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0 1459
marijuana stocks

Form 8-K for TWO RIVERS WATER & FARMING CO 

Regulation FD Disclosure, Financial Statements and Exhibits

ITEM 7.01 Regulation FD DisclosurePress ReleaseThe information in this Item 7.01 of this Current Report is furnished pursuant to Item 7.01 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing.

Two Rivers Water & Farming Company and GrowCo Inc., announced that it has completed a $4.4 million equity financing. Proceeds from the financing will be used to acquire land and water, and fund the construction of a fully equipped greenhouse in Colorado that has been leased to a Colorado-licensed marijuana grower.

The text of the press release is attached herewith as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits(d) Exhibits.The following is a complete list of exhibits filed as part of this Report. Exhibit numbers correspond to the numbers in the exhibit table of Item 601 of Regulation S-K. 

Exhibit No.              Description
   99.1     Press release dated January 20, 2015*
____________________

 

1 1493

GrowCo Completes Financing for Initial Cannabis Greenhouse

Computer Controlled Facilities Designed to Provide Enhanced THC and CBD Control

DENVER, CO / ACCESSWIRE / January 20, 2015 / GrowCo, Inc. (“GrowCo”), a subsidiary of Two Rivers Water & Farming Company (“Two Rivers”) (TURV), announced today that it has completed a $4.4 million equity financing. Proceeds from the financing will be used to acquire land and water, and fund the construction of a fully equipped greenhouse in Colorado that has been leased to a Colorado-licensed marijuana grower.

The private placement consisted of units comprised of preferred membership interests in GrowCo Partners 1, LLC (“GCP 1″) and warrants to purchase common stock of GrowCo. The GCP 1 preferred membership interests contemplate a 12% yield and 50% of the economic interests in GCP 1. Investors have certain rights to exchange their acquired securities for common stock of either GrowCo or Two Rivers.

TR Capital Partners, LLC (“TRCP”), a wholly owned subsidiary of Two Rivers, acquired 26.54% of the units sold in the private placement, in exchange for cancellation of $1.1 million in start-up financing. TRCP also owns the other 50% economic interest in GCP 1, thereby effectively providing Two Rivers with a 63.27% net profits interest in the rental income of the greenhouse.

Two Rivers founded GrowCo in 2014 and issued 20,000,000 founder’s shares of GrowCo common stock to Two Rivers. Two Rivers then distributed 10,000,000 of those shares to TRCP and agreed to deposit the other 10,000,000 shares in an irrevocable trust, for distribution, when registered, in installments of 2,500,000 to persons who were Two Rivers’ shareholders of record as of January 1, 2015, April 1, 2015, July 1, 2015 and October 1, 2015. GrowCo has no other shares outstanding and no debt at this time. GrowCo has issued warrants to purchase shares of GrowCo common stock to GCP 1 preferred members and expects to issue additional warrants to investors in subsequent financings of GrowCo greenhouses.

GrowCo expects to complete construction of the GCP 1 greenhouse by May 2015. The greenhouse is designed to have 90,000 square feet of growing space and 15,000 square feet of warehouse and processing space. The primary focus of the greenhouse facility will be to grow marijuana from which oils and other byproducts can be extracted and used for marijuana-infused products.

GrowCo is targeting the construction, through other subsidiaries, of three additional greenhouse facilities in Colorado in 2015. GrowCo, through its subsidiaries, combines proprietary greenhouse technology with the water, land and capital to build state of the art greenhouse facilities for licensed marijuana growers. GrowCo greenhouses can be built in any state that permits the legal growing of marijuana.

GrowCo greenhouses significantly increase yield and lower costs compared to a converted warehouse. Converted warehouses are artificial growing environments that provide less than optimal growing conditions for marijuana. Currently, 95% of the marijuana grown in Colorado is grown in converted warehouses, probably as a result of the limited legacy skill set of growers when marijuana was first legalized.

