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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 420, Denver, CO 80222         |                                      |
|                                                         | (Address of principal executive offices) (Zip Code)                    |                                      |
|                                                         |                                                                   |                                      |
|                                                         | Registrant’s telephone number, including area code:(303)222-1000 |                                      |
|                                                         |                                                                   |                                      |
|                                                         | Securities registered pursuant to Section 12(b) of the Act:            |                                      |
| Title of each class registered                               |                                                                   | Name of each exchange on which registered |
| Not Applicable                                               |                                                                   | Not Applicable                            |
|                                                         | Securities registered pursuant to Section 12(g) of the Act:            |                                      |
|                                                         | Common Stock(Title of class)                                           |                                      |

| 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)                                                                                 |   |
|                                    | Condensed Consolidated Balance SheetsJune 30, 2011 and  December 31, 2010                              | 1      |
|                                    | Condensed Consolidated Statements of Operations – Three months and Six months ended June 30, 2011 and 2010 | 2      |
|                                    | Condensed Consolidated Statements of Cash Flows – Six months ended June 30, 2011 and 2010                  | 3      |
|                                    | Notes to Condensed Consolidated Financial Statements                                                             | 5      |
| Item 2                                  | Management’s Discussion and Analysis of Financial Conditionand Results of Operations                       | 17     |
| Item 3                                  | Quantitative and Qualitative Disclosures About Market Risk                                                       | 20     |
| Item 4                                  | Controls and Procedures                                                                                          | 21     |
|  PART II – OTHER INFORMATION |                                                                                                             |
| Item 1                                  | Legal Proceedings                                                                                                | 22     |
| Item 2                                  | Changes in Securities                                                                                            | 22     |
| Item 3                                  | Defaults Upon Senior Securities – Not Applicable                                                           | 22     |
| Item 4                                  | Removed and Reserved.                                                                                            | 22     |
| Item 5                                  | Other Information – Not Applicable                                                                         | 22     |
| Item 6                                  | Exhibits                                                                                                         | 23     |
|                                    | SIGNATURES                                                                                                       |   |

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Condensed Consolidated Balance Sheets  (In Thousands)

