##### Table of Contents



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 December 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
    
    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 þ No o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting companyþ(Do not check if a smaller reporting company)
 o þ




---



##### 



ELDORADO ARTESIAN SPRINGS, INC.
 FORM 10-Q
 INDEX
 PagePart I  Financial InformationItem 1  Financial StatementsBalance Sheets as of December 31, 2010 (Unaudited) and March 31, 2010
    
    
    2Unaudited Statements of Operations for the Three and Nine Months Ended December 31, 2010 and December 31, 2009
    
    
    3Unaudited Statements of Cash Flows for the Nine Months Ended December 31, 2010 and December 31, 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




---



##### Table of Contents



ITEM 1. FINANCIAL STATEMENTS
 ELDORADO ARTESIAN SPRINGS, INC.
 
 Balance Sheets
 December 31,
    
    
    March 31,2010
    
    
    2010(Unaudited)AssetsCurrent assetsCash
    
    $
    48,105
    
    
    $
    65,304Accounts receivable  trade, net of $80,000 allowance
    
    
    950,161
    
    
    
    853,914Inventories
    
    
    406,020
    
    
    
    391,410Prepaid expenses and other
    
    
    57,300
    
    
    
    136,396Deferred tax asset
    
    
    29,648
    
    
    
    29,648Total current assets
    
    
    1,491,234
    
    
    
    1,476,672Non-current assetsProperty, plant and equipment  net
    
    
    4,019,129
    
    
    
    4,149,154Notes receivable  related party
    
    
    390,704
    
    
    
    369,397Investments
    
    
    361,196
    
    
    
    361,196Water rights
    
    
    71,675
    
    
    
    71,675Deposits
    
    
    118,020
    
    
    
    118,020Deferred tax asset  long term
    
    
    123,066
    
    
    
    101,466Other  net
    
    
    52,328
    
    
    
    34,346Total non-current assets
    
    
    5,136,118
    
    
    
    5,205,254Total assets
    
    $
    6,627,352
    
    
    $
    6,681,926Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    427,056
    
    
    $
    570,584Accrued expenses
    
    
    332,467
    
    
    
    283,145Customer deposits
    
    
    85,113
    
    
    
    73,423Line of credit
    
    
    105,000
    
    
    
    Current portion of capital lease obligations
    
    
    74,549
    
    
    
    121,634Current portion of long-term debt
    
    
    68,842
    
    
    
    68,842Total current liabilities
    
    
    1,093,027
    
    
    
    1,117,628Non-current liabilitiesCapital lease obligations, less current portion
    
    
    46,982
    
    
    
    17,910Long-term debt, less current portion
    
    
    4,202,289
    
    
    
    4,256,953Deferred gain on the sale of real estate
    
    
    178,822
    
    
    
    178,822Total non-current liabilities
    
    
    4,428,093
    
    
    
    4,453,685Total liabilities
    
    
    5,521,120
    
    
    
    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 (December and March
2010) issued and outstanding
    
    
    6,536
    
    
    
    6,536Additional paid-in capital
    
    
    1,806,337
    
    
    
    1,768,598Accumulated deficit
    
    
    (706,641
    )
    
    
    (664,521
    )Total stockholders equity
    
    
    1,106,232
    
    
    
    1,110,613Total liabilities and stockholders equity
    
    $
    6,627,352
    
    
    $
    6,681,926
   2




---



##### Table of Contents



ELDORADO ARTESIAN SPRINGS, INC.
 
 Unaudited Statements of Operations
 For the Three Months Ended
    
    
    For the Nine Months EndedDecember 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2010
    
    
    2009RevenueWater and related
    
    $
    2,009,753
    
    
    $
    1,917,200
    
    
    $
    6,637,721
    
    
    $
    6,434,674Resort operations
    
    
    3,000
    
    
    
    
    
    
    
    135,558
    
    
    
    95,852Net revenue
    
    
    2,012,753
    
    
    
    1,917,200
    
    
    
    6,773,279
    
    
    
    6,530,526Cost of goods sold
    
    
    512,748
    
    
    
    435,420
    
    
    
    1,760,012
    
    
    
    1,631,432Gross profit
    
    
    1,500,005
    
    
    
    1,481,780
    
    
    
    5,013,267
    
    
    
    4,899,094Operating expensesSalaries and related
    
    
    759,407
    
    
    
    739,517
    
    
    
    2,488,909
    
    
    
    2,520,625Administrative and general
    
    
    357,076
    
    
    
    371,732
    
    
    
    1,216,692
    
    
    
    1,254,729Delivery
    
    
    178,931
    
    
    
    186,855
    
    
    
    574,758
    
    
    
    571,159Advertising and promotions
    
    
    45,512
    
    
    
    62,602
    
    
    
    206,321
    
    
    
    278,804Depreciation and
amortization
    
    
    115,375
    
    
    
    123,886
    
    
    
