##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 
 (Mark one)
 þ
    
    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2011
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 000-18235
 
 ELDORADO ARTESIAN SPRINGS, INC.
  
 Colorado
    
    84-0907853(State or Other Jurisdiction of
    
    (IRS EmployerIncorporation or Organization)
    
    Identification No.)1783 Dogwood StreetLouisville, Colorado
    
    80027(Address of Principal Executive Offices)
    
    (Zip Code)
 Registrants Telephone Number, Including Area Code: (303) 499-1316
  
 Yes o No þ
 Yes o No þ
 Yes þ No o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



ELDORADO ARTESIAN SPRINGS, INC.
 TABLE OF CONTENTS
 PART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    7Item 1B. Unresolved Staff Comments
    
    
    7Item 2. Properties
    
    
    7Item 3. Legal Proceedings
    
    
    7Item 4. [Removed and Reserved]
    
    
    7PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuers Purchases of Equity Securities
    
    
    8Item 6. Selected Financial Data
    
    
    9Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 8. Financial Statements and Supplementary Data
    
    
    15Item 9. Change In and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    15Item 9A. Controls and Procedures
    
    
    15Item 9B. Other Information
    
    
    17PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    18Item 11. Executive Compensation
    
    
    18Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    18Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    18Item 14. Principal Accountant Fees and Services
    
    
    18PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    19Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I
 Introductory Note. Cautionary Statement Regarding Forward-Looking Information and Risk
Factors. Certain statements made in this Annual Report on Form 10-K are forward-looking
statements (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding
the plans and objectives of management for future operations. Such statements involve known and
unknown risks, uncertainties and other factors that may cause actual results, performance or
achievements of Eldorado to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. The forward-looking
statements included herein are based on current expectations that involve numerous risks and
uncertainties. Eldorados plans and objectives are based, in part, on assumptions involving the
continued expansion of business. Assumptions relating to the foregoing involve judgments with
respect to, among other things, future economic, competitive and market conditions, availability of
debt and equity financing, ability to purchase additional water rights, interest rate fluctuations,
labor and marketing costs, operating costs, packaging costs, competition, legal claims and future
business decisions, all of which are difficult or impossible to predict accurately and many of
which are beyond the control of Eldorado. Although Eldorado believes that its assumptions
underlying the forward-looking statements are reasonable, any of the assumptions could prove
inaccurate. In light of the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded as a representation by
Eldorado or any other person that the objectives and plans of Eldorado will be achieved. We
undertake no obligation to revise or update publicly any forward-looking statements for any reason.
 All references in this report to Company, we, us, our, or Eldorado refer to Eldorado
Artesian Springs, Inc.
 
 ITEM 1.
    
    BUSINESS.
  Industry Background
      3




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Company Background
      Organic Vitamin Charged . Organic Vitamin Charged
 Water Source and Bottling
    4




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##### Table of Contents



Products
  Sales and Distribution
  Home/Commercial Delivery Business
  PET Packaging/Retail Distribution Business
   5




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Marketing
     Supplies
  Seasonality
  Competition
  Government Regulation
   6




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##### Table of Contents



Employees
  
 ITEM 1A.
    
    RISK FACTORS.
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS.
  
 ITEM 2.
    
    PROPERTIES.
  Eldorado Springs, Colorado
  Louisville, Colorado
  
 ITEM 3.
    
    LEGAL PROCEEDINGS.
  
 ITEM 4.
    
    [REMOVED AND RESERVED]
  7




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
 Market Price of Common Stock
  Fiscal Year 2011
    
    High
    
    
    LowFourth Quarter through March 31, 2011
    
    $
    0.73
    
    
    $
    0.35Third Quarter through December 31, 2010
    
    $
    0.45
    
    
    $
    0.35Second Quarter through September 30, 2010
    
    $
    0.45
    
    
    $
    0.35First Quarter through June 30, 2010
    
    $
    0.40
    
    
    $
    0.39Fiscal Year 2010
    
    High
    
    
    LowFourth Quarter through March 31, 2010
    
    $
    1.50
    
    
    $
    0.35Third Quarter through December 31, 2009
    
    $
    0.59
    
    
    $
    0.32Second Quarter through September 30, 2009
    
    $
    1.10
    
    
    $
    0.30First Quarter through June 30, 2009
    
    $
    1.40
    
    
    $
    0.25
  Holders
  Dividends
  Securities Authorized for Issuance Under Equity Compensation Plans
  Recent Sales of Unregistered Securities
   8




