Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2019 | Jul. 05, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PURE CYCLE CORP | |
Entity Central Index Key | 0000276720 | |
Current Fiscal Year End Date | --08-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,801,598 | |
Entity Small Business | true | |
Document Fiscal Year Focus | 2019 | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 3,581,310 | $ 11,565,038 |
Short-term investments | 6,189,143 | 8,717,967 |
Trade accounts receivable, net | 594,249 | 1,067,268 |
Prepaid expenses and other current assets | 2,634,164 | 1,372,886 |
Inventories | 12,693,514 | 5,195,059 |
Total current assets | 25,692,380 | 27,918,218 |
Long-term investments | 0 | 190,370 |
Investments in water and water systems, net | 43,614,590 | 36,721,884 |
Land and mineral interests | 4,821,728 | 4,659,569 |
Notes receivable - related parties, including accrued interest | 971,176 | 906,199 |
Other assets | 1,007,458 | 777,734 |
Long-term land investment | 450,641 | 450,641 |
Deferred tax asset | 282,000 | 282,000 |
Total assets | 76,839,973 | 71,906,615 |
Current liabilities: | ||
Accounts payable | 461,830 | 787,662 |
Accrued liabilities | 2,627,069 | 849,538 |
Deferred revenues, current | 1,631,797 | 361,050 |
Deferred oil and gas lease payment and contracts, current | 196,255 | 55,733 |
Total current liabilities | 4,916,951 | 2,053,983 |
Deferred revenues, less current portion | 18,578 | 60,378 |
Participating interests in Export Water Supply | 333,033 | 339,035 |
Total liabilities | 5,268,562 | 2,453,396 |
Preferred stock: | ||
Series B - par value $.0.001 per share, 25 million shares authorized; 432,513 shares issued and outstanding (liquidation preference of $432,513) | 433 | 433 |
Common stock: | ||
Par value 1/3 of $.01 per share, 40 million shares authorized; 23,801,598 and 23,764,098 shares outstanding, respectively | 79,344 | 79,218 |
Additional paid-in capital | 172,203,831 | 171,831,293 |
Accumulated other comprehensive income | 12,656 | 66,446 |
Accumulated deficit | (100,724,853) | (102,524,171) |
Total shareholders' equity | 71,571,411 | 69,453,219 |
Total liabilities and shareholders' equity | $ 76,839,973 | $ 71,906,615 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (unaudited) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Common stock: | ||
Common stock, par value (in dollars per share) | $ 0.003 | $ 0.003 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares outstanding (in shares) | 23,801,598 | 23,764,098 |
Series B Preferred Stock [Member] | ||
Preferred stock: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 432,513 | 432,513 |
Preferred stock, shares outstanding (in shares) | 432,513 | 432,513 |
Liquidation preference | $ 432,513 | $ 432,513 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |||
Revenues: | ||||||
Total revenues | $ 5,184,663 | $ 1,212,119 | $ 10,887,631 | $ 3,066,911 | ||
Expenses: | ||||||
Water service operations | (400,495) | (418,280) | (965,279) | (906,899) | ||
Wastewater service operations | (14,512) | (6,632) | (21,889) | (21,303) | ||
Land development construction costs | (2,588,072) | 0 | (5,715,994) | 0 | ||
Other | (33,889) | (24,243) | (104,162) | (64,822) | ||
Depletion and depreciation | (225,334) | (145,887) | (537,709) | (376,608) | ||
Total cost of revenues | (3,262,302) | (595,042) | (7,345,033) | (1,369,632) | ||
Gross profit | 1,922,361 | 617,077 | 3,542,598 | 1,697,279 | ||
General and administrative expenses | (665,684) | (635,502) | (1,864,125) | (1,816,110) | ||
Depreciation | (97,846) | (69,373) | (276,251) | (183,370) | ||
Operating (loss) income | 1,158,831 | (87,798) | 1,402,222 | (302,201) | ||
Other income (expense): | ||||||
Oil and gas lease income, net | 13,933 | 13,933 | 41,800 | 37,156 | ||
Oil and gas royalty income, net | 37,263 | 61,113 | 113,104 | 152,653 | ||
Interest income | 53,986 | 69,027 | 246,809 | 176,001 | ||
Other | (2,642) | (1,674) | (4,617) | (5,456) | ||
Income from operations before income taxes | 1,261,371 | 54,601 | 1,799,318 | 58,153 | ||
Income tax expense | 0 | 0 | 0 | 0 | ||
Net income | 1,261,371 | 54,601 | 1,799,318 | 58,153 | ||
Unrealized holding gains (losses) | (31) | 40,613 | (53,790) | 71,330 | ||
Total comprehensive income | $ 1,261,340 | $ 95,214 | $ 1,745,528 | $ 129,483 | ||
Basic net income (loss) per common share (in dollars per share) | $ 0.05 | [1] | $ 0.08 | [1] | ||
Diluted net income (loss) per common share (in dollars per share) | $ 0.05 | [1] | $ 0.07 | [1] | ||
Weighted average common shares outstanding-basic (in shares) | 23,801,598 | 23,764,098 | 23,791,320 | 23,759,654 | ||
Weighted average common shares outstanding-diluted (in shares) | 24,003,242 | 23,955,046 | 23,998,254 | 23,913,863 | ||
Metered Water Usage [Member] | ||||||
Revenues: | ||||||
Total revenues | $ 1,396,926 | $ 1,162,570 | $ 2,923,795 | $ 2,888,913 | ||
Wastewater Treatment Fees [Member] | ||||||
Revenues: | ||||||
Total revenues | 7,419 | 11,675 | 23,821 | 32,157 | ||
Water Tap Fees Recognized [Member] | ||||||
Revenues: | ||||||
Total revenues | 1,034,284 | 0 | 1,756,186 | 49,948 | ||
Land Development [Member] | ||||||
Revenues: | ||||||
Total revenues | 2,708,093 | 0 | 6,035,670 | 0 | ||
Other [Member] | ||||||
Revenues: | ||||||
Total revenues | $ 37,941 | $ 37,874 | $ 148,159 | $ 95,893 | ||
[1] | Amount is less than $0.01 per share |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Total |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Adoption of accounting standards | $ 0 | $ 0 | $ 0 | $ 0 | $ 1,055,049 | $ 1,055,049 |
Balance at Aug. 31, 2017 | $ 433 | $ 79,185 | 171,431,486 | (11,105) | (103,993,900) | 67,506,099 |
Balance (in shares) at Aug. 31, 2017 | 432,513 | 23,754,098 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock option exercises | $ 33 | 74,967 | 0 | 0 | 75,000 | |
Stock option exercises (in shares) | 10,000 | |||||
Share-based compensation | $ 0 | $ 0 | 241,209 | 0 | 0 | 241,209 |
Net income (loss) | 0 | 0 | 0 | 0 | 58,153 | 58,153 |
Unrealized holding gain (loss) on investments | 0 | 0 | 0 | 71,330 | 0 | 71,330 |
Balance at May. 31, 2018 | $ 433 | $ 79,218 | 171,747,662 | 60,225 | (102,880,698) | 69,006,840 |
Balance (in shares) at May. 31, 2018 | 432,513 | 23,764,098 | ||||
Balance at Feb. 28, 2018 | $ 433 | $ 79,218 | 171,664,031 | 19,612 | (102,935,299) | 68,827,995 |
Balance (in shares) at Feb. 28, 2018 | 432,513 | 23,764,098 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock option exercises | $ 0 | 0 | 0 | 0 | 0 | |
Stock option exercises (in shares) | 0 | |||||
Share-based compensation | $ 0 | $ 0 | 83,631 | 0 | 0 | 83,631 |
Net income (loss) | 0 | 0 | 0 | 0 | 54,601 | 54,601 |
Unrealized holding gain (loss) on investments | 0 | 0 | 0 | 40,613 | 0 | 40,613 |
Balance at May. 31, 2018 | $ 433 | $ 79,218 | 171,747,662 | 60,225 | (102,880,698) | 69,006,840 |
Balance (in shares) at May. 31, 2018 | 432,513 | 23,764,098 | ||||
Balance at Aug. 31, 2018 | $ 433 | $ 79,218 | 171,831,293 | 66,446 | (102,524,171) | 69,453,219 |
Balance (in shares) at Aug. 31, 2018 | 432,513 | 23,764,098 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock option exercises | $ 126 | 114,725 | 0 | 0 | 114,851 | |
Stock option exercises (in shares) | 37,500 | |||||
Share-based compensation | $ 0 | $ 0 | 257,813 | 0 | 0 | 257,813 |
Net income (loss) | 0 | 0 | 0 | 0 | 1,799,318 | 1,799,318 |
Unrealized holding gain (loss) on investments | 0 | 0 | 0 | (53,790) | 0 | (53,790) |
Balance at May. 31, 2019 | $ 433 | $ 79,344 | 172,203,831 | 12,656 | (100,724,853) | 71,571,411 |
Balance (in shares) at May. 31, 2019 | 432,513 | 23,801,598 | ||||
Balance at Feb. 28, 2019 | $ 433 | $ 79,344 | 172,107,735 | 12,687 | (101,986,224) | 70,213,975 |
Balance (in shares) at Feb. 28, 2019 | 432,513 | 23,801,598 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock option exercises | $ 0 | 0 | 0 | 0 | 0 | |
Stock option exercises (in shares) | 0 | |||||
Share-based compensation | $ 0 | $ 0 | 96,096 | 0 | 0 | 96,096 |
Net income (loss) | 0 | 0 | 0 | 0 | 1,261,371 | 1,261,371 |
Unrealized holding gain (loss) on investments | 0 | 0 | 0 | (31) | 0 | (31) |
Balance at May. 31, 2019 | $ 433 | $ 79,344 | $ 172,203,831 | $ 12,656 | $ (100,724,853) | $ 71,571,411 |
Balance (in shares) at May. 31, 2019 | 432,513 | 23,801,598 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 9 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 1,799,318 | $ 58,153 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and depletion | 813,960 | 559,975 |
Recovery of bad debt expense | (31,233) | 0 |
Equity loss in Well Enhancement Recovery Systems, LLC | 7,846 | 7,847 |
Share-based compensation expense | 257,813 | 241,209 |
Interest income and other non-cash items | (315) | (867) |
Interest added to receivable from related parties | (30,753) | (46,377) |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 504,252 | (530,530) |
Prepaid expenses | (1,261,278) | (926,917) |
Inventories | (5,306,880) | (382,554) |
Notes receivable - related parties | (34,223) | (62,611) |
Notes receivable | 0 | (172,698) |
Other assets | (90,097) | 0 |
Accounts payable and accrued liabilities | (739,878) | (230,946) |
Deferred revenues | 1,270,747 | 0 |
Deferred oil and gas lease payment and contracts | 98,722 | 130,044 |
Net cash used in operating activities | (2,741,999) | (1,356,272) |
Cash flows from investing activities: | ||
Sales and maturities of short-term investments | 36,736,420 | 25,627,949 |
Purchase of short-term investments | (34,071,015) | (22,508,987) |
Investments in water, water systems, and land | (7,695,968) | (2,989,567) |
Investments in Sky Ranch development | 0 | (1,490,000) |
Purchase of property and equipment | (320,014) | (271,146) |
Net cash used in investing activities | (5,350,577) | (1,631,751) |
Cash flows from financing activities: | ||
Proceeds from note receivable - related parties | 0 | 215,504 |
Proceeds from the issuance of stock | 114,850 | 75,000 |
Payments to contingent liability holders | (6,002) | (2,152) |
Net cash provided by (used in) financing activities | 108,848 | 288,352 |
Net change in cash and cash equivalents | (7,983,728) | (2,699,671) |
Cash and cash equivalents - beginning of period | 11,565,038 | 5,575,823 |
Cash and cash equivalents - end of period | 3,581,310 | 2,876,152 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Inventories included in accounts payable and accrued liabilities | 2,191,577 | 0 |
Transfer of prepaid asset to other asset | 0 | 89,609 |
Transfer of land and mineral interest to inventory | $ 0 | $ 1,691,989 |
PRESENTATION OF INTERIM INFORMA
PRESENTATION OF INTERIM INFORMATION | 9 Months Ended |
May 31, 2019 | |
PRESENTATION OF INTERIM INFORMATION [Abstract] | |
PRESENTATION OF INTERIM INFORMATION | NOTE 1 – PRESENTATION OF INTERIM INFORMATION The May 31, 2019 consolidated balance sheet, the consolidated statements of operations and comprehensive income for the three and nine months ended May 31, 2019 and 2018, the consolidated statements of shareholders’ equity for the three and nine months ended May 31, 2019 and 2018, and the consolidated statements of cash flows for the nine months ended May 31, 2019 and 2018 have been prepared by Pure Cycle Corporation (the “Company”) and have not been audited. The unaudited consolidated financial statements include all adjustments that are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows at May 31, 2019, and for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2018 (the “2018 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on November 13, 2018. The results of operations for interim periods presented are not necessarily indicative of the operating results for the full fiscal year. The August 31, 2018 balance sheet was derived from the Company’s audited consolidated financial statements. Reclassifications Certain reclassifications have been made to the 2018 financial statements to conform to the consolidated 2019 financial statement presentation. These reclassifications had no effect on net earnings or cash flows previously reported. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less. The Company’s cash equivalents are comprised entirely of money market funds maintained at a reputable financial institution. At various times during the three months ended May 31, 2019, the Company’s main operating account exceeded federally insured limits. To date, the Company has not suffered a loss due to such excess balance. Land Development Inventories Inventories primarily include land held for development and sale and are stated at cost. Capitalized lot development costs at Sky Ranch are costs incurred to construct finished lots at Sky Ranch that meet the Company’s capitalization criteria for improvements to a lot and are capitalized as incurred. The Company capitalizes certain legal, engineering, design, permitting, land acquisition, and construction costs related to the development of lots at Sky Ranch. The Company uses the specific identification method for the purpose of accumulating land development costs and allocates costs to each lot to determine the cost basis for each lot sale. The Company records land cost of sales for two of three of our builders over time based on inputs of costs to total costs and for one builder at a point in time as lots are delivered. In accordance with Accounting Standards Codification (“ASC”) Topic 360, Property, Plant and Equipment Contract Asset Contract receivables are recorded at the invoiced amount and do not bear interest. Credit is extended based on the evaluation of a customer’s financial condition and collateral is not required. is revenue which has been earned but not invoiced. The contract assets are transferred to the receivables when the Company has the right to bill such amounts and they are invoiced. Investments Management determines the appropriate classification of its investments in certificates of deposit and U.S. Treasury debt securities at the time of purchase and re-evaluates such determinations each reporting period. Certificates of deposit and U.S. Treasury debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. The Company has $192,200 of investments classified as held-to-maturity at May 31, 2019, which represent certificates of deposit with a maturity date in October 2019. Securities that the Company does not have the positive intent or ability to hold to maturity, including certificates of deposit and U.S. Treasury debt securities, are reported at their fair value. Changes in value of such securities are recorded as a component of Accumulated other comprehensive income (loss). Concentration of Credit Risk and Fair Value Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and investments. From time to time, the Company places its cash in money market instruments, certificates of deposit and U.S. Treasury obligations. To date, the Company has not experienced significant losses on any of these investments. The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value. Cash and Cash Equivalents – maintained at a reputable financial institution Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less. At various times during the three and nine months ended May 31, 2019, the Company’s main operating account exceeded federally insured limits. To date, the Company has not suffered a loss due to such excess balance. Trade Accounts Receivable – Investments – Fair Value Measurements. Accounts Payable – Long-Term Financial Liabilities – Water and Land Assets Water and Land Assets Long-Term Obligations and Operating Lease – Participating Interests in Export Water Supply Notes Receivable – Related Parties – Off-Balance Sheet Instruments – Long-Term Obligations and Operating Lease – Participating Interests in Export Water Supply Revenue Recognition The Company disaggregates revenue by major product line as reported on the consolidated statements of operations and comprehensive income. The Company generates revenues