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| [X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|-----|-----------------------------------------------------------------------------------------|

| Colorado                                                     |                                                                   | 13-4228144                         |
|--------------------------------------------------------------|------------------------------------------------------------------------|------------------------------------|
| State or other jurisdiction of incorporation or organization |                                                                   | I.R.S. Employer Identification No. |
|                                                         | 2000 South Colorado Boulevard, Annex Ste 200, Denver, CO 80222         |                               |
|                                                         | (Address of principal executive offices) (Zip Code)                    |                               |
|                                                         |                                                                   |                               |
|                                                         | Registrant’s telephone number, including area code:(303)222-1000 |                               |
|                                                         |                                                                   |                               |

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| Large accelerated filer                                            | [___] |   | Accelerated filer         | [___] |
|--------------------------------------------------------------------|-------|--------|---------------------------|-------|
| Non-accelerated filer(Do not check if a smaller reporting company) | [___] |   | Smaller reporting company | [X]   |

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TABLE OF CONTENTS

|                                    |                                                                                                         | Page   |
|-----------------------------------------|--------------------------------------------------------------------------------------------------------------|--------|
| Item 1                                  | Financial Statements (Unaudited)                                                                             |   |
|                                    | Consolidated Balance SheetsSeptember 30, 2010 and  December 31, 2009                               | 1      |
|                                    | Consolidated Statements of Operations – Three months and nine months ended September 30, 2010 and 2009 | 2      |
|                                    | Consolidated Statements of Cash Flows –Nine months ended September 30, 2010 and 2009                   | 3      |
|                                    | Consolidated Statement of Changes in Stockholders’ Equity – September 30, 2010                   | 5      |
|                                    | Notes to Consolidated Financial Statements                                                                   | 6      |
| Item 2                                  | Management’s Discussion and Analysis of Financial Conditionand Results of Operations                   | 31     |
| Item 3                                  | Quantitative and Qualitative Disclosures About Market Risk                                                   | 36     |
| Item 4                                  | Controls and Procedures                                                                                      | 36     |
|  PART II – OTHER INFORMATION |                                                                                                         |
| Item 1                                  | Legal Proceedings                                                                                            | 37     |
| Item 2                                  | Unregistered Sales of Equity Securities and Use of Proceeds.                                                 | 38     |
| Item 3                                  | Defaults Upon Senior Securities – Not Applicable                                                       |   |
| Item 4                                  | Rescinded and Removed                                                                                        |   |
| Item 5                                  | Other Information – Not Applicable                                                                     | 38     |
| Item 6                                  | Exhibits                                                                                                     |   |
|                                    | SIGNATURES                                                                                                   | 40     |

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Consolidated Balance Sheets  (In Thousands)

|                                                                                                                     |   | September 30, 2010 |   |   | December 31, 2009 |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
| ASSETS:                                                                                                                  |   | Unaudited          |   |   | Audited           |   |
| Current Assets:                                                                                                          |   |               |   |   |              |   |
| Cash and cash equivalents                                                                                                |   | $                  | 1,140  |   |              | $      | 616 |   |
| Note receivable - Aegis/Grizzle (Notes 2, 4)                                                                             |   |               | -      |   |              |   | 295 |   |
| Accrued interest receivable                                                                                              |   |               | 1      |   |              |   | 4 |   |
| Advances and accounts receivable                                                                                         |   |               | 43     |   |              |   | 1 |   |
| Income taxes receivable (Notes 2, 8)                                                                                     |   |               | -      |   |              |   | 489 |   |
| Deposits                                                                                                                 |   |               | 51     |   |              |   | 202 |   |
| Prepaid expenses                                                                                                         |   |               | 12     |   |              |   | 16 |   |
| Assets held for sale                                                                                                     |   |               | -      |   |              |   | 134 |   |
| Total Current Assets                                                                                                     |   |               | 1,247  |   |              |   | 1,757 |   |
|   Property, equipment and software, net (Note 2)                                                               |   |               | 174    |   |              |   | 94 |   |
| Other Assets                                                                                                             |   |               |   |   |              |   |   |   |
| Investment in Boston Property all units sold as of Sept 30,2010, net of impairment of $889 on December 31, 2009 (Note 3) |   |               | -      |   |              |   | 2,073 |   |
| Land (Notes 2, 3)                                                                                                        |   |               | 1,294  |   |              |   | 991 |   |
| Water rights and infrastructure (Notes 2, 3)                                                                             |   |               | 24,196 |   |              |   | 2,267 |   |
| Options on real estate (Notes 2, 3)                                                                                      |   |               | -      |   |              |   | 2,586 |   |
| Dam Construction (Note 3)                                                                                                |   |               | 474    |   |              |   | 163 |   |
| Farm product                                                                                                             |   |               | 144    |   |              |   | - |   |
| Assets held for sale (Notes 2, 4)                                                                                        |   |               | 671    |   |              |   | 1,274 |   |
| Other assets                                                                                                             |   |               | 5      |   |              |   | - |   |
| Total Other Assets                                                                                                       |   |               | 26,784 |   |              |   | 9,354 |   |
| TOTAL ASSETS                                                                                                             |   | $                  | 28,205 |   |              | $      | 11,205 |   |
|                                                                                                                     |   |               |   |   |              |   |   |   |
| LIABILITIES & STOCKHOLDERS' EQUITY:                                                                                  |   |               |   |   |              |   |   |   |
| Current Liabilities:                                                                                                     |   |               |   |   |              |   |   |   |
| Accounts payable                                                                                                         |   | $                  | 215    |   |              | $      | 281 |   |
| Short term borrowings  (Note 5)                                                                                |   |               | -      |   |              |   | 950 |   |
| Deposits held                                                                                                            |   |               | -      |   |              |   | 30 |   |
| Accrued liabilities                                                                                                      |   |               | 90     |   |              |   | 5 |   |
| Total Current Liabilities                                                                                                |   |               | 305    |   |              |   | 1,266 |   |
| Notes Payable - Long Term (Note 5)                                                                                       |   |               | 9,126  |   |              |   | 2,175 |   |
| Total Liabilities                                                                                                        |   |               | 9,431  |   |              |   | 3,441 |   |
| Commitments and Contingencies (Notes 1, 2, 3, 4, 5, 7, 8, 9, 10, 12, 13)                                                 |   |               |   |   |              |   |   |   |
| Stockholders' Equity:                                                                                                    |   |               |   |   |              |   |   |   |
| Common stock, $0.001 par value, 100,000,000 shares                                                                       |   |               | 20     |   |              |   | 9 |   |
| authorized, 19,609,583 and  9,214,583 shares issued                                                            |   |               |   |   |              |   |   |   |
| and outstanding at Sep 30, 2010 and Dec 31, 2009, respectively                                                           |   |               |   |   |              |   |   |   |
| Additional paid-in capital                                                                                               |   |               | 24,257 |   |              |   | 9,200 |   |
| Accumulated (deficit)                                                                                                    |   |               | (7,618 | )      |              |   | (4,120 | ) |
| Total Two Rivers Water Company Shareholders' Equity                                                                      |   |               | 16,659 |   |              |   | 5,089 |   |
| Noncontrolling interest in subsidiary (Note 2)                                                                           |   |               | 2,115  |   |              |   | 2,675 |   |
|         Total Stockholders' Equity                                               |   |               | 18,774 |   |              |   | 7,764 |   |
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                                                                             |   | $                  | 28,205 |   |              | $      | 11,205 |   |

