Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 09, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | TWO RIVERS WATER & FARMING Co | |
Entity Central Index Key | 1,302,946 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 43,347,967 | |
Trading Symbol | TURV | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 54 | $ 14 |
Accounts receivable, net | 5 | 5 |
Accounts receivable, related party | 19 | |
Deposits and other current assets | 85 | 32 |
Total Current Assets | 144 | 70 |
Long Term Assets: | ||
Property, equipment and software, net | 25 | 160 |
Land | 3,394 | 3,505 |
Water assets | 24,864 | 25,016 |
Greenhouse & infrastructure, net | 5,955 | |
Construction in progress | 3,361 | |
Investment in GCP1 | 2,405 | |
Other long term assets | 89 | 85 |
Total Long Term Assets | 30,777 | 38,082 |
TOTAL ASSETS | 30,921 | 38,152 |
Current Liabilities: | ||
Accounts payable | 1,114 | 1,553 |
Accrued liabilities | 5,133 | 1,837 |
Current portion of notes payable, net of discount | 8,400 | 17,419 |
Preferred dividend payable | 4,970 | 3,968 |
Total Current Liabilities | 19,617 | 24,777 |
Notes Payable, net of current portion | 1,143 | 1,238 |
Total Liabilities | 20,760 | 26,015 |
Commitments & Contingencies (Notes 4, 7, 9, 10) | ||
Stockholders' Equity: | ||
Common stock, $0.001 par value, 200,000,000 shares authorized, 34,847,967 shares issued and outstanding at September 30, 2018 and 32,749,920 shares issued and outstanding at December 31, 2017 | 36 | 34 |
Preferred shares, $0.001 par value, 5,000,000 shares authorized, 64,935 shares issued and outstanding at September 30, 2018 December 31, 2017. | 252 | 252 |
Additional paid-in capital | 78,484 | 77,267 |
Accumulated (deficit) | (91,122) | (97,168) |
Total Two Rivers Water Company Shareholders' Equity | (12,350) | (19,615) |
Noncontrolling interest in subsidiaries | 22,511 | 31,752 |
Total Stockholders' Equity | 10,161 | 12,137 |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ 30,921 | $ 38,152 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 34,847,967 | 32,749,920 |
Common stock, shares outstanding | 34,847,967 | 32,749,920 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 64,935 | 64,935 |
Preferred stock, shares outstanding | 64,935 | 64,935 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | ||||
Leasing - Greenhouse | $ 1,006 | $ 2,865 | ||
Other | 5 | 16 | 22 | 40 |
Total Revenue | 5 | 1,022 | 22 | 2,905 |
Operating Expenses: | ||||
General and administrative | 642 | 625 | 1,808 | 1,201 |
Depreciation and amortization | 17 | 94 | 75 | 343 |
Total operating expenses | 659 | 719 | 1,883 | 1,544 |
Profit (Loss) from Operations | (654) | 303 | (1,861) | 1,361 |
Other Income (Expense) | ||||
Interest expense | (217) | (717) | (736) | (1,905) |
Warrant expense | (19) | (93) | (30) | (93) |
Gain (loss) on disposal of assets and intangibles | 37 | (72) | 114 | 9 |
Dam demolition (expense) | (1,800) | (1,800) | ||
Other income (expense) | 4 | 15 | 9 | |
Gain on de-consolidation of GrowCo | 12,773 | |||
Loss on investment in GrowCo | (617) | |||
Total other income (expense) | (1,995) | (882) | 9,719 | (1,980) |
Net Profit (Loss) from Continuing Operations before Taxes | (2,649) | (579) | 7,858 | (619) |
Income tax (provision) benefit | ||||
Net Profit (Loss) from Continuing Operations After Taxes | (2,649) | (579) | 7,858 | (619) |
Net (Loss) from Discontinued Operations | (92) | (810) | (1,174) | |
Net Profit (Loss) before Preferred Dividends and Non-Controlling Interest | (2,649) | (671) | 7,048 | (1,793) |
Preferred distributions | (6) | (686) | (1,002) | (1,880) |
Net loss attributable to noncontrolling interest | 395 | 538 | ||
Net Profit (Loss) Attributable to Common Shareholders | $ (2,655) | $ (962) | $ 6,046 | $ (3,135) |
Profit (Loss) Per Common Share - Basic: | $ (0.08) | $ (0.03) | $ 0.18 | $ (0.10) |
Profit (Loss) Per Common Share - Dilutive: | $ (0.08) | $ (0.03) | $ 0.16 | $ (0.10) |
Weighted Average Shares Outstanding: | ||||
Basic | 34,256,000 | 31,974,000 | 33,529,000 | 31,571,000 |
Dilutive | 34,256,000 | 31,974,000 | 37,149,000 | 31,571,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows from Operating Activities: | ||
Net loss, before NCI | $ 6,046 | $ (3,673) |
Net loss from discontinued operations | 810 | 1,174 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation & Amortization | 75 | 344 |
Accretion of debt discount | 178 | 326 |
Loss from debt extinguishment | 70 | |
Stock Option and Warrant expense | 1,220 | 728 |
Gain on deconsolidation | (12,773) | |
Loss on investment in GrowCo | 617 | |
Loss (Gain) on write down of assets related to property and equipment | 578 | |
Loss (Gain) from disposal of fixed assets | (114) | (9) |
Net change in operating assets and liabilities: | ||
(Increase) Decrease in accounts receivable | 32 | |
Decrease (increase) in accounts receivable, related party | 2 | (2,515) |
Decrease in deposits, prepaid expenses and other assets | (47) | (63) |
Increase (decrease) in accounts payable | 93 | (987) |
Increase in distribution payable to preferred shareholders | 1,002 | 1,881 |
Increase in accrued liabilities and other | 2,067 | 820 |
Net Cash Used in Operating Activities | (824) | (2,459) |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (79) | |
Sale of property and equipment | 72 | 945 |
Investment in water assets | (102) | |
Construction in progress | (616) | |
Net Cash Used in Investing Activities | (30) | 250 |
Cash Flows from Financing Activities: | ||
Preferred membership offerings | 252 | |
Proceeds from warrant exercises | 209 | |
Proceeds from debt | 1,426 | 2,236 |
Payment on notes payable | (532) | (536) |
Net Cash Provided by Financing Activities | 894 | 2,161 |
Net Increase in Cash & Cash Equivalents | 40 | (48) |
Beginning Cash & Cash Equivalents | 14 | 150 |
Ending Cash & Cash Equivalents | 54 | 102 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest, net of $-0- and $122 respectively capitalized into CIP | 196 | 961 |
Shares issued in exchange for debt | 322 | |
Conversion of debt, preferred shares into Two Rivers common stock | 100 | |
Land Exchanged for debt | 1,606 | |
Conversion of TR Cap into Two Rivers common shares | 70 | |
Conversion of Accounts Payable into Water Redevelopment preferred shares | $ 100 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Interest capitazlied into CIP | $ 0 | $ 122 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization and Business | NOTE 1 – ORGANIZATION AND BUSINESS Unless the context requires otherwise, references in these notes to “Two Rivers,” the “Company,” “we,” “our,” “us” and similar terms are to Two Rivers Water & Farming Company and its subsidiaries. Corporate Evolution In 2014, we formed a new company, TR Capital Partners, LLC or TR Capital, which issued all its common units to Two Rivers Water & Farming Company, and our direct and indirect subsidiaries entered into a series of related transactions as the result of which assets and operations of those subsidiaries transferred to TR Capital. As a result of those transactions, TR Capital operates or controls all of the operations formerly conducted by those subsidiaries, and we classify TR Capital as Two Rivers Water & Farming Company for purposes of our financial statements. Overview In 2009, we began acquiring and developing irrigated farmland and associated water rights and infrastructure. As of September 30, 2018, we own 6,430 gross acres. Gross acres owned decreased from 6,538 gross acres at December 31, 2017 due to the sale of 108 acres. We are focused on water assets we have acquired and will potentially acquire in the future. Since 2009, we have acquired strategic water assets and land in the Huerfano and Cucharas river basins in southeastern Colorado, thus our name Two Rivers Water Farming & Water Company. Our water assets are located in a basin that spans over 1,500 square miles and drops in elevation from over 14,000 feet down to the confluence of the Arkansas River, just east of Pueblo Colorado at 4,500 feet. We operate in a natural, gravity fed water alluvial. This basin is the last undeveloped basin along the front range of Colorado. As our first water-focused project, we plan to fully develop this basin to properly manage the water contained therein and serve the community while providing returns to our investors. Since October 2016 we have refocused on monetizing our assets. Monetization occurs in two different ways: sell or additionally invest. We have determined to sell assets that we have determined will not yield significant future returns to our shareholders and invest strategically in the assets that will. We will take net proceeds, if any, from these sales and continue to invest in our water and water infrastructure. In May 2014, we formed GrowCo, Inc., a wholly owned subsidiary of Two Rivers through the issuance of 20,000,000 shares of common stock. On August 1, 2014, we announced that we were placing 10,000,000 GrowCo shares in a trust to be distributed to Two Rivers’ common shareholders. As of March 31, 2018, the Company owned 10,000,000 GrowCo shares out of reported shares outstanding of 34,343,000, or 29.12%. The reported outstanding shares were provided to the Company by GrowCo’s management. The Company requested from GrowCo management financial information to complete the Company’s June 30, 2018 financials. On July 17, 2018 the Company was notified by GrowCo’s management that GrowCo will not provide the requested financial information. This event triggered the Company’s management to re-examine the consolidation and VIE (variable interest entity) rules under US GAAP. Management concluded that as of April 1, 2018 the consolidation of GrowCo and GrowCo’s related entities is no longer required under US GAAP. Water Redevelopment Company We formed Water Redevelopment Company (“Water Redev”) in February 2017 for the purpose of separating our water assets from the rest of our business and to enable additional raising of capital for the purpose of investing in our water assets. Water Redevelopment Company is a subsidiary of Two Rivers and focuses on development and redevelopment of infrastructure for water management and delivery. Water is one of the most basic, core assets. Water Redevelopment’s first area of focus is in the Huerfano-Cucharas river basin in southeastern Colorado. