ELDORADO ARTESIAN SPRINGS INC - FORM 10-K

Attached files

file	filename
EX-31.2 - CERTIFICATION - ELDORADO ARTESIAN SPRINGS INC	eldo_ex312.htm
EX-31.1 - CERTIFICATION - ELDORADO ARTESIAN SPRINGS INC	eldo_ex311.htm
EX-32.2 - CERTIFICATION - ELDORADO ARTESIAN SPRINGS INC	eldo_ex322.htm
EX-32.1 - CERTIFICATION - ELDORADO ARTESIAN SPRINGS INC	eldo_ex321.htm
EX-23.1 - CONSENT - ELDORADO ARTESIAN SPRINGS INC	eldo_ex231.htm

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, 2015

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.

(Exact name of registrant as specified in its charter)

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

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.001 per share

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes o No þ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o		Non-accelerated filer o		Smaller reporting company þ
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $4,027,255.

As of June 29, 2015, the Issuer had a total of 6,036,091 shares of common stock, $.001 par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

PART I

	Item 1.	Business	3

	Item 1A.	Risk Factors	6

	Item 1B.	Unresolved Staff Comments	6

	Item 2.	Properties	6

	Item 3.	Legal Proceedings	7

	Item 4.	Mine Safety Disclosures	7

PART II

	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	8

	Item 6.	Selected Financial Data	8

	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	13

	Item 8.	Financial Statements and Supplementary Data	13

	Item 9.	Change In and Disagreements with Accountants on Accounting and Financial Disclosure	15

	Item 9A.	Controls and Procedures	15

	Item 9B.	Other Information	16

PART III

	Item 10.	Directors, Executive Officers and Corporate Governance	17

	Item 11.	Executive Compensation	20

	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	21

	Item 13.	Certain Relationships and Related Transactions, and Director Independence	23

	Item 14.	Principal Accounting Fees and Services	23

PART IV

	Item 15.	Exhibits and Financial Statement Schedules	24

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.

The Company bottles, markets and distributes natural spring water under the Eldorado Artesian Spring Water brand. The Company also markets and distributes organic vitamin charged spring water under the Eldorado Artesian Spring Water brand. The Company distributes to businesses, homes and offices using its own trucks for distribution primarily in Colorado. The Company also distributes directly to regional warehouses for major grocery store chains and distribution companies.

Industry Background

Bottled water is perceived by many consumers as being a healthy, natural beverage, and this perception has driven demand for this product among many consumers. Recently, reports have been released that show that many water systems in America are contaminated with the residual waste of pharmaceutical drugs, caffeine, steroids and countless other chemicals that are nearly impossible for the municipal treatment systems today to eliminate from the water supply. Further fuel to the water market was provided by the rising health consciousness of people in general, as they have turned away from high caloric and alcoholic beverages in favor of products that are perceived as natural and beneficial.

Bottles used for the smaller packaging, typically in sizes 1.5 liters and smaller, are made of polyethylene terephthalate (PET), a premium clear plastic. These bottles are commonly referred to in the beverage industry as PET bottles. The PET market has been driven by manufacturers who sell their water in smaller, more portable sizes, which are sold at retail and intended to fit the active lifestyles of bottled water consumers. The PET category has been the driving force behind the explosive growth in bottled water consumption. It is the most competitive market, dominated by four of the largest food and beverage companies in the world.

While much of the bottled water market is still highly fragmented and controlled by local brands, consolidation is rapidly occurring, as four companies have come to dominate much of the market. Larger multi-national companies have been active in acquisitions of smaller more regional bottled water companies. Coca-Cola (Dasani) and PepsiCo (Aquafina) have both been successful in producing and marketing their own brands, creating much competition for the smaller regional producers that typically have higher costs of production and distribution.

Company Background

The primary business of the Company is the bottling and sale of spring water from springs located in Eldorado Springs, Colorado on property owned by the Company. In addition to real property, the wells and springs thereon, and water rights, the Company owns a bottling plant in Louisville, Colorado (including a building and bottling equipment), associated containers and equipment, resort buildings, a residential home, and an outdoor swimming pool which are located on the property in Eldorado Springs, Colorado.

The Company began operations by delivering 5 gallon bottles and renting equipment to homes and offices as well as delivering 1 gallon bottles to retailers. In 1994, the Company introduced the 1.5 liter bottle, which was followed, in 1995, with the 1.0 liter, 0.5 liter and 24 ounce bottles.

The Company bottles the same natural spring water that emanates from the source in Eldorado Springs, Colorado. The Company also utilizes additional high speed bottling equipment that is utilized at the Louisville warehouse. By utilizing high speed equipment, and the additional warehouse, bottling and office space, the Company has been able to realize benefits in increased bottling speeds as well as efficiencies in transporting and storing raw materials and finished goods.

The Company has reacted to consumer demands by adding additional products to its service and delivery operations. In order to handle competition from other companies, the Company added filtration products in July 2003. Currently, the Company services approximately 1,100 filter accounts.

In October 2005, the Company added coffee products and coffee equipment as products to be delivered off of existing route vehicles. The coffee is provided a few large coffee roasters utilizing their various coffee brands to be delivered by our employees. Coffee has been integrated into the Company’s current distribution channel and is a product that is counter-seasonal to water. The Company expects to continue to grow the coffee sector of the business.

In September 2007, the Company introduced a line of Organic Vitamin Charged spring water. The beverage industry has been influenced by the Enhanced segment of the beverage market. The Company believes the Organic Vitamin Charged spring water will compete based on the organic ingredients, superior taste and brand recognition in the Colorado area where we currently distribute our water products. The Company continues to try and grow the distribution of this product off of existing delivery vehicles as well as through other independent distribution companies.

Water Source and Bottling

When we purchased the Eldorado Springs property in 1983, included in the purchase of the real estate were certain water rights that had been decreed for the water sources located on the property. We have the right to beneficially use the water derived from the sources of water that are the subject of the decreed water rights, unless there is a call being made downstream from our location by a water right that is senior to ours. A senior water right would be obtained by those that applied water to a beneficial use prior to the uses associated with our water sources. Because the Eldorado Springs area was not developed until the early 1900’s, there are many senior water rights that could place a call on the stream and, unless we have a recognized replacement source of water or a decreed augmentation plan (“Augmentation Plan”), we would be forced to stop using the water from our sources.

Because demand for our spring water exists on a year round basis, we require a replacement water source that can be delivered to the stream at any time during the year. Since the drought of 2002, we purchased shares of stock of Farmers Reservoir and Irrigation Company (“FRICO”), entitling us to use a pro rata portion of the water belonging to FRICO as operated pursuant to state regulations that govern what are known as Mutual Ditch Companies. The Marshall reservoir is located in close proximity to our water sources in Eldorado Springs and because the water is stored, it can be released upon demand to meet our obligations.

The water represented by our shares in the FRICO system had been historically used for irrigating croplands. This meant that, in addition to obtaining a decreed Augmentation Plan from the Colorado Water Court, we had to obtain a change of use decree in order to use the water for replacing our withdrawals as part of the Augmentation Plan. The Water Court of the State of Colorado entered a Decree on April 16, 2013 approving the change in water rights and the terms and conditions of our Augmentation Plan, subject to the retained jurisdiction clauses normally associated with such actions. The Decree allows us to use the water represented by our FRICO shares as augmentation water to replace our out-of-priority withdrawals from our springs and other sources. It also established the conditions under which we can add other sources of water to the Augmentation Plan for use as additional replacement water. It is possible that our ability to withdraw water from our springs in a particular year may be limited if the water associated with our FRICO shares under drought conditions is not sufficient to meet all of our replacement requirements. Because drought is an ever present possibility in our location, we plan to continue to seek additional sources of replacement and augmentation water to add to our Augmentation Plan.

Products

The Company is principally in the business of selling bottled artesian spring water. Sales of the Company's water have historically been made by selling five gallon and three gallon bottles of water directly to homes and businesses, retail grocery stores and distributors located in Colorado. The Company also sells its water at wholesale to retail food stores (grocery chains), by packaging the water into smaller, more convenient sizes which are suitable for retail distribution. The Company rents coolers to customers to dispense the bottled water. The Company also rents and sells filtration equipment to customers for home and office accounts. The Company added coffee and coffee equipment to its product mix delivered to customers from route delivery vehicles. The coffee is packaged by Green Mountain Coffee Roasters and is delivered by the Company’s employees. The Company’s water bottling operation accounted for approximately 98.5% of the Company’s revenues for the fiscal year ended March 31, 2015. The Company also has a line of organic vitamin charged spring water. Additionally, in Eldorado Springs, the Company owns and operates a resort on its property during the summer months and rents a single-family home.

Sales and Distribution

Home/Commercial Delivery Business

Direct delivery of bottled water to homes and businesses has historically been the focus of the Company’s business. The Company’s bottled water delivery business primarily consists of the sale of five gallon and three gallon containers of water to customers who lease water dispensers from the Company. The Company delivers these bottles directly to customers using trucks owned or leased by the Company. The Company’s delivery sales are made primarily in the Denver/Boulder, Colorado metropolitan area (but also in selected other cities along the front range). As of March 31, 2015, the Company had approximately 17,500 active delivery accounts, and the delivery business currently accounts for roughly 60% of the Company's revenues. Of the five and three gallon accounts, approximately 50% were home accounts and 50% were commercial accounts.

One Gallon and PET Packaging/Retail Distribution Business

The one gallon case products and PET case products business consists principally of the wholesale distribution of the Company’s case products to grocery store chains with operations primarily in Colorado. The Company uses its own trucks to deliver its case products to grocery customers’ warehouses in the Denver metropolitan area. From there, the water is shipped to customers’ grocery stores throughout Colorado. In addition, because some of the grocery customers’ warehouse distribution extends beyond the State of Colorado, the Company receives some distribution at these customers’ grocery stores located in New Mexico, Wyoming, Kansas, Utah, Oklahoma and Texas.