through two lines of business. Revenues are derived through its wholesale water and wastewater business and through the sale of developed land primarily for residential lots, both of which businesses are described below. Wholesale Water and Wastewater Fees The Company generates revenues through its wholesale water and wastewater business predominantly from three sources: (i) monthly wholesale water usage fees and wastewater service fees, including monthly usage fees for water deliveries to the oil and gas industry for hydraulic fracturing, (ii) one-time water and wastewater tap fees and construction fees/Special Facility funding (as defined below), and (iii) consulting fees. Because these items are separately delivered and distinct, the Company accounts for each of the items separately, as described below. (i) Monthly water usage and wastewater treatment fees – Water and Land Assets Water and Land Assets In addition to providing domestic water, the Company provides raw water for hydraulic fracturing to industrial customers in the oil and gas industry that are located in and adjacent to its service areas. Frack water revenues are recognized at a point in time upon delivering water to a customer. The Company delivered 96.9 million and 106.1 million gallons of water to customers during the three months ended May 31, 2019 and 2018, respectively, of which 93% and 73% was used for oil and gas exploration. The Company delivered 232.3 million and 253.5 million gallons of water to customers during the nine months ended May 31, 2019 and 2018, respectively, of which 85% and 80% was used for oil and gas exploration. The Company recognizes wastewater treatment revenues monthly based on a flat monthly fee and actual usage charges. The monthly wastewater treatment fees are shown net of amounts retained by the Rangeview District. Costs of delivering water and providing wastewater service to customers are recognized as incurred. (ii) Water and wastewater tap fees/Special Facility funding Long-Term Obligations and Operating Lease Participating Interests in Export Water Supply The Company recognizes construction fees, including fees received to construct “Special Facilities,” over time as the construction is completed because the customer is generally able to use the property improvement to enhance the value of other assets during the construction period. Special Facilities are facilities that enable water to be delivered to a single customer and are not otherwise classified as a typical wholesale facility or retail facility. Temporary infrastructure required prior to construction of permanent water and wastewater systems or transmission pipelines to transfer water from one location to another are examples of Special Facilities. Management has determined that Special Facilities are separate and distinct performance obligations because these projects are contracted to construct a specific water and wastewater system or transmission pipeline and typically do not include multiple performance obligations in a contract with a customer. No Special Facilities revenue has been recognized during the three or nine months ended May 31, 2019 or 2018. (iii) Consulting fees Land Development Activities The Company generates revenues through the sale of finished lots at its Sky Ranch development primarily from several sources of revenues: (i) land development through the sale of finished lots, (ii) construction support activities, (iii) project management services, and (iv) reimbursable expenses incurred to develop certain infrastructure. (i) Land development through the sale of finished lots The Company sells lots at Sky Ranch pursuant to distinct agreements with each builder. These agreements follow one of two formats. One format is the sale of a finished lot, whereby the builder pays for a ready-to-build finished lot and payment is a lump-sum payment upon completion of the finished lot. The Company recognizes revenues at the point in time of the closing of the sale of a finished lot in which control transfers to the builder and the builder is able to obtain a building permit, as the transaction cycle is complete, and the Company has no further obligations for the lot. During the three months ended May 31, 2019, the Company received payment and recognized revenue of $1,770,000 from one home builder in exchange for the delivery of 25 finished lots. During the nine months ended May 31, 2019, the Company received payment and recognized revenue of $2,070,000 from one home builder in exchange for the delivery of 29 finished lots. No revenue was recognized for lot sales at a point in time for the three or nine months ended May 31, 2018. The Company’s second format is the sale of finished lots pursuant to a development agreement with a builder, whereby the Company receives payments in stages that include (i) payment upon the delivery of platted lots (which requires the Company to deliver deeded title to individual lots), (ii) a second payment upon the completion of certain infrastructure milestones, and (iii) final payment upon the delivery of the finished lot. Ownership and control of the platted lots pass to the builder once the Company closes the sale of the platted lots. Because the builder (i.e., the customer) takes control of the lot at the first closing and subsequent improvements made by the Company improve the builder’s lot as construction progresses, the Company accounts for revenue over time with progress measured based upon costs incurred to date compared to total expected costs. Any revenue in excess of amounts entitled to be billed is reflected on the balance sheet as a contract asset, and amounts received in excess of revenue recognized are recorded as deferred revenue. As of May 31, 2019, the Company had received payments of $7.7 million under development agreements relating to 150 lots, $6.1 million of which had been recognized based on the costs incurred to date compared to total expected costs for full completion of the 150 finished lots. For the three and nine months ended May 31, 2019, the Company recognized $938,100 and $3,965,700 of lot sales over time, respectively. No revenue was recognized for lot sales for the three or nine months ended May 31, 2018. The Company had deferred revenue related to lot sales of $1,631,800 and $0 as of May 31, 2019 and 2018, respectively. The Company does not have any material significant payment terms as all payments are expected to be received within 12 months after the delivery of each platted lot. The Company adopted the practical expedient for financing components and does not need to account for a financing component of these lot sales as the delivery of lot sales is expected to occur within one year or less. (ii) Construction support activities Inventories (iii) Project management services Pursuant to these agreements, the Company acts as the project manager and provides any and all services required to deliver the CAB-eligible improvements, including but not limited to CAB compliance; planning design and approvals; project administration; contractor agreements; and construction management and administration. The Company must submit to the CAB a monthly invoice, in a form acceptable to the CAB. The Company is responsible for all expenses it incurs in the performance of the agreements and is not entitled to any reimbursement or compensation except as defined in the agreements, unless otherwise approved in advance by the CAB in writing. The CAB is subject to annual budget and appropriation procedures and does not intend to create a multiple-fiscal year direct or indirect debt or other financial obligation. The Company receives a project management fee of five percent (5%) of actual construction costs of CAB-eligible improvements. The project management fee qualifies as a reimbursable cost to the Company. The project management fee is based only on the actual costs of the improvements; thus, items such as fees, permits, review fees, consultant or other soft costs, and land acquisition or any other costs that are not directly related to the cost of construction of CAB-eligible improvements are not included in the calculation of the project management fee. Soft costs and other costs that are not directly related to the construction of CAB-eligible improvements are being accrued to the reimbursable costs due from the CAB upon issuance of municipal bonds by the CAB. Upon issuance of municipal bonds by the CAB, all reimbursable costs, including reimbursable costs for project management services, will be recorded as a note receivable and will reduce any remaining capitalized expenses. Any reimbursable costs in excess of capitalized expenses will be recognized as a gain. To date, the Company has accrued $703,600 Inventories (iv) Reimbursable Costs for Infrastructure Related Parties Related Party Transactions Inventories Land development construction costs The Company evaluated disaggregation of revenue and has determined that no additional disaggregation of revenue is necessary. Contract asset by segment is as follows: May 31, 2019 August 31, 2018 Wholesale water and wastewater services $ — $ — Land development activities — — Corporate — — Balance, end of period $ — $ — Changes in contract asset were as follows: May 31, 2019 August 31, 2018 Balance, beginning of period $ — $ — Recognition of revenue contract asset 1,020,146 — Contract asset invoiced (1,020,146 ) — Balance, end of period $ — $ — Deferred revenue by segment is as follows: May 31, 2019 August 31, 2018 Land development activities $ 1,631,797 $ 361,050 Oil and gas contracts 140,522 — Oil and gas leases 74,311 116,111 Balance, end of period 1,846,630 477,161 Oil and gas leases and contracts, less current portion (196,255 ) (55,733 ) Oil and gas leases, long term 18,578 60,378 Total oil and gas leases $ 74,311 $ 116,111 Changes in deferred revenue were as follows: May 31, 2019 August 31, 2018 Balance, beginning of period $ 477,161 $ 1,055,488 Cumulative effect of adoption of ASU 2014-09 — (1,055,488 ) Deferral of revenue 6,652,560 2,667,200 Recognition of unearned revenue (5,283,091 ) (2,190,039 ) Balance, end of period $ 1,846,630 $ 477,161 Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized revenue”), which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. At May 31, 2019, the Company had outstanding open contracts for $27,502,700, which primarily related to the sale of 506 lots at Sky Ranch. The Company expects to recognize approximately 54% of such revenue over the next 12 months. Inventories Inventories include land held for development and sale that the Company has developed and are stated at cost. Capitalized lot development costs at Sky Ranch are costs incurred to construct finished lots at Sky Ranch that meet the Company’s capitalization criteria for improvements to a lot and are capitalized as incurred. The Company capitalizes certain legal, engineering, design, permitting, land acquisition, and construction costs related to the development of lots at Sky Ranch. The Company uses the specific identification method for purposes of accumulating land development costs and allocates costs to each lot to determine the cost basis for each lot sale. The Company records all land cost of sales for those contracts accounted for over time with progress measured based upon costs incurred to date compared to total expected costs. For customer contracts accounted for at a point in time, all costs are accumulated and recognized at the point in time control transfers to the customer, which is generally at closing for each finished lot. Inventory costs include common area costs that the Company funded through the CAB. The Company expects that the costs will be reimbursed by the CAB. The Company will record any reimbursements as a reduction of cost once the CAB has the ability to reimburse the costs (i.e., once the CAB has issued bonds). In accordance with ASC 360, the Company measures land held for sale at the lower of the carrying value or fair value less estimated costs to sell. In determining fair value, the Company primarily relies upon the most recent negotiated price. If a negotiated price is not available, the Company will consider several factors, including, but not limited to, current market conditions, recent comparable sales transactions and market analysis studies. If the fair value less estimated costs to sell is lower than the current carrying value, the land is impaired to its estimated fair value less costs to sell. Royalty and Other Obligations Revenues from the sale of Export Water are shown gross of royalties payable to the Land Board. Revenues from the sale of water on the Lowry Range are invoiced directly by the Rangeview District, and a percentage of such collections are then paid to the Company by the Rangeview District. Water revenue from such sales are shown net of royalties paid to the Land Board and amounts retained by the Rangeview District. Oil and Gas Lease Payments As further described in Note 2 – Summary of Significant Accounting Policies Other income Deferred Revenue Deferred revenue as of May 31, 2019, was comprised of unearned revenue from a Paid-Up Oil and Gas Lease between the Company and Bison Oil and Gas, LLP, for the purpose of exploring for, developing, producing, and marketing oil and gas on the 40 acres of mineral estate that the Company owns adjacent to the Lowry Range (the “Bison Lease”) and unearned revenue from advanced payments for lot sales at Sky Ranch. The Company received an up-front payment of $167,200 in October 2017, which will be recognized as income on a straight-line basis over three years (the term of the Bison Lease). The Company recognized lease income of $13,900 during each of the three months ended May 31, 2019 and 2018 related to the up-front payment received pursuant to the Bison Lease. The Company recognized lease income of $41,800 and $37,200 during the nine months ended May 31, 2019 and 2018, respectively, related to the up-front payment received pursuant to the Bison Lease. As of May 31, 2019, and August 31, 2018, the Company had deferred revenue of $74,300 and $116,100, respectively, related to the Bison Lease that will be recognized as income ratably through September 2020. The Company also received a payment of $1.4 million from one of its industrial water customers in the third quarter ended May 31, 2019. The customer issued the upfront payment to reserve water for its oil and gas fracking needs. As of May 31, 2019, the Company had deferred revenue of $140,500 as a result of the upfront payment. Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the eventual use of the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Capitalized Costs of Water and Wastewater Systems and Depletion and Depreciation of Water Assets Costs to construct water and wastewater systems that meet the Company’s capitalization criteria are capitalized as incurred, including any interest, and depreciated on a straight-line basis over their estimated useful lives of up to 30 years. The Company capitalizes design and construction costs related to construction activities, and it capitalizes certain legal, engineering and permitting costs relating to the adjudication and improvement of its water assets. The Company depletes its groundwater assets that are being utilized on the basis of units produced (i.e., thousands of gallons sold) divided by the total volume of water adjudicated in the water decrees. Share-Based Compensation The Company maintains a stock option plan for the benefit of its employees and non-employee directors. The Company records share-based compensation costs as expense over the applicable vesting period of the stock award using the straight-line method. The compensation costs to be expensed are measured at the grant date based on the fair value of the award. The Company has adopted the alternative transition method for calculating the tax effects of share-based compensation, which allows for a simplified method of calculating the tax effects of employee share-based compensation. Because the Company has a full valuation allowance on its deferred tax assets, the granting and exercise of stock options has no impact on the income tax provisions. The Company recognized $96,100 and $83,600 of share-based compensation expense during the three months ended May 31, 2019 and 2018, respectively. The Company recognized $257,800 and $241,200 of share-based compensation expense during the nine months ended May 31, 2019 and 2018, respectively. Income Taxes The Company uses a “more-likely-than-not” threshold for the recognition and de-recognition of tax positions, including any potential interest and penalties relating to tax positions taken by the Company. The Company did not have any significant unrecognized tax benefits as of May 31, 2019. As a result of H.R.1, commonly known as the Tax Cuts and Jobs Act (the “Tax Act”), signed into law on December 22, 2017, the Company has a $282,000 alternative minimum tax (“AMT”) deferred tax asset for which it did not have a valuation allowance as of May 31, 2019 and August 31, 2018. The Company expects to receive the AMT as a refund in future years. Most, if not all, of this credit will be refundable starting with the filing of the 2018 (fiscal year ending 2019) through 2021 (fiscal year ending 2022) tax returns, subject to limitations of Internal Revenue Code Section 382 (arises with ownership changes) and the sequestration limitation of the Balanced Budget Act of 1997. The Company has evaluated the Tax Act and determined that the impact was immaterial. The Company’s effective tax rate was 0% for the three and nine months ended May 31, 2019 and 2018 due to the release of the value allowance the Company maintains on its net deferred tax asset. The Company maintains a valuation allowance on the net deferred tax asset other than AMT credits, as the Company has determined it is more likely than not that the Company will not realize its deferred tax assets. Such assets primarily consist of operating loss carryforwards. The Company assessed the realizability of its deferred tax asset using all available evidence. In particular, the Company considered both historical results and projections of profitability for the reasonably foreseeable future periods. The Company is required to reassess its conclusions regarding the realization of its deferred tax assets at each financial reporting date. A future evaluation could result in a conclusion that all or a portion of the valuation allowance is no longer necessary, which could have a material positive impact on our results of operations and financial position. The Company files income tax returns with the Internal Revenue Service and the State of Colorado. The tax years that remain subject to examination are fiscal year 2015 through fiscal year 2018. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At May 31, 2019, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the three or nine months ended May 31, 2019 or 2018. Income (Loss) per Common Share Income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares outstanding during each period. Common stock options of 206,934 common share equivalents as of the nine months ended May 31, 2019, were included in the calculation of income per common share as dilutive common stock equivalents using the treasury stock method. Common stock options aggregating 50,000 common share equivalents as of the nine months ended May 31, 2019, have been excluded from the calculation of income per common share as their effect is anti-dilutive. Common stock options of 154,209 common share equivalents as of the nine months ended May 31, 2018, were included in the calculation of income per common share as dilutive common stock equivalents using the treasury stock method. Common stock options aggregating 32,500 common share equivalents as of the nine months ended May 31, 2018, have been excluded from the calculation of income per common share as their effect is anti-dilutive. Recently Issued Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its consolidated financial statements and to ensure that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below: In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In February 2018, the FASB issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Act and will improve the usefulness of information reported to financial statement users. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance of the standard. The Company believes the impact of this standard on its condensed consolidated financial statements is immaterial. In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to nonemployees. This standard expands the scope of ASC Topic 718, Compensation — Stock Compensation Equity — Equity-Based Payments to Non-Employees |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
May 31, 2019 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 2 – FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of significant input to determine where within the fair value hierarchy the measurement falls. Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as the NASDAQ Stock Market. The Company had no Level 1 assets or liabilities as of May 31, 2019 or August 31, 2018. Level 2 — Valuations for assets and liabilities obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company had four and seven Level 2 assets as of May 31, 2019 and August 31, 2018, respectively, which consist of U.S. Treasury debt securities. Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker-traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. The Company had one Level 3 liability, the contingent portion of the CAA, as of May 31, 2019 and August 31, 2018. The Company has determined that the contingent portion of the CAA does not have a determinable fair value (see Note 4 – Long-Term Obligations and Operating Lease) The Company maintains policies and procedures to value instruments using what management believes to be the best and most relevant data available. Level 2 Asset – Investments. The Company’s non-financial assets measured at fair value on a non-recurring basis when assessing recoverability consist entirely of its investments in water and water systems and other long-lived assets. See Note 3 – Water and Land Assets The following table provides information on the assets and liabilities measured at fair value on a recurring basis as of May 31, 2019: Fair Value Measurement Using: Fair Value Cost / Other Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Accumulated Unrealized Gains and (Losses) U.S. Treasury debt securities $ 5,997,000 $ 5,984,300 $ — $ 5,997,000 $ — $ 12,700 Total $ 5,997,000 $ 5,984,300 $ — $ 5,997,000 $ — $ 12,700 The following table provides information on the assets and liabilities measured at fair value on a recurring basis as of August 31, 2018: Fair Value Measurement Using: Fair Value Cost / Other Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Accumulated Unrealized Gains and (Losses) U.S. Treasury debt securities $ 8,718,000 $ 8,644,900 $ — $ 8,718,000 $ — $ 66,400 Total $ 8,718,000 $ 8,644,900 $ — $ 8,718,000 $ — $ 66,400 The Company also holds a certificate of deposit that is not carried at fair value on the consolidated balance sheets and is classified as a held-to-maturity security. As of May 31, 2019, the carrying amount of held-to-maturity securities was $192,200 and is included in short-term investments in the accompanying consolidated financial statements. As of August 31, 2018, the carrying amount of held-to-maturity securities was $190,400 and is recorded as long-term investments in the accompanying consolidated financial statements. |
WATER AND LAND ASSETS
WATER AND LAND ASSETS | 9 Months Ended |
May 31, 2019 | |
WATER AND LAND ASSETS [Abstract] | |
WATER AND LAND ASSETS | NOTE 3 – WATER AND LAND ASSETS The Company’s water rights and current water and wastewater service agreements are more fully described in Note 4 – Water and Land Assets Investment in Water and Water Systems The Company’s Investments in Water and Water Systems consist of the following costs and accumulated depreciation and depletion at May 31, 2019 and August 31, 2018: May 31, 2019 August 31, 2018 Costs Accumulated Depreciation and Depletion Costs Accumulated Depreciation and Depletion Rangeview Water Supply $ 14,820,700 $ (14,000 ) $ 14,813,800 $ (12,800 ) Sky Ranch water rights and other costs 7,361,000 (704,600 ) 7,171,700 (561,400 ) Fairgrounds water and water system 2,899,900 (1,129,000 ) 2,899,900 (1,062,900 ) Rangeview water system 5,578,000 (323,000 ) 1,655,600 (261,200 ) Water Supply – Other 4,430,100 (803,400 ) 4,337,200 (625,300 ) Wild Pointe service rights 1,631,700 (316,600 ) 1,631,700 (267,700 ) Sky Ranch pipeline 5,707,000 (363,900 ) 5,615,900 (222,000 ) Construction in progress 4,840,700 — 1,609,400 — Totals 47,269,100 (3,654,500 ) 39,735,200 (3,013,300 ) Net investments in water and water systems $ 43,614,600 $ 36,721,900 Capitalized terms in this section not defined herein are defined in Note 4 – Water and Land Assets Construction in progress primarily consists of capital water projects at Sky Ranch, including the wastewater facility, the water storage tank and the water pump station. Depletion and Depreciation The Company recorded depletion charges of $500 and $4,300 during the three months ended May 31, 2019 and 2018, respectively, and $1,300 and $5,300 during the nine months ended May 31, 2019 and 2018, respectively. The depletion was related entirely to the Rangeview Water Supply. The Company recorded $322,700 and $211,000 of depreciation expense during the three months ended May 31, 2019 and 2018, respectively. The Company recorded $812,700 and $554,700 of depreciation expense during the nine months ended May 31, 2019 and 2018, respectively. These figures include depreciation for other equipment not included in the table above. |
LONG-TERM OBLIGATIONS AND OPERA
LONG-TERM OBLIGATIONS AND OPERATING LEASE | 9 Months Ended |
May 31, 2019 | |
LONG-TERM OBLIGATIONS AND OPERATING LEASE [Abstract] | |
LONG-TERM OBLIGATIONS AND OPERATING LEASE | NOTE 4 – LONG-TERM OBLIGATIONS AND OPERATING LEASE The Participating Interests in Export Water Supply is an obligation of the Company that has no scheduled maturity date. Therefore, maturity of this liability is not disclosed in tabular format but is described below. Participating Interests in Export Water Supply The Company acquired its Rangeview Water Supply through various amended agreements entered into in the early 1990s. The acquisition was consummated with the signing of the CAA in 1996. Upon entering into the CAA, the Company recorded an initial liability of $11.1 million, which represented the cash that the Company received from the participating interest holders that was used to purchase the Company’s Export Water (described in greater detail in Note 4 – Water and Land Assets The CAA obligation is non-interest bearing, and if the Export Water is not sold, the parties to the CAA have no recourse against the Company. If the Company does not sell the Export Water, the holders of the Series B preferred stock of the Company are also not entitled to payment of any dividend and have no contractual recourse against the Company. As the proceeds from the sale of Export Water are received and the amounts are remitted to the external CAA holders, the Company allocates a ratable percentage of this payment to the principal portion (the Participating Interests in Export Water Supply From time to time, the Company reacquired various portions of the CAA obligations, which retained their original priority, including the Land Board’s CAA interest which was assigned and relinquished to the Company in 2014. The Company did not make any CAA acquisitions during the three months ended May 31, 2019 and 2018. As a result of the acquisitions, the Company is currently allocated approximately 88% of the total proceeds from the sale of Export Water after payment of the Land Board royalty. The acquisitions and cumulative sales of Export Water are detailed in the table below. The remaining potential third-party obligation at May 31, 2019, is approximately $1 million. Export Water Proceeds Received Initial Export Water Proceeds to Pure Cycle Total Potential Third-Party Obligation Participating Interests Liability Contingency Original balances $ — $ 218,500 $ 31,807,700 $ 11,090,600 $ 20,717,100 Activity from inception until August 31, 2018: Acquisitions — 28,042,500 (28,042,500 ) (9,790,000 ) (18,252,500 ) Relinquishment — 2,386,400 (2,386,400 ) (832,100 ) (1,554,300 ) Option payments - Sky Ranch and The Hills at Sky Ranch 110,400 (42,300 ) (68,100 ) (23,800 ) (44,300 ) Arapahoe County tap fees (1) 533,000 (373,100 ) (159,900 ) (55,800 ) (104,100 ) Export Water sale payments 737,300 (593,900 ) (143,400 ) (49,800 ) (93,600 ) Balance at August 31, 2018 1,380,700 29,638,100 1,007,400 339,100 668,300 Fiscal 2019 activity: Export Water sale payments 144,700 (127,500 ) (17,200 ) (6,000 ) (11,200 ) Balance at May 31, 2019 $ 1,525,400 $ 29,510,600 $ 990,200 $ 333,100 $ 657,100 (1) The Arapahoe County tap fees are net of $34,522 in royalties paid to the Land Board. The CAA includes contractually established priorities which call for payments to CAA holders in order of their priority. This means that the first payees receive their full payment before the next priority level receives any payment and so on until full repayment. Of the next approximately $6.5 million of Export Water payouts, which based on current payout levels would occur over several years, the Company will receive approximately $5.7 million of revenue. Thereafter, the Company will be entitled to all but approximately $220,000 of the proceeds from the sale of Export Water after deduction of the Land Board royalty. WISE Partnership In December 2014, the Company, through the Rangeview District, consented to the waiver of all contingencies set forth in the Amended and Restated WISE Partnership – Water Delivery Agreement, dated December 31, 2013 (the “WISE Partnership Agreement”), among the City and County of Denver acting through its Board of Water Commissioners (“Denver Water”), the City of Aurora acting by and through its Utility Enterprise (“Aurora Water”), and the South Metro WISE Authority (“SMWA”). The SMWA was formed by the Rangeview District and nine other governmental or quasi-governmental water providers pursuant to the South Metro WISE Authority Formation and Organizational Intergovernmental Agreement, dated December 31, 2013 (the “SM IGA”), to enable the members of SMWA to participate in the regional water supply project known as the Water Infrastructure Supply Efficiency partnership (“WISE”) created by the WISE Partnership Agreement. The SM IGA specifies each member’s pro rata share of WISE and the members’ rights and obligations with respect to WISE. The WISE Partnership Agreement provides for the purchase of certain infrastructure (i.e., pipelines, water storage facilities, water treatment facilities, and other appurtenant facilities) to deliver water to and among the 10 members of the SMWA, Denver Water and Aurora Water. Certain infrastructure has been constructed, and other infrastructure will be constructed over the next several years. By consenting to the waiver of the contingencies set forth in the WISE Partnership Agreement, pursuant to the terms of the Rangeview/Pure Cycle WISE Project Financing Agreement (the “WISE Financing Agreement”) between the Company and the Rangeview District, the Company has an agreement to fund the Rangeview District’s participation in WISE effective as of December 22, 2014. The Company’s cost of funding the Rangeview District’s purchase of its share of existing infrastructure and future infrastructure for WISE and funding operations and water deliveries related to WISE is projected to be approximately $6.8 million over the next five years. See further discussion in Note 6 – Related Party Transactions. Operating Lease Effective as of February 2018, the Company entered into an operating lease for approximately 11,393 square feet of office and warehouse space. The lease has a three-year term with payments of $6,600 per month and an option to extend the primary lease term for a two-year period at a rate equal to a 12.5% increase over the primary base payments. The change in the lease costs is not material to the Company’s operations. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