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Two Rivers along with its farming, water and greenhouse operations. All significant inter-company balances and transactions have been eliminated in consolidation. Under guidance in ASC 810-10-05-8 “Consolidation of VIEs” (Variable Interest Entities) the Company’s management has determined that GrowCo and its related entities, GCP1, GCP Super Units, GCP2, should no longer be consolidated for financial statement purposes. The Company now reports its ownership position under the equity method of accounting. Before the three months ended June 30, 2018, GrowCo and its related entities were consolidated. Deconsolidation of GrowCo, Inc. Even though the Company no longer consolidates GrowCo and GrowCo’s related entities into the Company’s financials, Management has determined that the Company is a guarantor of GrowCo’s $4M Secured Notes. The Company did not sign these notes as a guarantor but has provided collateral owned by the Company with a recent appraised value of $2,359,000. GCP1 managers have been in contact with Blue Green, the holder of $2,115,000 of the notes to discuss an arrangement whereby GCP1 might use leasing cash flow to pay the secured note holders. No agreement has been reached, but there have been discussions on a general structure that 50% of lease revenue (after direct costs) might be used to pay interest and retire the principal of these notes. Since Two Rivers’ Management desires to present a conservative representation of its financial information it has determined to set the probability of collection against its collateral at 100% of the recent appraised value. The Company has recorded a contingent liability of $2,359,000 and offset this amount as an increase in the Company’s investment in GCP1 (ASC 460-10-55-23c). Additionally, US GAAP (ASC 810-10-40) provides guidance on “Derecognition” of a previously consolidated entity or entities. Under this guidance, Two Rivers shall account for the deconsolidation of a subsidiary or derecognition of a group of assets specified in ASC 810-10-40-3A by recognizing a gain or loss in net income attributable to the parent, measured as the difference between: a. The aggregate of all of the following: 1. The fair value of any consideration received. In Two Rivers case, no consideration was received. 2. The fair value of any retained noncontrolling investment in the former subsidiary or group of assets at the date the subsidiary is deconsolidated, or the group of assets is derecognized. In Two Rivers case, there were no retained noncontrolling investments in GrowCo or its related entities. 3. The carrying amount of any noncontrolling interest in the former subsidiary (including any accumulated other comprehensive income attributable to the noncontrolling interest) at the date the subsidiary is deconsolidated. In Two Rivers case, the total amount of the noncontrolling interest to derecognized is as follows as of April 1, 2018: Entity April 1, 2018 GrowCo (1,230,000 ) GrowCo Partners 1, LLC 3,621,000 GCP Super Units, LLC 5,016,000 TR Cap 20150630 Distribution, LLC 497,000 TR Cap 20150930 Distribution, LLC 460,000 TR Cap 20151231 Distribution, LLC 495,000 Total $ 8,859,000 b. The carrying amount of the former subsidiary’s assets and liabilities or the carrying amount of the group of assets. With the above guidance the Company determined that the effect of the deconsolidation of GrowCo produced a gain of $12,773,000 which is a non cash adjustment. This amount consists of elimination of the noncontrolling interest in GrowCo of $8,859,000 and $3,914,000 from the removal of GrowCo’s assets and liabilities. The $3,914,000 represented the amount of GrowCo liabilities over GrowCo’s assets. Investment in GrowCo Partners 1, LLC (GCP1) Due to the deconsolidation of GrowCo and its related entities, which include GCP1, the Company’s investment in GCP1 is now accounted for under the equity method. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Item 210 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation for the periods presented have been included as required by Regulation S-X, Rule 10-01. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ended December 31, 2018. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company’s consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission on April 9, 2018. Non-controlling Interest Below is the detail of non-controlling interest shown on the condensed consolidated balance sheets. Entity Sept 30 2018 Dec 31 2017 TR Capital $ 20,482,000 $ 20,482,000 HCIC 1,386,000 1,388,000 F-1 29,000 29,000 F-2 162,000 162,000 DFP 452,000 452,000 GrowCo - (850,000 ) GrowCo Partners 1, LLC - 3,621,000 GCP Super Units, LLC - 5,016,000 TR Cap 20150630 Distribution, LLC - 497,000 TR Cap 20150930 Distribution, LLC - 460,000 TR Cap 20151231 Distribution, LLC - 495,000 Total $ 22,511,000 $ 31,752,000 In 2015, $152,000 of TR Capital Preferred Membership units were exchanged, pursuant to a pre-existing exchange agreement, for Two Rivers’ common shares and $60,000 of Two Rivers Farms F-2, Inc. (“F-2”) membership units converted into Two Rivers’ common shares. 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates. Since GrowCo management did not provide its financial information, for the three months ended June 30, 2018, the Company estimated its share of the GrowCo loss as accounted for under the equity method. Cash and Cash Equivalents For purposes of reporting cash flows, Two Rivers 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. 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 property and equipment: Asset Type Life in Years Sept 30, 2018 Dec 31, 2017 Office equipment, furniture 5 – 7 $ 12,000 $ 12,000 Computers 3 46,000 46,000 Vehicles 5 25,000 92,000 Farm equipment 7 – 10 147,000 244,000 Buildings 27.5 10,000 10,000 Website 3 7,000 7,000 Subtotal 247,000 411,000 Less: Accumulated depreciation (222,000 ) (251,000 ) Net book value $ 25,000 $ 160,000 Land Land acquired for farming or water rights is recorded at cost. 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 Water Rights and Infrastructure Management periodically evaluates the carrying value of its assets including water rights and infrastructure, and if the carrying value is in excess of fair market value, the Company will establish an impairment allowance. Currently, there is a $6,930,000 impairment reserve 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 Huerfano Cucharas Irrigation Company (“HCIC”) and Orlando Reservoir No. 2 Company, LLC (“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. Revenue Recognition 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 condensed consolidated financial statements. The assessments that are not eliminated are included in Other revenue. 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. Dam Demolition Expense During the three months ended September 30, 2018 a court date has been set for a hearing of the State of Colorado’s legal action to compel the Company to demolish Cucharas #5 reservoir. A contingent liability, with an offsetting expense of $1,800,000 has been recognized. Net Income (Loss) per Share Basic net (loss) 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 2,425,000 options, and 17,536,958 warrants at September 30, 2018 and December 31, 2017, have an exercise price in excess of the Company’s closing price of $0.23/share as of September 28, 2018; therefore these shares have not been included in the determination of diluted earnings per share since, under ASC 260 they would anti-dilutive. If all convertible debt is converted into the Company’s common shares, there would be an additional 3,630,290 shares issued, using the Company’s closing price of $0.23/share as of September 28, 2018. Therefore, these additional shares are added to the basic shares for the nine months ended September 30, 2018. Recently Issued Accounting Pronouncements In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) “ Income Statement – Reporting Comprehensive Income (Topic 220) In July 2017, FASB issued ASU “ Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows In March 2016, the FASB issued ASU 2016-09, “ Improvements to Employee Share-Based Compensation Accounting In February 2016, the FASB issued ASU 2016-02, “ Leases 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. |
Investments and Long-Lived Asse
Investments and Long-Lived Assets | 9 Months Ended |
Sep. 30, 2018 | |
Investments, All Other Investments [Abstract] | |
