##### 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, 2010
 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
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    84-0907853
(IRS Employer
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
 Yes o No 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)
 Yes o No þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 PART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    7Item 1B. Unresolved Staff Comments
    
    
    7Item 2. Properties
    
    
    7Item 3. Legal Proceedings
    
    
    8Item 4. [Removed and Reserved]
    
    
    8PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuers Purchases of
Equity Securities
    
    
    9Item 6. Selected Financial Data
    
    
    9Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    14Item 8. Financial Statements and Supplementary Data
    
    
    14Item 9.
Change In and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    16Item 9A
(T). Controls and Procedures
    
    
    16Item 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 spring water. Organic Vitamin Charged
 Water Source and Bottling
   4




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Products
  Sales and Distribution
  Home/Commercial Delivery Business
   5




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PET Packaging/Retail Distribution Business
  Marketing
     Supplies
  Seasonality
  Competition
   6




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Government Regulation
     Employees
  
 ITEM 1A.
    
    RISK FACTORS.
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS.
  
 ITEM 2.
    
    PROPERTIES.
  Eldorado Springs, Colorado
   7




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Louisville, Colorado
  
 ITEM 3.
    
    LEGAL PROCEEDINGS.
  
 ITEM 4.
    
    [REMOVED AND RESERVED]
  8




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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
 www.corporatestock.com
 Fiscal 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
 Fiscal Year 2009
    
    High
    
    
    LowFourth Quarter through March 31, 2009
    
    $
    2.09
    
    
    $
    0.25Third Quarter through December 31, 2008
    
    $
    2.50
    
    
    $
    1.10Second Quarter through September 30, 2008
    
    $
    2.25
    
    
    $
    1.44First Quarter through June 30, 2008
    
    $
    2.50
    
    
    $
    1.50
  Holders
  Dividends
  Recent Sales of Unregistered Securities
  Issuer Purchases of Equity Securities
  
 ITEM 6.
    
    SELECTED FINANCIAL DATA
   9




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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, 2010 Compared to Year Ended March 31, 2009
 
    
    Liquidity and Capital Resources
 
    
    Critical Accounting Issues
 Forward Looking Statements
   Business Overview
   Results of Operations
     10




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Year Ended March 31, 2010 Compared to Year Ended March 31, 2009
 Sales
      Gross Profit/Cost of Goods Sold
   11




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Operating Expenses
      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
    
    
    Total2011
    
    $
    190,476
    
    
    $
    344,605
    
    
    $
    535,0812012
    
    
    1,466,952
    
    
    
    266,873
    
    
    
    1,733,8252013
    
    
    2,807,911
    
    
    
    161,628
    
    
    
    2,969,5392014
    
    
    
    
    
    
    73,358
    
    
    
    73,358Total
    
    $
    4,465,339
    
    
    $
    846,464
    
    
    $
    5,311,803
  13




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Impact of Inflation
  Recently Issued Accounting Pronouncements
   The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles  a replacement of FASB Statement No. 162
 Amendments to FASB Interpretation No. 46(R)
 
 ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
   14




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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
  15




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Ehrhardt Keefe Steiner & Hottman PC
 
  F-1




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Balance Sheets
 March 31, 2010
    
    
    March 31, 2009AssetsCurrent assetsCash
    
    $
    65,304
    
    
    $
    347,148Accounts receivable  trade, net
    
    
    853,914
    
    
    
    967,508Inventories
    
    
    391,410
    
    
    
    393,320Prepaid expenses and other
    
    
    136,396
    
    
    
    105,456Deferred tax asset
    
    
    29,648
    
    
    
    29,648Income tax receivable
    
    
    
    
    
    
    66,405Total current assets
    
    
    1,476,672
    
    
    
    1,909,485Non-current assetsProperty, plant and equipment, net
    
    
    4,149,154
    
    
    
    4,433,393Notes receivable  related party
    
    
    369,397
    
    
    
    342,787Investments
    
    
    361,196
    
    
    
