UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


                  QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
(X)     Quarterly  report  pursuant  to section 13 or 15 (d) of the Securities
         Exchange Act of 1934, for the quarterly period ended April 30, 1997.

( )      Transition report pursuant to section 13 or 15 (d) of the
         Securities Exchange Act of 1934, for the transition period from
                       to              .

Commission file number 0-17872

                          ECHO SPRINGS WATER CO., INC.
        (Exact name of small business issuer as specified in its charter)

New York                                     #16-1433379
(State of Incorporation)                    (I.R.S. Employer ID No.)

           Building 100A, Hackensack Avenue, Kearny, New Jersey 07032
                    (Address of Principal Executive Offices)

                                                       (201) 465-5151
                           (Issuer's Telephone Number)

                                       N/A
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

                                               Yes   X     No

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

            Class                    Outstanding at April 30, 1997

Common stock, $.0001 par value                       3,557,149 shares

Transitional Small Business Disclosure Format  Yes         No   X


<PAGE>










                          ECHO SPRINGS WATER CO., INC.



                              Index to Form 10-QSB





                                                                     Page
                   Item                                              Number


PART I.  FINANCIAL INFORMATION                                      3

 Item 1.  Financial Statements:

         Consolidated balance sheets -
         April 30, 1997 and October 31, 1996                        3
      

         Consolidated statements of operations -
         Three months ended April 30, 1997 and 1996                 4
      
         Six months ended April 30, 1997 and 1996                   5

         Consolidated statements of cash flows -
         Six months ended April 30, 1997 and 1996                   6

         Notes to Consolidated Financial Statements                 7-9

         Management's Discussion and Analysis of Financial
          Condition and Results of Operations                      10-12

PART II.          OTHER INFORMATION

         Item 1.  Legal Proceedings                                   13
         Item 5.  Other Events                                        13
         Item 6.  Exhibits and Reports on Form 8-K                    13

Signatures                                                            14











<PAGE>



PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                          ECHO SPRINGS WATER CO., INC.

                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

                                     ASSETS
                                               April 30,         October 31,
                                               1997              1996
Current Assets:
 Cash                                      $   51,543             $   44,631
 Accounts receivable - net of allowance
  for doubtful accounts of $15,000 in
  1997 and $14,000 in 1996                    250,505                 257,212
 Notes receivable, current portion             26,800                  26,010
 Inventories                                   31,424                  34,221
 Prepaid expenses                              58,774                  30,178
                                             ---------              ---------
         Total Current Assets                 419,046                  392,252

Notes receivable, net of current portion      146,268                  159,868

Property, plant and equipment - net         1,314,177                1,278,230

Other assets                                  257,584                  220,026
                                             ---------              ---------

         TOTAL ASSETS                       $2,137,075              $2,050,376
                                             =========              =========

                LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities:
 Current portion of debt                    $  280,000             $  552,153
 Debentures                                     50,000                 50,000
 Accounts payable and accrued expenses       1,523,601              1,513,582
 Customer deposits                             281,200                213,000
 Unearned revenues                              16,297                 17,677
                                             ---------              ---------
         Total Current Liabilities           2,151,098              2,346,412
                                             ---------              ---------

Shareholders' Equity (Deficiency):
 Common stock, $.0001 par, 75,000,000
  shares authorized; issued and
  outstanding 3,557,149 shares
  in 1997 and 2,907,149 shares in 1996         356                    291
 Additional paid-in capital              8,551,660              7,967,725
 Accumulated deficit                    (8,566,039)            (8,264,052)
                                        ---------              ---------
         Total Shareholders'
          Equity (Deficiency)              (14,023)              (296,036)
                                         ---------              ---------

         TOTAL LIABILITIES AND SHAREHOLDERS'
          EQUITY (DEFICIENCY)            $2,137,075             $2,050,376
                                          =========              =========




The  accompanying  notes are an integral  part of these  consolidated  financial
 statements.