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Table of Contents

Consolidated Statements of Operations  (In Thousands)

|                                                                                                                                                                                                                     |   | Three Months Ended |   |   | Nine Months Ended |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                     |   | 30-Sep-10          |   |   | 30-Sep-09         |   |   | 30-Sep-10 |   |   | 30-Sep-09 |   |
| Revenue                                                                                                                                                                                                                  |   |               |   |   |              |   |   |   |   |   |   |   |
| Loan Fees and real estate income                                                                                                                                                                                         |   | $                  | -      |   |              |   | 11 |   |   | $ | 2 |   |   | $ | 11 |   |
| Interest revenues                                                                                                                                                                                                        |   |               | 4      |   |              |   | (5 | ) |   |   | 13 |   |   |   | 40 |   |
| Farm Revenue                                                                                                                                                                                                             |   |               | 16     |   |              |   | - |   |   |   | 16 |   |   |   | -  |   |
| Water Revenue                                                                                                                                                                                                            |   |               | 14     |   |              |   | - |   |   |   | 14 |   |   |   | - |   |
| Member assessments                                                                                                                                                                                                       |   |               | -      |   |              |   | - |   |   |   | 53 |   |   |   | -  |   |
| Total Revenue                                                                                                                                                                                                            |   |               | 34     |   |              |   | 6 |   |   |   | 98 |   |   |   | 51 |   |
| Direct cost of revenue                                                                                                                                                                                                   |   |               | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Gross Profit                                                                                                                                                                                                             |   |               | 34     |   |              |   | 6 |   |   |   | 98 |   |   |   | 51 |   |
| Operating Expenses:                                                                                                                                                                                                      |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|     General and administrative                                                                                                                                                                       |   |               | 800    |   |              |   | 769 |   |   |   | 2,475 |   |   |   | 958 |   |
|     Depreciation and amortization                                                                                                                                                                    |   |               | 8      |   |              |   | (5 | ) |   |   | 21 |   |   |   | 1 |   |
|         Total operating expenses                                                                                                                                                 |   |               | 808    |   |              |   | 764 |   |   |   | 2,496 |   |   |   | 959 |   |
| (Loss) from operations                                                                                                                                                                                                   |   |               | (774   | )      |              |   | (758 | ) |   |   | (2,398 | ) |   |   | (908 | ) |
| Other income (expense):                                                                                                                                                                                                  |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    Gain (loss) on sale of investments                                                                                                                                                                     |   |               | -      |   |              |   | 107 |   |   |   | 41 |   |   |   | 38 |   |
| Gain(loss) from previous non-controlling interest                                                                                                                                                                        |   |               | (273   | )      |              |   |   |   |   |   |   |   |   |   |   |   |
|    Interest income                                                                                                                                                                                        |   |               | -      |   |              |   | 29 |   |   |   | - |   |   |   | 33 |   |
|    Interest (expense)                                                                                                                                                                                     |   |               | (109   | )      |              |   | (3 | ) |   |   | (283 | ) |   |   | (13 | ) |
| Other income (expense)                                                                                                                                                                                                   |   |               | (37    | )      |              |   | 0 |   |   |   | (125 | ) |   |   | - |   |
|    Total other income (expense)                                                                                                                                                                           |   |               | (419   | )      |              |   | 133 |   |   |   | (367 | ) |   |   | 58 |   |
| Net (Loss) from continuing operations before taxes                                                                                                                                                                       |   |               | (1,193 | )      |              |   | (625 | ) |   |   | (2,765 | ) |   |   | (850 | ) |
|                                                                                                                                                                                                                     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit (Note 8)                                                                                                                                                                                              |   |               | -      |   |              |   | 214 |   |   |   | - |   |   |   | 290 |   |
| Net (Loss) from continuing operations                                                                                                                                                                                    |   |               | (1,193 | )      |              |   | (411 | ) |   |   | (2,765 | ) |   |   | (560 | ) |
|                                                                                                                                                                                                                     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued Operations (Note 10)                                                                                                                                                                                        |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations of discontinued real estate and mortgage business (including loss on disposal of real estate of $81 and a  $57 gain for nine months ending Sept 30, 2010 and Sept 30, 2009, respectively) |   |               | (150   | )      |              |   | (423 | ) |   |   | (686 | ) |   |   | (1,333 | ) |
| Income tax benefit                                                                                                                                                                                                       |   |               | -      |   |              |   | 92 |   |   |   | - |   |   |   | 220 |   |
| (Loss) on discontinued operations                                                                                                                                                                                        |   |               | (150   | )      |              |   | (331 | ) |   |   | (686 | ) |   |   | (1,113 | ) |
| Net (Loss)                                                                                                                                                                                                               |   |               | (1,343 | )      |              |   | (742 | ) |   |   | (3,451 | ) |   |   | (1,673 | ) |
| Net loss (income) attributable to the noncontrolling interest (Note 2)                                                                                                                                                   |   |               | (9     | )      |              |   | - |   |   |   | (9 | ) |   |   | - |   |
|                                                                                                                                                                                                                     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net (Loss) attributable to Two Rivers Water Company                                                                                                                                                                      |   | $                  | (1,352 | )      |              |   | (742 | ) |   | $ | (3,460 | ) |   | $ | (1,673 | ) |
|                                                                                                                                                                                                                     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) Per Share - Basic:                                                                                                                                                                                                |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) from continuing operations                                                                                                                                                                                        |   |               | (0.08  | )      |              |   | (0.05 | ) |   |   | (0.19 | ) |   |   | (0.06 | ) |
| (Loss) from discontinued operations                                                                                                                                                                                      |   |               | (0.01  | )      |              |   | (0.03 | ) |   |   | (0.05 | ) |   |   | (0.12 | ) |
| Total                                                                                                                                                                                                                    |   |               | (0.09  | )      |              |   | (0.08 | ) |   |   | (0.24 | ) |   |   | (0.19 | ) |
| Weighted Average Shares Outstanding:                                                                                                                                                                                     |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    Basic                                                                                                                                                                                                  |   |               | 15,522 |   |              |   | 8,881 |   |   |   | 14,387 |   |   |   | 8,948 |   |