GrowCo greenhouses use proprietary technology, which allows significantly higher diffused UV-B light spectrum to reach the entire plant rather than just the tops of plants, as is generally the case in a converted warehouse. As a result, GrowCo greenhouses are designed to produce significantly more tetrahydrocannabinol (“THC”), the psychoactive ingredient, and Cannabidiol (“CBD”), the non-psychoactive ingredient, in marijuana.

The UV-B technology, when combined with automated environmental computer controls, is expected to enable growers to achieve a more precise, measured and controlled level of THC and CBD potency, which improves the quality and safety of products. GrowCo greenhouses are designed to enable the canopy of plants to reach heights between 10 and 12 feet and to produce substantially more of a higher quality usable product throughout the entire body of the plant than is produced in a converted warehouse.

About GrowCo

GrowCo was formed for the purpose of constructing state-of-the-art computer-controlled greenhouses for licensed marijuana growers. GrowCo is not a licensed marijuana grower or retailer. GrowCo does not “touch the plant” and only provides growing infrastructure, growing materials and consulting services for licensed marijuana tenants.

About Two Rivers

Two Rivers is building a new water paradigm for the arid regions of the southwestern United States. Two Rivers assembles its water assets by acquiring irrigated farmland with senior water rights because 85% of water rights in the arid southwest are owned by agricultural interests. Two Rivers transforms the value of its water rights and farmland by continually developing operations that generate higher revenues and better profit margins. Two Rivers current farm operations convert feed crop farmland into fruit and vegetable crop production in Pueblo County Colorado, which generates six times more revenue with better profit margins. In December 2012, Colorado legalized the personal use and cultivation of marijuana. As a result, Two Rivers is providing greenhouses and processing facilities for licensed marijuana growers in Colorado on land with water rights not used for fruit and vegetable crop production. Two Rivers also develops Metropolitan Districts to serve under served communities in rural areas in which Two Rivers’ farmland and water rights are located.

Forward-Looking Statements

This news release contain “forward-looking statements”, as that term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements that are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Actual results could differ from those projected in any forward-looking statements due to numerous factors, including the inherent uncertainties associated with developing and acquiring land and water resources. There can be no assurance GrowCo will be able to initiate and operate its grow facilities in accordance with its business plans. These forward-looking statements are made as of the date of this news release, and neither Two Rivers nor GrowCo assumes any obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements.

CONTACT:

Kirsty Cameron
GrowCo, Inc.
(303) 222-1000 ext.103
mailto:info@trgrowco.com
For Breaking News Follow GrowCo on Twitter: https://twitter.com/trgrowco

0 1147
marijuana stocks

Form 8-K for TWO RIVERS WATER & FARMING CO

29-Dec-2014

Regulation FD Disclosure, Financial Statements and Exhibits

ITEM 7.01 Regulation FD DisclosurePress Release

The information in this Item 7.01 of this Current Report is furnished pursuant to Item 7.01 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing.

Two Rivers Water & Farming Company announced today it has begun construction of its first greenhouse, which is leased to a licensed marijuana grower, through a majority owned subsidiary, GrowCo, Inc.

The text of the press release is attached herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits(d) Exhibits.The following is a complete list of exhibits filed as part of this Report. Exhibit numbers correspond to the numbers in the exhibit table of Item 601 of Regulation S-K.

Exhibit No. Description
99.1 Press release dated December 29, 2014* *Filed herewith

 

0 1251

GrowCo Begins Construction of Greenhouses

DENVER, CO / ACCESSWIRE / December 29, 2014 / GrowCo, Inc., a Colorado corporation (“GrowCo”), (TURV), announced today it has begun construction of its first greenhouse, which is leased to a licensed marijuana grower. To finance the construction, GrowCo raised $3,5000,000 in capital, $1,500,000 of which was provided by Two Rivers Water & Farming Company and $2,000,000 was provided by outside investors.

GrowCo constructs state-of–the–art computer controlled greenhouses, which are leased to licensed marijuana growers. The greenhouses are capable of producing two to three times the amount of marijuana at half the cost per square foot as can be grown in converted warehouses.