May 31, 2019 | |
SHAREHOLDERS' EQUITY [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 5 – SHAREHOLDERS’ EQUITY The Company maintains the 2014 Equity Incentive Plan (the “2014 Equity Plan”), which was approved by shareholders in January 2014 and became effective on April 12, 2014. Executives, eligible employees, consultants and non-employee directors are eligible to receive options and stock grants pursuant to the 2014 Equity Plan. Pursuant to the 2014 Equity Plan, options to purchase shares of stock and restricted stock awards can be granted with exercise prices, vesting conditions and other performance criteria determined by the Compensation Committee of the board of directors. The Company has reserved 1.6 million shares of common stock for issuance under the 2014 Equity Plan. The Company began awarding options under the 2014 Equity Plan in January 2015. Prior to the effective date of the 2014 Equity Plan, the Company granted stock awards to eligible participants under its 2004 Incentive Plan (the “2004 Incentive Plan”), which expired on April 11, 2014. No additional awards may be granted pursuant to the 2004 Incentive Plan; however, awards outstanding as of April 11, 2014, will continue to vest and expire and may be exercised in accordance with the terms of the 2004 Incentive Plan. The following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the nine months ended May 31, 2019: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Approximate Aggregate Intrinsic Value Outstanding at August 31, 2018 535,500 $ 5.31 6.04 $ 3,180,990 Granted (1) 82,500 $ 10.48 Exercised (37,500 ) $ 3.06 Forfeited or expired — $ — Outstanding at May 31, 2019 580,500 $ 6.19 6.50 $ 1,962,630 Options exercisable at May 31, 2019 428,000 $ 5.30 5.65 $ 1,761,260 (1) Includes 50,000 shares granted to Mr. Harding on September 26, 2018 and 32,500 total shares granted to non-employee directors on January 16, 2019. The following table summarizes the combined activity and value of non-vested options under the 2004 Equity Plan and 2014 Incentive Plan as of and for the nine months ended May 31, 2019: Number of Options Weighted Average Grant Date Fair Value Non-vested options outstanding at August 31, 2018 155,833 $ 3.76 Granted 82,500 4.60 Vested (85,834 ) 3.46 Forfeited — — Non-vested options outstanding at May 31, 2019 152,499 $ 4.03 All non-vested options are expected to vest. Stock-based compensation expense was $96,100 and $83,600 for the three months ended May 31, 2019 and 2018, respectively. Stock-based compensation expense was $257,800 and $241,200 for the nine months ended May 31, 2019 and 2018, respectively. At May 31, 2019, the Company had unrecognized compensation expenses totaling $362,400 relating to non-vested options that are expected to vest. The weighted-average period over which these options are expected to vest is approximately one year. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
May 31, 2019 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS The Rangeview District is a quasi-municipal corporation and political subdivision of Colorado formed in 1986 for the purpose of providing water and wastewater service to the Lowry Range and other approved areas. The Rangeview District is governed by an elected board of directors. Eligible voters and persons eligible to serve as a director of the Rangeview District must own an interest in property within the boundaries of the Rangeview District. The Company owns certain rights and real property interests which encompass the current boundaries of the Rangeview District. Sky Ranch Metropolitan District Nos. 1, 3, 4 and 5 (collectively, the “Sky Ranch Districts”) and the CAB are quasi-municipal corporations and political subdivisions of Colorado formed for the purpose of providing service to the Company’s Sky Ranch property. The current members of the board of directors of each of the Rangeview District, the Sky Ranch Districts and the CAB consist of three employees of the Company and one independent board member. The Rangeview District On December 16, 2009, the Company entered into a Participation Agreement with the Rangeview District, whereby the Company agreed to provide funding to the Rangeview District in connection with the Rangeview District joining the South Metro Water Supply Authority (“SMWSA”). The Company provides funding pursuant to the Participation Agreement annually with $22,200 and $198,200 being provided during fiscal years 2019 and 2018, respectively. Through the WISE Financing Agreement, the Company agreed to fund the Rangeview District’s cost of participating in the regional water supply project known as the WISE partnership. The Company anticipates spending approximately $6.8 million over the next five fiscal years to fund the Rangeview District’s purchase of its share of the water transmission line and additional facilities, water and related assets for WISE and to fund operations and water deliveries related to WISE. To date, the Company has capitalized the funding provided pursuant to the WISE Financing Agreement because the funding has been provided to purchase capacity in the WISE infrastructure. The Company’s total investment in the WISE assets as of May 31, 2019, is approximately $3.2 million. In 1995, the Company extended a loan to the Rangeview District. The loan provided for borrowings of up to $250,000, is unsecured, and bears interest based on the prevailing prime rate plus 2% (7.50% at May 31, 2019). The maturity date of the loan is December 31, 2020. In January 2014, the Rangeview District and the Company entered into a funding agreement that allows the Company to continue to provide funding to the Rangeview District for day-to-day operations and accrue the funding into a note that bears interest at a rate of 8% per annum and remains in full force and effect for so long as the 2014 Amended and Restated Lease Agreement remains in effect. The $944,500 balance of the notes receivable at May 31, 2019, includes borrowings of $534,100 and accrued interest of $410,400. Sky Ranch Metropolitan Districts No. 1, 3, 4 and 5 The Company has been providing funding to the Sky Ranch Districts. In each year since 2012, the Company entered into an Operation Funding Agreement with one of the Sky Ranch Districts, obligating the Company to advance funding to the Sky Ranch District for operations and maintenance expenses for the then-current calendar year. All payments were subject to annual appropriations by the Sky Ranch District in its absolute discretion. The advances by the Company accrued interest at a rate of 8% per annum from the date of the advance. The Operation Funding Agreements have been superseded by the 2018 FFAA as described below. In November 2014, but effective as of January 1, 2014, the Company entered into a Facilities Funding and Acquisition Agreement with a Sky Ranch District obligating the Company to either finance district improvements or to construct improvements on behalf of the Sky Ranch District subject to reimbursement. Improvements subject to this agreement were determined pursuant to a mutually agreed upon budget. Each year in September, the parties were to mutually determine the improvements required for the following year and finalize a budget by the end of October. Each advance or reimbursable expense accrued interest at a rate of 6% per annum. Upon the Sky Ranch District’s ratification of the advances and related expenditures, the amount was reclassified as long-term and is recorded as part of Notes receivable – related parties Sky Ranch Community Authority Board Pursuant to that certain Community Authority Board Establishment Agreement, as the same may be amended from time to time, Sky Ranch Metropolitan District Nos. 1 and 5 formed the CAB to, among other things, design, construct, finance, operate and maintain certain public improvements for the benefit of the property within the boundaries and/or service area of the Sky Ranch Districts. In order for the public improvements to be constructed and/or acquired, it is necessary for each Sky Ranch District, directly or through the CAB, to be able to fund the improvements and pay its ongoing operations and maintenance expenses related to the provision of services that benefit the property. In November 2017, but effective as of January 1, 2018, the Company entered into a Project Funding and Reimbursement Agreement (the “PF Agreement”) with the CAB for the Sky Ranch property. Improvements subject to the PF Agreement were determined pursuant to a mutually agreed upon budget. Pursuant to the PF Agreement, each advance or reimbursable expense accrued interest at a rate of 6% per annum. On September 18, 2018, the parties entered into a series of agreements, including a Facilities Funding and Acquisition Agreement with an effective date of November 13, 2017 (the “2018 FFAA”), which supersedes and consolidates the previous agreements pursuant to which ● the CAB agreed to repay the amounts owed by Sky Ranch Metropolitan District No. 5 to the Company, and the previous Facilities Funding and Acquisition Agreement entered into between the Company and Sky Ranch Metropolitan District No. 5 in 2014 was terminated; ● the PF Agreement and a June 2018 Funding Acquisition Agreement between the CAB and the Company were terminated; ● the CAB acknowledged all amounts owed to the Company under the terminated agreements, as well as amounts the Company incurred to finance the formation of the CAB; and ● the Company agreed to fund an agreed upon list of improvements to be constructed by the CAB with an estimated cost of $30,000,000 (including improvements already funded) on an as-needed basis for calendar years 2018–2023. All amounts owed under the 2018 FFAA bear interest at a rate of 6% per annum. No payment is required of the CAB for advances made to the CAB or expenses incurred related to construction of improvements unless and until the CAB and/or Sky Ranch Districts issue bonds in an amount sufficient to reimburse the Company for all or a portion of advances or other expenses incurred. The CAB agrees to exercise reasonable efforts to issue bonds to reimburse the Company subject to certain limitations. In addition, the CAB agrees to utilize any available moneys not otherwise pledged to payment of debt, used for operation and maintenance expenses, or otherwise encumbered, to reimburse the Company. Any advances not paid or reimbursed by the CAB by December 31, 2058, shall be deemed forever discharged and satisfied in full. As of May 31, 2019, the balance of the Company’s advances to the CAB plus accrued interest totaled $13.7 million, which is included in Inventories Land development construction costs Inventories. |
SIGNIFICANT CUSTOMERS
SIGNIFICANT CUSTOMERS | 9 Months Ended |
May 31, 2019 | |
SIGNIFICANT CUSTOMERS [Abstract] | |
SIGNIFICANT CUSTOMERS | NOTE 7 – SIGNIFICANT CUSTOMERS Water and Wastewater Revenues related to the provision of water for the oil and gas industry to one customer accounted for approximately 93% and 87% of the Company’s water and wastewater revenues for the three months ended May 31, 2019 and 2018, respectively. Revenues related to the provision of water for the oil and gas industry to two customers accounted for approximately 67% and 25%, respectively, of the Company’s water and wastewater revenues for the nine months ended May 31, 2019. Revenues related to the provision of water for the oil and gas industry to three customers represented approximately 71% 12% and 10%, respectively, of the Company’s water and wastewater revenues for the nine months ended May 31, 2018. Land Development Revenues from three customers represented 100% of the Company’s land development revenues for the three months ended May 31, 2019. The three customers represented 65%, 25% and 10%, respectively, of the Company’s land development revenues for the three months ended May 31, 2019. Revenues from three customers represented 100% of the Company’s land development revenues for the nine months ended May 31, 2019. The three customers represented 45%, 34% and 21%, respectively, of the Company’s land development revenues for the nine months ended May 31, 2019. No revenues were recognized from the Company’s land development activities for the three or nine months ended May 31, 2018. Accounts Receivable The Company had accounts receivable from the Rangeview District which accounted for 78% and 3% of the Company’s trade receivables balances at May 31, 2019 and August 31, 2018, respectively. The Company had accounts receivable from two other customers of approximately 43% and 30%, respectively, at August 31, 2018. Of the trade receivables from the Rangeview District as of May 31, 2019, approximately 94% is related to water tap sales and 6% is related to water and wastewater service sales. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
May 31, 2019 | |
ACCRUED LIABILITIES [Abstract] | |
ACCRUED LIABILITIES | NOTE 8 – ACCRUED LIABILITIES At May 31, 2019, the Company had accrued liabilities of $2,627,100, of which $65,900 was for estimated property taxes, $34,600 was for professional fees, and $2,526,600 was for operating payables, of which $2,191,600 is payable to the CAB for the development of Sky Ranch. These costs are also included in Inventories Land development construction costs At August 31, 2018, the Company had accrued liabilities of $849,500, of which $400,000 was for accrued compensation, $29,000 was for estimated property taxes, $59,000 was for professional fees and the remaining $361,500 was related to operating payables. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
May 31, 2019 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES The Company has historically been involved in various claims, litigation and other legal proceedings that arise in the ordinary course of its business. The Company records an accrual for a material loss contingency when its occurrence is probable and damages can be reasonably estimated based on the anticipated most likely outcome or the minimum amount within a range of possible outcomes. The Company makes such estimates based on information known about the claims and experience in contesting, litigating and settling similar claims. Disclosures are also provided for reasonably possible losses that could have a material effect on the Company’s financial position, results of operations or cash flows. The Company had no contingencies where the risk of material loss was reasonably possible as of May 31, 2019, or August 31, 2018. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
May 31, 2019 | |
SEGMENT INFORMATION [Abstract] | |