Marketing

The Company focuses on three major areas in marketing its products: five gallon and three gallon sales, small package products (.5 liter, 1 liter, 24 ounce, 1.5 liter and 1 gallon cases), and brand name recognition.

The five gallon and three gallon products are primarily sold through the acquisition of new accounts attracted by personal sales representatives at local events strategically located throughout the area. The efforts of the staff are augmented by internet marketing, the Company’s website, radio, and occasional television advertisements and by product donation to local events.

The smaller packages and the organic vitamin charged spring water, which are sold principally through retail chain stores, are effectively marketed by using point of purchase inducements to gain new trial customers, usually in the form of discounts in price in conjunction with signage.

The Company attempts to build brand name awareness by sponsoring or participating in many local events. The Company has been a sponsor of many races and events including the Bolder Boulder 10K race, the Eldorado Springs Cancer Research Run, the Taste of Colorado and many other local events.

Supplies

Water bottled by the Company comes from springs located on the Company's property in Eldorado Springs, Colorado which have been flowing for many years. While the Company could lose rights to the spring water, the Company does not foresee any disruption in the flow of the spring water. The Company currently sources all of its raw materials from outside vendors. Suppliers of the bottles have experienced seasonal shortages resulting from resin shortages. Changes in the supply of the bottles can affect the prices. The Company tries to mitigate possible shortages by maintaining sufficient inventory safety stocks so as not to interrupt production.

Seasonality

Sales tend to be mildly seasonal in the bottled water business. A ten to fifteen percent differential in sales is normally experienced between the peak summer months from May to September and the low winter months from November to March. As a result, revenues tend to be highest in the Company’s first and second fiscal quarters, and somewhat lower in the third and fourth fiscal quarters.

Competition

The bottled water industry has numerous competitors. Generally, the industry is made up of a few large companies (who own multiple brands), smaller companies whose products are distributed only on a regional or local basis and some private label brands. The Company's competitors include more diversified corporations having substantially greater assets and larger sales organizations than the Company, as well as other small firms. The Company also competes in the retail area for the smaller PET packages, one gallon packages and the organic vitamin charged spring water with products including Aquafina, Arrowhead, Evian, Deep Rock, Dasani, Vitamin Water, Propel, Snapple and various private label brands. The Company is a smaller regional company compared to the competitors as most of the Company’s products are sold in Colorado. The Company competes on the basis of product quality, customer service, and price. The Company believes that the products' superior taste, competitive pricing and attractive packaging are significant factors in maintaining the Company's competitive position.

Government Regulation

The Company's bottling operations are subject to regulation by the U.S. Food and Drug Administration and the Colorado Department of Public Health and Environment Consumer Protection Division. Weekly product and source bacteriological tests are required, and annual inspections are performed.

The Company is also subject to regulation under the Colorado Primary Drinking Water Regulations and the United States Safe Drinking Water Act. These regulations pertain to the operation of the water utility system owned by the Company that services the town of Eldorado Springs. These regulations are administered by the State of Colorado Health Department Drinking Water Division and regular periodic testing is required for this operation.

The Company operates a swimming pool that is also subject to regulation by the State of Colorado. These regulations are administered by the Boulder County Health Department and require periodic daily testing and agency inspections.

It is the Company's understanding that it is in compliance with these regulations as communicated by representatives of the responsible local agencies. Compliance with the standards and regulations above do not require material expenditures.

Employees

As of March 31, 2015, the Company had 83 full-time employees. During the summer months, the Company employs approximately 14 seasonal employees for the operation of the pool.

ITEM 1A. RISK FACTORS.

As a smaller reporting company, this item is not required.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

The Company owns property in two locations.

Eldorado Springs, Colorado

The Company owns approximately 42 acres of land in Eldorado Springs, Colorado. The buildings owned by the Company at this location total approximately 12,000 square feet. The Company uses this warehouse space for the fill station for the spring water as well as for storage of products from time to time. The Company also continues to use office space next to the warehouse. As part of the property in Eldorado Springs, the Company owns the wells and springs thereon and certain water rights. The Company owns an outdoor swimming pool that is operated during the summer months. Virtually all of the Company's property in Eldorado Springs is pledged as collateral on Company loan balances.

Louisville, Colorado

In August 2001, the Company purchased a new facility in Louisville, Colorado located approximately 10 miles from Eldorado Springs. This facility is approximately 40,000 square feet. The Company utilizes approximately 9,000 square feet for office space for its corporate headquarters. The facility also serves as the bottling facility and warehouse space for raw and finished materials. The building sits on 6.6 acres owned by the Company. The facility is financed through traditional bank financing.

ITEM 3. LEGAL PROCEEDINGS.

There are no material pending legal proceedings to which the Company is a party or to which any of its properties are subject.

ITEM 4. Mine Safety Disclosures

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Price of Common Stock

The Company’s common stock is traded in the over-the-counter market on the OTC Bulletin Board (“OTCBB”) under the symbol “ELDO.” Corporate Stock Transfer is the Company’s transfer agent and registrar, and is able to respond to inquiries from stockholders on its website: www.corporatestock.com or at its mailing address: 3200 Cherry Creek Drive South, Suite #430, Denver, CO 80209. The quotations presented below reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions. The following table sets forth, for the periods shown, high and low sales prices of our common stock, as quoted by the OTCBB:

Fiscal Year 2015	High		Low
Fourth Quarter through March 31, 2015	$	1.25	$	1.00
Third Quarter through December 31, 2014	$	1.18	$	0.90
Second Quarter through September 30, 2014	$	1.20	$	0.66
First Quarter through June 30, 2014	$	1.88	$	0.81

Fiscal Year 2014	High		Low
Fourth Quarter through March 31, 2014	$	1.89	$	0.72
Third Quarter through December 31, 2013	$	0.90	$	0.66
Second Quarter through September 30, 2013	$	0.83	$	0.44
First Quarter through June 30, 2013	$	0.44	$	0.44

The last price at which the Company’s common stock was sold was $1.40 on June 26, 2015.

Holders

The Company had 139 record owners of its common stock as of June 26, 2015.

Dividends

No dividends have been declared or paid to date on the Company's common stock, and the Company does not anticipate paying dividends in the foreseeable future. The Company follows a policy of cash preservation for future use in the business.

Recent Sales of Unregistered Securities

During the year ended March 31, 2015, we did not have any sales of securities in transactions that were not registered under the Securities Act of 1933, as amended, that have not been reported in a Form 8-K or Form 10-Q.

ITEM 6. SELECTED FINANCIAL DATA

As a smaller reporting company, this item is not required.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following Management’s Discussion and Analysis (MD&A) is intended to help the reader understand our Company. The MD&A should be read in conjunction with our consolidated financial statements and accompanying notes. The MD&A includes the following sections:

●	Forward Looking Statements

●	Business Overview

●	Results of Operations – Year Ended March 31, 2015 Compared to Year Ended March 31, 2014

●	Liquidity and Capital Resources

●	Contractual Obligations and Commitments

●	Impact of Inflation

●	Recently Issued Accounting Pronouncements

Forward Looking Statements

This filing contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and the Company intends that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements include the plans and objectives of management for future operations, including plans and objectives relating to services offered by and future economic performance of the Company.

The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties that might adversely affect the Company’s operating results in the future in a material way. Such risks and uncertainties include but are not limited to the following: availability of debt and equity financing, ability to purchase additional water rights, interest rate fluctuations, effects of regional economic and market conditions, labor and marketing costs, operating costs, packaging costs, intensity of competition and legal claims.

Business Overview

Eldorado Artesian Springs, Inc. is a Colorado based company that is primarily involved in the bottling and marketing of natural artesian spring water. The spring is located in the foothills of the Colorado Rocky Mountains and is surrounded by thousands of acres of state and city park land. The water rises up through many layers of sandstone under its own artesian pressure. Currently, the Company’s operations consist of its home/commercial delivery business (5 and 3 gallon bottles) and its one gallon and PET (polyethylene terephthalate, a premium clear plastic container) consumer business. The Company also has an organic vitamin charged spring water that is distributed locally off of the Company’s vehicles as well as to regional distribution facilities. The Company’s business includes the sales and rental of filtration and coffee dispensing equipment as well as the sale of coffee. During the summer months, the Company owns and operates a public swimming pool on its property and rents a single-family home on the property year round.

The Company’s headquarters and bottling facility consists of a total of approximately 40,000 square feet in Louisville, Colorado. The water is transported to the facility in stainless steel tanker trucks. Once at the bottling plant, the water is then transferred into stainless steel holding tanks until it is used for bottling.

Results of Operations

Performance Overview – Recent Trends

For the fiscal year ended March 31, 2015, the Company reported an increase in overall revenue of 11.5%. The increase in revenue was primarily due to overall increase in unit volumes across all categories. The number of home and office accounts increased for the fiscal year ended March 31, 2015 and the total units for many products increased to the retail establishments.

The Company continues to utilize advertising and promotional budgets to help promote various products. The Company has been pursuing ways to offer more sizes of the products off of our own delivery vehicles to increase sales to existing customers.

Overall operating expenses increased 13.0% for the year ended March 31, 2015 as compared to the same period ended March 31, 2014. Operating expenses increased from 65.5% of sales for the fiscal year ended March 31, 2014 to 66.3% of sales for the fiscal year ended March 31, 2015.

The Company believes that we are in a position to continue to grow in the markets we presently service by offering additional products and utilizing advertising and promotional budgets for promoting the products. We plan to continue to pursue additional business in new and emerging markets. In addition, we plan to continue to look for ways to decrease operating costs in order to maintain profitability in the future.

Year Ended March 31, 2015 Compared to Year Ended March 31, 2014

Sales

Sales for the year ended March 31, 2015 were $12,668,231 compared to $11,363,297 for the same period ended March 31, 2014, an increase of 11.5%.

