[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Colorado
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13-4228144
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State or other jurisdiction of incorporation or organization
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I.R.S. Employer Identification No.
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2000 South Colorado Boulevard, Annex Ste 420,
Denver, CO 80222
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||
(Address of principal executive offices) (Zip Code)
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Registrant’s telephone number, including area code:
(303)222-1000
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class registered
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Name of each exchange on which registered
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Not Applicable
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Not Applicable
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Securities registered pursuant to Section 12(g) of the Act:
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||
Common Stock
(Title of class)
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Large accelerated filer
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[___]
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Accelerated filer
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[___]
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Non-accelerated filer
(Do not check if a smaller reporting company)
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[___]
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Smaller reporting company
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[X]
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PART I
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Page
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Business
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1
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Risk Factors
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9
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Unresolved Staff Comments
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18
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Properties
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18
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Legal Proceedings
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19
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ITEM 4
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(Removed and Reserved)
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PART II
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|||
20 | |||
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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22
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Selected Financial Data
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23
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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28
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Quantitative and Qualitative Disclosures About Market Risk
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28
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Financial Statements and Supplementary Data
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28
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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28
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Controls and Procedures
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28
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Controls and Procedures
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29
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Other Information
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30
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PART III
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Directors, Executive Officers, and Corporate Governance
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31
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Executive Compensation
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34
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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39
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Certain Relationships and Related Transactions, and Director Independence
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40
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Principal Accounting Fees and Services
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41
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PART IV
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Exhibits Listing
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42
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44
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|||
45
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|||
43
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As of March 2, 2010 (the date HCIC acquired majority interest in the Mutual Ditch Company)
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$24,196,000
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As of September 30, 2010
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$26,217,000
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·
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Rainfall, runoff, flood control and availability of reservoir storage;
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·
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Availability of Huerfano River water;
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·
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The amount of useable water stored in reservoirs and groundwater basins;
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·
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The amount of water used by our customers and others;
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·
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Water quality; and
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·
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Legal limitations on production, diversion, storage, conveyance and use.
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·
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adversely affect our supply mix, for instance, causing increased reliance upon more expensive water sources; or
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·
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adversely affect our operating costs, for instance, by increasing the cost through the purchase or lease of required water.
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Location
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Legal Description
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Acreage
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Purchase date
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Pueblo County, CO
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Lots 2-4 Sec 4-22-62 less Lot 4 by WD#1519965 to Hall formerly #22-000-00-135
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85.3
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9/17/2009
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Pueblo County, CO
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33-21-62 SE4 Less POR sold in WD#123993 to Cook Formerly 12-000-00-042
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120
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9/17/2009
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Pueblo County, CO
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E2 35-22-63 320A
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320
|
2/2/2010
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Pueblo County, CO
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N2 SE4 26-22-63 Contg 80A formerly 23-000-00-139
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80
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2/2/2010
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Pueblo County, CO
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N2 S2 SE4 26-22-63 (40A) formerly 23-000-00-193
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40
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2/2/2010
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Pueblo County, CO
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36-22-63 All por of sec 36 desc as: comm fr NW cor of sec, N 88 deg 27 min 59 sec E alg N ln of sec A dist of 23304.98 ft, th S 03 deg 53 min 33 sec E a dist of 5270.92 ft to a sandstone marking th S4 of sec 36 th S 89 deg 24 min 00 sec W alg S ln of sec A dist of 2647.27 ft to SW cor of sec th N 00 deg 09 min 46 sec W alg the W ln of sec A dist of 5224.83 ft to pt of beg less 3.2A for ditch formerly #23-000-00-157
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297.24
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2/2/2010
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Pueblo County, CO
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NW 1/4 31-22-62 150.77A
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150.77
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2/22/2010
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Pueblo County, CO
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25-22-63 SW4 (160A) contg 320A less POR retained by Disanti formerly #23-000-00-072
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160
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2/22/2010
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Pueblo County, CO
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36-22-63 That part of Sec 36, lying ely of desc Div Ln; comm fr NW cor of Sec 36 monumented with 3/4: x 30" rebar & 3-1/4" alum cap n 88 deg 27 min 59 sec E alg N Ln of SD sec 36 a dist of 2304.98 ft to pt of beg of sd div ln, sd ln runs S 03 dge 53 min 33 sec E a dist of 5270.92 ft to a sandstone being the S4 cor of SD sec 36 + the pt of terminums of ths div ln formerly #23-000-00-157
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338.86
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2/22/2010
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Pueblo County, CO
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A PAR of land being a POR of the SE4 25-22-63 more part desc as follows: Comm from the NE Cor of the SE4 of SD sec 25, S 00 deg 00Min 00Sec E alg the Eln of SD sec 25, a dist of 1905.92 ft; th N 90 deg 00 Min 00sec W, a dist of 844.0 ft to the true pt of beg, th cont N 90 deg 00 Min 00Sec W a dist of 946.00 ft; th N 12 deg 16 min 49 sec E, a dist of 322.91 ft; th N 04 deg 58 min 28 sec W , a dist of 1543.82 ft to the N ln of undercliff rd (county rd); th N 89 deg 18 min 31 sec E alg the S
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41
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2/22/2010
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Walsenburg, CO
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TOWNSHIP 28 SOUTH, RANGE 67 WEST OF THE 6TH P.M. Section 19: Part of the SW1I4NW1I4, NW1I4SW1I4,
SEI
/
4NWI
/
4
being more particularly described as follows: Beginning at the SW comer of the
NW1
I
4SW1
/4
,
thence S 89°41 'E a distance of 1355.7 feet, thence N 0° 33' E a distance of583.3 feet; thence N 45° W a distance of333.3 feet; thence N 10° E a distance of 198 feet; thence N 31 ° 15' E a distance of 174.9 feet, thence N 9°E a distance of 152.7 feet, thence East a distance of 263.8 feet thence N45°E a distance of 149.9 feet, thence N 44°48' W a distance of 443.3 feet; thence N25°35'E a distance of72.6 feet, thence S64°E a distance of 133 feet, thence N9°1 O'E a distance of201.3 feet, thence N43°W a distance of 168.3 feet, thence N28°34'E a distance of 247.5 feet; thence N44°48'W a distance of 475.8; thence S 89°57'W a distance of 1142.7 feet; to the NW comer ofSWl!4NW1I4, thence S0054W a distance of 1306.25 feet to the W1I4 comer of said section 19 and 2612.5 feet to the place of beginning Section 24:
SI
/
2NE1/4NE1
I
4
less that part conveyed to Huerfano County Hospital District in Book 392, Page 535. Also a tract of land being Part of the SE1I4 and more particularly described as follows: Beginning at the S1I4 comer, thence North 2640 feet, thence East 726 feet; thence south 1996 feet, thence in a Northeasterly direction 75 feet, thence north 1980 feet; thence east 1815 feet, thence south 412 feet; thence in a southwesterly direction along the north right of way of the D&RGW railroad to the point of beginning except that part conveyed to Jesus Maria Lopez in Book 40, Page 78 and Ramon Vigil in Book 33, Page 326 and less that part conveyed to the D&RGW railroad ROW.