SEGMENT INFORMATION | NOTE 10 – SEGMENT INFORMATION An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (the “CODM”), or decision-making group, to evaluate performance and make operating decisions. The Company has identified its CODM as the Chief Executive Officer. During the year 2018, the Company began construction of lots at Sky Ranch, which the Company has identified as a segment. Currently, the Company operates its wholesale water and wastewater services segment and land development activities at Sky Ranch as its two lines of business. The wholesale water and wastewater services business includes selling water service to customers, which water is provided by the Company using water rights owned or controlled by the Company, and developing infrastructure to divert, treat and distribute that water and collect, treat and reuse wastewater. As part of the Company’s land development activities at Sky Ranch, the Company entered into contracts for the sale of lots (see Note 2 – Summary of Significant Accounting Policies Oil and gas royalties and licenses are a passive activity and not an operating business activity and, therefore, are not classified as a segment. The following table summarizes wholesale water and wastewater services and land development revenue information by segment: Three Months Ended May 31, Nine Months Ended May 31, 2019 2018 2019 2018 Wholesale water and wastewater services $ 2,476,570 $ 1,212,119 $ 4,851,961 $ 3,066,911 Land development activities 2,708,093 — 6,035,670 - Total revenues $ 5,184,663 $ 1,212,119 $ 10,887,631 $ 3,066,911 The following table summarizes wholesale water and wastewater services and land development pretax income by segment: Three Months Ended May 31, Nine Months Ended May 31, 2019 2018 2019 2018 Wholesale water and wastewater services $ 1,802,340 $ 617,077 $ 3,222,922 $ 1,697,279 Land development activities 120,021 — 319,676 - Corporate (660,990 ) (562,476 ) (1,743,280 ) (1,639,126 ) Total pretax income (loss) $ 1,261,371 $ 54,601 $ 1,799,318 $ 58,153 The following table summarizes total assets for the Company’s wholesale water and wastewater services business and land development business by segment. The assets consist of water rights and water and wastewater systems in the Company’s wholesale water and wastewater services segment. The assets consist of land, inventories and deposits in the Company’s land development segment. The Company’s other assets primarily consist of cash and cash equivalents, equipment, mineral rights, related party notes receivables and a deferred tax asset. May 31, 2019 August 31, 2018 Wholesale water and wastewater services $ 43,614,590 $ 36,721,884 Land development activities 18,477,341 9,497,106 Corporate 14,748,041 25,687,625 Total assets $ 76,839,973 $ 71,906,615 |
PRESENTATION OF INTERIM INFOR_2
PRESENTATION OF INTERIM INFORMATION (Policies) | 9 Months Ended |
May 31, 2019 | |
PRESENTATION OF INTERIM INFORMATION [Abstract] | |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2018 financial statements to conform to the consolidated 2019 financial statement presentation. These reclassifications had no effect on net earnings or cash flows previously reported. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less. The Company’s cash equivalents are comprised entirely of money market funds maintained at a reputable financial institution. At various times during the three months ended May 31, 2019, the Company’s main operating account exceeded federally insured limits. To date, the Company has not suffered a loss due to such excess balance. |
Land Development Inventories | Land Development Inventories Inventories primarily include land held for development and sale and are stated at cost. Capitalized lot development costs at Sky Ranch are costs incurred to construct finished lots at Sky Ranch that meet the Company’s capitalization criteria for improvements to a lot and are capitalized as incurred. The Company capitalizes certain legal, engineering, design, permitting, land acquisition, and construction costs related to the development of lots at Sky Ranch. The Company uses the specific identification method for the purpose of accumulating land development costs and allocates costs to each lot to determine the cost basis for each lot sale. The Company records land cost of sales for two of three of our builders over time based on inputs of costs to total costs and for one builder at a point in time as lots are delivered. In accordance with Accounting Standards Codification (“ASC”) Topic 360, Property, Plant and Equipment |
Contract Asset | Contract Asset Contract receivables are recorded at the invoiced amount and do not bear interest. Credit is extended based on the evaluation of a customer’s financial condition and collateral is not required. |
Investments | Investments Management determines the appropriate classification of its investments in certificates of deposit and U.S. Treasury debt securities at the time of purchase and re-evaluates such determinations each reporting period. Certificates of deposit and U.S. Treasury debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. The Company has $192,200 of investments classified as held-to-maturity at May 31, 2019, which represent certificates of deposit with a maturity date in October 2019. Securities that the Company does not have the positive intent or ability to hold to maturity, including certificates of deposit and U.S. Treasury debt securities, are reported at their fair value. Changes in value of such securities are recorded as a component of Accumulated other comprehensive income (loss). |
Concentration of Credit Risk and Fair Value | Concentration of Credit Risk and Fair Value Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and investments. From time to time, the Company places its cash in money market instruments, certificates of deposit and U.S. Treasury obligations. To date, the Company has not experienced significant losses on any of these investments. The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value. Cash and Cash Equivalents – maintained at a reputable financial institution Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less. At various times during the three and nine months ended May 31, 2019, the Company’s main operating account exceeded federally insured limits. To date, the Company has not suffered a loss due to such excess balance. Trade Accounts Receivable – Investments – Fair Value Measurements. Accounts Payable – Long-Term Financial Liabilities – Water and Land Assets Water and Land Assets Long-Term Obligations and Operating Lease – Participating Interests in Export Water Supply Notes Receivable – Related Parties – Off-Balance Sheet Instruments – Long-Term Obligations and Operating Lease – Participating Interests in Export Water Supply |
Revenue Recognition | Revenue Recognition The Company disaggregates revenue by major product line as reported on the consolidated statements of operations and comprehensive income. The Company generates revenues through two lines of business. Revenues are derived through its wholesale water and wastewater business and through the sale of developed land primarily for residential lots, both of which businesses are described below. Wholesale Water and Wastewater Fees The Company generates revenues through its wholesale water and wastewater business predominantly from three sources: (i) monthly wholesale water usage fees and wastewater service fees, including monthly usage fees for water deliveries to the oil and gas industry for hydraulic fracturing, (ii) one-time water and wastewater tap fees and construction fees/Special Facility funding (as defined below), and (iii) consulting fees. Because these items are separately delivered and distinct, the Company accounts for each of the items separately, as described below. (i) Monthly water usage and wastewater treatment fees – Water and Land Assets Water and Land Assets In addition to providing domestic water, the Company provides raw water for hydraulic fracturing to industrial customers in the oil and gas industry that are located in and adjacent to its service areas. Frack water revenues are recognized at a point in time upon delivering water to a customer. The Company delivered 96.9 million and 106.1 million gallons of water to customers during the three months ended May 31, 2019 and 2018, respectively, of which 93% and 73% was used for oil and gas exploration. The Company delivered 232.3 million and 253.5 million gallons of water to customers during the nine months ended May 31, 2019 and 2018, respectively, of which 85% and 80% was used for oil and gas exploration. The Company recognizes wastewater treatment revenues monthly based on a flat monthly fee and actual usage charges. The monthly wastewater treatment fees are shown net of amounts retained by the Rangeview District. Costs of delivering water and providing wastewater service to customers are recognized as incurred. (ii) Water and wastewater tap fees/Special Facility funding Long-Term Obligations and Operating Lease Participating Interests in Export Water Supply The Company recognizes construction fees, including fees received to construct “Special Facilities,” over time as the construction is completed because the customer is generally able to use the property improvement to enhance the value of other assets during the construction period. Special Facilities are facilities that enable water to be delivered to a single customer and are not otherwise classified as a typical wholesale facility or retail facility. Temporary infrastructure required prior to construction of permanent water and wastewater systems or transmission pipelines to transfer water from one location to another are examples of Special Facilities. Management has determined that Special Facilities are separate and distinct performance obligations because these projects are contracted to construct a specific water and wastewater system or transmission pipeline and typically do not include multiple performance obligations in a contract with a customer. No Special Facilities revenue has been recognized during the three or nine months ended May 31, 2019 or 2018. (iii) Consulting fees Land Development Activities The Company generates revenues through the sale of finished lots at its Sky Ranch development primarily from several sources of revenues: (i) land development through the sale of finished lots, (ii) construction support activities, (iii) project management services, and (iv) reimbursable expenses incurred to develop certain infrastructure. (i) Land development through the sale of finished lots The Company sells lots at Sky Ranch pursuant to distinct agreements with each builder. These agreements follow one of two formats. One format is the sale of a finished lot, whereby the builder pays for a ready-to-build finished lot and payment is a lump-sum payment upon completion of the finished lot. The Company recognizes revenues at the point in time of the closing of the sale of a finished lot in which control transfers to the builder and the builder is able to obtain a building permit, as the transaction cycle is complete, and the Company has no further obligations for the lot. During the three months ended May 31, 2019, the Company received payment and recognized revenue of $1,770,000 from one home builder in exchange for the delivery of 25 finished lots. During the nine months ended May 31, 2019, the Company received payment and recognized revenue of $2,070,000 from one home builder in exchange for the delivery of 29 finished lots. No revenue was recognized for lot sales at a point in time for the three or nine months ended May 31, 2018. The Company’s second format is the sale of finished lots pursuant to a development agreement with a builder, whereby the Company receives payments in stages that include (i) payment upon the delivery of platted lots (which requires the Company to deliver deeded title to individual lots), (ii) a second payment upon the completion of certain infrastructure milestones, and (iii) final payment upon the delivery of the finished lot. Ownership and control of the platted lots pass to the builder once the Company closes the sale of the platted lots. Because the builder (i.e., the customer) takes control of the lot at the first closing and subsequent improvements made by the Company improve the builder’s lot as construction progresses, the Company accounts for revenue over time with progress measured based upon costs incurred to date compared to total expected costs. Any revenue in excess of amounts entitled to be billed is reflected on the balance sheet as a contract asset, and amounts received in excess of revenue recognized are recorded as deferred revenue. As of May 31, 2019, the Company had received payments of $7.7 million under development agreements relating to 150 lots, $6.1 million of which had been recognized based on the costs incurred to date compared to total expected costs for full completion of the 150 finished lots. For the three and nine months ended May 31, 2019, the Company recognized $938,100 and $3,965,700 of lot sales over time, respectively. No revenue was recognized for lot sales for the three or nine months ended May 31, 2018. The Company had deferred revenue related to lot sales of $1,631,800 and $0 as of May 31, 2019 and 2018, respectively. The Company does not have any material significant payment terms as all payments are expected to be received within 12 months after the delivery of each platted lot. The Company adopted the practical expedient for financing components and does not need to account for a financing component of these lot sales as the delivery of lot sales is expected to occur within one year or less. (ii) Construction support activities Inventories (iii) Project management services Pursuant to these agreements, the Company acts as the project manager and provides any and all services required to deliver the CAB-eligible improvements, including but not limited to CAB compliance; planning design and approvals; project administration; contractor agreements; and construction management and administration. The Company must submit to the CAB a monthly invoice, in a form acceptable to the CAB. The Company is responsible for all expenses it incurs in the performance of the agreements and is not entitled to any reimbursement or compensation except as defined in the agreements, unless otherwise approved in advance by the CAB in writing. The CAB is subject to annual budget and appropriation procedures and does not intend to create a multiple-fiscal year direct or indirect debt or other financial obligation. The Company receives a project management fee of five percent (5%) of actual construction costs of CAB-eligible improvements. The project management fee qualifies as a reimbursable cost to the Company. The project management fee is based only on the actual costs of the improvements; thus, items such as fees, permits, review fees, consultant or other soft costs, and land acquisition or any other costs that are not directly related to the cost of construction of CAB-eligible improvements are not included in the calculation of the project management fee. Soft costs and other costs that are not directly related to the construction of CAB-eligible improvements are being accrued to the reimbursable costs due from the CAB upon issuance of municipal bonds by the CAB. Upon issuance of municipal bonds by the CAB, all reimbursable costs, including reimbursable costs for project management services, will be recorded as a note receivable and will reduce any remaining capitalized expenses. Any reimbursable costs in excess of capitalized expenses will be recognized as a gain. To date, the Company has accrued $703,600 Inventories (iv) Reimbursable Costs for Infrastructure Related Parties Related Party Transactions Inventories Land development construction costs The Company evaluated disaggregation of revenue and has determined that no additional disaggregation of revenue is necessary. Contract asset by segment is as follows: May 31, 2019 August 31, 2018 Wholesale water and wastewater services $ — $ — Land development activities — — Corporate — — Balance, end of period $ — $ — Changes in contract asset were as follows: May 31, 2019 August 31, 2018 Balance, beginning of period $ — $ — Recognition of revenue contract asset 1,020,146 — Contract asset invoiced (1,020,146 ) — Balance, end of period $ — $ — Deferred revenue by segment is as follows: May 31, 2019 August 31, 2018 Land development activities $ 1,631,797 $ 361,050 Oil and gas contracts 140,522 — Oil and gas leases 74,311 116,111 Balance, end of period 1,846,630 477,161 Oil and gas leases and contracts, less current portion (196,255 ) (55,733 ) Oil and gas leases, long term 18,578 60,378 Total oil and gas leases $ 74,311 $ 116,111 Changes in deferred revenue were as follows: May 31, 2019 August 31, 2018 Balance, beginning of period $ 477,161 $ 1,055,488 Cumulative effect of adoption of ASU 2014-09 — (1,055,488 ) Deferral of revenue 6,652,560 2,667,200 Recognition of unearned revenue (5,283,091 ) (2,190,039 ) Balance, end of period $ 1,846,630 $ 477,161 Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized revenue”), which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. At May 31, 2019, the Company had outstanding open contracts for $27,502,700, which primarily related to the sale of 506 lots at Sky Ranch. The Company expects to recognize approximately 54% of such revenue over the next 12 months. |