    361,196Water rights, net
    
    
    71,675
    
    
    
    71,675Deposits
    
    
    118,020
    
    
    
    112,820Deferred tax
asset  long term
    
    
    101,466
    
    
    
    28,066Other, net
    
    
    34,346
    
    
    
    78,538Total non-current assets
    
    
    5,205,254
    
    
    
    5,428,475Total assets
    
    $
    6,681,926
    
    
    $
    7,337,960Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    570,584
    
    
    $
    420,849Accrued expenses
    
    
    283,145
    
    
    
    283,540Customer deposits
    
    
    73,423
    
    
    
    66,477Current portion of capital lease obligations
    
    
    121,634
    
    
    
    118,334Current portion of long-term debt
    
    
    68,842
    
    
    
    363,086Total current liabilities
    
    
    1,117,628
    
    
    
    1,252,286Non-current liabilitiesCapital lease obligations, less current portion
    
    
    17,910
    
    
    
    135,118Long-term debt, less current portion
    
    
    4,256,953
    
    
    
    4,332,360Deferred gain on the sale of real estate
    
    
    178,822
    
    
    
    178,822Total non-current liabilities
    
    
    4,453,685
    
    
    
    4,646,300Total liabilities
    
    
    5,571,313
    
    
    
    5,898,586Commitments 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; 6,536,091 (2010 and
2009) issued and outstanding
    
    
    6,536
    
    
    
    6,536Additional paid-in capital
    
    
    1,768,598
    
    
    
    1,736,438Accumulated deficit
    
    
    (664,521
    )
    
    
    (303,600
    )Total stockholders equity
    
    
    1,110,613
    
    
    
    1,439,374Total liabilities and stockholders equity
    
    $
    6,681,926
    
    
    $
    7,337,960
   F-2




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Statements of Operations
 For the Years EndedMarch 31,2010
    
    
    2009RevenuesWater and related
    
    $
    8,380,923
    
    
    $
    9,106,801Resort operations
    
    
    95,852
    
    
    
    184,067Total revenues
    
    
    8,476,775
    
    
    
    9,290,868Cost of goods sold
    
    
    2,129,757
    
    
    
    2,405,606Gross profit
    
    
    6,347,018
    
    
    
    6,885,262Operating expensesSalaries and related expenses
    
    
    3,226,075
    
    
    
    3,705,175Administrative and general
    
    
    1,647,194
    
    
    
    1,830,011Delivery
    
    
    746,670
    
    
    
    890,892Advertising and promotions
    
    
    328,731
    
    
    
    360,215Depreciation and amortization
    
    
    497,947
    
    
    
    485,754Total operating expenses
    
    
    6,446,617
    
    
    
    7,272,047Loss from operations
    
    
    (99,599
    )
    
    
    (386,785
    )Other income (expense)Gain on the sale of property
    
    
    
    
    
    
    384,000Interest income
    
    
    26,745
    
    
    
    27,358Interest expense
    
    
    (361,467
    )
    
    
    (362,447
    )Total other income (expense)
    
    
    (334,722
    )
    
    
    48,911Loss before income taxes
    
    
    (434,321
    )
    
    
    (337,874
    )Income tax benefitDeferred
    
    
    73,400
    
    
    
    101,000Total income tax benefit (expense)
    
    
    73,400
    
    
    
    101,000Net loss available to common shareholders
    
    $
    (360,921
    )
    
    $
    (236,874
    )Basic and diluted weighted average common shares outstanding
    
    
    6,536,091
    
    
    
    6,669,144Basic and diluted loss per common share
    
    $
    (0.06
    )
    
    $
    (0.04
    )
   F-3




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Statement of Changes in Stockholders Equity
 For
the Year Ended March 31, 2010
 Additional
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid-in
    
    
    Accumulated
    
    

StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    EquityBalance  March 31, 2008
    
    
    6,426,464
    
    
    $
    6,426
    
    
    $
    1,634,159
    
    
    $
    (66,726
    )
    