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Table of Contents

Consolidated Statements of Cash Flows (In Thousands)

|                                                                                    |   | For the nine months ended Sept 30, |   |
|-----------------------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                                    |   | 2010                               |   |   | 2009 |   |
| Net (Loss)                                                                              |   | $                                  | (3,451 | ) |   | $ | (1,673 | ) |
| Adjustments to reconcile net income or (loss) to net cash used in operating activities: |   |                               |   |   |   |
| Depreciation (including discontinued operations)                                        |   |                               | 49     |   |   |   | 59 |   |
| (Decrease) in bad debt allowance on note receivables                                    |   |                               | -      |   |   |   | (478 | ) |
| Legendary Investment sale and write off                                                 |   |                               | 49     |   |   |   | - |   |
| Increase in reserves and impairments                                                    |   |                               | 463    |   |   |   | 741 |   |
| Loss from REOs sold (discontinued operations)                                           |   |                               | 44     |   |   |   | 8 |   |
| (Gain) Loss on sale of investments and assets held                                      |   |                               | (40    | ) |   |   | 38 |   |
| Decrease in assets held for sale                                                        |   |                               | 134    |   |   |   | - |   |
| Loss on sale of Boston property                                                         |   |                               | 38     |   |   |   | - |   |
| Stock based compensation and warrant extension                                          |   |                               | 990    |   |   |   | 93 |   |
| Changes in operating assets and liabilities:                                            |   |                               |   |   |   |   |   |   |
| (Decrease) in deferred revenue                                                          |   |                               | -      |   |   |   | (6 | ) |
| (Increase) in accounts receivable                                                       |   |                               | (39    | ) |   |   | (4 | ) |
| Decrease in prepaid expenses and other assets                                           |   |                               | -      |   |   |   | (125 | ) |
| Decrease in mortgage loans receivable                                                   |   |                               | -      |   |   |   | 1,048 |   |
| (See Supplemental Information below)                                                    |   |                               |   |   |   |   |   |   |
| Decrease (increase) in income tax receivable                                            |   |                               | 489    |   |   |   | (510 | ) |
| Decrease in accrued interest and expenses                                               |   |                               | -      |   |   |   | 1 |   |
| (Decrease) in accounts payable                                                          |   |                               | (66    | ) |   |   | (118 | ) |
| Increase (Decrease) in accrued liabilities and other                                    |   |                               | 55     |   |   |   | (88 | ) |
| Net Cash (Used in) Operating Activities                                                 |   |                               | (1,285 | ) |   |   | (1,014 | ) |
|                                                                                    |   |                               |   |   |   |   |   |   |
| Cash Flows from Investing Activities:                                                   |   |                               |   |   |   |   |   |   |
| Investments (increased)/decreased                                                       |   |                               |   |   |   |   |   |   |
| Boston real estate and other residential real estate                                    |   |                               | 1,925  |   |   |   | (250 | ) |
| Marketable securities purchased                                                         |   |                               | -      |   |   |   | (124,357 | ) |
| Proceeds from marketable securities sold                                                |   |                               | -      |   |   |   | 124,207 |   |
| Proceeds from REO properties sold                                                       |   |                               | 498    |   |   |   | 2,109 |   |
| Proceeds from asset held for sale                                                       |   |                               | 176    |   |   |   | 270 |   |
| Purchase of property, equipment and software                                            |   |                               | (131   | ) |   |   | - |   |
| Proceeds from fixed assets sold                                                         |   |                               | 18     |   |   |   | (122 | ) |
| Other assets                                                                            |   |                               | -      |   |   |   | 3 |   |
| Purchase of land, water shares, infrastructure and options                              |   |                               | (8,423 | ) |   |   | (2,561 | ) |
| Dam construction                                                                        |   |                               | (310   | ) |   |   | - |   |
| Farm product                                                                            |   |                               | (144   | ) |   |   | - |   |
| Net Cash Provided by/(Used in) Investing Activities                                     |   |                               | (6,391 | ) |   |   | (701 | ) |
|                                                                                    |   |                               |   |   |   |   |   |   |
| Cash Flows from Financing Activities:                                                   |   |                               |   |   |   |   |   |   |
| Increase in long term borrowings                                                        |   |                               | 6,951  |   |   |   | 2,175 |   |
| Private placement - net of placement costs                                              |   |                               | 2,204  |   |   |   | (250 | ) |
| (Decrease) in short term borrowings                                                     |   |                               | (950   | ) |   |   | - |   |
| Retirement of Common Stock                                                              |   |                               | (5     | ) |   |   | (79 | ) |
| Net Cash Provided by Financing Activities                                               |   |                               | 8,200  |   |   |   | 1,846 |   |
| Net (Decrease) in Cash & Cash Equivalents                                           |   |                               | 524    |   |   |   | 131 |   |
| Beginning Cash & Cash Equivalents                                                   |   |                               | 616    |   |   |   | 874 |   |
| Ending Cash & Cash Equivalents                                                      |   | $                                  | 1,140  |   |   | $ | 1,005 |   |

