
                           Three Months Ended  Three Months Ended     
                            March 31, 1998       March 31, 1997  
<S>                           <C>                <C>
Net Sales                     $ 783,957          $ 572,565         
Cost of Sales                   513,746            369,635        

Gross Profit                    270,211            202,930 

Operating Expenses:
     Selling                     76,671             83,259                  
     General                     99,917             91,436   
     Research & Development      31,469             31,297               

                                           
                                208,057            205,992  

Income (Loss) From Operations    62,154            ( 3,062)
                                                  

Other Income (Expenses):
     Interest Expense               -0-                -0-            
     Interest Income                362                573       
     Other Income (Expenses)      8,060              7,465 
                                  8,422              8,038

  
Net Income (Loss)              $ 70,576           $  4,976            
                              

                    
Earning per share:              
  Net Income (Loss)             $  .202            $ .014                   
                              
                                                                            
Weighted Average Common
  Shares Outstanding            349,205            349,205        
</TABLE>

<PAGE>
<TABLE>
                                ZEON Corporation
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
<CAPTION>
                                        Three Months Ended    Three Months Ended
                                          March 31, 1998        March 31, 1997 
<S>                                           <C>                <C>
Cash Flows From Operating Activities:                           
   Net Income (Loss)                          $ 70,576            $   4,976   
 Adjustments to Reconcile Net Income
   (Loss) to Net Cash Provided By (Used
   In) Operating Activities:
     Depreciation & Amortization                 9,691                12,114  
     Provisions for Losses on
       Accounts Receivable                       2,000                 1,500
     Gain on Sale of Fixed Assets                  -0-                   -0-
     Change in Operating Assets & Liabilities:
     Decrease (Increase) in Accts Receivable   (19,033)              (51,476) 
     Decrease (Increase) in Inventory           12,681               (16,921)
     Decrease (Increase) in Prepaid Assets      (9,881)                4,970
     Increase (Decrease) in Accts Payable       12,775                83,945
     Increase (Decrease) in Accrued Expenses   (21,756)              (50,563)
TOTAL ADJUSTMENTS:                             (13,523)              (16,431)

Net Cash Provided By (Used In) Operating
  Activity:                                     57,053               (11,455)

Cash Flows From Investing Activities:
   Proceeds from Sale of Fixed Assets              -0-                   -0-
   Purchase of Capital Assets                 ( 49,554)               (9,619)
                                                  
Net Cash Provided by (Used In) Investing
  Activities:                                  (49,554)               (9,619)

Cash Flows From Financing Activities:
   Purchase of Common Stock                        -0-                 (1,012)
   Net Increase (Decrease) of
     Long-term Debt                             35,428                   -0-

Net Cash Provided By (Used In) Financing
  Activities:                                   35,428                (1,012)

Net Increase (Decrease) In Cash:                42,927                (22,086)

Cash At Beginning of Period:                   181,533                133,778

Cash At End of Period:                        $224,460               $111,692
</TABLE>

<PAGE>
                                              
                              ZEON Corporation
                         NOTES TO FINANCIAL STATEMENTS

1.   Summary of significant accounting policies:

     Inventories:
     Inventories are valued at the lower of cost or market.  Cost is determined
     at standard, which approximates first-in, first-out.

     Property, Equipment and Depreciation:
     Property and equipment are stated at cost.  For financial reporting
     purposes, depreciation is calculated using the straight-line method over
     the related assets estimated useful lives, which approximates five years. 
     For income tax reporting purposes, depreciation is calculated using
     accelerated methods.

     Revenue Recognition:
     Sales are recorded in the periods that product is shipped.

     Taxes on Income:
     The Company follows the provisions of Statement of Financial Accounting
     Standards No.109 - Accounting for Income Taxes (SFAS No.109).  Under SFAS
     No. 109 the Company's policy is to provide deferred income taxes related
     primarily to depreciation and other items that result in differences
     between the financial reporting and tax basis of assets and liabilities. 
     
     Earnings (Loss) Per Share:
     Income (loss) per common share is computed on the basis of the weighted
     average number of common shares outstanding during each period.  The
     average number of shares outstanding was 349,205 during each of the
     periods ended March 31, 1998 and December 31, 1997, respectively.

     Reclassifications:
     Certain reclassifications have been made to the accompanying financial
     statements for comparative purposes.

2.   Inventories:

     Inventories consist of the following:
                                             March 31,      December 31,
                                                1998            1997    
          Finished Goods                     $  84,087      $ 106,422       
          Work-in-process                        8,447          9,876         
          Raw Materials                        183,398        172,315
                                             $ 275,932      $ 288,613      
                                             



<PAGE>


ZEON Corporation
                             NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3.   Notes payable and long-term debt:

     The Company has a line-of-credit commitment from its bank for borrowings 
     of up to $100,000, with interest on any borrowing at 1% above the bank's 
     reference rate to be paid monthly.  The loan commitment, if exercised, is
     collateralized by trade receivables, inventories, property and equipment
     and intangibles.  Under the terms of the agreement, the Company is subject
     to   certain restrictions which include, among other things, restrictions
     on borrowings and dividend payments.  At March 31, 1998 and December 31,
     1997, no amount was outstanding under line of credit agreements.  

     A Company vehicle was purchased and financed with a $36,000 loan.  Terms
     of the debt are five years and a 8 1/4% interest rate.
       