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Issuer Purchases of Equity Securities
  ISSUER PURCHASES OF EQUITY SECURITIES
 Maximum Number (orTotal Number of Shares
    
    
    Approximate Dollar Value)Purchased as Part of
    
    
    of Shares That May Yet BeTotal Number of Shares
    
    
    Average Price Paid per
    
    
    Publicly Announced Plans
    
    
    Purchased Under the PlansPeriod
    
    Purchased
    
    
    Share
    
    
    or Programs
    
    
    or ProgramsJanuary 1-31, 2011
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    February 1-28, 2011
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    March 1-31, 2011
    
    
    500,000
    (1)
    
    $
    0.35
    (2)
    
    
    
    
    
    
    Total
    
    
    500,000
    (1)
    
    $
    0.35
    (2)
    
    
    
    
    
    
    
 (1)
    
    On March 31, 2011, Mr. Larson, our President, forfeited and transferred 500,000 shares
of common stock to the Company pursuant to a pledge agreement in exchange for the cancellation
of a note that was in default. As of March 31, 2011, the total amount owed on the note was
$398,076 and the shares of common stock forfeited and transferred to us had an aggregate value
of $175,000 based on a price of $0.35 per share. As a result, the difference between the
outstanding amount owed at default and the value of the shares received in exchange for the
cancellation of the note is $223,076, which is a personal benefit to Mr. Larson and will be
reported as compensation to Mr. Larson in the summary compensation table to be included in our
proxy statement for our 2011 annual meeting of shareholders and which is incorporated by
reference into this Form 10-K.(2)
    
    The average price per share is based upon the closing price of the common stock on
March 31, 2011. 
 ITEM 6.
    
    SELECTED FINANCIAL DATA
  
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  
    
    Forward Looking Statements
 
    
    Business Overview
 
    
    Results of Operations  Year Ended March 31, 2011 Compared to Year Ended March 31, 2010
 
    
    Liquidity and Capital Resources
 
    
    Critical Accounting Issues
 Forward Looking Statements
    9




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Business Overview
   Results of Operations
 Performance Overview  Recent Trends
     Year Ended March 31, 2011 Compared to Year Ended March 31, 2010
 Sales
    10




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Gross Profit/Cost of Goods Sold
   Operating Expenses
   11




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Interest, Taxes, Other Income and Other Expenses
      Liquidity and Capital Resources
     12




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Contractual Obligations and Commitments
  Long-Term DebtFiscal Year End
    
    and  Capital Leases
    
    
    Operating Lease
    
    
    Total2012
    
    $
    4,291,971
    
    
    $
    384,237
    
    
    $
    4,676,2082013
    
    
    26,321
    
    
    
    271,304
    
    
    
    297,6252014
    
    
    16,530
    
    
    
    162,385
    
    
    
    178,9152015
    
    
    
    
    
    
    80,835
    
    
    
    80,835Thereafter
    
    
    
    
    
    
    18,252
    
    
    
    18,252Total
    
    $
    4,334,822
    
    
    $
    917,013
    
    
    $
    5,251,835
  13




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##### Table of Contents



Impact of Inflation
  Recently Issued Accounting Pronouncements
    Subsequent Events
  Intangibles  Goodwill and Other (Topic 350): When
to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative
Carrying Amounts
  14




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##### Table of Contents



ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
   15




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Table of Contents
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-1Financial StatementsBalance Sheets
    
    
    F-2Statements of Operations
    
    
    F-3Statement of Changes in Stockholders Equity
    
    
    F-4Statements of Cash Flows
    
    
    F-5Notes to Financial Statements
    
    
    F-6
  16




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
  F-1




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##### Table of Contents



Balance Sheets
 March 31, 2011
    
    
    March 31, 2010AssetsCurrent assetsCash
    
    $
    79,202
    
    
    $
    65,304Accounts receivable  trade, net
    
    
    1,048,546
    
    
    
    853,914Inventories
    
    
    368,197
    
    
    
    391,410Prepaid expenses and other
    
    
    57,018
    
    
    
    136,396Deferred tax asset
    
    
    
    
    
    
    29,648Total current assets
    
    
    1,552,963
    
    
    
    1,476,672Non-current assetsProperty, plant and equipment, net
    
    
    3,994,823
    
    
    