About GrowCo

GrowCo is a majority owned subsidiary of Two Rivers Water & Farming Company, (TURV), which was formed for the purpose of constructing state-of-the-art computer controlled greenhouses for licensed marijuana growers throughout the United States. GrowCo is not a licensed marijuana grower or retailer. GrowCo does not “touch the plant” and only provides growing infrastructure as a landlord for licensed marijuana tenants. Progress on GrowCo construction projects can be viewed at trgrowco.com.

CONTACT:

Kirsty Cameron
GrowCo, Inc.
(303) 222-1000 ext.103
info@trgrowco.com

For Breaking News Follow GrowCo on Twitter: https://twitter.com/trgrowco


SOURCE:
Two Rivers Water & Farming Company

 

0 1195

Form 8-K for TWO RIVERS WATER & FARMING CO

8-Dec-2014

Change in Directors or Principal Officers

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.Mr. Gus Blass, a director of Two Rivers Water & Farming Company (the “Company”), provided written notice today to the Company that he has decided to resign from the Company’s Board of Directors effective December 31, 2014. There were no disagreements between Mr. Blass and the Company. Mr. Blass tendered his resignation based on the Company’s aggressive growth plans for the coming year, which will require significantly more time to adequatelyserve as a Company director, along with his desire to spend more time with his family and other longstanding board commitments.

Mr. Blass will continue to serve as one of the Preferred Managers of TR Capital Partners, LLC, a wholly owned subsidiary of the Company.

 

0 1392

Form 8-K for TWO RIVERS WATER & FARMING CO

21-Nov-2014

Regulation FD Disclosure, Financial Statements and Exhibits

ITEM 7.01 Regulation FD DisclosurePress Release

The information in this Item 7.01 of this Current Report is furnished pursuant to Item 7.01 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing.

Two Rivers Water & Farming Company announced today it has rejected Farmland Partner, Inc.’s offer to purchase and lease back irrigated farmland that Two Rivers owns on the Bessemer Ditch in Pueblo County, Colorado.

The text of the press release is attached herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits(d) Exhibits.The following is a complete list of exhibits filed as part of this Report. Exhibit numbers correspond to the numbers in the exhibit table of Item 601 of Regulation S-K.

Exhibit No. Description
99.1 Press release dated November 21, 2014* *Filed herewith

0 1384

Two Rivers Rejects Farmland Partners’ Bid

DENVER, CO / ACCESSWIRE / November 21, 2014 / Two Rivers Water & Farming Company (TURV) (www.2riverswater.com) announced today it has rejected Farmland Partner, Inc.’s offer to purchase and lease back irrigated farmland that Two Rivers owns on the Bessemer Ditch in Pueblo County, Colorado. On September 16, 2014, Two Rivers entered into an agreement whereby Two Rivers would sell Farmland Partners 247 acres of high yield irrigated farmland for $2,500,000. Simultaneously, Farmland Partners would lease the land back to Two River’s for a period of 5 years at a lease rate of 7.5% of capital invested.

After a series of proposals by Farmland Partners to amend the original agreements, the last of which came just two business days prior to the scheduled closing on November 24, 2014, Two Rivers determined it was not in their best interests to continue to work with Farmland Partners.

Two Rivers is confident they can find a suitable institutional agricultural investor who will be interested in developing a long term relationship whereby the institution purchases and leases back to Two Rivers high quality irrigated farmland for a 7.5% lease rate.

About Two Rivers:

Two Rivers assembles its water assets by acquiring irrigated farmland with senior water in the arid southwest. Two Rivers farming operations convert feed crop farmland into fruit and vegetable crop production in Pueblo County Colorado. In December 2012, Colorado legalized the personal use and cultivation of marijuana. As a result, Two Rivers is providing greenhouses and processing facilities for licensed marijuana growers in Colorado on land with water rights not used for fruit and vegetable crop production.