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Table of Contents

| Continued from previous page                                  |   |   |   |   |   |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Supplemental Disclosure of Cash Flow Information              |   |   |   |   |   |   |
| Non cash settlement on short term mortgages and transfers     |   | $      | -      |   |   | $      | 3,864 |   |
| Non-controlling interest                                      |   | $      | 9      |   |   | $      | - |   |
| Cash paid for Interest                                        |   | $      | 88     |   |   | $      | 46 |   |
| Cash received from Income tax refunds                         |   | $      | 501    |   |   | $      | 310 |   |
| Common stock issued for land and water share purchase         |   | $      | 500    |   |   | $      | - |   |
| Conversion of note receivable for loan on land                |   | $      | 295    |   |   | $      | - |   |
| Increase in Water Shares due to acquisition costs             |   | $      | 174    |   |   | $      | - |   |
| Increase in note receivable from sale of Legendary Investment |   | $      | 9      |   |   | $      | - |   |
| Stock issued for non-controlling interest in HCIC             |   | $      | 11,379 |   |   | $      | - |   |

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Table of Contents

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

|                                                 |   |         |   |   |       |   |   |          |   |   | Accumulated |   |   |        |   |   |          |   |   |   |   |
|------------------------------------------------------|--------|--------------|--------|--------|------------|--------|--------|---------------|--------|--------|-------------|--------|--------|-------------|--------|--------|---------------|--------|--------|--------|--------|
|                                                 |   | Voting       |   |   | Additional |   |   | Other         |   |   | Non-        |   |   |        |   |   |          |   |
|                                                 |   | Common Stock |   |   | Paid-in    |   |   | Comprehensive |   |   | Controlling |   |   | Accumulated |   |   | Stockholders' |   |
|                                                 |   | Shares       |   |   | Amount     |   |   | Capital       |   |   | Income      |   |   | Interest    |   |   | (Deficit)     |   |   | Equity |   |
| Balances, December 31, 2007                          |   |         | 8,924  |   |       | $      | 9      |          |   | $      | 8,758       |   |   | $           | 1,578  |   |          | $      | -      |   |   | $ | (1,377 | ) |   | $ | 8,968 |   |
|                                                 |   |         |   |   |       |   |   |          |   |   |        |   |   |        |   |   |          |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                           |   |         | -      |   |       |   | -      |          |   |   | -           |   |   |        | -      |   |          |   | -      |   |   |   | 182 |   |   |   | 182 |   |
| Options exercised                                    |   |         | 100    |   |       |   | -      |          |   |   | 5           |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 5 |   |
| Change in unrealized gains                           |   |         | -      |   |       |   | -      |          |   |   | -           |   |   |        | (1,578 | )      |          |   | -      |   |   |   | - |   |   |   | (1,578 | ) |
| Stock-based compensation expense                     |   |         | -      |   |       |   | -      |          |   |   | 114         |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 114 |   |
| Retirement of Stock- open market purchases           |   |         | (5     | )      |       |   | -      |          |   |   | (4          | )      |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | (4 | ) |
| Balances, December 31, 2008                          |   |         | 9,019  |   |       |   | 9      |          |   |   | 8,873       |   |   |        | -      |   |          |   | -      |   |   |   | (1,195 | ) |   |   | 7,687 |   |
|                                                 |   |         |   |   |       |   |   |          |   |   |        |   |   |        |   |   |          |   |   |   |   |   |   |   |   |   |   |   |
| Net (Loss)                                           |   |         | -      |   |       |   | -      |          |   |   | -           |   |   |        | -      |   |          |   | (175   | )      |   |   | (2,925 | ) |   |   | (3,100 | ) |
| Stock-based compensation expense                     |   |         | -      |   |       |   | -      |          |   |   | 118         |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 118 |   |
| Retirement of Stock - open market purchases          |   |         | (155   | )      |       |   | -      |          |   |   | (94         | )      |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | (94 | ) |
| Stock purchased through private placement            |   |         | 150    |   |       |   | -      |          |   |   | 150         |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 150 |   |
| Options exercised                                    |   |         | 200    |   |       |   | -      |          |   |   | 10          |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 10 |   |
| Recovered BPZ stock                                  |   |         | -      |   |       |   | -      |          |   |   | 143         |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 143 |   |
| Non-controlling interest in a subsidiary             |   |         | -      |   |       |   | -      |          |   |   | -           |   |   |        | -      |   |          |   | 2,850  |   |   |   | - |   |   |   | 2,850 |   |
| Balances, December 31, 2009                          |   |         | 9,214  |   |       |   | 9      |          |   |   | 9,200       |   |   |        | -      |   |          |   | 2,675  |   |   |   | (4,120 | ) |   |   | 7,764 |   |
|                                                 |   |         |   |   |       |   |   |          |   |   |        |   |   |        |   |   |          |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss)                                    |   |         | -      |   |       |   | -      |          |   |   | -           |   |   |        | -      |   |          |   | 9      |   |   |   | (3,460 | ) |   |   | (3,451 | ) |
| Stock-based compensation expense                     |   |         | -      |   |       |   | -      |          |   |   | 940         |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 940 |   |
| Warrant extension expense                            |   |         | -      |   |       |   | -      |          |   |   | 50          |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 50 |   |
| Stock issued in exchange for land and water shares   |   |         | 500    |   |       |   | 1      |          |   |   | 499         |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 500 |   |
| Stock purchased through private placement            |   |         | 2,400  |   |       |   | 3      |          |   |   | 2,397       |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | 2,400 |   |
| Direct cost of private placement                     |   |         | -      |   |       |   | -      |          |   |   | (196        | )      |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | (196 | ) |
| Stock issued in merger with TRB                      |   |         | 7,500  |   |       |   | 7      |          |   |   | 11,372      |   |   |        | -      |   |          |   | 2,160  |   |   |   | - |   |   |   | 13,539 |   |
| Non-controlling interest in subsidiaries elimination |   |         | -      |   |       |   | -      |          |   |   | -           |   |   |        | -      |   |          |   | (2,729 | )      |   |   | (38 | ) |   |   | (2,767 | ) |
| Retirement of Stock - open market purchases          |   |         | (5     | )      |       |   | -      |          |   |   | (5          | )      |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | (5 | ) |
| Balances, September 30, 2010                         |   |         | 19,609 |   |       | $      | 20     |          |   | $      | 24,257      |   |   | $           | -      |   |          | $      | 2,115  |   |   | $ | (7,618 | ) |   | $ | 18,774 |   |

