TWO RIVERS WATER & FARMING (TURV) 10-K 19 Mar 14 2013 FY Annual report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 12, 2014
Document and Entity Information:	'	'
Entity Registrant Name	'TWO RIVERS WATER & FARMING Co	'
Document Type	'10-K	'
Document Period End Date	31-Dec-13	'
Amendment Flag	'false	'
Entity Central Index Key	'0001302946	'
Current Fiscal Year End Date	'--12-31	'
Entity Common Stock, Shares Outstanding	'	21,274,386
Entity Public Float	'	$18,083,228
Entity Filer Category	'Smaller Reporting Company	'
Entity Current Reporting Status	'Yes	'
Entity Voluntary Filers	'No	'
Entity Well-known Seasoned Issuer	'No	'
Document Fiscal Year Focus	'2013	'
Document Fiscal Period Focus	'FY	'

Statement_of_Financial_Positio

Statement of Financial Position (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Balance Sheets	'	'
Cash and Cash Equivalents, at Carrying Value	$2,069	$1,340
Accounts Receivable, Net, Current	54	184
Farm Product	29	49
Other Assets, Current	108	74
Assets, Current	2,260	1,647
Property, Plant and Equipment, Gross	1,892	2,397
Land	4,978	3,919
Water assets	31,507	35,388
Intangible assets, net	997	1,037
Other Assets, Noncurrent	68	64
Assets, Noncurrent	39,442	42,805
Assets	41,702	44,452
Accounts Payable, Current	47	298
Notes Payable, Current	2,759	10,978
Accrued Liabilities, Current	317	830
Liabilities, Current	3,123	12,106
Other Long-term Debt, Noncurrent	12,961	4,368
Liabilities	16,084	16,474
Preferred Stock, Value, Issued	2,851	2,851
Common Stock, Value, Issued	25	24
Additional Paid in Capital, Common Stock	60,220	56,703
Retained Earnings (Accumulated Deficit)	-47,449	-41,440
Stockholders' Equity Attributable to Noncontrolling Interest	9,971	9,840
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	25,618	27,978
Liabilities and Equity	$41,702	$44,452

Statement_of_Income

Statement of Income (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Revenues	'	'
Farm Revenue	$2,002	$979
Water revenue	40	36
Member Assessments	32	49
Other Revenue, Net	17	11
Revenues	2,091	1,075
Cost of Revenue	'	'
Direct cost of revenue	1,714	1,116
Cost of Revenue	1,714	1,116
Gross Profit	377	-41
Operating Expenses	'	'
General and Administrative Expense	2,946	7,577
Depreciation, Depletion and Amortization	534	271
Operating Expenses	3,480	7,848
Operating Income (Loss)	-3,103	-7,889
Nonoperating Income (Expense)	'	'
Other Nonoperating Income (Expense)	-24	-74
Nonoperating Income (Expense)	-24	-74
Interest and Debt Expense	'	'
Interest Expense	938	2,869
Extinguishment Of Debt Amount	873	'
Warrant expense	96	315
Debt Issuance Costs	'	3,359
Interest and Debt Expense	1,907	6,543
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	-5,034	-14,506
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest	-5,034	-14,506
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest	-16	-43
Net Income (Loss) Attributable to Parent	-5,050	-14,549
ComprehensiveIncomeNetOfTax	($5,050)	($14,549)
Earnings Per Share	'	'
Weighted Average Number of Shares Outstanding, Basic	24,636	23,660
Weighted Average Number of Shares Outstanding, Diluted	24,636	23,660

Statement_of_Cash_Flows

Statement of Cash Flows (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Net Cash Provided by (Used in) Operating Activities	'	'
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	($5,034)	($14,549)
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities	'	'
Depreciation	494	271
Amortization	40	3,359
Assumption of assessments due to purchase of HCIC shares	80	'
Loss on disposal of assets	177	'
Gains (Losses) on Extinguishment of Debt	873	'
Realized loss (gain) of marketable securities	'	72
Beneficial Conversion Feature of Preferred Stock	'	1,735
Stock based compensation and warrants expense	166	3,434
Issuance of Stock and Warrants for Services or Claims	883	1,028
Accretion Of Discount	89	'
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities	-2,232	-4,650
Increase (Decrease) in Operating Assets	'	'
Decreae (increase) in advances & accounts receivable	49	-96
Increase in farm products	20	-6
Increase (Decrease) in Prepaid Expense and Other Assets	82	-55
Increase (Decrease) in Operating Assets	151	-157
Increase (Decrease) in Operating Liabilities	'	'
Increase (Decrease) in Accounts Payable	-257	-333
Increase (Decrease) in Accrued Liabilities	-249	849
Increase (Decrease) in Operating Capital	-506	516
Net Cash Provided by (Used in) Operating Activities	-2,587	-4,291
Net Cash Provided by (Used in) Investing Activities	'	'
Proceeds from Sale of Property, Plant, and Equipment	-36	-1,098
Purchase of land, watershares, infrastructure	-1,329	-2,497
Proceeds from Sale of Intangible Assets	'	-900
Proceeds from Sale and Maturity of Marketable Securities	'	116
Construction And Development Costs	'	-34
Proceeds from Sale of Other Productive Assets	58	'
Net Cash Provided by (Used in) Investing Activities	-1,307	-4,413
Net Cash Provided by (Used in) Financing Activities	'	'
Proceeds from issuance of bridge loan	1,300	3,994
Payment of offering costs	-223	-281
Proceeds from (Repayments of) Notes Payable	-655	-315
Proceeds from Issuance of Preferred Stock and Preference Stock	1,600	3,400
Proceeds from Issuance of Long-term Debt	2,601	2,369
Proceeds from Warrant Exercises	'	100
Net Cash Provided by (Used in) Financing Activities	4,623	9,267
Cash and Cash Equivalents, Period Increase (Decrease)	729	563
Cash and Cash Equivalents, at Carrying Value	1,340	777
Cash and Cash Equivalents, at Carrying Value	$2,069	$1,340

Statement_of_Shareholders_Equi

Statement of Shareholders' Equity and Other Comprehensive Income (USD $)	Common Stock	Preferred Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	NoncontrollingInterestMember	Total
In Thousands
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Dec. 31, 2011	$23	'	$39,847	($19,785)	($51)	$2,162	$22,196
Shares, Outstanding at Dec. 31, 2011	23,259	'	'	'	'	'	23,259
Stock Issued During Period, Value, New Issues	'	'	100	'	'	'	100
Stock Issued During Period, Shares, New Issues	100	'	'	'	'	'	100
Stock Issued During Period, Value, Acquisitions	1	2,851	996	'	'	'	3,848
Stock Issued During Period, Shares, Acquisitions	617	3,794	'	'	'	'	4,411
Stock Issued During Period, Value, Other	'	'	1,028	'	'	'	1,028
Stock Issued During Period, Shares, Other	676	'	'	'	'	'	676
Stock Repurchased and Retired During Period, Value	'	'	-3	'	'	'	-3
Stock Repurchased and Retired During Period, Shares	-624	'	'	'	'	'	-624
Adjustments to Additional Paid in Capital, Other	'	'	4,024	'	'	'	4,024
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	'	'	'	-14,549	'	'	-14,549
Stockholders' Equity, Other	'	'	10,711	-7,106	51	7,635	11,291
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Dec. 31, 2012	24	2,851	56,703	-41,440	'	9,840	27,978
Noncontrolling Interest at Dec. 31, 2012	'	'	'	'	'	43	43
Shares, Outstanding at Dec. 31, 2012	24,028	3,794	'	'	'	'	27,822
Stock Issued During Period, Shares, New Issues	190	'	'	'	'	'	190
Stock Issued During Period, Value, Acquisitions	1	'	882	'	'	'	883
Stock Issued During Period, Shares, Acquisitions	764	'	'	'	'	'	764
Stock Repurchased and Retired During Period, Value	'	'	-3	'	'	'	-3
Stock Repurchased and Retired During Period, Shares	-103	'	'	'	'	'	-103
Adjustments to Additional Paid in Capital, Other	'	'	-188	'	'	'	-188
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	'	'	'	-5,050	'	16	-5,034
Stockholders' Equity, Other	'	'	2,826	-959	'	115	1,982
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Dec. 31, 2013	$25	$2,851	$60,220	($47,449)	'	$9,971	$25,618
Shares, Outstanding at Dec. 31, 2013	24,879	3,794	'	'	'	'	28,673

Note_1_Organization_and_Busine

Note 1 - Organization and Business	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 1 - Organization and Business	'
	NOTE 1 – ORGANIZATION AND BUSINESS
	The following is a summary of some of the information contained in this document.  Unless the context requires otherwise, references in this document to “Two Rivers,” or the “Company” is to Two Rivers Water & Farming Company and its subsidiaries.
	Overview
	Currently, there is a significant arbitrage between the value of irrigation water and municipal water in the semi-arid regions of the southwestern United States.  The arbitrage is amplified by a predicted water supply shortage for municipalities in the near future.  The arbitrage results in a 5-10 fold increase in the price of municipal water over irrigation water.  First generation western water business models attempted to capture the arbitrage by “buying and drying” irrigated farmland in order to sell the irrigation water to municipalities.  The practice fallowed some of the most productive irrigated farmland and decimated entire agricultural communities. The buy and dry model failed to generate any significant revenues and earnings for investors as political and legal challenges developed. The buy and dry model became politically, economically and legally untenable.  In the late 19th century, 85% of all water rights were granted to and are still primarily held by agriculture interests.  Since then, populations have increased and people have moved from the farm to the city.  This has resulted in a water shortage for municipalities, for which there must be a solution.  Two Rivers has developed amore viable and sustainable solution than the buy and dry practices of the past.
	Our business model reinvigorates, rather than decimates, agricultural communities and provides excess water to municipalities through market forces. Our core business converts irrigated farmland, which is marginally profitable growing low value feed crops, into highly profitable irrigated farmland growing high yield, high value, fruit and vegetable crops. Fruit & vegetable crops generate six times the revenue of feed crops with better margins.  As a result of our higher revenue and better margins, we can afford to and are willing to pay a higher price for water.  As the price of water increases, so does the supply.  Farmers receive more for their crops and water.  Municipal consumers pay more for excess water and make better water choices.  The water arbitrage shrinks.  Water supply and demand reaches equilibrium.  Market action, between satisfied buyers and sellers from both the agricultural and municipal communities, rather than insurmountable political and legal processes, is the driving force of our business.
	Our financial returns far outpace the revenues and margins generated by first generation western water business models.  In the agricultural communities where we operate, we create new and better paying jobs for farming, marketing, handling and processing vegetables.  In the municipal communities, we provide wholesale water not necessary for our core business, agriculture.  We concentrate our acquisitions on water rights and infrastructure that are, in part, owned by municipalities, thereby letting the municipalities do the heavy legal and political lifting necessary to obtain excess water.
	We generated farm revenues of $2.0 million in 2013, more than doubling from $979,000 in 2012.  We had no farm revenues in 2011.  In 2013 we farmed a total of 1,385 gross acres, of which 868 gross acres (820 net acres) were planted and 517 acres received federal crop insurance due to drought conditions.  A total of 690 of the 1,385 gross acres were irrigated, and we owned 1,242 of the 1,385 acres and leased the remaining 95 acres.  Our crop production consisted of cabbage, pumpkins and squash raised for human consumption, as well as feed crops, such as alfalfa, corn, oats and sorghum, planted as part of our crop rotation practice.  Our produce marketing operations package and ship produce for our farms and for a network of farmers who grow crops for us, and to date we have sold our fruits and vegetables principally to national accounts through our wholly owned subsidiary Dionisio Farms & Produce..
	In 2009, we began acquiring and developing irrigated farmland and associated water rights and infrastructure.  As of December 31, 2013, we own 7,465 gross acres.  Gross acres owned increased from 5,211 gross acres at December 31, 2012 and 4,600 gross acres at December 31, 2011.  We will seek to expand our holdings by strategically acquiring or leasing irrigable farmland in the Arkansas River Basin.  We intend to develop and bring into production more of our currently held gross acres as we acquire additional water rights. We also expect to increase the variety of crops we produce as we continue to expand our farming operations through acreage we manage and through our network of growers.
	Colorado allocates water based on the Prior Appropriation Doctrine, whereby water rights are unconnected to land ownership.  The first person to use a quantity of water from a water source for a beneficial use has the right to continue to use that quantity of water for that purpose.  Subsequent users can use the remaining water for their own beneficial purposes provided that they do not impinge on the rights of previous users.Water rights can be developed, managed, purchased and sold much like real property, and the seniority of water rights are a significant consideration when we acquire additional irrigated farmland.  Water rights include the ability to divert stream flow, build a storage reservoir, pump ground water and create augmentation water supplies to offset depletions of water taken out of priority.  To date, our water operations have focused principally on acquiring and developing water rights to support our farming efforts, including the farming operations of the network of farmers who grow crops for us.  Our revenues from leasing water totaled $40,000 in 2013 and $36,000 in 2012.  We intend to expand our portfolio of water rights in the future to not only support our expanding farm operations, but also to lease and sell water to other users in the Arkansas River Basin.
	In 2014 we have initiated a corporate restructuring pursuant to which we intend to organize all of our operations, other than those of our 95%-owned subsidiary Huerfano-Cucharas Irrigation Company or HCIC, under the control of a newly formed subsidiary, TR Capital Partners, LLC, or TR Capital.  This restructuring will better reflect our emphasis on acquiring and operating irrigated farming and water distribution activities under our integrated business model.  As described under “Our Organizational Structure,” Two Rivers Water & Farming Company owns all of the Common Units of TR Capital and outside investors, who are investing $6.0 million in cash and exchanging outstanding preferred and convertible securities of Two Rivers Water & Farming Company and its subsidiaries, will receive Preferred Units that are entitled to distributions and are exchangeable for common stock and warrants of Two Rivers Water & Farming Company.
	Our Organizational Structure
	Since we commenced operations as a farming-and-water company in 2009, we have built a corporate organizational structure that enabled us to raise capital for specific projects completed by our direct and indirect subsidiaries.  The following chart shows our corporate organization as of December 31, 2013:
	On January 29, 2014, the board of directors approved a plan to reorganize our subsidiaries in a more integrated manner based on functional operations.  We formed a new company, TR Capital Partners, LLC or TR Capital, which issued all of its Common Units to Two Rivers Water & Farming Capital.  TR Capital then initiated the transactions described below under “Placement of Preferred Units.”  Following the completion of those transactions in mid-2014, we expect that TR Capital and our other direct and indirect subsidiaries (excluding HCIC Holdings, LLC and Huerfano-Cucharas Irrigation Company) will enter into a series of related transactions as the result of which assets and operations of such other subsidiaries will be transferred to TR Capital.  As a result of those transactions, TR Capital would operate all of the operations formerly conducted by those subsidiaries.  The following chart shows our expected corporate organization following completion of the anticipated transactions among our subsidiaries, as well as the principal operating areas to be managed by TR Capital:
	Corporate Evolution
	Prior to 2009, the Company was named Navidec Financial Services, Inc. (“Navidec”) and had been engaged in mortgage lending and other enterprises unrelated to its current lines of business.  Navidec was incorporated in the state of Colorado on December 20, 2002. On July 28, 2009, Navidec formed a wholly-owned Colorado corporation for the purpose of acquiring farm and water assets in the Huerfano/Cucharas watershed.  On November 19, 2009, with shareholder approval, Navidec changed its name to Two Rivers Water Company. On December 11, 2012, with shareholder approval, the Company changed its name to Two Rivers Water & Farming Company.