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76.38
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10/26/2009
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Huerfano, CO
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S 1/2 of the NW 1/4 of Section 4, Township 27 South, Range 64 West, Huerfano County, Colorado; The SW 1/4 of Section 4, Township 27 South, Range 64 West, Huerfano County, Colorado; the S 1/2 of the NE 1/4 of Section 5, Township 27 South, Range 64 West
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320
|
11/10/2009
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Quarter Ended
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High
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Low
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2010
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||
December 31
st
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$ 2.35
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$ 1.40
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September 30
th
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1.80
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1.10
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June 30
th
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1.40
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1.05
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March 31
st
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1.49
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1.20
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2009
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December 31
st
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$ 2.05
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$ 1.00
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September 30
th
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1.53
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0.45
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June 30
th
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0.75
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0.32
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March 31
st
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0.85
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0.32
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Number of Shares
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|||
FOR
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WITHHOLD
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Total Voted
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John R. McKowen
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5,187,029
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14,555
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5,201,584
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John Stroh, II
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5,187,029
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14,555
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5,201,584
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Dennis Channer
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5,197,537
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4,047
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5,201,584
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Gary Barber
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5,197,559
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4,025
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5,201,584
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Brad Walker
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5,197,559
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4,025
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5,201,584
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DATE OF SALE
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TITLE OF SECURITIES
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NO. OF SHARES
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CONSIDERATION
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CLASS OF PURCHASER
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||||
Jan – Aug 2010
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Common
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2,900,000
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$2,900,000
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Common
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DATE OF ISSUANCE
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TITLE OF SECURITIES
|
NO. OF SHARES
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CONSIDERATION
|
CLASS OF PURCHASER
|
||||
Oct 2010
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Common
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5,713,088
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$ -
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Common
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-
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Equity and debt proceeds through private placements of Two Rivers securities;
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-
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Revenue generated from operations;
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-
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Loans and lines of credit;
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-
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Sales of residential properties acquired through deed-in-lieu actions;
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-
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Sales of equity investments, and
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-
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Proceeds from the exercise of legacy Navidec, Inc. Options
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Allowance for:
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Amount
|
|||
Short Term Mortgages
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$ | 144,000 | ||
Real Estate owned – depreciation
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- | |||
Real Estate owned – impairments
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93,000 | |||
Total
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$ | 237,000 |
As of March 2, 2010 (the date HCIC acquired majority interest in the Mutual Ditch Company)
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$24,196,000
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As of September 30, 2010
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$26,217,000
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(i)
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pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
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(ii)
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provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made on in accordance with authorizations of our management and directors; and
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(iii)
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provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
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·
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An inability to ensure there is timely analysis and review of accounting records, spreadsheets, and supporting data; and
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·
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an inability to effectively monitor access to, or maintain effective controls over changes to, certain financial application programs and related data.
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·
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we have authorized the addition of additional staff members to the finance department to ensure that there are sufficient resources within the department to prepare our financial statements and disclosures in accordance with accounting principles generally accepted in the United States of America; and
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·
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we are in the process of analyzing our processes for all business units and the establishment of formal policies and procedures with necessary segregation of duties, which will establish mitigating controls to compensate for the risk due to lack of segregation of duties.
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·
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In 2010 we established an audit committee to oversee the financial operations and reporting of the Company.
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Age
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Position
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Term
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|
John McKowen
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61
|
Chief Executive Officer, Chairman of the Board of Directors
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Annual
|
Gary Barber (1)
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56
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Chief Operations Officer, President of Two Rivers Water Company, Director
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Annual
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Wayne Harding
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56
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Chief Financial Officer, Corporate Secretary
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Annual
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John Stroh II
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63
|
Director
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Annual
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Bradley Walker
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52
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Director
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Annual
|
Dennis Channer
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60
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Director
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Annual
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(1)
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Mr. Barber was appointed as Chief Operating Officer and President of Two Rivers Water Company in February, 2011.
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Name & Position
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Year
|
Salary ($)
|
Bonus ($)
|
Stock Awards ($) (10)
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Option Awards ($)
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Non-equity incentive plan comp
($)
|
Non-qualified deferred comp earnings ($)
|
All other comp ($)
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Total ($)
|
John McKowen, CEO, Chairman
|
2010(1)
|
223,158
|
0
|
0
|
0
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0
|
0
|
14,738
|
237,896
|
2009(2)
|
241,484
|
27,500
|
0
|
0
|
0
|
0
|
7,476
|
276,460
|
|
2008(3)
|
270,833
|
0
|
0
|
0
|
0
|
0
|
45,779
|
316,612
|
|
Wayne Harding, CFO & Secretary
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2010(4)
|
97,750
|
1,833
|
0
|
0
|
0
|
0
|
14,880
|
114,463
|
2009(5)
|
95,423
|
6,250
|
0
|
0
|
0
|
0
|
23,069
|
124,742
|
|
2008(6)
|
0
|
0
|
0
|
140,330
|
0
|
0
|
0
|
140,330
|
|
Gary Barber, COO & Pres
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2010(7)
|
0
|
0
|
0
|
0
|
0
|
0
|
32,000
|
32,000
|
John Stroh, President
|
2010(8)
|
45,260
|
1,125
|
0
|
0
|
0
|
0
|
58,437
|
104,822
|
2009(9)
|
0
|
0
|
0
|
0
|
0
|
0
|
63,192
|
63,192
|
|
(1)
|
Other Compensation is the payment of the health insurance benefit by the Company ($5,757) and auto allowance ($8,981).
|
(2)
|
Other Compensation is the payment of the health insurance benefit by the Company ($7,476).
|
(3)
|
Other Compensation is the payment of the health insurance benefit by the Company ($11,765); auto allowance ($13,014), and office reimbursement ($21,000).
|
(4)
|
Other Compensation is the payment of the health insurance benefit by the Company.
|
(5)
|
Salary and bonus is the amount for the entire year ending December 31, 2009. Mr. Harding did not become an officer of the Company until September 2009 and did not become a director of the Company until November 2009. Other Compensation is the payment of dental and health insurance benefit ($23,069).
|
(6)
|
Mr. Harding’s options were granted on July 28, 2008. A black-scholes computation indicated $140,330 value upon grant. At the time of grant, Mr. Harding was not an officer or director of the Company. Mr. Harding became the CFO and Secretary of the Company in September, 2009.
|
(7)
|
Mr. Barber was paid as a contract employee during 2010.
|
(8)
|
Mr. Stroh’s Other Compensation is the payment of contract pay of $54,666 and health insurance benefit payment by the Company of $3,771.
|
(9)
|
Mr. Stroh became the President of TRWC, Inc. in August, 2009. He is paid via a contract labor agreement. In 2009, Mr. Stroh was paid $61,840 in contract labor and $1,352 in health and dental insurance premiums.
|
(10)
|
Stock award compensation is based on Restricted Stock Units granted and vested during the year. No RSUs vested in 2010.