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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| As of March 2, 2010 (the date HCIC acquired majority interest in the Mutual Ditch Company) |   | $ | 24,196,000 |   |
|--------------------------------------------------------------------------------------------|--------|---|------------|--------|
| As of September 30, 2010                                                                   |   | $ | 26,217,000 |   |

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| (in thousands)       |   | Nine months ending September 30, 2010 |   |   | Year ending December 31, 2009 |   |
|----------------------|--------|---------------------------------------|--------|--------|-------------------------------|--------|
| HCIC Holdings, LLC   |   | $                                     | -      |   |                          |   | (175 | ) |
| Mutual Ditch Company |   |                                  | 9      |   |                          |   | - |   |
| Total                |   | $                                     | 9      |   |                          |   | (175 | ) |

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| Part 1—Real estate owned at end of period (in thousands)    |    |                                  | Part 2—Rental income (in thousands) |   |
|-------------------------------------------------------------------|---------|---------------------------------------|-------------------------------------------|--------|
| Column A—List classification of property as indicated below |    | Column B—Amount of encumbrances |                                      |   | Column C—Initial cost to company |   |   | Column D—Cost of improvements, etc. |   |   | Column E—Amount at which carried at close of period |   |   | Column F—Reserve for depreciation and impairments |   |   | Column G—Rents due and accrued at end of period |   |   | Column H—Total rental income applicable to period |   |   | Column I—Expended for interest, taxes, repairs and expenses |   |   | Column J—Net income applicable to period |   |
| Farms                                                             |    |                                  |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                       |    |                                  |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Arizona                                                           | $  |                                  |                                      |   |   | 113 |   |   |   | 3 |   |   |   | 115 |   |   |   | 72 |   |   |   | 0 |   |   |   | 10 |   |   |   | 4 |   |   |   | 6 |   |
| Colorado                                                          |    |                                  |                                      |   |   | 407 |   |   |   | 5 |   |   |   | 412 |   |   |   | 48 |   |   |   | 0 |   |   |   | 26 |   |   |   | 16 |   |   |   | 10 |   |
| Apartments and business                                           |    |                                  | 0                                         |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| Unimproved                                                        |    |                                  | 0                                         |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| VA                                                                |    |                                  | 0                                         |   |   |   | 123 |   |   |   | 0 |   |   |   | 123 |   |   |   | 93 |   |   |   | 0 |   |   |   | 0 |   |   |   | 1 |   |   |   | (1 | ) |
| CO                                                                |    |                                  | 600                                       |   |   |   | 1,294 |   |   |   | 0 |   |   |   | 1,294 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1 |   |   |   | (1 | ) |
|       Total                         |    |                                  | 600                                       |   |   |   | 1,937 |   |   |   | 7 |   |   |   | 1,934 |   |   |   | 213 |   |   |   | 0 |   |   |   | 37 |   |   |   | 23 |   |   |   | 15 |   |
| Rent from properties sold during period                           |    |                                  |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| AZ                                                                |    |                                  |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|       Total                         | $  |                                  | 600                                       |   |   |   | 1,937 |   |   |   | 7 |   |   |   | 1,944 |   |   |   | 213 |   |   |   | 0 |   |   |   | 37 |   |   |   | 23 |   |   |   | 15 |   |

| Real Estate Detail  (in thousands) |   | Boston Property |    |   | Other Real Estate Owned |   |   | Total  |   |
|----------------------------------------------|--------|-----------------|---------|--------|-------------------------|--------|--------|--------|--------|
| Beginning Balance: As of Dec 31, 2009        |   | $               | 2,073   |   |                    | $      | 2,033  |   |   | $ | 4,106 |   |
| Additions during the period:                 |   |            |    |   |                    |   |   |   |   |   |   |   |
| Acquisitions through foreclosure             |   |            |    |   |                    |   |   |   |   |   | - |   |
| Other acquisitions                           |   |            |    |   |                    |   | 482    |   |   |   | 482 |   |
| Improvements, etc.                           |   |            | 629     |   |                    |   | 13     |   |   |   | 642 |   |
| Cost of  real estate sold          |   |            | (2,295  | )      |                    |   | (753   | )      |   |   | (3,048 | ) |
| Impairments                                  |   |            | (407    | )      |                    |   | (41    | )      |   |   | (448 | ) |
| Other (describe) - depreciation              |   |            | -  |   |                    |   | (3     | )      |   |   | (3 | ) |
| Ending Balance, Sept 30,2010                 |   | $               | 0       |   |                    | $      | 1,731  |   |   | $ | 1,731 |   |

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| Asset Type                       |   | Life in Years |        |   | September 30, 2010 |   |    | December 31, 2009 |   |
|----------------------------------|--------|---------------|-------------|--------|--------------------|--------|---------|-------------------|--------|
| Office equipment & Furniture |   |          | 5 – 7 |   |               | $      | 86,000  |              |   | $ | 86,000 |   |
| Computers                        |   |          | 3           |   |               |   | 59,000  |              |   |   | 52,000 |   |
| Vehicles                         |   |          | 5           |   |               |   | 45,000  |              |   |   | - |   |
| Farm equipment                   |   |          | 7           |   |               |   | 38,000  |              |   |   | - |   |
| Mobile office                    |   |          | 10          |   |               |   | 10,000  |              |   |   | - |   |
| Irrigation system                |   |          | 10          |   |               |   | 31,000  |              |   |   | - |   |
| Website                          |   |          | 3           |   |               |   | 2,000   |              |   |   | 2,000 |   |
| Subtotal                         |   |          |        |   |               |   | 271,000 |              |   |   | 140,000 |   |
| Less Accumulated Depreciation    |   |          |        |   |               |   | 97,000  |              |   |   | 46,000 |   |
| Net Book Value                   |   |          |        |   |               | $      | 174,000 |              |   | $ | 94,000 |   |