                                                         - 3 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      CONSOLIDATED STATEMENT OF OPERATIONS

                      FOR THE THREE MONTHS ENDED APRIL 30,
                                   (UNAUDITED)



                                         1997                        1996
                                         ----                        ----

Revenues:
 Gross sales                        $   507,755                 $   568,696
 Credits and allowances                 (63,525)                     (2,356)
 Freight out                            (10,839)                    (10,014)
 Other income                             3,831                      10,272
                                        ----------                  ----------
                                        437,222                     566,598
                                        ----------                  ----------

Costs and Expenses:
 Cost of sales                           180,568                     219,273
 Selling, general and
  administrative                         402,453                     372,133
 Interest                                  8,901                      58,223
 Amortization of other assets              1,219                       1,219
 Loss (gain) on sale of assets            (1,653)                     (2,160)
                                        ----------                  ----------
         Total Costs and Expenses        591,488                     648,688
                                       ----------                  ----------

Net loss                              $  (154,266)               $   (82,090)
                                        ==========                  ==========

Net loss per share                    $      (.04)              $      (.05)
                                        ==========                  ==========

Weighted average shares outstanding     3,540,482                   1,699,996
                                        ==========                  ==========








The  accompanying  notes are an integral  part of these  consolidated  financial
 statements.



                                                         - 4 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      CONSOLIDATED STATEMENT OF OPERATIONS

                       FOR THE SIX MONTHS ENDED APRIL 30,
                                   (UNAUDITED)



                                           1997                        1996
                                           ----                        ----

Revenues:
 Gross sales                         $   952,231                 $ 1,094,308
 Credits and allowances                  (66,177)                     (6,675)
 Freight out                             (19,788)                    (22,065)
 Other income                              3,696                      14,417
                                         ----------                  ----------
                                          869,962                   1,079,985
                                         ----------                  ----------

Costs and Expenses:
 Cost of sales                             369,362                     438,933
 Selling, general and
  administrative                           776,287                     733,503
 Interest                                   26,375                     115,581
 Amortization of other assets                2,438                       2,438
 Loss (gain) on sale of assets              (2,513)                     (3,360)
                                         ----------                  ----------
         Total Costs and Expenses        1,171,949                    1,287,095
                                          ----------                  ----------

Net loss                               $  (301,987)                $  (207,110)
                                         ==========                  ==========

Net loss per share                    $      (.09)                $      (.12)
                                          ==========                  ==========

Weighted average shares outstanding       3,223,816                   1,679,996
                                         ==========                  ==========








The  accompanying  notes are an integral  part of these  consolidated  financial
 statements.



                                                         - 5 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                       FOR THE SIX MONTHS ENDED APRIL 30,
                                   (UNAUDITED)

                                            1997                1996
                                           ----                ----
Operating Activities:
 Net loss                                 $(301,987)          $(207,110)
 Adjustments to reconcile net loss to
  net cash used by
  operating activities:
  Depreciation and amortization              82,588              76,243
  Loss (gain) on sale of assets              (2,513)             (3,360)
  Provision for doubtful accounts             1,000               3,000
  Changes in assets and liabilities -
   Accounts receivable                        5,707             (37,368)
   Inventories                                2,797               8,603
   Prepaid expenses                         (28,596)            (50,762)
   Other assets                             (28,752)               (693)
   Accounts payable and accrued
    expenses                                 10,019              21,934
   Customer deposits                         68,200              13,600
   Unearned revenues                         (1,380)            (29,884)
                                             --------            --------
         Net Cash Used by
          Operating Activities             (192,917)           (205,797)
                                            --------            --------

Investing Activities:
 Capital expenditures                      (125,559)            (18,595)
 Collections on notes receivable             12,810               8,437

 Proceeds from sale of assets                11,975               3,360
                                            --------            --------

         Net Cash Used by
          Investing Activities             (100,774)             (6,798)
                                            --------            --------

Financing Activities:
 Proceeds from issuance of
   common stock                              584,000              60,000
 Increase in installment debt                110,000             135,000
 Repayment of installment debt              (382,153)            (29,011)
 Deferred public offering costs              (11,244)
                                            --------
         Net Cash Provided
          by Financing Activities            300,603             165,989
                                            --------            --------

Net increase (decrease) in cash               6,912             (46,606)

Cash - beginning                             44,631              57,224
                                             --------            --------

CASH - ENDING                              $  51,543           $  10,618
                                            ========            ========

SUPPLEMENTAL INFORMATION:
 Cash paid for interest                    $  33,269           $   9,765

The  accompanying  notes are an integral  part of these  consolidated  financial
 statements.