Note_2_Summary_of_Significant_

Note 2 - Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 2 - Summary of Significant Accounting Policies	'
	NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	Principles of Consolidation
	The accompanying consolidated financial statements include the accounts of Two Rivers and its subsidiaries, Farms, F-1, F-2, TR Water, HCIC, Orlando, and discontinued operations.  All significant inter-company balances and transactions have been eliminated in consolidation.
	Non-controlling Interest
	Non-controlling interest is recorded for the ownership of HCIC not owned by the Company and for preferred shares not owned by the Company in the Company’s subsidiaries.   Below is the detail of non-controlling interest shown on the balance sheet.
	Entity	Year ended December 31,
		2013	2012
	HCIC	$1,363,000	$2,205,000
	F-1	$1,494,000	$1,494,000
	F-2	$3,933,000	$3,933,000
	DFP	$3,181,000	$2,208,000
	Totals	$9,971,000	$9,840,000
	Below is the breakdown of the non-controlling interest share of gains (losses):
	Entity	Year ended December 31,
		2013	2012
	HCIC (1)	$16,000	$43,000
	F-1 (2)	-	-
	F-2 (2)	-	-
	DFP (2)	-	-
	Totals	$16,000	$43,000
	Notes:
	-1	The Company owns 95% of HCIC.
	-2	The terms of the preferred shares in each subsidiary allows for a participatory additional preferred share dividend of 25% of the profits derived from the assets held by the subsidiary.  This participatory dividend, if any, will be recorded as a non-controlling share of the income.
	Reclassification
	Certain amounts previously reported have been reclassified to conform to current presentation.  Certain labels of accounts/classifications have been changed.
	Use of Estimates
	The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions.  These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period.  Actual results could differ materially from those estimates.
	Cash and Cash Equivalents
	For purposes of reporting cash flows, Two Rivers Water & Farming Company considers cash and cash equivalents to include highly liquid investments with original maturities of 90 days or less. Those are readily convertible into cash and not subject to significant risk from fluctuations in interest rates.  The recorded amounts for cash equivalents approximate fair value due to the short-term nature of these financial instruments.
	Concentration of Credit Risk
	Financial instruments that potentially subject Two Rivers to significant concentrations of credit risk include cash equivalents, marketable investments, advances and accounts receivable.  The Company maintains its cash and investment balances in the form of bank demand deposits, money market accounts that management believes to be of high credit quality.  Accounts receivable are typically uncollateralized and are derived from transactions with and from customers primarily located in the United States.
	The Company’s farming revenue for the year ended December 31, 2013 of $2,002,000 consisted of 11 customers, of which one customer represented 20% or more of revenue.
	Fair Value of Measurements and Disclosures
	Fair Value of Assets and Liabilities Acquired
	Fair value is the price that would be received from the sale of an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market in an orderly transaction between market participants.  In determining fair value, the accounting standards established a three-level hierarchy that distinguishes between (i) market data obtained or developed from independent sources (i.e., observable data inputs) and (ii) a reporting entity’s own data and assumptions that market participants would use in pricing an asset or liability (i.e., unobservable data inputs).  Financial assets and financial liabilities measured and reported at fair value are classified in one of the following categories, in order of priority of observability and objectivity of pricing inputs:
	• Level 1 – Fair value based on quoted prices in active markets for identical assets or liabilities.
	• Level 2 – Fair value based on significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data.
	• Level 3 – Fair value based on prices or valuation techniques that require significant unobservable data inputs.  Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.
	The fair value measurement level for an asset or liability is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques should maximize the use of observable inputs and minimize the use of unobservable inputs.
	Recurring Fair Value Measurements:
	The carrying value of the Company’s financial assets and financial liabilities is their cost, which may differ from fair value.   The carrying value of cash held as demand deposits, money market and certificates of deposit, marketable investments, accounts receivable, short-term borrowings, accounts payable and accrued liabilities approximated their fair value.  Marketable investments are valued at Level 1 due to readily available market quotes. The fair value of the Company’s long-term debt, including the current portion approximated its carrying value.  Fair value for long-term debt was estimated based on quoted market prices of the identical debt instruments or values of comparable borrowings.
	Accounts Receivable
	The Company carries its accounts receivable, net at management’s expectation of collection and past experience.  As of December 31, 2013 the Company did not have a reserve receivables from a customer based on past payment performance.
	Property and Equipment
	Property and equipment are stated at cost less accumulated depreciation.  Depreciation is computed principally on the straight-line method over the estimated useful life of each type of asset which ranges from three to twenty seven and a half years.  Maintenance and repairs are charged to expense as incurred; improvements and betterments are capitalized.  Upon retirement or disposition, the related costs and accumulated depreciation are removed from the accounts, and any resulting gains or losses are credited or charged to income.
	Below is a summary of premises and equipment:
			December 31,
	Asset Type	Life in Years	2013	2012
	Office equipment, furniture & computers	3 – 7	$51,000	$109,000
	Vehicles	5	45,000	361,000
	Farm equipment	10-Jul	1,411,000	1,286,000
	Irrigation system	10	989,000	1,039,000
	Buildings	27.5	35,000	-
	Website	3	7,000	7,000
	Subtotal		2,538,000	2,802,000
	Less Accumulated Depreciation		646,000	405,000
	Net Book Value		$1,892,000	$2,397,000
	Land
	Land acquired for farming is recorded at cost.  Some of the land acquired has not been farmed for many years, if not decades.  Therefore, additional expenditures are required to make the land ready for efficient farming.  Expenditures for leveling the land are added to the cost of the land.  Irrigation is not capitalized in the cost of Land (Property and Equipment above). Land is not depreciated.  However, once per year, Management will assess the value of land held, and in their opinion, if the land has become impaired, Management will establish an allowance against the land.
	Water rights and infrastructure
	Subsequent to purchase of water rights and water infrastructure, management periodically evaluates the carrying value of its assets, and if the carrying value is in excess of fair market value, the Company will establish an impairment allowance.  Currently, there are no impairments on the Company’s land and water shares.  No amortization or depreciation is taken on the water rights.
	Intangibles
	Two Rivers recognizes the estimated fair value of water rights acquired by the Company’s purchase of stock in HCIC and Orlando.   These intangible assets will not be amortized because they have an indefinite remaining useful life based on many factors and considerations, including, the historical upward valuation of water rights within Colorado.
Impairments
Property and Equipment
Once per year we review all property, equipment and software owned by the Company and compared the net book value of such assets with the fair market value of each piece of equipment having a net book value greater than $5,000.  If it is determined that the net book value is greater than the fair market value, an impairment will be recorded.  If impairment is necessary, a loss on the value of the affected asset will be recorded, and the impairment will not be reversed in future periods.
Land
Once per year we review each parcel of land owned by the Company together with improvements to each parcel and compare the carrying cost with the fair market value.  If it appears that our carrying value may be greater than the fair market value, an independent appraisal will be ordered.  If the appraised value is less than our carrying value, an impairment will be recorded.  If impairment is necessary, a loss on the value of our land will be recorded, and the impairment will not be reversed in future periods.
Water rights and infrastructure
Once per year we assess the value of the water rights held by the Company, comparing our estimated values with recent sales of comparable water rights.  In the event that such assessment indicates that the carrying value is greater than the fair market value of the water rights, an impairment will be recorded.  If impairment is necessary, a loss on value of our water rights will be recorded, and the impairment will not be reversed in future periods.
Revenue Recognition
Farm Revenues
Revenues from farming operations are recognized when sold into the market.  All direct expenses related to farming operations are capitalized as farm inventory and recognized as a direct cost of sale upon the sale of the crops.
Water Revenues
Current water revenues are from the lease of water own by HCIC to farmers in the HCIC service area and through re-leasing of our water from the Pueblo Board of Water lease.   Water revenues are recognized when the water is consumed.
Member Assessments
Once per year the HCIC board estimates HCIC’s expenses, less anticipated water revenues, and establishes an annual assessment per ownership share.  One-half of the member assessment is recorded in the first quarter of the calendar year and the other one-half of the member assessment is recorded in the third quarter of the calendar year.  Assessments paid by Two Rivers Water Company to HCIC are eliminated in consolidation of the financial statements.
HCIC does not reserve against any unpaid assessments.  Assessments due, but unpaid, are secured by the member’s ownership of HCIC.  The value of this ownership is significantly greater than the annual assessments.
Stock Based Compensation
Beginning January 1, 2006, the Company adopted the provisions of ASC 718 and accounts for stock-based compensation in accordance with ASC 718.  Under the fair value recognition provisions of this standard, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which generally is the vesting period.  The Company elected the modified-prospective method, under which prior periods are not revised for comparative purposes.  The valuation provisions of ASC 718 apply to new grants and to grants that were outstanding as of the effective date and are subsequently modified.
All options granted prior to the adoption of ASC 718 and outstanding during the periods presented were fully vested at the date of adoption.
In December 2007, the SEC issued Staff Accounting Bulletin (“SAB”) 110 which was issued to express the understanding that the use of a “simplified” method, as discussed in SAB 107 in developing an estimate of expected term of “plain vanilla” share options in accordance with ASC 718 would be acceptable beyond December 31, 2007.  The Company adopted this standard beginning January 2008.
Income Taxes
Provision for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets, and for operating loss and tax credit carry forwards.  The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period.  Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustment to the tax provision or benefit in the period of enactment.
The Company uses a two-step process to evaluate a tax position.  The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position.  The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements.  A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.
Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met.  Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.  The Company reports tax-related interest and penalties as a component of income tax expense.
Based on all known facts and circumstances and current tax law, the Company believes that the total amount of unrecognized tax benefits as of December 31, 2013, is not material to its results of operations, financial condition, or cash flows.  The Company also believes that the total amount of unrecognized tax benefits as of December 31, 2013, if recognized, would not have a material effect on its effective tax rate.  The Company further believes that there are no tax positions for which it is reasonably possible, based on current tax law and policy that the unrecognized tax benefits will significantly increase or decrease over the next 12 months producing, individually or in the aggregate, a material effect on the Company’s results of operations, financial condition or cash flows.
The amount of income taxes the Company pays is subject to ongoing examinations by federal and state tax authorities.  To date, there have been no reviews performed by federal or state tax authorities on any of the Company’s previously filed returns.  The Company’s 2010 and later tax returns are still subject to examination.
Net Income (Loss) per Share
Basic net income per share is computed by dividing net income (loss) attributed to Two Rivers available to common shareholders for the period by the weighted average number of common shares outstanding for the period.  Diluted net income (loss) per share is computed by dividing the net income for the period by the weighted average number of common and potential common shares outstanding during the period.
The dilutive effect of the outstanding 3,122,615 RSUs, 2,014,867 options and 9,890,209 warrants at December 31, 2013, has not been included in the determination of diluted earnings per share since, under ASC 260 they would anti-dilutive.
Recently issued Accounting Pronouncements
In July 2013, the FASB issued Accounting Standards Update No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU No. 2013-11”). ASU No. 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with limited exceptions. ASU No. 2013-11 is effective for interim and annual periods beginning after December 15, 2013 and may be applied retrospectively. The adoption of the provisions of ASU No. 2013-11 is not expected to have a material impact on the company’s financial position or results of operations.
Management does not believe that any other recently issued, but not effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