Sales of the products used in the delivery to homes and offices which include 5 and 3 gallons bottles as well as the rental of dispenser units were 55.7% of sales and increased from $6,293,983 for fiscal year 2014 to $7,056,070 for fiscal year 2015, an increase of $762,087 or 12.1%. Total revenues for equipment rentals increased 20.4% from $554,321 for the fiscal year ended March 31, 2014 to $667,352 for the fiscal year ended March 31, 2015. The Company plans to continue to look for additional products to distribute to existing and new customers to increase sales off of existing route vehicles. The Company offers purified drinking water in the 5 gallon bottles for delivery off of existing route vehicles as a lower cost alternative for customers.

Filter rental and sales decreased slightly from $282,630 in fiscal year 2014 to $280,585 in fiscal year 2015, a decrease of $2,045 or less than 1%. The Company also sells coffee and coffee equipment from our existing route vehicles. Sales for coffee, coffee equipment and accessories increased from $318,160 for the fiscal year ended March 31, 2014 to $325,615 for the fiscal year ended March 31, 2015.

Sales of the Company’s PET products (.5 liter to 1.5 liter sizes), including private label products, represented 17.4% of sales for fiscal year 2015 and 17.3% of sales for fiscal year 2014 or $2,199,864 and $1,967,807, respectively. This represented an increase of 11.8%. The Company’s gallon size products were 15.7% of sales or $1,778,375 in fiscal year 2014 compared to 15.9% of sales or $2,016,697 in fiscal year 2015, an increase of 13.4%.

The Company distributes an organic vitamin charged spring water off of existing route vehicles as well as through major distributors throughout Colorado and in portions of surrounding states. Total net sales for the organic vitamin charge spring water were $137,084 for the fiscal year 2014 compared to $131,502 for the fiscal year 2015.

Gross Profit/Cost of Goods Sold

Cost of goods sold for fiscal year 2015 were $3,182,997, or 25.1% of sales, compared to $2,861,679, or 25.2% of sales for fiscal year 2014. Gross profit increased from $8,501,618 or 74.8% of sales for fiscal year 2014 to $9,485,234 or 74.9% of sales for fiscal year 2015. Overall, gross profit increased 11.6% from the fiscal year ended March 31, 2014.

Cost of goods sold for the home and office products were $428,837, or 6.1% of 5 and 3 gallon sales for fiscal year 2015, compared to $411,563, or 6.5% of 5 and 3 gallon sales for fiscal year 2014. Cost of goods sold for the Eldorado brand 1 gallon products were $1,119,290, or 55.5% of 1 gallon sales for fiscal year 2015, compared to $981,910, or 49.1% of 1 gallon sales for fiscal year 2014. Cost of goods sold for the PET products were $1,099,871, or 49.9% of sales for fiscal year 2015, compared to $966,151, or 49.1% of sales for fiscal year 2014.

Operating Expenses

Total operating expenses increased to $8,403,057 in fiscal year 2015 from $7,439,316 in fiscal year 2014, an increase of $963,741 or 13.0%. Of the total operating expenses, salaries and related expenses increased to $4,208,275 in fiscal year 2015, or 33.2% of sales, from $3,679,471 in fiscal year 2014, or 32.4% of sales. The increase in salaries and related expenses is due to the increase in overall revenues for the fiscal year 2015.

Administrative and general expenses increased 12.4% to $2,267,421 for fiscal year 2015 as compared to $2,017,330 for fiscal year 2014. The increase was due in part to the cost of implementing a new CRM system. The Company also had additional costs related to professional fees and legal fees. Additionally, the Company incurred an additional $40,000 of bad debt expense in order to increase the allowance for doubtful accounts.

Delivery expenses increased from $975,805 for fiscal year 2014 to $1,090,900 for fiscal year 2015, an increase of 11.8%. Truck maintenance and leased equipment fees increased over the previous fiscal year as the Company entered into agreements for additional vehicles and had repair costs for damage to the leased vehicles that were taken out of service.

Advertising and promotion expenses increased 2.6% for fiscal year 2015 compared to fiscal year 2014. Advertising and promotion expenses were 2.0% and 2.2% of sales for fiscal year 2015 and 2014, respectively.

Depreciation and amortization increased 12.3% for fiscal year 2015 as compared to fiscal year 2014. Depreciation and amortization was 4.6% of sales for fiscal year 2015 and 4.5% of sales for 2014.

Interest, Taxes, Other Income and Other Expenses

Interest expense for the year ended March 31, 2015 decreased 10.2% to $215,395 as compared to $239,826 for the year ended March 31, 2014 due to the reduction in the principal of the outstanding debt.

For the fiscal year ended March 31, 2015, the Company recorded income tax expense of $298,104 against our pretax income of $868,290, a 34.3% effective tax rate. For the fiscal year ended March 31, 2014, the Company recorded income tax expense of $320,051 against our pretax book income of $824,518, a 38.8% effective tax rate.

The Company had net income after taxes of $570,186 in fiscal year 2015 compared to net income of $504,467 for fiscal year 2014.

Liquidity and Capital Resources

Trade accounts receivable for the year ended March 31, 2015 were 24.4% more than at year ended March 31, 2014. This partially resulted from the increase in overall revenue. Days sales outstanding was approximately 48 days at March 31, 2015 and 42 days at March 31, 2014. In February 2014, the Company implemented a new customer relations management (CRM) system which affected our billing cycles. The Company expects billing schedules to return to normal resulting in days sales outstanding returning to previous levels.

Cash flows from operating activities had a net inflow of $1,045,970 for fiscal year 2015. The cash provided by operating activities represents an increase of $169,564 from fiscal year 2014. The largest reconciling item between net income and net cash flow from operations was the $577,267 of depreciation and amortization. The Company anticipates that cash flow from operations will be available to fund existing obligations for expected cash requirements over the next year.

Cash flows from investing activities resulted in a net outflow of $369,228 for fiscal year 2015 as compared to net outflow of $471,289 for fiscal year 2014, a decrease of 21.7%. This represents expenditures on equipment for additional electric water coolers, filtration equipment and coffee dispensing equipment that are rented to delivery customers.

Cash flows from financing activities resulted in a net outflow of $300,546 for fiscal year 2015 as compared to net outflow of $211,204 for fiscal year 2014, an increase of $89,342.

The Company’s cash balance at March 31, 2015 increased to $1,050,655 by a net amount of $376,196 from $674,459 at March 31, 2014.

The Company has a line of credit with ANB Bank in the amount of $750,000. As of March 31, 2015, the Company did not have a balance on the line of credit. The line of credit is subject to certain borrowing base requirements, requires monthly interest payments calculated at Prime plus 1% with a minimum rate of 4.25%. The borrowing base was $750,000 as of March 31, 2015. The line includes certain reporting and financial covenants, is cross-collateralized by accounts receivable and inventory and is guaranteed by two company executives who are also directors of the Company. The line has a maturity date of December 27, 2015.

The Company has a note payable with ANB Bank. The note bears interest at a fixed rate of 5.0%. The loan is payable at a rate of $17,690 per month, which includes principal and interest. A single “balloon payment: of the entire unpaid balance of principal and interest will be due on February 2, 2022. The Company has a note payable obtained from the Small Business Administration (“SBA). The SBA loan bears interest at a fixed rate of 4.951% for its full 20 year term and is payable at a rate of $10,089 per month until maturity on April 1, 2032.

The above loans are cross-collateralized with the line of credit and secured by substantially all of the assets of the Company, including the real estate in Eldorado Springs and Louisville, Colorado. The loan agreements specify events of default customary to facilities of their type, including any non-payment of principal, interest or other amounts, misrepresentation of representations and warranties, violation of covenants, certain events of bankruptcy or insolvency, certain material judgments, seizure of assets, or other material adverse changes. Upon the occurrence of an event of default, the payments by the Company of all of its outstanding obligations may be accelerated, and the commitments under the loan agreements may be terminated by the respective lender. The loans are guaranteed by two Company executives who are also directors of the Company and a previous director and officer of the Company. The loan agreements also include certain performance and reporting covenants.

Contractual Obligations and Commitments

The following table sets forth our contractual commitments as of March 31, 2015:

Fiscal Year End	Long-Term Debt and Capital Leases		Operating Lease		Total
2016	$	280,514	$	431,422	$	711,936
2017		202,459		418,866		621,325
2018		178,474		389,347		567,821
2019		163,001		349,002		512,003
2020		169,867		247,549		417,416
Thereafter		3,074,339		132,458		3,206,797

Total	$	4,068,654	$	1,968,644	$	6,037,298

Please refer to notes 4, 5, 7 and 8 in the Consolidated Financial Statements for more information regarding the Company’s future cash commitments.

Impact of Inflation

The Company believes that the results are not dependent upon moderate changes in inflation rates.

Recently Issued Accounting Pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. New pronouncements assessed by the Company recently are discussed below:

In August 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance clarifying management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The updated guidance requires that an entity’s management evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The update is effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. The amendment is not expected to have an impact on our consolidated financial statements or disclosures.

In May 2014, the FASB issued updated guidance which supersedes existing revenue recognition requirements in U.S. GAAP. The updated guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the guidance establishes a five-step approach for the recognition of revenue. The update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements.

In April 2014, the FASB issued updated guidance changing the requirements for reporting discontinued operations. The updated guidance requires that a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component or components meet the criteria to be classified as held for sale, is disposed of by sale or is disposed of other than by sale. The updated guidance also requires additional disclosures about discontinued operations. The updates are effective for disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014. The updates are not applicable to a component or components that are classified as held for sale before the effective date. The amendment is not expected to have a significant impact on our consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, this item is not required.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements of the Company, including the notes thereto, and the report of the independent registered public accounting firm, are included in this Annual Report and begin on page F-1.