                                                         - 6 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



NOTE 1 -          SIGNIFICANT ACCOUNTING POLICIES
                  -------------------------------

                  BASIS OF PRESENTATION

                  The interim  consolidated  financial  statements  are prepared
                  pursuant to the requirements for reporting on Form 10-QSB. The
                  October 31, 1996  balance  sheet data was derived from audited
                  consolidated   financial  statements  and  together  with  the
                  interim  consolidated  financial  statements and notes thereto
                  should be read in conjunction with the consolidated  financial
                  statements and notes  included in the Company's  latest annual
                  report on Form  10-KSB/A.  In the opinion of  management,  the
                  interim   consolidated   financial   statements   reflect  all
                  adjustments of a normal recurring nature neces sary for a fair
                  statement  of the results for  interim  peri ods.  The current
                  period results of operations are not necessarily indicative of
                  results which  ultimately will be reported for the full fiscal
                  year.

                  BUSINESS

                  Echo Springs  Water Co.,  Inc.  ("the  Company"),  through its
                  subsidiaries,  is engaged  principally in the  distribution of
                  bottled water and allied  products.  The Company bottles water
                  from its own  natural  springs  in  Burlington,  NY for direct
                  distribution and sale to business and residential customers as
                  well as for wholesale to supermarkets  and other bottled water
                  distributors.

                  REVENUE RECOGNITION

                  Revenue  from  equipment  rental  is  recognized  based on the
                  period in which it is earned and unearned revenue is recorded
                  for the portion billed in advance. Revenues from product sales
                  are recognized upon shipment to the wholesal er or delivery to
                  the customer, as applicable.

                  LOSS PER SHARE

                  Net loss per share is based upon the weighted  average  number
                  of shares  outstanding  during each period.  All share and per
                  share amounts give effect to a 1-for-25 reverse stock split in
                  October, 1996.


                                                         - 7 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)




NOTE 2 -          INVENTORIES
                  -----------

                  Inventories  are  valued at the lower of cost or market on the
                  first-in,  first-out  basis and at October  31, 1996 and April
                  30, 1997 consist of the following:

                                                   April              October
                                                 30, 1997            31, 1996

                  Bottles                        $ 2,085             $ 1,722
                  Product held for sale           13,080              16,415
                  Supplies                        16,259              16,084
                                                  ------              ------
                                                  $31,424             $34,221
                                                  ======              ======

NOTE 3 -          PROPERTY, PLANT AND EQUIPMENT
                  -----------------------------

                  Property,  plant  and  equipment  are  recorded  at  cost  and
                  depreciated  by the  straight-line  method over the  estimated
                  economic  useful  lives of the various  asset groups of 5 - 40
                  years and consist of the following:
                                                  April               October
                                                  30, 1997            31, 1996
                  Land                            150,000           $  150,000
                  Buildings and improvements      362,298              362,298
                  Water coolers, bottles and
                   brewers                        976,517              918,730
                  Machinery and equipment         390,821              335,069
                  Vehicles                         60,500               60,850
                  Furniture and fixtures          126,393              127,128
                                                 ---------            ---------
                                                 2,066,529            1,954,075

                  Less: accumulated depreciation
                   and amortization               752,352              675,845
                                                ---------            ---------

                                                $1,314,177           $1,278,230
                                                 =========            =========

NOTE 4 -          OTHER ASSETS
                  ------------

                  Other  assets at  October  31,  1996 and  April  30,  1997 are
                  comprised of the following:
                                                    April             October
                                                   30, 1997           31, 1996
                  Water rights                    205,000             $205,000
                  Accumulated amortization         35,967               33,529
                                                  -------              -------
                       Net deferred charges        169,033              171,471
                  Security deposits                 59,289               30,537
                  Deferred public offering costs    29,262               18,018
                                                  -------              -------
                                                  $257,584             $220,026
                                                  =======              =======




                                                         - 8 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 5 -          INDEBTEDNESS
                  ------------

                  The  Company  is  currently  in default  as to  principal  and
                  interest  on its  debt  and  debentures  except  for  advances
                  payable to  stockholder  of  $282,153  at October 31, 1996 and
                  $60,000 at April 30, 1997. Although the debt is in default and
                  therefore  currently  due,  the  debtholders  have  informally
                  agreed to wait for payment  until  completion  of the proposed
                  public offering. (See Note 7).