Note_3_Investments_and_Longliv

Note 3 - Investments and Long-lived Assets	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 3 - Investments and Long-lived Assets	'
	NOTE 3 – INVESTMENTS AND LONG-LIVED ASSETS
	Land
	Upon purchasing land, the value is recorded at the purchase price or fair value, whichever is more accurate.  Costs incurred to prepare the land for the intended purpose, which is efficient irrigated farming, is also capitalized in the recorded cost of the land.  No amortization or depreciation is taken on Land.  However the land is reviewed by management at least once per year to ascertain if a further analysis is necessary for any potential impairments.
	Water rights and infrastructure
	The Company has acquired both direct flow water rights and water storage rights.  We have obtained water rights through the purchase of shares in a mutual ditch company, which we did with our purchase of shares in HCIC, or through the purchase of an entity holding water rights, which we did with our purchase of the Orlando.  The Company may also acquire water rights through outright purchase.  In all cases, such rights are recognized under decrees of the Colorado water court and administered under the jurisdiction of the Office of the State Engineer.
	Upon purchasing water rights, the value is recorded at our purchase price.  If a majority interest is acquired in a company holding water assets (potentially with other assets including water delivery infrastructure, right of ways, and land), the Company determines the fair value of the assets.  To assist with the valuation, the Company may consider reports from a third-party valuation firm.  If the value of the water rights is greater than what the Company paid then a bargain purchase gain is recognized.   If the value of the water assets are less than what the Company paid then goodwill is recognized.
	Subsequent to purchase, management periodically evaluates the carrying value of its assets, and if the carrying value is in excess of fair market value, the Company will establish an impairment allowance.  Currently, there are no impairments on the Company’s land and water shares.  No amortization or depreciation is taken on the water rights.
	Dam and water infrastructure construction in progress
	The Company has commenced engineering for the reconstruction of the dam owned by the HCIC.  In addition the Company is in the process of rehabilitating various outlet gates, pipes and water gates.  These costs are capitalized, and not amortized or depreciated until the dam reconstruction is completed in accordance with ASC 360 and 835.
	Reconstruction costs are as follows:
		Year ended
		Dec 31 2013	31-Dec-12
	Beginning balance	$          34,000	$               848,000
	Additions	-	567,000
	Completed, transferred	-	(1,381,000)
	Ending Balance	$          34,000	$                  34,000
	Intangible Assets
	On November 2, 2012, the Company acquired the Dionisio produce business and related equipment for $1,873,000 plus accrued interest of $30,000.  Dionisio has been producing vegetable crops for over 70 years and has well-established commercial relationships for the sale and distribution of its crops.  The Company is operating these acquired assets under the Dionisio name and has entered into employment agreements with members of the Dionisio family to maintain the experience and skill in producing and marketing of the vegetable crops.
	The Company paid $900,000 at closing; the seller carried back $600,000 (subsequently reduced to $590,000 with the assumption of additional debt and see Note 4, “Seller Carry Back – Dionisio”), and the Company assumed $415,000 in equipment debt.
	The purchase price was allocated as follows:
	Produce business	$1,037,000
	Equipment	836,000
	Prepaid interest	30,000
	Ending Balance	$       1,903,000
	The equipment was appraised by an independent, third party appraiser.  After the allocation to equipment and the cost of the acquisition, the remainder was assigned to the produce business.  Management performed a discounted cash flow analysis to validate the assigned value intangible assets of $1,037,000.  The produce business value consists of trademarks, customer lists, and customer contracts.
	Based on the discounted cash flow analysis and assuming the average life of a customer is 20 years, the produce business has the following values, as of December 31, 2013:
	Customer list	$580,000
	Trade name	220,000
	Residual goodwill	237,000
		$       1,037,000
	Less accumulated amortization	40,000
	Ending Balance	$  997,000
	The cost of the customer list and the trade name will be amortized on a straight-line basis over 20 years.  The residual goodwill will be tested once per year for impairments, if any.
	Based on the 20-year life of the trade name and customer list with no value at the end of the 20 years, the yearly amount of amortization is $40,000 per year.

Note_4_Notes_Payable

Note 4 - Notes Payable	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 4 - Notes Payable	'
	NOTE 4 – NOTES PAYABLE
	HCIC Seller Carry Back Notes
	Beginning on September 17, 2009, Two Rivers began acquiring shares in HCIC and related land from a HCIC shareholder.  As part of these acquisitions, many of the sellers financed notes payable with Two Rivers and HCIC.  As of December 31, 2012 and 2011, these loans totaled $7,364,000 and $7,403,000, respectfully.   The notes carry interest at 6% per annum, interest payable monthly, the principal amounts due at various dates from March 31, 2013 through September 30, 2015, and are collateralized by HCIC shares and land.
	As of December 31, 2012, of the $7,364,000 in seller carry back notes, notes representing $2,709,000 provides the holders the right to convert some or all of the amounts owing into the Company’s stock at $1/share to $1.25/share.  The holder can convert anytime until the note is paid.  These convertible notes of $2,114,000 are due on August 31, 2013 and September 30, 2013 with 6% annual interest, with the interest paid monthly.
	In June 2013, the Company negotiated an extension on holders representing $6,164,000 of the seller carry back notes.  Previously these amounts were due either August or September, 2013.  The holders of the notes agreed to extend the due date to June 30, 2016.  In exchange for this extension, the Company increased the principal balance by 20% from $6,164,000 to $7,397,000, paid 5.43% against the principal and agreed to begin paying monthly interest and principal at a 20-year amortization rate.
	Holders representing $2,777,000 of the notes held conversion rights into the Company’s common shares at $1.00 to $1.25.  These conversions were cancelled and replaced by 5-year warrants at $3.00 per share.  A total of 1,367,000 warrants were issued.   The warrants issued had a fair value of $277,000 using the Black Scholes method of fair value determination.
	Pursuant to ASC 470-50-40-10, testing was performed by management on whether the new note structure constituted a debt extinguishment and issuance of new debt.  Management determined that this note modification qualified as a debt extinguishment.  Therefore ASC 820 was used to determine the fair value of the new debt issued.  The fair value, using a 10% discount factor for the present value analysis of the new cash flow stream and fair value of the warrants issued determined the fair value of the new debt to be $7,037,000.  Compared to the prior debt value of $6,164,000, the fair value produced a one-time $873,000 loss, recorded in the fourth quarter of 2013.
	Additionally, a discount on the HCIC debt was recorded in the quarter ended December 31, 2013 for $637,000, which will be amortized using an effective interest rate of 10% over the three year term. As of December 31, 2013 the discount was $548,000.
	Orlando Seller Carry Back Note
	On January 28, 2011, the Company purchased water storage and direct flow from the Orlando Reservoir No. 2 Company, LLC (“Orlando”) for $3,100,000, which consisted of a cash payment of $100,000 and a seller financed note payable of $3,000,000.  The note was due January 28, 2014.  Interest is to be paid based on 50% of the Company’s gross profits received from all of the Company’s crop operations payment or sales where the water assets from Orlando are used and $40 per acre foot of water used.  The Company was accruing interest at 5% per annum until a better estimate can be made on the payments to be made to Orlando.  The holder of the note has an option to convert the amount of all outstanding principal and accrued and unpaid interest into common stock of Two Rivers at the conversion price of $4.00 per share.  The Company also recorded a gain on forgiveness of debt of $384,000.
	In July 2011, the Company and Orlando renegotiated the purchase of the Orlando LLC for 650,000 shares of the Company’s stock, $1,412,500 cash payment and a seller carryback note of $187,500.  The Company shares were valued at $1,557,000.  Upon the completion of the Orlando purchase, the Company engaged a water research firm to perform a valuation of Orlando.  The valuation report was issued on January 16, 2012 with an approximate value of $5,195,000.
	Series A Convertible Debt
	In February 2011, F-1 offered a $2,000,000 Series A convertible debt offering.  This offering was closed at the end of February 2011.  This offering financed the land, water rights, irrigation, and farm equipment for F-1.  The terms of this debt is interest at 5% per annum, one-third of the crop profit and the right to convert debt into Company common stock at $2.50/share.  The note was due March 31, 2014.  When the debt was issued and closed, the Company’s stock was trading for less than the conversion, so no additional beneficial interest was recognized.
	In December 2012 the Company offered the holders of the Series A convertible debt the opportunity to convert their debt into preferred shares of F-1 (which converted from an LLC to a corporation) and receive warrants in Two Rivers Water & Farming Company.  Each preferred share can be converted into one share of common stock of Two Rivers.  For every two preferred shares, one warrant to purchase one common share of the Company was also issued.  The warrant expires December 31, 2017 and can be exercised at $3 per common share of Two Rivers.
	As of December 31, 2012, we received from the Series A debt holders the intent, subject to a final review of all transactional and legal documents, to convert $1,975,000 of the debt thereby leaving $25,000 of the originally issued Series A convertible debt and accrued interest of $86,000 as outstanding as of December 31, 2012.   In order to properly record the conversion, the Company applied the guidance in ASC Topic 470-20 “Debt with Conversion and Other Options” as the F-1 preferred shares have a beneficial conversion feature (“BCF”) with detachable warrants.  The Company determined the fair value of the associated warrants to be $494,000, after a relative fair value allocation was performed on the $1,989,000 of debt converted (includes $14,000 of accrued interest).  The remaining amount of $1,494,000 was recorded as the original face value of the F-1 preferred shares.  The F-1 preferred shares are recorded as non-controlling interest due to being legally issued in the name of F-1.  The F-1 preferred shares are convertible into the Company’s common shares at a conversion price of $1 per share.  A BCF was determined to exist at the time of issuance, resulting in a deemed preferred share dividend of $882,000.
	The Series A conversion transaction was recorded as of December 31, 2012.
	Series B Convertible Debt
	In June 2011, F-2 offered a $6,000,000 Series B convertible debt offering.  This offering was closed at the end of August 2011 having raised $5,332,000.  This offering financed the land, water rights, and irrigation for F-2.  The terms of this debt was interest at 6% per annum and 10% of the net-crop revenue of production of farm product from land owned by F-2.  Net-crop revenue is defined as the gross selling price of the crops less basis.  Basis is the difference between the futures price for a commodity and the local cash price offered by grain buyers.  It reflects the cost of marketing grain from one point of sale to another point of sale.  The 10% net-crop revenue share is paid on the crops that are produced on the approximately 1,200 acres of farmland that secures the Series B debt.
	The Note holders have the right to convert debt into Company common stock at $2.50/share.  The notes are due June 30, 2014.
	In conjunction with the Series B, the Company issued 2,132,800 warrants to the debt holders that could be exercised into the Company’s common shares at $2.50 through December 31, 2012.  The Company also issued 171,000 warrants (convertible at $2.50/share) to three broker-dealers with an expiration of September 30, 2014.  The fair value of the warrants issued was computed at $1,675,000 for the debt holder warrants. This amount was recorded as a discount on the note and is amortized over the life of the note to interest expense utilizing the effective-interest method.  There is an additional expense of $149,000 for the broker dealer warrants, which is amortized over the warrants and recognized as interest expense.
	For the year ended December 31, 2011, the Company also recorded a beneficial conversion amount with Series B.  After accounting for the fair value of the warrants at $0.7854/share, the adjusted and effective Series B conversion rate is $1.7146/share.  Taking into account the various closing dates of the Series B and the respective stock price of our common stock at each closing, the value of the beneficial conversion feature is $1,490,000.  This amount was recorded as a discount on the note and is accreted over the life of the note to interest expense utilizing the effective-interest method.  The Company estimated the effective interest rate to be 46% per annum.
	In December 2012, F-2 offered the holders of the Series B convertible debt the opportunity to convert their debt into preferred shares of F-2 (which converted from an LLC to a corporation) and receive warrants in the Company.  Each preferred share can be converted into one share of common stock of Two Rivers.  For every two preferred shares, a warrant to purchase one common share of the Company was also issued.  The warrant expires December 31, 2017 and can be exercised at $3 per common share of Two Rivers.
	As of December 31, 2012, we received from the Series B debt holders the intent, subject to a final review of all transactional and legal documents, to convert $5,107,000 of the debt thereby leaving $225,000 of the originally issued Series B convertible debt and accrued interest of $194,000 as outstanding as of December 31, 2012.   In order to properly record the conversion, the Company applied the guidance in ASC Topic 470-20 “Debt with Conversion and Other Options” as the F-2 preferred shares have a beneficial conversion feature (“BCF”) with detachable warrants.  The Company determined the fair value of the associated warrants to be $1,301,000, after a relative fair value allocation was performed on the $5,233,000 of debt converted (includes $126,000 of accrued interest).  The remaining amount of $3,933,000 was recorded as the original face value of the F-2 preferred shares.  The F-2 preferred shares are recorded as non-controlling interest due to being legally issued in the name of F-2.  The F-2 preferred shares are convertible into the Company’s common shares at a conversion price of $1 per share.  A BCF was determined to exist at the time of issuance, resulting in a deemed preferred share dividend of $2,347,000.
	The Series B conversion transaction was recorded as of December 31, 2012.
	Below is a summary of Series B discount and accretion:
		Beginning discount balance	2011 discount accretion	2012 discount accretion	Dec 31, 2012 conversion to preferred shares	Net
	Face	$  5,332,000			-5,107,000	$  225,000
	Warrant fair value	-1,675,000	245,000	951,000	1,969,000	-
	Beneficial conversion	-1,490,000
	Net	$  2,167,000	245,000	951,000	3,138,000	$225,000
	The un-accredited original debt discount to the Series B debt of $1,969,000 as of December 31, 2012 was accelerated and recorded as debt issuance costs for the year ended December 31, 2012.
	Colorado Water Conservation Loan
	On March 5, 2012 the Company closed long-term financing with the Colorado Department of Natural Resources, Colorado Water Conservation Board in the amount of $1,185,000 (the “CWCB Loan”).  This loan partially finances the rehabilitation of the Cucharas Reservoir to bring it into safety compliance with the Colorado State Engineers office.  Further, the CWCB Loan assisted with the rehabilitation of the Orlando facilities.  There was a $12,000 service fee due upon closing.  This amount is being amortized over the expected life of the CWCB Loan, which is 20 years with interest fixed at 2.5% per annum.
	First National Bank of Pueblo (FNB) – Dionisio Purchase
	The cost of the Dionisio land/water acquisition was $1,500,000, of which $900,000 was financed by FNB and $600,000 was paid in cash.  The purchase price has been allocated to land for $513,000, building for $35,000, and $952,000 to water rights representing the purchase of the Bessemer Ditch Company (“BIDC”) shares.
	The terms of the FNB loan is at 1% above the base rate on corporate loans posted by at least 75% of the nation’s 30 largest banks known as the Wall Street Journal Prime Rate (3.25% as of December 31, 2013 and December 31, 2012), subject to a minimum of 6% per annum.   The FNB loan is secured by the Dionisio assets, which include 146 shares of the BIDC.  There are five annual payments of $76,000 due each December 15 commencing December 15, 2012.  A balloon payment of all accrued interest and outstanding principal is due June 15, 2017.
	Seller Carry Back – Dionisio
	On November 2, 2012, the Company acquired the Dionisio produce business and related equipment for $1,500,000.  The seller carried back $600,000 (which was subsequently reduced to $590,000 due to the Company assuming additional debt owed by seller) of this purchase price.  The note is paid quarterly, interest only at 6% per annum.  The note is due November 2, 2017.  Certain assets of Dionisio secure the note.
	First National Bank of Pueblo (FNB) – Mater Purchase
	The cost of the Mater land/water acquisition was $325,000, of which $169,000 was financed by FNB, $25,000 seller carry back and $131,000 was paid in cash.  The purchase price has been allocated to land for $106,000 and $219,000 to water rights representing the purchase of BIDC shares.
	The terms of the FNB loan is at 1% above the base rate on corporate loans posted by at least 75% of the nation’s 30 largest banks known as the Wall Street Journal Prime Rate (3.25% as of December 31, 2013 and December 31, 2012), subject to a minimum of 6% per annum.   The FNB loan is secured by the Mater assets.  There are four annual payments of $15,000 due each December 5 commencing December 15, 2013.  A balloon payment of all accrued interest and outstanding principal is due December 5, 2017 for $159,000.
	McFinney Agri-Finance LLC (McFinney) and Ellicot second mortgage (Ellicot)
	On March 15, 2013, the Company purchased unimproved land in El Paso county, Colorado for a purchase price of $1,250,000.  The company paid $620,000 (including closing costs and allocations) and financed $650,000 through McFinney and $400,000 (Ellicot) through private investors.
	The terms of the McFinney financing is for monthly payments of principal and interest of $4,238 per month, a fixed interest rate of 6.8% per annum, with the remaining principal due on April 1, 2018.  The note is secured by a deed of trust on the 2,579 acres of land purchased and a guaranty of payment by the Company.
	The Company also secured an additional $400,000 in financing.  The financing is for a total of $400,000, secured by a second deed of trust on the 2,579 acres of the land purchased, 12% per annum interest with interest only payments each month.  The Ellicot notes are due February 25, 2015.  The Company, upon sale of the land, will also pay an additional consideration through a 6.25% payment of the sales price less cost of generating the sale and the basis of the land sold.
	ASF Note
	In May 2013, ASF began offering, only to accredited investors up to $3,000,000 in 8.0% senior secured notes due 2023 plus pre-paid interest through May 31, 2014.  The Notes are offered to help with funding the further research, engineering, hydrology and permitting for the constructing of gravel pit storage reservoirs just east of the confluence of the Arkansas River and Fountain Creek in Pueblo County, Colorado.  The intention is to collaborate with Colorado Front Range municipal water districts.
	Through December 31, 2013, $2,036,000 was outstanding including $67,000 of prepaid interest.
	ASF is offering up to $3,000,000 in Notes plus prepaid interest through May 31, 2014 was offered.  Through September 30, 2013, $2,036,000 (including $150,000 prepaid interest) of the Notes was sold.
	The ASF Notes carry a mandatory redemption if a related metropolitan district issues municipal bond obligations.  There is also an optional redemption that can be exercised by ASF or the Company.  If there is an early redemption, there is a make-whole provision whereby ASF or the Company pays the par value of the Notes plus accrued and unpaid interest thereon to the date of redemption plus an amount equal to the present value of all remaining interest payments on the Notes, calculated using a discount rate of 8%.
	ASF and the Company guarantee the Notes fully and unconditionally.
	Bridge Notes
	On December 31, 2012, the Company closed a short-term bridge note financing (the “Bridge Notes”) in the total amount of $1,300,000.  The Bridge Notes paid monthly interest at 12% per annum and were due on January 31, 2014.  Participants in the Bridge Notes have the option of converting the principal into preferred membership units of TR Capital Partners, LLC.  On February 1, 2014, the participants converted the entire principal amount into TR Capital Partners, LLC preferred membership units.  (See Note 11.)
	Below is a summary of the Company’s long term debt:
	Note	Dec 31, 2013 principal balance	Dec 31, 2013 accrued interest	Interest rate	Security
	HCIC seller carry back	$7,896,000	$        -	6%	Shares in the Mutual Ditch Company
	Orlando seller carry back	188,000	30,000	7%	188 acres of land
	Series A convertible debt	110,000	6,000	5-6%	F-1 assets
	Series B convertible debt	405,000	24,000	6%	F-2 assets
	CWCB	1,151,000	24,000	2.50%	Certain Orlando and farmland assets
	FNB - Dionisio Farm	826,000	-	-1	Dionisio farmland and 146.4 shares of Bessemer Irrigating Ditch Company Stock, well permits
	Seller Carry Back - Dionisio	590,000	-	6.00%	Unsecured
	FNB - Mater	166,000	1,000	-1	Secured by Mater assets purchased
Seller Carry Back - Mater	25,000	-	6.00%	Land from Mater purchase
McFinney Agri-Finance	645,000	-	6.80%	2,579 acres of pasture land in Ellicott Colorado
Ellicott second mortgage	400,000	-	12.00%	Second lien on above Ellicott land
ASF Note holders	2,036,000	-	8.00%	ASF assets
Bridge Notes	1,300,000	-	12.00%	Unsecured
Kirby Group	45,000	-	6.00%	Unsecured
Equipment loans	485,000	7,000	5 - 8%	Specific equipment
Total	16,268,000	$92,000
Less: HCIC discount	(548,000)
Less: Current portion	(2,759,000)
Long Term portion	$12,961,000
Note:
(1) Prime rate + 1%, but not less than 6%
Current portion long term debt:	12/31/13
HCIC seller carry back	$              490,000
Orlando seller carry back	188,000
Series A convertible	110,000
Series B convertible	405,000
CWCB	47,000
FNB -Dionisio Farm	25,000
FNB-Mater	3,000
McFinney Agri-Finance	7,000
Bridge Loan	1,300,000
Kirby Group	45,000
Equipment loans	139,000
Total	$           2,759,000
Schedule of principal payments due by year:
Year Ending December 31,	Principal Due
2014	$2,759,000
2015	1,459,000
2016	6,569,000
2017	1,504,000
2018	666,000
2019 & beyond	3,311,000
Total	$16,268,000