Table of Contents

		Page
Report of Independent Registered Public Accounting Firm		F-1

Financial Statements

	Balance Sheets	F-2

	Statements of Operations	F-3

	Statement of Changes in Stockholders' Equity	F-4

	Statements of Cash Flows	F-5

Notes to Financial Statements		F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Eldorado Artesian Springs, Inc.

Louisville, Colorado

We have audited the accompanying balance sheets of Eldorado Artesian Springs, Inc. (“the Company”) as of March 31, 2015 and 2014 and the related statements of operations, changes in stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Eldorado Artesian Springs, Inc. as of March 31, 2015 and 2014 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

EKS&H, LLLP

June 29, 2015

Boulder, Colorado

F-1

Balance Sheets

	March 31, 2015		March 31, 2014
Assets
Current assets
Cash	$	1,050,655	$	674,459
Accounts receivable - trade, net		1,643,740		1,321,330
Inventories		450,041		377,907
Income tax receivable		-		57,358
Prepaid expenses and other		56,332		26,158
Deferred tax asset		44,470		29,648
Total current assets		3,245,238		2,486,860
Non-current assets
Property, plant and equipment, net		3,732,498		3,822,386
Investments		361,196		361,196
Water rights, net		71,675		71,675
Deposits		20,384		92,204
Other, net		109,545		125,482
Total non-current assets		4,295,298		4.472,943
Total assets	$	7,540,536	$	6,959,803

Liabilities and Stockholders' Equity

Current liabilities
Accounts payable	$	359,643	$	452,494
Accrued expenses		398,605		361,026
Income taxes payable		138,914		-
Customer deposits		146,639		107,191
Current portion of capital lease obligations		91,860		82,508
Current portion of long-term debt		188,654		189,042
Total current liabilities		1,324,315		1,192,261
Non-current liabilities
Deferred tax liability		147,805		59,151
Capital lease obligations, less current portion		68,771		73,462
Long-term debt, less current portion		3,719,369		3,924,839
Total non-current liabilities		3,935,945		4,057,452
Total liabilities		5,260,260		5,249,713
Commitments and contingencies
Stockholders' equity
Preferred 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 issued and outstanding		6,036		6,036
Additional paid-in capital		1,693,738		1,693,738
Retained Earnings		580,502		10,316
Total stockholders' equity		2,280,276		1,710,090
Total liabilities and stockholders' equity	$	7,540,536	$	6,959,803

See notes to financial statements

F-2

Statements of Operations

	For the Years Ended
	March 31,
	2015			2014
Revenues
Water and related, net	$	12,497,850		$	11,192,711
Resort operations		170,381			170,586
Total revenues		12,668,231			11,363,297
Cost of goods sold		3,182,997			2,861,679
Gross profit		9,485,234			8,501,618
Operating expenses
Salaries and related expenses		4,208,275			3,679,471
Administrative and general		2,267,421			2,017,330
Delivery		1,090,900			975,805
Advertising and promotions		259,194			252,540
Depreciation and amortization		577,267			514,170
Total operating expenses		8,403,057			7,439,316
Income from operations		1,082,177			1,062,302
Other income (expense)
Interest income		1,508			2,042
Interest expense		(215,395	)		(239,826	)
Total other expense		(213,887	)		(237,784	)
Income before income taxes		868,290			824,518
Income tax expense
Current		(224,271	)		(268,375	)
Deferred		(73,833	)		(51,676	)
Total income tax expense		(298,104	)		(320,051	)
Net income available to common shareholders	$	570,186		$	504,467

Basic common shares outstanding		6,036,091			6,036,091
Basic income per common share	$	0.09		$	0.08

Diluted weighted average common shares outstanding		6,038,738			6,051,043
Diluted income per common share	$	0.09		$	0.08

See notes to financial statements

F-3

Statement of Changes in Stockholders' Equity

For the Years Ended March 31, 2015 and 2014

	Common Stock						(Accumulated Deficit)
	Shares		Amount		Additional Paid-in Capital		Retained Earnings			Total Stockholders’ Equity
Balance - March 31, 2013		6,036,091	$	6,036	$	1,693,738	$	(494,151	)	$	1,205,623
Net income		-		-		-		504,467			504,467
Balance - March 31, 2014		6,036,091	$	6,036	$	1,693,738	$	10,316		$	1,710,090
Net income		-		-		-		570,186			570,186
Balance - March 31, 2015		6,036,091	$	6,036	$	1,693,738	$	580,502		$	2,280,276

See notes to financial statements

F-4

Statements of Cash Flows

	For the Years Ended
	March 31,
	2015			2014
Cash flows from operating activities
Net income	$	570,186		$	504,467
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		577,267			514,170
Deferred income taxes		73,833			51,676
Changes in assets and liabilities
Accounts receivable		(322,410	)		(314,133	)
Inventories		(72,134	)		42,141
Prepaid expenses and other		38,781			12,883
Accounts payable		(92,851	)		37,052
Accrued expenses		37,579			92,010
Income taxes payable		196,271			(66,125	)
Customer deposits		39,448			2,265
Net cash provided by operating activities		1,045,970			876,406
Cash flows from investing activities
Purchases of property and equipment		(369,228	)		(471,289	)
Net cash used in investing activities		(369,228	)		(471,289	)
Cash flows from financing activities
Payments on long-term debt and capital leases		(300,546	)		(230,123	)
Borrowings on long-term obligations		-			18,919
Net cash used in financing activities		(300,546	)		(211,204	)
Net increase in cash		376,196			193,913
Cash – beginning of year		674,459			480,546
Cash - end of year	$	1,050,655		$	674,459

Supplemental disclosure of cash flow information

Cash paid during the year for interest was $215,395 (2015) and $239,826 (2014).

Cash paid during the year for income taxes was $28,000 (2015) and $292,000 (2014).

The Company acquired $99,349 (2015) and $234,975 (2014) in equipment through capital leases.

See notes to financial statements

F-5

Note 1 - Description of Business and Summary of Significant Accounting Policies

Eldorado Artesian Springs, Inc., (the "Company"), is a Colorado corporation which primarily sells bottled Artesian spring water from springs located in Eldorado Springs, Colorado and rents water dispensers. The Company sells coffee products and rents coffee equipment to customers. The Company also sells a line of Organic Vitamin Charged Spring Water to retail stores. During the summer months, the Company operates a natural Artesian spring pool. The Company's bottling and distribution facility is located in Louisville, Colorado.

Concentrations of Credit Risk

The Company maintains cash in bank accounts that may, at times, exceed FDIC insurance limits. Financial instruments potentially subjecting the Company to concentrations of credit risk consist primarily of accounts receivable. The Company grants credit to customers located primarily in Colorado. The Company periodically performs credit analysis and monitors the financial condition of its clients in order to minimize credit risk.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. At March 31, 2015 and 2014, the Company did not have any cash equivalents.

Accounts Receivable

The Company extends unsecured credit to its customers in the ordinary course of business. The Company considers a reserve for doubtful accounts based on the creditworthiness of the customer. The provision for uncollectible amounts is continually reviewed and adjusted to maintain the allowance at a level considered adequate to cover future losses. The allowance is management's best estimate of uncollectible amounts and is determined based on historical performance that is tracked by the Company on an ongoing basis.

Inventories

Inventories consist of direct costs which are primarily made up of water bottles and packaging and are stated at the lower of cost or market, determined using the first-in, first-out method (FIFO).

Deposits

Deposits consist primarily of deposits related to the purchase of equipment.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Machinery, equipment, furniture and fixtures are depreciated using various methods over their estimated useful lives, ranging from 3 to 7 years. Buildings and improvements are depreciated using the straight-line method over the estimated useful lives for owned assets, ranging from 15 to 39 years. Depreciable lives on leasehold improvements are the shorter of the lease term or the useful life. Capital leased assets amortize over the estimated useful life or related lease term.

Investments

The Company owns investments of capital stock in an investee. This investment entitles the Company to an equal pro rata share of this investee’s irrigation system. As the ownership represents less than 20% ownership of the Company the value of this investment is stated at cost and evaluated for impairment if there are indications of such.

Water Rights

Water rights are recorded at cost. As water rights have an indefinite life, no amortization is recognized.

F-6

Other Assets

Other assets consist of loan fees and other costs which have been recorded at cost and are being amortized using the effective interest method over the term of the loan. The Company expects to amortize approximately $18,500 each year for the next three years.

Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company looks primarily to the undiscounted future cash flows in its assessment of whether or not long-lived assets have been impaired. No impairments were deemed necessary during the fiscal years 2015 and 2014.

Customer Deposits

Customer deposits consist primarily of deposits on bottles and equipment.

Stock Based Compensation

The Company accounts for stock-based compensation arrangements for employees and recognizes compensation expense for share-based awards based on the grant date estimated fair value of the awards using the Black Scholes option pricing model. Compensation expense for all share-based awards is recognized in earnings over the requisite service period (generally the vesting period). The Company records compensation expense related to non-employees over the service periods commensurate with the services provided. The Company did not have any stock based compensation expense during fiscal year 2015 and 2014.

Income Taxes

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined based on the differences between the financial statement and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that are not expected to be realized based on available evidence.

The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. As of March 31, 2015 and 2014, no liabilities for uncertain tax positions have been recorded.

Basic and Diluted Income Per Common Share

Basic earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period that they were outstanding. Diluted earnings per share is computed in a manner consistent with that of basic earnings per share while giving effect to all potentially dilutive common shares that were outstanding during the period.

Potentially dilutive common shares and outstanding options and warrants which have been excluded from the computation of diluted income per share as of March 31, 2015 and 2014 were 78,000 and 99,000, respectively, because their effect would have been antidilutive.

Fair Value of Financial Instruments

The carrying amounts of financial instruments including cash, receivables, accounts payable and accrued expenses approximated fair value as of March 31, 2015, because of the relatively short maturity of these instruments. The carrying amount of long-term debt issued approximates fair value as of March 31, 2015 because interest rates on these instruments approximate market interest rates.