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 appropriate. Costs incurred to prepare the land for the intended purpose are 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. It has obtained water rights through the purchase of shares in a mutual ditch company, which it accomplished through its purchase of shares in HCIC, or through the purchase of an entity holding water rights, which it effected through its purchase of a membership interest of 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. 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 $6,930,000 of impairments on the Company’s land and water shares. No amortization or depreciation is taken on the water rights. Gain on Disposal of Assets During the nine months ended September 30, 2018, we sold sub-divided, unimproved lots of land located in El Paso County Colorado and recognized a gain of $156,000. During the nine months ended September 30, 2018 there was also a $42,000 loss from the sale of equipment. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 4 – NOTES PAYABLE Below is a summary of the Company’s consolidated long term debt: September 30, 2018 December 31, 2017 Note Principal Balance Accrued Interest Discount Principal Balance Interest rate Security HCIC seller carry back $ 6,301,000 $ 552,000 $ - $ 6,301,000 6 % Shares in the Mutual Ditch Company CWCB 690,000 - - 748,000 2.5 % Certain Orlando and Farmland assets McFinney Agri-Finance 238,000 - - 441,000 6.8 % 2,579 acres of pasture land in Ellicott Colorado TR Note to GrowCo 390,000 - - - GrowCo $4M notes - - - 4,000,000 22.5 % Various land and water assets GrowCo $1.5M exchange note - - - 100,000 22.5 % Various land and water assets GrowCo $6M exchange note - - - 1,855,000 22.5 % GrowCo $7M exchange note - - - 3,132,000 10-22.5 % GrowCo $2M exchange note - - - 1,520,000 10-22.5 % Bridge loan Harding - - - 13,000 18 % None Powderhorn Note 338,000 - (48,000 ) - Third lien on Ellicott land Morning View LLC 105,000 4,000 (5,000 ) - Unsecured TURV Long Term NP 271,000 44,000 - 275,000 12.0 % Second lien on Ellicott land WRC Convertible NP 300,000 57,000 - 300,000 12.0 % Lien on water supply agreement WRC Butte Valley Land Notes 400,000 28,000 (1,000 ) - Butte Valley Land Equipment loans 57,000 2,000 - 122,000 5 - 8 % Equipment OID Black Mountain 107,000 - - 300,000 Investors Fiduciary LLC 400,000 12,000 - - - Shares of HCIC Total 9,597,000 $ 699,000 $ (54,000 ) 19,107,000 Less: note discounts (54,000 ) (450,000 ) Less: Current portion net of discount (8,400,000 ) (17,419,000 ) Long term portion net of discount $ 1,143,000 $ 1,238,000 Notes: (1) Prime rate + 1%, but not less than 6% (2) Prime rate + 1.5%, but not less than 6% The Company elected to adopt early FASB ASU 2016-03, whereby debt issuance costs are recorded as a deduction from the carrying value of liability, and not recorded as an asset. The debt issuance costs are amortized using the effective interest method which, in this situation, equals a straight line method. HCIC Carry Back Loan Payments to all of the HCIC note holders are behind schedule. As of September 30, 2018, the Company is in technical default on $6,301,000 of the HCIC carry back notes due to non-payment of principal and interest. Consequently, the entire amount of the notes has been classified as current. GrowCo $4M Notes Guaranty During the period ended December 31, 2015, GrowCo issued $4,000,000 in secured promissory notes to 17 individual investors. The notes have a security interest in the land, water and improvements on the 40 acres where GrowCo Partners 1 has its greenhouse and associated warehouse. The notes pay 22.5% in annual interest, with interested paid monthly, and are due April 1, 2020. GrowCo cannot prepay the notes; however, noteholders have the right to call the notes at the first anniversary, or thereafter, of each note with a 60-day notice to the Company. Due to the past due interest owed to the secured $4M Note holders, these notes are in technical default. On January 19, 2018 Blue & Green, LLC (“Blue Green”) filed a complaint against GrowCo claiming a default on payments by GrowCo to Blue Green under the terms of the $4 million GrowCo $2,115,000 promissory note held by Blue Green. The complaint requested immediate payment of the note, back due interest in excess of $300,000, and attorney fees. Even though the Company no longer consolidates GrowCo and GrowCo’s related entities into the Company’s financials (see above Note 2 – Principals of Consolidation), under ASC 460-10-05, Management has determined that the Company is a guarantor of the $4M Secured Notes. The Company did not sign these notes as a guarantor but has provided collateral owned by the Company with a recent appraised value of $2,359,000. GCP1 managers have been in contact with Blue Green, the holder of $2,115,000 of the notes to discuss an arrangement whereby GCP1 might use leasing cash flow to pay the secured note holders. No agreement has been reached, but there have been discussions on a general structure that 50% of lease revenue (after direct costs) might be used to pay interest and retire the principal of these notes. Since Two Rivers’ Management desires to present a conservative representation of its financial information it has determined to set the probability of collection against its collateral at 100% of the recent appraised value. The Company has recorded a contingent liability of $2,359,000 and offset this amount as an increase in the Company’s investment in GCP1 (ASC 460-10-55-23c). Powderhorn Note The Company has decided to pay Powderhorn’s August and September 2018 payments by issuance of 800,000 and 646,154 shares and not in cash. Subsequent to September 30, 2018, 800,000 shares have been issued and the 646,154 shares have yet to be issued. OID Black Mountain During the nine months ended September 30, 2018, the Company issued 874,250 common shares for a principal reduction of $100,000. It was originally due on October 26, 2017 but was extended to July 31, 2018. It has been further extended to September 30, 2018. In October 2018, the Company reached an agreement with Black Mountain to fully pay Black Mountain amount due of $138,370 with the issuance of 900,000 common shares of the Company’s stock. Investors Fiduciary LLC On July 23, 2018 the Company entered into a convertible promissory note with Investors Fiduciary LLC for a bridge loan up to $500,000. As of September 30, 2018, $400,000 has been drawn on this note. The note carries interest at 20% per annum and is secured by the Company’s unencumbered 2,456.5 shares in the Huerfano Cucharas Irrigation Company. The holder has a right to convert principal and any accrued interest into the Company’s common shares at a rate of $0.14/share. On July 23, 2018, the Company’s common stock closed at $0.117/share. Therefore, the Company did not record a beneficial conversion feature. |
Information on Business Segment
Information on Business Segments | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
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 Greenhouse business with Two Rivers Water & Farming Company as the Parent company. Therefore, we report our segments by these lines of businesses: Greenhouse and Water. Greenhouse contains our construction and leasing of state of the art greenhouses to cannabis growers. 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. The Farming Business has been discontinued and therefore the operating losses and assets have been summarized. Effective April 1, 2018 and for the nine months ended September 30, 2018, the Company stopped consolidating GrowCo, the Greenhouse segment. 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): Nine Months Ended Sept 30, 2018 Nine Months Ended Sept 30, 2017 Parent Farms Greenhouse Water Total Parent Farms Greenhouse Water Total Revenue $ 10 $ - $ - $ 12 $ 22 $ - $ - $ 2,865 $ 40 $ 2,905 Expenses Total Operating Expenses (886 ) - - (997 ) (1,883 ) (571 ) - (306 ) (667 ) (1,544 ) Total Other Income (Expense) 11,928 - - (2,209 ) 9,719 (41 ) - (1,689 ) (250 ) (1,980 ) Net (Loss) from Operations Before Income Taxes 11,052 - - (3,194 ) 7,858 (612 ) - 870 (877 ) (619 ) Income Taxes (Expense)/Credit - - - - - - - - - - Net (Loss) from Operations 11,052 - - (3,194 ) 7,858 (612 ) - 870 (877 ) (619 ) Net (Loss) from Discontinued Operations - - (810 ) - (810 ) - (1,174 ) - - (1,174 ) Preferred dividends (986 ) - - (16 ) (1,002 ) (1,480 ) - (394 ) (6 ) (1,880 ) Non-controlling interest - - - - - - - 540 (2 ) 538 Net (Loss) $ 10,066 $ - $ (810 ) $ (3,210 ) $ 6,046 $ (2,092 ) $ (1,174 ) $ 1,016 $ (885 ) $ (3,135 ) Segment Assets $ 10,746 $ - $ - $ 20,175 $ 30,921 $ 907 $ - $ 12,309 $ 34,265 $ 47,481 |
Equity Transactions