Note_5_Information_On_Business

Note 5 - Information On Business Segments	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 5 - Information On Business Segments	'
	NOTE 5 – Information on Business Segments
	We organize our business segments based on the nature of the products and services offered.  We focus on the Water and Farming Business with Two Rivers Water & Farming Company as the Parent company.  Therefore, we report our segments by these lines of businesses: Farms and Water.  Farms contain all of our Farming Business (Farms, F-1, F-2, Dionisio).  Water contains our Water Business (HCIC and Orlando).  Our Parent category is not a separate reportable operating segment.  Segment allocations may differ from those on the face of the income statement.
	In the following tables of financial data, the total of the operating results of these business segments is reconciled, as appropriate, to the corresponding consolidated amount.  There are some corporate expenses that were not allocated to the business segments, and these expenses are contained in the “Total Operating Expenses” under Parent.
	Operating results for each of the segments of the Company are as follows (in thousands):
			For the year ended December 31, 2013				For the year ended December 31, 2012
			Parent	Farms	Water	Total	Parent	Farms	Water	Total
	Revenue
		Assessments	$    -	$      -	$   32	$    32	$  -	$   -	$   49	$   49
		Farm revenue	-	2,002	-	2,002	-	979	-	979
		Water revenue	-	-	40	40	-	-	36	36
		Other & misc.	-	14	3	17	-	-	11	11
			-	2,016	75	2,091	-	979	96	1,075
		Less: direct cost of revenue	-	1,673	41	1,714	-	1,116	-	1,116
	Gross Margin		-	343	34	377	-	(137)	96	(41)
	Operating Expenses
		General & administrative	(2,108)	(395)	(443)	(2,946)	(6,353)	(899)	(325)	(7,577)
		Depreciation	(15)	(349)	(170)	(534)	(14)	(170)	(87)	(271)
	Income (Loss) from operations		(2,123)	(401)	(579)	(3,103)	(6,367)	(1,206)	(316)	(7,889)
	Other Income (Expenses)
		Interest expense	(57)	(170)	(711)	(938)	(1,000)	(1,426)	(443)	(2,869)
		Recapture debt issue costs	-	-	-	-	(997)	(2,362)	-	(3,359)
		Warrant expense	(96)	-	-	(96)	(315)	-	-	(315)
		Other & misc.	148	(22)	(1,023)	(897)	(83)	-	9	(74)
	Total Other Income (Expense)		(5)	(192)	(1,734)	(1,931)	(2,395)	(3,788)	(434)	(6,617)
	Net (Loss) Income from continuing operations before income taxes		(2,129)	(593)	(2,313)	(5,034)	(8,762)	(4,994)	(750)	(14,506)
	Income Taxes (Expense)/Credit		-	-	-	-	-	-	-	-
	Net Income (Loss) from continuing operations		(2,129)	(593)	(2,313)	(5,034)	(8,762)	(4,994)	(750)	(14,506)
	Non-controlling interest		-	-	(16)	(16)	-	-	(43)	(43)
	Net (Loss) Income		$(2,129)	$(593)	$(2,329)	$(5,050)	$(8,762)	$(4,994)	$(793)	$(14,549)
	Segment assets		$1,567	$12,804	$27,331	$41,702	$116	$12,582	$31,754	$44,452

