Name of Issuer:
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Two Rivers Water Company
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Title of Class of Securities:
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Common Stock
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CUSIP Number:
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90207B107
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Contact Person:
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G. Brian Christie
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Christie Law Firm
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4 Upper Newport Plaza
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Suite 101
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Newport Beach, CA 92660
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Phone: (949) 863-9495
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Fax: (949) 863-9497
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Email: brianchristie@christielaw.net
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1. Names of Reporting Persons:
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Fred F. Jones
Steve Hodges
Roger Lefler
Ken Roehrich
David Cheng
Keith Wilhite
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2.
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(a) Shares held by each of the Reporting Members are imputed to the TRB Group.
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3.
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4.
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Not applicable
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5.
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Not applicable
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6.
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All members of the TRB Group are citizens of the United States of America.
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7.
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Sole Voting Power: 5,507,140 shares
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8.
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Shared Voting Power: Not applicable
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9.
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Sole Dispositive Power: 5,507,140 shares
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10.
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Shared Dispositive Power: Not applicable
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11.
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Aggregate Amount Beneficially Owned by Each Reporting Person: The TRB Group owns 5,507,140 shares, held by its six members as listed above.
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12.
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Not applicable
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13.
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Percent of Class Represented by Amount in Row 11: 23.33%, based on 23,616,824 shares reported outstanding in Registrant’s most recent Form 10-K.
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14.
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Type of Reporting Person: OO. Other. Six natural persons listed in #1 above, each of whom owns the number of shares listed in response to Item 2, formed a group (“the TRB Group”) to explore the coordinated disposition of all or a portion of their shares in a common transaction or series of transactions.
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Item 1.
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Security and Issuer: Refer to Cover Page.
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1.
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a) |
Fred F. Jones - 996,430 shares
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b)
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13 Pedregal Lane, Pueblo, CO 81005
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c)
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Consultant at Star Consulting, Inc., 13 Pedregal Lane, Pueblo, CO 81005
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d)
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No convictions
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e)
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No securities law violations
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f)
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Citizen of the United States of America
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2. |
a)
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Stephen Russell Hodges - 996,430 shares
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b)
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P.O. Box 942, Walsenburg, CO 81089
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c)
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Regional Sales Manager for Southern Farm Bureau Casualty Ins.
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d)
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No convictions
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e)
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No securities law violations
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f)
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Citizen of the United States of America
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3. |
a)
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Roger Lefler - 996,430 shares
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b)
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P.O. Box 33490, Las Vegas, NV 89133
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c)
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Retired
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d)
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No convictions
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e)
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No securities law violations
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f)
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Citizen of the United States of America
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4. |
a)
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Ken Roehrich - 996,430 shares
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b)
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102 Flocktown Road, Long Valley, NJ 07853
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c)
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Retired
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d)
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No convictions
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e)
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No securities law violations
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f)
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Citizen of the United States of America
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5. |
a)
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David Cheng - 996,430 shares
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b)
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2923 Pullman Street, Santa Ana, CA 92705
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c)
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President, Accord Engineering, Inc., 2923 Pullman Street, Santa Ana, CA 92705.
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d)
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No convictions
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e)
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No securities law violations
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f)
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Citizen of the United States of America
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6. |
a)
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Keith Wilhite – 524,990 shares
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b)
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2132 Vinewood, Pueblo, CO 81005
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c)
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Retired
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d)
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No convictions
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e)
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No securities law violations
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f)
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Citizen of the United States of America
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Item 3.
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Source and Amount of Funds or Other Consideration:
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Item 4.
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Purpose of Transaction:
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Item 5.
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Interest in Securities of the Issuer:
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Item 6.
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Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer:
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Item 7.
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Material to be Filed as Exhibits:
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1.
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Engagement Agreement
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2.
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Discussion Term Sheet
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Dated: April 18, 2012
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/s/ G. Brian Christie | |
G. Brian Christie, Attorney | ||
for the TRB Group | ||
By: | /s/ G. Brian Christie | ||
G. Brian Christie, Attorney at Law
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Percentage | ||||||
FRED F. JONES | 13.3% | |||||
Address: | ||||||
KEVIN LOWTHER | 13.3%__ | |||||
Address: | ||||||
STEVE HODGES | 13.3% | |||||
Address: | ||||||
JOHN STROH | 13.3% | |||||
Address: | ||||||
ROGER LEFLER | 13.3% | |||||
Address: | ||||||
KEN ROEHRICH | 13.3% | |||||
Address: | ||||||
DAVID CHENG | 13.3% | |||||
Address: | ||||||
KEITH WILHITE | 6.9% | |||||
Address: | ||||||
WEDBUSH SECURITIES INC.
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Member NYSE/FINRA/SIPC
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Purchase and Options:
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1. Purchase 1,835,714 TRWC common stock at $1.25 per share from the TRB Group ($2,294,642.50).
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2. The TRB Group and its individual members will agree to lock up their remaining shares (“Remaining Shares”) for two years, subject to: (i) a Purchaser’s option to purchase 1,835,713 of the Remaining Shares at a strike price of $2.75 per share ($5,048,210.75) and (ii) a Purchaser’s right of first refusal to 1,835,713 of the Remaining Shares.
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3. During the lock up period, the Remaining Shares will be contractually obligated to vote the shares as recommended by the TRWC Board; however, the Purchaser will have the right to exercise any other rights granted to the Remaining Shares during the lock up period.
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Early Exit Opportunity:
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The Company will provide registration rights and agreement to include the sale of up to 3,671,426 of Purchaser’s TRWC common stock in an anticipated follow-on underwritten offering. Based on planned deployment of new capital and expected progress in implementing its business plan, the Company believes that the value of the Company can be substantially increased over the next two to three years and that such value should be reflected in an increased share price.
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Potential Board Representation:
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The Company will consider a qualified nominee of the Purchaser to serve on its Board of Directors.
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Alignment with Management:
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In light of the Company’s unique assets and business plan, the management team’s incentives have been aligned with shareholders through a restricted stock unit program which features vesting on an incremental basis taking into account both time and performance milestones. Further, the CEO is a participant in the Company’s current Bridge Loan and will consider deferring liquidity of his equity investment in the Company to accommodate a preferential exit for the Purchaser.
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Registration:
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In the event that (i) the Purchaser does not fully exercise the option to purchase Remaining Shares, and/or (ii) the Remaining Shares subject to the Purchaser’s right of first refusal are not liquidated during the two-year lock up period, the Company will register the Remaining Shares still in the hands of the TRB Group and will support their distribution in conjunction with the Company’s next succeeding registered equity offering; provided, however, there will be no restriction on the ability of the TRB Group to sell, or not to sell, the Remaining Shares at, or after, said offering.
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Company Background:
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On March 8, 2012, the Company filed with the SEC its latest annual report on Form 10-K. Copies are available on the Company’s website (www.2riverswater.com) and on the SEC’s website. In addition, subject to a Non-disclosure Agreement, the management team will be available for discussion of current market trends and to conduct a tour of Company facilities in Huerfano and Pueblo Counties in Colorado.
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Facilitation Fee:
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Wedbush Securities is the Company’s exclusive financial advisor and, in that role, is assisting the Company to develop and execute an integrated capitalization plan. For its role in facilitating the purchase/sale of the TRB Group’s shares, the Purchaser will pay Wedbush 1% of the acquisition price for the TRB Group’s shares at the time of each such acquisition.
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