    $
    1,573,859Exercise of options and
deferred tax benefit
    
    
    109,627
    
    
    
    110
    
    
    
    46,515
    
    
    
    
    
    
    
    46,625Stock options issued to
employees
    
    
    
    
    
    
    
    
    
    
    55,764
    
    
    
    
    
    
    
    55,764Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (236,874
    )
    
    
    (236,874
    )Balance  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
    )
    
    $
    1,110,613
   F-4




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##### Table of Contents



Statements of Cash Flows
 For the Years EndedMarch 31,2010
    
    
    2009Cash flows from operating activitiesNet loss
    
    $
    (360,921
    )
    
    $
    (236,874
    )Adjustments to reconcile net loss to net cash provided by operating activitiesDepreciation and amortization
    
    
    497,947
    
    
    
    485,754Deferred income taxes
    
    
    (73,400
    )
    
    
    (75,480
    )Stock based compensation
    
    
    32,160
    
    
    
    55,764Accrued interest on related party note receivable
    
    
    (26,610
    )
    
    
    (24,649
    )Changes in assets and liabilitiesAccounts receivable
    
    
    113,594
    
    
    
    (128,848
    )Inventories
    
    
    1,910
    
    
    
    43,851Prepaid expenses and other
    
    
    (3,478
    )
    
    
    178,386Deposits
    
    
    (5,200
    )
    
    
    22,965Accounts payable
    
    
    149,735
    
    
    
    2,920Accrued expenses
    
    
    (395
    )
    
    
    (34,812
    )Income taxes
    
    
    66,405
    
    
    
    (66,405
    )Customer deposits
    
    
    6,946
    
    
    
    (14,053
    )Net cash provided by operating activities
    
    
    398,693
    
    
    
    208,519Cash flows from investing activitiesPurchases of property and equipment
    
    
    (196,978
    )
    
    
    (389,920
    )Net cash used in investing activities
    
    
    (196,978
    )
    
    
    (389,920
    )Cash flows from financing activitiesProceeds from exercise of stock options
    
    
    
    
    
    
    2,625Net proceeds from line of credit
    
    
    
    
    
    
    300,000Payments on long-term debt and capital leases
    
    
    (483,559
    )
    
    
    (163,516
    )Net cash (used in) provided by financing activities
    
    
    (483,559
    )
    
    
    139,109Net decrease in cash
    
    
    (281,844
    )
    
    
    (42,292
    )Cash  beginning of year
    
    
    347,148
    
    
    
    389,440Cash  end of year
    
    $
    65,304
    
    
    $
    347,148
        F-5




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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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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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Shipping Costs
  Promotional Expense  Consideration to Vendors
  Advertising Costs
  Use of Estimates
  Recently Issued Accounting Pronouncements
   The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles  a replacement of FASB Statement No. 162
 Amendments to FASB Interpretation No. 46(R)
  F-8




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##### Table of Contents



Note 2  Balance Sheet Disclosures
  March 31, 2010
    
    
    March 31, 2009Accounts receivableAccounts receivable
    
    $
    933,914
    
    
    $
    1,047,508Allowance for doubtful accounts
    
    
    (80,000
    )
    
    
    (80,000
    )$
    853,914
    
    
    $
    967,508
  March 31, 2010
    
    
    March 31, 2009Property, plant and equipmentLand
    
    $
    1,000,263
    
    
    $
    1,000,263Buildings and improvements
    
    
    4,294,275
    
    
    
    4,183,129Machinery and equipment
    
    
    5,088,521
    
    
    
    5,002,689Office furniture and fixtures
    
    
    329,391
    
    
    
    329,39110,712,450
    
    
    
    10,515,472Less accumulated depreciation and amortization
    
    
    (6,563,296
    )
    
    
    (6,082,079
    )$
    4,149,154
    
    
    $
    4,433,393
  March 31, 2010
    
    
    March 31, 2009Accrued expensesAccrued payroll and taxes
    
    $
    90,313
    
    
    $
    83,011Accrued property taxes
    
    
    168,754
    
    
    
    174,511Accrued sales taxes
    
    
    24,078
    
    
    
    26,018$
    283,145
    
    
    $
    283,540
 Note 3  Deferred Gain on the Sale of Real Estate
    F-9




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Note 4  Long-Term Debt
  March 31, 2010
    
    
    March 31, 2009Note 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 and matures October 2012. 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.
    