NOTE 6 -          INCOME TAXES
                  ------------

                  The Company  files a  consolidated  federal  income tax return
                  with its  subsidiaries.  At October 31,  1996,  the  estimated
                  maximum amount of net operating loss carryforward available to
                  reduce  future  taxable  income is  approximately  $8,200,000,
                  expiring  from 2004 through  2010.  Deferred tax benefits from
                  the use of net operating loss  carryforwards  of approximately
                  $2,780,000 are offset by a  corresponding  amount of valuation
                  allowance  since it is more  likely  than not that all or some
                  portion of the defered tax asset will not be realized.

NOTE 7 -          GOING CONCERN
                  -------------

                  The Company  sustained  losses of $228,571  (before  extraordi
                  nary gain) for the  fiscal  year ended  October  31,  1996 and
                  $301,987 for the six months ended April 30, 1997.  The Company
                  had  deficit  net worths of  $296,036  at October 31, 1996 and
                  $14,023 at April 30, 1997.  In  addition,  the Compa ny was in
                  default on principal  and interest  payments on a  substantial
                  portion of its debt.  These  facts  raise sub  stantial  doubt
                  about the  Company's  ability to continue as a going  concern.
                  Considerations  which tend to mitigate  the  question of going
                  concern  include  management's  successful  efforts in raising
                  funds through private  placements,  the ability to renegotiate
                  and restructure long-term financing with major creditors, past
                  and present  efforts to convert debt to equity and the ability
                  to acquire, restructure and develop the bottled water business
                  which  it  believes   will  be  able  to  achieve   profitable
                  operations.   In  June,   1996,   the  Company   entered  into
                  negotiations  to  consummate  a public  offering  with minimum
                  gross  proceeds  of  approximately  $4,000,000.   The  Company
                  intends  to use a  protion  of the  proceeds  of the  proposed
                  public  offering  to seek  and  consum  mate  acquisitions  of
                  companies in the bottled water and allied  products  business.
                  No assurance  can be given that the Company will be successful
                  in identifying  potential  acquisitions or, if made, that such
                  acquisitions will have a beneficial effect on the Company. The
                  Company has no cur rent  agreement  to acquire any business or
                  property,  or intent  to  acquire  any  specific  business  or
                  property.  The Company  believes  that these  factors  provide
                  meaningful evidence as to the Company's ability to continue in
                  operat  ion for the next  fiscal  year and  support  the going
                  concern   presentation   in  the   accompanying   consolidated
                  financial  statements in favor of the liquidation basis. There
                  can be no assurance, however, that management will continue to
                  be able to raise  sufficient  capital or convert existing debt
                  to equity or to achieve profitable operations going forward.


                                                         - 9 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

            FOR THE SIX MONTHS ENDED APRIL 30, 1997 COMPARED WITH THE

                         SIX MONTHS ENDED APRIL 30, 1996


Gross sales  decreased  $142,077  (13.0%) to $952,231  for the six months  ended
April 30, 1997 ("1997") from  $1,094,308 for the six months ended April 30, 1996
("1996").  Five-gallon sales to Aramark  Corporation  increased by approximately
$73,000,   primarily  due  to  the  Company's  expansion  into  this  customer's
Pennsylvania  locations.  However,  five-gallon  and allied product sales to and
rental income from the  Company's  regular  customer base fell by  approximately
$57,000,  $37,000  and  $47,000,  respectively,  largely  due  to  a  deliberate
discontinuance  of  service  to  marginal  customers  and a lack  of  sales  and
marketing  staff as the  Company  concentrated  its  efforts  toward the Aramark
business  as this  business  requires  no capital  investment  outlay for cooler
equipment and provides its own sales and marketing at no additional  cost to the
Company. The 2.5-gallon sales fell by approximately  $12,000 as this low-margin,
low-volume  product line was  discontinued in July,  1996. Sales of one gallons,
another low-margin product,  decreased by approxi mately $62,000, largely due to
a  discontinuance  of service to one  supermarket  customer  and the loss of one
private label brand of one of the Company's  distributors to supply competition.
Credits and  allowanc es  increased  by  approximately  $60,000 as a result of a
half-price  discount  offered to Aramark for three months (March 10 through June
8, 1997) as an incentive to obtain their Pennsylvania business.  Other income in
1996 included  approximately  $8,000 of discounts earned upon the  renegotiation
and settlement of two older payables, which event did not recur in 1997.