|
No. of securities underlying exercised options
(#)
|
No. of securities underly-ing unexer-cised options
(#)
|
Equity incentive plan awards: No. of securities underly-ing unexer-cised unearned options
(#)
|
Option exercise price ($)
|
Option expir-ation date
|
No. of shares or units of stock that have not vested (#)
|
Market Value of shares or units of stock that have not vested
($)
|
Equity incentive plan awards: no. of unearned shares, units or other rights that have not vested
(#)
|
Equity incentive plan awards; Market or payout value of unearned shares, units or other rights that have not vested
($)
|
|
John McKowen, CEO
|
0
|
0
|
0
|
N/A
|
N/A
|
0
|
0
|
0
|
0
|
Gary Barber, President
|
0
|
0
|
0
|
N/A
|
N/A
|
0
|
0
|
0
|
0
|
Wayne Harding, CFO
|
0
|
0
|
0
|
N/A
|
N/A
|
0
|
0
|
0
|
0
|
Name
|
Grant Date
|
Estimated future payouts under non-equity incentive plan awards
|
Estimated future payments under equity incentive plan awards
|
All other stock awards: No. of shares of stock or units (#)
|
All other option awards: Number of securities underlying options (#)
|
Exercise or base price of option awards ($/Sh)
|
Grant date fair value of stock and option awards ($)
|
||||
Threshold ($)
|
Target ($)
|
Maximum ($)
|
Threshold (#)
|
Target (#)
|
Maximum (#)
|
||||||
John McKowen
|
Oct 2010
|
N/A
|
N/A
|
N/A
|
1,480,947
|
2,480,947
|
2,480,947
|
0
|
0
|
N/A
|
4,561,000
|
Gary Barber
|
Oct 2010
|
N/A
|
N/A
|
N/A
|
0
|
1,000,000
|
1,000,000
|
0
|
0
|
N/A
|
1,701,000
|
Wayne Harding
|
Oct 2010
|
N/A
|
N/A
|
N/A
|
200,000
|
700,000
|
700,000
|
0
|
0
|
N/A
|
1,292,000
|
Name
|
Fees earned or paid in cash
($)
|
Stock awards
($) (6)
|
Option Awards ($)
|
Non-equity incentive plan compen-
sation
($)
|
Non-
Qualified
Deferred compen-
sation earnings
($)
|
All other compen-sation
($)
|
Total
($)
|
John McKowen (1)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Gary Barber (2)
|
500
|
9,333
|
0
|
0
|
0
|
0
|
9,833
|
John Stroh II (3)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Bradley Walker
|
500
|
9,333
|
0
|
0
|
0
|
0
|
9,833
|
Dennis Channer
|
500
|
9,333
|
0
|
0
|
0
|
0
|
9,833
|
Wayne Harding (4)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Jolee Henry (7)
|
8,204
|
0
|
0
|
0
|
0
|
0
|
8,204
|
Fred Jones(5)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1)
|
During the year ended December 31, 2010, Mr. McKowen received compensation as set forth in the
Executive Compensation Table.
|
(2)
|
During the year ended December 31, 2010, Mr. Barber received compensation as set forth in the
Executive Compensation Table.
|
(3)
|
During the year ended December 31, 2010, Mr. Stroh received compensation as set forth in the
Executive Compensation Table.
|
(4)
|
During the year ended December 31, 2010, Mr. Harding received compensation as set forth in the
Executive Compensation Table.
Mr. Harding did not stand for board reelection.
|
(5)
|
During the year ended December 31, 2009, Mr. Jones received contract labor compensation for services rendered outside of his board function of $34,800. Mr. Jones resigned in 2010.
|
(6)
|
Stock awards are granted the calendar quarter following the calendar quarter of service.
|
(7)
|
Jolee Henry did not stand for board re-election at the October 2010 annual meeting. Therefore, effective October 2010, Ms. Henry is no longer a Company’s board member.
|
(1)
|
Applicable percentage ownership is based on 19,782,916 shares of common stock issued and outstanding as of December 31, 2010. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that are currently exercisable or exercisable within 60 days of December 31, 2010 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. For the purpose of the Officers and Directors ownership computation, there are 19,782,916 common shares outstanding; 1,725,562 options, 894,044 RSUs and 150,000 warrants, for a total dilution pool of 22,567,522 which is used as the denominator is the Percent of Class calculation.
|
(2)
|
Mr. McKowen holds, directly, 1,805,054 shares of the Company’s common stock. He holds RSUs exercisable for 2,480,948 shares of the Company’s common stock, of which 740,474 are considered for the beneficial ownership calculation.
|
(3)
|
Mr. Harding directly holds 7,089 shares of the Company’s common stock. He holds RSUs exercisable for 700,000, of which 100,000 shares are considered for the beneficial ownership calculation.
|
(4)
|
Mr. Barber directly owns no shares of the Company’s common stock. He is granted 5,000 shares of the Company in January 2011 for board service in 2010.
|
(5)
|
Mr. Stroh directly holds 896,787 shares of the Company’s common stock. He also owns 99,643 shares that are being held in escrow due to the terms of the TRB merger. He is granted 5,000 shares of the Company in January 2011 for board service in 2010.
|
(6)
|
Mr. Channer directly owns no shares of the Company’s common stock. He is granted 5,000 shares of the Company in January 2011 for board service in 2010.
|
(7)
|
Mr. Walker directly owns no shares of the Company’s common stock. He is granted 5,000 shares of the Company in January 2011 for board service in 2010.
|
Year Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Audit Fees
|
$ | 63,885 | $ | 69,900 | ||||
Audit-related Fees
|
0 | 0 | ||||||
Tax Fees
|
0 | 0 | ||||||
All Other Fees
|
0 | 0 | ||||||
Total Fees
|
$ | 63,885 | $ | 69,900 |
Numbe
r
|
Description
|
21.1
|
List of Subsidiaries of Two Rivers Water Company
|
Filed Herewith
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
|
Filed Herewith
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
|
Filed Herewith
|
32.1
|
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
|
Filed Herewith
|
32.2
|
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
|
Filed Herewith
|
99.1
|
Board of Director Code of Conduct
|
Filed Herewith
|
99.2
|
Audit Committee Charter
|
Filed Herewith
|
99.3
|
Governance, Compensation and Nominating Committee Charter
|
Filed Herewith
|
Dated: March 29, 2011
|
Two Rivers Water Company
|
By:
|
/s/John McKowen
|
John McKowen,
Chief Executive Officer and Chairman of the Board
|
|
By:
|
/s/ Wayne Harding
|
Wayne Harding,
Chief Financial Officer
|
Dated: March 29, 2011
|
Two Rivers Water Company
|
/s/John McKowen
|
|
John McKowen, President, Chief Executive Officer and Chairman of the Board
|
|
/s/Wayne Harding
|
|
Wayne Harding, Chief Financial Officer and Director
|
|
/s/ Gary Barber
|
|
Gary Barber, President, Chief Operations Officer, Director
|
|
/s/ John Stroh II
|
|
John Stroh II, Director
|
|
/s/ Brad Walker
|
|