Inventories | Inventories Inventories include land held for development and sale that the Company has developed and are stated at cost. Capitalized lot development costs at Sky Ranch are costs incurred to construct finished lots at Sky Ranch that meet the Company’s capitalization criteria for improvements to a lot and are capitalized as incurred. The Company capitalizes certain legal, engineering, design, permitting, land acquisition, and construction costs related to the development of lots at Sky Ranch. The Company uses the specific identification method for purposes of accumulating land development costs and allocates costs to each lot to determine the cost basis for each lot sale. The Company records all land cost of sales for those contracts accounted for over time with progress measured based upon costs incurred to date compared to total expected costs. For customer contracts accounted for at a point in time, all costs are accumulated and recognized at the point in time control transfers to the customer, which is generally at closing for each finished lot. Inventory costs include common area costs that the Company funded through the CAB. The Company expects that the costs will be reimbursed by the CAB. The Company will record any reimbursements as a reduction of cost once the CAB has the ability to reimburse the costs (i.e., once the CAB has issued bonds). In accordance with ASC 360, the Company measures land held for sale at the lower of the carrying value or fair value less estimated costs to sell. In determining fair value, the Company primarily relies upon the most recent negotiated price. If a negotiated price is not available, the Company will consider several factors, including, but not limited to, current market conditions, recent comparable sales transactions and market analysis studies. If the fair value less estimated costs to sell is lower than the current carrying value, the land is impaired to its estimated fair value less costs to sell. |
Royalty and Other Obligations | Royalty and Other Obligations Revenues from the sale of Export Water are shown gross of royalties payable to the Land Board. Revenues from the sale of water on the Lowry Range are invoiced directly by the Rangeview District, and a percentage of such collections are then paid to the Company by the Rangeview District. Water revenue from such sales are shown net of royalties paid to the Land Board and amounts retained by the Rangeview District. |
Oil and Gas Lease Payments | Oil and Gas Lease Payments As further described in Note 2 – Summary of Significant Accounting Policies Other income |
Deferred Revenue | Deferred Revenue Deferred revenue as of May 31, 2019, was comprised of unearned revenue from a Paid-Up Oil and Gas Lease between the Company and Bison Oil and Gas, LLP, for the purpose of exploring for, developing, producing, and marketing oil and gas on the 40 acres of mineral estate that the Company owns adjacent to the Lowry Range (the “Bison Lease”) and unearned revenue from advanced payments for lot sales at Sky Ranch. The Company received an up-front payment of $167,200 in October 2017, which will be recognized as income on a straight-line basis over three years (the term of the Bison Lease). The Company recognized lease income of $13,900 during each of the three months ended May 31, 2019 and 2018 related to the up-front payment received pursuant to the Bison Lease. The Company recognized lease income of $41,800 and $37,200 during the nine months ended May 31, 2019 and 2018, respectively, related to the up-front payment received pursuant to the Bison Lease. As of May 31, 2019, and August 31, 2018, the Company had deferred revenue of $74,300 and $116,100, respectively, related to the Bison Lease that will be recognized as income ratably through September 2020. The Company also received a payment of $1.4 million from one of its industrial water customers in the third quarter ended May 31, 2019. The customer issued the upfront payment to reserve water for its oil and gas fracking needs. As of May 31, 2019, the Company had deferred revenue of $140,500 as a result of the upfront payment. |
Long-Lived Assets | Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the eventual use of the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Capitalized Costs of Water and Wastewater Systems and Depletion and Depreciation of Water Assets | Capitalized Costs of Water and Wastewater Systems and Depletion and Depreciation of Water Assets Costs to construct water and wastewater systems that meet the Company’s capitalization criteria are capitalized as incurred, including any interest, and depreciated on a straight-line basis over their estimated useful lives of up to 30 years. The Company capitalizes design and construction costs related to construction activities, and it capitalizes certain legal, engineering and permitting costs relating to the adjudication and improvement of its water assets. The Company depletes its groundwater assets that are being utilized on the basis of units produced (i.e., thousands of gallons sold) divided by the total volume of water adjudicated in the water decrees |
Share-Based Compensation | Share-Based Compensation The Company maintains a stock option plan for the benefit of its employees and non-employee directors. The Company records share-based compensation costs as expense over the applicable vesting period of the stock award using the straight-line method. The compensation costs to be expensed are measured at the grant date based on the fair value of the award. The Company has adopted the alternative transition method for calculating the tax effects of share-based compensation, which allows for a simplified method of calculating the tax effects of employee share-based compensation. Because the Company has a full valuation allowance on its deferred tax assets, the granting and exercise of stock options has no impact on the income tax provisions. The Company recognized $96,100 and $83,600 of share-based compensation expense during the three months ended May 31, 2019 and 2018, respectively. The Company recognized $257,800 and $241,200 of share-based compensation expense during the nine months ended May 31, 2019 and 2018, respectively. |
Income Taxes | Income Taxes The Company uses a “more-likely-than-not” threshold for the recognition and de-recognition of tax positions, including any potential interest and penalties relating to tax positions taken by the Company. The Company did not have any significant unrecognized tax benefits as of May 31, 2019. As a result of H.R.1, commonly known as the Tax Cuts and Jobs Act (the “Tax Act”), signed into law on December 22, 2017, the Company has a $282,000 alternative minimum tax (“AMT”) deferred tax asset for which it did not have a valuation allowance as of May 31, 2019 and August 31, 2018. The Company expects to receive the AMT as a refund in future years. Most, if not all, of this credit will be refundable starting with the filing of the 2018 (fiscal year ending 2019) through 2021 (fiscal year ending 2022) tax returns, subject to limitations of Internal Revenue Code Section 382 (arises with ownership changes) and the sequestration limitation of the Balanced Budget Act of 1997. The Company has evaluated the Tax Act and determined that the impact was immaterial. The Company’s effective tax rate was 0% for the three and nine months ended May 31, 2019 and 2018 due to the release of the value allowance the Company maintains on its net deferred tax asset. The Company maintains a valuation allowance on the net deferred tax asset other than AMT credits, as the Company has determined it is more likely than not that the Company will not realize its deferred tax assets. Such assets primarily consist of operating loss carryforwards. The Company assessed the realizability of its deferred tax asset using all available evidence. In particular, the Company considered both historical results and projections of profitability for the reasonably foreseeable future periods. The Company is required to reassess its conclusions regarding the realization of its deferred tax assets at each financial reporting date. A future evaluation could result in a conclusion that all or a portion of the valuation allowance is no longer necessary, which could have a material positive impact on our results of operations and financial position. The Company files income tax returns with the Internal Revenue Service and the State of Colorado. The tax years that remain subject to examination are fiscal year 2015 through fiscal year 2018. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At May 31, 2019, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the three or nine months ended May 31, 2019 or 2018 |
Income (Loss) per Common Share | Income (Loss) per Common Share Income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares outstanding during each period. Common stock options of 206,934 common share equivalents as of the nine months ended May 31, 2019, were included in the calculation of income per common share as dilutive common stock equivalents using the treasury stock method. Common stock options aggregating 50,000 common share equivalents as of the nine months ended May 31, 2019, have been excluded from the calculation of income per common share as their effect is anti-dilutive. Common stock options of 154,209 common share equivalents as of the nine months ended May 31, 2018, were included in the calculation of income per common share as dilutive common stock equivalents using the treasury stock method. Common stock options aggregating 32,500 common share equivalents as of the nine months ended May 31, 2018, have been excluded from the calculation of income per common share as their effect is anti-dilutive. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its consolidated financial statements and to ensure that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below: In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In February 2018, the FASB issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Act and will improve the usefulness of information reported to financial statement users. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance of the standard. The Company believes the impact of this standard on its condensed consolidated financial statements is immaterial. In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to nonemployees. This standard expands the scope of ASC Topic 718, Compensation — Stock Compensation Equity — Equity-Based Payments to Non-Employees |
PRESENTATION OF INTERIM INFOR_3
PRESENTATION OF INTERIM INFORMATION (Tables) | 9 Months Ended |
May 31, 2019 | |
PRESENTATION OF INTERIM INFORMATION [Abstract] | |
Changes in Contract Asset and Deferred Revenue | The Company evaluated disaggregation of revenue and has determined that no additional disaggregation of revenue is necessary. Contract asset by segment is as follows: May 31, 2019 August 31, 2018 Wholesale water and wastewater services $ — $ — Land development activities — — Corporate — — Balance, end of period $ — $ — Changes in contract asset were as follows: May 31, 2019 August 31, 2018 Balance, beginning of period $ — $ — Recognition of revenue contract asset 1,020,146 — Contract asset invoiced (1,020,146 ) — Balance, end of period $ — $ — Deferred revenue by segment is as follows: May 31, 2019 August 31, 2018 Land development activities $ 1,631,797 $ 361,050 Oil and gas contracts 140,522 — Oil and gas leases 74,311 116,111 Balance, end of period 1,846,630 477,161 Oil and gas leases and contracts, less current portion (196,255 ) (55,733 ) Oil and gas leases, long term 18,578 60,378 Total oil and gas leases $ 74,311 $ 116,111 Changes in deferred revenue were as follows: May 31, 2019 August 31, 2018 Balance, beginning of period $ 477,161 $ 1,055,488 Cumulative effect of adoption of ASU 2014-09 — (1,055,488 ) Deferral of revenue 6,652,560 2,667,200 Recognition of unearned revenue (5,283,091 ) (2,190,039 ) Balance, end of period $ 1,846,630 $ 477,161 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
May 31, 2019 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table provides information on the assets and liabilities measured at fair value on a recurring basis as of May 31, 2019: Fair Value Measurement Using: Fair Value Cost / Other Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Accumulated Unrealized Gains and (Losses) U.S. Treasury debt securities $ 5,997,000 $ 5,984,300 $ — $ 5,997,000 $ — $ 12,700 Total $ 5,997,000 $ 5,984,300 $ — $ 5,997,000 $ — $ 12,700 The following table provides information on the assets and liabilities measured at fair value on a recurring basis as of August 31, 2018: Fair Value Measurement Using: Fair Value Cost / Other Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Accumulated Unrealized Gains and (Losses) U.S. Treasury debt securities $ 8,718,000 $ 8,644,900 $ — $ 8,718,000 $ — $ 66,400 Total $ 8,718,000 $ 8,644,900 $ — $ 8,718,000 $ — $ 66,400 |
WATER AND LAND ASSETS (Tables)
WATER AND LAND ASSETS (Tables) | 9 Months Ended |
May 31, 2019 | |
WATER AND LAND ASSETS [Abstract] | |
Investments in Water and Water Systems | The Company’s Investments in Water and Water Systems consist of the following costs and accumulated depreciation and depletion at May 31, 2019 and August 31, 2018: May 31, 2019 August 31, 2018 Costs Accumulated Depreciation and Depletion Costs Accumulated Depreciation and Depletion Rangeview Water Supply $ 14,820,700 $ (14,000 ) $ 14,813,800 $ (12,800 ) Sky Ranch water rights and other costs 7,361,000 (704,600 ) 7,171,700 (561,400 ) Fairgrounds water and water system 2,899,900 (1,129,000 ) 2,899,900 (1,062,900 ) Rangeview water system 5,578,000 (323,000 ) 1,655,600 (261,200 ) Water Supply – Other 4,430,100 (803,400 ) 4,337,200 (625,300 ) Wild Pointe service rights 1,631,700 (316,600 ) 1,631,700 (267,700 ) Sky Ranch pipeline 5,707,000 (363,900 ) 5,615,900 (222,000 ) Construction in progress 4,840,700 — 1,609,400 — Totals 47,269,100 (3,654,500 ) 39,735,200 (3,013,300 ) Net investments in water and water systems $ 43,614,600 $ 36,721,900 |
LONG-TERM OBLIGATIONS AND OPE_2
LONG-TERM OBLIGATIONS AND OPERATING LEASE (Tables) | 9 Months Ended |
May 31, 2019 | |
LONG-TERM OBLIGATIONS AND OPERATING LEASE [Abstract] | |
Remaining Third Party Obligation | The remaining potential third-party obligation at May 31, 2019, is approximately $1 million. Export Water Proceeds Received Initial Export Water Proceeds to Pure Cycle Total Potential Third-Party Obligation Participating Interests Liability Contingency Original balances $ — $ 218,500 $ 31,807,700 $ 11,090,600 $ 20,717,100 Activity from inception until August 31, 2018: Acquisitions — 28,042,500 (28,042,500 ) (9,790,000 ) (18,252,500 ) Relinquishment — 2,386,400 (2,386,400 ) (832,100 ) (1,554,300 ) Option payments - Sky Ranch and The Hills at Sky Ranch 110,400 (42,300 ) (68,100 ) (23,800 ) (44,300 ) Arapahoe County tap fees (1) 533,000 (373,100 ) (159,900 ) (55,800 ) (104,100 ) Export Water sale payments 737,300 (593,900 ) (143,400 ) (49,800 ) (93,600 ) Balance at August 31, 2018 1,380,700 29,638,100 1,007,400 339,100 668,300 Fiscal 2019 activity: Export Water sale payments 144,700 (127,500 ) (17,200 ) (6,000 ) (11,200 ) Balance at May 31, 2019 $ 1,525,400 $ 29,510,600 $ 990,200 $ 333,100 $ 657,100 (1) The Arapahoe County tap fees are net of $34,522 in royalties paid to the Land Board. |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