Cost of sales for 1997 was  $369,362  (38.8%  of gross  sales)  as  compared  to
$438,933 (40.1% of gross sales) for 1996. This 1.3 percentage point  improvement
is comprised of a 3.0 percentage point gain due to the above-noted reductions in
the sales of low-margin product lines, offset by a 1.7 percentage point increase
caused by the  above-noted  decrease in the  equipment  rental  portion of gross
sales.

Selling,  general and administrative  expenses were $776,287 in 1997 as compared
to  $733,503 in 1996.  Delivery  and  warehouse  costs  increased  approximately
$35,000,  primarily due to start-up of the  Pennsylvania  operations  plus a 50%
truck rental price increase in May, 1996.  Further,  general and  administrative
expenses rose by approximately  $32,000.  Increased clerical costs accounted for
approximately  $14,000.  The  investor  relation  costs  of  the  debt-to-equity
conversion  and the reverse  stock  split  accounted  for another  approximately
$9,000  and the  final  factor  was  increased  business  development  costs  of
approximately  $9,000 to investigate new potential business  investments.  These
increases were offset by reduced  selling costs of  approximately  $24,000.  Bad
debt  expense  decreased  approximately  $13,000,  primarily  as a result of the
above-noted discontinuance of service to marginal customers. Reduced yellow page
advertising  accounted for another approximately $7,000. Third party commissions
fell approximately $4,000 as a result of the above-noted  reductions in sales of
low-margin product lines.

Interest expense  decreased from $115,581 in 1997 to $26,376 in 1996,  primarily
as a result of the October,  1996  debt-to-equity  conversion.  Amortization  of
other  assets of $2,438 in 1997 and 1996  related to the  amortization  of water
rights.

The net loss for 1997  increased by $94,877 from $207,110 in 1996 to $301,987 in
1997.

                                                         - 10 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

           FOR THE THREE MONTHS ENDED APRIL 30, 1997 COMPARED WITH THE

                        THREE MONTHS ENDED APRIL 30, 1996


Gross sales  decreased  $60,941  (10.7%) to $507,755  for the three months ended
April 30, 1997  ("1997") from $568,696 for the three months ended April 30, 1996
("1996").  Five-gallon sales to Aramark  Corporation  increased by approximately
$58,000,   primarily  due  to  the  Company's  expansion  into  this  customer's
Pennsylvania  locations.  However,  five-gallon  and allied product sales to and
rental income from the  Company's  regular  customer base fell by  approximately
$31,000,  $16,000  and  $18,000,  respectively,  largely  due  to  a  deliberate
discontinuance  of  service  to  marginal  customers  and a lack  of  sales  and
marketing  staff as the  Company  concentrated  its  efforts  toward the Aramark
business  as this  business  requires  no capital  investment  outlay for cooler
equipment and provides its own sales and marketing at no additional  cost to the
Company.  The 2.5-gallon sales fell by approximately  $7,000 as this low-margin,
low-volume  product line was  discontinued in July,  1996. Sales of one gallons,
another low-margin product, decreased by approximately $46,000, largely due to a
discontinuance  of  service  to one  supermarket  customer  and the  loss of one
private label brand of one of the Company's  distributors to supply competition.
Credits  and  allowances  increased  by  approximately  $61,000 as a result of a
half-price  discount  offered to Aramark for three months (March 10 through June
8, 1997) as an incentive to obtain their Pennsylvania business.  Other income in
1996 included  approximately  $8,000 of discounts earned upon the  renegotiation
and settlement of two older payables, which event did not recur in 1997.