F-7

Revenue Recognition

Revenue is recognized on the sale of products as customer shipments are made. Returns are estimated and recorded at the time of sale. Rental revenue is recognized on a monthly basis upon commencement of the lease agreement. Water utility revenue is recognized on a monthly basis based upon the monthly contracted rate.

Shipping Costs

Shipping costs for materials used in the final products are included in the cost of goods. Shipping costs for products delivered to customers are included in total operating expenses.

Promotional Expense – Consideration to Vendors

The Company recognizes certain promotional expense as a reduction in revenues. These costs included off invoice discounts to resellers and promotions for customers.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising expense for the years ended March 31, 2015 and 2014 were $259,194 and $252,540, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

F-8

Note 2 - Balance Sheet Disclosures

Accounts receivable consist of the following:

	March 31, 2015			March 31, 2014
Accounts receivable
Accounts receivable	$	1,763,740		$	1,401,330
Allowance for doubtful accounts		(120,000	)		(80,000	)
	$	1,643,740		$	1,321,330

Property, plant and equipment consist of the following at:

	March 31, 2015			March 31, 2014
Property, plant and equipment
Land	$	1,000,263		$	1,000,263
Buildings and improvements		4,634,662			4,543,436
Machinery and equipment		6,545,792			6,228,346
Office furniture and fixtures		390,224			330,561
CRM/ERP system		220,807			220,807
		12,791,748			12,323,413
Less accumulated depreciation and amortization		(9,059,250	)		(8,501,027	)
	$	3,732,498		$	3,822,386

Depreciation expense for the fiscal year ended March 31, 2015 and 2014 was $558,465 and $497,507, respectively.

Accrued expenses consist of the following at:

	March 31, 2015		March 31, 2014
Accrued expenses
Accrued payroll and taxes	$	185,843	$	153,680
Accrued property taxes		169,970		171,000
Accrued sales taxes		42,792		36,346
	$	398,605	$	361,026

F-9

Note 3 - Long-Term Debt

Long-term debt is as follows:

	March 31, 2015			March 31, 2014

Note payable to a bank with interest fixed at 5.0% until February 2017, at which time the interest rate may change. The note calls for monthly principal and interest payments of $17,690 with unpaid principal and interest due February 2, 2022. The note is cross-collateralized with the line of credit and backed by substantially all assets of the Company and guaranteed by two Company executives who are also directors of the Company and a previous director and officer of the Company. The note is subject to certain restrictive covenants.	$	2,568,417		$	2,648,620
Note payable to a bank with an effective interest rate of 4.951% for the full 20 year term. The note calls for monthly principal and interest payments of $10,089 and matures in April 2032. The note is cross collateralized with the line of credit and backed by substantially all assets of the Company and guaranteed by two Company executives who are also directors of the Company and a previous director and officer of the Company.	$	1,289,506		$	1,348,046
Note payable to a bank with interest fixed at 6% until maturity in October 2017. The note calls for monthly principal and interest payments of $349. The note is cross collateralized with the line of credit and backed by substantially all assets of the Company and is guaranteed by two Company executives who are also directors of the Company and a previous director and officer of the Company.	$	3,704		$	9,873
Note payable to a bank with interest fixed at 6% until maturity in May 2017. The note calls for monthly principal and interest payments of $444. The note is cross collateralized with the line of credit and backed by substantially all assets of the Company and is guaranteed by two Company executives who are also directors of the Company and a previous director and officer of the Company.	$	10,396		$	15,342
Agreement with a vendor for CRM software. Agreement calls for monthly payments of $4,000 until February 2016.	$	36,000		$	92,000
		3,908,023			4,113,881
Less current portion		(188,654	)		(189,042	)
	$	3,719,369		$	3,924,839

Maturities of Long-Term Debt Obligations:

Year Ending March 31,
2016	$	188,654
2017		155,260
2018		156,902
2019		163,001
2020		169,867
Thereafter		3,074,339
Total payments		3,908,023

Note 4 – Line of Credit

The Company has a line of credit with ANB Bank in the amount of $750,000. As of March 31, 2015, the Company did not have a balance on the line of credit. The line of credit is subject to certain borrowing base requirements, requires monthly interest payments calculated at Prime plus 1% with a minimum rate of 4.25%. The borrowing base was $750,000 as of March 31, 2015. The line includes certain reporting and financial covenants, is cross-collateralized by accounts receivable and inventory of the Company and is guaranteed by two Company executives who are also directors of the Company. The line has a maturity date of December 27, 2015.

Note 5 - Capital Leases

The Company acquired assets under the provisions of a long-term lease. For financial reporting purposes, minimum lease payments relating to the assets have been capitalized. The leases have various expiration dates between September 2015 and October 2017. Amortization of the leased property is included in depreciation expense.

F-10

The assets under capital lease have cost and accumulated amortization as follows:

	March 31,
	2015
Cost	$	419,549
Less accumulated amortization		(299,336	)
	$	120,213

Maturities of capital lease obligations are as follows:

Year Ending March 31,
2016	$	105,999
2017		51,226
2018		24,434
Total minimum lease payments		181,659
Amount representing interest		(21,028	)
Present value of net minimum lease payments		160,631
Less current portion		(91,860	)
Long term capital lease obligation	$	68,771

Note 6 - Income Taxes

The Company is subject to income taxes in the U.S. federal jurisdiction, and various state and local jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. In the United States, the tax years 2011-2014 remain open to examination by the federal Internal Revenue Service and the tax years 2010-2014 remain open for various state taxing authorities. The net current and long-term deferred tax assets and liabilities in the accompanying balance sheet include the following:

	March 31, 2015		March 31, 2014
Current deferred tax asset	$	44,470	$	29,648
Current deferred tax liability		-		-
Net current deferred tax asset	$	44,470	$	29,648

Temporary differences giving rise to the net deferred tax (liability) asset are as follows:

Allowance for doubtful accounts	$	44,470		$	29,648
Property and equipment		(149,805	)		(85,673	)
Net operating loss and credits		2,000			26,522
	$	(103,335	)	$	(29,503	)

F-11

The following is a reconciliation of the statutory federal income tax rate applied to pre-tax accounting net income compared to the income tax expense (benefit) in the statements of income:

	For the Years Ended
	March 31,
	2015			2014

Federal income taxes computed at statutory rate	$	295,218		$	280,336
State income taxes, net		25,432			23,760
Return to provision adjustments		(19,007	)		3,820
Domestic production activities deduction		(26,570	)		-
Other disallowances		23,031			12.135
	$	298,104		$	320,051
Effective tax rate		34.3	%		38.8	%

Note 7 – Commitments and Contingency

Operating Leases

The Company leases delivery trucks, vehicles, equipment and property under non-cancelable operating leases. Rent expense for these leases was $463,662 and $446,302 for the years ended March 31, 2015 and 2014, respectively.

Future minimum lease payments under these leases are approximately as follows:

Year Ending March 31,
2016	$	431,422
2017		418,866
2018		389,347
2019		349,002
2020		247,549
Thereafter		132,458
	$	1,968,644

Renewable Energy Service Agreement

On June 11, 2009, the Company entered into a twenty year renewable energy service agreement with Eldorado Springs Solar, LLC, an unrelated third party, to design, install, own, operate and maintain a solar electricity generating system at our property in Louisville, Colorado. The Company will purchase all of the solar electricity generated by the system which will provide approximately 50% of the electricity needs at the facility in Louisville, Colorado. The agreement provides a guaranteed energy rate schedule for 10 years with a reset rate in year eleven for the electric cost. If the Company was to terminate the agreement the Company would be required to pay a termination penalty. As of March 31, 2015, this penalty would be approximately $350,000. The Company also has the option to purchase and take title to the system starting in year eleven. During the fiscal year ended March 31, 2015 and 2014, the Company expensed $9,916 and $11,750, respectively, in utility costs under this agreement.

Note 8 – Contingency

When we purchased the Eldorado Springs property in 1983, included in the purchase of the real estate were certain water rights that had been decreed for the water sources located on the property. We have the right to beneficially use the water derived from the sources of water that are the subject of the decreed water rights, unless there is a call being made downstream from our location by a water right that is senior to ours. A senior water right would be obtained by those that applied water to a beneficial use prior to the uses associated with our water sources. Because the Eldorado Springs area was not developed until the early 1900’s there are many senior water rights that could place a call on the stream and unless we have a recognized replacement source of water or a decreed augmentation plan (“Augmentation Plan”), we would be forced to stop using the water from our sources.

F-12

Because demand for our spring water exists on a year round basis, we require a replacement water source that can be delivered to the stream at any time during the year. Since the drought of 2002, we purchased shares of stock of FRICO, entitling us to use a pro rata portion of the water belonging to FRICO as operated pursuant to state regulations that govern what are known as Mutual Ditch Companies. The Marshall reservoir is located in close proximity to our water sources in Eldorado Springs and because the water is stored, it can be released upon demand to meet our obligations.

The water represented by our shares in the FRICO system had been historically used for irrigating croplands. This meant that, in addition to obtaining a decreed Augmentation Plan from the Colorado Water Court, we had to obtain a change of use decree in order to use the water for replacing our withdrawals as part of the Augmentation Plan. The Water Court of the State of Colorado entered a Decree on April 16, 2013 approving the change in water rights and the terms and conditions of our Augmentation Plan, subject to the retained jurisdiction clauses normally associated with such actions. The Decree allows us to use the water represented by our FRICO shares as augmentation water to replace our out-of-priority withdrawals from our springs and other sources. It also established the conditions under which we can add other sources of water to the Augmentation Plan for use as additional replacement water. It is possible that our ability to withdraw water from our springs in a particular year may be limited if the water associated with our FRICO shares under drought conditions is not sufficient to meet all of our replacement requirements. Because drought is an ever present possibility in our location, we will continue to seek additional sources of replacement and augmentation water to add to our Augmentation Plan.