    $
    2,893,080
    
    
    $
    2,939,695Note 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.
Cross-collateralized by all rents and
deed of trust of the Company and
guaranteed by three stockholders and
officers of the Company.
    
    
    1,432,715
    
    
    
    1,455,751Note payable to a bank with interest
fixed at 8.0%.The Company paid off the
note in January 2010.
    
    
    
    
    
    
    300,0004,325,795
    
    
    
    4,695,446Less current portion
    
    
    (68,842
    )
    
    
    (363,086
    )$
    4,256,953
    
    
    $
    4,332,360
  Year Ending March 31,2011
    
    $
    68,8422012
    
    
    1,449,0422013
    
    
    2,807,911$
    4,325,795
 Note 5  Capital Leases
   March 31, 2010Cost
    
    $
    351,877Less accumulated amortization
    
    
    (92,981
    )$
    258,896
  F-10




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##### Table of Contents



Year Ending March 31,2011
    
    $
    128,3422012
    
    
    24,035Total minimum lease payments
    
    
    152,377Amount representing interest
    
    
    (12,833
    )Present value of net minimum lease payments
    
    
    139,544Less current portion
    
    
    (121,634
    )Long-term capital lease obligation
    
    $
    17,910
 Note 6  Income Taxes
   March 31, 2010
    
    
    March 31, 2009Current deferred tax asset
    
    $
    29,648
    
    
    $
    29,648Current deferred tax liability
    
    
    
    
    
    
    Net current deferred tax asset
    
    $
    29,648
    
    
    $
    29,648Long-term deferred tax asset, net of valuation allowance
    
    $
    101,466
    
    
    $
    148,153Long-term deferred tax liability
    
    
    
    
    
    
    (120,087
    )Net long-term deferred tax asset
    
    $
    101,466
    
    
    $
    28,066
  Allowance for doubtful accounts
    
    $
    29,648
    
    
    $
    29,648Property and equipment
    
    
    (58,651
    )
    
    
    (112,220
    )Deductible stock compensation
    
    
    9,914
    
    
    
    9,914Net operating loss and credits
    
    
    216,319
    
    
    
    138,239Deferred gain and other
    
    
    3,884
    
    
    
    (7,867
    )Valuation allowance
    
    
    (70,000
    )
    
    
    $
    131,114
    
    
    $
    57,714
  F-11




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##### Table of Contents



For the Years EndedMarch 31,2010
    
    
    2009Federal income taxes computed at statutory rate
    
    $
    (147,669
    )
    
    $
    (114,877
    )State income taxes
    
    
    (11,568
    )
    
    
    (8,721
    )Stock based compensation
    
    
    10,934
    
    
    
    9,864Tax to provision true-up
    
    
    (1,970
    )
    
    
    4,633Other
    
    
    6,873
    
    
    
    8,101Valuation allowance
    
    
    70,000
    
    
    
    $
    (73,400
    )
    
    $
    (101,000
    )
 Note 7  Commitments
 Operating Leases
   Year Ending March 31,2011
    
    $
    344,6052012
    
    
    266,8732013
    
    
    161,6282014
    
    
    73,358Thereafter
    
    
    $
    846,464
 Renewable Energy Service Agreement
  Note 8  Contingency
   F-12




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##### Table of Contents



Note 9  Stockholders Equity
 Stock Options
   F-13




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##### Table of Contents



WeightedAverageStock
    
    
    ExerciseOptions
    
    
    PriceOutstanding  March 31, 2008
    
    
    905,000
    
    
    