Brad Walker, Director
|
|
/s/Dennis Channer
|
|
Dennis Channer, Director
|
ASSETS:
|
December 31, 2010
|
December 31, 2009
|
||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 645 | $ | 616 | ||||
Note receivable - Aegis/Grizzle (Notes 2, 3)
|
- | 295 | ||||||
Accrued interest receivable
|
3 | 4 | ||||||
Advances and accounts receivable
|
38 | 1 | ||||||
Income taxes receivable (Notes 2, 8)
|
- | 489 | ||||||
Deposits
|
- | 202 | ||||||
Prepaid expenses
|
13 | 16 | ||||||
Assets held for sale
|
- | 134 | ||||||
Total Current Assets
|
699 | 1,757 | ||||||
Property, equipment and software, net (Note 2)
|
156 | 94 | ||||||
Other Assets
|
||||||||
Investment in Boston Property all units sold as of Dec 31,2010,
|
- | 2,073 | ||||||
net of impairment of $889 on December 31, 2009 (Note 2, 4)
|
||||||||
Land (Notes 2, 4)
|
1,279 | 991 | ||||||
Water rights and infrastructure (Notes 2, 4)
|
24,216 | 2,267 | ||||||
Options on real estate and water shares (Notes 2, 4)
|
100 | 2,586 | ||||||
Dam Construction (Note 4)
|
489 | 163 | ||||||
Assets held for sale (Notes 2, 4)
|
259 | 1,274 | ||||||
Total Other Assets
|
26,343 | 9,354 | ||||||
TOTAL ASSETS
|
$ | 27,198 | $ | 11,205 | ||||
LIABILITIES & STOCKHOLDERS' EQUITY:
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 463 | $ | 281 | ||||
Short term borrowings (Note 5)
|
- | 950 | ||||||
Deposits held
|
- | 30 | ||||||
Accrued liabilities
|
114 | 5 | ||||||
Total Current Liabilities
|
577 | 1,266 | ||||||
Notes Payable - Long Term (Note 5)
|
9,128 | 2,175 | ||||||
Total Liabilities
|
9,705 | 3,441 | ||||||
Commitments and Contingencies (Notes 1, 2, 3, 4, 5, 7, 8, 9, 10, 11, 12, 13)
|
||||||||
Stockholders' Equity:
|
||||||||
Common stock, $0.001 par value, 100,000,000 shares
|
20 | 9 | ||||||
authorized, 19,782,916 and 9,214,583 shares issued
|
||||||||
and outstanding at Dec 30, 2010 and Dec 31, 2009, respectively
|
||||||||
Additional paid-in capital
|
28,949 | 9,200 | ||||||
Accumulated (deficit)
|
(13,587 | ) | (4,120 | ) | ||||
Total Two Rivers Water Company Shareholders' Equity
|
15,382 | 5,089 | ||||||
Noncontrolling interest in subsidiary (Note 2)
|
2,111 | 2,675 | ||||||
Total Stockholders' Equity
|
17,493 | 7,764 | ||||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
|
$ | 27,198 | $ | 11,205 |
Year Ended
|
||||||||
31-Dec-10
|
31-Dec-09
|
|||||||
Revenue
|
||||||||
Farm Revenue
|
$ | 153 | $ | - | ||||
Water Revenue
|
15 | - | ||||||
Member assessments
|
25 | - | ||||||
Other Income
|
3 | 11 | ||||||
Total Revenue
|
196 | 11 | ||||||
Direct cost of revenue
|
285 | - | ||||||
Gross Profit
|
(89 | ) | 11 | |||||
Operating Expenses:
|
||||||||
General and administrative
|
2,653 | 2,055 | ||||||
Stock based compensation
|
4,841 | 118 | ||||||
Depreciation and amortization
|
24 | 7 | ||||||
Total operating expenses
|
7,518 | 2,180 | ||||||
(Loss) from operations
|
(7,607 | ) | (2,169 | ) | ||||
Other income (expense)
|
||||||||
Gain (loss) on sale of investments
|
40 | 33 | ||||||
Interest income
|
1 | 42 | ||||||
Interest (expense)
|
(745 | ) | (54 | ) | ||||
Warrant (expense)
|
(218 | ) | ||||||
Other income (expense)
|
13 | - | ||||||
Total other income (expense)
|
(909 | ) | 21 | |||||
Net (Loss) from continuing operations before taxes
|
(8,516 | ) | (2,148 | ) | ||||
Income tax benefit (Note 8)
|
- | 314 | ||||||
Net (Loss) from continuing operations
|
(8,516 | ) | (1,834 | ) | ||||
Discontinued Operations (Note 9)
|
||||||||
Loss from operations of discontinued real estate and mortgage business
|
(946 | ) | (1,427 | ) | ||||
Income tax benefit
|
- | 161 | ||||||
(Loss) on discontinued operations
|
(946 | ) | (1,266 | ) | ||||
Net (Loss)
|
(9,462 | ) | (3,100 | ) | ||||
Net loss (income) attributable to the noncontrolling interest (Note 2)
|
(4 | ) | 175 | |||||
Net (Loss) attributable to Two Rivers Water Company
|
$ | (9,466 | ) | $ | (2,925 | ) | ||
(Loss) Per Share - Basic:
|
||||||||
(Loss) from continuing operations
|
(0.60 | ) | (0.20 | ) | ||||
(Loss) from discontinued operations
|
(0.07 | ) | (0.13 | ) | ||||
Total
|
(0.67 | ) | (0.33 | ) | ||||
Weighted Average Shares Outstanding:
|
||||||||
Basic
|
14,148 | 8,959 |
For the year ended December 31,
|
||||||||
2010 | 2009 | |||||||
Cash Flows from Operating Activities:
|
|
|||||||
Net (Loss)
|
$ | (9,462 | ) | $ | (3,100 | ) | ||
Adjustments to reconcile net income or (loss) to net cash used in operating activities:
|
||||||||
Depreciation (including discontinued operations)
|
58 | 67 | ||||||
Increase in bad debt allowance on note receivables
|
51 | 23 | ||||||
Legendary Investment sale and write off
|
14 | |||||||
Increase in reserves and impairments (discontinued operations)
|
448 | 784 | ||||||
Recapture of impairments from REOs sold
|
- | (708 | ) | |||||
Loss from REOs sold (discontinued operations)
|
83 | 250 | ||||||
(Gain) Loss on sale of investments and assets held
|
45 | (33 | ) | |||||
Beneficial Conversion
|
325 | - | ||||||
Loss on sale of Boston property (discontinued operations)
|
110 | - | ||||||
Stock for services
|
298 | - | ||||||
Stock based compensation and warrant extension
|
5,059 | 118 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Decrease (increase) in deposits, prepaid expenses and other assets
|
- | (197 | ) | |||||
Decrease in mortgage loans receivable (See Supplemental Information below)
|
- | 1,246 | ||||||
Decrease (increase) in income tax receivable
|
489 | (489 | ) | |||||
Increase (decrease) in accrued interest and expenses
|
(36 | ) | 83 | |||||
Increase in accounts payable
|
182 | 122 | ||||||
Increase (Decrease) in accrued liabilities and other
|
131 | (88 | ) | |||||
Net Cash (Used in) Operating Activities
|
(2,205 | ) | (1,922 | ) | ||||
Cash Flows from Investing Activities:
|
||||||||
Investments (increased)/decreased
|
||||||||
Boston real estate and other residential real estate
|
(381 | ) | (289 | ) | ||||
Proceeds from Boston real estate | 1,925 | - | ||||||
Marketable securities purchased
|
- | (124,357 | ) | |||||
Proceeds from marketable securities sold
|
- | 124,533 | ||||||
Proceeds from REO properties sold
|
863 | 2,710 | ||||||
Proceeds from asset held for sale
|
176 | - | ||||||
Decrease in note receivable
|
- | 155 | ||||||
Purchase of property, equipment and software
|
(131 | ) | (17 | ) | ||||
Proceeds from fixed assets sold
|
19 | - | ||||||
Purchase of real estate option
|
(100 | ) | - | |||||
Purchase of land, water shares, infrastructure
|
(8,012 | ) | (2,711 | ) | ||||
Dam construction
|
(326 | ) | (163 | ) | ||||
Other assets
|
3 | 3 | ||||||