    4,149,154Notes receivable  related party
    
    
    
    
    
    
    369,397Investments
    
    
    361,196
    
    
    
    361,196Water rights, net
    
    
    71,675
    
    
    
    71,675Deposits
    
    
    148,200
    
    
    
    118,020Deferred tax asset  long term
    
    
    
    
    
    
    101,466Other, net
    
    
    51,354
    
    
    
    34,346Total non-current assets
    
    
    4,627,248
    
    
    
    5,205,254Total assets
    
    $
    6,180,211
    
    
    $
    6,681,926Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    503,166
    
    
    $
    570,584Accrued expenses
    
    
    335,580
    
    
    
    283,145Customer deposits
    
    
    99,107
    
    
    
    73,423Line of credit
    
    
    370,051
    
    
    
    Current portion of capital lease obligations
    
    
    42,655
    
    
    
    121,634Current portion of long-term debt
    
    
    4,249,316
    
    
    
    68,842Total current liabilities
    
    
    5,599,875
    
    
    
    1,117,628Non-current liabilitiesCapital lease obligations, less current portion
    
    
    42,851
    
    
    
    17,910Long-term debt, less current portion
    
    
    
    
    
    
    4,256,953Deferred gain on the sale of real estate
    
    
    
    
    
    
    178,822Total non-current liabilities
    
    
    42,851
    
    
    
    4,453,685Total liabilities
    
    
    5,642,726
    
    
    
    5,571,313Commitments and contingencyStockholders equityPreferred stock, par value $.001 per share;
10,000,000 shares authorized; 0 shares issued
and outstanding
    
    
    
    
    
    
    Common stock, par value $.001 per share;
50,000,000 shares authorized; 6,036,091 and
6,536,091 (2011 and 2010) issued and
outstanding
    
    
    6,036
    
    
    
    6,536Additional paid-in capital
    
    
    1,653,496
    
    
    
    1,768,598Accumulated deficit
    
    
    (1,122,047
    )
    
    
    (664,521
    )Total stockholders equity
    
    
    537,485
    
    
    
    1,110,613Total liabilities and stockholders equity
    
    $
    6,180,211
    
    
    $
    6,681,926
   F-2




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Statements of Operations
 For the Years EndedMarch 31,2011
    
    
    2010RevenuesWater and related
    
    $
    8,715,073
    
    
    $
    8,380,923Resort operations
    
    
    138,558
    
    
    
    95,852Total revenues
    
    
    8,853,631
    
    
    
    8,476,775Cost of goods sold
    
    
    2,363,365
    
    
    
    2,129,757Gross profit
    
    
    6,490,266
    
    
    
    6,347,018Operating expensesSalaries and related expenses
    
    
    3,439,184
    
    
    
    3,226,075Administrative and general
    
    
    1,755,868
    
    
    
    1,647,194Delivery
    
    
    778,782
    
    
    
    746,670Advertising and promotions
    
    
    236,860
    
    
    
    328,731Depreciation and amortization
    
    
    470,367
    
    
    
    497,947Total operating expenses
    
    
    6,681,061
    
    
    
    6,446,617Loss from operations
    
    
    (190,795
    )
    
    
    (99,599
    )Other income (expense)Gain on the sale of property
    
    
    178,822
    
    
    
    Interest income
    
    
    33,054
    
    
    
    26,745Interest expense
    
    
    (347,493
    )
    
    
    (361,467
    )Total other income (expense)
    
    
    (135,617
    )
    
    
    (334,722
    )Loss before income taxes
    
    
    (326,412
    )
    
    
    (434,321
    )Income tax (expense) benefitDeferred
    
    
    (131,114
    )
    
    
    73,400Total income tax (expense) benefit
    
    
    (131,114
    )
    
    
    73,400Net loss available to common shareholders
    
    $
    (457,526
    )
    
    $
    (360,921
    )Basic and diluted weighted average common shares outstanding
    
    
    6,036,091
    
    
    
    6,536,091Basic and diluted loss per common share
    
    $
    (0.08
    )
    
    $
    (0.06
    )
   F-3




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##### Table of Contents



Statement of Changes in Stockholders Equity
 For the Years Ended March 31, 2011 and 2010
 TotalCommon Stock
    
