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, 1998.
( ) 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)
(973) 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, 1998
Common stock, $.0001 par value 3,822,149 shares
Transitional Small Business Disclosure Format Yes No X
<PAGE>
ECHO SPRINGS WATER CO., INC.
Index to Form 10-QSB
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Page
Item Number
PART I. FINANCIAL INFORMATION 3
Item 1. Financial Statements:
Consolidated Balance Sheets -
April 30, 1998 and October 31, 1997 3
Consolidated Statements of Operations -
Three months ended April 30, 1998 and 1997 4
Consolidated Statements of Operations -
Six months ended April 30, 1998 and 1997 5
Consolidated Statements of Cash Flows -
Six months ended April 30, 1998 and 1997 6
Notes to Consolidated Financial Statements 7-10
Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 5. Other Events 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ECHO SPRINGS WATER CO., INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
April 30, October 31,
1998 1997
Current assets:
Cash $ 223,177 $ 170,288
Accounts receivable - net of allowance
for doubtful accounts of $7,000 in
1998 and $9,000 in 1997 290,776 255,675
Notes receivable, current portion 33,032 29,842
Inventories 36,717 25,753
Prepaid expenses 79,530 22,620
--------- ---------
Total current assets 663,232 504,178
Notes receivable, net of current portion 117,814 132,254
Property, plant and equipment - net 1,280,785 1,187,029
Other assets 260,729 353,970
--------- ---------
TOTAL ASSETS $2,322,560 $2,177,431
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Installment debt $1,081,000 $ 624,000
Debentures 25,000 25,000
Accounts payable and accrued expenses 1,412,664 1,419,074
Customer deposits 315,400 304,800
Unearned revenues 13,733 14,963
--------- ---------
Total current liabilities 2,847,797 2,387,837
--------- ---------
Shareholders' equity (deficiency):
Common stock, $.0001 par value,
75,000,000 shares authorized; issued
and outstanding 3,822,149 shares in
1998 and 1997 382 382
Additional paid-in capital 8,792,884 8,792,884
Accumulated deficit (9,318,503) (9,003,672)
--------- ---------
Total shareholders'
equity (deficiency) (525,237) (210,406)
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIENCY) $2,322,560 $2,177,431
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
- 3 -
<PAGE>
ECHO SPRINGS WATER CO., INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED APRIL 30,
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1998 1997
---- ----
Revenues:
Gross sales $ 482,814 $ 507,755
Credits and allowances (4,683) (63,525)
Freight out (7,337) (10,839)
Other income 2,737 3,831
---------- ----------
473,531 437,222
---------- ----------
Costs and expenses:
Cost of sales 154,557 180,568
Selling, general and
administrative 443,254 402,453
Interest 24,303 8,901
Amortization of other assets 1,219 1,219
Other expenses (income) - net 40
Loss (gain) on disposal of assets (857) (1,653)
---------- ----------
Total costs and expenses 622,516 591,488
---------- ----------
Net loss $ (148,985) $ (154,266)
========== ==========
Net loss per share $ (.04) $ (.04)
========== ==========
Weighted average shares outstanding 3,822,149 3,540,482
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
- 4 -
<PAGE>
ECHO SPRINGS WATER CO., INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30,
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1998 1997
---- ----
Revenues:
Gross sales $ 924,812 $ 952,231
Credits and allowances (13,133) (66,177)
Freight out (14,872) (19,788)
Other income 1,988 3,696
---------- ----------
898,795 869,962
---------- ----------
Costs and expenses:
Cost of sales 321,875 369,362
Selling, general and
administrative 847,622 776,287
Interest 43,092 26,375
Amortization of other assets 2,438 2,438
Other expenses (income) - net 40
Loss (gain) on disposal of assets (1,441) (2,513)
---------- ----------
Total costs and expenses 1,213,626 1,171,949
---------- ----------
Net loss $ (314,831) $ (301,987)
========== ==========
Net loss per share $ (.08) $ (.09)
========== ==========
Weighted average shares outstanding 3,822,149 3,223,816
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
- 5 -
<PAGE>
ECHO SPRINGS WATER CO., INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED APRIL 30,