Net Cash Provided by/(Used in) Investing Activities
|
(5,964 | ) | (136 | ) | ||||
Cash Flows from Financing Activities:
|
||||||||
Increase in long term borrowings
|
6,951 | 2,175 | ||||||
Paydown of real estate loans
|
(950 | ) | (441 | ) | ||||
Private placement - net of offering costs
|
2,202 | 150 | ||||||
Option exercise
|
- | 10 | ||||||
Retirement of Common Stock
|
(5 | ) | (94 | ) | ||||
Net Cash Provided by Financing Activities
|
8,198 | 1,800 | ||||||
Net (Decrease) in Cash & Cash Equivalents
|
29 | (258 | ) | |||||
Beginning Cash & Cash Equivalents
|
616 | 874 | ||||||
Ending Cash & Cash Equivalents
|
$ | 645 | $ | 616 |
Supplemental Disclosure of Cash Flow Information
|
||||||||
Non cash settlement on short term mortgages and transfers
|
$ | - | $ | 3,864 | ||||
Non cash retirement/disposal of fixed assets
|
$ | - | $ | (77 | ) | |||
Non-controlling interest
|
$ | 4 | $ | 2,850 | ||||
Cash paid for Interest
|
$ | 526 | $ | 107 | ||||
Cash received from Income tax refunds
|
$ | 501 | $ | 75 | ||||
Common stock issued for land and water share purchase
|
$ | 500 | $ | - | ||||
Conversion of note receivable for loan on land
|
$ | 295 | $ | - | ||||
Increase in note receivable from sale of Legendary Investment
|
$ | 9 | $ | - | ||||
Increase of Additional Paid In Capital due to stock options issued
|
$ | - | $ | 10 | ||||
Stock issued for non-controlling interest in HCIC
|
$ | 11,379 | $ | - | ||||
Recovery of BPZ shares
|
$ | - | $ | 143 | ||||
Related party note receivable exchanged for property
|
$ | - | $ | 160 |
Accumulated Other Comprehen-sive Income
|
||||||||||||||
Voting Common Stock
|
Additional Paid In Capital
|
Non-Controlling Interest
|
Stock-holders' Equity
|
|||||||||||
Accumulated (Deficit)
|
||||||||||||||
Shares
|
Amount
|
|||||||||||||
Balances, December 31, 2008
|
9,019
|
$
|
9
|
8,873
|
$ |
-
|
$ |
-
|
$ |
(1,195)
|
$ |
7,687
|
||
Net (Loss)
|
-
|
-
|
-
|
-
|
(175)
|
(2,925)
|
(3,100)
|
|||||||
Stock-based compensation expense
|
-
|
-
|
118
|
-
|
-
|
-
|
118
|
|||||||
Retirement of Stock - open market purchases
|
(155)
|
-
|
(94)
|
-
|
-
|
-
|
(94)
|
|||||||
Stock purchased through private placement
|
150
|
-
|
150
|
-
|
-
|
-
|
150
|
|||||||
Options exercised
|
200
|
-
|
10
|
-
|
-
|
-
|
10
|
|||||||
Recovered BPZ stock
|
-
|
-
|
143
|
-
|
-
|
-
|
143
|
|||||||
Non-controlling interest in a subsidiary
|
-
|
-
|
-
|
-
|
2,850
|
-
|
2,850
|
|||||||
Balances, December 31, 2009
|
9,214
|
9
|
9,200
|
-
|
2,675
|
(4,120)
|
7,764
|
|||||||
Net Income (Loss)
|
-
|
-
|
-
|
-
|
4
|
(9,467)
|
(9,463)
|
|||||||
Stock-based compensation expense
|
-
|
-
|
4,841
|
-
|
-
|
-
|
4,841
|
|||||||
Warrant extension expense
|
-
|
-
|
218
|
-
|
-
|
-
|
218
|
|||||||
Stock issued in exchange for land and water shares and contract labor
|
723
|
1
|
798
|
-
|
-
|
-
|
799
|
|||||||
Stock purchased through private placement
|
2,400
|
3
|
2,398
|
-
|
-
|
-
|
2,401
|
|||||||
Direct cost of private placement
|
-
|
-
|
(196)
|
-
|
-
|
-
|
(196)
|
|||||||
Stock issued in merger with TRB
|
7,500
|
7
|
11,371
|
-
|
(568)
|
-
|
10,810
|
|||||||
Beneficial conversion
|
-
|
-
|
325
|
-
|
-
|
-
|
325
|
|||||||
Retirement of Stock - open market purchases
|
(55)
|
-
|
(6)
|
-
|
-
|
-
|
(6)
|
|||||||
Balances, December 31, 2010
|
19,782
|
$
|
20
|
$
|
28,949
|
$
|
-
|
$
|
2,111
|
$
|
(13,587)
|
$
|
17,493
|
As of March 2, 2010 (the date HCIC acquired majority interest in the Mutual Ditch Company)
|
$24,196,000
|
As of September 30, 2010
|
$26,217,000
|
(in thousands)
|
Year ended
December 31, 2010
|
Year ended
December 31, 2009
|
||||||
HCIC Holdings, LLC
|
$ | - | (175 | ) | ||||
Mutual Ditch Company
|
4 | - | ||||||
Total
|
$ | 4 | (175 | ) |
Real Estate Detail (in thousands)
|
Boston Property
|
Other Real Estate Owned
|
Total
|
|
Beginning Balance: As of 12-31-09
|
$2,073
|
$2,033
|
$4,106
|
|
Additions during the period:
|
||||
Acquisitions through foreclosure
|
0
|
|||
Other acquisitions
|
400
|
400
|
||
Improvements, etc.
|
367
|
13
|
380
|
|
Other (describe) – impairment reclassification
|
0
|
|||
Deductions during the period:
|
0
|
|||
Cost of real estate sold
|
(2,033)
|
(1,084)
|
(3,117)
|
|
Impairments
|
(407)
|
(52)
|
(459)
|
|
Other (describe) - depreciation
|
||||
Ending Balance, Dec 31,2010
|
$0
|
$1,310
|
$1,310
|
Asset Type
|
Life in Years
|
December 31, 2010
|
December 31, 2009
|
|||||||||
Office equipment & Furniture
|
5 – 7 | $ | 74,000 | $ | 86,000 | |||||||
Computers
|
3 | 59,000 | 52,000 | |||||||||
Vehicles
|
5 | 45,000 | - | |||||||||
Farm equipment
|
7 | 39,000 | - | |||||||||
Mobile office
|
10 | 10,000 | - | |||||||||
Irrigation system
|
10 | 31,000 | - | |||||||||
Website
|
3 | 2,000 | 2,000 | |||||||||
Subtotal
|
260,000 | 140,000 | ||||||||||
Less Accumulated Depreciation
|
107,000 | 46,000 | ||||||||||
Net Book Value
|
$ | 153,000 | $ | 94,000 |
Note From
|
Due
|
Principal Amount
|
12/31/10 Balance
|
Annual Interest rate
|
Accrued Interest
|
Collateral
|
|||||||||
Short term home mortgages
|
Various and on-going
|
$ | 371,000 | $ | 371,000 |
9.95% to 14%
|
$ | - |
First mortgage
|
||||||
Less: Impairments
|
(144,000 | ) | |||||||||||||
Net Balance
|
$ | 227,000 |
Dec 31, 2010
|
Dec 31, 2009
|
|||||||
Real estate owned
|
$ | 123 ,000 | 1,395,000 | |||||
Allowance for:
|
||||||||
Real Estate owned – depreciation
|
- | 40,000 | ||||||
Real Estate owned – impairments
|
93,000 | 313,000 | ||||||
Total
|
$ | 30,000 | 1,042,000 |
Dec 31, 2010
|
Dec 31, 2009
|
|||||||
Mortgage receivables - net
|
$ | 228,000 | 232,000 | |||||
Real estate owned – net
|
30,000 | 1,042,000 | ||||||
Total
|
$ | 258,000 | 1,274,000 |
Year ended
|
||||||||
Dec 31 2010
|
Dec 31, 2009
|
|||||||
Beginning balance
|
$ | 163,000 | $ | - | ||||
Additions
|
326,000 | 163,000 | ||||||
Retirements, deletions
|
- | - | ||||||
Depreciations
|
- | - | ||||||
Ending Balance
|
$ | 489,000 | $ | 163,000 |
For the year ended December 31, 2010
|
||||||||||||||||||||||||||||||||||||||||
Two Rivers Water Co.
|
North-sight, Inc.
|
Southie, LLC
|
Legendary Investment Group, LLC
|
TRWC
|
HCIC Holdings JV
|
Two Rivers Farms
|
Two Rivers Energy
|
Two Rivers Water LLC
|
Mutual Ditch Company
|
|||||||||||||||||||||||||||||||
Revenue
|
||||||||||||||||||||||||||||||||||||||||
Loan fees, interest and other
|
$ | - | - | - | ||||||||||||||||||||||||||||||||||||
Assessments
|
25 | |||||||||||||||||||||||||||||||||||||||
Farm Revenue
|
153 | |||||||||||||||||||||||||||||||||||||||
Water Revenue
|
15 | |||||||||||||||||||||||||||||||||||||||
Other & misc.