|                                                                                                                                                                        |   | June 30, 2011 |    |   | December 31, 2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
| ASSETS:                                                                                                                                                                     |   | Unaudited     |    |   |              |   |
| Current Assets:                                                                                                                                                             |   |          |    |   |              |   |
| Cash and cash equivalents                                                                                                                                                   |   | $             | 383     |   |              | $      | 645 |   |
| Accrued interest receivable                                                                                                                                                 |   |          | 1       |   |              |   | 3 |   |
| Advances and accounts receivable                                                                                                                                            |   |          | 70      |   |              |   | 38 |   |
| Farm product (Note 2)                                                                                                                                                       |   |          | 135     |   |              |   | - |   |
| Deposits                                                                                                                                                                    |   |          | 41      |   |              |   | - |   |
| Prepaid expenses                                                                                                                                                            |   |          | 161     |   |              |   | 13 |   |
| Total Current Assets                                                                                                                                                        |   |          | 791     |   |              |   | 699 |   |
|   Property, equipment and software, net                                                                                                                           |   |          | 956     |   |              |   | 156 |   |
| Other Assets                                                                                                                                                                |   |          |    |   |              |   |   |   |
| Prepaid Cost Offering                                                                                                                                                       |   |          | 195     |   |              |   | - |   |
| Land (Note 2)                                                                                                                                                               |   |          | 1,615   |   |              |   | 1,279 |   |
| Water rights and infrastructure (Note 2)                                                                                                                                    |   |          | 27,216  |   |              |   | 24,216 |   |
| Options on real estate and water shares (Note 2)                                                                                                                            |   |          | -       |   |              |   | 100 |   |
| Dam construction (Note 2)                                                                                                                                                   |   |          | 521     |   |              |   | 489 |   |
| Discontinued operations - assets held for sale (Notes 2, 6)                                                                                                                 |   |          | 103     |   |              |   | 259 |   |
| Total Other Assets                                                                                                                                                          |   |          | 29,650  |   |              |   | 26,343 |   |
| TOTAL ASSETS                                                                                                                                                                |   | $             | 31,397  |   |              | $      | 27,198 |   |
|                                                                                                                                                                        |   |          |    |   |              |   |   |   |
| LIABILITIES & STOCKHOLDERS' EQUITY:                                                                                                                                     |   |          |    |   |              |   |   |   |
| Current Liabilities:                                                                                                                                                        |   |          |    |   |              |   |   |   |
| Accounts payable                                                                                                                                                            |   | $             | 436     |   |              | $      | 463 |   |
| Current portion of notes payable (Note 3)                                                                                                                                   |   |          | 63      |   |              |   | - |   |
| Accrued liabilities                                                                                                                                                         |   |          | 268     |   |              |   | 114 |   |
| Total Current Liabilities                                                                                                                                                   |   |          | 767     |   |              |   | 577 |   |
| Notes Payable - Long Term (Note 3)                                                                                                                                          |   |          | 12,358  |   |              |   | 9,128 |   |
| Total Liabilities                                                                                                                                                           |   |          | 13,125  |   |              |   | 9,705 |   |
|                                                                                                                                                                        |   |          |    |   |              |   |   |   |
| Stockholders' Equity:                                                                                                                                                       |   |          |    |   |              |   |   |   |
| Common stock, $0.001 par value, 100,000,000 shares authorized, 22,325,114 and 19,782,916 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively |   |          | 22      |   |              |   | 20 |   |
| Additional paid-in capital                                                                                                                                                  |   |          | 33,155  |   |              |   | 28,949 |   |
| Accumulated (deficit)                                                                                                                                                       |   |          | (17,040 | )      |              |   | (13,587 | ) |
| Total Two Rivers Water Company Shareholders' Equity                                                                                                                         |   |          | 16,137  |   |              |   | 15,382 |   |
| Noncontrolling interest in subsidiary (Note 2)                                                                                                                              |   |          | 2,135   |   |              |   | 2,111 |   |
|         Total Stockholders' Equity                                                                                                  |   |          | 18,272  |   |              |   | 17,493 |   |
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                                                                                                                                |   | $             | 31,397  |   |              | $      | 27,198 |   |

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Condensed Consolidated Statements of Operations  (In Thousands)