    
    Additional Paid-
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Amount
    
    
    in Capital
    
    
    Deficit
    
    
    EquityBalance  March 31, 2009
    
    
    6,536,091
    
    
    $
    6,536
    
    
    $
    1,736,438
    
    
    $
    (303,600
    )
    
    $
    1,439,374Stock options issued to employees
    
    
    
    
    
    
    
    
    
    
    32,160
    
    
    
    
    
    
    
    32,160Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (360,921
    )
    
    
    (360,921
    )Balance  March 31, 2010
    
    
    6,536,091
    
    
    $
    6,536
    
    
    $
    1,768,598
    
    
    $
    (664,521
    )
    
    $
    1,110,613Stock options issued to employees
    
    
    
    
    
    
    
    
    
    
    59,398
    
    
    
    
    
    
    
    59,398Stock transferred for note payment
    
    
    (500,000
    )
    
    
    (500
    )
    
    
    (174,500
    )
    
    
    
    
    
    
    (175,000
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (457,526
    )
    
    
    (457,526
    )Balance  March 31, 2011
    
    
    6,036,091
    
    
    $
    6,036
    
    
    $
    1,653,496
    
    
    $
    (1,122,047
    )
    
    $
    537,485
   F-4




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##### Table of Contents



Statements of Cash Flows
 For the Years EndedMarch 31,2011
    
    
    2010Cash flows from operating activitiesNet loss
    
    $
    (457,526
    )
    
    $
    (360,921
    )Adjustments to reconcile net loss to net cash provided by operating activitiesDepreciation and amortization
    
    
    470,367
    
    
    
    497,947Deferred income taxes
    
    
    131,114
    
    
    
    (73,400
    )Stock based compensation
    
    
    59,398
    
    
    
    32,160Accrued interest on related party note receivable
    
    
    (28,679
    )
    
    
    (26,610
    )Change in deferred gain on the sale of real estate
    
    
    (178,822
    )
    
    
    Compensation on related party note receivable write-off
    
    
    223,076
    
    
    
    Changes in assets and liabilitiesAccounts receivable
    
    
    (194,632
    )
    
    
    113,594Inventories
    
    
    23,213
    
    
    
    1,910Prepaid expenses and other
    
    
    62,370
    
    
    
    (3,478
    )Deposits
    
    
    (30,180
    )
    
    
    (5,200
    )Accounts payable
    
    
    (67,418
    )
    
    
    149,735Accrued expenses
    
    
    52,435
    
    
    
    (395
    )Income taxes
    
    
    
    
    
    
    66,405Customer deposits
    
    
    25,684
    
    
    
    6,946Net cash provided by operating activities
    
    
    90,400
    
    
    
    398,693Cash flows from investing activitiesPurchases of property and equipment
    
    
    (240,917
    )
    
    
    (196,978
    )Net cash used in investing activities
    
    
    (240,917
    )
    
    
    (196,978
    )Cash flows from financing activitiesNet proceeds from line of credit
    
    
    370,051
    
    
    
    Payments on long-term debt and capital leases
    
    
    (205,636
    )
    
    
    (483,559
    )Net cash provided by (used in) financing activities
    
    
    164,415
    
    
    
    (483,559
    )Net increase (decrease) in cash
    
    
    13,898
    
    
    
    (281,844
    )Cash  beginning of year
    
    
    65,304
    
    
    
    347,148Cash  end of year
    
    $
    79,202
    
    
    $
    65,304
        F-5




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##### Table of Contents



Note 1  Description of Business and Summary of Significant Accounting Policies
  Concentrations of Credit Risk
  Cash and Cash Equivalents
  Inventories
  Deposits
  Property, Plant, and Equipment
  Investments
  Water Rights
  Other Assets
   F-6




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##### Table of Contents



Accounts Receivable
  Long-Lived Assets
  Customer Deposits
  Stock Based Compensation
  Basic and Diluted Loss Per Common Share
 
  Fair Value of Financial Instruments
   Revenue Recognition
   F-7




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##### Table of Contents



Shipping Costs
  Promotional Expense  Consideration to Vendors
  Advertising Costs
  Use of Estimates
  Recently Issued Accounting Pronouncements
    Subsequent Events
   F-8




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Intangibles  Goodwill and Other (Topic 350): When
to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative
Carrying Amounts
 Note 2  Going Concern
  Note 3  Balance Sheet Disclosures
  March 31, 2011
    