Equity Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Equity Transactions | NOTE 6 – EQUITY TRANSACTIONS The Company has authorized 200,000,000 shares of common stock with a par value of $0.001. The total issued common stock as of September 30, 2018, was 34,847,967 common shares. During the nine months ended September 30, 2018, Two Rivers issued the following common stock: ● 874,250 common stock to Black Mountain for a $100,000 in principal reduction in its note payable. ● 1,090,957 common stock issued to Spotfin Funding for financial services. These shares issued were expensed in the previous year. ● 14,840 issued for a conversion from TR Capital into the Company’s common shares. These shares issued were expensed in the previous year. ● 118,000 issued for a RSU exercise. The RSU expense was recognized in a previous year. During the nine months ended September 30, 2018, Two Rivers recognized $1,190,000 in stock based compensation to its employees and directors. During the nine months ended September 30, 2018, Two Rivers granted 1,541,380 warrants and recognized $30,000 in warrant expense. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | NOTE 7 – LEGAL PROCEEDINGS Suncanna Litigation Since 2016, the Suncanna lease arrangement was the subject of administrative and judicial proceedings: ● On April 14, 2016 we were notified that Suncanna LLC had received a notice of suspension from the Marijuana Enforcement Division of the Colorado Department of Revenue. This suspension remains in place until a hearing. ● This caused Suncanna to be in violation of its lease with GCP1. On April 25, 2016, GCP1 terminated Suncanna’s lease and began an eviction process against Suncanna. Due to the eviction process, during the three months ended March 31, 2016, we wrote off $743,000 in Lease Revenues – Related Party, wrote off $587,000 in advances to Suncanna, and did not recognize any Lease Revenues – Related Party. ● On July 22, 2016 GCP1 received a Writ of Restitution from the Pueblo County Colorado District Court ordering Suncanna to vacate the greenhouse by September 6, 2016. ● On August 31, 2016 a lawsuit was filed by Aaron Van Wingerden, owner of Suncanna, in Pueblo County Colorado District Court against GrowCo, GrowCo Business Development, LLC, GCP1, GrowCo Funding, LLC., TR Capital, Two Rivers and certain current and former employees, and associates. We believe that the suit has no merit and will have no material impact on our financial condition. ● On September 6, 2016, in accordance with the Writ of Restitution, Suncanna vacated the greenhouse and GCP1 took possession and began re-conditioning its greenhouse for a new tenant, who began growing operations in the fourth quarter of 2016. ● On October 27, 2016, in a contempt of court hearing, a Pueblo County Colorado District Court judge ruled in favor of plaintiff Aaron Van Wingerden and against GCP1 in a matter regarding the prevention of Suncanna’s access to GCP1’s greenhouse prior to Suncanna vacating the premises on September 6, 2016. We believe that this ruling was in error and are appealing this decision. The Company, the other defendants and the plaintiffs have settled this case. Prior board of directors’ litigation On August 8, 2017, a summons was issued in the Arapahoe County District Court on behalf of former board members Dennis Channer, Rockey Wells and John Stroh demanding the Company pay $139,000 in attorneys’ fees owed to Ryley Carlock & Applewhite (“RCA”) for services rendered to the former board members at their behest while members of the board. The $139,000 is included in our accounts payable on the balance sheet. An agreement has been reached with RCA to pay amounts owed over time. DFP litigation On October 18, 2017, at the Company filed a lawsuit against former employees of the its DFP farming operation for alleged theft. We are in the process of gathering evidence of the theft and setting a court hearing date. A former employee of DFP has filed a counter claim against the Company, which amount is immaterial. Management believes that claims against former employees are in excess of any counter claims. State of Colorado litigation The Company, the State of Colorado (Office of the State Engineer and the local Division Engineer), and neighboring water rights holders have been involved in litigation in the Colorado Division 2 Water Court concerning water rights and claims by the State concerning an existing dam in Huerfano County, Colorado, and a demand by the State to breach the dam structure. ( Two Rivers Water and Farming Co. vs. Welton Land and Water Co In the quarter ending March 31, 2016, Two Rivers entered into a stipulation agreement with the State, settling the State’s claims at that time. Under the stipulation agreement, Two Rivers agreed to take the existing dam structure down to the sediment level by March 31, 2018. Two Rivers has been able to empty all the water in the Dam but was not able to meet the requirements of the agreement by March 31, 2018 due to lack of capital. On April 3, 2018, the State filed a motion for the issuance of a contempt of court citation against the Company, its directors, former director and CEO John McKowen, and certain other individuals for breach of the agreement seeking sanctions, imposition of a civil penalty of $100,000 and payment of legal fees. The Company and its directors are contesting the sanctions sought in the contempt motion, based in part upon those sanctions being unnecessary and unduly punitive. Preliminary hearings for the defendants were held on May 10 and June 8, 2018. At the May 10, 2018 hearing it was determined that the State of Colorado could proceed with its action. At the June 8 hearing, a trial date of December 17, 2018 was set by the Court that was subsequently postponed to October 2019. The Company intends to continue its efforts to seek funding so that it can comply with the agreement. If successful in obtaining financing, the Company intends to work with the Colorado State Engineer to take down the existing dam. Once this work is completed, the Company will seek additional funding to construct a new dam close to the prior dam structure. The Company’s engineering firm estimate the cost to breach the dam structure to be between $1.8 to $2.2 million. As of September 30, 2018 we have accrued a liability and other expense of $1,800,000 for this work. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 8 – DISCONTINUED OPERATIONS Dionisio Farms & Produce During the fourth quarter of 2016, we decided to discontinue operations of our Dionisio Farms and Produce (DFP) subsidiary. We decided to sell all assets associated with this business due to the sustained losses incurred. The DFP loss from discontinued operations presented in the statements of operations consist of the following for the nine months ended September 30, 2018 and September 30, 2017: Sept 30, 2018 Sept 30, 2017 Revenues $ - $ - Cost of goods sold - - General and administrative expenses - 508,000 Depreciation and amortization - 1,000 Interest - 41,000 Other (loss on disposal of assets and intangibles) - 624,000 Total $ - $ (1,174,000 ) On March 3, 2017, the Company’s land and water assets associated with farming operations were auctioned off. Gross proceeds from the auction were $1,740,000 with net proceeds of $1,611,000. Proceeds were used to pay off secured debt first with the residual proceeds used to pay unsecured debt. GrowCo and related entities Effective April 1, 2018, the Company is no longer consolidating the financials of GrowCo and its related entities. The effect of deconsolidation created a one-time non-cash gain of $12,773,000 and a recognition of a loss from GrowCo discontinued operations of $810,000; broken down as follows: Sept 30, 2018 Sept 30, 2017 Revenues $ 52,000 $ - General and administrative expenses (89,000 ) - Depreciation and amortization (61,000 ) - Interest (1,092,000 ) - Non-controlling interest 380,000 - Total $ (810,000 ) $ - |
Contingent Liability
Contingent Liability | 9 Months Ended |
Sep. 30, 2018 | |
Contingent Liability | |
Contingent Liability | NOTE 9 – CONTINGENT LIABILITY Even though the Company no longer consolidates GrowCo and GrowCo’s related entities into the Company’s financials (see above Note 2 – Principals of Consolidation), under ASC 460-10-05, management has determined that the Company is a guarantor of the $4M Secured Notes. The Company did not sign these notes as a guarantor but has provided collateral owned by the Company with a recent appraised value of $2,359,000. GCP1 managers have been in contact with Blue Green, the holder of $2,115,000 of the notes to discuss an arrangement whereby GCP1 might use leasing cash flow to pay these note holders. No agreement has been reached, but there have been discussions on a general structure that 50% of lease revenue (after direct costs) might be used to pay interest and retire the principal of these note holders. Since Two Rivers’ management desires to present a conservative representation of its financial information it has determined to set the probability of collection against its collateral at 100% of the recent appraised value. Therefore, the Company has recorded a contingent liability of $2,359,000 and offset this amount as an increase in the Company’s investment in GCP1 (ASC 460-10-55-23c). |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 10 – GOING CONCERN The consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has not generated significant revenues and has incurred net losses (including significant non-cash expenses) of $12,924,000 during the year ended December 31, 2017 and a profit of 6,046,000 for the nine months ended September 30, 2018, which is largely due to a non-cash gain on the consolidation of GrowCo of $12,773,000. Actual cash consumed from our operations during the nine months ended September 30, 2018 was $824,000. At September 30, 2018, the Company had a working capital deficit of $19,473,000 and an accumulated deficit of approximately $91,122,000, respectively. The HCIC seller carry back debt are in technical default. These factors raise doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. The following paragraphs describe management’s plans to mitigate. For the nine months ended September 30, 2018, we have collected $1,426,000 in additional debt. In addition, the Company is in different stages of discussion with parties interested in providing capital. This includes on-going discussions with a strategic partner and seeking out new debt funding to consolidate our existing debt and provide new capital to expand our water redevelopment and expansion efforts. We continue to reduce our general and administrative and cash required for our operations. |
