Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Aug. 31, 2020 | Oct. 29, 2020 | Feb. 29, 2020 | |
Cover page. | |||
Entity Registrant Name | PURE CYCLE CORP | ||
Entity Central Index Key | 0000276720 | ||
Current Fiscal Year End Date | --08-31 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Aug. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Address, State or Province | CO | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 191,563,737 | ||
Entity Common Stock, Shares Outstanding | 23,868,216 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 21,797,358 | $ 4,478,020 |
Short-term investments | 0 | 5,188,813 |
Trade accounts receivable, net | 1,123,740 | 1,099,631 |
Prepaid expenses and deposits | 1,000,617 | 1,016,751 |
Land development inventories | 481,451 | 11,613,112 |
Income taxes receivable | 1,588,035 | 141,410 |
Total current assets | 25,991,201 | 23,537,737 |
Investments in water and water systems, net | 55,086,743 | 50,270,310 |
Land and mineral interests | 4,914,880 | 5,104,477 |
Other assets | 2,043,429 | 1,945,202 |
Notes receivable - related parties, including accrued interest | 1,078,596 | 988,381 |
Deferred tax asset | 0 | 1,283,246 |
Long-term land investment | 450,641 | 450,641 |
Operating leases - right of use assets, less current portion | 195,566 | 0 |
Income taxes receivable | 0 | 141,410 |
Total assets | 89,761,056 | 83,721,404 |
Current liabilities: | ||
Accounts payable | 179,718 | 170,822 |
Accrued liabilities | 1,390,949 | 1,097,922 |
Accrued liabilities - related parties | 1,212,404 | 2,330,496 |
Deferred revenues | 1,635,443 | 3,991,535 |
Deferred oil and gas lease and water sales payment | 1,800,068 | 706,464 |
Total current liabilities | 6,218,582 | 8,297,239 |
Deferred oil and gas lease and water sales payment, less current portion | 165,012 | 360,884 |
Participating Interests in Export Water Supply | 327,718 | 332,140 |
Deferred tax liability | 885,632 | 0 |
Lease obligations - operating leases, less current portion | 120,285 | 0 |
Total liabilities | 7,717,229 | 8,990,263 |
Commitments and contingencies | ||
SHAREHOLDERS' EQUITY: | ||
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; 23,856,098 and 23,826,598 shares issued and outstanding, respectively | 79,525 | 79,427 |
Additional paid-in capital | 172,926,538 | 172,360,413 |
Accumulated other comprehensive income | 0 | 3,891 |
Accumulated deficit | (90,962,669) | (97,713,023) |
Total shareholders' equity | 82,043,827 | 74,731,141 |
Total liabilities and shareholders' equity | $ 89,761,056 | $ 83,721,404 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
SHAREHOLDERS' EQUITY: | ||
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 issued (in shares) | 23,856,098 | 23,826,598 |
Common stock, shares outstanding (in shares) | 23,856,098 | 23,826,598 |
Series B Preferred Stock [Member] | ||
SHAREHOLDERS' EQUITY: | ||
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 - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Revenues: | ||
Total revenues | $ 25,855,215 | $ 20,361,509 |
Expenses: | ||
Water service operations | (804,080) | (1,502,370) |
Wastewater service operations | (199,962) | (28,020) |
Land development construction costs | (15,869,547) | (11,304,962) |
Other | (70,408) | (140,118) |
Depletion and depreciation | (1,367,160) | (968,229) |
Total cost of revenues | (18,311,157) | (13,943,699) |
Gross profit | 7,544,058 | 6,417,810 |
General and administrative expenses | (4,249,315) | (3,106,547) |
Non-cash mineral interest impairment charge | (1,425,459) | 0 |
Depreciation | (355,909) | (312,602) |
Operating income | 1,513,375 | 2,998,661 |
Other income: | ||
Reimbursement of construction costs - related party | 6,275,500 | 0 |
Oil and gas lease income, net | 246,962 | 55,733 |
Oil and gas royalty income, net | 669,033 | 148,327 |
Interest income | 178,554 | 298,605 |
Other | 35,723 | 26,627 |
Net income before taxes | 8,919,147 | 3,527,953 |
Income tax (expense) benefit | (2,168,793) | 1,283,195 |
Net income | 6,750,354 | 4,811,148 |
Unrealized holding losses | (3,891) | (62,556) |
Total comprehensive income | $ 6,746,463 | $ 4,748,592 |
Earnings per common share: | ||
Basic (in dollars per share) | $ 0.28 | $ 0.20 |
Diluted (in dollars per share) | $ 0.28 | $ 0.20 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 23,845,015 | 23,795,973 |
Diluted (in shares) | 24,061,612 | 24,002,836 |
Metered Water Usage - Municipal Customers [Member] | ||
Revenues: | ||
Total revenues | $ 524,060 | $ 318,199 |
Metered Water Usage - Industrial Oil and Gas [Member] | ||
Revenues: | ||
Total revenues | 512,772 | 4,238,334 |
Wastewater Treatment Fees [Member] | ||
Revenues: | ||
Total revenues | 95,810 | 35,818 |
Lot Sales [Member] | ||
Revenues: | ||
Total revenues | 18,934,400 | 11,955,989 |
Water and Wastewater Tap Fees [Member] | ||
Revenues: | ||
Total revenues | 5,641,020 | 3,642,548 |
Other [Member] | ||
Revenues: | ||
Total revenues | $ 147,153 | $ 170,621 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Total |
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] | ||||||
Share-based compensation | $ 0 | $ 0 | 336,228 | 0 | 0 | 336,228 |
Exercise of options | $ 0 | $ 209 | 192,892 | 0 | 0 | 193,101 |
Exercise of options (in shares) | 0 | 62,500 | ||||
Net income | $ 0 | $ 0 | 0 | 0 | 4,811,148 | 4,811,148 |
Unrealized holding losses on investments | 0 | 0 | 0 | (62,556) | 0 | (62,556) |
Balance at Aug. 31, 2019 | $ 433 | $ 79,427 | 172,360,413 | 3,891 | (97,713,023) | 74,731,141 |
Balance (in shares) at Aug. 31, 2019 | 432,513 | 23,826,598 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | $ 0 | $ 0 | 367,624 | 0 | 0 | 367,624 |
Exercise of options | $ 0 | $ 58 | 49,141 | 0 | 0 | 49,199 |
Exercise of options (in shares) | 0 | 17,500 | ||||
Unrestricted stock issue | $ 0 | $ 40 | 149,360 | 0 | 0 | 149,400 |
Unrestricted stock issue (in shares) | 0 | 12,000 | ||||
Net income | $ 0 | $ 0 | 0 | 0 | 6,750,354 | 6,750,354 |
Unrealized holding losses on investments | 0 | 0 | 0 | (3,891) | 0 | (3,891) |
Balance at Aug. 31, 2020 | $ 433 | $ 79,525 | $ 172,926,538 | $ 0 | $ (90,962,669) | $ 82,043,827 |
Balance (in shares) at Aug. 31, 2020 | 432,513 | 23,856,098 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 6,750,354 | $ 4,811,148 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Share-based compensation expense | 517,024 | 336,228 |
Depreciation and depletion | 1,723,069 | 1,280,830 |
Recovery of doubtful accounts | 0 | (37,233) |
Investment in Well Enhancement and Recovery Systems LLC | 11,730 | 6,601 |
Interest income and other non-cash items | (175) | (420) |
Interest added to receivable from related parties | (45,556) | (41,776) |
Deferred income taxes | 2,168,878 | (1,284,066) |
Proceeds from Sky Ranch CAB reimbursement applied to land development inventories | 4,229,501 | 0 |
Non-cash mineral interest impairment charge | 1,425,459 | 0 |
Changes in operating assets and liabilities: | ||
Land development inventories | 6,487,689 | (5,018,452) |
Trade accounts receivable | (24,109) | 4,870 |
Prepaid expenses and other assets | 91,195 | (700,063) |
Note receivable - related parties | (44,659) | (40,406) |
Accounts payable and accrued liabilities | 192,057 | (368,456) |
Income taxes | (1,305,215) | 0 |
Deferred revenues | (2,353,591) | 3,630,485 |
Deferred income - oil and gas lease and water sales payment | 897,732 | 951,237 |
Lease obligations - operating leases | (1,291) | 0 |
Net cash provided by operating activities | 20,720,092 | 3,530,527 |
Cash flows from investing activities: | ||
Investments in water, water systems and land | (8,044,059) | (14,106,724) |
Sales and maturities of marketable securities | 6,905,157 | 55,697,933 |
Purchase of marketable securities | (1,720,234) | (52,040,964) |
Purchase of property and equipment | (586,396) | (353,995) |
Net cash used by investing activities | (3,445,532) | (10,803,750) |
Cash flows from financing activities: | ||
Proceeds from exercise of options | 49,199 | 193,101 |
Payment to contingent liability holders | (4,421) | (6,896) |
Net cash provided by financing activities | 44,778 | 186,205 |
Net change in cash and cash equivalents | 17,319,338 | (7,087,018) |
Cash and cash equivalents - beginning of year | 4,478,020 | 11,565,038 |
Cash and cash equivalents - end of year | 21,797,358 | 4,478,020 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Land development inventories included in accounts payable and accrued liabilities | 985,130 | 1,399,602 |
Investments in water, water systems and land included in accounts payable and accrued liabilities | 260,649 | 930,895 |
Transfer of income taxes to income taxes receivable | 0 | 282,820 |
Income taxes paid, net of refunds | $ 1,022,310 | $ 0 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Aug. 31, 2020 | |
ORGANIZATION [Abstract] | |
ORGANIZATION | NOTE 1 – ORGANIZATION Pure Cycle Corporation (the “Company”) was incorporated in Delaware in 1976 and reincorporated in Colorado in 2008. The Company operates in two business segments: (i) wholesale water and wastewater services and (ii) land development. The Company has accumulated valuable water and land interests over the past 30 years and has developed an extensive network of wholesale water production, storage, treatment and distribution systems, and wastewater collection and treatment systems which serve domestic, commercial and industrial customers in the Denver metropolitan region. The Company’s land assets are located along the active and high-profile I-70 corridor in the Denver metropolitan region. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Aug. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements of the Company include the accounts of Pure Cycle Corporation and its wholly-owned and controlled subsidiary. Intercompany accounts and transactions have been eliminated in consolidation. Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) On March 27, 2020, Congress enacted the CARES Act to provide financial relief due to the outbreak of a novel strain of the coronavirus (“COVID-19”) . The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain refundable employee retention credits. The Company does not believe there will be any material impacts to its financial statements because of the CARES Act. On April 17, 2020, the Company entered into a $390,000 note payable to Central Bank & Trust part of Farmers & Stockmens Bank, pursuant to the Paycheck Protection Program (“PPP Loan”) under the CARES Act. On May 13, 2020, the Company returned the entire outstanding balance of $390,278, inclusive of interest. The interest was waived by Central Bank & Trust. Reclassifications Certain reclassifications have been made to the financial statements to conform to the consolidated 2020 financial statement presentation. These reclassifications had no effect on net earnings or cash flows previously reported. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“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 financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used to account for certain items such as revenue recognition, reimbursable costs and expenses, costs of revenue for lot sales, share-based compensation, deferred tax asset valuation, and the useful lives of assets. 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 and U.S. Treasury debt securities. The Company had no cash equivalents as of August 31, 2020. At various times during the fiscal year ended August 31, 2020, the Company’s main operating account exceeded federally insured limits. To date, the Company has never suffered a loss due to such excess balance. Contract Asset Contract assets reflect revenue which has been earned but not yet invoiced. Contract assets are transferred to receivables when the Company has the right to bill such amounts and they are invoiced. 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 Management determines the appropriate classification of investments in marketable securities at the time of purchase and reevaluates such determinations each reporting period. Marketable securities the Company does not have the positive intent or ability to hold to maturity, including certificate of deposits 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). Land Development Inventories Land development inventories primarily include land held for development and sale stated at cost. The Company began developing its Sky Ranch property in 2018. Capitalized lot development costs at Sky Ranch are costs incurred to construct finished lots 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 when a lot is completed and sold on a lot-by-lot basis. Costs included in Land Development Inventories Land Development Inventories The Company measures land held for sale at the lower of the carrying value or net realizable value. In determining net realizable value, the Company primarily relies upon the most recent comparable sales prices. If recent sales prices are not available, the Company will consider several factors, including, but not limited to, current market conditions, nearby recent sales transactions, and market analysis studies. If the net realizable value is lower than the current carrying value, the land is written down to its net realizable 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. government 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. 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. The estimated fair value measurements in Note 2 – Fair Value Measurements Cash and Cash Equivalents – Trade Accounts Receivable – Investments – Fair Value Measurements. Accounts Payable – Long-Term Financial Liabilities – Water and Land Assets Water and Land Assets Participating Interests in Export Water Notes Receivable – Related Parties – Notes receivable – related parties Off-Balance Sheet Instruments – Participating Interests in Export Water Trade Accounts Receivable The Company records accounts receivable net of allowances for uncollectible accounts. The Company has not recorded an allowance for uncollectible accounts in receivables from continuing operations for either of the periods ended August 31, 2020 or 2019. The allowance for uncollectible accounts was determined based on a specific review of all past due accounts. Long-Lived Assets Impairment Loss The Company evaluates its long-lived assets for impairment at least annually or more frequently if the Company believes events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Estimates of future cash flows and timing of events for evaluating long-lived assets for impairment are based upon management’s assumptions and market conditions. If any of its long-lived assets are deemed to be impaired, the amount of impairment to be recognized is the excess of the carrying amount of the assets over its fair value. As of August 31, 2020, the Company assessed the recoverability of its Arkansas Valley mineral rights. The Company determined the carrying value of these mineral rights is not recoverable. As a result, the Company recorded an impairment charge of $1.4 million. The charge was recorded in Non-cash mineral asset impairment charge Capitalized Costs of Water and Wastewater Systems and Depreciation and Depletion Charges Costs to construct water and wastewater systems that meet the Company’s capitalization criteria are capitalized as incurred, including interest, if applicable, 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 water assets that are being utilized based on units produced (i.e., thousands of gallons sold) divided by the total volume of water adjudicated in the water decrees. 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. Water and Wastewater Segment Revenues The Company generates revenues through its wholesale water and wastewater business predominantly from the items identified below. Because these items are separately delivered and distinct, the Company accounts for each of the items separately, as described below. Monthly water usage and wastewater treatment fees – Water and Land Assets The Company also sells raw water for industrial uses to oil and gas companies during drilling processes (referred to as “O&G operations”). O&G operations revenues are recognized at a point in time upon delivering water to the customer, unless other special arrangements are made. The Company delivered 76.2 million and 356.3 million gallons of water to customers during the years ended August 31, 2020 and 2019. Of this, 1% and 84% was used for O&G operations. 