|                                                                     |   | Three Months Ended |   |   | Six Months Ended |   |
|--------------------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                                     |   | June 30, 2011      |   |   | June 30, 2010    |   |   | June 30, 2011 |   |   | June 30, 2010 |   |
| Revenue                                                                  |   |               |   |   |             |   |   |   |   |   |   |   |
| Member assessments                                                       |   | $                  | 48     |   |             | $      | 35 |   |   | $ | 48 |   |   | $ | 53 |   |
|                                                                     |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     General and administrative                       |   |               | 1,773  |   |             |   | 957 |   |   |   | 2,836 |   |   |   | 1,675 |   |
|     Depreciation and amortization                    |   |               | 35     |   |             |   | 8 |   |   |   | 49 |   |   |   | 13 |   |
|         Total operating expenses |   |               | 1,808  |   |             |   | 965 |   |   |   | 2,885 |   |   |   | 1,688 |   |
| (Loss) from operations                                                   |   |               | (1,760 | )      |             |   | (930 | ) |   |   | (2,837 | ) |   |   | (1,635 | ) |
|                                                                     |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                                                   |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net interest expense                                                     |   |               | (215   | )      |             |   | (115 | ) |   |   | (383 | ) |   |   | (133 | ) |
| Gain (Loss) on extinguishment of notes payable                           |   |               | -      |   |             |   | - |   |   |   | (188 | ) |   |   | - |   |
| Other income (expense)                                                   |   |               | 1      |   |             |   | (39 | ) |   |   | 8 |   |   |   | (88 | ) |
|    Total other income (expense)                           |   |               | (214   | )      |             |   | (154 | ) |   |   | (563 | ) |   |   | (221 | ) |
| Net (Loss) from continuing operations before taxes                       |   |               | (1,974 | )      |             |   | (1,084 | ) |   |   | (3,400 | ) |   |   | (1,856 | ) |
| Income tax (provision) benefit                                           |   |               | -      |   |             |   | - |   |   |   | - |   |   |   | - |   |
| Net (Loss) from continuing operations                                    |   |               | (1,974 | )      |             |   | (1,084 | ) |   |   | (3,400 | ) |   |   | (1,856 | ) |
|                                                                     |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued Operations (Note 10)                                        |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations of discontinued real estate and mortgage business   |   |               | (9     | )      |             |   | (363 | ) |   |   | (31 | ) |   |   | (525 | ) |
| Income tax (provision) benefit                                           |   |               | -      |   |             |   | - |   |   |   | - |   |   |   | - |   |
| (Loss) on discontinued operations                                        |   |               | (9     | )      |             |   | (363 | ) |   |   | (31 | ) |   |   | (525 | ) |
| Net (Loss)                                                               |   |               | (1,983 | )      |             |   | (1,447 | ) |   |   | (3,431 | ) |   |   | (2,381 | ) |
| Net loss (income) attributable to the noncontrolling interest (Note 2)   |   |               | (24    | )      |             |   | 200 |   |   |   | (24 | ) |   |   | 273 |   |
| Net (Loss) attributable to Two Rivers Water Company                      |   | $                  | (2,007 | )      |             | $      | (1,247 | ) |   | $ | (3,455 | ) |   | $ | (2,108 | ) |
|                                                                     |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) Per Share - Basic and Dilutive:                                   |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) from continuing operations                                        |   |               | (0.09  | )      |             |   | (0.10 | ) |   |   | (0.16 | ) |   |   | (0.17 | ) |
| (Loss) from discontinued operations                                      |   |               | -      |   |             |   | (0.03 | ) |   |   | - |   |   |   | (0.05 | ) |
| Total                                                                    |   | $                  | (0.09  | )      |             | $      | (0.13 | ) |   | $ | (0.16 | ) |   | $ | (0.22 | ) |
|                                                                     |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Weighted Average Shares Outstanding:                                     |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|    Basic and Dilutive                                     |   |               | 22,054 |   |             |   | 11,267 |   |   |   | 21,054 |   |   |   | 10,700 |   |

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Condensed Consolidated Statements of Cash Flows (In Thousands)