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1998 1997
---- ----
Operating activities:
Net loss $(314,831) $(301,987)
Adjustments to reconcile net loss to
net cash used by
operating activities -
Depreciation and amortization 72,609 82,588
Gain on disposal of assets (1,441) (2,513)
Provision for doubtful accounts (2,000) 1,000
Changes in assets and liabilities -
Accounts receivable (33,101) 5,707
Inventories (10,964) 2,797
Prepaid expenses (56,910) (28,596)
Other assets (983) (28,752)
Accounts payable and accrued
expenses (6,410) 10,019
Customer deposits 10,600 68,200
Unearned revenues (1,230) (1,380)
-------- --------
Net cash used by
operating activities (344,661) (192,917)
-------- --------
Investing activities:
Capital expenditures (70,687) (125,559)
Collections on notes receivable 11,250 12,810
Proceeds from disposal of assets 1,441 11,975
-------- --------
Net cash used by
investing activities (57,996) (100,774)
-------- --------
Financing activities:
Proceeds from issuance of
common stock 584,000
Increase in installment debt 540,000 110,000
Repayment of installment debt (83,000) (382,153)
Deferred public offering costs (1,454) (11,244)
-------- --------
Net cash provided by
financing activities 455,546 300,603
-------- --------
Net increase in cash 52,889 6,912
Cash - beginning 170,288 44,631
-------- --------
CASH - ENDING $ 223,177 $ 51,543
======== ========
SUPPLEMENTAL INFORMATION:
Interest paid $ 14,274 $ 33,269
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
- 6 -
<PAGE>
ECHO SPRINGS WATER CO., INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BUSINESS AND 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, 1997 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. 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 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 re corded
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 Common Share
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. Loss per share represents both the basis and
diluted amounts, since all conversion and exercise of options
and warrants would be antidilutive and therefore not taken
into consideration.
- 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, 1997 and April
30, 1998 consist of the following:
April October
30, 1998 31, 1997
Bottles $ 5,728 $
Product held for sale 15,619 16,585
Supplies 15,370 9,168
------ ------
$36,717 $25,753
====== ======
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 ranging from
5 - 40 years and consist of the following:
April October
30, 1998 31, 1997
Land $ 150,000 $ 150,000
Buildings and improvements 364,541 362,298
Water coolers, bottles and
brewers 805,096 754,084
Machinery and equipment 496,445 397,345
Vehicles 10,500 10,500
Furniture and fixtures 89,446 77,874
-------- ---------
1,916,028 1,752,101
Less: accumulated depreciation
and amortization 635,243 565,072
--------- ---------
$1,280,785 $1,187,029
========= =========
- 8 -
<PAGE>
ECHO SPRINGS WATER CO., INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
NOTE 4 - OTHER ASSETS
------------
Other assets at October 31, 1997 and April 30, 1998 are
comprised of the following:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
April October
30, 1998 31, 1997
Water rights $205,000 $205,000
Accumulated amortization 40,843 38,405
------- -------
Net water rights 164,157 166,595
Deposits 63,242 155,499
Deferred public offering costs 33,330 31,876
------- -------
$260,729 $353,970
======= =======
</TABLE>
NOTE 5 - INDEBTEDNESS
------------
The Company is currently in default on principal and inter est
payments on its debentures and $75,000 of its debt. Although
the debt is in default and therefore currently due, the
debtholders have informally agreed to wait for payment until
completion of a proposed public offering. (Note 7).
NOTE 6 - INCOME TAXES
------------
The Company files a consolidated federal income tax return
with its subsidiaries. At October 31, 1997, the estimated
maximum amount of net operating loss carryforward available to
reduce future taxable income is approximately $8,925,000,
expiring from 2004 through 2012. Deferred tax benefits from
the use of net operating loss carryforwards of approximately
$3,000,000 are offset by a corresponding amount of valuation
allowance since it is more likely than not that all or some
portion of the deferred tax asset will not be realized.