Related Party
Related Party | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party | NOTE 11 – RELATED PARTY There were no related party transactions during the nine months ended September 30, 2018. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 – SUBSEQUENT EVENTS Pursuant to ASC 855, management has evaluated all events and transactions that occurred from September 30, 2018 ● On October 3, 2018, the Company issued 6,800,000 common restricted shares to two financing entities that could be used for a loan to the Company, using this issued stock as collateral. The funds will be available on or after April 3, 2019. Funding will be at the discretion of the Company. If funding does not occur, the shares issued will be returned to the Company. ● On October 29, 2018, the Company issued 900,000 common shares to Black Mountain in exchange for payment in full of the Company’s $138,370 debt to Black Mountain. ● On November 5, 2018, the Company issued 800,000 common shares to Powderhorn in exchange for the September 2018 payment on the note due for a $63,000 due. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Two Rivers along with its farming, water and greenhouse operations. All significant inter-company balances and transactions have been eliminated in consolidation. Under guidance in ASC 810-10-05-8 “Consolidation of VIEs” (Variable Interest Entities) the Company’s management has determined that GrowCo and its related entities, GCP1, GCP Super Units, GCP2, should no longer be consolidated for financial statement purposes. The Company now reports its ownership position under the equity method of accounting. Before the three months ended June 30, 2018, GrowCo and its related entities were consolidated. |
Deconsolidation of GrowCo, Inc | Deconsolidation of GrowCo, Inc. Even though the Company no longer consolidates GrowCo and GrowCo’s related entities into the Company’s financials, Management has determined that the Company is a guarantor of GrowCo’s $4M Secured Notes. The Company did not sign these notes as a guarantor but has provided collateral owned by the Company with a recent appraised value of $2,359,000. GCP1 managers have been in contact with Blue Green, the holder of $2,115,000 of the notes to discuss an arrangement whereby GCP1 might use leasing cash flow to pay the secured note holders. No agreement has been reached, but there have been discussions on a general structure that 50% of lease revenue (after direct costs) might be used to pay interest and retire the principal of these notes. Since Two Rivers’ Management desires to present a conservative representation of its financial information it has determined to set the probability of collection against its collateral at 100% of the recent appraised value. The Company has recorded a contingent liability of $2,359,000 and offset this amount as an increase in the Company’s investment in GCP1 (ASC 460-10-55-23c). Additionally, US GAAP (ASC 810-10-40) provides guidance on “Derecognition” of a previously consolidated entity or entities. Under this guidance, Two Rivers shall account for the deconsolidation of a subsidiary or derecognition of a group of assets specified in ASC 810-10-40-3A by recognizing a gain or loss in net income attributable to the parent, measured as the difference between: a. The aggregate of all of the following: 1. The fair value of any consideration received. In Two Rivers case, no consideration was received. 2. The fair value of any retained noncontrolling investment in the former subsidiary or group of assets at the date the subsidiary is deconsolidated, or the group of assets is derecognized. In Two Rivers case, there were no retained noncontrolling investments in GrowCo or its related entities. 3. The carrying amount of any noncontrolling interest in the former subsidiary (including any accumulated other comprehensive income attributable to the noncontrolling interest) at the date the subsidiary is deconsolidated. In Two Rivers case, the total amount of the noncontrolling interest to derecognized is as follows as of April 1, 2018: Entity April 1, 2018 GrowCo (1,230,000 ) GrowCo Partners 1, LLC 3,621,000 GCP Super Units, LLC 5,016,000 TR Cap 20150630 Distribution, LLC 497,000 TR Cap 20150930 Distribution, LLC 460,000 TR Cap 20151231 Distribution, LLC 495,000 Total $ 8,859,000 b. The carrying amount of the former subsidiary’s assets and liabilities or the carrying amount of the group of assets. With the above guidance the Company determined that the effect of the deconsolidation of GrowCo produced a gain of $12,773,000 which is a non cash adjustment. This amount consists of elimination of the noncontrolling interest in GrowCo of $8,859,000 and $3,914,000 from the removal of GrowCo’s assets and liabilities. The $3,914,000 represented the amount of GrowCo liabilities over GrowCo’s assets. |
Investment in GrowCo Partners 1, LLC (GCP1) | Investment in GrowCo Partners 1, LLC (GCP1) Due to the deconsolidation of GrowCo and its related entities, which include GCP1, the Company’s investment in GCP1 is now accounted for under the equity method. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Item 210 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation for the periods presented have been included as required by Regulation S-X, Rule 10-01. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ended December 31, 2018. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company’s consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission on April 9, 2018. |
Non-controlling Interest | Non-controlling Interest Below is the detail of non-controlling interest shown on the condensed consolidated balance sheets. Entity Sept 30 2018 Dec 31 2017 TR Capital $ 20,482,000 $ 20,482,000 HCIC 1,386,000 1,388,000 F-1 29,000 29,000 F-2 162,000 162,000 DFP 452,000 452,000 GrowCo - (850,000 ) GrowCo Partners 1, LLC - 3,621,000 GCP Super Units, LLC - 5,016,000 TR Cap 20150630 Distribution, LLC - 497,000 TR Cap 20150930 Distribution, LLC - 460,000 TR Cap 20151231 Distribution, LLC - 495,000 Total $ 22,511,000 $ 31,752,000 In 2015, $152,000 of TR Capital Preferred Membership units were exchanged, pursuant to a pre-existing exchange agreement, for Two Rivers’ common shares and $60,000 of Two Rivers Farms F-2, Inc. (“F-2”) membership units converted into Two Rivers’ common shares. |
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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates. Since GrowCo management did not provide its financial information, for the three months ended June 30, 2018, the Company estimated its share of the GrowCo loss as accounted for under the equity method. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, Two Rivers 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. |
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 property and equipment: Asset Type Life in Years Sept 30, 2018 Dec 31, 2017 Office equipment, furniture 5 – 7 $ 12,000 $ 12,000 Computers 3 46,000 46,000 Vehicles 5 25,000 92,000 Farm equipment 7 – 10 147,000 244,000 Buildings 27.5 10,000 10,000 Website 3 7,000 7,000 Subtotal 247,000 411,000 Less: Accumulated depreciation (222,000 ) (251,000 ) Net book value $ 25,000 $ 160,000 |
Land | Land Land acquired for farming or water rights is recorded at cost. 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 |
Water Rights and Infrastructure | Water Rights and Infrastructure Management periodically evaluates the carrying value of its assets including water rights and infrastructure, and if the carrying value is in excess of fair market value, the Company will establish an impairment allowance. Currently, there is a $6,930,000 impairment reserve on the Company’s land and water shares. No amortization or depreciation is taken on the water rights. |
Intangibles | Intangibles Two Rivers recognizes the estimated fair value of water rights acquired by the Company’s purchase of stock in Huerfano Cucharas Irrigation Company (“HCIC”) and Orlando Reservoir No. 2 Company, LLC (“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. |
Revenue Recognition | Revenue Recognition 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 condensed consolidated financial statements. The assessments that are not eliminated are included in Other revenue. 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 | 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. |
Dam Demolition Expense | Dam Demolition Expense During the three months ended September 30, 2018 a court date has been set for a hearing of the State of Colorado’s legal action to compel the Company to demolish Cucharas #5 reservoir. A contingent liability, with an offsetting expense of $1,800,000 has been recognized. |