Note 9 - Stockholders' Equity

Stock Options

The Company has a qualified stock plan, the 2008 Incentive Stock Plan, pursuant to which 2,000,000 shares were reserved for issuance. As of March 31, 2015, 1,950,000 shares were available for future grant. Additionally, the Company previously had a qualified stock plan, the 1997 Stock Option Plan, which expired in 2007, pursuant to which 875,000 shares were reserved for issuance. As of March 31, 2015, 38,000 shares were reserved for issuance pursuant to outstanding grants and no shares were available for future grant as the plan has expired. The 2008 Incentive Stock Plan and the 1997 Stock Option Plan, referred to herein as the Plans, and the shares issuable there under, are both registered on Form S-8 with the Securities and Exchange Commission. The Plans provide for the grant of options and other equity based awards to employees, directors and consultants of the Company and are administered by the Company’s Board of Directors.

The following table presents the activity for options outstanding:

	Stock Options			Weighted Average Exercise Price
Outstanding - March 31, 2013		104,000		$	1.57
Granted		-			-
Forfeited/canceled		(5,000	)		0.88
Exercised		-			-
Outstanding - March 31, 2014		99,000			1.60
Granted		-			-
Forfeited/canceled/expired		(11,000	)		1.00
Exercised		-			-
Outstanding - March 31, 2015		88,000		$	1.66

F-13

The following table presents the composition of options outstanding and exercisable:

		Options Outstanding						Options Exercisable
Exercise Prices		Number		Price*		Life*		Number		Price*
$	0.875		10,000	$	0.88		0.08		10,000	$	0.88
	1.65		13,000		1.65		1.09		13,000		1.65
	1.75		15,000		1.75		2.09		15,000		1.75
	1.80		50,000		1.80		3.05		50,000		1.80
Total - March 31, 2015			88,000	$	1.66		2.26		88,000	$	1.66

*Price and Life reflect the weighted average exercise price and weighted average remaining contractual life, in years, respectively.

As of March 31, 2015 all options granted under the 1997 Incentive Stock Plan were fully vested and 50,000 options were fully vested under the 2008 Incentive Stock Plan.

Note 10 - Employee Benefit Plan

The Company has adopted a 401(k) profit sharing plan for its employees. Employees become eligible to participate in the plan once they have completed one year of service and have reached 21 years of age. Contributions by the Company and employees vest immediately. The Company matches 100% of employee’s contributions up to 3% of the employee’s gross pay. The Company matched approximately $54,200 for the year ended March 31, 2015 and $52,600 for the year ended March 31, 2014. No discretionary profit sharing contributions were approved by the Board of Directors for the years ended March 31, 2015 and 2014.

Note 11 – Subsequent Events

On April 20, 2015, the Board of Directors of the Company approved and authorized the Company to terminate the registration of its common stock and suspend its reporting obligations under Sections 12(g) and 15(d), respectively, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company filed a Form 15 with the US Securities and Exchange Commission (the “SEC”) to effect this termination on April 30, 2015. The Company expects that the deregistration will become effective 90 days after the filing of the Form 15.

F-14

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness Of Disclosure Controls And Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives.

Our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective for the purpose of providing reasonable assurance that the information required to be disclosed in the reports we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.

Management's Annual Report On Internal Control Over Financial Reporting

Our management, under the supervision of our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of Company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of the inherent limitations of internal control over financial reporting, misstatements may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, with the participation of our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of March 31, 2015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), referred to as the Internal Control-Integrated Framework. Based on this assessment, management, with the participation of our principal executive officer and principal financial officer, has determined that we maintained effective internal controls over financial reporting as of March 31, 2015.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report on Form 10-K.

Remediation of Material Weaknesses

A material weakness is a significant deficiency, or combination of significant deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

As disclosed in the Company’s 2014 Annual Report on Form 10-K, management concluded that our internal control over financial reporting was previously not effective based on the material weakness in internal control over financial reporting surrounding our lack of technical expertise regarding complex accounting matters associated with certain income tax calculations. Management has remediated this material weakness in fiscal 2015. Specifically, during the year ended March 31, 2015, we implemented have utilized external advisors regarding complex income tax calculations to supplement knowledge that may not be available internally.

Based on management’s assessment, the controls over financial reporting surrounding our accounting for income taxes are deemed to be operating effectively as of March 31, 2015.

Changes In Internal Control Over Financial Reporting

Other than the change above described in “Remediation of Material Weakness,” which occurred during 2015, there were no changes in the Company’s internal control over financial reporting during the fourth quarter 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

Subsequent Events

On April 20, 2015, the Board of Directors of the Company approved and authorized the Company to terminate the registration of its common stock and suspend its reporting obligations under Sections 12(g) and 15(d), respectively, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company filed a Form 15 with the U.S. Securities and Exchange Commission (the “SEC”) to effect this termination on April 30, 2015.

The Company expects that with the filing of the Form 15, the Company's obligation to file periodic and current reports with the SEC, Forms 10-K, 10-Q, and 8-K, will be suspended. As of the first day of the Company’s current fiscal year, April 1, 2015, the Company had fewer than 300 shareholders of record, which permits suspension of its reporting obligations. The Company expects that the deregistration will become effective 90 days after the filing of the Form 15. Following the effective date of deregistration, the Company will no longer file periodic reports with the SEC, including Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q, and it will no longer be subject to the SEC’s proxy rules or Section 16 requirements.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The Company’s entire Board of Directors, which currently consists of four directors, is elected annually by the shareholders at the annual shareholders meeting, to hold office until the next annual meeting of shareholders or until their successors are elected and qualified or until the earlier of their death, resignation or removal. The Company’s Bylaws provide that the number of directors constituting the Board shall be between one and seven, to be fixed by the Board from time to time. There are no arrangements or understandings between the Company and any person pursuant to which such person has been elected or nominated as a director. There is no family relationship between any director or nominee for director and any other director, nominee or executive officer of the Company.

The following table sets forth the name and age of each nominee for director, indicating all positions and offices with the Company presently held by him or her, and the commencement of their term as a director.

Name	Age	Position(s)	Director Since

Douglas A. Larson	60	President and Director	1986

Jeremy S. Martin	60	Vice President of Marketing and Director	1986

J. Ross Colbert	59	Director	2007

Jane S. Miller	56	Director	2014

The principal occupation and business experience of each nominee for director is set forth below.

Douglas A. Larson was a co-founder of Eldorado, has served as a director since 1986 and has been President of Eldorado since 1991. Mr. Larson’s responsibilities include corporate strategy and administration of all operating activities at Eldorado. Before his association with Eldorado, Mr. Larson worked as a stockbroker with Richey-Frankel and Co. from 1981 to 1983 and with B.J. Leonard, Inc. from 1980 to 1981. Mr. Larson holds a Bachelor of Science Degree in Business Finance from the University of Colorado. The Board believes that Mr. Larson’s prior experience with the financial markets as a former stockbroker, his executive management experience and his knowledge of the beverage industry provides us with valuable insight to our product development, operational and financial challenges and qualify him to serve as a member of our Board of Directors. Mr. Larson has served as a director of the Company for 29 years.

Jeremy S. Martin was a co-founder of Eldorado, has served as a director since 1986 and has served as Vice President since 1985. Mr. Martin’s responsibilities include special event promotions and public relations. Before his association with Eldorado, Mr. Martin was an independent distributor for Sunasu International, a nutritional products manufacturer. Mr. Martin holds a Bachelor of Science Degree in Business from the University of Colorado. The Board believes that Mr. Martin’s prior experience as a distributor for a major nutritional products manufacturer and his knowledge regarding our sales and marketing operations, including current industry trends and conditions, qualify him to serve as a member of our Board of Directors. Mr. Martin has served as a director of the Company for 29 years.

J. Ross Colbert has served as a director of Eldorado since 2007. Mr. Colbert is the Global Strategist for Beverages with Rabobank in their Food and Agribusiness Research and Advisory (FAR) group based in New York. Mr. Colbert has over 22 years of beverage industry experience. He has completed more than 60 transactions across numerous industry segments including soft drinks, bottled water, juice, beer, contract packaging, equipment suppliers and packing companies. He has advised several of the largest national and global beverage companies such as Nestle, Cadbury Schwepps, Heineken and PepsiCo, as well as many privately-owned, middle market companies in the industry. Mr. Colbert has also worked closely with leading private equity funds and financial institutions in structuring beverage industry acquisitions and divestitures. Mr. Colbert graduated from the University of Hawaii and completed the Executive Program of the Wharton School of Business of the University of Pennsylvania. He received an MBA from the University of New Haven. The Board believes that Mr. Colbert’s industry knowledge, experience in beverage industry mergers, acquisitions and financings, including valuation and strategic planning, and insight gained as a consultant to numerous industry participants, bring a valuable outside perspective to the Board and qualify him to serve as a member of our Board of Directors. Mr. Colbert has served as a director of the Company for 7 years.

Jane S. Miller has served as a director of Eldorado since 2014. She is the founder of a career advice website, Janeknows.com, and the author of Sleep Your Way to the Top (and other myths about business success). She is deeply engaged as a mentor at the University of Colorado and as a board member of the Unreasonable Institute, Justin’s Nut Butter and Rework. She has thirty years in the corporate world holding c-suite positions at PepsiCo, Bestfoods, HJ Heinz and Hostess. Most recently, she was the CEO of Rudi’s Organic Bakery, a private-equity backed company, from 2009 until it was sold to Hain-Celestial in April 2014. Ms. Miller has a Russian Studies degree from Knox College in Galesburg, IL and an MBA from Southern Methodist University in Dallas, TX.

Identification of Executive Officers

The following table sets forth information about the executive officers of the Company, including age, principal occupation and date each first became an executive officer.