Cost of sales for 1997 was  $180,568  (35.6%  of gross  sales)  as  compared  to
$219,273 (38.6% of gross sales) for 1996. This 3.0 percentage point  improvement
is comprised of a 4.4 percentage point gain due to the above-noted reductions in
the sales of low-margin product lines, offset by a 1.4 percentage point increase
caused by the  above-noted  decrease in the  equipment  rental  portion of gross
sales.

Selling,  general and administration  expenses were $402,453 in 1997 as compared
to  $372,133 in 1996.  Delivery  and  warehouse  costs  increased  approximately
$28,000,  primarily  due to start-up of the  Pennsylvania  operations.  Further,
general and administrative  expenses rose by approximately $14,000,  largely due
to increased  clerical  costs.  These  increases  were offset by an  approximate
$12,000  decrease in bad debt expense,  primarily as a result of the above-noted
discontinuance of service to marginal customers.

Interest expense decreased from $58,223 in 1997 to $8,901 in 1996,  primarily as
a result of the October, 1996 debt-to-equity  conversion.  Amortization of other
assets of $1,219 in 1997 and 1996 related to the amortization of water rights.

The net loss for 1997  increased  by $72,176 from $82,090 in 1996 to $154,266 in
1997.

                                                         - 11 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                         LIQUIDITY AND CAPITAL RESOURCES

The Company's  primary sources of liquidity have been cash generated from sales,
issuance of common stock,  debentures and installment  debt, and borrowings from
its officers.

During the six months  ended April 30, 1997 and 1996,  the Company had  negative
cash flows from  operating  activities of $192,917 and  $205,797,  respectively.
Investing activities used cash of $100,774 in 1997 and $6,798 in 1996, primarily
for the  acquisition  of property  and  equipment.  The Company has financed its
operating and investing  activities  during these periods  primarily through the
issuance of common stock and installment debt.

At April 30, 1997, the Company had a working  capital  deficiency of $1,732,052.
Short-term credit sources are limited to trade credit on purchases and services.
The report issued by the Company's  accountants  that  accompanies the Company's
Consolidated  Financial  Statements  for the year ended  October 31, 1996 states
that there is a substantial  doubt about the Company's  ability to continue as a
going concern.

As indicated in Note 5 to the accompanying  Consolidated  Financial  Statements,
certain of the  Company's  indebtedness  is in default.  Although the debt is in
default and therefore  currently due, the debtholders have informally  agreed to
wait for payment until completion of the proposed public offering noted below.

Considerations  which tend to mitigate  the  question of going  concern  include
management's successful efforts in raising funds through private placements, the
ability to renegotiate and restructure long-term financing with major creditors,
past and present  efforts to convert  debt to equity and the ability to acquire,
restructure  and develop the bottled  water  business  which it believes will be
able to achieve profitable operations.

In June,  1996,  the Company  entered into  negotiations  to consummate a public
offering with minimum gross proceeds of approximately $4,000,000.  Such offering
is expected  to take place  during  Fiscal  1997.  The Company  intends to use a
portion of the proceeds of the proposed  public  offering to seek and consummate
acquisitions of companies in the bottled water and allied products business.  No
assurance  can be given  that the  company  will be  successful  in  identifying
potential  acquisitions  or,  if  made,  that  such  acquisitions  will  have  a
beneficial  effect on the  Company.  The  Company  has no current  agreement  to
acquire any business or property,  or intent to acquire any specific business or
property.

The Company  believes that these factors provide  meaningful  evidence as to the
Company's  ability to continue in operation for the next fiscal year and support
the  going  concern  presentation  in the  accompanying  Consolidated  Financial
Statements  in  favor  of the  liquidation  basis.  There  can be no  assurance,
however, that management will continue to be able to raise sufficient capital or
convert  existing  debt to  equity or to  achieve  profitable  operations  going
forward.

The Company has no plans or commitments for capital expenditures during the next
twelve months other than the ordinary equipment  purchases which are expected to
be funded with additional installment debt. The Company is close to settling its
prior years'  unpaid  payroll  taxes and,  upon  agreement,  intends to pay such
amounts from additional borrowings.