May 31, 2019 | |
SHAREHOLDERS' EQUITY [Abstract] | |
Stock Option Activity | The following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the nine months ended May 31, 2019: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Approximate Aggregate Intrinsic Value Outstanding at August 31, 2018 535,500 $ 5.31 6.04 $ 3,180,990 Granted (1) 82,500 $ 10.48 Exercised (37,500 ) $ 3.06 Forfeited or expired — $ — Outstanding at May 31, 2019 580,500 $ 6.19 6.50 $ 1,962,630 Options exercisable at May 31, 2019 428,000 $ 5.30 5.65 $ 1,761,260 (1) Includes 50,000 shares granted to Mr. Harding on September 26, 2018 and 32,500 total shares granted to non-employee directors on January 16, 2019. |
Value of Non-vested Options | The following table summarizes the combined activity and value of non-vested options under the 2004 Equity Plan and 2014 Incentive Plan as of and for the nine months ended May 31, 2019: Number of Options Weighted Average Grant Date Fair Value Non-vested options outstanding at August 31, 2018 155,833 $ 3.76 Granted 82,500 4.60 Vested (85,834 ) 3.46 Forfeited — — Non-vested options outstanding at May 31, 2019 152,499 $ 4.03 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
May 31, 2019 | |
SEGMENT INFORMATION [Abstract] | |
Information by Segments | The following table summarizes wholesale water and wastewater services and land development revenue information by segment: Three Months Ended May 31, Nine Months Ended May 31, 2019 2018 2019 2018 Wholesale water and wastewater services $ 2,476,570 $ 1,212,119 $ 4,851,961 $ 3,066,911 Land development activities 2,708,093 — 6,035,670 - Total revenues $ 5,184,663 $ 1,212,119 $ 10,887,631 $ 3,066,911 The following table summarizes wholesale water and wastewater services and land development pretax income by segment: Three Months Ended May 31, Nine Months Ended May 31, 2019 2018 2019 2018 Wholesale water and wastewater services $ 1,802,340 $ 617,077 $ 3,222,922 $ 1,697,279 Land development activities 120,021 — 319,676 - Corporate (660,990 ) (562,476 ) (1,743,280 ) (1,639,126 ) Total pretax income (loss) $ 1,261,371 $ 54,601 $ 1,799,318 $ 58,153 The following table summarizes total assets for the Company’s wholesale water and wastewater services business and land development business by segment. The assets consist of water rights and water and wastewater systems in the Company’s wholesale water and wastewater services segment. The assets consist of land, inventories and deposits in the Company’s land development segment. The Company’s other assets primarily consist of cash and cash equivalents, equipment, mineral rights, related party notes receivables and a deferred tax asset. May 31, 2019 August 31, 2018 Wholesale water and wastewater services $ 43,614,590 $ 36,721,884 Land development activities 18,477,341 9,497,106 Corporate 14,748,041 25,687,625 Total assets $ 76,839,973 $ 71,906,615 |
PRESENTATION OF INTERIM INFOR_4
PRESENTATION OF INTERIM INFORMATION, Land Development Inventories (Details) | 9 Months Ended |
May 31, 2019HomeBuilders | |
Land Development Inventories [Abstract] | |
Number of builders on over a time based inputs for land cost of sales | 2 |
Number of home builders | 3 |
Number of builders at a point in time for land cost of sales | 1 |
PRESENTATION OF INTERIM INFOR_5
PRESENTATION OF INTERIM INFORMATION, Investments (Details) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Investments [Abstract] | ||
Held-to-maturity securities | $ 192,200 | $ 190,400 |
PRESENTATION OF INTERIM INFOR_6
PRESENTATION OF INTERIM INFORMATION, Revenue Recognition (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2019USD ($)aHomeBuildersLotgal | May 31, 2018USD ($)gal | May 31, 2019USD ($)aHomeBuildersBusinessLineSourceLotAgreementacre ftgal | May 31, 2018USD ($)gal | Aug. 31, 2018USD ($) | |
Revenue Recognition [Abstract] | |||||
Number of business lines | BusinessLine | 2 | ||||
Number of revenue sources | Source | 3 | ||||
Total revenues | $ 5,184,663 | $ 1,212,119 | $ 10,887,631 | $ 3,066,911 | |
Deferred revenues, current | $ 1,631,797 | $ 1,631,797 | $ 361,050 | ||
Land [Abstract] | |||||
Area of land (in acres) | a | 930 | 930 | |||
Number of home builders | HomeBuilders | 3 | ||||
Contract revenues recognized | $ 5,283,091 | $ 2,190,039 | |||
Construction support amount invoiced | $ 410,800 | ||||
Metered Water Usage [Member] | |||||
Revenue Recognition [Abstract] | |||||
Assumed annual water demand (in acre feet) | acre ft | 0.4 | ||||
Water delivered to customers | gal | 96,900,000 | 106,100,000 | 232,300,000 | 253,500,000 | |
Percentage of water used for oil and gas exploration | 93.00% | 73.00% | 85.00% | 80.00% | |
Total revenues | $ 1,396,926 | $ 1,162,570 | $ 2,923,795 | $ 2,888,913 | |
Wastewater Treatment Fees [Member] | |||||
Revenue Recognition [Abstract] | |||||
Assumed daily contribution of wastewater flows (in gallons per day) | gal | 300 | ||||
Total revenues | 7,419 | 11,675 | $ 23,821 | 32,157 | |
Water Tap Fees Recognized [Member] | |||||
Revenue Recognition [Abstract] | |||||
Total revenues | 1,034,284 | 0 | 1,756,186 | 49,948 | |
Water Tap Fees [Member] | |||||
Revenue Recognition [Abstract] | |||||
Total revenues | 880,500 | 0 | 1,499,900 | 49,900 | |
Wastewater Tap Fees [Member] | |||||
Revenue Recognition [Abstract] | |||||
Total revenues | 153,800 | 0 | 256,300 | 0 | |
Special Facility Funding Recognized [Member] | |||||
Revenue Recognition [Abstract] | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Consulting Fees [Member] | |||||
Revenue Recognition [Abstract] | |||||
Total revenues | 37,900 | 37,900 | 148,200 | 95,900 | |
Lot Sales - Agreement with Purchaser [Member] | |||||
Revenue Recognition [Abstract] | |||||
Total revenues | $ 1,770,000 | 0 | $ 2,070,000 | 0 | |
Land [Abstract] | |||||
Number of home builders | HomeBuilders | 1 | 1 | |||
Number of finished lots sold | Lot | 25 | 29 | |||
Lot Sales - Agreement with Builders [Member] | |||||
Revenue Recognition [Abstract] | |||||
Total revenues | $ 938,100 | 0 | $ 3,965,700 | 0 | |
Deferred revenues, current | 1,631,800 | $ 0 | 1,631,800 | $ 0 | |
Land [Abstract] | |||||
Proceeds from sale of lots | $ 7,700,000 | ||||
Number of home builders | HomeBuilders | 3 | ||||
Number of platted lots sold | Lot | 150 | ||||
Number of finished lots sold | Lot | 150 | ||||
Contract revenues recognized | $ 6,100,000 | ||||
Lot Sales - Agreement with Builders [Member] | Maximum [Member] | |||||
Land [Abstract] | |||||
Expected delivery period for lots sold | 1 year | ||||
Project Management Services [Member] | |||||
Land [Abstract] | |||||
Number of service agreements | Agreement | 2 | ||||
Project management fee percentage | 5.00% | ||||
Project management services - accrued reimbursable amount | $ 703,600 | $ 703,600 |
PRESENTATION OF INTERIM INFOR_7
PRESENTATION OF INTERIM INFORMATION, Disaggregation of Revenue (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2019USD ($) | May 31, 2018USD ($) | May 31, 2019USD ($)Lot | May 31, 2018USD ($) | Aug. 31, 2018USD ($) | |
Changes in Contract Asset [Abstract] | |||||
Balance, beginning of period | $ 0 | $ 0 | $ 0 | ||
Recognition of revenue contract asset | 1,020,146 | 0 | |||
Contract asset invoiced | (1,020,146) | 0 | |||
Balance, end of period | $ 0 | 0 | 0 | ||
Deferred Revenue Current and Noncurrent [Abstract] | |||||
Oil and gas leases and contracts, less current portion | (196,255) | (196,255) | (55,733) | ||
Oil and gas leases, long term | 18,578 | 18,578 | 60,378 | ||
Changes in Deferred Revenue [Abstract] | |||||
Balance, beginning of period | 477,161 | 1,055,488 | 1,055,488 | ||
Deferral of revenue | 6,652,560 | 2,667,200 | |||
Recognition of unearned revenue | (5,283,091) | (2,190,039) | |||
Balance, end of period | 1,846,630 | 1,846,630 | 477,161 | ||
Sky Ranch [Member] | |||||
Changes in Deferred Revenue [Abstract] | |||||
Balance, end of period | 140,500 | 140,500 | |||
Revenue, Performance Obligation [Abstract] | |||||
Remaining performance obligation | $ 27,502,700 | $ 27,502,700 | |||
Number of lots sold | Lot | 506 | ||||
Remaining performance obligation expected to be recognized in the next 12 months | 54.00% | 54.00% | |||
ASU 2014-09 [Member] | |||||
Changes in Deferred Revenue [Abstract] | |||||
Cumulative effect of adoption of ASU 2014-09 | $ 0 | (1,055,488) | |||
Corporate [Member] | |||||
Changes in Contract Asset [Abstract] | |||||
Balance, beginning of period | 0 | ||||
Balance, end of period | $ 0 | 0 | 0 | ||
Wholesale Water and Wastewater Services [Member] | |||||
Changes in Contract Asset [Abstract] | |||||
Balance, beginning of period | 0 | ||||
Balance, end of period | 0 | 0 | 0 | ||
Land Development Activities [Member] | |||||
Changes in Contract Asset [Abstract] | |||||
Balance, beginning of period | 0 | ||||
Balance, end of period | 0 | 0 | 0 | ||
Changes in Deferred Revenue [Abstract] | |||||
Balance, beginning of period | 361,050 | ||||
Balance, end of period | 1,631,797 | 1,631,797 | 361,050 | ||
Oil and Gas Contracts [Member] | |||||
Changes in Deferred Revenue [Abstract] | |||||
Balance, beginning of period | 0 | ||||
Balance, end of period | 140,522 | 140,522 | 0 | ||
Oil and Gas Leases [Member] | |||||
Deferred Revenue Current and Noncurrent [Abstract] | |||||
Oil and gas leases, long term | 18,578 | 18,578 | 60,378 | ||
Changes in Deferred Revenue [Abstract] | |||||
Balance, beginning of period | 116,111 | ||||
Recognition of unearned revenue | (13,900) | $ (13,900) | (41,800) | $ (37,200) | |
Balance, end of period | 74,311 | 74,311 | 116,111 | ||
Oil and Gas Leases and Contracts [Member] | |||||
Deferred Revenue Current and Noncurrent [Abstract] | |||||
Oil and gas leases and contracts, less current portion | $ (196,255) | $ (196,255) | $ (55,733) |
PRESENTATION OF INTERIM INFOR_8
PRESENTATION OF INTERIM INFORMATION, Oil and Gas Lease Payments (Details) | 3 Months Ended | 9 Months Ended | ||
May 31, 2019USD ($)Well | May 31, 2018USD ($) | May 31, 2019USD ($)Well | May 31, 2018USD ($) | |
Oil and Gas Lease Payments [Abstract] | ||||
Number of drilling wells | Well | 2 | 2 | ||
Oil and gas royalty income, net | $ | $ 37,263 | $ 61,113 | $ 113,104 | $ 152,653 |
PRESENTATION OF INTERIM INFOR_9
PRESENTATION OF INTERIM INFORMATION, Deferred Revenue (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
May 31, 2019USD ($)a | May 31, 2018USD ($) | May 31, 2019USD ($)aCustomer | May 31, 2018USD ($) | Aug. 31, 2018USD ($) | Oct. 31, 2017USD ($) | Aug. 31, 2017USD ($) | |
Land [Abstract] | |||||||
Contract revenues recognized | $ (5,283,091) | $ (2,190,039) | |||||
Deferred revenue | $ 1,846,630 | 1,846,630 | 477,161 | $ 1,055,488 | |||
Sky Ranch [Member] | |||||||
Land [Abstract] | |||||||
Deferred revenue | 140,500 | $ 140,500 | |||||
Proceeds from wholesale water sales | $ 1,400,000 | ||||||
Number of industrial water customers | Customer | 1 | ||||||
Oil and Gas Leases [Member] | |||||||
Land [Abstract] | |||||||
Mineral estate area owned (in acres) | a | 40 | 40 | |||||
Term period of lease | 3 years | ||||||
Contract revenues recognized | $ (13,900) | $ (13,900) | $ (41,800) | $ (37,200) | |||
Deferred revenue | $ 74,311 | $ 74,311 | $ 116,111 | $ 167,200 |
PRESENTATION OF INTERIM INFO_10
PRESENTATION OF INTERIM INFORMATION, Capitalized Costs of Water and Wastewater Systems and Depletion and Depreciation of Water Assets (Details) | 9 Months Ended |
May 31, 2019 | |
Maximum [Member] | |
Capitalized Costs of Water and Wastewater Systems and Depletion and Depreciation of Water Assets [Abstract] | |
Estimated useful lives | 30 years |
PRESENTATION OF INTERIM INFO_11
PRESENTATION OF INTERIM INFORMATION, Share-Based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Share-Based Compensation [Abstract] | ||||
Share-based compensation expense | $ 96,100 | $ 83,600 | $ 257,813 | $ 241,209 |
PRESENTATION OF INTERIM INFO_12
PRESENTATION OF INTERIM INFORMATION, Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | |
Income Taxes [Abstract] | |||||
Deferred tax assets (AMT) | $ 282,000 | $ 282,000 | $ 282,000 | ||
Accrued interest of unrecognized tax benefits | 0 | 0 | |||
Accrued penalties of unrecognized tax benefits | 0 | 0 | |||
Interest expense on unrecognized tax benefits | $ 0 | $ 0 | $ 0 | $ 0 | |
Effective tax rate | 0.00% | 0.00% | 0.00% | 0.00% |
PRESENTATION OF INTERIM INFO_13
PRESENTATION OF INTERIM INFORMATION, Income (Loss) per Common Share (Details) - shares | 9 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income (Loss) per Common Share [Abstract] | ||
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares) | 206,934 | 154,209 |
Anti-dilutive securities excluded from calculation of income per common share (in shares) | 50,000 | 32,500 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) | May 31, 2019USD ($)AssetsLiabilities | Aug. 31, 2018USD ($)AssetsLiabilities |
Information on assets and liabilities measured at fair value [Abstract] | ||
Held-to-maturity securities | $ 192,200 | $ 190,400 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Number of assets or liabilities [Abstract] | ||
Number of assets | Assets | 0 | 0 |
Number of liabilities | Liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Number of assets or liabilities [Abstract] | ||
Number of assets | Assets | 4 | 7 |
Significant Unobservable Inputs (Level 3) | ||
Number of assets or liabilities [Abstract] | ||
Number of liabilities | Liabilities | 1 | 1 |
Recurring [Member] | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Accumulated unrealized gains and (losses) | $ 12,700 | $ 66,400 |
Recurring [Member] | U.S. Treasury Debt Securities [Member] | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Accumulated unrealized gains and (losses) | 12,700 | 66,400 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | 0 | 0 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury Debt Securities [Member] | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | 0 | 0 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | 5,997,000 | 8,718,000 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) | U.S. Treasury Debt Securities [Member] | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | 5,997,000 | 8,718,000 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | 0 | 0 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) | U.S. Treasury Debt Securities [Member] | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | 0 | 0 |
Recurring [Member] | Fair Value [Member] | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | 5,997,000 | 8,718,000 |
Recurring [Member] | Fair Value [Member] | U.S. Treasury Debt Securities [Member] | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | 5,997,000 | 8,718,000 |
Recurring [Member] | Cost / Other Value [Member] | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | 5,984,300 | 8,644,900 |
Recurring [Member] | Cost / Other Value [Member] | U.S. Treasury Debt Securities [Member] | ||
Information on assets and liabilities measured at fair value [Abstract] | ||
Available-for-sale securities | $ 5,984,300 | $ 8,644,900 |
WATER AND LAND ASSETS (Details)
WATER AND LAND ASSETS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | |
Investment in Water and Water Systems [Abstract] | |||||
Costs | $ 47,269,100 | $ 47,269,100 | $ 39,735,200 | ||
Accumulated depreciation and depletion | (3,654,500) | (3,654,500) | (3,013,300) | ||
Net investments in water and water systems | 43,614,590 | 43,614,590 | 36,721,884 | ||
Depletion and Depreciation [Abstract] | |||||
Depreciation | 322,700 | $ 211,000 | 812,700 | $ 554,700 | |