Note_6_Equity_Transactions

Note 6 - Equity Transactions	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 6 - Equity Transactions	'
	NOTE 6 - EQUITY TRANSACTIONS
	Common Stock
	The Company has authorized 100,000,000 shares of common stock with a par value of $0.001.  The total issued common stock as of December 31, 2013, was 24,879,549 common shares.
	During the year ended December 31, 2013 the Company had the following common stock transactions:
	·         RSUs to employees:
	o    2,850,000 RSU shares were voided, and
	o    190,000 RSU shares were exercised
	·         764,348 common stock issued for services as follows:
	o    85,000 shares with a value of $141,000 were issued to our Board for service in 2012,
	o    100,000 shares to an independent board member of Dionisio Food & Produce, Inc. with a value of $100,000,
	o    179,348 shares with a value of $177,500 were issued in exchange for consulting services,
	o    200,000 shares with a value of $260,000 were issued in exchange for investor relations services, and
	o    200,000 shares with a value of $204,000 were issued in exchange for advertising and marketing services.
	·         Other common stock transactions consisting of 103,002 shares:
	o    we returned 3,002 shares from a profit sharing plan that was no longer in effect to our authorized but unissued common stock, and
	o    we retired 100,000 shares that we received from a settlement of a legal action.
	During the year ended December 31, 2012 the Company had the following common stock transactions:
	·         RSUs to employees:
	o    3,185,000 net RSU shares were returned to the Plan
	o    516,666 RSU shares were exercised.
	·         616,850 unregistered common shares were issued to holders of our Bridge Loan for two Bridge Loan extensions
	·         676,666 common stock issued for services as follows:
	o    50,000 shares of our common stock with a value of $111,000 were issued to our Board for service in 2011,
	o    83,330 shares with a value of $122,000 were issued in exchange for consulting services,
	o    216,666 shares with a value of $314,000 were issued in exchange for consulting services,
	o    we issued 50,000 shares with a value of $85,000 for consulting services,
	o    we issued 70,000 shares with a value of $123,000 as an exchange for legacy options held by a past employee,
	o    we issued 190,000 shares with a value of $256,000 for consulting services, and
	o    we issued 16,670 shares with a value of $17,000 for consulting services.
	·         We issued 100,000 unregistered common shares due to the exercise of warrants.
	Convertible Preferred Shares
	The Company has authorized 4,000,000 shares of convertible preferred stock with a par value of $0.001.  As of December 31, 2013, 3,794,000 shares were issued and outstanding.
	Series BL Convertible Preferred Stock
	As part of the December 2012 conversion of certain bridge loan convertible debt, the Company created a series of preferred stock designated as Series BL Convertible Preferred Stock (the “BL Preferred”).  Each share of the BL Preferred can be converted into one share of common stock of Two Rivers.  The BL Preferred include two dividends: (1) Cumulative 8% Annual Dividend, and (2) 10% Annual Net Profits Participation Dividend.   Under the Cumulative 8% Annual Dividend, holders of the BL Preferred will be entitled to receive an annual dividend, when and if declared by the Company’s Board of Directors, at the rate of 8% per annum.  Under the 10% Annual Net Profits Participation Dividend, BL Preferred holders will be entitled to receive an annual cumulative dividend, when and if declared, on a pro rata basis, equal to 10%, on a fully converted basis, of the Annual Net Profit.
	In December 2012, the Company issued 3,794,000 shares of Series BL Convertible Preferred Stock in association with the conversion of certain bridge loan debt.
	As of December 31, 2013, the Company has not declared either a Cumulative 8% Annual Dividend or a 10% Annual Net Profit Participation Dividend.
	Stock Incentive Plans
	The Company previously had a 2005 Stock Option Plan (“2005 Plan”) that was superseded by the Two Rivers 2011 Long-Term Stock Incentive Plan (“2011 Plan”).   Upon the Company’s shareholder adoption of the 2011 Plan, the 2005 Plan stopped issuance of any further grants, except for grants previously committed by agreement.
	Under the 2005 Plan, we have the following stock options issued and outstanding:
	Company Relationship	Options	Date of Grant	Vesting Date	Performance Requirement	Expiration Date	Exercise Price	Exercised to Date
	Former Director	1,023,200	6-Jul	6-Jul	Satisfied	16-Jul	$1.25	-
	Consultants	966,667	Various	Various	Satisfied	Various	$1.25	-
	Total	1,989,867
	If all of the options were exercised, $2,487,000 would be collected by the Company and yield an average share price of $1.25.
	During the year ended December 31, 2013, the Company reissued 366,667 options under the 2005 Plan and pursuant to a prior written agreement with a financial consultant.  The options have a strike of $1.25/share and have fully vested.  In association with these options, the Company recognized stock based compensation expense of $274,000 for the year ended December, 2013.
	A summary of the Two Rivers 2005 Option Plan (“2005 Plan”) is as follows:
		Shares	Weighted Average Exercise Price
	Outstanding January 1, 2012	1,727,866	$1.34
	Granted	204,480	1.25
	Cancelled	(250,000)	2.00
	Expired	(39,146)	-
	Exercised	-	-
	Outstanding December 31, 2012	1,643,200	1.27
	Granted	-	-
	Re-issued	366,667	1.25
	Cancelled	-20,000	3.00
	Expired	-	-
	Exercised	-	-
	Outstanding December 31, 2013	1,989,867	$1.25
	Options Exercisable, December 31, 2013	1,989,867	$1.25
	Option Valuation Process
	The fair value of each option award is estimated on the date of grant.  To calculate the fair value of options, the Company uses the Black-Scholes model employing the following variables:
		2013	2012
Expected stock price volatility	72%	78%
Risk-free interest rate	1.41%	2.64%
Expected option life (years)	2.8	2.2
Expected annual dividend yield	0%	0%
The Company arrived at the foregoing estimate of volatility of the Company’s common stock based on the Company’s stock closing price on a weekly basis and averaged over the prior five years. The risk-free rate for periods within the expected term of the options is based on the U.S. Treasury yield curve in effect at the time of grant. The Company believes these estimates and assumptions are reasonable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions.
For the reissuance of 366,667 options for the year ended December 31, 2013, the Company used a stock price volatility of 72%, a risk-free interest rate of 1.41% and an expect life of 2.8 years.
A summary of the Two Rivers 2011 Long-Term Stock Incentive Plan (“2011 Plan”) is as follows:
	Shares
Outstanding January 1, 2012	5,450,948
Granted	4,700,237
Cancelled	-3,185,000
Expired	-
Exercised	(636,903)
Outstanding December 31, 2012	6,329,282
Granted	410,000
Cancelled (1)	(3,016,667)
Expired	-
Exercised	-600,000
Outstanding December 31, 2013	3,122,615
Exercisable, December 31, 2013	3,122,615
Under the 2011 Plan, we have issued the following Restricted Stock Units (RSUs):
Grantee		Company Relationship	RSUs issued	Date of Grant	Vesting Date	Performance Requirement	Exercised to Date
John McKowen		Chairman/CEO	2,480,948	10-Oct	-1	-2	-
Wayne Harding		CFO	700,000	10-Oct	-1	-2	533,333
Jolee Henry		Prior Director	400,000	10-Oct	11-Jan	n/a	-
Employee			50,000	10-Oct	-1	n/a	-
			3,630,948				533,333
	Notes:
	(1) Vests 1/3 at the end of each 12 months from Date of Grant
	(2)  Subject to employer deferral and employment agreement, if applicable and to satisfactory employee performance during the vesting period
The Company can issue stock awards and options for nonemployee services.  If stock is granted, the Company values the stock using an average of the closing price of the Company’s stock over the period that the service was rendered.  If options are granted, the Company uses the Black-Scholes model for determining fair value (see above).
It is estimated that $3,868,000 in stock-based compensation expense will be fully amortized by December 31, 2015.
The stock-based compensation expense from both the 2011 and 2005 Plans were $175,000 and $3,434,000 for the years ended December 31, 2013 and 2012, respectively.
Warrants
On January 27, 2012, our Board of Directors authorized an extension of the expiration date of 100,000 warrants to purchase the Company’s common stock at $1.00/share held by the Elevation Fund.  The former expiration date was December 31, 2011, and the expiration date was extended to June 30, 2012.  The extension was granted in consideration of the Elevation Fund’s assistance with the Company’s capital financing.  Due to the extension of the warrant expiration date, a new fair value calculation was performed using the Black-Scholes method.  Based on this calculation, an expense of $55,000 was recorded.  The Elevation Fund’s 100,000 warrants were exercised by June 30, 2012.
In December  2012Two Rivers Water & Farming Company offered the holders of Convertible Debt Series A with a total balance of $2,000,000 (Two Rivers Farms F-1), Convertible Debt Series B with a total balance of $5,332,000 (Two Rivers Farms F-2), and Bridge Loan with a total of $3,794,000 the opportunity to convert into preferred shares and receive warrants.
As of December 31, 2012, the Company received from the debt holders the following intent to convert, subject to a final review of all transactional and legal documents:  Series A for $1,975,000, Series B for $5,107,000 ($100,000 conversion requests were executed after December 31, 2012) and the Bridge Loan for $3,794,000.
Each preferred share issued pursuant to these debt conversions can be converted into one share of common stock of Two Rivers.  For every two preferred shares, one warrant to purchase a common share of the Company was also issued.  The warrants expire December 31, 2017 and can be exercised at $3/share of Two Rivers.
As of December 31, 2013, the Company has outstanding the following warrants to purchase common stock:
Grantee	Company Relationship	Shares	Date of Grant	Vesting Date	Expiration Date	Exercise Price
Broker Dealer Series B Debt	Placement Agents	170,624	11-Aug	11-Aug	14-Sep	$2.50
Holders of Series B Debt	Investors	90,000	11-Aug	11-Aug	14-Sep	$2.50
Boenning Scattergood	Financial Advisor	250,000	11-May	11-May	16-May	$2.00
Investor Group	Investors	300,000	12-Feb	12-Mar	-1	-1
Wedbush Securities	Financial Advisor	200,000	12-Jun	12-Jun	17-Jun	$1.20
Dionisio Farms & Produce, Inc.	Investors in subsidiary	1,700,000	12-Dec	12-Dec	17-Dec	$3.00
Two Rivers Farms F-1	Investors in subsidiary	994,375	12-Dec	12-Dec	17-Dec	$3.00
Two Rivers Farms F-2	Investors in subsidiary	2,696,210	12-Dec	12-Dec	17-Dec	$3.00
Two Rivers Farms F-2	Remaining debt holders	225,000	11-Aug	11-Aug	12-Dec	$2.50
Bridge Loan conversion	Investors	1,897,000	12-Dec	12-Dec	17-Dec	$3.00
HCIC Note Holders	Creditors	1,367,000	13-Jun	13-Jun	18-Jun	$3.00
		9,890,209
These warrants are priced at the same price per share as the expected equity offering and expire one year after the completion of the expected equity offering.
Conversion Rights:
As of December 31, 2013, through the Company’s various capital raising activities, we have issued the following rights to convert debt into the Company’s common stock as follows:
Grantee	Company Relationship	Shares	Date of Grant	Vesting Date	Expiration Date	Exercise Price
Two Rivers Farms F-1	Creditors	10,000	Feb-11	Feb-11	Mar-14	$2.50
Two Rivers Farms F-2	Creditors	90,000	Aug-11	Aug-11	Jun-14	$2.50

Note_7_Income_Taxes

Note 7 - Income Taxes	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 7 - Income Taxes	'
	Note 7 – Income Taxes
	The Company accounts for income taxes in accordance with ASC 740, Income Taxes (formerly Statement of Financial Accounting Standard No., 109, Accounting for Income Taxes). Under the provisions of ASC 740, a deferred tax asset or liability (net of a valuation allowance) is provided in the financial statements by applying the provisions of applicable laws to measure the deferred tax consequences of temporary differences that will result in taxable or deductible amounts in future years as a result of events recognized in the financial statements in the current or proceeding years.
	The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consists of the following:
		December 31,
	Years ended	2012	2011
	Federal statutory rate	34.00%	34.00%
	Effect of:
	State taxes, net of federal tax benefit	3.06%	3.06%
	Permanent items	-0.82%	0.60%
	Return to Provision Allowance	7.05%	-
	Valuation allowance	(43,29%)	-37.66%
	Effective income tax rate	-  %	-  %
	Book loss reconciliation to estimated taxable income is as follows (in thousands):
			2013	2012
	Book loss		($5,050)	($14,549)
	Tax adjustments:
	Stock based Comp		($174)	$3,434
	Stock comp exercised		($83)	($256)
	Entertainment		$15	$8
	Warrant Expense		$96	$-
	Donations		$4	$10
	Depreciation		$274	$37
	Amortization		$(43)	($20)
	Estimate of taxable income		$(4,961)	($11,336)
	Income tax provision is summarized below (in thousands):
			2013	2012
	Current expense (benefit)
	Federal		$           -	$           -
	State		-	-
	Total current		-	-
	Deferred expense (benefit)
	Federal		-2,006	(6,111)
	State		-180	-550
	Total deferred		-2,186	-6,661
	Less: Valuation allowance		2,186	6,661
	Total		$           -	$           -
	We will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if incurred.  At December 31, 2013 we had no unrecognized tax benefits in income tax expense, and do not expect any in 2014.  Our income tax returns are no longer subject to Federal tax examinations by tax authorities for years before 2009 and state examinations for years before 2009.
	The components of the deferred tax asset are as follows (in thousands):
			2013	2012
	Current deferred tax asset:
	Net operating loss carryforwards		($11,269)	($9,260)
	Capital loss		-27	-34
	Bargain purchase		643	643
	RSU & stock option expense		-2,075	(2,171)
	Fixed Assets and Intangibles		35	305
	Charitable Contributions		-5	(4)
	Bad Debt		-8	-
	Total cumulative deferred tax assets		-12,706	-10,520
	Valuation allowance		12,706	10,520
	Effective income tax asset		$         -	$       -
	For the year ended December 31, 2013 and December 31, 2012 the deferred tax asset of $12,706,000 and $10,520,000, respectively, for a total of $23,226,000 is not recognized, since management has determined the tax benefit cannot be reasonably assured of being used in the near future.  The net operating loss carryforward, if not used, will expire in various years through 2031, and is severely restricted as per the Internal Revenue Code if there is a change in ownership.  The following is a summary of the combined net operating loss carryforward (in thousands):
			Federal	Colorado
	12/31/12		$25,447	$19,629
	12/31/13		$4,961	$4,961
	Balance		$30,408	$24,590

Note_8_Commitments_and_Conting

Note 8 - Commitments and Contingencies	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 8 - Commitments and Contingencies	'
	NOTE 8 - COMMITMENTS AND CONTINGENCIES
	Operating Leases
	In April 2012, the Company entered into a new lease with the Colorado Center in Denver Colorado for the corporate headquarters.   The space is 1,775 square feet and monthly payments of $3,600. The lease terminates on June 30, 2015.
	The amounts due at the base rate are as follows:
	Period	Amount Due
	2014	$43,200
	2015	$21,600
	The Company has entered into leases of farmland, which is as follows:
	Expiration	County	Acres	Amount per year
	2018	Pueblo	301	$187,000
	2032	Pueblo	95	$14,000
	In addition to the above, Two Rivers has entered into a water lease arrangement with Pueblo Board of Water Works.  The lease is effective in 2012, has a term of five years, and calls for annual payments of $100,000 beginning in April, 2012.  The annual payments can be escalated based upon the percentage increase, if any, over the previous year of the PBWW water rates for its general customers for treated water.  The lease is for up to 500 acre feet of water per year. There are no further obligations under this lease.
	The purpose of the lease is two-fold: a) to establish an appropriation of a water right for exchange from the Arkansas River main stream water to various Two Rivers’ reservoirs, and b) to provide supplemental irrigation water for our farming operations through releases from those reservoirs.
	Defined Contribution Plan
	Two Rivers does not have a defined contribution plan.
	Employment Agreements
	On September 9, 2004, (and amended on June 15, 2005 and December 16, 2010) the Company entered into an employment agreement with John McKowen, as President and CEO.  The initial term of the contract was two years, which renews automatically for successive one-year terms unless and until either party delivers notice of termination within 30 days of the expiration of the then current term.
	On November 1, 2008, (and amended on December 16, 2010) the Company entered into an employment agreement with Wayne Harding.  The initial term of the contract was one year, which renews automatically for successive one-year terms unless and until either party delivers notice of termination within 30 days of the expiration of the then current term.
	Besides compensation levels, Mr. McKowen’s and Mr. Harding’s employment agreement terms are similar.  The Board determines annual incentive compensation at the Board’s sole discretion.  If there is a change of control, each is entitled to an accelerated option/RSU vesting.
	Effective January 1, 2013, Mr. McKowen’s pay was increased to $250,000 and Mr. Harding’s pay was increased to $125,000.

Note_9_Related_Party_Transacti

Note 9 - Related Party Transactions	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 9 - Related Party Transactions	'
	NOTE 9 – RELATED PARTY TRANSACTIONS
	Pursuant to ASC 850 “Related Party Disclosure”, Management has evaluated related parties and all transactions associated with those and determined that no transactions exist which would require disclosure, except as disclosed below:
	The seller of DFP assets is now an employee of the Company and is owed $590,000,
	The Company’s Chief Executive Officer, Chief Financial Officer and two other employees of the Company serve as the only members of the Sunset Metropolitan District (Sunset).  Sunset is a quasi-governmental agency operating under Title 32 of the State of Colorado Constitution.  As of December 31, 2013, the Company has advanced $68,000 to Sunset.