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. Water and wastewater tap fees and construction fees/special facility funding The Company recognizes water and wastewater tap fee revenues at the time the Company grants a right for the customer to connect to the water or wastewater service line to obtain service, and the customer pays the tap fee. During the years ended August 31, 2020 and 2019, the Company recognized $4,758,700 and $3,116,100 of water tap fee revenues. The water tap fees recognized are based on the amounts billed by the Rangeview District to customers, after deduction of royalties due to the Land Board for water taps, if applicable, and net of amounts paid to third parties pursuant to the CAA as further described in Note 7 – Long-Term Obligations and Operating Lease During the years ended August 31, 2020 and 2019, the Company recognized $882,300 and $526,400 of wastewater tap fee revenues. 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 was recognized during the fiscal year ended August 31, 2020 or 2019. As of August 31, 2020 and 2019, the Company had no contract liabilities related to water tap and construction fee/special facility funding revenue. Consulting fees Other income Land Development Segment Revenues The Company generates revenues through its land development business predominantly from the sources described below. Because these items are separately delivered and distinct, the Company accounts for each of the items separately, as described below. Sale of finished lots The Company sells lots at Sky Ranch pursuant to distinct agreements with each home builder. These agreements follow one of two formats. One format is the sale of a finished lot, whereby the purchaser pays for a ready-to-build finished lot and the sales price is paid in a lump-sum upon completion of the finished lot that is permit ready. 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 as the transaction cycle is complete and the Company has no further obligations for the lot. During the year ended August 31, 2020, the Company received payment and recognized revenue of $4,911,700 from one home builder in exchange for the delivery of 70 finished lots. During the year ended August 31, 2019, the Company received payment and recognized revenue of $4,053,800 from one home builder in exchange for the delivery of 57 finished lots. The second format is the sale of finished lots pursuant to a lot development agreement with builders, 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 builders 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 August 31, 2020, the Company had received cumulative payments of $25.6 million under the development agreements relating to 356 lots from two home builders, of which $24.1 million of revenue was recognized over time based on the costs incurred to date compared to total expected costs for full completion of the 356 lots. For the years ended August 31, 2020 and 2019, the Company recognized $14,022,700 and $7,902,200 of lot sales over time. As of August 31, 2020 and 2019, the Company had deferred revenues of $1,635,400 and $3,991,500. 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 the 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. Reimbursable Costs for Public Improvements Related Party Transactions Pursuant to the agreements with the Sky Ranch CAB, the Sky Ranch CAB is not required to make payments to the Company for any advances made by the Company or expenses incurred related to construction of public improvements unless and until the Sky Ranch CAB and/or the Sky Ranch Districts issue bonds in an amount sufficient to reimburse the Company for all or a portion of the advances made and expenses incurred. Because the timing of the issuance and approval of any bonds is subject to considerable uncertainty, any potential reimbursable costs for the construction of public improvements, including construction support activities and project management fees, are initially capitalized in Land development nventories. Land development construction costs Other income Land development nventories ther income The Company has entered certain funding agreements with the Sky Ranch CAB, which are described in Note 6 – Related Party Transactions. On November 19, 2019, the Sky Ranch CAB sold tax-exempt, fixed rate senior bonds in the aggregate principal amount of $11,435,000 and tax-exempt, fixed-rate subordinate bonds in the aggregate principal amount of $1,765,000 (collectively, the “Bonds”). Upon the issuance of the Bonds, the Company received $10.5 million as partial reimbursement for advances the Company made to the Sky Ranch CAB to fund the construction of public improvements to the Sky Ranch property. Of the $10.5 million received by the Company, $6.3 million was recognized as Income from reimbursement of construction costs (related party) Land development nventories Project management services Land development nventories Construction support activities Land development nventories Land development construction costs Related Party Transactions Reimbursable Costs for Public Improvements Land development inventories Unpaid reimbursable costs the Company believes are recoverable from the Sky Ranch CAB are recorded to a note receivable from the Sky Ranch CAB. Each reporting period, the Company assesses the collectability of the receivable from the Sky Ranch CAB and the recoverability of the outstanding reimbursable costs to determine if the amounts should be expensed. The following table summarizes all reimbursable costs incurred as of August 31, 2020, payments made from the Sky Ranch CAB and any outstanding reimbursable amounts. As of August 31, 2020 Costs incurred Reimbursement Received Net costs incurred Public Improvements $ 26,355,400 $ 10,505,000 $ 15,850,400 Accrued interest 1,176,300 — 1,176,300 Project management services 1,464,900 — 1,464,900 Construction support activities 674,800 — 674,800 Total reimbursable costs $ 29,671,400 $ 10,505,000 $ 19,166,400 The Company believes it will incur an additional $2.3 million through the end of the calendar year 2021 to complete the construction related to public improvements for the initial lots at Sky Ranch. It further believes that it will be reimbursed an additional $18.5 million related to the public improvement costs on this initial filing. Pursuant to the Company’s agreements with the Sky Ranch CAB, no payment is required by the Sky Ranch CAB with respect to reimbursable costs unless and until the Sky Ranch CAB and/or the Sky Ranch Districts have funds or issue municipal bonds in an amount sufficient to reimburse the Company for all or a portion of advances provided or expenses incurred for reimbursables. The Company evaluated disaggregation of revenue and has determined that no additional disaggregation of revenue is necessary. Deferred Revenue In July 2019, the Company received an up-front payment of $573,700 from an Agreement on Locations of Oil and Gas Operations (the “OGOA”) for a pad site covering approximately 16 acres with the operator of the Sky Ranch O&G Lease (defined below under the heading Oil and Gas Lease Payments), In September 2017, the Company entered a Paid-Up Oil and Gas Lease with Bison Oil and Gas, LLP (the “Bison Lease”). Pursuant to the Bison Lease, 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 the three-year term of the lease. During each of the years ended August 31, 2020 and 2019, the Company recognized lease income of $55,700 related to the up-front payment received pursuant to the Bison Lease. As of August 31, 2020 and 2019, the Company had deferred revenue of $4,700 and $60,400, related to the Bison Lease that will be recognized as income ratably through September 2020. One of the Company’s industrial water customers provided $2.0 million of advanced water purchase payments to the Company to reserve first-priority water for O&G operations for defined periods through January 2021. The customer is required to use predetermined amounts of water on a predetermined schedule. The Company recognizes revenue based on the amount of water used by the customer in the period the water is used. If the customer does not use the water pursuant to the predetermined use and timing schedules, then the customers first-priority is forfeited. The Company records breakage revenue when it is remote that any future water services will be provided to the customer. In July 2020, the customer failed to use its water pursuant to the predetermined schedule. The customer revised its water usage estimate; therefore, the first of its upfront payments of $425,800 was recognized in Industrial - Oil and gas operations The Company has also deferred recognition of lot sale revenues, which are recognized as development progresses. As of August 31, 2020 and 2019, the Company’s deferred revenues along with the changes in the deferred revenues are as follows: August 31, 2020 August 31, 2019 Deferred lot sale revenue $ 1,635,443 $ 3,991,535 Oil and gas lease and water sales payments 1,965,080 1,067,348 Total deferred revenues $ 3,600,523 $ 5,058,883 Changes in deferred revenue were as follows: August 31, 2020 August 31, 2019 Balance, beginning of period $ 5,058,883 $ 477,161 Billings 24,643,817 24,998,964 Revenue recognized (26,102,177 ) (20,417,242 ) Balance, end of period $ 3,600,523 $ 5,058,883 As of August 31, 2020, one homebuilder at Sky Ranch still has payment obligations to the Company pursuant to a purchase and sale agreement for lots at Sky Ranch. This contracted payment represents revenue that has not yet been fully recognized because revenue is recognized as construction work is completed. At August 31, 2020, the Company had outstanding open contracts for $1.6 million, which relates to the last payment for the sale of the final lots in the first development filing at Sky Ranch, which contractually was payable in December 2020, but was paid on November 3, 2020. In addition to the deferred revenues recorded on the Company’s consolidated balance sheet, the Company has deferred interest income of $1.2 million and project management revenues of $1.5 million due from the Sky Ranch CAB related to the development at Sky Ranch, which, due to the contingent nature of the payments, are not reflected on the Company’s consolidated balance sheet. 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 4 – Water and Land Assets Other income Share-based Compensation The Company maintains a stock option plan for the benefit of its employees and non-employee directors. The Company recognizes share-based compensation costs as expenses 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. The Company has released its full valuation allowance on its deferred tax assets as of August 31, 2019. The impact on the income tax provision for the granting and exercise of stock options during the fiscal year ended August 31, 2020, was a tax expense of $80,300. Because the Company had a full valuation allowance on its deferred tax assets as of August 31, 2018, there was a $410,600 deferred tax impact on the 2019 income tax provision as a result of the granting and exercise of stock options. The Company recognized $517,000 and $336,200 of share-based compensation expenses during the years ended August 31, 2020 and 2019. 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 does not have any significant unrecognized tax benefits as of August 31, 2020. The Company records deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as operating losses and tax credit carry-forwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. Due to continued operating losses, prior to the Company’s fiscal 2019, the Company maintained a valuation allowance on the net deferred tax assets other than Alternative Minimum Tax (“AMT”) credits. During the year ended August 31, 2019, the Company determined it was more likely than not that the Company would realize its deferred tax assets, consisting primarily of net operating loss carryforwards, resulting in the release of the valuation allowance. By releasing the valuation allowance, for the year ended August 31, 2019, the Company recognized a deferred tax benefit of $1,284,100. The Company is required to reassess its conclusions regarding the realization of its deferred tax assets at each financial reporting date. 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 2015 through fiscal 2019. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of income tax expense. At August 31, 2020, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the years ended August 31, 2020 or 2019. Earnings per Common Share Basic earnings per common share is computed by dividing net income by the weighted-average number of shares outstanding during each period. Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised and all unvested share-based payment awards were vested. As of August 31, 2020 and 2019, the Company included 216,600 and 206,860 stock options in the calculation of diluted earnings per common share as dilutive common stock equivalents using the treasury stock method. As of each August 31, 2020 and 2019, the Company excluded 50,000 stock options from the diluted earnings 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 (the “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 continues to monitor economic implications of the COVID-19 pandemic; however, based on current market conditions, we do not expect the impact of ASU 2016-13 to be material upon adoption. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Aug. 31, 2020 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 3 – 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 input to determine fair value. Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as The NASDAQ Stock Market. As of August 31, 2020 and August 31, 2019, the Company had no Level 1 assets or liabilities. Level 2 — Valuations for assets and liabilities obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. As of August 31, 2020 and 2019, the Company had zero and one Level 2 assets, which consisted of U.S. treasury notes. 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. As of August 31, 2020, the Company had two level 3 assets, the right-of-use asset (its operating lease) and the Arkansas Valley mineral rights As of August 31, 2019, the Company had one level 3 asset, the Arkansas Valley mineral rights and one Level 3 liability, the contingent portion of the CAA. Participating Interests in Export Water 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 4 – Water and Land Assets There were no assets or liabilities measured at fair value on a recurring basis as of August 31, 2020. The following table provides information on the assets and liabilities measured at fair value on a recurring basis as of August 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. treasuries $ 4,996,000 $ 4,992,100 $ — $ 4,996,000 $ — $ 3,900 Total $ 4,996,000 $ 4,992,100 $ — $ 4,996,000 $ — $ 3,900 As of August 31, 2019, the Company held a $192,800 certificate of deposit that is not carried at fair value on the consolidated balance sheets because it is classified as a held-to-maturity security. As of August 31, 2020, the Company had no securities it was holding-to-maturity. Level 3 Assets and Liability. The carrying value of the operating lease right-of-use asset is deemed recoverable based on the present value of the estimated future cash flows using a discount rate commensurate with the risk. During 2020, as described in Note 2 – Summary of significant Accounting Policies Participating Interests in Export Water There were no transfers between Level 1, 2 or 3 categories during the years ended August 31, 2020 or 2019 . |
WATER AND LAND ASSETS
WATER AND LAND ASSETS | 12 Months Ended |
Aug. 31, 2020 | |
WATER AND LAND ASSETS [Abstract] | |