The Company's business is subject to seasonal fluctuation, with summer being the
busiest  season and winter the  slowest.  To date,  seasonality  has not had any
material effect on the Company's financial condition or results of operations.







                                                         - 12 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.



PART II           OTHER INFORMATION


ITEM 1.           Legal Proceedings

                  There have been no new legal  proceedings or material  changes
                  to legal proceedings  during the period from those reported in
                  the  Company's  Form  10-KSB/A for the year ended  October 31,
                  1996.

ITEM 5.           Other Events

                  In March,  1997,  Echo Springs Water Co., Inc. (the "Company")
                  concluded a private  placement of 50,000  shares of its common
                  stock,  par value $.0001 ("Common  Stock") at $1.00 per share,
                  for  gross  proceeds  of  50,000.00  to one  investor,  an "ac
                  credited  investor"  within the meaning of Regulation D of the
                  Securities Act of 1933, as amended (the "Act").  The issu ance
                  of the shares of Common Stock was exempt from the registration
                  provision of the Act by reason of Section 4(2) thereof.

ITEM 6.           Exhibits and Reports on Form 8-K

                  a.  Exhibits - None

                  b.  Reports on Form 8-K

                  Report dated February 11, 1997 noted sale of 400,000 shares of
                  common  stock to private  investors  for  $400,000 and sale of
                  200,000  shares of common stock  pursuant to  Regulation S for
                  $200,000.

                                                         - 13 -

<PAGE>






                                   SIGNATURES


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

                          ECHO SPRINGS WATER CO., INC.
                                    (Issuer)



         By       /s/ Michael S. Rakusin
                  Michael S. Rakusin
                  President



Dated:  June 23, 1997

                                                         - 14 -

<PAGE>


                          ECHO SPRINGS WATER CO., INC.

                             FINANCIAL DATA SCHEDULE

                     FOR THE SIX MONTHS ENDED APRIL 30, 1997





This  schedule  contains  summary  financial   information  extracted  from  the
financial statements for the six months ended April 30, 1997 and is qualified in
its entirety by reference to such financial state ments.



Item #          Item Description                                Amount

5-02(1)         Cash and cash items                           $  51,543
5-02(2)         Marketable securities                                 0
5-02(3)(a)(1)   Notes and accounts receivable-trade             265,505
5-02(4)         Allowances for doubtful accounts                 15,000
5-02(6)         Inventory                                        31,424
5-02(9)         Total current assets                            419,046
5-02(13)        Property, plant and equipment                 2,066,529
5-02(14)        Accumulated depreciation                        752,352
5-02(18)        Total assets                                  2,137,075
5-02(21)        Total current liabilities                     2,151,098
5-02(22)        Bonds, mortgages and similar debt                     0
5-02(28)        Preferred stock-mandatory redemption                  0
5-02(29)        Preferred stock-no
                mandatory redemption                                  0
5-02(30)        Common stock                                         356
5-02(31)        Other stockholders' equity                       (14,379)
5-02(32)        Total liabilities and
                  stockholders' equity                         2,137,075
5-03(b)(1)(a)   Net sales of tangible products                   866,266
5-03(b)(1)      Total revenues                                   869,962
5-03(b)(2)(a)   Cost of tangible goods sold                      369,362
5-03(b)(2)      Total costs and expenses applicable
                      to sales and revenues                      369,362
5-03(b)(3)      Other costs and expenses                               0
5-03(b)(5)      Provision for doubtful
                      accounts and notes                               0
5-03(b)(8)      Interest and amortization
                       of debt discount                            26,375
5-03(b)(10)     Income before taxes and
                       other items                               (301,987)
5-03(b)(11)     Income tax expense                                      0
5-03(b)(14)     Income/loss continuing operations                       0
5-03(b)(15)     Discontinued operations                                 0
5-03(b)(17)     Extraordinary items                                     0
5-03(b)(18)     Cumulative effect-changes
                     in accounting principles                            0
5-03(b)(19)     Net income or loss                                (301,987)
5-03(b)(20)     Earnings per share-primary                            (.09)
5-03(b)(20)     Earnings per share-fully diluted                         0

                                                         - 15 -

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