    350,051
    
    
    
    375,9041,456,301
    
    
    
    1,484,592
    
    
    
    4,836,731
    
    
    
    5,001,221Operating income (loss)
    
    
    43,704
    
    
    
    (2,812
    )
    
    
    176,536
    
    
    
    (102,127
    )Other income (expense)Interest income
    
    
    8,449
    
    
    
    6,727
    
    
    
    22,520
    
    
    
    19,905Interest expense
    
    
    (90,290
    )
    
    
    (88,254
    )
    
    
    (262,776
    )
    
    
    (276,151
    )(81,841
    )
    
    
    (81,527
    )
    
    
    (240,256
    )
    
    
    (256,246
    )Net loss before provision
for income taxes
    
    
    (38,137
    )
    
    
    (84,339
    )
    
    
    (63,720
    )
    
    
    (358,373
    )Income tax benefit
    
    
    13,100
    
    
    
    25,900
    
    
    
    21,600
    
    
    
    119,400Net loss
    
    $
    (25,037
    )
    
    $
    (58,439
    )
    
    $
    (42,120
    )
    
    $
    (238,973
    )Basic and
dilutive loss per common share
    
    $
    (0.00
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    (0.04
    )Weighted average number of
common shares outstanding 
basic and dilutive
    
    
    6,536,091
    
    
    
    6,536,091
    
    
    
    6,536,091
    
    
    
    6,536,091
   3




---



##### Table of Contents



ELDORADO ARTESIAN SPRINGS, INC.
 
 Unaudited Statements of Cash Flows
 Nine Months EndedDecember 31,2010
    
    
    2009Cash flows from operating activitiesNet loss
    
    $
    (42,120
    )
    
    $
    (238,973
    )Adjustments to reconcile net loss to net cash
provided by operating activitiesDepreciation and amortization
    
    
    350,051
    
    
    
    375,904Deferred income tax benefit
    
    
    (21,600
    )
    
    
    (119,400
    )Stock based compensation
    
    
    37,739
    
    
    
    24,120Accrued interest on related party note receivable
    
    
    (21,307
    )
    
    
    (19,770
    )Changes in certain assets and liabilitiesAccounts receivable
    
    
    (96,247
    )
    
    
    137,117Inventories
    
    
    (14,610
    )
    
    
    1,388Prepaid expenses and other
    
    
    61,114
    
    
    
    (30,272
    )Deposits
    
    
    
    
    
    
    (5,200
    )Accounts payable
    
    
    (143,528
    )
    
    
    150,764Accrued expenses
    
    
    49,322
    
    
    
    (75,744
    )Income tax receivable
    
    
    
    
    
    
    66,405Customer deposits
    
    
    11,690
    
    
    
    (770
    )Net cash provided by operating activities
    
    
    170,504
    
    
    
    265,569Cash flows from investing activitiesPurchases of property and equipment
    
    
    (143,863
    )
    
    
    (170,546
    )Net cash flows used in investing activities
    
    
    (143,863
    )
    
    
    (170,546
    )Cash flows from financing activitiesProceeds on line of credit
    
    
    105,000
    
    
    
    Payments on long-term obligations
    
    
    (148,840
    )
    
    
    (352,308
    )Net cash flows used in financing activities
    
    
    (43,840
    )
    
    
    (352,308
    )Net decrease in cash
    
    
    (17,199
    )
    
    
    (257,285
    )Cash  beginning of period
    
    
    65,304
    
    
    
    347,148Cash  end of period
    
    $
    48,105
    
    
    $
    309,257
       4




---



##### Table of Contents



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




---



##### Table of Contents



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




---



##### Table of Contents



Note 5  Commitments
 Line of Credit
  Notes Payable
   Renewable Energy Service Agreement
   7




---



##### Table of Contents



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
   8




---



##### Table of Contents



Organic Vitamin Charged Spring Water
  Three and Nine Months Ended December 31, 2010 Compared to Three and Nine Months Ended December 31,
2009
 Revenues
     Organic Vitamin Charged Spring Water Organic Vitamin
Charged Spring Water Organic Vitamin Charged Spring Water
  9




---



##### Table of Contents



Gross Profit/Cost of Goods Sold
  Operating Expenses
    10




---



##### Table of Contents



Interest, Taxes, Other Income and Other Expenses
     11




---



##### Table of Contents



Liquidity and Capital Resources
         12




---



##### Table of Contents



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




---



##### Table of Contents



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




---



##### Table of Contents



SIGNATURES
  ELDORADO ARTESIAN SPRINGS, INC.Date: February 14, 2011
    By:
    /s/ Douglas A. LarsonDouglas A. LarsonPresident
(Principal Executive Officer)Date: February 14, 2011
    By:
    /s/ Cathleen ShoenfeldCathleen ShoenfeldChief Financial Officer
(Principal Financial Officer)  15




---



##### Table of Contents



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