WATER AND LAND ASSETS | NOTE 4 – WATER AND LAND ASSETS Investment in Water and Water Systems The Company’s water and water systems consist of the following: August 31, 2020 August 31, 2019 Costs Accumulated Depreciation and Depletion Costs Accumulated Depreciation and Depletion Rangeview water supply $ 14,569,900 $ (15,600 ) $ 14,823,800 $ (14,700 ) Sky Ranch water rights and other costs 7,498,900 (980,600 ) 7,371,500 (757,400 ) Fairgrounds water and water system 2,899,900 (1,238,900 ) 2,899,800 (1,151,000 ) Rangeview water system 15,947,700 (788,600 ) 5,617,800 (372,300 ) Water supply – other 7,549,800 (1,115,800 ) 4,758,200 (860,100 ) Wild Pointe service rights 1,631,800 (708,500 ) 1,631,800 (489,800 ) Sky Ranch pipeline 5,727,300 (602,300 ) 5,723,700 (411,600 ) Lost Creek water supply 3,372,400 — 3,324,000 — Construction in progress 1,339,300 — 8,176,600 — Totals 60,537,000 (5,450,300 ) 54,327,200 (4,056,900 ) Net investments in water and water systems $ 55,086,700 $ 50,270,300 Construction in progress primarily consists of an irrigation system and new water well at Sky Ranch. The Company anticipates the additional facilities will be placed in service during fiscal 2021. During fiscal 2019, the Company constructed a water reclamation facility for the Sky Ranch development. The costs of the facility were recorded in construction in progress. The Company placed the facility in service during the second quarter of fiscal 2020 at a total cost of $10.2 million. The Rangeview water system includes the Sky Ranch water reclamation facility. Depletion and Depreciation During the years ended August 31, 2020 and 2019, the Company recorded an immaterial amount of depletion charges, which relates entirely to the Rangeview Water Supply (as defined below). During the years ended August 31, 2020 and 2019, the Company recorded $1,722,200 and $1,278,900 of depreciation expense. These figures include $355,900 and $312,600 of depreciation expense for other equipment not included in the table above in the fiscal years ended August 31, 2020 and 2019. The following table presents the estimated useful lives by asset class used for calculating depreciation and depletion charges: Assets Classes Estimated Useful Lives Wild Pointe Units of production depletion Rangeview water supply Units of production depletion Lost Creek water supply Units of production depletion Rangeview, Sky Ranch and WISE water systems 30 years ECCV wells 10 years Furniture and fixtures 5 years Trucks and heavy equipment 5 years Water system general (pumps, valves, etc.) 5 years Computers 3 years Water equipment 3 years Software 1 year Rangeview Water Supply and Water System The “Rangeview Water Supply” consists of approximately 27,000 acre-feet and is a combination of tributary surface water and groundwater rights along with certain storage rights associated with the Lowry Range, a 26,000-acre property owned by the Land Board located 16 miles southeast of Denver, Colorado. As of August 31, 2020, the Company had invested $17.9 million in facilities to extend water service to customers located on and off the Lowry Range. The recorded costs of the Rangeview Water Supply include payments to the sellers of the Rangeview Water Supply, design and construction costs and certain direct costs related to improvements to the asset, including legal and engineering fees. The Company acquired the Rangeview Water Supply in 1996 pursuant to the following agreements: • 1996 Amended and Restated Lease Agreement between the Land Board and the Rangeview District, which was superseded by the 2014 Amended and Restated Lease Agreement, dated July 10, 2014 (the “Lease”), between the Company, the Land Board, and the Rangeview District; • The 1996 Service Agreement between the Company and the Rangeview District, which was superseded by the Amended and Restated Service Agreement, dated July 11, 2014, between the Company and the Rangeview District (the “Lowry Service Agreement”), which provides for the provision of water service to the Rangeview District’s customers located on the Lowry Range; • The Agreement for Sale of non-tributary and not non-tributary groundwater between the Company and the Rangeview District (the “Export Agreement”), pursuant to which the Company purchased a portion of the Rangeview Water Supply referred to as the “Export Water” because the Export Agreement allows the Company to export water from the Lowry Range to supply water to nearby communities; and • The 1997 Wastewater Service Agreement between the Company and Rangeview District (the “Lowry Wastewater Agreement”), which allows the Company to provide wastewater service to the Rangeview District’s customers on the Lowry Range. The Lease, the Lowry Service Agreement, the Export Agreement, and the Lowry Wastewater Agreement are collectively referred to as the “Rangeview Water Agreements.” Additionally, in August 2019, the Company purchased approximately 300 acre-feet of fully consumptive surface water in the Lost Creek Designated Ground Water Basin (“Lost Creek Water”). The Lost Creek Water is currently adjudicated for agricultural use, and the Company has filed an application with the Colorado water court to change the use of the water to augment its municipal/industrial water supplies at the Lowry Range. The Company has consolidated the Lost Creek Water with the Rangeview Water Supply to provide service to the Rangeview District’s customers both on and off the Lowry Range. Pursuant to the Rangeview Water Agreements, the Company owns 11,650 acre feet of water consisting of 10,000 acre feet of groundwater and 1,650 acre feet of average yield surface water which can be exported off the Lowry Range to serve area users (referred to as “Export Water”). The 1,650 acre feet of surface rights are subject to completion of documentation by the Land Board related to the Company’s exercise of its right to substitute an aggregate gross volume of 165,000 acre feet of its groundwater for 1,650 acre feet per year of adjudicated surface water and to use this surface water as Export Water. Additionally, assuming completion of the substitution of groundwater for surface water, the Company has the exclusive right to provide water and wastewater service, through 2081, to all water users on the Lowry Range and the right to develop an additional 13,685 acre feet of groundwater and 1,650 acre feet of adjudicated surface water to serve customers either on or off the Lowry Range. The Rangeview Water Agreements also provide for the Company to use surface reservoir storage capacity in providing water service to customers both on and off the Lowry Range. Services on the Lowry Range – Rates and charges for all water and wastewater services on the Lowry Range, including tap fees and usage or monthly fees, are governed by the terms of the Rangeview Water Agreements. Rates and charges cannot exceed the average of similar rates and charges of three surrounding municipal water and wastewater service providers, which are reassessed annually. Pursuant to the Rangeview Water Agreements, the Land Board receives a royalty of 10% or 12% of gross revenues from the sale or disposition of the water, depending on the nature and location of the purchaser of the water, except that the royalty on tap fees shall be 2% (other than taps sold for Sky Ranch which are exempt). The Company also is required to pay the Land Board a minimum annual water production fee of $45,600 per year, which offsets earned royalties, and annual rent of $7,600 which amount is increased every five years based on the Consumer Price Index for Urban Customers The Rangeview District retains 2% of the remaining revenues, and the Company receives 98% of the remaining revenues after the Land Board royalty. The Land Board does not receive a royalty on wastewater fees. The Company receives 100% of the Rangeview District’s wastewater tap fees and 90% of the Rangeview District’s wastewater treatment fees (the Rangeview District retains the other 10%). Export Water – 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. During the years ended August 31, 2020 and 2019, the Company made $2.8 million and $419,200 in capital investments in WISE. Capitalized terms used under this caption are defined in Note 7 – Long-Term Obligations and Operating Lease The Arapahoe County Fairgrounds Water and Water System The Company owns 321 acre-feet of groundwater purchased pursuant to its agreement with Arapahoe County. The Company plans to use this water in conjunction with its Rangeview Water Supply in providing water to areas outside the Lowry Range. The $2.9 million of capitalized costs noted in the table Investment in Water and Water Systems The Lost Creek Water Supply In August 2019, the Company purchased 150 acre-feet of ditch water rights, 800 acre-feet of renewable groundwater rights, 70 acre-feet of deep groundwater rights and 260 acres of land in Weld County. Total consideration for the land, water and related costs was $3.5 million. The Company allocated the acquisition cost to the land and water rights based on estimates of each asset’s respective fair value at the acquisition date. The purchase of the Lost Creek land and water was accounted for as an asset acquisition. Service to Customers Not on the Lowry Range Sky Ranch – Total consideration for the land, water and acquisition related costs and fees was $7.6 million. The Company allocated the total acquisition cost to the land and water rights based on estimates of each asset’s respective fair value at the acquisition date. The purchase of the Sky Ranch land and water was accounted for as an asset acquisition. In June 2017, the Company completed and placed into service its Sky Ranch pipeline, which cost $5.7 million to construct, connecting its Sky Ranch water system to the Rangeview District’s water system. Wild Pointe – O&G Leases In 2011, the Company signed the Sky Ranch O&G Lease with Anadarko. Pursuant to the Sky Ranch O&G Lease, the Company received an up-front payment from Anadarko for the purpose of exploring for, developing, producing and marketing oil and gas on 634 acres of mineral estate owned by the Company at its Sky Ranch property. The Sky Ranch O&G Lease is now held by production, entitling the Company to royalties based on production. In September 2017, the Company signed the three-year Bison Lease for the purpose of exploring for, developing, producing, and marketing oil and gas on 40 acres of mineral estate owned by the Company adjacent to the Lowry Range. Land and Mineral Rights As part of the 2010 Sky Ranch acquisition, the Company acquired approximately 930 acres of land, of which approximately 150 acres have been sold to home builders for the purpose of building residential homes. As of August 31, 2020, the remaining acres the Company owns, which are also intended to be sold to builders, are valued at $3.6 million. Additionally, the Company holds approximately 13,900 acres of mineral interests in Southeast Colorado in Otero, Bent and Prowers Counties and has valued these mineral interests at $1.4 million. As further described in Note 2 – Summary of significant Accounting Policies , the Company assessed the recoverability of the Arkansas Valley mineral right and determined that the fair value of these assets was below their carrying value by $1.4 million. As a result, the Company recorded an impairment charge of $1.4 million in N on-cash mineral rights impairment charge in the consolidated statements of operations and comprehensive income for fiscal 2020. There was no impairment for the Arkansas Valley mineral rights long-lived asset in fiscal 2019. As of August 31, the costs allocated to the Company’s land and mineral interest are as follows: August 31, 2020 August 31, 2019 Sky Ranch land $ 3,569,266 $ 3,037,556 Sky Ranch development costs 1,127,476 423,324 Lost Creek land 218,138 218,138 Arkansas Valley mineral rights — 1,425,459 Net land and mineral interests $ 4,914,880 $ 5,104,477 |
PARTICIPATING INTERESTS IN EXPO
PARTICIPATING INTERESTS IN EXPORT WATER | 12 Months Ended |
Aug. 31, 2020 | |
PARTICIPATING INTERESTS IN EXPORT WATER [Abstract] | |
PARTICIPATING INTERESTS IN EXPORT WATER | NOTE 5 – PARTICIPATING INTERESTS IN EXPORT WATER The acquisition of the Rangeview Water Supply was finalized 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. Additionally, if the Company does not sell the Export Water, the holders of the Series B Preferred Stock are 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 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 repurchased various portions of the CAA obligations, which retained their original priority. The Company did not make any CAA acquisitions during the fiscal year ended August 31, 2020 or 2019. The Company is currently allocated approximately 88% of the total proceeds from the sale of Export Water after payment of the Land Board royalty. Additionally, as a result of the acquisitions, and the consideration from the cumulative sales of Export Water, as detailed in the table below, the remaining potential third-party obligation at August 31, 2020, 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, 2017 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 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 166,300 (146,500 ) (19,800 ) (6,900 ) (12,900 ) Balance at August 31, 2019 1,547,000 29,491,600 987,600 332,200 655,400 Fiscal 2020 Export Water sale payments 106,600 (93,900 ) (12,700 ) (4,500 ) (8,200 ) Balance at August 31, 2020 $ 1,653,600 $ 29,397,700 $ 974,900 $ 327,700 $ 647,200 The CAA includes contractually established priorities which call for payments to CAA holders in order of their priority. This means the first payees receive their full payment before the next priority level receives any payment and so on until full repayment. Of the next $6.3 million of Export Water payouts, which at current levels would occur over several years, the Company will receive $5.6 million of revenue. Thereafter, the Company will be entitled to all but $220,000 of the proceeds from the sale of Export Water after deduction of the Land Board royalty. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Aug. 31, 2020 | |
ACCRUED LIABILITIES [Abstract] | |
ACCRUED LIABILITIES | NOTE 6 – ACCRUED LIABILITIES At August 31, 2020, the Company had accrued liabilities of $2.6 million, of which $766,800 was for accrued compensation, $74,000 was for current operating lease obligations, $72,200 was for estimated property taxes, $56,000 was for professional fees and the remaining $1.7 million was related to operating payables. Of the $1.7 million in operating payables, $1.2 million is payable to the Sky Ranch CAB related to development costs at Sky Ranch. These costs are included in Land development nventories Land development construction costs Investments in water and water systems. At August 31, 2019, the Company had accrued liabilities of $3.4 million, of which $460,500 was for accrued compensation, $94,000 was for estimated property taxes, $70,000 was for professional fees and the remaining $2.8 million was related to operating payables. Of the $2.8 million in operating payables, $1.4 million is payable to the Sky Ranch CAB for costs related to the development of Sky Ranch. These costs are included in Land development inventories Land development construction costs Investments in water and water systems. |
LONG-TERM OBLIGATIONS AND OPERA
LONG-TERM OBLIGATIONS AND OPERATING LEASE | 12 Months Ended |
Aug. 31, 2020 | |
LONG-TERM OBLIGATIONS AND OPERATING LEASE [Abstract] | |
LONG-TERM OBLIGATIONS AND OPERATING LEASE | NOTE 7 – LONG-TERM OBLIGATIONS AND OPERATING LEASE As of August 31, 2020 and 2019, the Company had no debt. The Participating Interests in Export Water Supply are obligations of the Company that have no scheduled maturity dates. Therefore, these liabilities are not disclosed in tabular format. However, the Participating Interests in Export Water Supply are described in Note 5 – Participating Interests in Export Water WISE Partnership During 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. Pursuant to the terms of the Rangeview/Pure Cycle WISE Project Financing and Service 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. During the years ended August 31, 2020 and 2019, the Company through the Rangeview District, purchased an additional 400 and 0 acre-feet of WISE water for $582,200 and $0. See further discussion in Note 14 – Related Party Transactions. Lease Commitments Operating lease expense is generally recognized evenly over the term of the lease. As of September 1, 2019, the company adopted ASU No. 2016-02, Leases (“Topic 842”). Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. Prior to September 1, 2019 leases were accounted for under the previous guidance in 840. The Company did not enter into any new leases in fiscal 2020 . For the years ended August 31, 2020 and 2019 , rent expense consisted of operating lease expense of $85,200 and $79,200. The Company paid $72,800 against Lease obligations — operating leases during fiscal 2020 . Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet. For lease agreements entered into or reassessed in the future, the Company will be required to combine the lease and non-lease components in determining the lease liabilities and right-of-use (“ROU”) assets. The Company’s lease agreements generally do not provide an implicit borrowing rate; therefore, an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. The Company used the incremental borrowing rate of 6% on September 1, 2019, for all leases that commenced prior to that date. The Company elected the hindsight practical expedient to determine the lease term for existing leases, which resulted in the lengthening of the lease term related to the Company’s office lease. ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the consolidated balance sheet as follows: As of August 31, 2020 Operating leases - ROU assets $ 195,566 Accrued liabilities $ 73,991 Lease obligations - operating leases, net of current portion 120,285 Total lease liability $ 194,275 Weighted average remaining lease term (in years) 2.4 Weighted average discount rate 6 % |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Aug. 31, 2020 | |