Net Income (Loss) Per Share | Net Income (Loss) per Share Basic net (loss) 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 2,425,000 options, and 17,536,958 warrants at September 30, 2018 and December 31, 2017, have an exercise price in excess of the Company’s closing price of $0.23/share as of September 28, 2018; therefore these shares have not been included in the determination of diluted earnings per share since, under ASC 260 they would anti-dilutive. If all convertible debt is converted into the Company’s common shares, there would be an additional 3,630,290 shares issued, using the Company’s closing price of $0.23/share as of September 28, 2018. Therefore, these additional shares are added to the basic shares for the nine months ended September 30, 2018. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) “ Income Statement – Reporting Comprehensive Income (Topic 220) In July 2017, FASB issued ASU “ Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows In March 2016, the FASB issued ASU 2016-09, “ Improvements to Employee Share-Based Compensation Accounting In February 2016, the FASB issued ASU 2016-02, “ Leases 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Noncontrolling Interest to Derecognized | . In Two Rivers case, the total amount of the noncontrolling interest to derecognized is as follows as of April 1, 2018: Entity April 1, 2018 GrowCo (1,230,000 ) GrowCo Partners 1, LLC 3,621,000 GCP Super Units, LLC 5,016,000 TR Cap 20150630 Distribution, LLC 497,000 TR Cap 20150930 Distribution, LLC 460,000 TR Cap 20151231 Distribution, LLC 495,000 Total $ 8,859,000 |
Schedule of Detail of Non-controlling Interest | Below is the detail of non-controlling interest shown on the condensed consolidated balance sheets. Entity Sept 30 2018 Dec 31 2017 TR Capital $ 20,482,000 $ 20,482,000 HCIC 1,386,000 1,388,000 F-1 29,000 29,000 F-2 162,000 162,000 DFP 452,000 452,000 GrowCo - (850,000 ) GrowCo Partners 1, LLC - 3,621,000 GCP Super Units, LLC - 5,016,000 TR Cap 20150630 Distribution, LLC - 497,000 TR Cap 20150930 Distribution, LLC - 460,000 TR Cap 20151231 Distribution, LLC - 495,000 Total $ 22,511,000 $ 31,752,000 |
Schedule of Property and Equipment | Below is a summary of property and equipment: Asset Type Life in Years Sept 30, 2018 Dec 31, 2017 Office equipment, furniture 5 – 7 $ 12,000 $ 12,000 Computers 3 46,000 46,000 Vehicles 5 25,000 92,000 Farm equipment 7 – 10 147,000 244,000 Buildings 27.5 10,000 10,000 Website 3 7,000 7,000 Subtotal 247,000 411,000 Less: Accumulated depreciation (222,000 ) (251,000 ) Net book value $ 25,000 $ 160,000 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | Below is a summary of the Company’s consolidated long term debt: September 30, 2018 December 31, 2017 Note Principal Balance Accrued Interest Discount Principal Balance Interest rate Security HCIC seller carry back $ 6,301,000 $ 552,000 $ - $ 6,301,000 6 % Shares in the Mutual Ditch Company CWCB 690,000 - - 748,000 2.5 % Certain Orlando and Farmland assets McFinney Agri-Finance 238,000 - - 441,000 6.8 % 2,579 acres of pasture land in Ellicott Colorado TR Note to GrowCo 390,000 - - - GrowCo $4M notes - - - 4,000,000 22.5 % Various land and water assets GrowCo $1.5M exchange note - - - 100,000 22.5 % Various land and water assets GrowCo $6M exchange note - - - 1,855,000 22.5 % GrowCo $7M exchange note - - - 3,132,000 10-22.5 % GrowCo $2M exchange note - - - 1,520,000 10-22.5 % Bridge loan Harding - - - 13,000 18 % None Powderhorn Note 338,000 - (48,000 ) - Third lien on Ellicott land Morning View LLC 105,000 4,000 (5,000 ) - Unsecured TURV Long Term NP 271,000 44,000 - 275,000 12.0 % Second lien on Ellicott land WRC Convertible NP 300,000 57,000 - 300,000 12.0 % Lien on water supply agreement WRC Butte Valley Land Notes 400,000 28,000 (1,000 ) - Butte Valley Land Equipment loans 57,000 2,000 - 122,000 5 - 8 % Equipment OID Black Mountain 107,000 - - 300,000 Investors Fiduciary LLC 400,000 12,000 - - - Shares of HCIC Total 9,597,000 $ 699,000 $ (54,000 ) 19,107,000 Less: note discounts (54,000 ) (450,000 ) Less: Current portion net of discount (8,400,000 ) (17,419,000 ) Long term portion net of discount $ 1,143,000 $ 1,238,000 Notes: (1) Prime rate + 1%, but not less than 6% (2) Prime rate + 1.5%, but not less than 6% |
Information on Business Segme_2
Information on Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results by Segment | Operating results for each of the segments of the Company are as follows (in thousands): Nine Months Ended Sept 30, 2018 Nine Months Ended Sept 30, 2017 Parent Farms Greenhouse Water Total Parent Farms Greenhouse Water Total Revenue $ 10 $ - $ - $ 12 $ 22 $ - $ - $ 2,865 $ 40 $ 2,905 Expenses Total Operating Expenses (886 ) - - (997 ) (1,883 ) (571 ) - (306 ) (667 ) (1,544 ) Total Other Income (Expense) 11,928 - - (2,209 ) 9,719 (41 ) - (1,689 ) (250 ) (1,980 ) Net (Loss) from Operations Before Income Taxes 11,052 - - (3,194 ) 7,858 (612 ) - 870 (877 ) (619 ) Income Taxes (Expense)/Credit - - - - - - - - - - Net (Loss) from Operations 11,052 - - (3,194 ) 7,858 (612 ) - 870 (877 ) (619 ) Net (Loss) from Discontinued Operations - - (810 ) - (810 ) - (1,174 ) - - (1,174 ) Preferred dividends (986 ) - - (16 ) (1,002 ) (1,480 ) - (394 ) (6 ) (1,880 ) Non-controlling interest - - - - - - - 540 (2 ) 538 Net (Loss) $ 10,066 $ - $ (810 ) $ (3,210 ) $ 6,046 $ (2,092 ) $ (1,174 ) $ 1,016 $ (885 ) $ (3,135 ) Segment Assets $ 10,746 $ - $ - $ 20,175 $ 30,921 $ 907 $ - $ 12,309 $ 34,265 $ 47,481 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities of Discontinued Operations and Income from Discontinued Operations | The DFP loss from discontinued operations presented in the statements of operations consist of the following for the nine months ended September 30, 2018 and September 30, 2017: Sept 30, 2018 Sept 30, 2017 Revenues $ - $ - Cost of goods sold - - General and administrative expenses - 508,000 Depreciation and amortization - 1,000 Interest - 41,000 Other (loss on disposal of assets and intangibles) - 624,000 Total $ - $ (1,174,000 ) The effect of deconsolidation created a one-time non-cash gain of $12,773,000 and a recognition of a loss from GrowCo discontinued operations of $810,000; broken down as follows: Sept 30, 2018 Sept 30, 2017 Revenues $ 52,000 $ - General and administrative expenses (89,000 ) - Depreciation and amortization (61,000 ) - Interest (1,092,000 ) - Non-controlling interest 380,000 - Total $ (810,000 ) $ - |
Organization and Business (Deta
Organization and Business (Details Narrative) | 1 Months Ended | ||||
May 31, 2014shares | Sep. 30, 2018ashares | Mar. 31, 2018shares | Dec. 31, 2017ashares | Aug. 01, 2014shares | |
Acres owned | 6,430 | 6,538 | |||
Sale of acres | 108 | ||||
Number of shares outstanding | shares | 34,847,967 | 32,749,920 | |||
GrowCo [Member] | |||||
Shares issued by subsidiary | shares | 20,000,000 | ||||
Shares reserved for issuance | shares | 10,000,000 | 10,000,000 | |||
Number of shares outstanding | shares | 34,343,000 | ||||
Shares outstanding, percentage | 29.12% | ||||
Cucharas River [Member] | |||||
Water asset area | 1,500 | ||||
Arkansas River [Member] | |||||
Water asset area | 14,000 | ||||
Colorado [Member] | |||||
Water asset area | 4,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Sep. 28, 2018 | Dec. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Promissory notes | $ 9,597,000 | $ 9,597,000 | $ 19,107,000 | ||||
Gain on deconsolidation | 12,773,000 | ||||||
Non controlling interest | 22,511,000 | 22,511,000 | $ 31,752,000 | ||||
Value of exchanged preferred units | $ 152,000 | ||||||
Conversion of units converted | $ 60,000 | ||||||
Impairment reserve land and water shares | 6,930,000 | 6,930,000 | |||||
Dam Demolition Expense | 1,800,000 | $ 1,800,000 | |||||
Stock Options [Member] | |||||||
Anti-dilutive shares | 2,425,000 | ||||||
Exercise price of options | $ 0.23 | ||||||
Warrants [Member] | |||||||
Anti-dilutive shares | 17,536,958 | ||||||
Warrants exercise price per share | $ 0.23 | ||||||
Convertible Debt [Member] | |||||||
Anti-dilutive shares | 3,630,290 | ||||||
Debt conversion price per share | $ 0.23 | ||||||
Minimum [Member] | |||||||
Useful life of assets | 3 years | ||||||
Maximum [Member] | |||||||
Useful life of assets | 27 years 6 months | ||||||
Deconsolidation Date As of April 1, 2018 [Member] | |||||||
Gain on deconsolidation | $ 12,773,000 | ||||||
Non controlling interest | 8,859,000 | 8,859,000 | |||||
Removal cost from assets and liabilities | 3,914,000 | ||||||
Removal cost liabilities over assets | 3,914,000 | ||||||
GrowCo [Member] | |||||||
Guaranteed debt amount | 4,000,000 | 4,000,000 | |||||
Debt collateral amount | 2,359,000 | 2,359,000 | |||||
Promissory notes | $ 2,115,000 | $ 2,115,000 | |||||
Debt interest rate | 50.00% | 50.00% | |||||
Debt collateral, percentage | 100.00% | 100.00% | |||||
Debt contingent liability | $ 2,359,000 | ||||||
Non controlling interest | $ (850,000) | ||||||
GrowCo [Member] | Deconsolidation Date As of April 1, 2018 [Member] | |||||||
Non controlling interest | $ (1,230,000) | $ (1,230,000) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Noncontrolling Interest to Derecognized (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Noncontrolling interest in subsidiary | $ 22,511 | $ 31,752 |
Deconsolidation Date As of April 1, 2018 [Member] | ||
Noncontrolling interest in subsidiary | 8,859 | |
GrowCo [Member] | ||
Noncontrolling interest in subsidiary | (850) | |
GrowCo [Member] | Deconsolidation Date As of April 1, 2018 [Member] | ||
Noncontrolling interest in subsidiary | (1,230) | |
GrowCo Partners 1, LLC [Member] | ||
Noncontrolling interest in subsidiary | 3,621 | |
GrowCo Partners 1, LLC [Member] | Deconsolidation Date As of April 1, 2018 [Member] | ||
Noncontrolling interest in subsidiary | 3,621 | |
GCP Super Units, LLC [Member] | ||
Noncontrolling interest in subsidiary | 5,016 | |
GCP Super Units, LLC [Member] | Deconsolidation Date As of April 1, 2018 [Member] | ||
Noncontrolling interest in subsidiary | 5,016 | |
TR Cap 20150630 Distribution, LLC [Member] | ||
Noncontrolling interest in subsidiary | 497 | |
TR Cap 20150630 Distribution, LLC [Member] | Deconsolidation Date As of April 1, 2018 [Member] | ||
Noncontrolling interest in subsidiary | 497 | |
TR Cap 20150930 Distribution, LLC [Member] | ||