This news release contain “forward-looking statements,” as that term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements that are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with developing and acquiring land and water resources. There can be no assurance GrowCo will be able to initiate and operate its grow facilities in accordance with its business plans or will be able to register its securities for public resale in the time frame currently targeted or at all. These forward-looking statements are made as of the date of this news release, and neither Two Rivers nor GrowCo assumes any obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements.

For Breaking News Follow Two Rivers on Twitter: https://twitter.com/2riverswater

CONTACT:

John McKowen
Two Rivers Water & Farming Company
(303) 222-1000
info@2riverswater.com

SOURCE: Two Rivers Water & Farming Company

 

0 1448
marijuana stocks

Form 10-Q for TWO RIVERS WATER & FARMING CO

12-Nov-2014

Quarterly Report

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSUnless the context requires otherwise, references in this Form 10-Q to “we,” “our,” “us” and similar terms refer to Two Rivers Water & Farming Company and its subsidiaries.

Note about Forward-Looking Statements

This Form 10-Q contains forward-looking statements, such as statements relating to our financial condition, results of operations, plans, objectives, future performance and business operations. These statements relate to expectations concerning matters that are not historical facts. These forward-looking statements reflect our current views and expectations based largely upon the information currently available to us and are subject to inherent risks and uncertainties. Although we believe our expectations are based on reasonable assumptions, they are not guarantees of future performance and there are a number of important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. By making these forward-looking statements, we do not undertake to update them in any manner except as may be required by our disclosure obligations in filings we make with the Securities and Exchange Commission under the Federal securities laws. Our actual results may differ materially from our forward-looking statements.

Overview

There is a water shortage in the arid regions of the southwestern United States. There is a municipal water shortage in Colorado (see CWCB study). The Colorado municipal water shortage has created a price differential, an arbitrage, of 5-10 to 1 increase in the price of municipal water over irrigation water. In the late 1800s, 85% of all water rights in Colorado were granted to and still are primarily held by agriculture. Since then, populations have increased and people have moved to the city.

First generation western water business models attempted to capture the water arbitrage by “buying and drying” the most productive irrigated farmland and moving the water to the cities, which decimated some agricultural communities.
The buy and dry model has become politically, economically and legally untenable and is no longer capable of capturing the water arbitrage (see ). Two Rivers has built a new business model that reinvigorates, rather than ruins, agricultural communities and captures the water arbitrage in multiple stages through market transactions.

In the initial acquisition stage, Two Rivers acquires water rights through the purchase of irrigated farmland used for feed crop production and converts the farmland into fruit and vegetable crop production, which generate six times more revenue with better profit margins. In later stages, Two Rivers creates additional value for its shareholders by partnering with other economic activities in need of water resources. Those activities are as varied as the economy itself and presently include water augmentation programs to replace out of priority diversions, greenhouse development and leasing for licensed marijuana growers and establishing Metropolitan Districts to provide water to under-served communities.

Results of Operations

Our Consolidated Operations

For the three Months Ended September 30, 2014 Compared to the three Months Ended September 30, 2013

During the three months ended September 30, 2014 and 2013 we recognized revenues of $1,072,000 compared to $995,000, in the three-month period ended September 30, 2013. Our primary revenue source is from the sale of agriculture products grown by us. The sale of these products is highly seasonal and occurs primarily in the third and fourth quarter of the year. The increase of $76,000 is primarily due to additional freight revenue earned in the third quarter of 2014being shown in revenue, while in 2013, net freight was shown as a reduction in the direct cost of revenue.

Table of Contents
Our direct cost of revenue was $786,000 compared to $598,000 for the three months ended September 30, 2014 and 2013, respectively. This produced a gross margin $286,000 compared to $397,000 for the three months ended September 30, 2014 and 2013, respectively. The decrease in gross margin is due to management’s lowering of the target gross margin of farm production. This is an estimate, which will be finalized by the year ending December 31, 2014.