|
- | 3 | ||||||||||||||||||||||||||||||||||||||
Less: Cost of Services
|
||||||||||||||||||||||||||||||||||||||||
Gross Profit
|
15 | - | - | - | - | - | 156 | - | - | 25 | ||||||||||||||||||||||||||||||
Total Operating Expenses
|
7,166 | 29 | 555 | 457 | 15 | 155 | 427 | |||||||||||||||||||||||||||||||||
Total Other Income/(Expense)
|
||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income from continuing operations before income taxes
|
(7,151 | ) | - | - | - | (29 | ) | (555 | ) | (301 | ) | (15 | ) | (155 | ) | (402 | ) | |||||||||||||||||||||||
Income Taxes (Expense)/Credit
|
- | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Net Income (Loss) from continuing operations
|
(7,151 | ) | - | - | - | (29 | ) | (555 | ) | (301 | ) | (15 | ) | (155 | ) | (402 | ) | |||||||||||||||||||||||
Discontinued operations:
|
||||||||||||||||||||||||||||||||||||||||
(Loss) gain from operations of discontinued real estate and mortgage business
|
17 | (161 | ) | (769 | ) | 59 | ||||||||||||||||||||||||||||||||||
Income tax benefit
|
- | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Loss on discontinued operations
|
17 | (161 | ) | (769 | ) | 59 | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Non-controlling interest
|
- | - | - | - | (4 | ) | ||||||||||||||||||||||||||||||||||
Net (Loss) Income
|
$ | (7,134 | ) | (161 | ) | (769 | ) | 59 | (29 | ) | (555 | ) | (301 | ) | (15 | ) | (155 | ) | (406 | ) | ||||||||||||||||||||
Segment assets
|
$ | 848 | 70 | 1 | - | - | 25,603 | 105 | 1 | 8 | 562 |
For the year ended December 31, 2009
|
||||||||||||||||||||||||
Two Rivers Water Co
|
Northsight, Inc.
|
Southie, LLC
|
Legendary Investment Group, LLC
|
TRWC
|
HCIC Holdings JV
|
|||||||||||||||||||
Revenue
|
||||||||||||||||||||||||
Loan fees, interest and other
|
$ | 11 | - | - | - | - | - | |||||||||||||||||
Assessments
|
- | - | - | - | - | - | ||||||||||||||||||
Farm Revenue
|
||||||||||||||||||||||||
Water Revenue
|
||||||||||||||||||||||||
Other & misc.
|
- | - | - | - | - | - | ||||||||||||||||||
Less: Cost of Services
|
- | - | - | - | - | - | ||||||||||||||||||
Gross Profit
|
11 | - | - | - | - | - | ||||||||||||||||||
Total Operating Expenses
|
1,316 | - | - | - | 52 | 312 | ||||||||||||||||||
Total Other Income/(Expense)
|
59 | - | - | - | (39 | ) | ||||||||||||||||||
Net (Loss) Income from continuing operations before income taxes
|
(1,246 | ) | - | - | - | (52 | ) | (351 | ) | |||||||||||||||
Income Taxes (Expense)/Credit
|
314 | - | - | - | - | - | ||||||||||||||||||
Net Income (Loss) from continuing operations
|
(932 | ) | - | - | - | (52 | ) | (351 | ) | |||||||||||||||
Discontinued operations:
|
||||||||||||||||||||||||
(Loss) gain from operations of discontinued real estate and mortgage business
|
44 | (351 | ) | (1,571 | ) | (48 | ) | - | - | |||||||||||||||
Income tax benefit
|
- | 60 | 101 | - | - | - | ||||||||||||||||||
Loss on discontinued operations
|
- | (291 | ) | (1,470 | ) | (48 | ) | - | - | |||||||||||||||
Non-controlling interest
|
- | - | - | - | - | 175 | ||||||||||||||||||
Net (Loss) Income
|
$ | (888 | ) | (291 | ) | (1,470 | ) | (48 | ) | (52 | ) | (176 | ) | |||||||||||
Segment assets
|
$ | 1,708 | 125 | 3,093 | 42 | 7 | 6,230 |
Shares
|
Weighted Average
Exercise Price
|
|||||||
Outstanding, January 1, 2009
|
3,941,510 | $ | 1.33 | |||||
Granted
|
- | - | ||||||
Cancelled
|
(110,000 | ) | $ | 2.00 | ||||
Expired
|
- | - | ||||||
Exercised
|
(200,000 | ) | $ | 0.05 | ||||
Outstanding, January 1, 2010
|
3,631,510 | $ | 1.38 | |||||
Granted
|
20,000 | $ | 2.00 | |||||
Cancelled
|
(1,905,948 | ) | $ | 1.41 | ||||
Expired
|
- | - | ||||||
Exercised
|
- | - | ||||||
Outstanding, December 31, 2010
|
1,745,562 | $ | 1.37 | |||||
Options Exercisable , December 31, 2010
|
1,712,229 | $ | 1.36 |
Shares
|
Weighted Average
Exercise Price
|
|||||||
Outstanding, January 1, 2009
|
582,777 | $ | 0.50 | |||||
Granted
|
- | - | ||||||
Cancelled
|
(562,777 | ) | $ | 0.50 | ||||
Expired
|
- | - | ||||||
Exercised
|
- | - | ||||||
Outstanding, January 1, 2010
|
20,000 | $ | 0.50 | |||||
Granted
|
200,000 | $ | 0.50 | |||||
Cancelled
|
(20,000 | ) | $ | 0.50 | ||||
Expired
|
- | - | ||||||
Exercised
|
- | - | ||||||
Outstanding, December 31, 2010
|
200,000 | $ | 0.50 | |||||
Options Exercisable , December 31, 2010
|
200,000 | $ | 0.50 |
Expected stock price volatility
|
122%
|
Risk-free interest rate
|
2.64%
|
Expected option life (years)
|
3.3 to 5.2
|
Expected annual dividend yield
|
0%
|
Shares
|
||||
Outstanding, January 1, 2010
|
- | |||
Granted
|
5,713,088 | |||
Cancelled
|
- | |||
Expired
|
- | |||
Exercised
|
- | |||
Outstanding, December 31, 2010
|
5,713,088 | |||
RSUs Exercisable , December 31, 2010
|
- |
Number of common
shares covered by warrants
|
Exercise Price
|
Expiration Date
|
|||||
1,332,500 | $ | 4.00 |
December 31, 2010
|
||||
1,332,500 | 2.00 |
December 31, 2010
|
|||||
150,000 | 1.00 |
December 31, 2011
|
|||||
2,815,000 |
Expected stock price volatility
|
35%
|
Risk-free interest rate
|
2.64%
|
Expected option life (years)
|
3.3 to 5.2
|
Expected annual dividend yield
|
0%
|
Federal Rate
|
34.00 | % | ||
State Rate
|
4.63 | % | ||
Federal benefit of State Rate
|
(1.57 | )% | ||
Net Effective Rate
|
37.06 | % |
Loss reported on financials before taxes
|
$ | (9,466 | ) | |
Tax adjustments:
|
||||
Non-deductible impairment expense
|
468 | |||
RSUs and stock option expense
|
4,841 | |||
Entertainment and other items
|
17 | |||
Adjusted taxable loss
|
(4,140 | ) | ||
Net Effective Rate
|
37.06 | % | ||
Tax Benefit from Loss Carryback
|
$ | (1,534 | ) | |
Deferred tax asset valuation allowance
|
1,534 | |||
Income tax receivable as of Dec 31, 2010
|
$ | - |
(in thousands)
|
2010
|
2009
|
||||||
Federal income taxes (benefit):
|
||||||||
Current
|
$ | - | (433 | ) | ||||
Deferred
|
- | (273 | ) | |||||
Total Federal income taxes
|
- | (706 | ) | |||||
State income taxes:
|
||||||||
Current
|
- | (50 | ) | |||||
Deferred
|
- | (4 | ) | |||||
Total state income taxes
|
- | (54 | ) | |||||
Total Income Taxes
|
$ | - | (760 | ) |
(in thousands)
|
Dec 31, 2010
|
Dec 31, 2009
|
||||||
Mortgages receivable
|
$ | 371 | $ | 371 | ||||
Thomas Park project
|
- | 2,962 | ||||||
Other real estate owned
|
123 | 1,529 | ||||||
Subtotal
|
494 | 4,862 | ||||||
Less allowances and depreciation
|
(237 | ) | (1,381 | ) | ||||
Net book value of property to sell
|
257 | 3,481 | ||||||
Less amounts owed on real estate to be sold
|
- | (950 | ) | |||||
Net projected proceeds from mortgage receivables, Thomas Park, and other real estate owned
|
$ | 257 | $ | 2,531 |
Period
|
Amount Due
|
|||
2011
|
$ | 20,000 | ||
2012
|
$ | 3,000 | ||
2013
|
-0- |
·
|
Approval of the convertible debt private placement to accredited investors to a maximum offering of $2,000,000. The Company raised $2,000,000 and closed the offering on March 2, 2011.
