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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 (Mark one)
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 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 Street 
Louisville, Colorado
(Address of Principal Executive Offices)
    
    80027
(Zip Code)
 Registrants Telephone Number, Including Area Code: (303) 499-1316
 þ 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)
 Yes o No þ




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##### 



ELDORADO ARTESIAN SPRINGS, INC.
FORM 10-Q
 INDEX
 PagePart I  Financial InformationItem 1   Financial StatementsBalance Sheets as of June 30, 2009 (Unaudited) and March 31, 2009
    
    
    2Unaudited Statements of Operations for the Three Months Ended
June 30, 2009 and June 30, 2008
    
    
    3Unaudited Statements of Cash Flows for the Three Months Ended
June 30, 2009 and June 30, 2008
    
    
    4Notes to Unaudited Financial Statements
    
    
    5Item 2   Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 3   Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 4(T)   Controls and Procedures
    
    
    15Part II  Other InformationItem 1   Legal Proceedings
    
    
    16Item 1A   Risk Factors
    
    
    16Item 2   Unregistered Sales of Equity Securities and Use and Proceeds
    
    
    16Item 3   Defaults Upon Senior Securities
    
    
    16Item 4   Submission of Matters to a Vote of Security Holders
    
    
    16Item 5   Other Information
    
    
    16Item 6   Exhibits
    
    
    16Signatures
    
    
    17Exhibit Index
    
    
    18Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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ITEM 1.
    
    FINANCIAL STATEMENTS
 ELDORADO ARTESIAN SPRINGS, INC.
 
 Balance Sheets
 June 30,
    
    
    March 31,2009
    
    
    2009(Unaudited)AssetsCurrent assetsCash
    
    $
    534,167
    
    
    $
    347,148Accounts receivable  trade, net
    
    
    992,779
    
    
    
    967,508Inventories
    
    
    436,662
    
    
    
    393,320Prepaid expenses and other
    
    
    122,616
    
    
    
    105,456Deferred tax asset
    
    
    29,648
    
    
    
    29,648Income tax receivable
    
    
    66,405
    
    
    
    66,405Total current assets
    
    
    2,182,277
    
    
    
    1,909,485Non-current assetsProperty, plant and equipment  net
    
    
    4,380,121
    
    
    
    4,433,393Notes receivable  related party
    
    
    349,254
    
    
    
    342,787Investments
    
    
    361,196
    
    
    
    361,196Water rights
    
    
    71,675
    
    
    
    71,675Deposits
    
    
    117,770
    
    
    
    112,820Other  net
    
    
    116,384
    
    
    
    106,604Total non-current assets
    
    
    5,396,400
    
    
    
    5,428,475Total assets
    
    $
    7,578,677
    
    
    $
    7,337,960Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    697,273
    
    
    $
    420,849Accrued expenses
    
    
    359,120
    
    
    
    283,540Customer deposits
    
    
    78,523
    
    
    
    66,477Current portion of capital lease obligations
    
    
    118,334
    
    
    
    118,334Current portion of long-term debt
    
    
    353,918
    
    
    
    363,086Total current liabilities
    
    
    1,607,168
    
    
    
    1,252,286Non-current liabilitiesCapital lease obligations, less current portion
    
    
    108,024
    
    
    
    135,118Long-term debt, less current portion
    
    
    4,319,743
    
    
    
    4,332,360Deferred gain on the sale of real estate
    
    
    178,822
    
    
    
    178,822Total non-current liabilities
    
    
    4,606,589
    
    
    
    4,646,300Total liabilities
    
    
    6,213,757
    
    
    
    5,898,586Commitments and contingenciesStockholders equityPreferred stock, par value $.001 per share;
10,000,000 shares authorized; 0 issued and
outstanding
    
    
    
    
    
    
    Common stock, par value $.001 per share;
50,000,000 shares authorized; 6,536,091 (June
and March 2009) issued and outstanding
    
    
    6,536
    
    
    
    6,536Additional paid-in capital
    
    
    1,744,478
    
    
    
    1,736,438Accumulated deficit
    
    
    (386,094
    )
    
    
    (303,600
    )Total stockholders equity
    
    
    1,364,920
    
    
    
    1,439,374Total liabilities and stockholders equity
    
    $
    7,578,677
    
    
    $
    7,337,960
   2




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ELDORADO ARTESIAN SPRINGS, INC.
 
 Unaudited Statements of Operations
 For the Three Months EndedJune 30,2009
    
    
    2008RevenueWater and related
    
    $
    2,226,469
    
    
    $
    2,175,050Resort operations
    
    
    29,121
    
    
    
    42,288Net revenue
    
    
    2,255,590
    
    
    
    2,217,338Cost of goods sold
    
    
    567,002
    
    
    
    521,696Gross profit
    
    
    1,688,588
    
    
    
    1,695,642Operating expensesSalaries and related
    
    
    878,633
    
    
    
    971,322Administrative and general
    
    
    424,850
    
    
    
    506,396Delivery
    
    
    192,688
    
    
    
    238,565Advertising and promotions
    
    
    102,083
    
    
    
    96,618Depreciation and amortization
    
    
    126,861
    
    
    
    116,5681,725,115
    
    
    
    1,929,469Operating loss
    
    
    (36,527
    )
    
    
    (233,827
    )Other income (expense)Interest income
    
    
    6,527
    
    
    
    6,743Interest expense
    
    
    (94,494
    )
    
    
    (89,456
    )(87,967
    )
    
    
    (82,713
    )Net loss before provision for income taxes
    
    
    (124,494
    )
    
    
    (316,540
    )Income tax benefit
    
    
    42,000
    
    
    
    110,000Net loss
    
    $
    (82,494
    )
    
    $
    (206,540
    )Basic and diluted loss per common share
    
    $
    (0.01
    )
    
    $
    (0.03
    )Weighted average number of common shares
outstanding  basic and dilutive
    
    
    6,536,091
    
    
    
    6,579,365
   3




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ELDORADO ARTESIAN SPRINGS, INC.
 