SHAREHOLDERS' EQUITY [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 8 – SHAREHOLDERS’ EQUITY Preferred Stock The Company’s non-voting Series B Preferred Stock has a preference in liquidation of $1.00 per share less any dividends previously paid. Additionally, the Series B Preferred Stock is redeemable at the discretion of the Company for $1.00 per share less any dividends previously paid. In the event the proceeds from the sale or disposition of Export Water rights exceed $36,026,232, the Series B Preferred Shareholders will receive the next $432,513 of proceeds in the form of a dividend. The terms of the Series B Preferred Stock prohibit payment of dividends on common stock unless all dividends accrued on the Series B Preferred Stock have been paid. Equity Compensation Plan The Company maintains the 2014 Equity Incentive Plan (the “2014 Equity Plan”), which was approved by shareholders in January 2014 and became effective 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 Company’s board of directors. The Company has reserved 1.6 million shares of common stock for issuance under the 2014 Equity Plan. As of August 31, 2020, stock awards and awards to purchase 511,500 shares of the Company’s common stock have been made under the 2014 Equity Plan. As of August 31, 2020 and 2019, there were 1,088,500 and 1,230,500 shares available for grant under the 2014 Equity Plan. The Company estimates the fair value of share-based payment awards on the date of grant using the Black-Scholes option-pricing model (“Black-Scholes model”). Using the Black-Scholes model, the value of the portion of the award that is ultimately expected to vest is recognized as a period expense over the requisite service period in the consolidated statements of operations and comprehensive income (loss). Option forfeitures are to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company does not expect any forfeiture of its option grants, and therefore, the compensation expense has not been reduced for estimated forfeitures. For the years ended August 31,2020 and 2019, 6,500 options and zero options expired. The Company attributes the value of share-based compensation to expense using the straight-line single option method for all options granted. The Company’s determination of the estimated fair value of share-based payment awards on the date of grant is affected by the following variables and assumptions: ● The grant date exercise price – is the closing market price of the Company’s common stock on the date of grant; ● Estimated option lives – based on historical experience with existing option holders; ● Estimated dividend rates – based on historical and anticipated dividends over the life of the option; ● Life of the option – based on historical experience, option grants have lives of between five and 10 years; ● Risk-free interest rates – with maturities that approximate the expected life of the options granted; ● Calculated stock price volatility – calculated over the expected life of the options granted, which is calculated based on the weekly closing price of the Company’s common stock over a period equal to the expected life of the option; and ● Option exercise behaviors – based on actual and projected employee stock option exercises. In fiscal 2020, the Company granted 80,000 stock options to employees with weighted-average grant-date fair values of $4.21, and three-year vesting terms which expire ten years from the grant date. In fiscal 2020, the Company granted 50,000 stock options to an executive officer with a weighted-average grant-date fair value of $4.16, a three-year vesting term and an expiration date of ten years from the grant date. In addition, the six non-employee Board members were each granted 2,000 unrestricted stock grants. The fair market value of the unrestricted shares for share-based compensation expensing is equal to the closing price of the Company’s common stock on the date of grant of $12.45. Stock-based compensation expense includes $149,400 of expense related to these unrestricted stock grants. The unrestricted stock grants were fully expensed at the date of the grant because no vesting requirements exist for unrestricted stock grants. There was no stock-based compensation expense related to unrestricted stock grants for fiscal 2019. In fiscal 2019, the Company granted 50,000 stock options to an executive officer with a weighted-average grant-date fair value of $5.06, a three-year vesting term and an expiration date of ten years from the grant date. In fiscal 2019, the Company granted its non-employee directors a combined 32,500 stock options with a weighted-average grant-date fair value of $126,700, a one year vesting term and an expiration date of ten years from the grant date. The variable assumptions used in the fair value calculations using the Black-Scholes model are as follows: For the Fiscal Years Ended August 31, 2020 2019 Expected term (years) 6.00 5.80 Risk-free interest rate 1.71 % 2.93 % Expected volatility 39.32 % 41.83 % Expected dividend yield 0 % 0 % Weighted average grant-date fair value $ 4.19 $ 4.60 During the fiscal years ended August 31, 2020 and 2019, 17,500 and 62,500 options were exercised. The following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the year ended August 31, 2020: 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 82,500 $ 10.48 Exercised (62,500 ) $ 3.09 Forfeited or expired — $ — Outstanding at August 31, 2019 555,500 $ 6.33 6.27 $ 2,527,590 Granted 130,000 $ 10.41 Exercised (17,500 ) $ 2.81 Forfeited or expired (6,500 ) $ 6.08 Outstanding at August 31, 2020 661,500 $ 7.23 6.17 $ 1,831,075 Options exercisable at August 31, 2020 481,501 $ 6.08 5.22 $ 1,795,076 The following table summarizes the activity and value of non-vested options as of and for the year ended August 31, 2020: Number of Options Weighted Average Grant Date Fair Value Non-vested options outstanding at August 31, 2019 152,499 $ 4.03 Granted 130,000 4.19 Vested (102,500 ) 3.75 Forfeited — — Non-vested options outstanding at August 31, 2020 179,999 $ 4.31 All non-vested options are expected to vest. For the years ended August 31, 2020 and 2019, the total fair value of options vested was $384,400 and $297,100. For the years ended August 31, 2020 and 2019, the weighted-average grant-date fair value of options granted was $4.19 and $4.60. For the years ended August 31, 2020 and 2019, share-based compensation expense was $517,000 and $336,200. As of August 31, 2020, the Company had unrecognized share-based compensation expenses totaling $461,100 relating to non-vested options that are expected to vest. The weighted average period over which these options are expected to vest is 1.7 years. The Company has not recorded any excess tax benefits to additional paid-in capital. Warrants As of August 31, 2020, the Company had outstanding warrants to purchase 92 shares of common stock at an exercise price of $1.80 per share. These warrants expire six months from the earlier of: • The date that all the Export Water is sold or otherwise disposed of, • The date that the CAA is terminated with respect to the original holder of the warrant, or • The date on which the Company makes the final payment pursuant to Section 2.1(r) of the CAA. No warrants were exercised during fiscal 2020 and 2019. |
SIGNIFICANT CUSTOMERS
SIGNIFICANT CUSTOMERS | 12 Months Ended |
Aug. 31, 2020 | |
SIGNIFICANT CUSTOMERS [Abstract] | |
SIGNIFICANT CUSTOMERS | NOTE 9 – SIGNIFICANT CUSTOMERS The Company primarily provides water and wastewater services on the Rangeview District’s behalf to the Rangeview District’s customers. Because the Rangeview District accounts for the majority of the Company’s water and wastewater service revenue, the Company has included the end-use customers of the Rangeview District who generate the most revenue for it on its list of significant customers. Additionally, the Company has presented the percentages of revenue from water and wastewater services and water and wastewater tap sales separately (versus by the water and wastewater resource development segment or total revenue) because it believes that provides a more meaningful presentation of the relevance of each customer to that service line. Lot sales are generated entirely through sales to three customers as noted below. The tables below present revenue generated from the Company’s significant customers for each of the services presented. For the year ended August 31, 2020 Water and wastewater metered services Water and wastewater tap fees Land development (Lot sales recognized) Ridgeview Youth Services 14 % – – Conoco / Crestone Peak (O&G operations) 45 % – – All Sky Ranch Homes (1) 22 % – – All Wild Pointe Homes (2) 9 % 4 % – Taylor Morrison – 28 % 32 % KB Home – 38 % 26 % Richmond Homes – 31 % 42 % Combined totals presented 90 % 100 % 100 % (1) This represents the water and wastewater fees for all homes combined at Sky Ranch and not one individual home (2) This represents the water and wastewater metered services and water and wastewater tap fees for all homes combined at Wild Pointe and not one individual home For the year ended August 31, 2019 Water and wastewater metered services Water and wastewater tap fees Land development (Lot sales recognized) Ridgeview Youth Services 3 % – – Conoco / Crestone Peak (O&G operations) 74 % – – All Sky Ranch Homes (1) – – – All Wild Pointe Homes (2) 3 % 6 % – Taylor Morrison – 26 % 34 % KB Home – 29 % 34 % Richmond Homes – 38 % 32 % Combined totals presented 80 % 100 % 100 % (1) This represents the water and wastewater fees for all homes combined at Sky Ranch and not one individual home (2) This represents the water and wastewater metered services and water and wastewater tap fees for all homes combined at Wild Pointe and not one individual home The Ridgeview Youth Services customer accounted for approximately the same dollar sales year over year, but due to the decline in O&G operations revenue, the percentage increased in fiscal 2020 over 2019. Because the Company provides services to the Rangeview District’s customers, and those customers pay the Rangeview District, which then remits amounts to the Company, the Company’s trade receivables at August 31, 2020 and 2019 from the Rangeview District comprise 81% and 40% of the balances. However, the receivable balances from the end-use customers that are owed to the Rangeview District, the majority of which in turn are owed to the Company, are comprised primarily of amounts owed by the home builders at Sky Ranch for tap fees. As of August 31, 2020, the three home builders accounted for 42% of the receivables balance, with all Sky Ranch homeowners combined accounting for 17% of the receivable balance and all Wild Pointe homeowners combined accounting for 14% of the receivable balance. As of August 31, 2019, the three home builders accounted for 5% of the receivables balance, with all Wild Pointe homeowners combined accounting for 26% of the receivable balance, and Conoco accounting for 57% of the receivable balance. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Aug. 31, 2020 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 10 – INCOME TAXES The Company recorded income tax expense of $2.2 million and an income tax benefit of $1.3 million for the fiscal years ended August 31, 2020 and 2019. The net expense during the fiscal year ended August 31, 2020, consisted of current income tax expense of $0 and deferred income tax expense of $2.2 million. The deferred tax expense consists of the usage of the Company’s $2.2 million net operating loss carryforwards and the timing difference between book and tax depreciation of fixed assets. The Company’s effective income tax rate was 24.4% and (36.4%) for fiscal years August 31, 2020 and 2019. The Company’s effective tax rate was a benefit for 2019 due to the release of its valuation allowance on its deferred tax assets. The Company paid Federal and State tax installments of $1,089,700 and $215,500, respectively, during fiscal year ended August 31, 2020. No taxes were paid during the fiscal year ended August 31, 2019. Deferred income taxes reflect the tax effects of net operating loss carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of August 31 are as follows: For the Fiscal Years Ended August 31, 2020 2019 Deferred tax assets (liabilities): Net operating loss carryforwards $ 22,922 $ 609,439 AMT credit carryforward — — Accrued compensation 166,948 113,559 Deferred revenues 88,994 149,895 Depreciation and depletion (1,700,771 ) (46,408 ) Non-qualified stock options 490,952 410,633 Other 45,323 46,128 Valuation allowance — — Net deferred tax (liability) asset $ (885,632 ) $ 1,283,246 As of August 31, 2020 and August 31, 2019 the Company had no liability for unrecognized tax benefits. The Company maintained a valuation allowance on the net deferred tax asset other than AMT credit carryforwards through fiscal year August 31, 2018. During the fiscal year ended August 31, 2019, the Company had determined it is more likely than not that the Company will realize its deferred tax assets, which consist primarily net operating loss carryforwards. The Company assessed the realizability of its deferred tax assets using all available evidence; considering both historical results and projections of profitability for the reasonably foreseeable future periods. As a result of the Company’s annual reassessment of its conclusions regarding the realization of its deferred tax assets at each financial reporting date, the Company concluded that its deferred tax assets were realizable, and therefore, the valuation allowance was no longer necessary. By releasing the valuation allowance, the Company recognized a deferred tax benefit of approximately $1,284,100 which positively impacted the Company’s results of operations and financial position. Income taxes computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following for the fiscal years ended August 31: For the Fiscal Years Ended August 31, 2020 2019 Expected benefit from federal taxes at statutory rate of 21% for the years 2020 and 2019 $ 1,873,021 $ 740,870 State taxes, net of federal benefit 326,441 129,123 Permanent and other differences 2,137 10,388 NOL true up (8,240 ) 225,067 Non-qualified stock options adjustment — (348,441 ) Other (24,566 ) (26,202 ) Change in valuation allowance — (2,014,000 ) Total income tax expense / (benefit) $ 2,168,793 $ (1,283,195 ) At August 31, 2020, the Company has $109,200 of net operating loss carryforwards available for income tax purposes. The net operating loss carryforwards expire at various times beginning in 2036 and ending in 2038 for federal income tax purposes and expire at various times beginning in 2035 and ending in 2036 for state income tax purposes. At August 31, 2019, the Company had $2.5 million of net operating loss carryforwards available for income tax purposes. No net operating loss carryforwards expired during the fiscal year ended August 31, 2020 or 2019. |
401(k) PLAN
401(k) PLAN | 12 Months Ended |
Aug. 31, 2020 | |
401(k) PLAN [Abstract] | |
401(k) PLAN | NOTE 11 – 401(k) PLAN The Company maintains the Pure Cycle Corporation 401(k) Profit Sharing Plan (the “401(k) Plan”), a defined contribution retirement plan for the benefit of its employees. In fiscal 2020, the Company implemented a 401(k) Plan match, for which the Company contributes 1.5% if an employee contributes 3% or more up to a maximum contribution of $2,500 per annum. The contributions vest based on years of service - first anniversary 25%, second anniversary 50%, third anniversary 75% and the fourth anniversary 100%. The Company pays the annual administrative fees of the 401(k) Plan, and the 401(k) Plan participants pay the investment fees. The 401(k) Plan is open to all employees, age 18 or older, who have been employees of the Company for at least three months. For the years ended August 31, 2020 and 2019, the Company recorded total expense of $28,900 and $6,000, related to the 401(k) Plan. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Aug. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – 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 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. As of August 31, 2020, the Company had no contingencies where the risk of material loss was probable. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Aug. 31, 2020 | |
