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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, 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
    
    84-0907853(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (IRS Employer
Identification No.)1783 Dogwood Street 
Louisville, Colorado
    
    80027(Address of Principal Executive Offices)
    
    (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(Do not check if a smaller reporting company)
Smaller reporting company þ o 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, 2010 (Unaudited) and March 31, 2010
    
    
    2Unaudited Statements of Operations for the Three Months Ended
June 30, 2010 and June 30, 2009
    
    
    3Unaudited Statements of Cash Flows for the Three Months Ended
June 30, 2010 and June 30, 2009
    
    
    4Notes to Unaudited Financial Statements
    
    
    5Item 2   Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    8Item 3   Quantitative and Qualitative Disclosures About Market Risk
    
    
    13Item 4(T)   Controls and Procedures
    
    
    13Part II  Other InformationItem 1   Legal Proceedings
    
    
    14Item 1A   Risk Factors
    
    
    14Item 2   Unregistered Sales of Equity Securities and Use and Proceeds
    
    
    14Item 3   Defaults Upon Senior Securities
    
    
    14Item 4   Submission of Matters to a Vote of Security Holders
    
    
    14Item 5   Other Information
    
    
    14Item 6   Exhibits
    
    
    14Signatures
    
    
    15Exhibit Index
    
    
    16Exhibit 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 31,2010
    
    
    2010(Unaudited)AssetsCurrent assetsCash
    
    $
    48,231
    
    
    $
    65,304Accounts receivable  trade, net of $80,000 allowance
    
    
    1,011,924
    
    
    
    853,914Inventories
    
    
    414,430
    
    
    
    391,410Prepaid expenses and other
    
    
    105,634
    
    
    
    136,396Deferred tax asset
    
    
    29,648
    
    
    
    29,648Total current assets
    
    
    1,609,867
    
    
    
    1,476,672Non-current assetsProperty, plant and equipment  net
    
    
    4,100,692
    
    
    
    4,149,154Notes receivable  related party
    
    
    376,367
    
    
    
    369,397Investments
    
    
    361,196
    
    
    
    361,196Water rights
    
    
    71,675
    
    
    
    71,675Deposits
    
    
    118,020
    
    
    
    118,020Deferred tax asset  long term
    
    
    122,766
    
    
    
    101,466Other  net
    
    
    32,974
    
    
    
    34,346Total non-current assets
    
    
    5,183,690
    
    
    
    5,205,254Total assets
    
    $
    6,793,557
    
    
    $
    6,681,926Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    642,678
    
    
    $
    570,584Accrued expenses
    
    
    400,201
    
    
    
    283,145Customer deposits
    
    
    80,429
    
    
    
    73,423Current portion of capital lease obligations
    
    
    109,871
    
    
    
    121,634Current portion of long-term debt
    
    
    68,842
    
    
    
    68,842Total current liabilities
    
    
    1,302,021
    
    
    
    1,117,628Non-current liabilitiesCapital lease obligations, less current portion
    
    
    
    
    
    
    17,910Long-term debt, less current portion
    
    
    4,235,103
    
    
    
    4,256,953Deferred gain on the sale of real estate
    
    
    178,822
    
    
    
    178,822Total non-current liabilities
    
    
    4,413,925
    
    
    
    4,453,685Total liabilities
    
    
    5,715,946
    
    
    
    5,571,313Commitments 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 2010)
issued and outstanding
    
    
    6,536
    
    
    
    6,536Additional paid-in capital
    
    
    1,776,638
    
    
    
    1,768,598Accumulated deficit
    
    
    (705,563
    )
    
    
    (664,521
    )Total stockholders equity
    
    
    1,077,611
    
    
    
    1,110,613Total liabilities and stockholders equity
    
    $
    6,793,557
    
    
    $
    6,681,926
   2




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ELDORADO ARTESIAN SPRINGS, INC.
 Unaudited Statements of Operations
 For the Three Months EndedJune 30,2010
    
    
    2009RevenueWater and related
    
    $
    2,249,692
    
    
    $
    2,226,469Resort operations
    
    
    35,483
    
    
    
    29,121Net revenue
    
    
    2,285,175
    
    
    
    2,255,590Cost of goods sold
    
    
    644,306
    
    
    
    567,002Gross profit
    
    
    1,640,869
    
    
    