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| Note From                 | Due                  |   | Principal Amount |    |   | 9/30/10 Balance |   | Annual Interest rate |   | Accrued Interest |   | Collateral |
|---------------------------|----------------------|--------|------------------|---------|--------|-----------------|--------|----------------------|--------|------------------|--------|------------|
| Short term home mortgages | Various and on-going |   | $                | 371,000 |   |            | $      | 371,000              |   | 9.95% to 14%     |   | $          | - |   | First mortgage |
| Less: Impairments         |                 |   |             |    |   |            |   | (139,000             | )      |             |   |       |   |   |   |
| Net Balance               |                 |   |             |    |   |            | $      | 232,000              |   |             |   |       |   |   |   |

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|                                              |   | Sept 30, 2010 |    |   | Dec 31, 2009 |   |
|---------------------------------------------------|--------|---------------|---------|--------|--------------|--------|
| Real estate owned                                 |   | $             | 650,000 |   |         |   | 1,395,000 |   |
| Allowance for:                                    |   |          |    |   |         |   |   |   |
| Real Estate  owned – depreciation |   |          | 36,000  |   |         |   | 40,000 |   |
| Real Estate owned – impairments             |   |          | 175,000 |   |         |   | 313,000 |   |
| Total                                             |   | $             | 439,000 |   |         |   | 1,042,000 |   |

|                          |   | Sept 30, 2010 |    |   | Dec 31, 2009 |   |
|-------------------------------|--------|---------------|---------|--------|--------------|--------|
| Mortgage receivables - net    |   | $             | 232,000 |   |         |   | 232,000 |   |
| Real estate owned – net |   |          | 439,000 |   |         |   | 1,042,000 |   |
| Total                         |   | $             | 671,000 |   |         |   | 1,274,000 |   |

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|                                                                          |                                                                      | For the nine months ended Sept 30, 2010                                   |
|-------------------------------------------------------------------------------|---------------------------------------------------------------------------|---------------------------------------------------------------------------|
|                                                                          |                                                                      | (In thousands)                                                            |
|                                                                          |                                                                      |                                                                      | Two Rivers Water Co. |   | Northsight, Inc. |   | Southie, LLC |   | Legendary Investment Group, LLC |   | TRWC |   | HCIC Holdings LLC |   | Two Rivers Farms |   | Two Rivers Energy |   | Two Rivers Water LLC |   | Mutual Ditch Company |
| Revenue                                                                       |                                                                      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Loan fees, interest and other                                             | $                                                                         |          13 |   |               - |   |             - |   |                - |   |             - |   |            - |   |             - |   |             - |   |            - |   |              - |
|                                                                          | Assessments                                                               |                                                                      |             - |   |               - |   |             - |   |                - |   |            - |   |            - |   |             - |   |             - |   |          - |   |         463 |
|                                                                          | Farm Revenue                                                              |                                                                      |             - |   | - |   | - |   | - |   | - |   | - |   |           18 |   | - |   |          - |   | - |
|                                                                          | Water Revenue                                                             |                                                                      |          14 |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |
|                                                                          | Other & misc.                                                         |                                                                      |             - |   |               - |   |             - |   |                - |   |          - |   |            - |   |             - |   |             - |   |          - |   |             - |
|                                                                          | Less: Cost of Services                                                    |                                                                      |             - |   |               - |   |             - |   |                - |   |           - |   |            - |   |          - |   |             - |   |          - |   |             - |
| Gross Profit                                                                  |                                                                      |          27                  |   |               - |   |             - |   |                - |   |           - |   |             - |   |           18 |   |            - |   |          - |   |         463 |
|                                                                          |                                                                      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Operating Expenses                                                      |                                                                      |      1,896                                       |   |               - |   |             - |   |                - |   |        29 |   |         495 |   |         105 |   |           15 |   |       10 |   |        365 |
|                                                                          |                                                                      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Other Income/(Expense)                                                  |                                                                      |         (76)                      |   |               - |   |             - |   |                - |   |       - |   |    (281) |   |           (1) |   |             - |   | - |   |              - |
| Net (Loss) Income from continuing operations before income taxes              |                                                                      | (1,945)                                                                   |   |               - |   |             - |   |                - |   |    (29) |   |       (776) |   |         (88) |   |         (15) |   |    (10) |   |           98 |
| Income Taxes (Expense)/Credit                                                 |             - |                                                                      |               - |   |             - |   |                - |   |            - |   |            - |   |            - |   |            - |   |         - |   |             - |
|                                                                          |                                                                      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss) from continuing operations                                  |                                                                      |     (1,945)                                           |   |               - |   |             - |   |                - |   |         (29) |   |       (776) |   |         (88) |   |          (15) |   |    (10) |   |              98 |
|                                                                          |                                                                      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued operations:                                                      |                                                                      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) gain from operations of discontinued real estate and mortgage business |                                                                      |             - |   |          (108) |   |    (636) |   |              59 |   |           - |   |            - |   |            - |   |            - |   |         - |   |            - |
|                                                                          | Income tax benefit                                                        |                                                                      |             - |   |               - |   |             - |   |                - |   |            - |   |            - |   |            - |   |            - |   |           - |   |             - |
| Loss on discontinued operations                                               |             - |                                                                      |          (108) |   |        (636) |   |              59 |   |                - |   |                - |   |                - |   |                - |   |           - |   |                - |
|                                                                          |                                                                      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling interest                                                      |                                                                      | -                                                                    |   | -  |   | -  |   | -  |   | -  |   |            - |   |           - |   |            - |   |         - |   |            (9) |
|                                                                          |                                                                      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (Loss) Income                                                             | $                                                                         | (1,945)                                                                   |   |          (108) |   |   (636) |   |              59 |   |     (29) |   |      (776) |   |         (88) |   |        (15) |   |     (10) |   |          88 |
|                                                                          |                                                                      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment assets                                                                | $                                                                         |    14,887                                                  |   |            95 |   |         419 |   |                - |   |           5 |   |   11,999 |   |        242 |   |           1 |   | 26 |   |         531 |