Note_11_Subsequent_Events

Note 11 - Subsequent Events	12 Months Ended
	Dec. 31, 2013
Notes	'
Note 11 - Subsequent Events	'
	NOTE 11 – SUBSEQUENT EVENTS
	Pursuant to FASB ASC 855, Management has evaluated all events and transactions that occurred from December 31, 2013 through the date of issuance of these financial statements.  During this period, we did not have any significant subsequent events, except as disclosed below:
	TR Capital Partners, LLC (“TR Capital”) and certain investors (the “Initial Investors”) entered into a Membership Interest Purchase Agreement dated as of January 31, 2014 relating to a private placement of TR Capital’s Preferred Units.  TR Capital was formed in December 2013 by Two Rivers Water & Farming Company and issued all of its outstanding Common Units to Two Rivers Water & Farming Company in exchange for a capital contribution of $1,000.
	The Initial Investors subscribed to purchase a total of 17,973,536 of TR Capital’s Preferred Units at a purchase price of $0.70 per Preferred Unit for a total purchase price of $12,581,475, of which $6,000,000 is payable in cash and the balance is payable by delivery of “Qualified Assets,” which consist of outstanding securities previously issued by Two Rivers Water & Farming Company or certain of its subsidiaries.  One-half (8,986,768) of the subscribed Preferred Units were issued upon execution of the Membership Interest Purchase Agreement, for consideration consisting of (a) $3,000,000 in cash, including $1,300,000 of cash received by TR Capital from the Bridge Notes, which converted into Preferred Units (see “Bridge Notes” in Note 4), and (b) $3,290,737 in Qualified Assets.  The Initial Investors are obligated to purchase an additional 8,986,768 Preferred Units on June 30, 2014, for consideration consisting of $3,000,000 in cash and $3,290,737 in Qualified Assets.
	The cash proceeds of $6,000,000, net of transactional expenses, are to be applied for TR Capital’s general corporate purposes, including the purchase, construction and operation of irrigated farmland and water assets.  TR Capital may issue and sell up to an additional 14,526,464 Preferred Units on or before September 1, 2014 in exchange for Qualified Assets, but not for cash.
	Holders of Preferred Units generally will be entitled to receive distributions each fiscal year in an amount equal to the lesser of (a) 12% of such holders’ aggregate capital contributions and (b) TR Capital’s Adjusted Gross Margin (as defined) for such fiscal year, provided that such holders will be entitled to a minimum distribution for each full fiscal year equal to 8% of their aggregate capital contributions, payable in equal quarterly installments.  Distributions for the year ending December 31, 2014 will be pro rated for the portion of the year for which Preferred Units are outstanding.
	A holder may exchange a Preferred Unit at any time for consideration consisting of (a) accrued but unpaid preferred distributions on such Preferred Unit through the exchange date, (b) 1 share of common stock of Two Rivers Water & Farming Company and (c) a warrant to purchase one-half share of such common stock at a price of $2.10 per share.  In addition, TR Capital may require each of the outstanding Preferred Units to be exchanged for such consideration at any time after January 31, 2017, subject to specified trading and registration conditions.
	On January 31, 2014, Mr. Bradley Walker resigned from the Company’s Board of Directors.
	On February 11, 2014, the Company’s Board appointed Mr. Gus Blass III as a director until its next annual meeting of shareholders.

Note_2_Summary_of_Significant_1

Note 2 - Summary of Significant Accounting Policies: Principles of Consolidation (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Principles of Consolidation	'
	Principles of Consolidation
	The accompanying consolidated financial statements include the accounts of Two Rivers and its subsidiaries, Farms, F-1, F-2, TR Water, HCIC, Orlando, and discontinued operations.  All significant inter-company balances and transactions have been eliminated in consolidation.

Note_2_Summary_of_Significant_2

Note 2 - Summary of Significant Accounting Policies: Non-controlling Interest (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Non-controlling Interest	'
	Non-controlling Interest
	Non-controlling interest is recorded for the ownership of HCIC not owned by the Company and for preferred shares not owned by the Company in the Company’s subsidiaries.   Below is the detail of non-controlling interest shown on the balance sheet.
	Entity	Year ended December 31,
		2013	2012
	HCIC	$1,363,000	$2,205,000
	F-1	$1,494,000	$1,494,000
	F-2	$3,933,000	$3,933,000
	DFP	$3,181,000	$2,208,000
	Totals	$9,971,000	$9,840,000
	Below is the breakdown of the non-controlling interest share of gains (losses):
	Entity	Year ended December 31,
		2013	2012
	HCIC (1)	$16,000	$43,000
	F-1 (2)	-	-
	F-2 (2)	-	-
	DFP (2)	-	-
	Totals	$16,000	$43,000
	Notes:
	-1	The Company owns 95% of HCIC.
	-2	The terms of the preferred shares in each subsidiary allows for a participatory additional preferred share dividend of 25% of the profits derived from the assets held by the subsidiary.  This participatory dividend, if any, will be recorded as a non-controlling share of the income.

Note_2_Summary_of_Significant_3

Note 2 - Summary of Significant Accounting Policies: Reclassification (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Reclassification	'
	Reclassification
	Certain amounts previously reported have been reclassified to conform to current presentation.  Certain labels of accounts/classifications have been changed.

Note_2_Summary_of_Significant_4

Note 2 - Summary of Significant Accounting Policies: Use of Estimates (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Use of Estimates	'
	Use of Estimates
	The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions.  These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period.  Actual results could differ materially from those estimates.

Note_2_Summary_of_Significant_5

Note 2 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Cash and Cash Equivalents	'
	Cash and Cash Equivalents
	For purposes of reporting cash flows, Two Rivers Water & Farming Company considers cash and cash equivalents to include highly liquid investments with original maturities of 90 days or less. Those are readily convertible into cash and not subject to significant risk from fluctuations in interest rates.  The recorded amounts for cash equivalents approximate fair value due to the short-term nature of these financial instruments.

Note_2_Summary_of_Significant_6

Note 2 - Summary of Significant Accounting Policies: Concentration of Credit Risk (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Concentration of Credit Risk	'
	Concentration of Credit Risk
	Financial instruments that potentially subject Two Rivers to significant concentrations of credit risk include cash equivalents, marketable investments, advances and accounts receivable.  The Company maintains its cash and investment balances in the form of bank demand deposits, money market accounts that management believes to be of high credit quality.  Accounts receivable are typically uncollateralized and are derived from transactions with and from customers primarily located in the United States.
	The Company’s farming revenue for the year ended December 31, 2013 of $2,002,000 consisted of 11 customers, of which one customer represented 20% or more of revenue.

Note_2_Summary_of_Significant_7

Note 2 - Summary of Significant Accounting Policies: Fair Value of Measurements and Disclosures (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Fair Value of Measurements and Disclosures	'
	Fair Value of Measurements and Disclosures
	Fair Value of Assets and Liabilities Acquired
	Fair value is the price that would be received from the sale of an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market in an orderly transaction between market participants.  In determining fair value, the accounting standards established a three-level hierarchy that distinguishes between (i) market data obtained or developed from independent sources (i.e., observable data inputs) and (ii) a reporting entity’s own data and assumptions that market participants would use in pricing an asset or liability (i.e., unobservable data inputs).  Financial assets and financial liabilities measured and reported at fair value are classified in one of the following categories, in order of priority of observability and objectivity of pricing inputs:
	• Level 1 – Fair value based on quoted prices in active markets for identical assets or liabilities.
	• Level 2 – Fair value based on significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data.
	• Level 3 – Fair value based on prices or valuation techniques that require significant unobservable data inputs.  Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.
	The fair value measurement level for an asset or liability is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques should maximize the use of observable inputs and minimize the use of unobservable inputs.
	Recurring Fair Value Measurements:
	The carrying value of the Company’s financial assets and financial liabilities is their cost, which may differ from fair value.   The carrying value of cash held as demand deposits, money market and certificates of deposit, marketable investments, accounts receivable, short-term borrowings, accounts payable and accrued liabilities approximated their fair value.  Marketable investments are valued at Level 1 due to readily available market quotes. The fair value of the Company’s long-term debt, including the current portion approximated its carrying value.  Fair value for long-term debt was estimated based on quoted market prices of the identical debt instruments or values of comparable borrowings.

Note_2_Summary_of_Significant_8

Note 2 - Summary of Significant Accounting Policies: Accounts Receivable (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Accounts Receivable	'
	Accounts Receivable
	The Company carries its accounts receivable, net at management’s expectation of collection and past experience.  As of December 31, 2013 the Company did not have a reserve receivables from a customer based on past payment performance.

Note_2_Summary_of_Significant_9

Note 2 - Summary of Significant Accounting Policies: Property and Equipment (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Property and Equipment	'
	Property and Equipment
	Property and equipment are stated at cost less accumulated depreciation.  Depreciation is computed principally on the straight-line method over the estimated useful life of each type of asset which ranges from three to twenty seven and a half years.  Maintenance and repairs are charged to expense as incurred; improvements and betterments are capitalized.  Upon retirement or disposition, the related costs and accumulated depreciation are removed from the accounts, and any resulting gains or losses are credited or charged to income.
	Below is a summary of premises and equipment:
			December 31,
	Asset Type	Life in Years	2013	2012
	Office equipment, furniture & computers	3 – 7	$51,000	$109,000
	Vehicles	5	45,000	361,000
	Farm equipment	10-Jul	1,411,000	1,286,000
	Irrigation system	10	989,000	1,039,000
	Buildings	27.5	35,000	-
	Website	3	7,000	7,000
	Subtotal		2,538,000	2,802,000
	Less Accumulated Depreciation		646,000	405,000
	Net Book Value		$1,892,000	$2,397,000

Recovered_Sheet1

Note 2 - Summary of Significant Accounting Policies: Land (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Land	'
	Land
	Land acquired for farming is recorded at cost.  Some of the land acquired has not been farmed for many years, if not decades.  Therefore, additional expenditures are required to make the land ready for efficient farming.  Expenditures for leveling the land are added to the cost of the land.  Irrigation is not capitalized in the cost of Land (Property and Equipment above). Land is not depreciated.  However, once per year, Management will assess the value of land held, and in their opinion, if the land has become impaired, Management will establish an allowance against the land.

Recovered_Sheet2

Note 2 - Summary of Significant Accounting Policies: Water Rights and Infrastructure (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Water Rights and Infrastructure	'
	Water rights and infrastructure
	Subsequent to purchase of water rights and water infrastructure, management periodically evaluates the carrying value of its assets, and if the carrying value is in excess of fair market value, the Company will establish an impairment allowance.  Currently, there are no impairments on the Company’s land and water shares.  No amortization or depreciation is taken on the water rights.

Recovered_Sheet3

Note 2 - Summary of Significant Accounting Policies: Intangibles (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Intangibles	'
	Intangibles
	Two Rivers recognizes the estimated fair value of water rights acquired by the Company’s purchase of stock in HCIC and Orlando.   These intangible assets will not be amortized because they have an indefinite remaining useful life based on many factors and considerations, including, the historical upward valuation of water rights within Colorado.

Recovered_Sheet4

Note 2 - Summary of Significant Accounting Policies: Impairments (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Impairments	'
	Impairments
	Property and Equipment
	Once per year we review all property, equipment and software owned by the Company and compared the net book value of such assets with the fair market value of each piece of equipment having a net book value greater than $5,000.  If it is determined that the net book value is greater than the fair market value, an impairment will be recorded.  If impairment is necessary, a loss on the value of the affected asset will be recorded, and the impairment will not be reversed in future periods.
	Land
	Once per year we review each parcel of land owned by the Company together with improvements to each parcel and compare the carrying cost with the fair market value.  If it appears that our carrying value may be greater than the fair market value, an independent appraisal will be ordered.  If the appraised value is less than our carrying value, an impairment will be recorded.  If impairment is necessary, a loss on the value of our land will be recorded, and the impairment will not be reversed in future periods.
	Water rights and infrastructure
	Once per year we assess the value of the water rights held by the Company, comparing our estimated values with recent sales of comparable water rights.  In the event that such assessment indicates that the carrying value is greater than the fair market value of the water rights, an impairment will be recorded.  If impairment is necessary, a loss on value of our water rights will be recorded, and the impairment will not be reversed in future periods.

Recovered_Sheet5

Note 2 - Summary of Significant Accounting Policies: Revenue Recognition (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Revenue Recognition	'
	Revenue Recognition
	Farm Revenues
	Revenues from farming operations are recognized when sold into the market.  All direct expenses related to farming operations are capitalized as farm inventory and recognized as a direct cost of sale upon the sale of the crops.
	Water Revenues
	Current water revenues are from the lease of water own by HCIC to farmers in the HCIC service area and through re-leasing of our water from the Pueblo Board of Water lease.   Water revenues are recognized when the water is consumed.
	Member Assessments
	Once per year the HCIC board estimates HCIC’s expenses, less anticipated water revenues, and establishes an annual assessment per ownership share.  One-half of the member assessment is recorded in the first quarter of the calendar year and the other one-half of the member assessment is recorded in the third quarter of the calendar year.  Assessments paid by Two Rivers Water Company to HCIC are eliminated in consolidation of the financial statements.
	HCIC does not reserve against any unpaid assessments.  Assessments due, but unpaid, are secured by the member’s ownership of HCIC.  The value of this ownership is significantly greater than the annual assessments.

Recovered_Sheet6

Note 2 - Summary of Significant Accounting Policies: Stock Based Compensation (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Stock Based Compensation	'
	Stock Based Compensation
	Beginning January 1, 2006, the Company adopted the provisions of ASC 718 and accounts for stock-based compensation in accordance with ASC 718.  Under the fair value recognition provisions of this standard, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which generally is the vesting period.  The Company elected the modified-prospective method, under which prior periods are not revised for comparative purposes.  The valuation provisions of ASC 718 apply to new grants and to grants that were outstanding as of the effective date and are subsequently modified.
	All options granted prior to the adoption of ASC 718 and outstanding during the periods presented were fully vested at the date of adoption.
	In December 2007, the SEC issued Staff Accounting Bulletin (“SAB”) 110 which was issued to express the understanding that the use of a “simplified” method, as discussed in SAB 107 in developing an estimate of expected term of “plain vanilla” share options in accordance with ASC 718 would be acceptable beyond December 31, 2007.  The Company adopted this standard beginning January 2008.