    
    March 31, 2010Accounts receivableAccounts receivable
    
    $
    1,128,546
    
    
    $
    933,914Allowance for doubtful accounts
    
    
    (80,000
    )
    
    
    (80,000
    )$
    1,048,546
    
    
    $
    853,914
  March 31, 2011
    
    
    March 31, 2010Property, plant and equipmentLand
    
    $
    1,000,263
    
    
    $
    1,000,263Buildings and improvements
    
    
    4,401,998
    
    
    
    4,294,275Machinery and equipment
    
    
    5,294,411
    
    
    
    5,088,521Office furniture and fixtures
    
    
    329,391
    
    
    
    329,39111,026,063
    
    
    
    10,712,450Less accumulated depreciation and amortization
    
    
    (7,031,240
    )
    
    
    (6,563,296
    )$
    3,994,823
    
    
    $
    4,149,154
  F-9




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##### Table of Contents



March 31, 2011
    
    
    March 31, 2010Accrued expensesAccrued payroll and taxes
    
    $
    102,943
    
    
    $
    90,313Accrued property taxes
    
    
    206,331
    
    
    
    168,754Accrued sales taxes
    
    
    26,306
    
    
    
    24,078$
    335,580
    
    
    $
    283,145
 Note 4  Deferred Gain on the Sale of Real Estate
    Note 5  Long-Term Debt
  March 31, 2011
    
    
    March 31, 2010Note payable to a bank with
interest fixed at 7.5% until
October 2012, at which time the
balance of the note is due. The
note calls for monthly
principal and interest payments
of $22,385 with unpaid
principal and interest due
October 2012. The note is
cross-collateralized by
substantially all assets of the
Company and guaranteed by three
stockholders and officers of
the Company. The note is
subject to certain restrictive
covenants, which have a cross
default provision with the note
due in October 2012. The bank
has waived the covenants as of
March 31, 2011. As projected
future covenant violations have
not been waived and the Company
projects that they will not be
able to pay the remaining
balance of the note due in
February 2012, the balance of
the existing note has been
classified as current debt.
    
    $
    2,842,814
    
    
    $
    2,893,080
  F-10




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##### Table of Contents



March 31, 2011
    
    
    March 31, 2010Note payable to a bank with
interest fixed at 7.75% until
February 2012, at which time
the balance of the note is due.
The note calls for monthly
principal and interest payments
of $11,439 with all unpaid
principal and interest due
February 2012. The note is
cross-collateralized by all
rents and property as outlined
in the Deed of Trust and
guaranteed by three
stockholders and officers of
the Company. The note is
subject to certain restrictive
covenants, which have a cross
default provision with the note
due in October 2012. The bank
has waived the covenant
violations as of March 31,
2011.
    
    
    1,406,502
    
    
    
    1,432,7154,249,316
    
    
    
    4,325,795Less current portion
    
    
    (4,249,316
    )
    
    
    (68,842
    )$
    
    
    
    $
    4,256,953
 Note 6  Line of Credit
  Note 7  Capital Leases
   March 31,2011Cost
    
    $
    351,877Less accumulated amortization
    
    
    (227,691
    )$
    124,186
  Year Ending March 31,2012
    
    $
    53,2672013
    
    
    29,2322014
    
    
    17,052Total minimum lease payments
    
    
    99,551Amount representing interest
    
    
    (14,045
    )Present value of net minimum lease payments
    
    
    85,506Less current portion
    
    
    (42,655
    )Long-term capital lease obligation
    
    $
    42,851
  F-11




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##### Table of Contents



Note 8  Income Taxes
   March 31, 2011
    
    
    March 31, 2010Current deferred tax asset
    
    $
    
    
    
    $
    29,648Current deferred tax liability
    
    
    
    
    
    
    Net current deferred tax asset
    
    $
    
    
    
    $
    29,648Long-term deferred tax asset, net of valuation allowance
    
    $
    
    
    
    $
    101,466Long-term deferred tax liability
    
    
    
    
    
    
    Net long-term deferred tax asset, net of valuation allowance
    
    $
    
    
    
    $
    101,466
  Allowance for doubtful accounts
    
    $
    29,648
    
    
    $
    29,648Property and equipment
    
    
    630
    
    
    
    (58,651
    )Deductible stock compensation
    
    
    9,914
    
    
    
    9,914Net operating loss and credits
    
    
    212,078
    
    
    
    216,319Deferred gain and other
    
    
    
    
    