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|                                                                          |                                                          |                                                                      | For the nine months ended Sept 30, 2009                                               |                                                                                  |
|-------------------------------------------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------------------|---------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                                                                          |                                                          |                                                                      | (In thousands)                                                                        |                                                                                  |
|                                                                          |                                                          |                                                                      | Two Rivers Water Co                                                                   |                                                                                  | Northsight, Inc. |   | Southie, LLC |   | Legendary Investment Group, LLC |   | Two Rivers Water Co |   | HCIC Holdings LLC |
| Revenue                                                                       |                                                          |                                                                      |                                                                                  |                                                                                  |   |   |   |   |   |   |   |   |
|                                                                          | Loan fees, interest and other                                 | $                                                                         |          52                              |                                                                                  |               - |   |             - |   |               - |   | - |   | - |
|                                                                          |                                                          |                                                                      |                                                                                  |                                                                                  |   |   |   |   |   |   |   |   |   |
| Total Operating Expenses                                                      |                                                          |         728                       |                                                                                  |               - |   |             - |   |               - |   | 21 |   | 209 |
|                                                                          |                                                          |                                                                      |                                                                                  |                                                                                  |             - |   |   |   |   |   |   |   |   |
| Total Other Income/(Expense)                                                  |                                                          |          55                  |                                                                                  |               - |   |             - |   |               - |   | -  |   | -  |
| Net (Loss) Income from continuing operations before income taxes              |                                                          |   (621)                                                         |                                                                                  |               - |   |             - |   |               - |   | (21) |   |    (209) |
| Income Taxes (Expense)/Credit                                                 |         205           |                                                                      |               - |                                                                                  |             - |   |               - |   | 8 |   | 77 |
|                                                                          |                                                          |                                                                      |                                                                                  |                                                                                  |   |   |   |   |   |   |   |   |   |
| Net Income (Loss) from continuing operations                                  |                                                          |    (416)                                                   |                                                                                  |               - |   |             - |   |               - |   |         (13) |   |     (132) |
|                                                                          |                                                          |                                                                      |                                                                                  |                                                                                  |   |   |   |   |   |   |   |   |   |
| Discontinued operations:                                                      |                                                          |                                                                      |                                                                                  |                                                                                  |   |   |   |   |   |   |   |   |
| (Loss) gain from operations of discontinued real estate and mortgage business |                                                          |             - |                                                                                  |          (341)                           |   |     (955) |   |            (36) |   | - |   | - |
|                                                                          | Income tax benefit                                            |                                                                      |             -             |                                                                                  |            98 |   |         109 |   |             13 |   |   |   |   |
| Loss on discontinued operations                                               |           - |                                                                      |          (243)                           |                                                                                  |      (846) |   |            (23) |   |             - |   |             - |
|                                                                          |                                                          |                                                                      |                                                                                  |                                                                                  |   |   |   |   |   |   |   |   |   |
| Non-controlling interest                                                      |                                                          |          -                   |                                                                                  |               - |   |             - |   |               - |   |   |   |   |
|                                                                          |                                                          |                                                                      |                                                                                  |                                                                                  |   |   |   |   |   |   |   |   |   |
| Net (Loss) Income                                                             | $                                                             |    (416)                                                   |                                                                                  |          (243)                           |   |    (846) |   |            (23) |   |  (13) |   |    (132) |
|                                                                          |                                                          |                                                                      |                                                                                  |                                                                                  |   |   |   |   |   |   |   |   |   |
| Segment assets                                                                | $                                                             |   2,275                                                         |                                                                                  |           131                       |   |      4,235 |   |             31 |   | 13 |   | 5,700 |

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|                                     |   | Shares |       |   | Weighted AverageExercise Price |   |
|------------------------------------------|--------|--------|------------|--------|--------------------------------|--------|
| Outstanding,  January 1, 2009  |   |   | 3,941,510  |   |                           | $      | 1.33 |   |
| Granted                                  |   |   | -          |   |                           |   | - |   |
| Cancelled                                |   |   | (110,000   | )      |                           | $      | 2.00 |   |
| Expired                                  |   |   | -          |   |                           |   | - |   |
| Exercised                                |   |   | (200,000   | )      |                           | $      | 0.05 |   |
| Outstanding, January 1, 2010             |   |   | 3,631,510  |   |                           | $      | 1.38 |   |
| Granted                                  |   |   | -          |   |                           |   | - |   |
| Cancelled                                |   |   | (1,905,948 | )      |                           | $      | 1.41 |   |
| Expired                                  |   |   | -          |   |                           |   | - |   |
| Exercised                                |   |   | -          |   |                           |   | - |   |
| Outstanding, September 30, 2010          |   |   | 1,725,562  |   |                           | $      | 1.36 |   |
| Options Exercisable , September 30, 2010 |   |   | 1,725,562  |   |                           | $      | 1.36 |   |

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|                                     |   | Shares |     |   | Weighted AverageExercise Price |   |
|------------------------------------------|--------|--------|----------|--------|--------------------------------|--------|
| Outstanding, January 1, 2009             |   |   | 582,777  |   |                           | $      | 0.50 |   |
| Granted                                  |   |   | -        |   |                           |   | - |   |
| Cancelled                                |   |   | (562,777 | )      |                           | $      | 0.50 |   |
| Expired                                  |   |   | -        |   |                           |   | - |   |
| Exercised                                |   |   | -        |   |                           |   | - |   |
| Outstanding,  January 1, 2010  |   |   | 20,000   |   |                           | $      | 0.50 |   |
| Granted                                  |   |   | 200,000  |   |                           | $      | 0.50 |   |
| Cancelled                                |   |   | -        |   |                           |   | - |   |
| Expired                                  |   |   | -        |   |                           |   | - |   |
| Exercised                                |   |   | -        |   |                           |   | - |   |
| Outstanding, September 30, 2010          |   |   | 220,000  |   |                           | $      | 0.50 |   |
| Options Exercisable , September 30, 2010 |   |   | 206,667  |   |                           | $      | 0.50 |   |

| Expected stock price volatility | 35%        |
|---------------------------------|------------|
| Risk-free interest rate         | 2.64%      |
| Expected option life (years)    | 3.3 to 5.2 |
| Expected annual dividend yield  | 0%         |