|                                                                                      |   | For the six months ended June 30, |   |
|-------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                      |   | 2011                              |   |   | 2010 |   |
| Cash Flows from Operating Activities:                                                     |   |                              |   |   |   |   |
| Net (Loss)                                                                                |   | $                                 | (3,431 | ) |   | $ | (2,381 | ) |
| Adjustments to reconcile net income or (loss) to net cash (used in) operating activities: |   |                              |   |   |   |
| Depreciation (including discontinued operations)                                          |   |                              | 27     |   |   |   | 32 |   |
| Amortization of debt issuance costs and pre-paids                                         |   |                              | 114    |   |   |   | - |   |
| Legendary Investment sale and write off                                                   |   |                              | -      |   |   |   | 49 |   |
| Increase in reserves and impairments                                                      |   |                              | -      |   |   |   | 337 |   |
| Recapture of impairments from REOs sold                                                   |   |                              | -      |   |   |   | (75 | ) |
| Loss from REOs sold (discontinued operations)                                             |   |                              | -      |   |   |   | (17 | ) |
| (Gain) Loss on sale of investments and assets held                                        |   |                              | 27     |   |   |   | (40 | ) |
| Noncontrolling interest in loss                                                           |   |                              | -      |   |   |   | 273 |   |
| Loss on extinguishment of notes payables                                                  |   |                              | 188    |   |   |   | - |   |
| Stock based compensation and warrant expense                                              |   |                              | 1,456  |   |   |   | 630 |   |
| Stock for Services                                                                        |   |                              | 367    |   |   |   | - |   |
| Changes in operating assets and liabilities:                                              |   |                              |   |   |   |   |   |   |
| Decrease (increase) in deposits, prepaid expenses and other assets                        |   |                              | (177   | ) |   |   | 13 |   |
| Farm product                                                                              |   |                              | (135   | ) |   |   | (113 | ) |
| (Increase) in accounts receivable                                                         |   |                              | (32    | ) |   |   | (53 | ) |
| Decrease in income tax receivable                                                         |   |                              | -      |   |   |   | 62 |   |
| Decrease in L/T Mortgage                                                                  |   |                              | 129    |   |   |   | - |   |
| (Decrease) increase in accounts payable                                                   |   |                              | (27    | ) |   |   | 257 |   |
| Increase in accrued liabilities and other                                                 |   |                              | 156    |   |   |   | (6 | ) |
| Net Cash (Used in) Operating Activities                                                   |   |                              | (1,338 | ) |   |   | (1,032 | ) |
|                                                                                      |   |                              |   |   |   |   |   |   |
| Cash Flows from Investing Activities:                                                     |   |                              |   |   |   |   |   |   |
| Investments (increased)/decreased                                                         |   |                              |   |   |   |   |   |   |
| Boston real estate and other residential real estate                                      |   |                              | -      |   |   |   | (269 | ) |
| Proceeds from REO properties and other assets sold                                        |   |                              | -      |   |   |   | 498 |   |
| Proceeds from asset held for sale                                                         |   |                              | -      |   |   |   | 176 |   |
| Proceeds from fixed assets sold                                                           |   |                              | -      |   |   |   | 13 |   |
| Purchase of property, equipment and software                                              |   |                              | (707   | ) |   |   | (128 | ) |
| Purchase of land, water shares, infrastructure                                            |   |                              | (336   | ) |   |   | (5,939 | ) |
| Dam construction                                                                          |   |                              | (32    | ) |   |   | (273 | ) |
| Net Cash Provided by/(Used in) Investing Activities                                       |   |                              | (1,075 | ) |   |   | (5,922 | ) |
|                                                                                      |   |                              |   |   |   |   |   |   |
| Continued on next page                                                                    |   |                              |   |   |   |   |   |   |