Name	Age	Position(s)	Officer Since

Douglas A. Larson	60	President	1986
Jeremy S. Martin	60	Vice President of Marketing	1986
Cathleen M. Shoenfeld	46	Chief Financial Officer and Corporate Secretary	1998
Kate Janssen	44	Vice President of Sales and Customer Service	2002

Biographical information about Messrs. Larson and Martin can be found in the section above entitled “Identification of Directors.” Biographical information concerning executive officers who are not serving as directors is set forth below. Executive officers are appointed by the Board of Directors and serve at the discretion of the Board until their successors are appointed.

Cathleen M. Shoenfeld joined Eldorado in 1990 and served as Assistant Treasurer from 1991 to 1998. Currently, Ms. Shoenfeld is Chief Financial Officer and Corporate Secretary and her responsibilities include the procurement of financing for growth of operations of Eldorado, as well as overseeing the accounting functions for Eldorado including the annual audit and corporate reporting. Ms. Shoenfeld holds a Bachelor of Science Degree in Economics and a Masters of Business Administration from the University of Colorado and is a Certified Management Accountant (CMA).

Kate Janssen joined Eldorado in 1995 and has served as Vice President in charge of Sales & Customer Service since 2002. Her responsibilities include management of the sales and service sectors of the wholesale product divisions. Ms. Janssen holds a Bachelor of Fine Arts Degree from the University of Colorado.

Involvement in Certain Legal Proceedings

None.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers and beneficial owners of more than 10% of the Company’s outstanding common stock (collectively, “Insiders”) to file reports with the SEC disclosing direct and indirect ownership of the Company’s common stock and changes in such ownership. The rules of the SEC require Insiders to provide the Company with copies of all Section 16(a) reports filed with the SEC. Based solely upon a review of copies of Section 16(a) reports received, the Company believes that during the last fiscal year, all filing requirements under Section 16(a) applicable to its officers, directors and 10% shareholders were timely met.

Code of Ethics

The Board has adopted a Code of Ethics to provide guidance on maintaining the Company’s commitment to being honest and ethical in its business endeavors. The code covers a wide range of business practices, procedures and basic principles regarding corporate and personal conduct and applies to all directors, executives, officers and employees. A copy of the code may be obtained by written request submitted to the Company’s Chief Financial Officer, Eldorado Artesian Springs, Inc., 1783 Dogwood Street, Louisville, Colorado 80027.

Corporate Governance

Director Nominations

The entire Board of Directors acts as the Company’s nominating committee and the Board has not adopted a nominating committee charter. The Board believes that, considering the size of the Company and the Board of Directors, decisions relating to nominations for election to the Board can be made on a case-by-case basis by all members of the Board without the formality of a nominating committee. The Board of Directors does not have an express, specific policy with regard to the consideration of any director candidates recommended by shareholders since the Board believes that it can adequately evaluate any such nominees on a case-by-case basis. However, the Board will consider shareholder recommendations for director nominees that are properly received in accordance with the Company’s bylaws and the applicable rules and regulations of the Securities and Exchange Commission. The Board will evaluate shareholder-recommended candidates under the same criteria as internally generated candidates. Although the Board does not currently have formal minimum criteria for nominees, the Company believes that its directors should have the highest professional and personal ethics and values. They should be committed to enhancing shareholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties. Each director must represent the interest of all shareholders. When considering potential director candidates, the Board considers the candidate’s character, judgment, diversity, age, and skills, including financial literacy and experience in the context of the Company’s needs and the needs of the Board of Directors. Substantial relevant business and industry experience would generally be considered important qualifying criteria, as would the ability to attend and prepare for director and shareholder meetings. Any candidate must state in advance his or her willingness and interest in serving on the Board.

Audit Committee and Audit Committee Financial Expert

The entire Board of Directors acts as the Company’s audit committee and the Board has not adopted an audit committee charter. The Board’s duties in its capacity as audit committee are as follows: (i) review recommendations of the Company’s independent registered public accountants concerning the Company’s accounting principles, internal controls and accounting procedures and practices; (ii) review the scope of the annual audit; (iii) approve or disapprove each professional service or type of service other than standard auditing services to be provided by the registered public accountants; and (iv) review and discuss with the Company’s independent registered public accountants the Company’s audited financial statements. The Board has determined that Mr. Colbert, an independent director, qualifies as an audit committee financial expert as defined within Section 229.407(d)(5) of the Securities Exchange Act of 1934.

Report of the Board of Directors Acting as the Audit Committee

The Board of Directors serves as the Company’s audit committee. The Board acting as audit committee reviews the Company’s financial reporting process. In this context, the Board:

●	has reviewed and discussed with management the audited financial statements for the year ended March 31, 2015.

●	has discussed with EKS&H, LLLP, the Company’s independent registered public accountants, the matters required to be discussed by Statement on Auditing Standards No. 61, as modified or supplemented.

●

has received the written disclosures and the letter from EKS&H, LLLP, required by Independence Standards Board Standard No. 1 (“Independence Discussions with Audit Committees”), as modified or supplemented, and has discussed with EKS&H, LLLP, the independent registered public accountant’s independence.

Based on this review and the discussions referred to above, the Board determined that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2015, for filing with the Securities and Exchange Commission. The Board also appointed EKS&H, LLLP, as the Company’s independent registered public accountants for 2016.

This report is submitted on behalf of the members of the Board of Directors acting as the audit committee:

Douglas Larson

Jeremy Martin

J. Ross Colbert

Jane S. Miller

The Report of the Board acting as the audit committee set out above shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall it be incorporated by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference and shall not otherwise be deemed filed under these Acts.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the total compensation earned during the fiscal years ended March 31, 2015 and 2014 by the Company’s (i) principal executive officer; (ii) the two most highly compensated executive officers, other than the Company’s principal executive officer, and (iii) those two individuals, if any, who would have otherwise been in included in item (ii) above but for the fact that they were not serving as an executive officer as of March 31, 2015 (the individuals falling within categories (i), (ii) and (iii) are collectively referred to as the “named executive officers”).

Summary Compensation Table

Name and Principal Position	Fiscal Year	Salary ($)		Bonus ($)		Stock Awards ($)		Options Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($) (1)			Total ($)
Douglas A. Larson,	2015	$	156,000		—		—		—		—		—	$	12,906	(2)	$	168,906
President	2014	$	145,112		—		—		—		—		—	$	13,635	(2)	$	158,747

Jeremy Martin,	2015	$	136,500		—		—		—		—		—	$	11,694	(2)	$	148,194
Vice President of Marketing	2014	$	132,150		—		—		—		—		—	$	11,810	(2)	$	143,960

Cathleen Shoenfeld,	2015	$	130,000		—		—		—		—		—	$	4,911	(2)	$	134,911
Chief Financial Officer	2014	$	126,640		—		—		—		—		—	$	4,810	(2)	$	131,450

Kevin Sipple (3)	2015	$	30,000		—		—		—		—		—	$	1,455	(2)	$	31,455
Vice President of Operations	2014	$	130,650		—		—		—		—		—	$	3,900	(2)	$	134,550

____________________

(1)	Includes all other compensation not reported in the preceding columns, including perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is less than $10,000. Does not include certain fringe benefits made available on a nondiscriminatory basis to all the Company’s employees, such as group health insurance, vacation and sick leave, no-cost Eldorado water and related products, and Eldorado resort/swimming pool admission.
(2)	Includes (i) $8,226 paid in 2015 and $9,301 paid in 2014 to Mr. Larson, $1,200 paid in 2015 and $1,800 paid in 2014 to Mr. Sipple and $11,694 paid in 2015 and $7,960 paid in 2014 to Mr. Martin by the Company for vehicle lease, insurance and gas and (ii) $4,680 paid in 2015 and $4,334 paid in 2014 to Mr. Larson, $900 paid in 2015 and $3,900 paid in 2014 to Mr. Sipple and $4,095 paid in 2015 $3,950 paid in 2014 to Mr. Martin and $3,900 paid in 2015 and $3,799 paid in 2014 to Ms. Shoenfeld by the Company as matching contributions to the Company’s 401(k) plan.
(3)	Mr. Sipple resigned his position in May 2014.

Non-Employee Director Compensation

Each non-employee director receives compensation totaling $1,000 for each meeting of the Board he or she attends in person or by qualified electronic means. In addition, if the Board of Directors form any Board committees in the future, it is anticipated that each non-employee director will receive $500 for each committee meeting he or she attends in person or by electronic means. Directors are also reimbursed for out-of pocket travel and other expenses incurred in attending Board and/or committee meetings. In addition, non-employee directors may be engaged by the Company to perform consulting services from time to time and receive compensation for such services as negotiated with the Company.

The table below provides additional information with respect to compensation paid to the Company’s non-employee directors during fiscal 2015:

Name(1)	Fee Earned or Paid in Cash ($)(2)		Stock Awards ($)		Option Awards ($)		Other Compensation ($)		Total ($)

Ross Colbert	$	12,500		-		-		-	$	12,500

Jane S. Miller	$	10,500		-		-		-	$	10,500

____________________

(1)	Douglas A. Larson, the Company’s Chief Executive Officer and President and Jeremy S. Martin, the Company’s Vice President of Marketing, are not included in this table as they are employees and thus receive no compensation for their services as directors. The compensation received by Messrs. Larson and Martin as employees is shown in the summary compensation table above.
(2)	There were three meetings of the Board during fiscal 2015.

Compensation Philosophy

The Company does not currently have a compensation committee and the Board has not adopted a compensation committee charter. Compensation decisions regarding executive officers and directors are made by the entire Board of Directors. The Board believes that it is appropriate not to have a compensation committee considering the current size of the Company and the Board and the Board’s current composition of directors. The Board places high value on attracting and retaining executives since it is their talent and performance that is responsible for the Company’s success. The Company’s general compensation philosophy is to create a performance-based culture that attracts and retains superior individuals. The Company does not have any employment agreements with any of its executive officers.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plans

The following table gives information about the Company’s common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of March 31, 2015.