    
    3,884Valuation allowance
    
    
    (252,270
    )
    
    
    (70,000
    )$
    
    
    
    $
    131,114
  For the Years EndedMarch 31,2011
    
    
    2010Federal income taxes computed at statutory rate
    
    $
    (79,633
    )
    
    $
    (147,669
    )State income taxes
    
    
    (4,335
    )
    
    
    (11,568
    )Stock based compensation
    
    
    20,195
    
    
    
    10,934Other
    
    
    11,280
    
    
    
    4,903Valuation allowance
    
    
    183,607
    
    
    
    70,000$
    131,114
    
    
    $
    (73,400
    )
  F-12




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##### Table of Contents



Note 9  Commitments
 Operating Leases
   Year Ending March 31,2012
    
    $
    363,2372013
    
    
    271,3042014
    
    
    162,3852015
    
    
    80,835Thereafter
    
    
    18,252$
    896,013
 Renewable Energy Service Agreement
  Note 10  Contingency
     F-13




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##### Table of Contents



Note 11  Stockholders Equity
 Stock Options
   WeightedAverageStock
    
    
    ExerciseOptions
    
    
    Price ($)Outstanding  March 31, 2009
    
    
    270,000
    
    
    
    1.48Granted
    
    
    
    
    
    
    Forfeited/canceled
    
    
    (30,000
    )
    
    
    1.50Exercised
    
    
    
    
    
    
    Outstanding  March 31, 2010
    
    
    240,000
    
    
    
    1.47Granted
    
    
    
    
    
    
    Forfeited/canceled
    
    
    (14,000
    )
    
    
    1.48Exercised
    
    
    
    
    
    
    Outstanding  March 31, 2011
    
    
    226,000
    
    
    $
    1.47
  Options Outstanding
    
    
    Options ExercisableExercise Prices ($)
    
    Number
    
    
    Price*
    
    
    Life*
    
    
    Number
    
    
    Price*0.875
    
    
    21,000
    
    
    
    0.875
    
    
    
    3.44
    
    
    
    21,000
    
    
    
    0.8751.00
    
    
    17,000
    
    
    
    1.00
    
    
    
    2.88
    
    
    
    17,000
    
    
    
    1.001.43
    
    
    100,000
    
    
    
    1.43
    
    
    
    1.34
    
    
    
    100,000
    
    
    
    1.431.65
    
    
    18,000
    
    
    
    1.65
    
    
    
    5.59
    
    
    
    18,000
    
    
    
    1.651.75
    
    
    20,000
    
    
    
    1.75
    
    
    
    6.59
    
    
    
    20,000
    
    
    
    1.751.80
    
    
    50,000
    
    
    
    1.80
    
    
    
    7.55
    
    
    
    25,000
    
    
    
    1.80Total  March 31, 2011
    
    
    226,000
    
    
    $
    1.47
    
    
    
    3.31
    
    
    
    201,000
    
    
    $
    1.43
 *
    
    Price and Life reflect the weighted average exercise price and weighted average remaining
contractual life, in years, respectively.   F-14




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##### Table of Contents



Warrants
  Note 12  Employee Benefit Plan
  
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
 Conclusion Regarding the Effectiveness of Disclosure Controls And Procedures
   Managements Annual Report on Internal Control Over Financial Reporting
   F-15




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##### Table of Contents



Remediation of Material Weaknesses in Internal Control Over Financial Reporting
  Changes in Internal Control Over Financial Reporting
  
 ITEM 9B.
    
    OTHER INFORMATION
   17




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##### Table of Contents



PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
   
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
   18




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##### Table of Contents



PART IV
 
 ITEM 15.
    
    EXHIBITS
 (a) Documents Filed as Part of this Report
 (1)
    
    Financial Statements.The financial statements of Eldorado Artesian
Springs, Inc., which are listed on the Table of Contents to Financial Statements
appearing on page 16 of this Annual Report.
 (2)
    
    Financial Statement Schedules.All schedules for which provision is made
in the applicable accounting regulations of the SEC are omitted because of the
absence of conditions under which they are required or because the required
information is included in the financial statements and related notes thereto.
 (3)
    
    Exhibits.The following is a list of exhibits filed as part of this
Annual Report on Form 10-K.
 ExhibitNo.
    