|
·
|
Approval of various business consulting and finder’s fee agreements.
|
·
|
Promotion of Gary Barber to President of Two Rivers Water Company and as Chief Operations Officer.
|
Award Date
|
Vesting Date
|
Type (Option/RSU)
|
Strike Price
|
No. of Shares
|
Oct 13 2010
|
Jan 15, 2012
|
RSU
|
n/a
|
333,333
|
Oct 13 2010
|
Jan 15, 2013
|
RSU
|
n/a
|
333,333
|
Oct 13, 2010
|
Jan 15, 2014
|
RSU
|
n/a
|
333,334
|
Company
|
State of Organization
|
Ultimate Parent
|
Immediate Parent
|
% Ownership
|
Two Rivers Water Company
|
CO
|
|||
TRWC, Inc.
|
CO
|
Two Rivers Water Company
|
Two Rivers Water Company
|
100
|
HCIC Holdings, LLC
|
CO
|
Two Rivers Water Company
|
TRWC, Inc.
|
100
|
Huerfano-Cucharas Irrigation Company
|
CO
|
Two Rivers Water Company
|
HCIC Holdings
|
91
|
Two Rivers Water LLC
|
CO
|
Two Rivers Water Company
|
Two Rivers Water Company
|
100
|
Two Rivers Farms LLC
|
CO
|
Two Rivers Water Company
|
Two Rivers Water Company
|
100
|
Two Rivers Farms F-1 LLC
|
CO
|
Two Rivers Water Company
|
Two Rivers Water Company
|
100
|
Two Rivers Energy LLC
|
CO
|
Two Rivers Water Company
|
Two Rivers Water Company
|
100
|
Northsight, Inc.
|
CO
|
Two Rivers Water Company
|
Two Rivers Water Company
|
98
|
Southie Developments LLC
|
CO
|
Two Rivers Water Company
|
Northsight, Inc.
|
98
|
Dated: March 29, 2011
|
By: /s/ John McKowen
|
Chief Executive Officer and Chairman of the Board
|
Dated: March 29, 2011
|
By: /s/ Wayne Harding
|
Chief Financial Officer & Principal Accounting Officer
|
Dated: March 29, 2011
|
By: /s/ John McKowen
|
Chief Executive Officer and Chairman of the Board
|
Dated: March 29, 2011
|
By: /s/ Wayne Harding
|
Chief Financial Officer & Principal Accounting Officer
|
|
(i) represent the interests of the shareholders of the Company;
|
|
(ii) exhibit high standards of integrity, commitment and independence of thought and judgment;
|
|
(iii) dedicate sufficient time, energy and attention to ensure the diligent performance of his or her duties; and
|
|
(iv) comply with every provision of this Code.
|
|
(i) receiving loans or guarantees of obligations as a result of one's position as a Director;
|
|
(ii) engaging in conduct or activity that improperly interferes with the Company's existing or prospective business relations with a third party;
|
|
(iii) accepting bribes, kickbacks or any other improper payments for services relating to the conduct of the business of the Company; and
|
|
(iv) accepting, or having a member of a Director's immediate family accept, a gift from persons or entities that deal with the Company, in cases where the gift is being made in order to influence the Directors' actions as a member of the Board, or where acceptance of the gift could otherwise reasonably create the appearance of a conflict of interest.
|
|
(i) no Director shall use Confidential Information for his or her own personal benefit or to benefit persons or entities outside the Company; and
|
|
(ii) no Director shall disclose Confidential Information outside the Company, either during or after his or her service as a Director of the Company, except with authorization of the Board of Directors or as may be otherwise required by law.
|
·
|
non-public information about the Company's financial condition, prospects or plans, its marketing and sales programs and research and development information, as well as information relating to mergers and acquisitions, stock splits and divestitures;
|
·
|
non-public information concerning possible transactions with other companies or information about the Company's customers, suppliers or joint venture partners, which the Company is under an obligation to maintain as confidential; and
|
·
|
non-public information about discussions and deliberations relating to business issues and decisions, between and among employees, officers and Directors.
|
1.
|
Oversee management’s establishment and maintenance of processes to provide for the reliability and integrity of the accounting policies, financial statements, and financial reporting and disclosure practices of the Company.
|
2.
|
Oversee management’s establishment and maintenance of processes to provide for an adequate system of internal control over financial reporting at the Company and management’s policies and guidelines for the assessment and management of risk, and oversee the Company’s compliance with laws and regulations relating to financial reporting and internal control over financial reporting.
|
3.
|
Oversee management’s establishment and maintenance of processes to provide for compliance with the Company’s financial policies.
|
4.
|
Retain the independent registered public accounting firm, subject to shareholders’ vote, and oversee their independence and oversee the qualifications and performance of both the independent registered public accounting firm and internal auditors.
|
5.
|
If necessary, prepare the report required by the rules of the Securities and Exchange Commission to be included in the Company’s annual proxy statement.
|
1.
|
Hold at least two meetings per year and such additional meetings as may be called by the Chairperson of the Audit Committee, by a majority of the members of the Audit Committee, or at the request of the independent registered public accounting firm or the Chief Financial Officer. A quorum shall consist of a majority of members.
|
2.
|
Create an agenda for the ensuing year.
|
3.
|
Report through its Chairperson to the Board of Directors following the meetings of the Audit Committee.
|
4.
|
Maintain minutes or other records of meetings and activities of the Audit Committee.
|
5.
|
Review the responsibilities outlined in this charter annually and report and make recommendations to the Board of Directors on any revisions to this charter.
|
6.
|
Conduct or authorize investigations into any matters within the Audit Committee’s scope of responsibilities.
|
7.
|
Provide a mechanism for the independent registered public accounting firm to communicate directly with the Audit Committee without management present and periodically meet separately with the independent registered public accounting firm and management.
|
8.
|
Delegate authority to one or more members where appropriate.
|
9.
|
Establish a process for, and conduct, an annual performance evaluation of the Audit Committee.
|
1.
|
Review with management and the independent registered public accounting firm significant risks and exposures, and review and assess the steps management has taken to identify and manage such risks and exposures.
|
2.
|
Review and discuss earnings releases, as well as corporate policies with respect to the types of information to be disclosed and types of presentations to be made to analysts and rating agencies.
|
3.