SEGMENT REPORTING [Abstract] | |
SEGMENT REPORTING | NOTE 13 – SEGMENT REPORTING An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the CODM, or decision-making group, to evaluate performance and make operating decisions. The Company has identified its CODM as its Chief Executive Officer. Because of the methods used by the CODM to allocate resources, the Company has identified two operating segments which meet GAAP segment disclosure requirements, namely are the water and wastewater resource development segment and the land development segment. The water and wastewater resource development business includes selling water services 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. The land development segment includes all the activities necessary to develop and sell finished lots, which as of August 31, 2020 and 2019, was done exclusively at the Company’s Sky Ranch Master Planned Community. O&G operations, although material in certain years, are deemed a passive activity as the CODM does not actively allocate resources to these projects; therefore, this is not classified as a reportable segment. The tables below present the measure of profit and assets the CODM uses to assess the performance of the segment for the periods presented: Year Ended August 31, 2020 Water and wastewater resource development Land development Corporate Total Total revenue $ 6,920,815 $ 18,934,400 $ — $ 25,855,215 Cost of revenue (1,074,450 ) (15,869,547 ) — (16,943,997 ) Depletion and depreciation (1,367,160 ) — — (1,367,160 ) Total cost of revenue (2,441,610 ) (15,869,547 ) — (18,311,157 ) Gross Margin 4,479,205 3,064,853 — 7,544,058 Reimbursement of construction costs - related party — 6,275,500 — 6,275,500 Gross Margin after reimbursables $ 4,479,205 $ 9,340,353 $ — $ 13,819,558 Pretax operating income $ 4,479,205 $ 3,064,853 $ (6,030,683 ) $ 1,513,375 Total long-term assets $ 56,266,579 $ 6,975,289 $ 26,519,188 $ 89,761,056 Year Ended August 31, 2019 Water and wastewater resource development Land development Corporate Total Total revenue $ 8,405,520 $ 11,955,989 $ 0 $ 20,361,509 Cost of revenue (1,670,508 ) (11,304,962 ) — (12,975,470 ) Depletion and depreciation (968,229 ) — — (968,229 ) Total cost of revenue (2,638,737 ) (11,304,962 ) — (13,943,699 ) Gross Margin $ 5,766,783 $ 651,027 $ — $ 6,417,810 Pretax operating income $ 5,766,783 $ 651,027 $ (3,419,149 ) $ 2,998,661 Total long-term assets $ 51,588,079 $ 16,866,542 $ 15,266,783 $ 83,721,404 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Aug. 31, 2020 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14 – RELATED PARTY TRANSACTIONS 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”). During the years ended August 31, 2020 and 2019, the Company provided funding of $17,400 and $22,200 to the Rangeview District related to this Participation Agreement. Through the WISE Financing Agreement, to date the Company has made payments totaling $6,316,600 to purchase certain rights to use existing water transmission and related infrastructure acquired by the WISE project and to construct the connection to the WISE system. The amounts are included in Investments in water and water systems The cost of the water to the members is based on the water rates charged by Aurora Water and can be adjusted each January 1. As of January 1, 2020, WISE water was $5.77 per thousand gallons and such rate will remain in effect through calendar 2021. In addition, the Company pays certain system operational and construction costs. If a WISE member, including the Rangeview District, does not need its WISE water each year or a member needs additional water, the members can trade and/or buy and sell water amongst themselves. During the years ended August 31, 2020 and 2019, the Company provided $2.8 million and $1.5 million of financing to the Rangeview District to fund the Rangeview District’s obligation to purchase WISE water rights and pay for operational and construction charges. Ongoing funding requirements are dependent on the WISE water subscription amount and the Rangeview District’s allocated share of the operational and overhead costs of SMWA and construction activities related to delivery of WISE water. The Company has outstanding notes receivable of $1,078,600 in the aggregate from the Rangeview District and the Sky Ranch CAB, which are related parties, as discussed below: 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 (the “Sky Ranch Districts”) and the Sky Ranch 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 the Rangeview District, each Sky Ranch District, and the Sky Ranch CAB consist of three employees of the Company (including the Company’s President) and one independent board member. The Rangeview District 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% (5.25% at August 31, 2020). The maturity date of the loan is December 31, 2020. Beginning 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 Lease remains in effect. Of the August 31, 2020 balance in Notes receivable - related parties Notes receivable - related parties Sky Ranch Metropolitan District Nos. 1, 3, 4 and 5 The Company had been providing funding to the Sky Ranch Districts, beginning in 2012 through 2016 by entering into annual Operation Funding Agreements with one of the Sky Ranch Districts obligating the Company to advance funding to the Sky Ranch District for the operation and maintenance expenses for the then-current calendar year. The Sky Ranch District paid the outstanding note receivable to the Company in November 2017. As of August 31, 2018, there was no outstanding balance under these agreements. 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. Each advance or reimbursable expense accrued interest at a rate of 6% per annum. No payments were required by the Sky Ranch District unless and until the Sky Ranch District issued bonds in an amount sufficient to reimburse the Company for all or a portion of the advances and costs incurred. The Sky Ranch CAB agreed to repay the amounts owed by the Sky Ranch District under this agreement and the agreement was terminated pursuant to the Sky Ranch FFAA (defined and described below). Sky Ranch Community Authority Board Pursuant to a certain Community Authority Board Establishment Agreement, as the same may be amended from time to time, Sky Ranch Metropolitan District No. 1 and Sky Ranch Metropolitan District No. 5 formed the Sky Ranch 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 Sky Ranch 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 (“PF Agreement”) with the CAB for the Sky Ranch property. The PF Agreement required the Company to fund an agreed upon list of public improvements for Sky Ranch with respect to earthwork, erosion control, streets, drainage, and landscaping at an estimated cost of $13.2 million for calendar years 2018 and 2019. Each advance or reimbursable expense accrues interest at a rate of 6% per annum. On September 18, 2018 and effective as of November 13, 2017, the parties entered into a series of agreements that superseded and consolidated the previous agreements into one primary agreement, the Facilities Funding and Acquisition Agreement (the “Sky Ranch FFAA”), pursuant to which: ● the Sky Ranch CAB agreed to repay the amounts owed by Sky Ranch Metropolitan District No. 5 to the Company totaling $857,900, 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 Sky Ranch CAB and the Company totaling $2.4 million were terminated; ● the Sky Ranch CAB acknowledged all amounts owed to the Company under the terminated agreements totaling $3.3 million, as well as amounts the Company incurred to finance the formation of the Sky Ranch CAB; and ● the Company agreed to fund an agreed upon list of improvements to be constructed by the Sky Ranch 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 terminated agreements and all amounts advanced under the Sky Ranch FFAA, collectively totaling $20 million, bear interest at a rate of 6% per annum. No payment is required of the Sky Ranch CAB for advances made to the Sky Ranch CAB or expenses incurred related to construction of improvements unless and until the Sky Ranch 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 Sky Ranch CAB agrees to exercise reasonable efforts to issue bonds to reimburse the Company subject to certain limitations. In addition, the Sky Ranch 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 Sky Ranch CAB by December 31, 2058, shall be deemed forever discharged and satisfied in full. As of August 31, 2020, the balance of the Company’s advances for improvements, excluding interest, net of costs reimbursed in November 2019, to the Sky Ranch CAB totaled $15.9 million, of which $0.5 million is included in Land development nventories Land development construction costs Land development nventories. Other income Refer to Note 2 – Summary of Significant Accounting Policies - Revenue Recognition - Land Development Activities In 2018, the Company advanced the Sky Ranch CAB $2.3 million to begin construction of improvements on the Sky Ranch property. In 2019, the Company advanced the Sky Ranch CAB $17.7 million for the Sky Ranch property. The advances have been used by the Sky Ranch CAB to pay for construction of public improvements and have been recorded as Land development inventories Land development construction costs In September 2018, effective as of November 13, 2017, the Company entered into an Operation Funding Agreement with the Sky Ranch CAB obligating the Company to advance funding to the Sky Ranch CAB for operation and maintenance expenses for the 2018 and 2019 calendar years. All payments are subject to annual appropriations by the Sky Ranch CAB in its absolute discretion. The advances by the Company accrue interest at the rate of 6% per annum from the date of the advance. $28,600 of the balance of the Notes receivable – related parties Notes receivable – related parties |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Aug. 31, 2020 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS The Company, through its wholly-owned subsidiary PCY Holdings, LLC, entered into contracts for the purchase and sale of real estate in its second filing at Sky Ranch (collectively, the “Purchase and Sale Contracts”) with each of KB Home Colorado Inc. (“KB Home”), Melody Homes, Inc., a wholly-owned subsidiary of DR Horton, Inc. (“Melody Home”), Challenger Denver, LLC (“Challenger”), and Meritage Homes of Colorado, Inc. (“Meritage Home”), collectively referred to as the “Builders.” The Purchase and Sale Contracts with KB Home and Melody were entered into on October 30, 2020. The Purchase and Sale Contracts with Meritage and Challenger were entered into on November 2, 2020. Each Purchase and Sale Contract provides that, upon the terms and subject to the conditions set forth in the Purchase and Sale Contract, PCY Holdings will sell, and the Builder will purchase, a certain number of platted residential lots at the Sky Ranch property. Each Builder is required to purchase water and wastewater taps for the lots from the Rangeview District. The closing of the transactions contemplated by each Purchase and Sale Contract is subject to customary closing conditions, including, among others, the Builder’s completion to its satisfaction of a title review and other due diligence of the property, the accuracy of the representations and warranties made by the Company contained in the Purchase and Sale Contract, and a commitment by the title company to issue to the Builder a title policy, subject to certain conditions. KB Home, Meritage, and Challenger have a 60-day due diligence period, and Melody has a 75-day due diligence period. Within seven business days of the execution of each Purchase and Sale Contract, the Builders are obligated to make an earnest money deposit. Pursuant to certain Purchase and Sale Contracts, Builders are required to make additional earnest money deposits after the due diligence period and/or final approval of the entitlements for the property. If a Purchase and Sale Contract is terminated prior to the expiration of the due diligence period, then the earnest money deposit must be refunded to the Builder. Otherwise, the earnest money deposit and other deposits will be applied to the payment of the purchase price of the lots at closing in accordance with a specified takedown schedule or be paid to the Company, subject to certain conditions. Pursuant to each Purchase and Sale Contract, the Company must use commercially reasonable efforts to obtain final approval of the entitlements for the property on or before nine months after the expiration of the due diligence period, but the Company will have the right to extend the date for obtaining final approval of the entitlements for up to six months after the initial nine-month period. The Company estimates that the development of the finished lots for the second filing (nearly 900 lots) of Sky Ranch will cost $65.6 million. The total proceeds from the Purchase and Sales Contracts with the four builders for the 789 finished lots contracted for is $63.4 million. If the remaining 100+ lots, which have been reserved for future use, were sold at prices comparable to the first 789 lots, the total sales proceeds for all of filing two would be $72.6 million. The timing of cash flows will include payments for certain milestone deliveries, including, but not limited to, completion of governmental approvals for final plats, installation of wet utility public improvements, and final completion of lot deliveries. Additionally, on November 3, 2020, the Company completed the sale of the remaining lots in the initial Sky Ranch filing for consideration of $1.6 million. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Aug. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements of the Company include the accounts of Pure Cycle Corporation and its wholly-owned and controlled subsidiary. Intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain reclassifications have been made to the financial statements to conform to the consolidated 2020 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 financial statements in conformity with accounting principles generally accepted in the United States of America (“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 financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used to account for certain items such as revenue recognition, reimbursable costs and expenses, costs of revenue for lot sales, share-based compensation, deferred tax asset valuation, and the useful lives of assets. 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 and U.S. Treasury debt securities. The Company had no cash equivalents as of August 31, 2020. At various times during the fiscal year ended August 31, 2020, the Company’s main operating account exceeded federally insured limits. To date, the Company has never suffered a loss due to such excess balance. |
Contract Asset | Contract Asset Contract assets reflect revenue which has been earned but not yet invoiced. Contract assets are transferred to receivables when the Company has the right to bill such amounts and they are invoiced. 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 investments in marketable securities at the time of purchase and reevaluates such determinations each reporting period. Marketable securities the Company does not have the positive intent or ability to hold to maturity, including certificate of deposits 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). |
Land Development Inventories | Land Development Inventories Land development inventories primarily include land held for development and sale stated at cost. The Company began developing its Sky Ranch property in 2018. Capitalized lot development costs at Sky Ranch are costs incurred to construct finished lots 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 when a lot is completed and sold on a lot-by-lot basis. Costs included in Land Development Inventories Land Development Inventories The Company measures land held for sale at the lower of the carrying value or net realizable value. In determining net realizable value, the Company primarily relies upon the most recent comparable sales prices. If recent sales prices are not available, the Company will consider several factors, including, but not limited to, current market conditions, nearby recent sales transactions, and market analysis studies. If the net realizable value is lower than the current carrying value, the land is written down to its net realizable value. |