Noncontrolling interest in subsidiary | 460 | |
TR Cap 20150930 Distribution, LLC [Member] | Deconsolidation Date As of April 1, 2018 [Member] | ||
Noncontrolling interest in subsidiary | 460 | |
TR Cap 20151231 Distribution, LLC [Member] | ||
Noncontrolling interest in subsidiary | $ 495 | |
TR Cap 20151231 Distribution, LLC [Member] | Deconsolidation Date As of April 1, 2018 [Member] | ||
Noncontrolling interest in subsidiary | $ 495 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Detail of Non-controlling Interest (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Noncontrolling interest in subsidiary | $ 22,511 | $ 31,752 |
TR Capital [Member] | ||
Noncontrolling interest in subsidiary | 20,482 | 20,482 |
HCIC [Member] | ||
Noncontrolling interest in subsidiary | 1,386 | 1,388 |
F-1 [Member] | ||
Noncontrolling interest in subsidiary | 29 | 29 |
F-2 [Member] | ||
Noncontrolling interest in subsidiary | 162 | 162 |
DFP [Member] | ||
Noncontrolling interest in subsidiary | 452 | 452 |
GrowCo [Member] | ||
Noncontrolling interest in subsidiary | (850) | |
GrowCo Partners 1, LLC [Member] | ||
Noncontrolling interest in subsidiary | 3,621 | |
GCP Super Units, LLC [Member] | ||
Noncontrolling interest in subsidiary | 5,016 | |
TR Cap 20150630 Distribution, LLC [Member] | ||
Noncontrolling interest in subsidiary | 497 | |
TR Cap 20150930 Distribution, LLC [Member] | ||
Noncontrolling interest in subsidiary | 460 | |
TR Cap 20151231 Distribution, LLC [Member] | ||
Noncontrolling interest in subsidiary | $ 495 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property, equipment and software, Subtotal | $ 247,000 | $ 411 |
Less: Accumulated Depreciation | (222) | (251) |
Property, equipment and software, Net book value | $ 25 | 160 |
Minimum [Member] | ||
Useful life of assets | 3 years | |
Maximum [Member] | ||
Useful life of assets | 27 years 6 months | |
Office Equipment and Furniture [Member] | ||
Property, equipment and software, Subtotal | $ 12 | 12 |
Office Equipment and Furniture [Member] | Minimum [Member] | ||
Useful life of assets | 5 years | |
Office Equipment and Furniture [Member] | Maximum [Member] | ||
Useful life of assets | 7 years | |
Computers [Member] | ||
Useful life of assets | 3 years | |
Property, equipment and software, Subtotal | $ 46 | 46 |
Vehicles [Member] | ||
Useful life of assets | 5 years | |
Property, equipment and software, Subtotal | $ 25 | 92 |
Farm Equipment [Member] | ||
Property, equipment and software, Subtotal | $ 147 | 244 |
Farm Equipment [Member] | Minimum [Member] | ||
Useful life of assets | 7 years | |
Farm Equipment [Member] | Maximum [Member] | ||
Useful life of assets | 10 years | |
Buildings [Member] | ||
Useful life of assets | 27 years 6 months | |
Property, equipment and software, Subtotal | $ 10 | 10 |
Website [Member] | ||
Useful life of assets | 3 years | |
Property, equipment and software, Subtotal | $ 7 | $ 7 |
Investments and Long-Lived As_2
Investments and Long-Lived Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Gain on disposal of assets | $ 37 | $ (72) | $ 114 | $ 9 |
Loss from sales of equipment | 42 | |||
Colorado [Member] | ||||
Gain on disposal of assets | 156 | |||
Land and Water [Member] | ||||
Impairment of long lived assets | $ 6,930 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | Jan. 19, 2018USD ($) | Sep. 30, 2018USD ($)a$ / sharesshares | Aug. 31, 2018shares | Sep. 30, 2018USD ($)a$ / sharesshares | Sep. 30, 2017USD ($) | Dec. 31, 2015USD ($)a | Jul. 23, 2018USD ($)$ / shares | Mar. 31, 2018shares | Dec. 31, 2017USD ($)a | Aug. 01, 2014shares |
Area of land | a | 6,430 | 6,430 | 6,538 | |||||||
Repayments of notes payable | $ 532,000 | $ 536,000 | ||||||||
Promissory note | $ 9,597,000 | 9,597,000 | $ 19,107,000 | |||||||
Number of common shares issued for note reduction, value | $ 100,000 | |||||||||
GrowCo [Member] | ||||||||||
Debt instrument interest rate | 50.00% | 50.00% | ||||||||
Promissory note | $ 2,115,000 | $ 2,115,000 | ||||||||
Guaranteed debt amount | 4,000,000 | 4,000,000 | ||||||||
Debt collateral amount | $ 2,359,000 | $ 2,359,000 | ||||||||
Debt collateral, percentage | 100.00% | 100.00% | ||||||||
Debt contingent liability | $ 2,359,000 | |||||||||
Shares available for issuance | shares | 10,000,000 | 10,000,000 | ||||||||
Powderhorn [Member] | ||||||||||
Number of shares issued during period | shares | 646,154 | 800,000 | 800,000 | |||||||
Shares available for issuance | shares | 646,154 | 646,154 | ||||||||
OID Black Mountain [Member] | ||||||||||
Number of common shares issued for note reduction | shares | 874,250 | |||||||||
Number of common shares issued for note reduction, value | $ 100,000 | |||||||||
Debt maturity description | It was originally due on October 26, 2017 but was extended to July 31, 2018. It has been further extended to September 30, 2018. | |||||||||
OID Black Mountain [Member] | October 2018 [Member] | ||||||||||
Number of shares issued during period | shares | 900,000 | |||||||||
Number of shares issued during period, value | $ 138,370 | |||||||||
Investors Fiduciary LLC [Member] | ||||||||||
Debt instrument interest rate | 20.00% | 20.00% | ||||||||
Drawn on note | $ 400,000 | |||||||||
Unencumbered shares | shares | 2,456.5 | |||||||||
Shares issued price per share | $ / shares | $ 0.14 | $ 0.14 | $ 0.117 | |||||||
Investors Fiduciary LLC [Member] | Maximum [Member] | ||||||||||
Bridge loan | $ 500,000 | |||||||||
HCIC Seller Carryback Note [Member] | ||||||||||
Debt instrument face amount | $ 6,301,000 | $ 6,301,000 | ||||||||
Debt instrument interest rate | 6.00% | |||||||||
Promissory note | $ 6,301,000 | $ 6,301,000 | $ 6,301,000 | |||||||
GrowCo $4 Notes [Member] | ||||||||||
Debt instrument face amount | $ 4,000,000 | |||||||||
Area of land | a | 40 | |||||||||
Debt instrument interest rate | 22.50% | |||||||||
Maturity due date | Apr. 1, 2020 | |||||||||
Repayments of notes payable | $ 4,000,000 | |||||||||
Blue & Green, LLC [Member] | ||||||||||
Promissory note | $ 2,115,000 | |||||||||
Interest on debt | $ 300,000 |
Notes Payable - Schedule of Lon
Notes Payable - Schedule of Long Term Debt (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Principal balance | $ 9,597,000 | $ 19,107,000 |
Accrued Interest | 699,000 | |
Less: Note discounts | (54,000) | (450,000) |
Less: Current portion net of discount | (8,400,000) | (17,419,000) |
Long term portion net of discount | 1,143,000 | 1,238,000 |
McFinney Agri Finance [Member] | ||
Principal balance | 238,000 | $ 441,000 |
Accrued Interest | ||
Interest Rate | 6.80% | |
Security | 2,579 acres of pasture land in Ellicott Colorado | 2579 acres of pasture land in Ellicott Colorado |
Less: Note discounts | ||
Morning View LLC [Member] | ||
Principal balance | 105,000 | |
Accrued Interest | $ 4,000 | |
Security | Unsecured | Unsecured |
Less: Note discounts | $ (5,000) | |
HCIC Seller Carryback Note [Member] | ||
Principal balance | 6,301,000 | $ 6,301,000 |
Accrued Interest | $ 552,000 | |
Interest Rate | 6.00% | |
Security | Shares in the Mutual Ditch Company | Shares in the Mutual Ditch Company |
Less: Note discounts | ||
CWCB Note [Member] | ||
Principal balance | 690,000 | $ 748,000 |
Accrued Interest | ||
Interest Rate | 2.50% | |
Security | Certain Orlando and Farmland assets | Certain Orlando and Farmland Assets |
Less: Note discounts | ||
TR Note to GrowCo [Member] | ||
Principal balance | 390,000 | |
Accrued Interest | ||
Interest Rate | ||
Less: Note discounts | ||
GrowCo $4M Notes [Member] | ||
Principal balance | $ 4,000,000 | |
Accrued Interest | ||
Interest Rate | 22.50% | |
Security | Various land and water assets | Various land and water assets |
Less: Note discounts | ||
GrowCo $1.5M Exchange Note [Member] | ||
Principal balance | $ 100,000 | |
Accrued Interest | ||
Interest Rate | 22.50% | |
Security | Various land and water assets | Various land and water assets |
Less: Note discounts | ||
GrowCo $6M Exchange Note [Member] | ||
Principal balance | $ 1,855,000 | |
Accrued Interest | ||
Interest Rate | 22.50% | |
Less: Note discounts | ||
GrowCo $7M Exchange Note [Member] | ||
Principal balance | $ 3,132,000 | |
Accrued Interest | ||
Less: Note discounts | ||
GrowCo $7M Exchange Note [Member] | Minimum [Member] | ||
Interest Rate | 10.00% | |
GrowCo $7M Exchange Note [Member] | Maximum [Member] | ||
Interest Rate | 22.50% | |
GrowCo $2M Exchange Note [Member] | ||
Principal balance | $ 1,520,000 | |
Accrued Interest | ||
Less: Note discounts | ||
GrowCo $2M Exchange Note [Member] | Minimum [Member] | ||
Interest Rate | 10.00% | |
GrowCo $2M Exchange Note [Member] | Maximum [Member] | ||
Interest Rate | 22.50% | |
Bridge loan Harding [Member] | ||
Principal balance | $ 13,000 | |
Accrued Interest | ||
Interest Rate | 18.00% | |
Less: Note discounts | ||
Powderhorn Note [Member] | ||
Principal balance | 338,000 | |
Accrued Interest | ||
Security | Third lien on Ellicott land | Third lien on Ellicott land |
Less: Note discounts | $ (48,000) | |
TURV Long Term NP [Member] | ||
Principal balance | 271,000 | $ 275,000 |
Accrued Interest | $ 44,000 | |
Interest Rate | 12.00% | |
Security | Second lien on Ellicott land | Second lien on Ellicott land |
Less: Note discounts | ||
WRC Convertible NP [Member] | ||
Principal balance | 300,000 | $ 300,000 |
Accrued Interest | $ 57,000 | |
Interest Rate | 12.00% | |
Security | Lien on water supply agreement | Lien on water supply agreement |
Less: Note discounts | ||
WRC Butte Valley Land Notes [Member] | ||
Principal balance | 400,000 | |
Accrued Interest | $ 28,000 | |