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|                                    |   | Shares |      |
|-----------------------------------------|--------|--------|-----------|
| Outstanding,  January 1, 2010 |   |   | -         |   |
| Granted                                 |   |   | 5,105,948 |   |
| Cancelled                               |   |   | -         |   |
| Expired                                 |   |   | -         |   |
| Exercised                               |   |   | -         |   |
| Outstanding, September 30, 2010         |   |   | 5,105,948 |   |
| RSUs Exercisable , September 30, 2010   |   |   | -         |   |

| Number of commonshares covered by warrants |      |   | Exercise Price |   | Expiration Date |
|--------------------------------------------|-----------|--------|----------------|--------|-----------------|
|                                       | 1,332,500 |   |           | $      | 4.00            |   | December 31, 2010 |
|                                       | 1,332,500 |   |           |   | 2.00            |   | December 31, 2010 |
|                                       | 150,000   |   |           |   | 1.00            |   | December 31, 2010 |
|                                       | 2,815,000 |   |           |   |            |   |   |

| Expected stock price volatility | 35%        |
|---------------------------------|------------|
| Risk-free interest rate         | 2.64%      |
| Expected option life (years)    | 3.3 to 5.2 |
| Expected annual dividend yield  | 0%         |

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| Federal Rate                  | 34.00%  |
|-------------------------------|---------|
| State Rate                    | 4.63%   |
| Federal benefit of State Rate | (1.57)% |
| Net Effective Rate            | 37.06%  |

| Loss reported on financials before taxes     |   | $      | (3,460 | )      |
|----------------------------------------------|--------|--------|--------|--------|
| Tax adjustments:                             |   |   |   |   |
| Non-deductible impairment expense            |   |   | 463    |   |
| Stock option and warrant expense             |   |   | 990    |   |
| Entertainment and other items                |   |   | 17     |   |
| Adjusted taxable loss                        |   |   | (1,990 | )      |
| Net Effective Rate                           |   |   | 37.06  | %      |
| Tax benefit from loss carryback              |   | $      | (737   | )      |
|                                         |   |   |   |   |
| Refund expected as of December 31, 2009      |   | $      | 489    |   |
| Refunds received                             |   |   | (489   | )      |
| Deferred tax asset carried forward from 2009 |   |   | 277    |   |
| Additional benefit from loss carryback above |   |   | 737    |   |
| Deferred tax asset valuation allowance       |   |   | (1,014 | )      |
| Tax receivable as of September 30, 2010      |   | $      | -      |   |

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| (in thousands)                                                                             |   | Sept 30, 2010 |   |   | Dec 31, 2009 |   |
|--------------------------------------------------------------------------------------------|--------|---------------|--------|--------|--------------|--------|
| Mortgages receivable                                                                       |   | $             | 371    |   |         | $      | 371 |   |
| Thomas Park project                                                                        |   |          | -      |   |         |   | 2,962 |   |
| Other real estate owned                                                                    |   |          | 650    |   |         |   | 1,529 |   |
| Subtotal                                                                                   |   |          | 1,021  |   |         |   | 4,862 |   |
| Less allowances and depreciation                                                           |   |          | (350   | )      |         |   | (1,381 | ) |
| Net book value of property to sell                                                         |   |          | 671    |   |         |   | 3,481 |   |
| Less amounts owed on real estate to be sold                                                |   |          | -      |   |         |   | (950 | ) |
| Net projected proceeds from mortgage receivables, Thomas Park, and other real estate owned |   | $             | 671    |   |         | $      | 2,531 |   |

| Period |   | Amount Due |   |
|--------|--------|------------|--------|
| 2010   |   | $          | 15,000 |   |
| 2011   |   | $          | 12,500 |   |

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| ·   | Awarded 1,582,140 additional RSUs to key employees and a retiring director. |
|--------------------|-----------------------------------------------------------------------------|

| ·   | Changed a 20,000 share stock option grant from Northsight Inc to Two Rivers. |
|--------------------|------------------------------------------------------------------------------|

| ·   | Increased the stock subject to the Company’s 2005 Stock Option Plan. |
|--------------------|----------------------------------------------------------------------------|

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ITEM 2. 

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| -   | Equity proceeds through private placements of Two Rivers securities; |
|---------------|----------------------------------------------------------------------|

| -   | Revenue generated from operations; |
|---------------|------------------------------------|

| -   | Loans and lines of credit; |
|---------------|----------------------------|

| -   | Sales of residential properties acquired through deed-in-lieu actions, and |
|---------------|----------------------------------------------------------------------------|

| -   | Proceeds from the exercise of legacy Navidec, Inc. options |
|---------------|------------------------------------------------------------|

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| Allowance for:                                    |   | Sept 30, 2010 |    |   | Dec 31, 2009 |   |
|---------------------------------------------------|--------|---------------|---------|--------|--------------|--------|
| Short Term Mortgages                              |   | $             | 139,000 |   |         |   | 139,000 |   |
| Boston Property – Thomas Park               |   |          | -       |   |         |   | 889,000 |   |
| Real Estate  owned – depreciation |   |          | 36,000  |   |         |   | 40,000 |   |
| Real Estate owned – impairments             |   |          | 175,000 |   |         |   | 313,000 |   |
| Total                                             |   | $             | 350,000 |   |         |   | 1,381,000 |   |

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ITEM 3.

ITEM 4.

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PART II.  OTHER INFORMATION

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| Number | Description |   |
|--------|-------------|--------|

| 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act     | Filed Herewith |
|------|----------------------------------------------------------------------------------------------------|----------------|
| 31.2 | Certification of Principal Financial Officer pursuant to the Section 302 of the Sarbanes-Oxley Act | Filed Herewith |
| 32.1 | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act     | Filed Herewith |
| 32.2 | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act     | Filed Herewith |

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SIGNATURES

|                                 | TWO RIVERS WATER COMPANY (Registrant)                     |
|--------------------------------------|----------------------------------------------------------------|
|   Dated: November 12, 2010 |   By: /s/ John McKowen                               |
|                                 | Chief  Executive Officer & Chairman of the Board |
|                                 | By: /s/ Wayne Harding                                          |
|                                 | Chief Financial Officer & Principal Accounting Officer     |

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