Concentration of Credit Risk | 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. government treasury obligations. To date, the Company has not experienced significant losses on any of these investments. |
Fair Value | 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. 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. The estimated fair value measurements in Note 2 – Fair Value Measurements Cash and Cash Equivalents – Trade Accounts Receivable – Investments – Fair Value Measurements. Accounts Payable – Long-Term Financial Liabilities – Water and Land Assets Water and Land Assets Participating Interests in Export Water Notes Receivable – Related Parties – Notes receivable – related parties Off-Balance Sheet Instruments – Participating Interests in Export Water |
Trade Accounts Receivable | Trade Accounts Receivable The Company records accounts receivable net of allowances for uncollectible accounts. The Company has not recorded an allowance for uncollectible accounts in receivables from continuing operations for either of the periods ended August 31, 2020 or 2019. The allowance for uncollectible accounts was determined based on a specific review of all past due accounts. |
Long-Lived Assets Impairment Loss | Long-Lived Assets Impairment Loss The Company evaluates its long-lived assets for impairment at least annually or more frequently if the Company believes events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Estimates of future cash flows and timing of events for evaluating long-lived assets for impairment are based upon management’s assumptions and market conditions. If any of its long-lived assets are deemed to be impaired, the amount of impairment to be recognized is the excess of the carrying amount of the assets over its fair value. As of August 31, 2020, the Company assessed the recoverability of its Arkansas Valley mineral rights. The Company determined the carrying value of these mineral rights is not recoverable. As a result, the Company recorded an impairment charge of $1.4 million. The charge was recorded in Non-cash mineral asset impairment charge |
Capitalized Costs of Water and Wastewater Systems | Costs to construct water and wastewater systems that meet the Company’s capitalization criteria are capitalized as incurred, including interest, if applicable, 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. |
Depreciation and Depletion Charges | The Company depletes its water assets that are being utilized based on units produced (i.e., thousands of gallons sold) divided by the total volume of water adjudicated in the water decrees. |
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. Water and Wastewater Segment Revenues The Company generates revenues through its wholesale water and wastewater business predominantly from the items identified below. Because these items are separately delivered and distinct, the Company accounts for each of the items separately, as described below. Monthly water usage and wastewater treatment fees – Water and Land Assets The Company also sells raw water for industrial uses to oil and gas companies during drilling processes (referred to as “O&G operations”). O&G operations revenues are recognized at a point in time upon delivering water to the customer, unless other special arrangements are made. The Company delivered 76.2 million and 356.3 million gallons of water to customers during the years ended August 31, 2020 and 2019. Of this, 1% and 84% was used for O&G operations. 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. Water and wastewater tap fees and construction fees/special facility funding The Company recognizes water and wastewater tap fee revenues at the time the Company grants a right for the customer to connect to the water or wastewater service line to obtain service, and the customer pays the tap fee. During the years ended August 31, 2020 and 2019, the Company recognized $4,758,700 and $3,116,100 of water tap fee revenues. The water tap fees recognized are based on the amounts billed by the Rangeview District to customers, after deduction of royalties due to the Land Board for water taps, if applicable, and net of amounts paid to third parties pursuant to the CAA as further described in Note 7 – Long-Term Obligations and Operating Lease During the years ended August 31, 2020 and 2019, the Company recognized $882,300 and $526,400 of wastewater tap fee revenues. 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 was recognized during the fiscal year ended August 31, 2020 or 2019. As of August 31, 2020 and 2019, the Company had no contract liabilities related to water tap and construction fee/special facility funding revenue. Consulting fees Other income Land Development Segment Revenues The Company generates revenues through its land development business predominantly from the sources described below. Because these items are separately delivered and distinct, the Company accounts for each of the items separately, as described below. Sale of finished lots The Company sells lots at Sky Ranch pursuant to distinct agreements with each home builder. These agreements follow one of two formats. One format is the sale of a finished lot, whereby the purchaser pays for a ready-to-build finished lot and the sales price is paid in a lump-sum upon completion of the finished lot that is permit ready. 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 as the transaction cycle is complete and the Company has no further obligations for the lot. During the year ended August 31, 2020, the Company received payment and recognized revenue of $4,911,700 from one home builder in exchange for the delivery of 70 finished lots. During the year ended August 31, 2019, the Company received payment and recognized revenue of $4,053,800 from one home builder in exchange for the delivery of 57 finished lots. The second format is the sale of finished lots pursuant to a lot development agreement with builders, 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 builders 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 August 31, 2020, the Company had received cumulative payments of $25.6 million under the development agreements relating to 356 lots from two home builders, of which $24.1 million of revenue was recognized over time based on the costs incurred to date compared to total expected costs for full completion of the 356 lots. For the years ended August 31, 2020 and 2019, the Company recognized $14,022,700 and $7,902,200 of lot sales over time. As of August 31, 2020 and 2019, the Company had deferred revenues of $1,635,400 and $3,991,500. 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 the 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. Reimbursable Costs for Public Improvements Related Party Transactions Pursuant to the agreements with the Sky Ranch CAB, the Sky Ranch CAB is not required to make payments to the Company for any advances made by the Company or expenses incurred related to construction of public improvements unless and until the Sky Ranch CAB and/or the Sky Ranch Districts issue bonds in an amount sufficient to reimburse the Company for all or a portion of the advances made and expenses incurred. Because the timing of the issuance and approval of any bonds is subject to considerable uncertainty, any potential reimbursable costs for the construction of public improvements, including construction support activities and project management fees, are initially capitalized in Land development nventories. Land development construction costs Other income Land development nventories ther income The Company has entered certain funding agreements with the Sky Ranch CAB, which are described in Note 6 – Related Party Transactions. On November 19, 2019, the Sky Ranch CAB sold tax-exempt, fixed rate senior bonds in the aggregate principal amount of $11,435,000 and tax-exempt, fixed-rate subordinate bonds in the aggregate principal amount of $1,765,000 (collectively, the “Bonds”). Upon the issuance of the Bonds, the Company received $10.5 million as partial reimbursement for advances the Company made to the Sky Ranch CAB to fund the construction of public improvements to the Sky Ranch property. Of the $10.5 million received by the Company, $6.3 million was recognized as Income from reimbursement of construction costs (related party) Land development nventories Project management services Land development nventories Construction support activities Land development nventories Land development construction costs Related Party Transactions Reimbursable Costs for Public Improvements Land development inventories Unpaid reimbursable costs the Company believes are recoverable from the Sky Ranch CAB are recorded to a note receivable from the Sky Ranch CAB. Each reporting period, the Company assesses the collectability of the receivable from the Sky Ranch CAB and the recoverability of the outstanding reimbursable costs to determine if the amounts should be expensed. The following table summarizes all reimbursable costs incurred as of August 31, 2020, payments made from the Sky Ranch CAB and any outstanding reimbursable amounts. As of August 31, 2020 Costs incurred Reimbursement Received Net costs incurred Public Improvements $ 26,355,400 $ 10,505,000 $ 15,850,400 Accrued interest 1,176,300 — 1,176,300 Project management services 1,464,900 — 1,464,900 Construction support activities 674,800 — 674,800 Total reimbursable costs $ 29,671,400 $ 10,505,000 $ 19,166,400 The Company believes it will incur an additional $2.3 million through the end of the calendar year 2021 to complete the construction related to public improvements for the initial lots at Sky Ranch. It further believes that it will be reimbursed an additional $18.5 million related to the public improvement costs on this initial filing. Pursuant to the Company’s agreements with the Sky Ranch CAB, no payment is required by the Sky Ranch CAB with respect to reimbursable costs unless and until the Sky Ranch CAB and/or the Sky Ranch Districts have funds or issue municipal bonds in an amount sufficient to reimburse the Company for all or a portion of advances provided or expenses incurred for reimbursables. The Company evaluated disaggregation of revenue and has determined that no additional disaggregation of revenue is necessary. |
Deferred Revenue | Deferred Revenue In July 2019, the Company received an up-front payment of $573,700 from an Agreement on Locations of Oil and Gas Operations (the “OGOA”) for a pad site covering approximately 16 acres with the operator of the Sky Ranch O&G Lease (defined below under the heading Oil and Gas Lease Payments), In September 2017, the Company entered a Paid-Up Oil and Gas Lease with Bison Oil and Gas, LLP (the “Bison Lease”). Pursuant to the Bison Lease, 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 the three-year term of the lease. During each of the years ended August 31, 2020 and 2019, the Company recognized lease income of $55,700 related to the up-front payment received pursuant to the Bison Lease. As of August 31, 2020 and 2019, the Company had deferred revenue of $4,700 and $60,400, related to the Bison Lease that will be recognized as income ratably through September 2020. One of the Company’s industrial water customers provided $2.0 million of advanced water purchase payments to the Company to reserve first-priority water for O&G operations for defined periods through January 2021. The customer is required to use predetermined amounts of water on a predetermined schedule. The Company recognizes revenue based on the amount of water used by the customer in the period the water is used. If the customer does not use the water pursuant to the predetermined use and timing schedules, then the customers first-priority is forfeited. The Company records breakage revenue when it is remote that any future water services will be provided to the customer. In July 2020, the customer failed to use its water pursuant to the predetermined schedule. The customer revised its water usage estimate; therefore, the first of its upfront payments of $425,800 was recognized in Industrial - Oil and gas operations The Company has also deferred recognition of lot sale revenues, which are recognized as development progresses. As of August 31, 2020 and 2019, the Company’s deferred revenues along with the changes in the deferred revenues are as follows: August 31, 2020 August 31, 2019 Deferred lot sale revenue $ 1,635,443 $ 3,991,535 Oil and gas lease and water sales payments 1,965,080 1,067,348 Total deferred revenues $ 3,600,523 $ 5,058,883 Changes in deferred revenue were as follows: August 31, 2020 August 31, 2019 Balance, beginning of period $ 5,058,883 $ 477,161 Billings 24,643,817 24,998,964 Revenue recognized (26,102,177 ) (20,417,242 ) Balance, end of period $ 3,600,523 $ 5,058,883 As of August 31, 2020, one homebuilder at Sky Ranch still has payment obligations to the Company pursuant to a purchase and sale agreement for lots at Sky Ranch. This contracted payment represents revenue that has not yet been fully recognized because revenue is recognized as construction work is completed. At August 31, 2020, the Company had outstanding open contracts for $1.6 million, which relates to the last payment for the sale of the final lots in the first development filing at Sky Ranch, which contractually was payable in December 2020, but was paid on November 3, 2020. In addition to the deferred revenues recorded on the Company’s consolidated balance sheet, the Company has deferred interest income of $1.2 million and project management revenues of $1.5 million due from the Sky Ranch CAB related to the development at Sky Ranch, which, due to the contingent nature of the payments, are not reflected on the Company’s consolidated balance sheet. |
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 4 – Water and Land Assets Other income |
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 recognizes share-based compensation costs as expenses 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. The Company has released its full valuation allowance on its deferred tax assets as of August 31, 2019. The impact on the income tax provision for the granting and exercise of stock options during the fiscal year ended August 31, 2020, was a tax expense of $80,300. Because the Company had a full valuation allowance on its deferred tax assets as of August 31, 2018, there was a $410,600 deferred tax impact on the 2019 income tax provision as a result of the granting and exercise of stock options. The Company recognized $517,000 and $336,200 of share-based compensation expenses during the years ended August 31, 2020 and 2019. |
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 does not have any significant unrecognized tax benefits as of August 31, 2020. The Company records deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as operating losses and tax credit carry-forwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. Due to continued operating losses, prior to the Company’s fiscal 2019, the Company maintained a valuation allowance on the net deferred tax assets other than Alternative Minimum Tax (“AMT”) credits. During the year ended August 31, 2019, the Company determined it was more likely than not that the Company would realize its deferred tax assets, consisting primarily of net operating loss carryforwards, resulting in the release of the valuation allowance. By releasing the valuation allowance, for the year ended August 31, 2019, the Company recognized a deferred tax benefit of $1,284,100. The Company is required to reassess its conclusions regarding the realization of its deferred tax assets at each financial reporting date. 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 2015 through fiscal 2019. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of income tax expense. At August 31, 2020, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the years ended August 31, 2020 or 2019. |