Recovered_Sheet7

Note 2 - Summary of Significant Accounting Policies: Income Taxes (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Income Taxes	'
	Income Taxes
	Provision for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets, and for operating loss and tax credit carry forwards.  The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period.  Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustment to the tax provision or benefit in the period of enactment.
	The Company uses a two-step process to evaluate a tax position.  The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position.  The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements.  A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.
	Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met.  Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.  The Company reports tax-related interest and penalties as a component of income tax expense.
	Based on all known facts and circumstances and current tax law, the Company believes that the total amount of unrecognized tax benefits as of December 31, 2013, is not material to its results of operations, financial condition, or cash flows.  The Company also believes that the total amount of unrecognized tax benefits as of December 31, 2013, if recognized, would not have a material effect on its effective tax rate.  The Company further believes that there are no tax positions for which it is reasonably possible, based on current tax law and policy that the unrecognized tax benefits will significantly increase or decrease over the next 12 months producing, individually or in the aggregate, a material effect on the Company’s results of operations, financial condition or cash flows.
	The amount of income taxes the Company pays is subject to ongoing examinations by federal and state tax authorities.  To date, there have been no reviews performed by federal or state tax authorities on any of the Company’s previously filed returns.  The Company’s 2010 and later tax returns are still subject to examination.

Recovered_Sheet8

Note 2 - Summary of Significant Accounting Policies: Net Income (loss) Per Share (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Net Income (loss) Per Share	'
	Net Income (Loss) per Share
	Basic net income per share is computed by dividing net income (loss) attributed to Two Rivers available to common shareholders for the period by the weighted average number of common shares outstanding for the period.  Diluted net income (loss) per share is computed by dividing the net income for the period by the weighted average number of common and potential common shares outstanding during the period.
	The dilutive effect of the outstanding 3,122,615 RSUs, 2,014,867 options and 9,890,209 warrants at December 31, 2013, has not been included in the determination of diluted earnings per share since, under ASC 260 they would anti-dilutive.

Recovered_Sheet9

Note 2 - Summary of Significant Accounting Policies: Recently Issued Accounting Pronouncements (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Recently Issued Accounting Pronouncements	'
	Recently issued Accounting Pronouncements
	In July 2013, the FASB issued Accounting Standards Update No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU No. 2013-11”). ASU No. 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with limited exceptions. ASU No. 2013-11 is effective for interim and annual periods beginning after December 15, 2013 and may be applied retrospectively. The adoption of the provisions of ASU No. 2013-11 is not expected to have a material impact on the company’s financial position or results of operations.
	Management does not believe that any other recently issued, but not effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

Significant_Fourth_Quarter_Adj

Significant Fourth Quarter Adjustments and Restatement (Policies)	12 Months Ended
	Dec. 31, 2013
Policies	'
Significant Fourth Quarter Adjustments and Restatement	'
	NOTE 10 –RESTATEMENT OF JUNE 30, 2013 AND SEPTEMBER 30, 2013 FINANCIAL RESULTS
	During the fourth quarter of the year ended December 31, 2013, the Company identified certain accounting errors in the calculation of the fair value of the new terms on the HCIC seller carryback notes that were refinanced and initially reported in the Company’s periodic filing of its Form 10-Q as of June 30, 2013.  Upon recalculation of the fair value of the new debt, as in accordance with ASC 470-50-40-10 and ASC 820, the fair value of the new debt was adjusted to $7,037,000, which compared to the previously calculated debt fair value of $6,164,000.  The newly calculated fair value produced a one-time $873,000 loss, rather than the previously recorded gain in the quarter ended June 30, 2013 of $93,000.  Management believes the impact of these items, both individually and in the aggregate, to the year ended December 31, 2013 and to prior interim periods of June 30, 2013 and September 30, 2013 previously presented was not material.
	Also refer to Note 4 – Notes Payable, HCIC Seller Carry Back Notes – for further information of the effects of the debt extinguishment and refinancing and resultant $873,000loss for the year ended December 31, 2013.
	Below is a summary of the restatement on our statements of operations that were previously filed as of the periods ended June 30, 2013 and September 30, 2013:
		As of June 30, 2013		As of Sep 30, 2013
	Profit and Loss	3 Months	6 Months	9 Months
	Net Loss As Reported	$(1,679,000)	$(3,859,000)	$(5,293,000)
	EPS	$        (0.07)	$      (0.16)	$     (0.21)
	Adjustments:
	Previously reported Gain on Debt Extinguishment	$  94,000	$     94,000	$    94,000
	Corrected amount of Loss on Debt Extinguishment	$(873,000)	$(873,000)	$(873,000)
	Amortization of Debt Discount	$              -	$             -	$    80,000
	Total Adjustment	$(967,000)	$(967,000)	$(1,047,000)
	Restated Net Loss	$(2,646,000)	$(4,826,000)	$(6,340,000)
	Adjusted EPS	$(0.11)	$(0.19)	$(0.26)
	Variance	$(0.04)	$(0.03)	$(0.05)

Recovered_Sheet10

Note 2 - Summary of Significant Accounting Policies: Non-controlling Interest: Noncontrolling Interest (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Noncontrolling Interest	'
	Entity	Year ended December 31,
		2013	2012
	HCIC	$1,363,000	$2,205,000
	F-1	$1,494,000	$1,494,000
	F-2	$3,933,000	$3,933,000
	DFP	$3,181,000	$2,208,000
	Totals	$9,971,000	$9,840,000

Recovered_Sheet11

Note 2 - Summary of Significant Accounting Policies: Non-controlling Interest: Non-controlling Interest Share of Gains (losses) (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Non-controlling Interest Share of Gains (losses):	'
	Entity	Year ended December 31,
		2013	2012
	HCIC (1)	$16,000	$43,000
	F-1 (2)	-	-
	F-2 (2)	-	-
	DFP (2)	-	-
	Totals	$16,000	$43,000

Recovered_Sheet12

Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Summary of Premises and Equipment (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Summary of Premises and Equipment:	'
			December 31,
	Asset Type	Life in Years	2013	2012
	Office equipment, furniture & computers	3 – 7	$51,000	$109,000
	Vehicles	5	45,000	361,000
	Farm equipment	10-Jul	1,411,000	1,286,000
	Irrigation system	10	989,000	1,039,000
	Buildings	27.5	35,000	-
	Website	3	7,000	7,000
	Subtotal		2,538,000	2,802,000
	Less Accumulated Depreciation		646,000	405,000
	Net Book Value		$1,892,000	$2,397,000

Note_3_Investments_and_Longliv1

Note 3 - Investments and Long-lived Assets: Reconstruction Costs (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Reconstruction Costs	'
		Year ended
		Dec 31 2013	31-Dec-12
	Beginning balance	$          34,000	$               848,000
	Additions	-	567,000
	Completed, transferred	-	(1,381,000)
	Ending Balance	$          34,000	$                  34,000

Note_3_Investments_and_Longliv2

Note 3 - Investments and Long-lived Assets: Schedule of Purchase Price Allocation (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Purchase Price Allocation	'
	Produce business	$1,037,000
	Equipment	836,000
	Prepaid interest	30,000
	Ending Balance	$       1,903,000

Note_3_Investments_and_Longliv3

Note 3 - Investments and Long-lived Assets: Value of Business Segment (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Value of Business Segment	'
	Customer list	$580,000
	Trade name	220,000
	Residual goodwill	237,000
		$       1,037,000
	Less accumulated amortization	40,000
	Ending Balance	$  997,000

Note_4_Notes_Payable_Summary_o

Note 4 - Notes Payable: Summary of Series B Discount and Accretion (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Summary of Series B Discount and Accretion	'
		Beginning discount balance	2011 discount accretion	2012 discount accretion	Dec 31, 2012 conversion to preferred shares	Net
	Face	$  5,332,000			-5,107,000	$  225,000
	Warrant fair value	-1,675,000	245,000	951,000	1,969,000	-
	Beneficial conversion	-1,490,000
	Net	$  2,167,000	245,000	951,000	3,138,000	$225,000

Note_4_Notes_Payable_Schedule_

Note 4 - Notes Payable: Schedule of Long-term Debt Instruments (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Long-term Debt Instruments	'
	Note	Dec 31, 2013 principal balance	Dec 31, 2013 accrued interest	Interest rate	Security
	HCIC seller carry back	$7,896,000	$        -	6%	Shares in the Mutual Ditch Company
	Orlando seller carry back	188,000	30,000	7%	188 acres of land
	Series A convertible debt	110,000	6,000	5-6%	F-1 assets
	Series B convertible debt	405,000	24,000	6%	F-2 assets
	CWCB	1,151,000	24,000	2.50%	Certain Orlando and farmland assets
	FNB - Dionisio Farm	826,000	-	-1	Dionisio farmland and 146.4 shares of Bessemer Irrigating Ditch Company Stock, well permits
	Seller Carry Back - Dionisio	590,000	-	6.00%	Unsecured
	FNB - Mater	166,000	1,000	-1	Secured by Mater assets purchased
	Seller Carry Back - Mater	25,000	-	6.00%	Land from Mater purchase
	McFinney Agri-Finance	645,000	-	6.80%	2,579 acres of pasture land in Ellicott Colorado
	Ellicott second mortgage	400,000	-	12.00%	Second lien on above Ellicott land
	ASF Note holders	2,036,000	-	8.00%	ASF assets
	Bridge Notes	1,300,000	-	12.00%	Unsecured
	Kirby Group	45,000	-	6.00%	Unsecured
	Equipment loans	485,000	7,000	5 - 8%	Specific equipment
	Total	16,268,000	$92,000
	Less: HCIC discount	(548,000)
	Less: Current portion	(2,759,000)
	Long Term portion	$12,961,000

Note_4_Notes_Payable_Current_P

Note 4 - Notes Payable: Current Portion of Long Term Debt (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Current Portion of Long Term Debt	'
	Current portion long term debt:	12/31/13
	HCIC seller carry back	$              490,000
	Orlando seller carry back	188,000
	Series A convertible	110,000
	Series B convertible	405,000
	CWCB	47,000
	FNB -Dionisio Farm	25,000
	FNB-Mater	3,000
	McFinney Agri-Finance	7,000
	Bridge Loan	1,300,000
	Kirby Group	45,000
	Equipment loans	139,000
	Total	$           2,759,000

Note_4_Notes_Payable_Schedule_1

Note 4 - Notes Payable: Schedule of Principal Payments Due (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Principal Payments Due	'
	Year Ending December 31,	Principal Due
	2014	$2,759,000
	2015	1,459,000
	2016	6,569,000
	2017	1,504,000
	2018	666,000
	2019 & beyond	3,311,000
	Total	$16,268,000

Note_5_Information_On_Business1

Note 5 - Information On Business Segments: Operating Results of Business Segments (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Operating Results of Business Segments	'
			For the year ended December 31, 2013				For the year ended December 31, 2012
			Parent	Farms	Water	Total	Parent	Farms	Water	Total
	Revenue
		Assessments	$    -	$      -	$   32	$    32	$  -	$   -	$   49	$   49
		Farm revenue	-	2,002	-	2,002	-	979	-	979
		Water revenue	-	-	40	40	-	-	36	36
		Other & misc.	-	14	3	17	-	-	11	11
			-	2,016	75	2,091	-	979	96	1,075
		Less: direct cost of revenue	-	1,673	41	1,714	-	1,116	-	1,116
	Gross Margin		-	343	34	377	-	(137)	96	(41)
	Operating Expenses
		General & administrative	(2,108)	(395)	(443)	(2,946)	(6,353)	(899)	(325)	(7,577)
		Depreciation	(15)	(349)	(170)	(534)	(14)	(170)	(87)	(271)
	Income (Loss) from operations		(2,123)	(401)	(579)	(3,103)	(6,367)	(1,206)	(316)	(7,889)
	Other Income (Expenses)
		Interest expense	(57)	(170)	(711)	(938)	(1,000)	(1,426)	(443)	(2,869)
		Recapture debt issue costs	-	-	-	-	(997)	(2,362)	-	(3,359)
		Warrant expense	(96)	-	-	(96)	(315)	-	-	(315)
		Other & misc.	148	(22)	(1,023)	(897)	(83)	-	9	(74)
	Total Other Income (Expense)		(5)	(192)	(1,734)	(1,931)	(2,395)	(3,788)	(434)	(6,617)
	Net (Loss) Income from continuing operations before income taxes		(2,129)	(593)	(2,313)	(5,034)	(8,762)	(4,994)	(750)	(14,506)
	Income Taxes (Expense)/Credit		-	-	-	-	-	-	-	-
	Net Income (Loss) from continuing operations		(2,129)	(593)	(2,313)	(5,034)	(8,762)	(4,994)	(750)	(14,506)
	Non-controlling interest		-	-	(16)	(16)	-	-	(43)	(43)
	Net (Loss) Income		$(2,129)	$(593)	$(2,329)	$(5,050)	$(8,762)	$(4,994)	$(793)	$(14,549)
	Segment assets		$1,567	$12,804	$27,331	$41,702	$116	$12,582	$31,754	$44,452

Note_6_Equity_Transactions_Sto

Note 6 - Equity Transactions: Stock Options Issued and Outstanding (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Stock Options Issued and Outstanding	'
	Company Relationship	Options	Date of Grant	Vesting Date	Performance Requirement	Expiration Date	Exercise Price	Exercised to Date
	Former Director	1,023,200	6-Jul	6-Jul	Satisfied	16-Jul	$1.25	-
	Consultants	966,667	Various	Various	Satisfied	Various	$1.25	-
	Total	1,989,867

Note_6_Equity_Transactions_200

Note 6 - Equity Transactions: 2005 Options Plan (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
2005 Options Plan	'
		Shares	Weighted Average Exercise Price
	Outstanding January 1, 2012	1,727,866	$1.34
	Granted	204,480	1.25
	Cancelled	(250,000)	2.00
	Expired	(39,146)	-
	Exercised	-	-
	Outstanding December 31, 2012	1,643,200	1.27
	Granted	-	-
	Re-issued	366,667	1.25
	Cancelled	-20,000	3.00
	Expired	-	-
	Exercised	-	-
	Outstanding December 31, 2013	1,989,867	$1.25
	Options Exercisable, December 31, 2013	1,989,867	$1.25