Equity Compensation Plan Information Table

	Number of securities to be issued upon exercise of outstanding options and warrants		Weighted-average exercise price of outstanding options and warrants		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category	(a)		(b)		(c)
Equity compensation plans approved by security holders(1)		88,000	$	1.66		1,950,000

Total		88,000	$	1.66		1,950,000

____________________

(1)

Includes the Company’s 1997 Stock Option Plan (the “1997 Plan”) and the 2008 Incentive Stock Plan (the “2008 Plan”). The 1997 Plan expired in May 2008, however there are currently outstanding options to purchase 38,000 shares of common stock with a weighted average exercise price of $1.41 per share. With respect to the 2008 Plan, there are currently outstanding options to purchase a total of 50,000 shares of common stock with a weighted average exercise price of $1.80 and a total of 1,950,000 shares reserved for future awards. None of these options are held by the Company’s named executive officers.

Security Ownership of Certain Beneficial Owners

The following table, together with the accompanying footnotes, sets forth information regarding the beneficial ownership of the common stock of the Company as of June 27, 2015, for (i) each person known by the Company to own beneficially more than 5% of the Company’s common stock, (ii) each named executive officer, (iii) each of the Company’s directors and director nominees, and (iv) all directors and executive officers as a group. Applicable percentage ownership in the following table is based on 6,135,091 shares of common stock outstanding as of June 29, 2015, including securities deemed outstanding pursuant to Rule 13d-3(d)(1) under the Securities and Exchange Act of 1934, as amended.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting and investment power with respect to the securities. Subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

Unless indicated below, the address of each of the principal shareholders is c/o Eldorado Artesian Springs, Inc., 1783 Dogwood Street, Louisville, Colorado 80027.

Name and Address	Shares Beneficially Owned			Percentage of Class

Douglas A. Larson		987,181	(1)		16.1	%
Kevin M. Sipple		1,527,348	(2)		24.9	%
Jeremy S. Martin		1,542,120			25.1	%
Cathleen Shoenfeld		18,000		less than 1%

All officers and directors as a group, 6 persons (3)		4,074,649			66.4	%

____________________

(1)	Mr. Larson’s shares also include 13,171 shares held by Mr. Larson’s spouse. Mr. Larson has no voting or investment authority over the shares owned by his wife.
(2)	Mr. Sipple was a director and officer of the Company. Mr. Sipple resigned his position in May 2014.
(3)	Kate Janssen, who is an executive officer of the Company and J. Ross Colbert and Jane S. Miller, who are independent directors, do not beneficially own any shares of common stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

During the year ended March 31, 2015, there have been no transactions between the Company and any related persons in which the amount involved exceeds $120,000 and in which any related person had or will have an indirect material interest.

Independence of Directors

The Board has determined that J. Ross Colbert and Jane S. Miller are independent directors as that term is defined under Nasdaq Listing Rule 5605(a)(2). Messrs. Larson and Martin are not independent directors.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit, Audit-Related, Tax, and All Other Fees

The following table shows the aggregate fees billed to the Company for professional services by the Company’s principal independent registered public accounting firm, EKS&H, LLLP, for the fiscal years ended March 31, 2015 and 2014, respectively:

	Fiscal 2015		Fiscal 2014
Audit Fees(1)	$	69,000	$	64,500
Audit-Related fees		-		-
Tax Fees(2)		9,275		7,525
All Other Fees		-		-
Total Fees	$	78,275	$	72,025

____________________

(1)	Includes fees for the Company’s annual audits and reviews of the Company’s quarterly financial statements or services that are normally provided by the Company’s registered public accountant in connection with statutory or regulatory filings or engagements.
(2)	Includes fees for tax preparation services.

Pre-Approval Policies

The Company’s Board of Directors, which serves as the audit committee, reviews the scope and extent of all audit and non-audit services to be provided by the independent registered public accountant and reviews and pre-approves all fees to be charged for such services. The Board of Directors may establish additional or other procedures for the approval of audit and non-audit services that the Company’s independent registered public accountant performs. In pre-approving services to be provided by the independent registered public accountant, the Board of Directors considers whether such services are consistent with applicable rules regarding auditor independence. All fees set forth in the table above were approved by the Board of Directors.

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.

Exhibit No.	Description	Location

3.1	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, 1998

3.3	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, 2000

3.4	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, 1999

10.1*	1997 Stock Option Plan	Incorporated by reference to Exhibit 10.1 to Registration Statement No. 333-68553

10.2	Promissory Note with First National Bank of Boulder County dated June 27, 1997	Incorporated by reference to Exhibit 10.2 to Registration Statement No. 333-68553

10.3	Deed of Trust dated June 27, 1997	Incorporated by reference to Exhibit 10.3 to Registration Statement No. 333-68553

10.4	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, 2003

10.5	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, 2003

10.6	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

10.7	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, 2003

10.8	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, 2001

10.9	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, 2001


10.10	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, 2001

10.11	Note receivable – Doug Larson	Incorporated by reference to Exhibit 10.8 to Eldorado’s Form 10-KSB for the fiscal year ended March 31, 2003

10.12	Doug Larson – Pledge agreement	Incorporated by reference to Exhibit 10.9 to Eldorado’s Form 10-KSB for the fiscal year ended March 31, 2003

10.13	Note receivable – Kevin Sipple	Incorporated by reference to Exhibit 10.10 to Eldorado’s Form 10-KSB for the fiscal year ended March 31, 2003

10.14	Kevin Sipple – Pledge agreement	Incorporated by reference to Exhibit 10.11 to Eldorado’s Form 10-KSB for the fiscal year ended March 31, 2003

10.15	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, 2005

10.16	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, 2005

10.17	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

10.18	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, 2007

10.19	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, 2007

10.20	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

10.21	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, 2007

10.22	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, 2007

10.23	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, 2008

10.24*	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, 2008

10.25	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, 2008


10.26	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.

10.27	Commercial Loan Agreement with ANB Bank, dated February 2, 2012	Incorporated by reference to Exhibit 99.1 to Eldorado’s Form 8-k filed with the Securities and Exchange Commission on February 13, 2012.

10.28	Promissory Note between Eldorado Artesian Springs, Inc. and ANB Bank, dated February 2, 2012	Incorporated by reference to Exhibit 99.2 to Eldorado’s Form 8-k filed with the Securities and Exchange Commission on February 13, 2012.

10.29	Deeds of Trust between Eldorado Artesian Springs, Inc. and ANB Bank, dated February 2, 2012	Incorporated by reference to Exhibit 99.3 to Eldorado’s Form 8-k filed with the Securities and Exchange Commission on February 13, 2012.

10.30	Agreement to Provide Insurance between Eldorado Artesian Springs, Inc. and ANB Bank, dated February 2, 2012	Incorporated by reference to Exhibit 99.4 to Eldorado’s Form 8-k filed with the Securities and Exchange Commission on February 13, 2012.

10.31	Commercial Loan Agreement with ANB Bank, dated February 2, 2012	Incorporated by reference to Exhibit 99.5 to Eldorado’s Form 8-k filed with the Securities and Exchange Commission on February 13, 2012.

10.32	Promissory Note between Eldorado Artesian Springs, Inc. and ANB Bank, dated February 2, 2012	Incorporated by reference to Exhibit 99.6 to Eldorado’s Form 8-k filed with the Securities and Exchange Commission on February 13, 2012.

10.33	Deeds of Trust between Eldorado Artesian Springs, Inc. and ANB Bank, dated February 2, 2012	Incorporated by reference to Exhibit 99.7 to Eldorado’s Form 8-k filed with the Securities and Exchange Commission on February 13, 2012.

10.34	Agreement to Provide Insurance between Eldorado Artesian Springs, Inc. and ANB Bank, dated February 2, 2012	Incorporated by reference to Exhibit 99.8 to Eldorado’s Form 8-k filed with the Securities and Exchange Commission on February 13, 2012.

10.35	Promissory Note between Eldorado Artesian Springs, Inc. and the U.S. Small Business Administration, dated February 2, 2012.	Incorporated by reference to Exhibit 99.9 to Eldorado’s Form 8-k filed with the Securities and Exchange Commission on February 13, 2012.

10.36	Amendment to Commercial Loan Agreement with ANB Bank, dated December 11, 2013.	Incorporated by reference to Exhibit 10.36 to Eldorado’s Form 10-Q filed with the Securities and Exchange Commission on February 14, 2014.

23.1	Consent of EKS&H LLLP	Filed herewith

31.1	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 herewith

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	Filed herewith


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	Filed herewith

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	Filed herewith

101**	Financial Statements from the Annual Report on Form 10-K of Eldorado Artesian Springs for the year ended March 31, 2015, formatted in XBRL: (i) Balance Sheets; (ii) Statements of Operations; (iii) Statements of Stockholders Equity; (iv) Statements of Cash Flow; and (iv) Notes to Financial Statements	Filed herewith

* Management contract or compensatory plan

** In accordance with Rule 406T of Regulation ST, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ELDORADO ARTESIAN SPRINGS, INC.

Dated: June 29, 2015	By:	/s/ Douglas A. Larson
		Douglas A. Larson,
		President (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Douglas A. Larson	President and Director	June 29, 2015
Douglas A. Larson

/s/ Cathleen Shoenfeld	Chief Financial Officer, Chief Accounting Officer	June 29, 2015
Cathleen Shoenfeld	(Principal Financial and Accounting Officer), Secretary

/s/ Jeremy S. Martin	Vice-President and Director	June 29, 2015
Jeremy S. Martin

/s/ J. Ross Colbert	Director	June 29, 2015
J. Ross Colbert

/s/ Jane S. Miller	Director	June 29, 2015
Jane S. Miller

ELDORADO ARTESIAN SPRINGS INC - FORM 10-K - June 29, 2015

Attached files

ELDORADO ARTESIAN SPRINGS INC Reports