|
Review and discuss with management and the independent registered public accounting firm the Company’s unaudited quarterly and audited annual financial statements, including (a) matters required to be discussed by the independent registered public accounting firm by Statement on Auditing Standards No. 61 (as amended and as adopted by the Public Company Accounting Oversight Board), and the independent registered public accounting firm’s opinion rendered with respect to annual financial statements, and (b) the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The discussion should include, where appropriate, a discussion about the Company’s critical accounting estimates, accounting principles, financial statement presentation, the quality of earnings, significant financial reporting issues and judgments (including off-balance sheet structures and the use of pro forma or non-GAAP financial information), the adequacy of the Company’s internal controls, and any regulatory and accounting initiatives, correspondence with regulators, and published reports that raise material issues with respect to, or that could have a significant effect on, the Company’s financial statements. Based on this review and discussion, recommend, as appropriate, to the Board of Directors the inclusion of the audited financial statements in the Company’s Form 10-K and annual report.
|
4.
|
Review and discuss the adequacy and effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting including obtaining from management its assessments of the Company’s internal control over financial reporting; review the recommendations made by management and the independent registered public accounting firm and internal auditors regarding internal control over financial reporting and other matters relating to the accounting procedures and the books and records of the Company and review any material weaknesses or significant deficiencies in, or changes to, internal control over financial reporting or any fraud involving management reported to the Audit Committee by the independent registered public accounting firm or management and the resolution of any material weaknesses or significant deficiencies.
|
5.
|
Receive reports relating to, and provide the Audit Committee’s views with respect to, any information regarding accounting, internal accounting controls, or audit matters that the Corporate Governance Committee has become aware of as a result of monitoring the Company’s compliance with laws, regulations, and the Global Code of Conduct.
|
6.
|
Establish and oversee procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
|
7.
|
Review and approve expense accounts of the Chairman and the Chief Executive Officer (this activity is performed by the Audit Committee Chairperson) and review and discuss the policies and procedures regarding other executive officers’ expense accounts and use of corporate assets.
|
8.
|
Perform other functions as assigned by the Board of Directors.
|
1.
|
Be directly responsible, in its capacity as a committee of the Board, for the appointment, compensation, retention and oversight of the work of the independent registered public accounting firm. In this regard, the Audit Committee has the sole authority to appoint, although it may seek ratification by the Company’s shareholders, review the performance of, and as necessary, replace the independent registered public accounting firm, which reports directly to the Audit Committee.
|
2.
|
Receive from the independent registered public accounting firm, at least annually, and assess and discuss with the independent registered public accounting firm a report delineating all relationships between the independent registered public accounting firm and the Company and any other relationships that may adversely affect the independence of the independent registered public accounting firm, including an assurance that each member of the engagement team is in compliance regarding length of service.
|
3.
|
Review and approve in advance, at the discretion of the Committee, all services planned or expected to be rendered by the Company’s independent registered public accounting firm in accordance with the Audit Committee’s “Engaging the Independent Registered Public Accounting Firm” policy, along with a description of the services and the estimated fees. (By approving the audit engagement, a service within the scope of such engagement shall be deemed to have been pre-approved.)
|
4.
|
Review any reports prepared by the independent registered public accounting firm and provided to the Audit Committee relating to significant financial reporting issues and judgments including, among other things, the Company’s selection, application, and disclosure of critical accounting policies and practices, alternative treatments, assumptions, estimates or methods that have been discussed with management, including the ramifications of such treatments and the treatment preferred by the independent registered public accounting firm, and any other material written communications between the independent registered public accounting firm and management, such as any management letter or schedule of unadjusted differences.
|
5.
|
Obtain and review, at least annually, a report by the independent registered public accounting firm describing (a) the auditing firm’s internal quality-control procedures, and (b) any material issues raised by the most recent internal quality-control review or peer review of the firm, or by any inquiry or investigation by governmental or professional authorities or inspection by the Public Company Accounting Oversight Board, within the preceding five years, and any actions taken to address any such issues.
|
6.
|
As appropriate confer with the independent registered public accounting firm regarding the scope and results of their integrated audit of the consolidated financial statements of the Company, and management’s assessment of the Company’s internal control over financial reporting; review and approve the independent registered public accounting firm’s audit scope and approach and their plans, if any; review and approve the Company’s internal audit charter, annual audit plans, staffing and budgets (including progress against those plans/staffing/budgets; direct the attention of the independent registered public accounting firm to specific matters or areas deemed by the Audit Committee or the auditors to be of special significance; review with the independent registered public accounting firm and resolve, where applicable, any audit problems or difficulties and management’s response, including any restrictions on the scope of the independent registered public accounting firm’s activities or on access to requested information, and disagreements between management and the independent registered public accounting firm regarding accounting and financial disclosure, as well as any other matters required to be brought to the Audit Committee’s attention by applicable auditing standards; and authorize the independent registered public accounting firm to perform such supplemental reviews or audits as the Audit Committee may deem desirable.
|
7.
|
Set clear hiring policies for employees and former employees of the independent registered public accounting firm.
|
1.
|
Identify and recommend to the Board for election and/or appointment qualified candidates for membership on the Board and the committees of the Board.
|
2.
|
Review director candidates proposed by shareholders. The Chairman of the Committee will review director nominations received from shareholders and self-nominated candidates to determine whether the candidate possesses the minimum qualifications for membership on the Board.
|
3.
|
Discuss and set compensation for officers of the Company.
|
4.
|
Develop and recommend to the Board corporate governance principles and monitor compliance with all such principles and policies.
|
5.
|
Propose a slate of candidates for election as Directors at each Annual Meeting.
|
6.
|
Develop and monitor succession plans for the members of the Board, the members of the Committees of the Board, and the Chair of the Committees of the Board.
|
1.
|
Develop and recommend to the Board criteria for selecting new Directors and qualifications for members of the committees of the Board.
|
2.
|
Develop and recommend to the Board criteria to assess the independence of members of the Board.
|
3.
|
Review and periodically make recommendations to the Board concerning the composition, size, structure and activities of the Board and the committees of the Board.
|
4.
|
Oversee the evaluation of the Board and its Committees.
|
5.
|
Annually assess and report to the Board on the performance and effectiveness of the Board, the Committee and the other committees of the Board, and other issues of corporate governance.
|
6.
|
Review conflicts of interest of Directors, senior executives and consider waivers or other action related thereto.
|
7.
|
Annually review and report to the Board with respect to Director and officer compensation and benefits.
|
8.
|
Annually review succession plans for the members of the Board, the members of the Committees of the Board, and the Chair of the Committees of the Board.
|
9.
|
Report to shareholders in the Corporation's annual proxy statement about the director nomination process as required by the Securities and Exchange Commission rules.
|
10.
|
Review this Charter on an annual basis and update it as appropriate, and submit it for the approval of the Board when updated.
|
11.
|
Undertake such other responsibilities or tasks as the Board may delegate or assign to the Committee from time to time.
|
1.
|
The Committee shall consist entirely of independent Directors of the Board, as set forth in the Corporation's Corporate Governance Guidelines.
|
2.
|
The requisite number of the members of the Committee shall also satisfy, in the judgment of the Board, the applicable independence requirements.
|
3.
|
Each member of the Committee shall be free of any relationship that, in the judgment of the Board from time to time, would interfere with the exercise of his or her independent judgment.
|
1.
|
The Chairperson shall be appointed by the Board.
|
2.
|
The Committee shall meet at least two (2) times each year, or more frequently as circumstances require.
|
3.
|
The timing of the meetings shall be determined by the Committee and the Board.
|
4.
|
The Committee may delegate any of its duties to subcommittees comprised of Committee members as the Committee may deem appropriate at its sole discretion.
|
5.
|
The Board may at any time and in its complete discretion remove any member of the Committee and may fill any vacancy in the Committee.
|
6.
|
A majority of the total number of members of the Committee shall constitute a quorum of the Committee.
|
7.
|
A majority of the members of the Committee shall be empowered to act on behalf of the Committee.
|
8.
|
Minutes shall be kept of each meeting of the Committee, and the Committee shall regularly provide reports of its actions to the Board.
|