- 9 -
<PAGE>
ECHO SPRINGS WATER CO., INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
NOTE 7 - GOING CONCERN
-------------
The Company sustained losses of $739,620 for the fiscal year
ended October 31, 1997 and $314,831 for the six months ended
April 30, 1998. The Company had deficit net worths of $210,406
at October 31, 1997 and $525,237 at April 30, 1998. In
addition, the Company was in default on principal and interest
payments on a portion of its debt. (Note 5). These facts raise
substantial 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 portion of the proceeds of the proposed
public offering to seek and consummate acquisitions of
companies in the bottled water and allied products busi ness.
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 accompany ing consolidated
financial statements in favor of the liqui dation 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.
- 10 -
<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, 1998 COMPARED WITH THE
SIX MONTHS ENDED APRIL 30, 1997
Gross sales decreased $27,419 (2.9%) to $924,812 for the six months ended April
30, 1998 ("1998") from $952,231 for the six months ended April 30, 1997
("1997"). Five-gallon sales to Aramark Corporation increased by approximately
$139,000, due to increased sales of approx imately $33,000 to their continuing
New York and New Jersey operations plus the Company's expansion into this
customer's Pennsylvania loca tions, which accounted for the remaining
approximately $106,000. However, five-gallon and allied product sales to and
rental income from the Company's regular customer base fell by approximately
$49,000, $18,000 and $17,000, respectively, largely due to a deliber ate
discontinuance of service to marginal customers and only a nominal sales and
marketing effort 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. Further, low-margin five-gallon sales to distributors fell by
approximately $22,000, due largely to the loss of two distributors as a result
of price competi tion. Sales of one gallons and one quarts, both low-margin
products, and net freight-out decreased by approximately $55,000, $5,000 and
$3,000, respectively, largely due to the loss of one of the company's
distributors which completed its own bottling facility in July, 1997 and the two
distributors noted above as well as a discontinuance of service to one
supermarket customer. Credits and allowances decreased approximately $53,000 as
the one-year Aramark Pennsylvania incentive discount ended on March 8, 1998.
Cost of sales for 1998 was $321,875 (34.8% of gross sales) as compared to
$369,362 (38.8% of gross sales) for 1997. This 4.0 percentage point improvement
is comprised of a 5.1 percentage point gain due primarily to the above-noted
reductions in the sales of low-margin product lines, offset by a 1.1 percentage
point increase caused by the above-noted decrease in the equipment rental
portion of gross sales.
Selling, general and administrative expenses were $847,622 in 1998 as compared
to $776,287 in 1997. Delivery and warehouse costs increased approximately
$4,000, primarily as a result of the rent expense associated with opening the
Pennsylvania operations. Advertising and promotion costs increased approximately
$26,000 and related primarily to the Company's Aramark business. The addition of
one outside salesman added a further approximately $13,000 while third-party
commissions, telephone costs and bad debt expense fell approximately $3,000,
$4,000 and $3,000, respectively. Professional fees increased approximately
$48,000 and clerical costs rose by approximately $11,000. Travel and
entertainment expenses were reduced by approxi mately $21,000.
Interest expense increased from $26,375 in 1997 to $43,092 in 1998 as a result
of increased debt. Amortization of other assets of $2,438 in 1998 and 1997
related to the amortization of water rights.
The net loss for 1998 increased by $12,844 from $301,987 in 1997 to $314,831 in
1998.