Note_6_Equity_Transactions_Opt

Note 6 - Equity Transactions: Options Valuation (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Options Valuation	'
		2013	2012
	Expected stock price volatility	72%	78%
	Risk-free interest rate	1.41%	2.64%
	Expected option life (years)	2.8	2.2
	Expected annual dividend yield	0%	0%

Note_6_Equity_Transactions_Lon

Note 6 - Equity Transactions: Long-Term Stock Incentives Plan (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Long-Term Stock Incentives Plan	'
		Shares
	Outstanding January 1, 2012	5,450,948
	Granted	4,700,237
	Cancelled	-3,185,000
	Expired	-
	Exercised	(636,903)
	Outstanding December 31, 2012	6,329,282
	Granted	410,000
	Cancelled (1)	(3,016,667)
	Expired	-
	Exercised	-600,000
	Outstanding December 31, 2013	3,122,615
	Exercisable, December 31, 2013	3,122,615

Note_6_Equity_Transactions_Res

Note 6 - Equity Transactions: Restricted Stock Units Issued (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Restricted Stock Units Issued	'
	Grantee		Company Relationship	RSUs issued	Date of Grant	Vesting Date	Performance Requirement	Exercised to Date
	John McKowen		Chairman/CEO	2,480,948	10-Oct	-1	-2	-
	Wayne Harding		CFO	700,000	10-Oct	-1	-2	533,333
	Jolee Henry		Prior Director	400,000	10-Oct	11-Jan	n/a	-
	Employee			50,000	10-Oct	-1	n/a	-
				3,630,948				533,333
		Notes:
		(1) Vests 1/3 at the end of each 12 months from Date of Grant
		(2)  Subject to employer deferral and employment agreement, if applicable and to satisfactory employee performance during the vesting period

Note_6_Equity_Transactions_War

Note 6 - Equity Transactions: Warrants Outstanding (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Warrants Outstanding	'
	Grantee	Company Relationship	Shares	Date of Grant	Vesting Date	Expiration Date	Exercise Price
	Broker Dealer Series B Debt	Placement Agents	170,624	11-Aug	11-Aug	14-Sep	$2.50
	Holders of Series B Debt	Investors	90,000	11-Aug	11-Aug	14-Sep	$2.50
	Boenning Scattergood	Financial Advisor	250,000	11-May	11-May	16-May	$2.00
	Investor Group	Investors	300,000	12-Feb	12-Mar	-1	-1
	Wedbush Securities	Financial Advisor	200,000	12-Jun	12-Jun	17-Jun	$1.20
	Dionisio Farms & Produce, Inc.	Investors in subsidiary	1,700,000	12-Dec	12-Dec	17-Dec	$3.00
	Two Rivers Farms F-1	Investors in subsidiary	994,375	12-Dec	12-Dec	17-Dec	$3.00
	Two Rivers Farms F-2	Investors in subsidiary	2,696,210	12-Dec	12-Dec	17-Dec	$3.00
	Two Rivers Farms F-2	Remaining debt holders	225,000	11-Aug	11-Aug	12-Dec	$2.50
	Bridge Loan conversion	Investors	1,897,000	12-Dec	12-Dec	17-Dec	$3.00
	HCIC Note Holders	Creditors	1,367,000	13-Jun	13-Jun	18-Jun	$3.00
			9,890,209

Note_6_Equity_Transactions_Sch

Note 6 - Equity Transactions: Schedule of Conversions of Stock (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Conversions of Stock	'
	Grantee	Company Relationship	Shares	Date of Grant	Vesting Date	Expiration Date	Exercise Price
	Two Rivers Farms F-1	Creditors	10,000	Feb-11	Feb-11	Mar-14	$2.50
	Two Rivers Farms F-2	Creditors	90,000	Aug-11	Aug-11	Jun-14	$2.50

Note_7_Income_Taxes_Schedule_o

Note 7 - Income Taxes: Schedule of Effective Income Tax Rate (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Effective Income Tax Rate	'
		December 31,
	Years ended	2012	2011
	Federal statutory rate	34.00%	34.00%
	Effect of:
	State taxes, net of federal tax benefit	3.06%	3.06%
	Permanent items	-0.82%	0.60%
	Return to Provision Allowance	7.05%	-
	Valuation allowance	(43,29%)	-37.66%
	Effective income tax rate	-  %	-  %

Note_7_Income_Taxes_Schedule_o1

Note 7 - Income Taxes: Schedule of Taxable Income (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Taxable Income	'
		2013	2012
	Book loss	($5,050)	($14,549)
	Tax adjustments:
	Stock based Comp	($174)	$3,434
	Stock comp exercised	($83)	($256)
	Entertainment	$15	$8
	Warrant Expense	$96	$-
	Donations	$4	$10
	Depreciation	$274	$37
	Amortization	$(43)	($20)
	Estimate of taxable income	$(4,961)	($11,336)

Note_7_Income_Taxes_Income_Tax

Note 7 - Income Taxes: Income Tax Provision (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Income Tax Provision	'
		2013	2012
	Current expense (benefit)
	Federal	$           -	$           -
	State	-	-
	Total current	-	-
	Deferred expense (benefit)
	Federal	-2,006	(6,111)
	State	-180	-550
	Total deferred	-2,186	-6,661
	Less: Valuation allowance	2,186	6,661
	Total	$           -	$           -

Note_7_Income_Taxes_Schedule_o2

Note 7 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Deferred Tax Assets and Liabilities	'
		2013	2012
	Current deferred tax asset:
	Net operating loss carryforwards	($11,269)	($9,260)
	Capital loss	-27	-34
	Bargain purchase	643	643
	RSU & stock option expense	-2,075	(2,171)
	Fixed Assets and Intangibles	35	305
	Charitable Contributions	-5	(4)
	Bad Debt	-8	-
	Total cumulative deferred tax assets	-12,706	-10,520
	Valuation allowance	12,706	10,520
	Effective income tax asset	$         -	$       -

Note_7_Income_Taxes_Taxes_Carr

Note 7 - Income Taxes: Taxes Carryforwards (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Taxes Carryforwards	'
		Federal	Colorado
	12/31/12	$25,447	$19,629
	12/31/13	$4,961	$4,961
	Balance	$30,408	$24,590

Note_8_Commitments_and_Conting1

Note 8 - Commitments and Contingencies: Lease Payments Due (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Lease Payments Due	'
	Period	Amount Due
	2014	$43,200
	2015	$21,600

Note_8_Commitments_and_Conting2

Note 8 - Commitments and Contingencies: Farmland Leases (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Farmland Leases	'
	Expiration	County	Acres	Amount per year
	2018	Pueblo	301	$187,000
	2032	Pueblo	95	$14,000

Significant_Fourth_Quarter_Adj1

Significant Fourth Quarter Adjustments and Restatement: Restatement of Previously filed Statement of Operations (Tables)	12 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Restatement of Previously filed Statement of Operations	'
		As of June 30, 2013		As of Sep 30, 2013
	Profit and Loss	3 Months	6 Months	9 Months
	Net Loss As Reported	$(1,679,000)	$(3,859,000)	$(5,293,000)
	EPS	$        (0.07)	$      (0.16)	$     (0.21)
	Adjustments:
	Previously reported Gain on Debt Extinguishment	$  94,000	$     94,000	$    94,000
	Corrected amount of Loss on Debt Extinguishment	$(873,000)	$(873,000)	$(873,000)
	Amortization of Debt Discount	$              -	$             -	$    80,000
	Total Adjustment	$(967,000)	$(967,000)	$(1,047,000)
	Restated Net Loss	$(2,646,000)	$(4,826,000)	$(6,340,000)
	Adjusted EPS	$(0.11)	$(0.19)	$(0.26)
	Variance	$(0.04)	$(0.03)	$(0.05)

Recovered_Sheet13

Note 2 - Summary of Significant Accounting Policies: Non-controlling Interest: Noncontrolling Interest (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
HCIC	$1,363,000	$2,205,000
F-1	1,494,000	1,494,000
F-2	3,933,000	3,933,000
DFP	3,181,000	2,208,000
Noncontrolling Interest HCIC Total	$9,971,000	$9,840,000

Recovered_Sheet14

Note 2 - Summary of Significant Accounting Policies: Non-controlling Interest: Non-controlling Interest Share of Gains (losses) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
HCIC (1)	$16,000	$43,000

Recovered_Sheet15

Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Summary of Premises and Equipment (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
Property, Plant, and Equipment, Fair Value Disclosure	$51,000	$109,000
Vehicles	45,000	361,000
Farm Equipment	1,411,000	1,286,000
Irrigation system	989,000	1,039,000
Buildings	35,000	'
Website	7,000	7,000
Premises and Equipment Subtotal	2,538,000	2,802,000
Less Accumulated Depreciation	646,000	405,000
Assets, Net	$1,892,000	$2,397,000

Note_3_Investments_and_Longliv4

Note 3 - Investments and Long-lived Assets: Reconstruction Costs (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
Begining Balance	$34,000	$848,000
Additions	'	567,000
Completed, Transferred	'	-1,381,000
Ending Balance	$34,000	$34,000

Note_3_Investments_and_Longliv5

Note 3 - Investments and Long-lived Assets: Schedule of Purchase Price Allocation (Details) (USD $)	Nov. 02, 2012
Details	'
Produce business	$1,037,000
Equipment	836,000
Prepaid interest	30,000
Ending Balance	$1,903,000

Note_3_Investments_and_Longliv6

Note 3 - Investments and Long-lived Assets: Value of Business Segment (Details) (USD $)	Nov. 02, 2012
Details	'
Customer List	$580,000
Tradename	220,000
Residual goodwilll	237,000
Less accumulated amortization	40,000
Ending Balance	$997,000

Note_4_Notes_Payable_Current_P1

Note 4 - Notes Payable: Current Portion of Long Term Debt (Details) (USD $)	Dec. 31, 2013
Details	'
HCIC seller carry back	$490,000
Orlando seller carry back	188,000
Series A convertible	110,000
Series B convertible	405,000
CWCB	47,000
FNB -Dionisio Farm	25,000
FNB-Mater	3,000
McFinney Agri-Finance	7,000
Bridge Loan	1,300,000
Kirby Group	45,000
Equipment loans	139,000
LoansPayableCurrentTotal	$2,759,000

Note_4_Notes_Payable_Schedule_2

Note 4 - Notes Payable: Schedule of Principal Payments Due (Details) (USD $)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Details	'	'	'	'	'	'
Principal Due	$3,311,000	$666,000	$1,504,000	$6,569,000	$1,459,000	$2,759,000

Note_6_Equity_Transactions_Sto1

Note 6 - Equity Transactions: Stock Options Issued and Outstanding (Details) (USD $)	Dec. 31, 2013
Details	'
Former Director Shares	1,023,200
Former Director ExercisePrice	$1.25
Consultants Shares	966,667
Consultants ExercisePrice	$1.25

Note_6_Equity_Transactions_2001

Note 6 - Equity Transactions: 2005 Options Plan (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
Shares Outstanding	1,989,867	1,643,200
Weighted Average Exercise Price	$1.25	$1.27
Re-issued Shares	'	366,667
Re-issued weighted Average Exercise Price	'	$1.25
OptionsCancelledShares	'	-20,000
Cancelled weighted Average Exercise Price	'	$3
Options Exercisable	1,989,867	'
Exercise Price December 31, 2013	$1.25	'

Note_6_Equity_Transactions_Opt1

Note 6 - Equity Transactions: Options Valuation (Details)	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
ExpectedStockPriceVolatility	72.00%	78.00%
RiskfreeInterestRate	1.41%	2.64%
ExpectedOptionLife	'2 years 9 months 18 days	'2 years 2 months 12 days

Note_6_Equity_Transactions_Lon1

Note 6 - Equity Transactions: Long-Term Stock Incentives Plan (Details)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Details	'	'	'
RestrictedStockUnitsOutstandingBeginningBalance	3,122,615	6,329,282	5,450,948
RestrictedStockUnitsGranted	'	410,000	4,700,237
RestrictedStockUnitsCancelled	'	-3,016,667	-3,185,000
RestrictedStockUnitsExercised	3,122,615	-600,000	-636,903

Note_6_Equity_Transactions_Res1

Note 6 - Equity Transactions: Restricted Stock Units Issued (Details)	Dec. 31, 2013
Details	'
John McKowen RSUs issued	2,480,948
Wayne Harding RSUs issued	700,000
Jolee Henry RSUs issued	400,000
Employee RSUs issued	50,000

Note_7_Income_Taxes_Schedule_o3

Note 7 - Income Taxes: Schedule of Taxable Income (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
Book Loss	($5,050)	($14,549)
Stock Based Comp	-174	3,434
Stock Comp Exercised	-83	-256
Entertainment	15	8
Warrant Expense	96	'
Donations	4	10
Depreciation1	274	37
Amortization	-43	-20
EstimateOfTaxableIncome	($4,961)	($11,336)

Note_7_Income_Taxes_Income_Tax1

Note 7 - Income Taxes: Income Tax Provision (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
Federal	($2,006)	($6,111)
State	-180	-550
Total Deferred	-2,186	-6,661
Less: Valuation allowance	$2,186	$6,661

Note_7_Income_Taxes_Schedule_o4

Note 7 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
NetOperatingLossCarryforwards	($11,269)	($9,260)
Capital Loss	-27	-34
BargainPurchase	643	643
StockOptionExpense	-2,075	-2,171
Fixed Assets and Intangibles	35	305
Charitable Contributions	-5	-4
Bad Debt	-8	'
Deferred Tax Assets, Net of Valuation Allowance, Current	-12,706	-10,520
Valuation Allowance, Amount	$12,706	$10,520

Note_8_Commitments_and_Conting3

Note 8 - Commitments and Contingencies: Lease Payments Due (Details) (USD $)	Dec. 31, 2015	Dec. 31, 2014
Details	'	'
Lease Payments Due	$21,600	$43,200