Operating expenses during the three months ended September 30, 2014 and 2013were $831,000 and $1,500,000, respectively. The decrease of $669,000 is primarily due to a reduction of stock-based compensation of $583,000, a reduction in professional fees of $184,000 offset byan increase in labor expenses of $122,000 due to a workforce expansion. Therefore, for operations, during the three months ended September 30, 2014 and 2013, we recognized a net loss of $545,000 and $1,103,000, respectively.

Our non-operating expenses increased from $237,000 to $315,000 for the three months ended September 30, 2013 and 2014, respectively. The increase of $78,000 is primarily due to a $110,000 decrease of interest and warrant expense offset by a $108,000 increase in other income/expense and an $80,000 gain on debt extinguishment in 2013. The decrease of interest expense is due to the conversion of debt to preferred shares and the decrease in other income is due to a gain recognized on the recovery of an asset in the third quarter of 2013.

For the Nine Months Ended September 30, 2014 Compared to the Nine Months Ended September 30, 2013

During the nine months ended September 30, 2014, we recognized revenues from continuing operations of $1,087,000, as compared to $1,054,000 in revenues during the nine months ended September 30, 2013. Our primary revenue source is from the sale of agriculture products grown by us. The sale of these products is highly seasonal and occurs primarily in the third and fourth quarter of the year. The increase of $33,000 is primarily due to additional freight income earned in 2014being shown in revenue, while in 2013, net freight was shown as a reduction in the direct cost of revenue.

Our direct cost of revenue was $786,000 compared to $639,000 for the nine months ended September 30, 2014 and 2013, respectively. This produced a gross margin $301,000 compared to $415,000 for the nine months ended September 30, 2014 and 2013, respectively.

Operating expenses from operations during the nine months ended September 30, 2014 and 2013 were $2,924,000 and $5,085,000, respectively. The decrease of $2,161,000 is primarily due to: a $1,705,000 decrease in stock-based compensation expenses due to the cancellation of certain awards; a $577,000 decrease in professional fees due to investor relations and legal fees, and offset by a $125,000 increase in labor expenses due to workforce expansion. Therefore, for operations, during the nine months ended September 30, 2014 and 2013, we recognized a net loss of $2,623,000 and $4,670,000, respectively.

For the nine months ended September 30, 2014 and 2013, we recognized a net loss of $4,772,000 and$6,179,000, respectively. The decreased loss of $1,407,000 is due to the factors mentioned above and partially offset by an increase of preferred dividends of $1,130,000.

Liquidity and Capital Resources

To date, we have funded our operations primarily from the following sources:


Equity proceeds through private placements of securities of Two Rivers Water & Farming Company and certain of its direct and indirect subsidiaries;


Revenue generated from operations;


Loans and lines of credit;


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


Sales of equity investments, and


Proceeds from the exercise of options.

Table of Contents
As of September 30, 2014, we had no available line or letters of credit and do not intend to seek any such financing in the foreseeable future.

Cash flow from operations has not historically been sufficient to sustain our operations without the above additional sources of capital. As of September 30, 2014, we had cash and cash equivalents of $762,000. Cash flow consumed by our operating activities totaled $3.5 million for the nine months ended September 30, 2014, compared to operating activities consuming $2.6million for the ninemonths ended September 30, 2013. The increase in the cash consumed by our operating activities was largely due to greater cash expenses in operations, an increase in accounts receivable and farm product, partially offset by increase in payables and accrued liabilities.

Cash used in investing activities was $1.6 million for the nine months ended September 30, 2014 compared to use of cash of $1.3 million for the nine months ended September 30, 2013. During the nine months ended September 30, 2014, we purchased $300,000 of land, water shares and infrastructure, added $1,256,000 of equipment and added investments of $8,000. During the nine months ended September 30, 2013, we purchased $1.3 million of land, water shares and infrastructure, added $34,000 of equipment and sold equipment for $58,000.