    1.38Granted
    
    
    50,000
    
    
    
    1.80Forfeited/canceled
    
    
    (426,000
    )
    
    
    1.38Exercised
    
    
    (259,000
    )
    
    
    1.38Outstanding  March 31, 2009
    
    
    270,000
    
    
    
    1.48Granted
    
    
    
    
    
    
    Forfeited/canceled
    
    
    (30,000
    )
    
    
    1.50Exercised
    
    
    
    
    
    
    Outstanding  March 31, 2010
    
    
    240,000
    
    
    $
    1.47
  Options Outstanding
    
    
    Options ExercisableExercise Prices
    
    Number
    
    
    Price*
    
    
    Life*
    
    
    Number
    
    
    Price*0.875
    
    
    24,000
    
    
    
    0.875
    
    
    
    3.84
    
    
    
    24,000
    
    
    
    0.8751.00
    
    
    19,000
    
    
    
    1.00
    
    
    
    3.35
    
    
    
    19,000
    
    
    
    1.001.43
    
    
    100,000
    
    
    
    1.43
    
    
    
    1.84
    
    
    
    75,000
    
    
    
    1.431.65
    
    
    20,000
    
    
    
    1.65
    
    
    
    6.09
    
    
    
    20,000
    
    
    
    1.651.75
    
    
    24,000
    
    
    
    1.75
    
    
    
    7.09
    
    
    
    24,000
    
    
    
    1.751.80
    
    
    50,000
    
    
    
    1.80
    
    
    
    8.05
    
    
    
    12,500
    
    
    
    1.801.938
    
    
    3,000
    
    
    
    1.938
    
    
    
    0.08
    
    
    
    3,000
    
    
    
    1.938Total  March 31, 2010
    
    
    240,000
    
    
    $
    1.47
    
    
    
    4.31
    
    
    
    177,500
    
    
    $
    1.41
 *
    
    Price and Life reflect the weighted average exercise price and weighted average remaining
contractual life, in years, respectively.   Risk Free Interest Rate
    
    
    4.65
    %Expected life (years)
    
    
    5Expected dividend yield
    
    
    0
    %Annualized volatility
    
    
    88.5
    %Estimated fair value of options granted
    
    $1.01 per share
  F-14




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##### Table of Contents



Risk Free Interest Rate
    
    
    3.75
    %Expected life (years)
    
    
    7.5Expected dividend yield
    
    
    0
    %Annualized volatility
    
    
    118.27
    %Estimated fair value of options granted
    
    $1.26 per share
 Warrants
  Note 10  Employee Benefit Plan
 
  F-15




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A(T).
    
    CONTROLS AND PROCEDURES
 Conclusion Regarding the Effectiveness Of Disclosure Controls And Procedures
   Managements Annual Report On Internal Control Over Financial Reporting
    16




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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, 2006
  20




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##### Table of Contents



ExhibitNo.
    
    Description
    
    Location10.18
    
    
    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,
200710.21
    
    
    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. LarsonDouglas A. Larson,President (Principal
Executive Officer)   Name and Capacity
    
    
    
    Date/s/ Douglas A. Larson

Douglas A. Larson,
    
    
    
    June 18, 2010President and Director/s/ Kevin M. Sipple

Kevin M. Sipple,
    
    
    
    June 18, 2010Vice-President and Director/s/ Cathleen Shoenfeld

Cathleen Shoenfeld,
    
    
    
    June 18, 2010Chief Financial Officer, Chief Accounting Officer(Principal Financial and Accounting Officer), Secretary/s/ Jeremy S. Martin

Jeremy S. Martin,
    
    
    
    June 18, 2010Vice-President and Director/s/ George J. Schmitt

George J. Schmitt,
    
    
    
    June 18, 2010Director/s/ J. Ross Colbert

J. Ross Colbert,
Director
    
    
    
    June 18, 2010
  22