    Description
    
    Location3.1
    
    
    Articles of Incorporation and Bylaws
    
    Incorporated by
reference to
Exhibit 3 to the
Registration
Statement (No.
33-6738-D)3.2
    
    
    Amended Articles of Incorporation
    
    Incorporated by
reference to
Exhibit 3.1 to
Eldorados Form
10-KSB for the
fiscal year ended
March 31, 19983.3
    
    
    Amended and Restated Articles of Incorporation
    
    Incorporated by reference to
Exhibit 3.1 to
Eldorados Form
SB-2/A
(Registration
Statement No.
333-68553) filed
with the Securities
and Exchange
Commission on
November 21, 20003.4
    
    
    Amended and Restated Bylaws
    
    Incorporated by
reference to
Exhibit 3.2 to
Eldorados Form
SB-2/A
(Registration
Statement No.
333-68553) filed
with the Securities
and Exchange
Commission on July
2, 199910.1
    *
    
    1997 Stock Option Plan
    
    Incorporated by
reference to
Exhibit 10.1 to
Registration
Statement No.
333-6855310.2
    
    
    Promissory Note with First National Bank of
Boulder County dated June 27, 1997
    
    Incorporated by
reference to
Exhibit 10.2 to
Registration
Statement No.
333-6855310.3
    
    
    Deed of Trust dated June 27, 1997
    
    Incorporated by
reference to
Exhibit 10.3 to
Registration
Statement No.
333-6855310.4
    
    
    Small Business Administration Note  U.S. Bank,
August 21, 2001
    
    Incorporated by
reference to
Exhibit 10.4 to
Eldorados Form
10-KSB for the
fiscal year ended
March 31, 200310.5
    
    
    U.S. Bank, August 21, 2001
Deed of Trust
    
    Incorporated by
reference to
Exhibit 10.5 to
Eldorados Form
10-KSB for the
fiscal year ended
March 31, 200310.6
    
    
    U.S. Small Business Administration
Note  Bank of West, August 21, 2001
    
    Incorporated by
reference to
Exhibit 10.6 to
Eldorados Form
10-KSB for the
fiscal year ended
March 31, 2003
  19




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##### Table of Contents



ExhibitNo.
    
    Description
    
    Location10.7
    
    
    Bank of West, August 21, 2001, Deed of Trust
    
    Incorporated by
reference to
Exhibit 10.7 to
Eldorados Form
10-KSB for the
fiscal year ended
March 31, 200310.8
    
    
    Contract to Buy and Sell Real Estate (Commercial)
    
    Incorporated by reference to
Exhibit 10.1 to
Eldorados Form
10-QSB for the
quarter ended
September 30, 200110.9
    
    
    Contract to Buy and Sell Real Estate (Residential)
    
    Incorporated by
reference to
Exhibit 10.2 to
Eldorados Form
10-QSB for the
quarter ended
September 30, 200110.10
    
    
    Contract to Buy and Sell Real Estate (Residential)
    
    Incorporated by
reference to
Exhibit 10.3 to
Eldorados Form
10-QSB for the
quarter ended
September 30, 200110.11
    
    
    Note receivable  Doug Larson
    
    Incorporated by
reference to
Exhibit 10.8 to
Eldorados Form
10-KSB for the
fiscal year ended
March 31, 200310.12
    
    
    Doug Larson  Pledge agreement
    
    Incorporated by
reference to
Exhibit 10.9 to
Eldorados Form
10-KSB for the
fiscal year ended
March 31, 200310.13
    
    
    Note receivable  Kevin Sipple
    
    Incorporated by
reference to
Exhibit 10.10 to
Eldorados Form
10-KSB for the
fiscal year ended
March 31, 200310.14
    
    
    Kevin Sipple  Pledge agreement
    
    Incorporated by
reference to
Exhibit 10.11 to
Eldorados Form
10-KSB for the
fiscal year ended
March 31, 200310.15
    
    
    Management Consulting and Finders Agreement,
dated as of January 4, 2005, by and between the
Company and Capital Merchant Bank, LLC
    
    Incorporated by
reference to
Exhibit 10.1 to
Eldorados Form 8-K
filed with the
Securities and
Exchange Commission
on January 11, 200510.16
    
    
    Warrant to Purchase Shares of Common Stock, dated
January 4, 2005
    
    Incorporated by
reference to
Exhibit 10.2 to
Eldorados Form 8-K
filed with the
Securities and
Exchange Commission
on January 11, 200510.17
    