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| Continued from previous page                                            |    |                                                                                                                                                    |   |   |    |                                                                                                                                                                |   |
|-------------------------------------------------------------------------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                    |    |                                                                                                                                                    |   |   |    |                                                                                                                                                                |   |
| Cash Flows from Financing Activities:                                   |    |                                                                                                                                                    |   |   |    |                                                                                                                                                                |   |
| Proceeds from issuance of convertible notes                             | $  |    2,000                                                                                                                                 |   |   |  $ |                        -                         |   |
| Payment of offering costs                                               |    |                  (219)                                             |   |   |    |                            - |   |
| Proceeds from financing                                                 |    |                          - |   |   |    |                            - |   |
| Payment on convertible notes                                            |    |                    (38)                                  |   |   |    |                            - |   |
| Payment on Note Payable                                                 |    |                   (100)                                       |   |   |    |                            - |   |
| Payment for settlement of note payable                                  |    |                   (105)                                       |   |   |    |                            - |   |
| Options and warrants exercised                                          |    |                      613                       |   |   |    |                            - |   |
| Increase in long term borrowings                                        |    |                          - |   |   |    |                     4,944                                       |   |
| Retirement of Common Stock                                              |    |                       -                   |   |   |    |                         (6)                 |   |
| Private placement - net of offering costs                               |    |                          - |   |   |    |                     1,620                                       |   |
| Net Cash Provided by Financing Activities                               |    |                   2,151                                       |   |   |    |                     6,558                                       |   |
| Net Increase in Cash & Cash Equivalents                             |    |                  (262)                                             |   |   |    |                     (396)                                       |   |
| Beginning Cash & Cash Equivalents                                   |    |                     645                             |   |   |    |                        616                       |   |
| Ending Cash & Cash Equivalents                                      | $  |       383                                                                                                                 |   |   | $  |       220                                                                                                                             |   |
|                                                                    |    |                                                                                                                                                    |   |   |    |                                                                                                                                                                |   |   |
| Supplemental Disclosure of Cash Flow Information                        |    |                                                                                                                                                    |   |   |    |                                                                                                                                                                |   |
| Non-controlling interest                                                | $  |                  24                                                |   |   | $  |      (345)                                                                                                                                 |   |
| Cash paid for Interest                                                  | $  | 242                                                                                                                                                     |   |   | $  |   78                                                                                                                                                      |   |
| Cash received from Income tax refunds                                   | $  |         -                                                                                                       |   |   | $  |    61                                                                                                                                                |   |
| Conversion of note receivable for loan on land                          | $  |    -                                                                                                                                     |   |   | $  | 295                                                                                                                                                                 |   |
| Common stock issued for land and water share purchase                   | $  |     -                                                                                                                               |   |   | $  |     500                                                                                                                                         |   |
| Increase in Water Shares due to acquisition costs                       | $  |    -                                                                                                                                     |   |   | $  |  174                                                                                                                                                           |   |
| Increase in note receivable from sale of Legendary Investment           | $  |     -                                                                                                                               |   |   | $  |    9                                                                                                                                                 |   |
| Common stock issued in conjunction with extinguishment of notes payable | $  |   1,500                                                                                                                                       |   |   | $  |    -                                                                                                                                                 |   |
| Acquisition of Orlando Reservoir for Seller financed note payable       | $  |  3,000                                                                                                                                             |   |   | $  |     -                                                                                                                                           |   |
| Equipment purchases financed                                            | $  |   120                                                                                                                                         |   |   | $  |     -                                                                                                                                           |   |

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|                                              |   | June 30, 2011 |   |   | Dec 31, 2010 |   |
|---------------------------------------------------|--------|---------------|--------|--------|--------------|--------|
| Real estate owned                                 |   | $             | -      |   |         |   | 123,000 |   |
| Allowance for:                                    |   |          |   |   |         |   |   |   |
| Real Estate  owned – depreciation |   |          | -      |   |         |   | - |   |
| Real Estate owned – impairments             |   |          | -      |   |         |   | 93,000 |   |
| Total                                             |   | $             | -      |   |         |   | 30,000 |   |

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| Note                           |   | June 30, 2011 principal balance |       |   | June 30, 2011 accrued interest |   |   | Interest rate |   | Security |
|--------------------------------|--------|---------------------------------|------------|--------|--------------------------------|--------|--------|---------------|--------|----------|
| Mutual Ditch seller carry back |   | $                               | 7,401,000  |   |                           | $      | -      |          |   |     | 6 | % | Shares in the Mutual Ditch Company |
| Orlando purchase               |   |                            | 2,900,000  |   |                           |   | 37,000 |          |   | Various  |   | Orlando assets |
| Convertible debt               |   |                            | 2,000,000  |   |                           |   | 25,000 |          |   |     | 5 | % | F-1 assets |
| Equipment loans                |   |                            | 119,000    |   |                           |   | -      |          |   |     | 5 - 8 | % | Specific equipment |
| Total                          |   | $                               | 12,420,000 |   |                           | $      | 62,000 |          |   |     |   |   |   |
|                           |   |                            |       |   |                           |   |   |          |   |     |   |   |   |