- 11 -
<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, 1998 COMPARED WITH THE
THREE MONTHS ENDED APRIL 30, 1997
Gross sales decreased $24,941 (4.9%) to $482,814 for the three months ended
April 30, 1998 ("1998") from $507,755 for the three months ended April 30, 1997
("1997"). Five-gallon sales to Aramark Corporation increased by approximately
$58,000, due to increased sales of approxi mately $21,000 to their continuing
New York and New Jersey operations plus the Company's expansion into this
customer's Pennsylvania loca tions, which accounted for the remaining
approximately $37,000. However, five-gallon and allied product sales to and
rental income from the Company's regular customer base fell by approximately
$19,000, $9,000 and $8,000, respectively, largely due to a deliberate
discontinuance of service to marginal customers and only a nominal sales and
marketing effort 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. Further, low-margin five-gallon sales to distributors fell by
approximately $20,000, due largely to the loss of two distributors as a result
of price competi tion. Sales of one gallons and one quarts, both low-margin
products, and net freight-out decreased by approximately $24,000, $3,000 and
$2,000, respectively, largely due to the loss of one of the Company's
distributors which completed its own bottling facility in July, 1997 and the two
distributors noted above. Credits and allowances de creased approximately
$59,000 as the one-year Aramark Pennsylvania incentive discount ended on March
8, 1998.
Cost of sales for 1998 was $154,557 (32.0% of gross sales) as compared to
$180,568 (35.6% of gross sales) for 1997. This 3.6 percentage point improvement
is comprised of a 4.5 percentage point gain due primarily to the above-noted
reductions in the sales of low-margin product lines, offset by a 0.9 percentage
point increase caused by the above-noted decrease in the equipment rental
portion of gross sales.
Selling, general and administrative expenses were $443,254 in 1998 as compared
to $402,453 in 1997. Delivery and warehouse costs decreased approximately
$15,000 as a result of reduced labor, fuel and repair costs of approximately
$7,000, $2,000 and $6,000, respectively. Advertising and promotion costs
increased approximately $9,000 and related primarily to the Company's Aramark
business. The addition of one outside salesman added a further approximately
$6,000 while third-party commissions and telephone costs fell approximately
$1,000 and $2,000, respectively. Professional fees increased approximately
$50,000 and clerical costs rose by approximately $2,000. Travel and
entertainment expenses were reduced by approximately $8,000.
Interest expense increased from $8,901 in 1997 to $24,303 in 1998 as a result of
increased debt. Amortization of other assets of $1,219 in 1998 and 1997 related
to the amortization of water rights.
The net loss for 1998 decreased by $5,281 from $154,266 in 1997 to $148,985 in
1998.
- 12 -
<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, 1998 and 1997, the Company had negative
cash flows from operating activities of $344,661 and $192,917, respectively.
Investing activities used cash of $57,996 in 1998 and $100,774 in 1997,
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 installment debt and common stock.
At April 30, 1998, the Company had a working capital deficiency of $2,184,565.
Short-term credit sources are limited to trade credit on purchases and services.
The report issued by the Company's accoun tants that accompanies the Company's
Consolidated Financial Statements for the year ended October 31, 1997 states
that there is a substantial 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. While the
doubling of its asset and equity listing requirements during 1997 by the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
caused a delay in the Company's plans, such offering is expected to take place
during 1998. 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 benefi cial 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.
ECHO SPRINGS WATER CO., INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
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.
- 13 -
<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 for the year ended October 31, 1997.
ITEM 5. Other Events
None
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits - Financial Data Schedule
b. Reports on Form 8-K - None
- 14 -
<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 , 1998
- 15 -
<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: Michael S. Rakusin
President
Dated: June 8, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED APRIL 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> OCT-31-1997
<PERIOD-END> APR-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 297,776
<ALLOWANCES> 7,000
<INVENTORY> 36,717
<CURRENT-ASSETS> 635,243
<PP&E> 1,916,028
<DEPRECIATION> 635,243
<TOTAL-ASSETS> 2,322,560
<CURRENT-LIABILITIES> 2,847,797
<BONDS> 0
0
0
<COMMON> 382
<OTHER-SE> 525,619
<TOTAL-LIABILITY-AND-EQUITY> 2,322,560
<SALES> 896,807
<TOTAL-REVENUES> 898,795
<CGS> 321,875
<TOTAL-COSTS> 321,875
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 43,092
<INCOME-PRETAX> 314,831
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 314,831
<EPS-PRIMARY> .08
<EPS-DILUTED> 0
</TABLE>