4.   Commitments and related party transactions:   
     
     In December 1992, the Company entered into an operating lease to      
     consolidate its primary manufacturing and office facilities.  The property
     is leased through January 2003 from a partnership from which T. Bryan Alu,
     President and Chief Executive Officer of the Company, is a partner.  The 
     lease contains an option to renew for two additional five-year periods and
     requires monthly payments of approximately $8,400 with the Company also
     responsible for maintenance and operating costs. 
     
     The Company has an operating lease agreement with an unrelated party for
     additional manufacturing facilities which requires monthly payments of
     approximately $5,800 through December 31, 2000 including renewal options. 
     The Company entered into a sublease agreement for this space with an
     unrelated party through December 31, 2000 for an initial monthly rent of
     $9,200 and increasing at 5% per year.

     On April 29, 1995, The board of directors of the Company adopted the ZEON
     Corporation Stock Option Plan (the "Plan").  The Plan was approved by the
     stockholders at the Company's annual shareholders' meeting held on June 21,
     1995.  The Plan allows the board of directors of the Company to grant both
     incentive stock options and options which do not qualify as incentive stock
     options to employees and directors of the Company.  Thirty-five thousand
     (35,000) shares of the Company's common stock are available for the grant
     of options pursuant to the Plan.  The exercise price for each incentive
     stock option granted shall be no less than 100% of the fair market value
     (110% of the fair market value for employees owning more than 10% of the
     Company's common stock) of the common stock on the day the option is  
     granted.  The exercise price for each non-qualified stock option granted
     under the Plan will be the price established by the board of          
     directors which normally is expected to be no less than 100% of the fair
     market value on the date the option is granted.  A total of 27,000 non-
     qualified options have been granted under the plan for officers and   
     employees of the Company.  These options were granted on February 27, 1998,
     at an exercise price of $2.00 per share.     

<PAGE>

                           ZEON Corporation
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)



     Effective July 1991 the Company adopted a directors' compensation plan
     whereby directors will be compensated with restricted common stock of the
     Company in exchange for services provided.  Shares issued will be valued
     based upon the market value of the stock as determined by the Company.  As
     of March 31, 1998, no shares had been issued under this plan.


5.   Taxes on income and available carryforwards:
     
     At December 31, 1997, the Company had net operating loss carryforwards for
     income tax purposes of approximately $118,000 and investment credit and
     research and development credits of approximately $45,000. The net    
     operating losses expire in varying amounts from 2003 through 2011, and the
     investment credit and research and development credits expire in varying
     amounts from 1998 through 2000.




























<PAGE>



                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS:

Factors That May Affect Operating Results

The statements contained in this Form 10-QSB that are not purely historical
are forward looking statements within the meaning of federal securities laws,
including statements regarding the Company's expectations, hopes, intentions
or strategies regarding the future.  All forward looking statements included
in this document are based on information available to the Company on the
date hereof, and the Company assumes no obligation to update any such forward
looking statements.  It is important to note that the Company's actual
results could differ materially from those in such forward looking
statements.

Financial Condition:

The liquidity of ZEON Corporation remains adequate, with a current ratio of
3.9 to 1 as of March 31, 1998, and 3.6 to 1 as of December 31, 1997.  With
the solid order and shipment flow, trade accounts receivable levels have
increased.  However, both receivables and inventory are current and their
turnover experience are at same level as 1997.  Capital expenditures were
$49,600 for manufacturing equipment and a Company vehicle.  The vehicle was
financed with debt.  Liquidity from on-going operations are considered
adequate to meet the Company's immediate cash requirements.

Results of Operations:

Results of operations for the three months ending March 31, 1998 and 1997
<TABLE>
                          THREE MONTHS ENDED MARCH 31,

<CAPTION>

          <S>                <C>                 <C>                                                                           
                                1998                 1997   

          Sales:              $783,957            $572,565       
          Income:               70,576               4,976        
</TABLE>
         
Net income for the first quarter of 1998 was $70,576.  The Company had a solid
year end backlog and franchise orders continue to grow.  This resulted in a 37%
increase in 1998's first quarter shipments over 1997's first quarter.  With the
additional sales volume and relatively constant operating expenses, the 
increased operating profit resulted.

Gross profit margin, as a percentage of sales in the first quarter of 1998, was
35% or down .9% from 1997's first quarter. This .9% decrease was due to the
product mix.



<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS:


Selling expenses decreased by 8% percent over first quarter 1997. The $6,588
decrease resulted from reduced convention and travel expenses. Those 1997
expenses had increased as sales effort in the franchise markets increased.    
                    
General and Administrative expenses increased by $8,500 over same period last
year.  The additional expenses were salaries, insurance and other general
expenses.

Research and development remained relatively flat at $31,000.  An increase in
salaries was offset by reduction in supplies and other expenses.
                                                    







































<PAGE>



                    PART II-OTHER INFORMATION

Item 5.  Other information

June 1, 1998 has been set as the record date for Company's annual shareholders'
meeting to be held on July 10, 1998.

Item 6.  Exhibits and Reports on Form 8-K

     Part A.   None

     Part B.   No reports on Form 8-K have been filed for the quarter ended 
               March 31, 1998.


































<PAGE>

SIGNATURES                             


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




Date:        May 15, 1998                 /s/ T. Bryan Alu                 
                                             T. Bryan Alu
                                              President 



                                          /s/  R.G. Routt                   
                                             R. G. Routt  
                                        Corporate Controller