Earnings per Common Share | Earnings per Common Share Basic earnings per common share is computed by dividing net income by the weighted-average number of shares outstanding during each period. Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised and all unvested share-based payment awards were vested. As of August 31, 2020 and 2019, the Company included 216,600 and 206,860 stock options in the calculation of diluted earnings per common share as dilutive common stock equivalents using the treasury stock method. As of each August 31, 2020 and 2019, the Company excluded 50,000 stock options from the diluted earnings 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 (the “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 continues to monitor economic implications of the COVID-19 pandemic; however, based on current market conditions, we do not expect the impact of ASU 2016-13 to be material upon adoption. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Reimbursable Costs | The following table summarizes all reimbursable costs incurred as of August 31, 2020, payments made from the Sky Ranch CAB and any outstanding reimbursable amounts. As of August 31, 2020 Costs incurred Reimbursement Received Net costs incurred Public Improvements $ 26,355,400 $ 10,505,000 $ 15,850,400 Accrued interest 1,176,300 — 1,176,300 Project management services 1,464,900 — 1,464,900 Construction support activities 674,800 — 674,800 Total reimbursable costs $ 29,671,400 $ 10,505,000 $ 19,166,400 |
Deferred Revenue and Changes in Deferred Revenue | As of August 31, 2020 and 2019, the Company’s deferred revenues along with the changes in the deferred revenues are as follows: August 31, 2020 August 31, 2019 Deferred lot sale revenue $ 1,635,443 $ 3,991,535 Oil and gas lease and water sales payments 1,965,080 1,067,348 Total deferred revenues $ 3,600,523 $ 5,058,883 Changes in deferred revenue were as follows: August 31, 2020 August 31, 2019 Balance, beginning of period $ 5,058,883 $ 477,161 Billings 24,643,817 24,998,964 Revenue recognized (26,102,177 ) (20,417,242 ) Balance, end of period $ 3,600,523 $ 5,058,883 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table provides information on the assets and liabilities measured at fair value on a recurring basis as of August 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. treasuries $ 4,996,000 $ 4,992,100 $ — $ 4,996,000 $ — $ 3,900 Total $ 4,996,000 $ 4,992,100 $ — $ 4,996,000 $ — $ 3,900 |
WATER AND LAND ASSETS (Tables)
WATER AND LAND ASSETS (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
WATER AND LAND ASSETS [Abstract] | |
Water and Water Systems | The Company’s water and water systems consist of the following: August 31, 2020 August 31, 2019 Costs Accumulated Depreciation and Depletion Costs Accumulated Depreciation and Depletion Rangeview water supply $ 14,569,900 $ (15,600 ) $ 14,823,800 $ (14,700 ) Sky Ranch water rights and other costs 7,498,900 (980,600 ) 7,371,500 (757,400 ) Fairgrounds water and water system 2,899,900 (1,238,900 ) 2,899,800 (1,151,000 ) Rangeview water system 15,947,700 (788,600 ) 5,617,800 (372,300 ) Water supply – other 7,549,800 (1,115,800 ) 4,758,200 (860,100 ) Wild Pointe service rights 1,631,800 (708,500 ) 1,631,800 (489,800 ) Sky Ranch pipeline 5,727,300 (602,300 ) 5,723,700 (411,600 ) Lost Creek water supply 3,372,400 — 3,324,000 — Construction in progress 1,339,300 — 8,176,600 — Totals 60,537,000 (5,450,300 ) 54,327,200 (4,056,900 ) Net investments in water and water systems $ 55,086,700 $ 50,270,300 |
Useful Lives by Asset Class | The following table presents the estimated useful lives by asset class used for calculating depreciation and depletion charges: Assets Classes Estimated Useful Lives Wild Pointe Units of production depletion Rangeview water supply Units of production depletion Lost Creek water supply Units of production depletion Rangeview, Sky Ranch and WISE water systems 30 years ECCV wells 10 years Furniture and fixtures 5 years Trucks and heavy equipment 5 years Water system general (pumps, valves, etc.) 5 years Computers 3 years Water equipment 3 years Software 1 year |
Land and Mineral Interest | As of August 31, the costs allocated to the Company’s land and mineral interest are as follows: August 31, 2020 August 31, 2019 Sky Ranch land $ 3,569,266 $ 3,037,556 Sky Ranch development costs 1,127,476 423,324 Lost Creek land 218,138 218,138 Arkansas Valley mineral rights — 1,425,459 Net land and mineral interests $ 4,914,880 $ 5,104,477 |
PARTICIPATING INTERESTS IN EX_2
PARTICIPATING INTERESTS IN EXPORT WATER (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
PARTICIPATING INTERESTS IN EXPORT WATER [Abstract] | |
Remaining Third Party Obligation | The Company is currently allocated approximately 88% of the total proceeds from the sale of Export Water after payment of the Land Board royalty. Additionally, as a result of the acquisitions, and the consideration from the cumulative sales of Export Water, as detailed in the table below, the remaining potential third-party obligation at August 31, 2020, 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, 2017 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 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 166,300 (146,500 ) (19,800 ) (6,900 ) (12,900 ) Balance at August 31, 2019 1,547,000 29,491,600 987,600 332,200 655,400 Fiscal 2020 Export Water sale payments 106,600 (93,900 ) (12,700 ) (4,500 ) (8,200 ) Balance at August 31, 2020 $ 1,653,600 $ 29,397,700 $ 974,900 $ 327,700 $ 647,200 |
LONG-TERM OBLIGATIONS AND OPE_2
LONG-TERM OBLIGATIONS AND OPERATING LEASE (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
LONG-TERM OBLIGATIONS AND OPERATING LEASE [Abstract] | |
ROU Lease Assets and Lease Liabilities | ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the consolidated balance sheet as follows: As of August 31, 2020 Operating leases - ROU assets $ 195,566 Accrued liabilities $ 73,991 Lease obligations - operating leases, net of current portion 120,285 Total lease liability $ 194,275 Weighted average remaining lease term (in years) 2.4 Weighted average discount rate 6 % |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
SHAREHOLDERS' EQUITY [Abstract] | |
Variable Assumptions Used in Fair Value Calculations | The variable assumptions used in the fair value calculations using the Black-Scholes model are as follows: For the Fiscal Years Ended August 31, 2020 2019 Expected term (years) 6.00 5.80 Risk-free interest rate 1.71 % 2.93 % Expected volatility 39.32 % 41.83 % Expected dividend yield 0 % 0 % Weighted average grant-date fair value $ 4.19 $ 4.60 |
Stock Option Activity | The following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the year ended August 31, 2020: 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 82,500 $ 10.48 Exercised (62,500 ) $ 3.09 Forfeited or expired — $ — Outstanding at August 31, 2019 555,500 $ 6.33 6.27 $ 2,527,590 Granted 130,000 $ 10.41 Exercised (17,500 ) $ 2.81 Forfeited or expired (6,500 ) $ 6.08 Outstanding at August 31, 2020 661,500 $ 7.23 6.17 $ 1,831,075 Options exercisable at August 31, 2020 481,501 $ 6.08 5.22 $ 1,795,076 |
Non-Vested Options | The following table summarizes the activity and value of non-vested options as of and for the year ended August 31, 2020: Number of Options Weighted Average Grant Date Fair Value Non-vested options outstanding at August 31, 2019 152,499 $ 4.03 Granted 130,000 4.19 Vested (102,500 ) 3.75 Forfeited — — Non-vested options outstanding at August 31, 2020 179,999 $ 4.31 |
SIGNIFICANT CUSTOMERS (Tables)
SIGNIFICANT CUSTOMERS (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
SIGNIFICANT CUSTOMERS [Abstract] | |
Revenue from Significant Customers | The tables below present revenue generated from the Company’s significant customers for each of the services presented. For the year ended August 31, 2020 Water and wastewater metered services Water and wastewater tap fees Land development (Lot sales recognized) Ridgeview Youth Services 14 % – – Conoco / Crestone Peak (O&G operations) 45 % – – All Sky Ranch Homes (1) 22 % – – All Wild Pointe Homes (2) 9 % 4 % – Taylor Morrison – 28 % 32 % KB Home – 38 % 26 % Richmond Homes – 31 % 42 % Combined totals presented 90 % 100 % 100 % (1) This represents the water and wastewater fees for all homes combined at Sky Ranch and not one individual home (2) This represents the water and wastewater metered services and water and wastewater tap fees for all homes combined at Wild Pointe and not one individual home For the year ended August 31, 2019 Water and wastewater metered services Water and wastewater tap fees Land development (Lot sales recognized) Ridgeview Youth Services 3 % – – Conoco / Crestone Peak (O&G operations) 74 % – – All Sky Ranch Homes (1) – – – All Wild Pointe Homes (2) 3 % 6 % – Taylor Morrison – 26 % 34 % KB Home – 29 % 34 % Richmond Homes – 38 % 32 % Combined totals presented 80 % 100 % 100 % (1) This represents the water and wastewater fees for all homes combined at Sky Ranch and not one individual home (2) This represents the water and wastewater metered services and water and wastewater tap fees for all homes combined at Wild Pointe and not one individual home |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
INCOME TAXES [Abstract] | |
Deferred Tax Assets | Significant components of the Company’s deferred tax assets as of August 31 are as follows: For the Fiscal Years Ended August 31, 2020 2019 Deferred tax assets (liabilities): Net operating loss carryforwards $ 22,922 $ 609,439 AMT credit carryforward — — Accrued compensation 166,948 113,559 Deferred revenues 88,994 149,895 Depreciation and depletion (1,700,771 ) (46,408 ) Non-qualified stock options 490,952 410,633 Other 45,323 46,128 Valuation allowance — — Net deferred tax (liability) asset $ (885,632 ) $ 1,283,246 |
Statutory to Effective Income Tax Reconciliation | Income taxes computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following for the fiscal years ended August 31: For the Fiscal Years Ended August 31, 2020 2019 Expected benefit from federal taxes at statutory rate of 21% for the years 2020 and 2019 $ 1,873,021 $ 740,870 State taxes, net of federal benefit 326,441 129,123 Permanent and other differences 2,137 10,388 NOL true up (8,240 ) 225,067 Non-qualified stock options adjustment — (348,441 ) Other (24,566 ) (26,202 ) Change in valuation allowance — (2,014,000 ) Total income tax expense / (benefit) $ 2,168,793 $ (1,283,195 ) |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
SEGMENT REPORTING [Abstract] | |
Segment Information | The tables below present the measure of profit and assets the CODM uses to assess the performance of the segment for the periods presented: Year Ended August 31, 2020 Water and wastewater resource development Land development Corporate Total Total revenue $ 6,920,815 $ 18,934,400 $ — $ 25,855,215 Cost of revenue (1,074,450 ) (15,869,547 ) — (16,943,997 ) Depletion and depreciation (1,367,160 ) — — (1,367,160 ) Total cost of revenue (2,441,610 ) (15,869,547 ) — (18,311,157 ) Gross Margin 4,479,205 3,064,853 — 7,544,058 Reimbursement of construction costs - related party — 6,275,500 — 6,275,500 Gross Margin after reimbursables $ 4,479,205 $ 9,340,353 $ — $ 13,819,558 Pretax operating income $ 4,479,205 $ 3,064,853 $ (6,030,683 ) $ 1,513,375 Total long-term assets $ 56,266,579 $ 6,975,289 $ 26,519,188 $ 89,761,056 Year Ended August 31, 2019 Water and wastewater resource development Land development Corporate Total Total revenue $ 8,405,520 $ 11,955,989 $ 0 $ 20,361,509 Cost of revenue (1,670,508 ) (11,304,962 ) — (12,975,470 ) Depletion and depreciation (968,229 ) — — (968,229 ) Total cost of revenue (2,638,737 ) (11,304,962 ) — (13,943,699 ) Gross Margin $ 5,766,783 $ 651,027 $ — $ 6,417,810 Pretax operating income $ 5,766,783 $ 651,027 $ (3,419,149 ) $ 2,998,661 Total long-term assets $ 51,588,079 $ 16,866,542 $ 15,266,783 $ 83,721,404 |
ORGANIZATION (Details)
ORGANIZATION (Details) ft² in Millions | 12 Months Ended |
Aug. 31, 2020aSegmentUnitft² | |
ORGANIZATION [Abstract] | |
Number of business segments | Segment | 2 |
Area of land (in acres) | a | 930 |
Number of single-family and multifamily residential units | Unit | 3,200 |
Number of square feet of commercial, retail, and industrial space | ft² | 2 |
Maximum [Member] | |
Water and Land Interests Period [Abstract] | |
Estimated useful lives | 30 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CARES Act (Details) - PPP Loan [Member] - USD ($) | May 13, 2020 | Apr. 17, 2020 |
Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") [Abstract] | ||
Face amount | $ 390,000 | |
Repayment of note payable including interest | $ 390,278 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents (Details) | Aug. 31, 2020USD ($) |
Cash and Cash Equivalents [Abstract] | |
Cash equivalents | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Investments (Details) | Aug. 31, 2020USD ($) |
Investments [Abstract] | |
Marketable securities | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Trade Accounts Receivable (Details) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Trade Accounts Receivable [Abstract] | ||
Allowance for uncollectible accounts | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Long-Lived Assets Impairment Loss (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Long-Lived Assets Impairment Loss [Abstract] | ||
Non-cash mineral interest impairment charge | $ 1,425,459 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Capitalized Costs of Water and Wastewater Systems and Depreciation and Depletion Charges (Details) | 12 Months Ended |
Aug. 31, 2020 | |
Maximum [Member] | |
Capitalized Costs of Water and Wastewater Systems and Depletion and Depreciation of Water Assets [Abstract] | |
Estimated useful lives | 30 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details) gal in Millions | Nov. 19, 2019USD ($) | Aug. 31, 2020USD ($)aSegmentContractBuilderLotAgreementgal | Aug. 31, 2019USD ($)BuilderLotgal | Aug. 31, 2018USD ($) |
Revenue Recognition [Abstract] | ||||
Number of business lines | Segment | 2 | |||
Total revenues | $ 25,855,215 | $ 20,361,509 | ||
Land [Abstract] | ||||
Deferred revenue | $ 3,600,523 | 5,058,883 | $ 477,161 | |
Area of land (in acres) | a | 930 | |||
Number of home builders | Builder | 3 | |||
Deferred interest income | $ 1,176,300 | |||
Gain from reimbursement of construction costs | 6,275,500 | $ 0 | ||
Net proceeds used to reduce remaining capital expenses in inventories | $ 4,200,000 | |||
Number of service agreements | Agreement | 2 | |||
Construction support amount invoiced | $ 674,800 | |||
Sky Ranch CAB [Member] | ||||
Land [Abstract] | ||||
Net proceeds from sale of bonds | $ 10,500,000 | |||
Sky Ranch CAB [Member] | Senior Bonds [Member] | ||||
Land [Abstract] | ||||
Aggregate principal amount of bonds | 11,435,000 | |||
Sky Ranch CAB [Member] | Subordinate Bonds [Member] | ||||
Land [Abstract] | ||||
Aggregate principal amount of bonds | $ 1,765,000 | |||
Metered Water Usage [Member] | ||||
Revenue Recognition [Abstract] | ||||
Water delivered to customers | gal | 76.2 | 356.3 | ||
Percentage of water used for oil and gas exploration | 1.00% | 84.00% | ||
Water Tap Fees [Member] | ||||
Revenue Recognition [Abstract] | ||||
Total revenues | $ 4,758,700 | $ 3,116,100 | ||
Wastewater Tap Fees [Member] | ||||
Revenue Recognition [Abstract] | ||||
Total revenues | 882,300 | 526,400 | ||
Special Facility Funding Recognized [Member] | ||||
Revenue Recognition [Abstract] | ||||
Total revenues | 0 | 0 | ||
Water Tap and Construction Fee [Member] | ||||
Land [Abstract] | ||||
Deferred revenue | 0 | 0 | ||
Consulting Fees [Member] | ||||
Revenue Recognition [Abstract] | ||||
Total revenues | $ 25,700 | 158,600 | ||
Land [Abstract] | ||||
Number of consulting contracts cancelled | Contract | 1 | |||
Lot Sales [Member] | ||||
Revenue Recognition [Abstract] | ||||
Total revenues | $ 18,934,400 | 11,955,989 | ||
Lot Sales - Agreement with Purchaser [Member] | ||||
Revenue Recognition [Abstract] | ||||
Total revenues | $ 4,911,700 | $ 4,053,800 | ||
Land [Abstract] | ||||
Number of home builders | Builder | 1 | 1 | ||
Number of finished lots sold | Lot | 70 | 57 | ||
Lot Sales - Agreement with Builder [Member] | ||||
Revenue Recognition [Abstract] | ||||
Total revenues | $ 14,022,700 | $ 7,902,200 | ||
Land [Abstract] | ||||
Proceeds from sale of lots | 25,600,000 | |||
Deferred revenue | $ 1,635,400 | $ 3,991,500 | ||
Number of home builders | Builder | 2 | |||
Number of finished lots sold | Lot | 356 | |||
Number of platted lots sold | Lot | 356 | |||
Cumulative revenue recognized | $ 24,100,000 | |||
Lot Sales - Agreement with Builder [Member] | Maximum [Member] | ||||
Land [Abstract] | ||||
Expected delivery period for lots sold | 1 year | |||
Project Management Services [Member] | ||||
Land [Abstract] | ||||
Deferred interest income | $ 1,500,000 | |||
Project management fee percentage | 5.00% | |||
Project management services - accrued reimbursable amount | $ 1,464,900 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Reimbursable Costs Incurred to Date (Details) - USD ($) | Aug. 31, 2021 | Aug. 31, 2020 |