Cash flows generated by our financing activities for the nine months ended September 30, 2014, were $3.7 million compared to $3.6 million for the nine months ended September 30, 2013. During the nine months ended September 30, 2014, we received gross proceeds of $4.7 million from sales of preferred units of our subsidiary TR Capital Partners, LLC and we incurred additional long termindebtedness of $274,000 in connection with land purchases. During that period, we paid $636,000 in preferred dividends and applied $569,000 to pay amounts due under certain notes.

We currently expect that our cash expenditures will increase for the foreseeable future, as we seek to further expand our farmland business and to initiate operations of GrowCo. As a result, our existing cash and cash equivalents and other working capital may not be sufficient to meet all of the projected cash needs contemplated by our business strategies for the remainder of 2014 and for 2015. To the extent our cash and cash equivalents and other working capital are insufficient to fund our planned activities, we may need to either slow our growth initiatives or raise additional funds through public or private equity or debt financings. We also may need to raise additional funds in the event we determine in the future to effect one or more acquisitions of businesses, technologies and products. If additional funding is required, we cannot assure you that we will be able to effect an equity or debt financing on terms acceptable to us or at all.

Critical Accounting Policies

We have identified the policies below as critical to our business operations and the understanding of our results from operations. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Conditions and Results of Operations where such policies affect our reported and expected financial results. For a detailed discussion of the application of these and other accounting policies, see Note 2 of the notes to consolidated financial statements included elsewhere in this Form 10-Q. Our preparation of such consolidated financial statements and this Form 10-Q requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.

Revenue Recognition

We follow specific and detailed guidelines in measuring revenue; however, certain judgments may affect the application of our revenue policy. Revenue results are difficult to predict, and any shortfall in revenue or delay in recognizing revenue could cause our operating results to vary significantly from quarter to quarter and could result in future operating losses.

Table of Contents
Goodwill and Intangible Assets

We have acquired water shares in Huerfano-Cucharas Irrigation Company, which is considered an intangible asset and shown on our balance sheet as part of “Water assets”. Currently, these shares are recorded at purchase price less our pro rata share of the negative net worth in HCIC Holdings, LLC. Management evaluates the carrying value, and if necessary, will establish an impairment of value to reflect current fair market value. Currently, there are no impairments on the water shares.

In 2012, we acquired a produce business, which is considered an intangible asset and shown on our balance sheet as “Intangible assets, net.” Management evaluated the purchase price of $1.0 million and allocated this price to customer list, trade name and goodwill. For a detailed allocation, please see Note 3 of the Notes to Consolidated Financial Statements included elsewhere in the Form 10-Q.

Capitalization of Certain Interest Expenses

As part of our GrowCo development operations, which began in July, the Company began to incur large construction costs which are capitalized. The related interest expenses incurred related to these expenditures can be capitalized as well per ASC 720-15. This guidance states that interest should be capitalized in relation to the following assets: (i) assets that are constructed or otherwise produced for an entity’s own use, (ii) assets intended for sale or lease that are constructed or otherwise produced as discrete projects, and (iii) investments accounted for by the equity method while the investee has activities in progress necessary to commence its planned principal operations. As the GrowCo assets classify under the second point, the Company began the process of calculating interest costs to be capitalized each quarter. Interest capitalization begins when the expenditures begin and interest is being incurred. Management independently determines the start point for each individual project when it commences. At the end of each quarter, management will then take the average accumulated expenditures for each project, multiplied by the interest rate on the associated debt (or the weighted average rate on all debt if no debt is specifically associated) to arrive at a capitalized interest amount. This amount will be booked as an adjustment to interest expense each quarter. Once the construction process ends and the asset is deemed ready for use, capitalization of interest will cease.

Impairment Policy

At least once every year, management examines all of our assets for proper valuation and to determine if an impairment is necessary. In terms of real estate owned, this impairment examination also includes the accumulated depreciation. Management examines market valuations and if an additional impairment is necessary for lower of cost or market, then an impairment charge is recorded.

Inflation

We do not believe that inflation will have a material negative impact on our operations in the foreseeable future.

 

 

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