 Unaudited Statements of Cash Flows
 Three Months EndedJune 30,2009
    
    
    2008Cash flows from operating activitiesNet loss
    
    $
    (82,494
    )
    
    $
    (206,540
    )Adjustments to reconcile net loss to net cash (used in)
provided by operating activitiesDepreciation and amortization
    
    
    126,861
    
    
    
    116,569Deferred income tax benefit
    
    
    (42,000
    )
    
    
    (110,000
    )Stock based compensation
    
    
    8,040
    
    
    
    6,564Accrued interest on related party note receivable
    
    
    (6,467
    )
    
    
    (5,955
    )Changes in certain assets and liabilitiesAccounts receivable
    
    
    (25,271
    )
    
    
    (112,794
    )Inventories
    
    
    (43,342
    )
    
    
    (4,818
    )Prepaid expenses and other
    
    
    10,302
    
    
    
    30,347Deposits
    
    
    (4,950
    )
    
    
    13,363Accounts payable
    
    
    276,424
    
    
    
    138,998Accrued expenses
    
    
    75,580
    
    
    
    (63,723
    )Customer deposits
    
    
    12,046
    
    
    
    2,987Net cash used in operating activities
    
    
    304,729
    
    
    
    (221,729
    )Cash flows from investing activitiesPurchases of property and equipment
    
    
    (68,831
    )
    
    
    (75,316
    )Net cash flows used in investing activities
    
    
    (68,831
    )
    
    
    (75,316
    )Cash flows from financing activitiesPayments on long-term obligations
    
    
    (48,879
    )
    
    
    (17,163
    )Proceeds on line of credit
    
    
    
    
    
    
    140,000Net cash flows provided by financing activities
    
    
    (48,879
    )
    
    
    122,837Net (decrease) increase in cash
    
    
    187,019
    
    
    
    (174,208
    )Cash  beginning of period
    
    
    347,148
    
    
    
    389,440Cash  end of period
    
    $
    534,167
    
    
    $
    215,232
       4




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ELDORADO ARTESIAN SPRINGS, INC.
 
 Notes to Unaudited Financial Statements
 Note 1  Summary of Significant Accounting Policies
 Interim Unaudited Financial Statements
  Investments
  Revenue Recognition
  Note 2  Stockholders Equity
 Stock Option Expenses
   5




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Valuation and Expense Information under SFAS 123(R)
   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
  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
   6




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Note 3  Related Party Transactions
   Note 4  Contingencies
 Water Rights Contingency
    7




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Note 5  Commitments
 Line of Credit
     8




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Note Payable
   Renewable Energy Service Agreement
  Note 6  Subsequent Events
   9




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ITEM
2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward Looking Statements
   Overview
   Results of Operations
   Organic Vitamin Charged Spring Water
  10




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Organic Vitamin Charged Spring Water
  Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 Revenues
    Organic Vitamin Charged Spring Water Organic Vitamin
Charged Spring Water Organic Vitamin Charged
Spring Water
   11




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Gross Profit/Cost of Goods Sold
  Operating Expenses
    12




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Organic Vitamin Charged Spring Water
  Interest, Taxes, Other Income and Other Expenses
      13




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Liquidity and Capital Resources
          14




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ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4(T).
    
    CONTROLS AND PROCEDURES
 Conclusion Regarding The Effectiveness Of Disclosure Controls And Procedures
   Remediation Of Material Weaknesses in Internal Control Over Financial Reporting
  Changes In Internal Control Over Financial Reporting
   15




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PART II  OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
  
 ITEM 1A.
    
    RISK FACTORS
  
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE AND PROCEEDS
  
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5.
    
    OTHER INFORMATION
  
 ITEM 6.
    
    EXHIBITS
 Exhibit No.
    
    Description31.1
    
    
    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 2002.31.2
    
    
    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 2002.32.1
    
    
    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 2002.32.2
    
    
    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.
  16




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SIGNATURES
  ELDORADO ARTESIAN SPRINGS, INC.Date: August 14, 2009
    By:
    /s/ Douglas A. LarsonDouglas A. LarsonPresident
(Principal Executive Officer)Date: August 14, 2009
    By:
    /s/ Cathleen ShoenfeldCathleen ShoenfeldChief Financial Officer
(Principal Financial Officer)  17




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ELDORADO ARTESIAN SPRINGS, INC.
 
 
 Exhibit No.
    
    Description31.1
    
    
    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 2002.31.2
    
    
    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 2002.32.1
    
    
    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 2002.32.2
    
    
    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.
  18