Security | Butte Valley Land | Butte Valley Land |
Less: Note discounts | $ (1,000) | |
Equipment Loans [Member] | ||
Principal balance | 57,000 | $ 122,000 |
Accrued Interest | $ 2,000 | |
Security | Equipment | Equipment |
Less: Note discounts | ||
Equipment Loans [Member] | Minimum [Member] | ||
Interest Rate | 5.00% | |
Equipment Loans [Member] | Maximum [Member] | ||
Interest Rate | 8.00% | |
ODI Black Mountain [Member] | ||
Principal balance | 107,000 | $ 300,000 |
Accrued Interest | ||
Interest Rate | ||
Less: Note discounts | ||
Investors Fiduciary LLC [Member] | ||
Principal balance | 400,000 | |
Accrued Interest | $ 12,000 | |
Interest Rate | ||
Security | Shares of HCIC | Shares of HCIC |
Less: Note discounts | ||
Bridge Loan Harding [Member] | ||
Security | None | None |
Notes Payable - Schedule of L_2
Notes Payable - Schedule of Long Term Debt (Details) (Parenthetical) - a | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Acres of pasture land | 6,430 | 6,538 |
Variable rate description | Prime rate | Prime rate |
Spread on variable rate | 1.00% | 1.50% |
Maximum [Member] | ||
Spread on variable rate | 6.00% | 6.00% |
McFinney Agri-Finance Note [Member] | ||
Acres of pasture land | 2,579 | 2,579 |
Information on Business Segme_3
Information on Business Segments - Schedule of Operating Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenue | $ 5 | $ 1,022 | $ 22 | $ 2,905 | |
Total Operating Expenses | (1,883) | (1,544) | |||
Total Other Income (Expense) | 9,719 | (1,980) | |||
Net (Loss) from Operations Before Income Taxes | (2,649) | (579) | 7,858 | (619) | |
Income Taxes (Expense)/Credit | |||||
Net (Loss) from Operations | (2,649) | (579) | 7,858 | (619) | |
Net (Loss) from Discontinued Operations | (92) | (810) | (1,174) | ||
Preferred dividends | (6) | (686) | (1,002) | (1,880) | |
Non-controlling interest | 395 | 538 | |||
Net (Loss) | (2,655) | (962) | 6,046 | (3,135) | $ 12,924 |
Segment Assets | 30,921 | 47,481 | 30,921 | 47,481 | $ 38,152 |
Parent (Two Rivers) [Member] | |||||
Revenue | 10 | ||||
Total Operating Expenses | (886) | (571) | |||
Total Other Income (Expense) | 11,928 | (41) | |||
Net (Loss) from Operations Before Income Taxes | 11,052 | (612) | |||
Income Taxes (Expense)/Credit | |||||
Net (Loss) from Operations | 11,052 | (612) | |||
Net (Loss) from Discontinued Operations | |||||
Preferred dividends | (986) | (1,480) | |||
Non-controlling interest | |||||
Net (Loss) | 10,066 | (2,092) | |||
Segment Assets | 10,746 | 907 | 10,746 | 907 | |
Farms (DFP) [Member] | |||||
Revenue | |||||
Total Operating Expenses | |||||
Total Other Income (Expense) | |||||
Net (Loss) from Operations Before Income Taxes | |||||
Income Taxes (Expense)/Credit | |||||
Net (Loss) from Operations | |||||
Net (Loss) from Discontinued Operations | (1,174) | ||||
Preferred dividends | |||||
Non-controlling interest | |||||
Net (Loss) | (1,174) | ||||
Segment Assets | |||||
Greenhouse (GrowCo., GCP1, GCP2) [Member] | |||||
Revenue | 2,865 | ||||
Total Operating Expenses | (306) | ||||
Total Other Income (Expense) | (1,689) | ||||
Net (Loss) from Operations Before Income Taxes | 870 | ||||
Income Taxes (Expense)/Credit | |||||
Net (Loss) from Operations | 870 | ||||
Net (Loss) from Discontinued Operations | (810) | ||||
Preferred dividends | (394) | ||||
Non-controlling interest | 540 | ||||
Net (Loss) | (810) | 1,016 | |||
Segment Assets | 12,309 | 12,309 | |||
Water (TR Cap) [Member] | |||||
Revenue | 12 | 40 | |||
Total Operating Expenses | (997) | (667) | |||
Total Other Income (Expense) | (2,209) | (250) | |||
Net (Loss) from Operations Before Income Taxes | (3,194) | (877) | |||
Income Taxes (Expense)/Credit | |||||
Net (Loss) from Operations | (3,194) | (877) | |||
Net (Loss) from Discontinued Operations | |||||
Preferred dividends | (16) | (6) | |||
Non-controlling interest | (2) | ||||
Net (Loss) | (1,410) | (885) | |||
Segment Assets | $ 20,175 | $ 34,265 | $ 20,175 | $ 34,265 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Common Stock, shares authorized | 200,000,000 | 200,000,000 | |
Common Stock, par value | $ 0.001 | $ 0.001 | |
Common Stock, shares issued | 34,847,967 | 32,749,920 | |
Number of common shares issued for note reduction, value | $ 100 | ||
Shares issued for conversion | 14,840 | ||
Warrants [Member] | |||
Share based compensation shares granted | 1,541,380 | ||
Warrant expense | $ 30,000 | ||
Employees and Directors [Member] | |||
Stock based compensation | $ 1,190,000 | ||
Restricted Stock Units (RSUs) [Member] | |||
Number of restricted stock unit issued | 118,000 | ||
Spotfin Funding [Member] | |||
Number of shares issued for services | 1,090,957 | ||
Black Mountain [Member] | |||
Number of common shares issued for note reduction | 874,250 | ||
Number of common shares issued for note reduction, value | $ 100 |
Legal Proceedings (Details Narr
Legal Proceedings (Details Narrative) - USD ($) $ in Thousands | Apr. 03, 2018 | Aug. 08, 2017 | Mar. 31, 2018 | Mar. 31, 2016 | Sep. 30, 2018 |
Ryley Carlock & Applewhite [Member] | |||||
Legal fees | $ 139 | ||||
Accounts payable | $ 139 | ||||
Suncanna Lease Litigation [Member] | |||||
Lawsuit filing date | 08/31/2016 | ||||
Plaintiff name | Aaron Van Wingerden, owner of Suncanna | ||||
Defendants named | GrowCo, GrowCo Business Development, LLC, GCP1, GrowCo Funding, LLC., TR Capital, Two Rivers and certain current and former employees, and associates. | ||||
Domicile of litigation | Pueblo County Colorado District Court | ||||
Result of trial and status of litigation | On October 27, 2016, in a contempt of court hearing, a Pueblo County Colorado District Court judge ruled in favor of plaintiff Aaron Van Wingerden and against GCP1 in a matter regarding the prevention of Suncanna's access to GCP1's greenhouse prior to Suncanna vacating the premises on September 6, 2016. We believe that this ruling was in error and are appealing this decision. | ||||
Water Rights Litigation [Member] | |||||
Plaintiff name | State of Colorado (Office of the State Engineer and the local Division Engineer) | ||||
Damages sought | water rights and claims by the State concerning an existing dam in Huerfano County, Colorado, and a demand by the State to breach the dam structure. | ||||
State of Colorado Litigation [Member] | |||||
Legal fees | $ 100 | ||||
State of Colorado Litigation [Member] | Minimum [Member] | |||||
Loss contingency, damages sought, value | $ 1,800 | ||||
State of Colorado Litigation [Member] | Maximum [Member] | |||||
Loss contingency, damages sought, value | 2,200 | ||||
GCP1 [Member] | Lease Revenue [Member] | |||||
Write-off of receivables | $ 743 | ||||
GCP1 [Member] | Advances [Member] | |||||
Write-off of receivables | $ 587 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) $ in Thousands | Mar. 03, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Gross Proceeds from sale of land and water assets | $ 72 | $ 945 | |||
Gain on deconsolidation | 12,773 | ||||
Deconsolidation Date As of April 1, 2018 [Member] | |||||
Gain on deconsolidation | 12,773 | ||||
Discontinued Operations [Member] | |||||
Gross Proceeds from sale of land and water assets | $ 1,740 | ||||
Net proceeds from sale of land and water assets | $ 1,611 | ||||
Discontinued Operations [Member] | GrowCo [Member] | Deconsolidation Date As of April 1, 2018 [Member] | |||||
Net proceeds from sale of land and water assets | |||||
Gain on deconsolidation | 12,773 | ||||
Loss from discontinued operation | $ 810 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities of Discontinued Operations and Income from Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total | $ (92) | $ (810) | $ (1,174) | |
Dionisio Farms and Produce [Member] | ||||
Revenues | ||||
Cost of goods sold | ||||
General and administrative expenses | 508 | |||
Depreciation and amortization | 1 | |||
Interest | 41 | |||
Other (loss on disposal of assets and intangibles) | 624 | |||
Total | (1,174) | |||
GrowCo Related Entities [Member] | ||||
Revenues | 52 | |||
Cost of goods sold | ||||
General and administrative expenses | (89) | |||
Depreciation and amortization | (61) | |||
Interest | (1,092) | |||
Other (loss on disposal of assets and intangibles) | ||||
Non-controlling interest | 380 | |||
Total | $ (810) |
Contingent Liability (Details N
Contingent Liability (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Promissory notes | $ 9,597,000 | $ 19,107,000 |
GrowCo [Member] | ||
Guaranteed debt amount | 4,000,000 | |
Debt collateral amount | 2,359,000 | |
Promissory notes | $ 2,115,000 | |
Debt interest rate | 50.00% | |
Debt collateral, percentage | 100.00% | |
Debt contingent liability | $ 2,359,000 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net Profit (Loss) Attributable to Common Shareholders | $ (2,655) | $ (962) | $ 6,046 | $ (3,135) | $ 12,924 |
Gain on consolidation | 12,773 | ||||
Net Cash Used in Operating Activities | 824 | $ 2,459 | |||
Working capital deficit | 17,673 | 17,673 | |||
Accumulated deficit | 91,122 | 91,122 | $ 97,168 | ||
Additional debt | $ 1,426 | $ 1,426 |
Related Party (Details Narrativ
Related Party (Details Narrative) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Related Party Transactions [Abstract] | |
Related party transaction |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Nov. 05, 2018 | Oct. 03, 2018 |
Black Mountain [Member] | ||
Stock issued during period, shares restricted | 6,800,000 | |
Powderhorn [Member] | ||
Number of shares issued during period | 800,000 | |
Number of shares issued during period, value | $ 63,000 |