    
    Water Lease Agreement with Denver Wells, LLC
dated August 31, 2006
    
    Incorporate by
reference to
Exhibit 10.14 to
Eldorados Form 8-K
filed with the
Securities and
Exchange Commission
on October 4, 200610.18
    
    
    Commercial Loan Agreement with American National
Bank dated February 20, 2007
    
    Incorporated by reference to Exhibit 10.18 to Eldorados Form 10-KSB filed with the Securities and Exchange Commission on June 26, 200710.19
    
    
    Commercial Loan Agreement with American National
Bank dated October 11, 2007
    
    Incorporated by reference to Exhibit 10.1 to Eldorados Form 10-QSB filed with the Securities and Exchange Commission on November 14, 200710.20
    
    
    Purchase and Sale Agreement with Farmers
Reservoir and Irrigation Company Marshall Lake
Division Shares dated February 28, 2007
    
    Incorporated by reference to Exhibit 10.20 to Eldorados Form 10-QSB filed with the Securities and Exchange Commission on November 14, 2007
  20




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##### Table of Contents



ExhibitNo.
    
    Description
    
    Location10.21
    
    
    Purchase and Sale Agreement with Farmers
Reservoir and Irrigation Company Marshall Lake
Division Shares dated August 2, 2007
    
    Incorporated by reference to Exhibit 10.21 to Eldorados Form 10-QSB filed with the Securities and Exchange Commission on November 14, 200710.22
    
    
    Water Use Agreement with the City of Louisville,
Colorado dated October 16, 2007
    
    Incorporated by reference to Exhibit 10.22 to Eldorados Form 8-K filed with the Securities and Exchange Commission on November 21, 200710.23
    
    
    Purchase and Sale Agreement with Farmers
Reservoir and Irrigation Company Marshall Lake
Division Shares dated March 21, 2008
    
    Incorporated by reference to Exhibit 10.23 to Eldorados Form 10-KSB filed with the Securities and Exchange Commission on June 27, 200810.24
    *
    
    2008 Incentive Stock Plan
    
    Incorporated by
reference to Annex
A to Eldorados
Definitive Proxy
Statement on
Schedule 14A for
the Annual meeting
of Shareholders
held on August 26,
200810.25
    
    
    First Amendment to Water Lease Agreement dated
July 15, 2008
    
    Incorporated by
reference to
Exhibit 10.24 to
Eldorados Form 8-k
filed with the
Securities and
Exchange Commission
on August 1, 200810.26
    
    
    Commercial Loan Agreement with American National
Bank dated March 17, 2009 (including Debt
Modification Agreement dated March 17, 2009)
    
    Incorporated by
reference to
Exhibit 10.26 to
Eldorados Form
10-K filed with the
Securities and
Exchange Commission
on June 29, 2009.23.1
    
    
    Consent of Ehrhardt Keefe Steiner & Hottman PC
    
    Filed herewith31.1
    
    
    Certification of Principal Executive Officer
Pursuant to Rule 13a-14(a) or 15d-14(a) of the
Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
    
    Filed herewith31.2
    
    
    Certification of Principal Financial Officer
Pursuant to Rule 13a-14(a) or 15d-14(a) of the
Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
    
    Filed herewith32.1
    
    
    Certification of Principal Executive Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
    
    Filed herewith32.2
    
    
    Certification of Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
    
    Filed herewith
 
 *
    
    Management contract or compensatory plan  21




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##### Table of Contents



SIGNATURES
  ELDORADO ARTESIAN SPRINGS, INC.By:
    
    /s/ Douglas A. Larson

Douglas A. Larson,President(Principal Executive Officer)
   Name and Capacity
    
    Date/s/ Douglas A. Larson

Douglas A. Larson,
    
    June 29, 2011President and Director/s/ Kevin M. Sipple

Kevin M. Sipple,
    
    June 29, 2011Vice-President and Director/s/ Cathleen Shoenfeld

Cathleen Shoenfeld,
    
    June 29, 2011Chief Financial Officer, Chief Accounting Officer(Principal Financial and Accounting Officer), Secretary/s/ Jeremy S. Martin

Jeremy S. Martin,
    
    June 29, 2011Vice-President and Director/s/ George J. Schmitt

George J. Schmitt,
    
    June 29, 2011Director/s/ J. Ross Colbert

J. Ross Colbert,
    
    June 29, 2011Director
  22