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|                                                                          | For the six months ended June 30, 2011 |   |   |   |   |   | For the six months ended June 30, 2010 |   |   |   |             |
|-------------------------------------------------------------------------------|----------------------------------------|--------|--------|--------|--------|--------|----------------------------------------|--------|--------|--------|------------------|
|                                                                          |                                   | Parent |   |   | Farms  |   |                                   | Water  |   |   | Discon-tinuedOps |   |   | Total |   |   | Parent |   |   | Farms |   |   | Water |   |   | Discon-tinuedOps |   |   | Total |   |
| Revenue                                                                       |                                   |   |   |   |   |   |                                   |   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assessments                                                                   |                                   | $      | -      |   |   |   | -                                      |   |   |   | 48               |   |   |   | - |   |   |   | 48 |   |   |   | - |   |   |   | - |   |   |   | 53 |   |   |   | - |   |   |   | 53 |   |
| Other & misc.                                                             |                                   |   | -      |   |   |   | -                                      |   |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Gross Profit                                                                  |                                   |   | -      |   |   |   | -                                      |   |   |   | 48               |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 53 |   |   |   | - |   |   |   | 53 |   |
|                                                                          |                                   |   |   |   |   |   |                                   |   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Operating Expenses                                                      |                                   |   | (2,409 | )      |   |   | (248                                   | )      |   |   | (228             | ) |   |   | - |   |   |   | (2,885 | ) |   |   | (1,266 | ) |   |   | (23 | ) |   |   | (399 | ) |   |   | - |   |   |   | (1,688 | ) |
| Total Other Income/(Expense)                                                  |                                   |   | (37    | )      |   |   | (100                                   | )      |   |   | (426             | ) |   |   | - |   |   |   | (563 | ) |   |   | (49 | ) |   |   | 1 |   |   |   | (173 | ) |   |   | - |   |   |   | (221 | ) |
| Net (Loss) Income from continuing operations before income taxes              |                                   |   | (2,446 | )      |   |   | (348                                   | )      |   |   | (606             | ) |   |   | - |   |   |   | (3,400 | ) |   |   | (1,315 | ) |   |   | (22 | ) |   |   | (519 | ) |   |   | - |   |   |   | (1,856 | ) |
| Income Taxes (Expense)/Credit                                                 |                                   |   | -      |   |   |   | -                                      |   |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                          |                                   |   |   |   |   |   |                                   |   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss) from continuing operations                                  |                                   |   | (2,446 | )      |   |   | (348                                   | )      |   |   | (606             | ) |   |   | - |   |   |   | (3,400 | ) |   |   | (1,315 | ) |   |   | (22 | ) |   |   | (519 | ) |   |   | - |   |   |   | (1,856 | ) |
|                                                                          |                                   |   |   |   |   |   |                                   |   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued operations:                                                      |                                   |   |   |   |   |   |                                   |   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) gain from operations of discontinued real estate and mortgage business |                                   |   | -      |   |   |   | -                                      |   |   |   | -                |   |   |   | (31 | ) |   |   | (31 | ) |   |   | 11 |   |   |   | - |   |   |   | - |   |   |   | (536 | ) |   |   | (525 | ) |
| Income tax benefit                                                            |                                   |   | -      |   |   |   | -                                      |   |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Loss on discontinued operations                                               |                                   |   | -      |   |   |   | -                                      |   |   |   | -                |   |   |   | (31 | ) |   |   | (31 | ) |   |   | 11 |   |   |   | - |   |   |   | - |   |   |   | (536 | ) |   |   | (525 | ) |
|                                                                          |                                   |   |   |   |   |   |                                   |   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling interest                                                      |                                   |   | -      |   |   |   | -                                      |   |   |   | (24              | ) |   |   | - |   |   |   | (24 | ) |   |   | - |   |   |   | - |   |   |   | 273 |   |   |   | - |   |   |   | 273 |   |
|                                                                          |                                   |   |   |   |   |   |                                   |   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (Loss) Income                                                             |                                   | $      | (2,446 | )      |   |   | (348                                   | )      |   |   | (630             | ) |   |   | (31 | ) |   |   | (3,455 | ) |   |   | (1,304 | ) |   |   | (22 | ) |   |   | (246 | ) |   |   | (536 | ) |   |   | (2,108 | ) |
|                                                                          |                                   |   |   |   |   |   |                                   |   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment assets                                                                |                                   | $      | 888    |   |   |   | 1,002                                  |   |   |   | 29,497           |   |   |   | 9 |   |   |   | 31,397 |   |   |   | 827 |   |   |   | 208 |   |   |   | 13,161 |   |   |   | 2,496 |   |   |   | 16,692 |   |