Rangeview Water Supply [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Costs | 14,820,700 | 14,820,700 | 14,813,800 | ||
Accumulated depreciation and depletion | (14,000) | (14,000) | (12,800) | ||
Depletion and Depreciation [Abstract] | |||||
Depletion | 500 | $ 4,300 | 1,300 | $ 5,300 | |
Sky Ranch Water Rights and Other Costs [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Costs | 7,361,000 | 7,361,000 | 7,171,700 | ||
Accumulated depreciation and depletion | (704,600) | (704,600) | (561,400) | ||
Fairgrounds Water And Water System [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Costs | 2,899,900 | 2,899,900 | 2,899,900 | ||
Accumulated depreciation and depletion | (1,129,000) | (1,129,000) | (1,062,900) | ||
Rangeview Water System [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Costs | 5,578,000 | 5,578,000 | 1,655,600 | ||
Accumulated depreciation and depletion | (323,000) | (323,000) | (261,200) | ||
Water Supply - Other [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Costs | 4,430,100 | 4,430,100 | 4,337,200 | ||
Accumulated depreciation and depletion | (803,400) | (803,400) | (625,300) | ||
Wild Pointe Service Rights [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Costs | 1,631,700 | 1,631,700 | 1,631,700 | ||
Accumulated depreciation and depletion | (316,600) | (316,600) | (267,700) | ||
Sky Ranch Pipeline [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Costs | 5,707,000 | 5,707,000 | 5,615,900 | ||
Accumulated depreciation and depletion | (363,900) | (363,900) | (222,000) | ||
Construction in Progress [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Costs | 4,840,700 | 4,840,700 | 1,609,400 | ||
Accumulated depreciation and depletion | $ 0 | $ 0 | $ 0 |
LONG-TERM OBLIGATIONS AND OPE_3
LONG-TERM OBLIGATIONS AND OPERATING LEASE, Long-Term Obligations (Details) | 3 Months Ended | 9 Months Ended | 269 Months Ended | |
May 31, 2019USD ($) | May 31, 2019USD ($)Member | Aug. 31, 2018USD ($) | ||
LONG-TERM OBLIGATIONS AND OPERATING LEASE [Abstract] | ||||
Percentage of original recorded liability compared to original total liability | 35.00% | 35.00% | ||
Percentage of payment remitted to CAA holders allocated to recorded liability account | 35.00% | 35.00% | ||
Percentage of payment remitted to CAA holders allocated to contingent obligation | 65.00% | 65.00% | ||
Percentage of net proceeds from sale of export water allocated | 88.00% | 88.00% | ||
Export Water Proceeds Received [Roll Forward] | ||||
Balance at beginning of period | $ 1,380,700 | $ 0 | ||
Acquisitions | 0 | |||
Relinquishment | 0 | |||
Option payments - Sky Ranch and The Hills at Sky Ranch | 110,400 | |||
Arapahoe County tap fees | [1] | 533,000 | ||
Export water sale payments | 144,700 | 737,300 | ||
Balance at end of period | $ 1,525,400 | 1,525,400 | 1,380,700 | |
Initial Export Water Proceeds To Pure Cycle [Roll Forward] | ||||
Balance at beginning of period | 29,638,100 | 218,500 | ||
Acquisitions | 28,042,500 | |||
Relinquishment | 2,386,400 | |||
Option payments - Sky Ranch and The Hills at Sky Ranch | (42,300) | |||
Arapahoe County tap fees | [1] | (373,100) | ||
Export water sale payments | (127,500) | (593,900) | ||
Balance at end of period | 29,510,600 | 29,510,600 | 29,638,100 | |
Total Potential Third-Party Obligation [Roll Forward] | ||||
Balance at beginning of period | 1,007,400 | 31,807,700 | ||
Acquisitions | (28,042,500) | |||
Relinquishment | (2,386,400) | |||
Option payments | (68,100) | |||
Arapahoe County tap fees | [1] | (159,900) | ||
Export water sale payments | (17,200) | (143,400) | ||
Balance at end of period | 990,200 | 990,200 | 1,007,400 | |
Participating Interests Liability [Roll Forward] | ||||
Balance at beginning of period | 339,035 | 11,090,600 | ||
Acquisitions | (9,790,000) | |||
Relinquishment | (832,100) | |||
Option payments - Sky Ranch and The Hills at Sky Ranch | (23,800) | |||
Arapahoe County tap fees | [1] | (55,800) | ||
Export water sale payments | (6,000) | (49,800) | ||
Balance at end of period | 333,033 | 333,033 | 339,035 | |
Contingency [Roll Forward] | ||||
Balance at beginning of period | 668,300 | 20,717,100 | ||
Acquisitions | (18,252,500) | |||
Relinquishment | (1,554,300) | |||
Option payments - Sky Ranch and The Hills at Sky Ranch | (44,300) | |||
Arapahoe County tap fees | [1] | (104,100) | ||
Export water sale payments | (11,200) | (93,600) | ||
Balance at end of period | 657,100 | 657,100 | $ 668,300 | |
Royalties [Abstract] | ||||
Royalties paid to Land Board | 34,522 | |||
Export Water [Abstract] | ||||
Expected future export water payouts | 6,500,000 | |||
Revenue receivables from sale of export water | 5,700,000 | 5,700,000 | ||
Expected proceeds from sale of export water after deduction of Land Board royalty | $ 220,000 | |||
SMWA [Member] | ||||
WISE Partnership [Abstract] | ||||
Number of other governmental or quasi-governmental water providers | Member | 9 | |||
Number of members | Member | 10 | |||
Rangeview District [Member] | WISE Partnership [Member] | ||||
WISE Partnership [Abstract] | ||||
Projected cost | $ 6,800,000 | $ 6,800,000 | ||
Projected financing period | 5 years | 5 years | ||
[1] | The Arapahoe County tap fees are net of $34,522 in royalties paid to the Land Board. |
LONG-TERM OBLIGATIONS AND OPE_4
LONG-TERM OBLIGATIONS AND OPERATING LEASE, Operating Lease (Details) | 9 Months Ended |
May 31, 2019USD ($)ft² | |
Operating Lease [Abstract] | |
Area of office and warehouse | ft² | 11,393 |
Operating lease term | 3 years |
Monthly base rent of operating lease | $ | $ 6,600 |
Operating lease extension term | 2 years |
Percentage of increase in primary base payment for operating lease | 12.50% |
SHAREHOLDERS' EQUITY, Incentive
SHAREHOLDERS' EQUITY, Incentive and Equity Plan, and Combined Stock Option Activity (Details) - USD ($) | Jan. 16, 2019 | Sep. 26, 2018 | May 31, 2019 | Aug. 31, 2018 | |
2014 Equity Plan [Member] | |||||
Stock Option Activity [Abstract] | |||||
Reserved shares of common stock for issuance (in shares) | 1,600,000 | ||||
2004 Incentive Plan and 2014 Equity Plan [Member] | |||||
Number of Options [Roll Forward] | |||||
Outstanding, beginning of period (in shares) | 535,500 | ||||
Granted (in shares) | [1] | 82,500 | |||
Exercised (in shares) | (37,500) | ||||
Forfeited or expired (in shares) | 0 | ||||
Outstanding, end of period (in shares) | 580,500 | 535,500 | |||
Options exercisable (in shares) | 428,000 | ||||
Weighted Average Exercise Price [Roll Forward] | |||||
Outstanding, beginning of period (in dollars per share) | $ 5.31 | ||||
Granted (in dollars per share) | 10.48 | ||||
Exercised (in dollars per share) | 3.06 | ||||
Forfeited or expired (in dollars per share) | 0 | ||||
Outstanding, end of period (in dollars per share) | 6.19 | $ 5.31 | |||
Options exercisable (in dollars per share) | $ 5.30 | ||||
Stock Options, Additional Disclosure [Abstract] | |||||
Weighted average remaining contractual term | 6 years 6 months | 6 years 14 days | |||
Weighted average remaining contractual term options exercisable | 5 years 7 months 24 days | ||||
Approximate aggregate intrinsic value | $ 1,962,630 | $ 3,180,990 | |||
Approximate aggregate intrinsic value options exercisable | $ 1,761,260 | ||||
2004 Incentive Plan and 2014 Equity Plan [Member] | Mr. Harding [Member] | |||||
Number of Options [Roll Forward] | |||||
Granted (in shares) | 50,000 | ||||
2004 Incentive Plan and 2014 Equity Plan [Member] | Non-Employee Director [Member] | |||||
Number of Options [Roll Forward] | |||||
Granted (in shares) | 32,500 | ||||
[1] | Includes 50,000 shares granted to Mr. Harding on September 26, 2018 and 32,500 total shares granted to non-employee directors on January 16, 2019. |
SHAREHOLDERS' EQUITY, Combined
SHAREHOLDERS' EQUITY, Combined Activity and Value of Non-vested Options (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||
Stock Options, Additional Disclosure [Abstract] | |||||
Share-based compensation expense | $ 96,100 | $ 83,600 | $ 257,813 | $ 241,209 | |
2004 Incentive Plan and 2014 Equity Plan [Member] | |||||
Number of Options [Roll Forward] | |||||
Non-vested options outstanding, beginning of period (in shares) | 155,833 | ||||
Granted (in shares) | [1] | 82,500 | |||
Vested (in shares) | (85,834) | ||||
Forfeited (in shares) | 0 | ||||
Non-vested options outstanding, end of period (in shares) | 152,499 | 152,499 | |||
Weighted Average Grant Date Fair Value [Abstract] | |||||
Non-vested options outstanding, beginning of period (in dollars per share) | $ 3.76 | ||||
Granted (in dollars per share) | 4.60 | ||||
Vested (in dollars per share) | 3.46 | ||||
Forfeited (in dollars per share) | 0 | ||||
Non-vested options outstanding, end of period (in dollars per share) | $ 4.03 | $ 4.03 | |||
Stock Options, Additional Disclosure [Abstract] | |||||
Share-based compensation expense | $ 96,100 | $ 83,600 | $ 257,800 | $ 241,200 | |
Unrecognized compensation expenses | $ 362,400 | $ 362,400 | |||
Weighted-average period for options expected to vest | 1 year | ||||
[1] | Includes 50,000 shares granted to Mr. Harding on September 26, 2018 and 32,500 total shares granted to non-employee directors on January 16, 2019. |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
May 31, 2019USD ($)EmployeeBoardMember | May 31, 2019USD ($)EmployeeBoardMember | May 31, 2018USD ($) | Aug. 31, 2018USD ($) | |
Related Party Transactions [Abstract] | ||||
Proceeds from note receivable - related parties | $ 0 | $ 215,504 | ||
Rangeview District [Member] | Water and Wastewater Services [Member] | ||||
Related Party Transactions [Abstract] | ||||
Number of employee board of directors | Employee | 3 | 3 | ||
Number of independent board of directors | BoardMember | 1 | 1 | ||
Rangeview District [Member] | Water and Wastewater Services [Member] | Loans Receivable [Member] | ||||
Related Party Transactions [Abstract] | ||||
Interest rate | 7.50% | 7.50% | ||
Debt instrument maturity date | Dec. 31, 2020 | |||
Rangeview District [Member] | Water and Wastewater Services [Member] | Loans Receivable [Member] | Maximum [Member] | ||||
Related Party Transactions [Abstract] | ||||
Loan extended, maximum capacity | $ 250,000 | $ 250,000 | ||
Rangeview District [Member] | Water and Wastewater Services [Member] | Loans Receivable [Member] | Prime Rate [Member] | ||||
Related Party Transactions [Abstract] | ||||
Basis spread on variable rate | 2.00% | |||
Rangeview District [Member] | Water and Wastewater Services [Member] | Notes Receivable [Member] | ||||
Related Party Transactions [Abstract] | ||||
Interest rate | 8.00% | 8.00% | ||
Notes receivable | $ 944,500 | $ 944,500 | ||
Notes receivable, principal | 534,100 | 534,100 | ||
Notes receivable, accrued interest | 410,400 | 410,400 | ||
Rangeview District [Member] | WISE Partnership [Member] | ||||
Related Party Transactions [Abstract] | ||||
Funding pursuant to participation agreement | 22,200 | $ 198,200 | ||
Projected cost | $ 6,800,000 | $ 6,800,000 | ||
Projected financing period | 5 years | 5 years | ||
Investments in the WISE assets | $ 3,200,000 | $ 3,200,000 | ||
Sky Ranch District [Member] | Water and Wastewater Services [Member] | Notes Receivable [Member] | ||||
Related Party Transactions [Abstract] | ||||
Interest rate | 8.00% | 8.00% | ||
Proceeds from note receivable - related parties | 215,504 | |||
Loan outstanding | $ 0 | $ 0 | $ 0 | |
Sky Ranch District [Member] | Sky Ranch Community Authority Board [Member] | ||||
Related Party Transactions [Abstract] | ||||
Interest rate | 6.00% | 6.00% | ||
Estimated cost | $ 30,000,000 | $ 30,000,000 | ||
Advances plus accrued interest included in inventories | $ 13,700,000 | $ 13,700,000 |
SIGNIFICANT CUSTOMERS (Details)
SIGNIFICANT CUSTOMERS (Details) - Customer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | |
Revenue [Member] | Land Development [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 100.00% | 100.00% | |||
Number of customers | 3 | 3 | |||
Revenue [Member] | Oil and Gas Leases [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Number of customers | 1 | 1 | 2 | 3 | |
Revenue [Member] | Customer One [Member] | Water and Wastewater Services [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 93.00% | 87.00% | 67.00% | 71.00% | |
Revenue [Member] | Customer One [Member] | Land Development [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 65.00% | 45.00% | |||
Revenue [Member] | Customer Two [Member] | Water and Wastewater Services [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 25.00% | 12.00% | |||
Revenue [Member] | Customer Two [Member] | Land Development [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 25.00% | 34.00% | |||
Revenue [Member] | Customer Three [Member] | Water and Wastewater Services [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 10.00% | ||||
Revenue [Member] | Customer Three [Member] | Land Development [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 10.00% | 21.00% | |||
Accounts Receivable [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Number of customers | 2 | ||||
Accounts Receivable [Member] | Rangeview District [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 78.00% | 3.00% | |||
Accounts Receivable [Member] | Rangeview District [Member] | Water and Wastewater Services [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 6.00% | ||||
Accounts Receivable [Member] | Rangeview District [Member] | Water Tap Fees Recognized [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 94.00% | ||||
Accounts Receivable [Member] | Customer One [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 43.00% | ||||
Accounts Receivable [Member] | Customer Two [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 30.00% |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
ACCRUED LIABILITIES [Abstract] | ||
Accrued liabilities | $ 2,627,069 | $ 849,538 |
Accrued compensation | 400,000 | |
Estimated property taxes | 65,900 | 29,000 |
Professional fees | 34,600 | 59,000 |
Operating payables | 2,526,600 | $ 361,500 |
Operating payables to CAB | $ 2,191,600 |
SEGMENT INFORMATION, Revenue by
SEGMENT INFORMATION, Revenue by Segments (Details) | 3 Months Ended | 9 Months Ended | ||
May 31, 2019USD ($) | May 31, 2018USD ($) | May 31, 2019USD ($)BusinessLine | May 31, 2018USD ($) | |
SEGMENT INFORMATION [Abstract] | ||||
Number of business lines | BusinessLine | 2 | |||
Revenues [Abstract] | ||||
Total revenues | $ 5,184,663 | $ 1,212,119 | $ 10,887,631 | $ 3,066,911 |
Wholesale Water and Wastewater Services [Member] | ||||
Revenues [Abstract] | ||||
Total revenues | 2,476,570 | 1,212,119 | 4,851,961 | 3,066,911 |
Land Development Activities [Member] | ||||
Revenues [Abstract] | ||||
Total revenues | $ 2,708,093 | $ 0 | $ 6,035,670 | $ 0 |
SEGMENT REPORTING, Wholesale Wa
SEGMENT REPORTING, Wholesale Water and Wastewater Services and Land Development Pretax Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Pretax income (loss) [Abstract] | ||||
Total pretax income (loss) | $ 1,261,371 | $ 54,601 | $ 1,799,318 | $ 58,153 |
Corporate [Member] | ||||
Pretax income (loss) [Abstract] | ||||
Total pretax income (loss) | (660,990) | (562,476) | (1,743,280) | (1,639,126) |
Wholesale Water and Wastewater Services [Member] | ||||
Pretax income (loss) [Abstract] | ||||
Total pretax income (loss) | 1,802,340 | 617,077 | 3,222,922 | 1,697,279 |
Land Development Activities [Member] | ||||
Pretax income (loss) [Abstract] | ||||
Total pretax income (loss) | $ 120,021 | $ 0 | $ 319,676 | $ 0 |
SEGMENT REPORTING, Corporate As
SEGMENT REPORTING, Corporate Assets (Details) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Assets [Abstract] | ||
Total assets | $ 76,839,973 | $ 71,906,615 |
Corporate [Member] | ||
Assets [Abstract] | ||
Total assets | 14,748,041 | 25,687,625 |
Wholesale Water and Wastewater Services [Member] | ||
Assets [Abstract] | ||
Total assets | 43,614,590 | 36,721,884 |
Land Development Activities [Member] | ||
Assets [Abstract] | ||
Total assets | $ 18,477,341 | $ 9,497,106 |