    1,688,588Operating expensesSalaries and related
    
    
    817,502
    
    
    
    878,633Administrative and general
    
    
    442,875
    
    
    
    424,850Delivery
    
    
    183,029
    
    
    
    192,688Advertising and promotions
    
    
    65,204
    
    
    
    102,083Depreciation and amortization
    
    
    119,648
    
    
    
    126,8611,628,258
    
    
    
    1,725,115Operating income (loss)
    
    
    12,611
    
    
    
    (36,527
    )Other income (expense)Interest income
    
    
    6,970
    
    
    
    6,527Interest expense
    
    
    (81,923
    )
    
    
    (94,494
    )(74,953
    )
    
    
    (87,967
    )Net loss before provision for income taxes
    
    
    (62,342
    )
    
    
    (124,494
    )Income tax benefit
    
    
    21,300
    
    
    
    42,000Net loss
    
    $
    (41,042
    )
    
    $
    (82,494
    )Basic and diluted loss per common share
    
    $
    (0.01
    )
    
    $
    (0.01
    )Weighted average number of common shares
outstanding  basic and dilutive
    
    
    6,536,091
    
    
    
    6,536,091
   3




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ELDORADO ARTESIAN SPRINGS, INC.
 Unaudited Statements of Cash Flows
 Three Months EndedJune 30,2010
    
    
    2009Cash flows from operating activitiesNet loss
    
    $
    (41,042
    )
    
    $
    (82,494
    )Adjustments to reconcile net loss to net cash provided by
operating activitiesDepreciation and amortization
    
    
    119,648
    
    
    
    126,861Deferred income tax benefit
    
    
    (21,300
    )
    
    
    (42,000
    )Stock based compensation
    
    
    8,040
    
    
    
    8,040Accrued interest on related party note receivable
    
    
    (6,970
    )
    
    
    (6,467
    )Changes in certain assets and liabilitiesAccounts receivable
    
    
    (158,010
    )
    
    
    (25,271
    )Inventories
    
    
    (23,020
    )
    
    
    (43,342
    )Prepaid expenses and other
    
    
    30,761
    
    
    
    10,302Deposits
    
    
    
    
    
    
    (4,950
    )Accounts payable
    
    
    72,094
    
    
    
    276,424Accrued expenses
    
    
    117,056
    
    
    
    75,580Customer deposits
    
    
    7,006
    
    
    
    12,046Net cash provided by operating activities
    
    
    104,263
    
    
    
    304,729Cash flows from investing activitiesPurchases of property and equipment
    
    
    (69,813
    )
    
    
    (68,831
    )Net cash flows used in investing activities
    
    
    (69,813
    )
    
    
    (68,831
    )Cash flows from financing activitiesPayments on long-term obligations
    
    
    (51,523
    )
    
    
    (48,879
    )Net cash flows (used in) provided by financing activities
    
    
    (51,523
    )
    
    
    (48,879
    )Net decrease in cash
    
    
    (17,073
    )
    
    
    187,019Cash  beginning of period
    
    
    65,304
    
    
    
    347,148Cash  end of period
    
    $
    48,231
    
    
    $
    534,167
      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 Plans
   5




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Warrants
  Note 3  Related Party Transactions
  Note 4  Contingencies
 Water Rights Contingency
   6




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Note 5  Commitments
 Line of Credit
  Notes Payable
   7




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Renewable Energy Service Agreement
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward Looking Statements
   Overview
   8




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Results of Operations
    Organic Vitamin Charged Spring Water
   Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
 Revenues
    9




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Organic Vitamin Charged Spring Water Organic Vitamin
Charged Spring Water Organic Vitamin Charged Spring Water
    10




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Gross Profit/Cost of Goods Sold
  Operating Expenses
       Interest, Taxes, Other Income and Other Expenses
    11




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Liquidity and Capital Resources
         12




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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
   13




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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.
  14




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SIGNATURES
  ELDORADO ARTESIAN SPRINGS, INC.Date: August 12, 2010
    By:
    /s/ Douglas A. LarsonDouglas A. LarsonPresident
(Principal Executive Officer)Date: August 12, 2010
    By:
    /s/ Cathleen ShoenfeldCathleen ShoenfeldChief Financial Officer
(Principal Financial Officer)  15




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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.
  16