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|                                |   | Shares |      |   | Weighted AverageExercise Price |   |
|-------------------------------------|--------|--------|-----------|--------|--------------------------------|--------|
| Outstanding, December 31, 2010      |   |   | 1,745,562 |   |                           | $      | 1.37 |   |
| Granted                             |   |   | 293,333   |   |                           | $      | 1.49 |   |
| Cancelled                           |   |   | -         |   |                           |   | - |   |
| Expired                             |   |   | -         |   |                           |   | - |   |
| Exercised                           |   |   | 452,362   |   |                           | $      | 1.25 |   |
| Outstanding, June 30, 2011          |   |   | 1,586,533 |   |                           | $      | 1.42 |   |
| Options Exercisable , June 30, 2011 |   |   | 1,526,533 |   |                           | $      | 1.37 |   |

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|                                    |   | Shares |      |   | Exercise Price |   |
|-----------------------------------------|--------|--------|-----------|--------|----------------|--------|
| Outstanding,  January 1, 2010 |   |   | -         |   |           |   |   |
| Granted                                 |   |   | 5,713,088 |   |           | $      | - |   |
| Cancelled                               |   |   | -         |   |           |   |   |   |
| Expired                                 |   |   | -         |   |           |   |   |   |
| Exercised                               |   |   | -         |   |           |   |   |   |
| Outstanding, December 31, 2010          |   |   | 5,713,088 |   |           |   |   |   |
| Granted                                 |   |   | 50,000    |   |           |   |   |   |
| Cancelled                               |   |   | -         |   |           |   |   |   |
| Expired                                 |   |   | -         |   |           |   |   |   |
| Exercised                               |   |   | 1,147,614 |   |           | $      | - |   |
| Outstanding, June 30, 2011              |   |   | 4,615,474 |   |           | $      | - |   |
| RSUs Exercisable , June 30, 2011        |   |   | -         |   |           | $      | -  |   |

| (in thousands)                                                           |   | June 30, 2011 |   |   | Dec 31, 2010 |   |
|--------------------------------------------------------------------------|--------|---------------|--------|--------|--------------|--------|
| Mortgages receivable                                                     |   | $             | 247    |   |         |   | 373 |   |
| Other real estate owned                                                  |   |          | -      |   |         |   | 123 |   |
| Subtotal                                                                 |   |          | 247    |   |         |   | 496 |   |
| Less allowances and depreciation                                         |   |          | (144   | )      |         |   | (237 | ) |
| Net book value of property to sell                                       |   |          | 103    |   |         |   | 259 |   |
| Less amounts owed on real estate to be sold                              |   |          | -      |   |         |   | - |   |
| Net projected proceeds from discontinued operations assets held for sale |   | $             | 103    |   |         |   | 259 |   |

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| -   | The Orlando purchase agreement was modified to include the purchase of the assets through a non-affiliated entity with the entity also owning land.  On July 29, 2011, $700,000 was paid toward the purchase of the entity and 325,000 of the Company’s common shares were issued to the sellers. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | A grantee of 740,474 RSU shares returned the shares the Company; thereby refusing to take delivery of the shares for income tax purposes.  Under IRS regulations, the grantee has up to 12 months to take delivery of the shares. |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

| -   | Loans and lines of credit (none currently available); |
|---------------|-------------------------------------------------------|

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

| -   | Sales of equity investments, and |
|---------------|----------------------------------|

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

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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ITEM 4.  CONTROLS AND PROCEDURES

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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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|                               | TWO RIVERS WATER COMPANY (Registrant)                     |
|------------------------------------|----------------------------------------------------------------|
|   Dated: August 10, 2011 |   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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