Reimbursable Costs, Net [Abstract] | ||
Costs incurred | $ 29,671,400 | |
Reimbursement Received | 10,505,000 | |
Net costs incurred | 19,166,400 | |
Forecast [Member] | ||
Reimbursable Costs, Net [Abstract] | ||
Costs incurred | $ 18,500,000 | |
Public Improvements [Member] | ||
Reimbursable Costs, Net [Abstract] | ||
Costs incurred | 26,355,400 | |
Reimbursement Received | 10,505,000 | |
Net costs incurred | 15,850,400 | |
Public Improvements [Member] | Forecast [Member] | ||
Reimbursable Costs, Net [Abstract] | ||
Costs incurred | $ 2,300,000 | |
Accrued Interest [Member] | ||
Reimbursable Costs, Net [Abstract] | ||
Costs incurred | 1,176,300 | |
Reimbursement Received | 0 | |
Net costs incurred | 1,176,300 | |
Project Management Services [Member] | ||
Reimbursable Costs, Net [Abstract] | ||
Costs incurred | 1,464,900 | |
Reimbursement Received | 0 | |
Net costs incurred | 1,464,900 | |
Construction Support Activities [Member] | ||
Reimbursable Costs, Net [Abstract] | ||
Costs incurred | 674,800 | |
Reimbursement Received | 0 | |
Net costs incurred | $ 674,800 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Deferred Revenue (Details) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2019USD ($) | Oct. 31, 2017USD ($) | Aug. 31, 2020USD ($)aBuilderLotCustomer | Aug. 31, 2019USD ($) | |
Changes in Deferred Revenue [Abstract] | ||||
Balance | $ 5,058,883 | $ 477,161 | ||
Billings | 24,643,817 | 24,998,964 | ||
Revenue recognized | (26,102,177) | (20,417,242) | ||
Balance | 3,600,523 | 5,058,883 | ||
Deferred interest income | $ 1,176,300 | |||
Sky Ranch [Member] | ||||
Deferred Revenue [Abstract] | ||||
Number of industrial water customers | Customer | 1 | |||
Remaining performance obligation | $ 1,600,000 | 425,800 | ||
Changes in Deferred Revenue [Abstract] | ||||
Balance | 425,800 | |||
Balance | $ 2,000,000 | 425,800 | ||
Number of home builders having payment obligations | Builder | 1 | |||
Number of lots sold | Lot | 22 | |||
Deferred interest income | $ 1,200,000 | |||
Deferred Lot Sale Revenue [Member] | ||||
Changes in Deferred Revenue [Abstract] | ||||
Balance | 3,991,535 | |||
Balance | 1,635,443 | 3,991,535 | ||
Oil and Gas Lease and Water Sales Payments [Member] | ||||
Changes in Deferred Revenue [Abstract] | ||||
Balance | 1,067,348 | |||
Balance | $ 1,965,080 | 1,067,348 | ||
Bison Oil and Gas, LLP [Member] | ||||
Deferred Revenue [Abstract] | ||||
Upfront payment received | $ 573,700 | $ 167,200 | ||
Mineral estate area owned (in acres) | a | 40 | |||
Term period of lease | 3 years | |||
Changes in Deferred Revenue [Abstract] | ||||
Balance | $ 60,400 | |||
Revenue recognized | (55,700) | (55,700) | ||
Balance | $ 4,700 | 60,400 | ||
OGOA [Member] | ||||
Deferred Revenue [Abstract] | ||||
Mineral estate area owned (in acres) | a | 16 | |||
Term period of lease | 3 years | |||
Term for which operator may extend right | 1 year | |||
Required payment from operator for extending right for one year | $ 75,000 | |||
Number of additional years for which operator may extend lease | 2 years | |||
Maximum term of lease | 5 years | |||
Changes in Deferred Revenue [Abstract] | ||||
Balance | $ 547,500 | |||
Revenue recognized | (191,200) | (26,200) | ||
Balance | 356,300 | $ 547,500 | ||
Project Management Services [Member] | ||||
Changes in Deferred Revenue [Abstract] | ||||
Deferred interest income | $ 1,500,000 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Oil and Gas Lease Payments (Details) | 12 Months Ended | |
Aug. 31, 2020USD ($)Well | Aug. 31, 2019USD ($) | |
Oil and Gas Lease Payments [Abstract] | ||
Number of wells that have been drilled | 6 | |
Number of wells placed into service | 4 | |
Oil and gas royalty income, net | $ | $ 669,033 | $ 148,327 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Share-based Compensation (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Share-Based Compensation [Abstract] | ||
Tax expense for granting and exercise of stock options | $ 80,300 | |
Deferred tax impact | $ 410,600 | |
Share-based compensation expense | $ 517,024 | $ 336,228 |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Income Taxes [Abstract] | ||
Deferred tax benefit | $ 2,168,878 | $ (1,284,066) |
Accrued interest on unrecognized tax benefits | 0 | |
Accrued penalties on unrecognized tax benefits | 0 | |
Interest expense on unrecognized tax benefits | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income (Loss) per Common Share (Details) - shares | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Earnings per Common Share [Abstract] | ||
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares) | 216,600 | 206,860 |
Anti-dilutive securities excluded from calculation of loss per common share (in shares) | 50,000 | 50,000 |
SUMMARY OF SIGNIFICANT ACCOU_17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Recently Issued Accounting Pronouncements (Details) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Recently Issued Accounting Pronouncements [Abstract] | ||
Right-to use assets | $ 195,566 | $ 0 |
Lease liability | 194,276 | |
ASU 2016-02 [Member] | ||
Recently Issued Accounting Pronouncements [Abstract] | ||
Right-to use assets | 258,900 | |
Lease liability | $ 252,300 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) | 12 Months Ended | |
Aug. 31, 2020USD ($)AssetLiability | Aug. 31, 2019USD ($)AssetLiability | |
Fair Value Measurements [Abstract] | ||
Held-to-maturity securities | $ 0 | $ 192,800 |
Transfers from Level 1 to Level 2 | 0 | 0 |
Transfers from Level 2 to Level 1 | 0 | 0 |
Transfers into (out of) Level 3 | $ 0 | $ 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements [Abstract] | ||
Number of assets | Asset | 0 | 0 |
Number of liabilities | Liability | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements [Abstract] | ||
Number of assets | Asset | 0 | 1 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements [Abstract] | ||
Number of liabilities | Liability | 1 | 1 |
Recurring [Member] | ||
Fair Value Measurements [Abstract] | ||
Accumulated unrealized gains and (losses) | $ 3,900 | |
Assets measured at fair value | $ 0 | |
Liabilities measured at fair value | $ 0 | |
Recurring [Member] | US Treasuries [Member] | ||
Fair Value Measurements [Abstract] | ||
Accumulated unrealized gains and (losses) | 3,900 | |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | 0 | |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | US Treasuries [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | 0 | |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | 4,996,000 | |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | US Treasuries [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | 4,996,000 | |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | 0 | |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | US Treasuries [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | 0 | |
Recurring [Member] | Fair Value [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | 4,996,000 | |
Recurring [Member] | Fair Value [Member] | US Treasuries [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | 4,996,000 | |
Recurring [Member] | Cost / Other Value [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | 4,992,100 | |
Recurring [Member] | Cost / Other Value [Member] | US Treasuries [Member] | ||
Fair Value Measurements [Abstract] | ||
Available-for-sale securities | $ 4,992,100 |
WATER AND LAND ASSETS, Investme
WATER AND LAND ASSETS, Investment in Water and Water Systems & Depletion and Depreciation (Details) - USD ($) | 12 Months Ended | |||||
Aug. 31, 2020 | Aug. 31, 2019 | Feb. 28, 2020 | Jun. 30, 2017 | Dec. 15, 2016 | Aug. 31, 2010 | |
Investment in Water and Water Systems [Abstract] | ||||||
Costs | $ 60,537,000 | $ 54,327,200 | ||||
Accumulated Depreciation and Depletion | (5,450,300) | (4,056,900) | ||||
Net investments in water and water systems | 55,086,743 | 50,270,310 | ||||
Depletion and Amortization [Abstract] | ||||||
Depreciation | 1,722,200 | 1,278,900 | ||||
Rangeview Water Supply [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Costs | 14,569,900 | 14,823,800 | ||||
Accumulated Depreciation and Depletion | (15,600) | (14,700) | ||||
Sky Ranch Water Rights and Other Costs [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Costs | 7,498,900 | 7,371,500 | $ 7,600,000 | |||
Accumulated Depreciation and Depletion | (980,600) | (757,400) | ||||
Fairgrounds Water And Water System [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Costs | 2,899,900 | 2,899,800 | ||||
Accumulated Depreciation and Depletion | (1,238,900) | (1,151,000) | ||||
Rangeview Water System [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Costs | 15,947,700 | 5,617,800 | ||||
Accumulated Depreciation and Depletion | (788,600) | (372,300) | ||||
Water Supply - Other [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Costs | 7,549,800 | 4,758,200 | ||||
Accumulated Depreciation and Depletion | (1,115,800) | (860,100) | ||||
Wild Pointe Service Rights [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Costs | 1,631,800 | 1,631,800 | $ 1,631,700 | |||
Accumulated Depreciation and Depletion | (708,500) | (489,800) | ||||
Sky Ranch Pipeline [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Costs | 5,727,300 | 5,723,700 | $ 5,723,700 | |||
Accumulated Depreciation and Depletion | (602,300) | (411,600) | ||||
The Lost Creek Water Supply [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Costs | 3,372,400 | 3,324,000 | ||||
Accumulated Depreciation and Depletion | 0 | 0 | ||||
Construction in Progress [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Costs | 1,339,300 | 8,176,600 | ||||
Accumulated Depreciation and Depletion | $ 0 | 0 | ||||
Sky Ranch [Member] | ||||||
Investment in Water and Water Systems [Abstract] | ||||||
Estimated cost to complete construction of water reclamation facility | $ 10,200,000 | |||||
Rangeview, Sky Ranch and WISE Water Systems [Member] | ||||||
Depletion and Amortization [Abstract] | ||||||
Estimated useful lives | P30Y | |||||
ECCV Wells [Member] | ||||||
Depletion and Amortization [Abstract] | ||||||
Estimated useful lives | P10Y | |||||
Furniture and Fixtures [Member] | ||||||
Depletion and Amortization [Abstract] | ||||||
Estimated useful lives | P5Y | |||||
Trucks and Heavy Equipment [Member] | ||||||
Depletion and Amortization [Abstract] | ||||||
Estimated useful lives | P5Y | |||||
Water System General (Pumps, Valves, etc.) [Member] | ||||||
Depletion and Amortization [Abstract] | ||||||
Estimated useful lives | P5Y | |||||
Computers [Member] | ||||||
Depletion and Amortization [Abstract] | ||||||
Estimated useful lives | P3Y | |||||
Water Equipment [Member] | ||||||
Depletion and Amortization [Abstract] | ||||||
Estimated useful lives | P3Y | |||||
Software [Member] | ||||||
Depletion and Amortization [Abstract] | ||||||
Estimated useful lives | P1Y | |||||
Other Equipment [Member] | ||||||
Depletion and Amortization [Abstract] | ||||||
Depreciation | $ 355,900 | $ 312,600 |
WATER AND LAND ASSETS, Rangevie
WATER AND LAND ASSETS, Rangeview Water Supply and Water System (Details) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2019USD ($)acre ft | Aug. 31, 2020USD ($)aServiceProviderMemberacre ft | Aug. 31, 2019USD ($) | |
Rangeview Water Supply and Water System [Abstract] | |||
Area of land (in acres) | a | 930 | ||
Approximately investments in water and water systems | $ | $ 50,270,310 | $ 55,086,743 | $ 50,270,310 |
Annual royalty payments | $ | $ 220,000 | ||
SMWA [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Number of members | Member | 10 | ||
Rangeview District [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Percentage of remaining gross revenue retained | 2.00% | ||
Percentage of wastewater usage fees recognized as income | 10.00% | ||
Rangeview Water Agreements [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Volume of water purchased | 11,650 | ||
Number of surrounding municipal water and wastewater service providers used as a benchmark for rates and charges | ServiceProvider | 3 | ||
Royalty on tap fees percentage | 2.00% | ||
Annual rent | $ | $ 7,600 | ||
Period of time when there is no increase in annual rent | 5 years | ||
Percentage of remaining gross revenue retained | 98.00% | ||
Percentage of wastewater tap fees recognized as income | 100.00% | ||
Percentage of wastewater usage fees recognized as income | 90.00% | ||
Rangeview Water Agreements [Member] | Minimum [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Royalty as a percentage of gross revenues | 10.00% | ||
Annual royalty payments | $ | $ 45,600 | ||
Rangeview Water Agreements [Member] | Maximum [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Royalty as a percentage of gross revenues | 12.00% | ||
Rangeview Water Agreements [Member] | Ground Water [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Volume of water purchased | 10,000 | ||
Aggregate gross volume | 165,000 | ||
Additional volume of water | 13,685 | ||
Rangeview Water Agreements [Member] | Export Water [Member] | Minimum [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Royalty as a percentage of gross revenues | 10.00% | ||
Rangeview Water Agreements [Member] | Export Water [Member] | Maximum [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Royalty as a percentage of gross revenues | 12.00% | ||
Rangeview Water Agreements [Member] | Surface Water [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Volume of water purchased | 1,650 | ||
Additional volume of water | 1,650 | ||
Rangeview Water Agreements [Member] | SMWA [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Investment in infrastructure | $ | $ 2,800,000 | $ 419,200 | |
Rangeview Water Supply [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Area of land (in acres) | a | 27,000 | ||
Lowry Range [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Volume of water purchased | 26,000 | ||
Approximately investments in water and water systems | $ | $ 17,900,000 | ||
The Lost Creek Water Supply [Member] | Surface Water [Member] | |||
Rangeview Water Supply and Water System [Abstract] | |||
Volume of water purchased | 300 |
WATER AND LAND ASSETS, The Arap
WATER AND LAND ASSETS, The Arapahoe County Fairgrounds Water and Water System (Details) - Fairgrounds Water And Water System [Member] gal in Thousands, $ in Millions | 12 Months Ended |
Aug. 31, 2020USD ($)galacre ft | |
The Arapahoe County Fairgrounds Water and Water System [Abstract] | |
Capitalized costs | $ | $ 2.9 |
Capacity of water tank | gal | 500 |
Ground Water [Member] | |
The Arapahoe County Fairgrounds Water and Water System [Abstract] | |
Volume of water purchased | acre ft | 321 |
WATER AND LAND ASSETS, The Lost
WATER AND LAND ASSETS, The Lost Creek Water Supply (Details) | 1 Months Ended | |
Aug. 31, 2019USD ($)aacre ft | Aug. 31, 2020a | |
The Lost Creek Water Supply [Abstract] | ||
Area of land (in acres) | a | 930 | |
The Lost Creek Water Supply [Member] | ||
The Lost Creek Water Supply [Abstract] | ||
Cost of water and land portions of asset acquisition | $ | $ 3,500,000 | |
The Lost Creek Water Supply [Member] | Ditch Water [Member] | ||
The Lost Creek Water Supply [Abstract] | ||
Volume of water purchased | 150 | |
Area of land (in acres) | a | 260 | |
The Lost Creek Water Supply [Member] | Renewable Ground Water [Member] | ||
The Lost Creek Water Supply [Abstract] | ||
Volume of water purchased | 800 | |
The Lost Creek Water Supply [Member] | Deep Ground Water [Member] | ||
The Lost Creek Water Supply [Abstract] | ||
Volume of water purchased | 70 |
WATER AND LAND ASSETS, Service
WATER AND LAND ASSETS, Service to Customers Not on the Lowry Range & O&G Leases (Details) | Aug. 31, 2010USD ($)acre ft | Aug. 31, 2020USD ($)aConnection | Aug. 31, 2019USD ($) | Jun. 30, 2017USD ($) | Dec. 15, 2016USD ($) | Aug. 31, 2011a |
Service to Customers Not on the Lowry Range [Abstract] | ||||||
Costs | $ 60,537,000 | $ 54,327,200 | ||||
Sky Ranch Water Rights and Other Costs [Member] | ||||||
Service to Customers Not on the Lowry Range [Abstract] | ||||||
Volume of water purchased | acre ft | 830 | |||||
Capitalized costs | $ 23,400,000 | |||||
Costs | $ 7,600,000 | 7,498,900 | 7,371,500 | |||
Wild Pointe Service Rights [Member] | ||||||
Service to Customers Not on the Lowry Range [Abstract] | ||||||
Costs | $ 1,631,800 | 1,631,800 | $ 1,631,700 | |||
Percentage of wastewater tap fees recognized as income | 100.00% | |||||
Percentage of remaining gross revenue retained | 98.00% | |||||
Number of single family equivalent water connections | Connection | 200 | |||||
Sky Ranch Pipeline [Member] | ||||||
Service to Customers Not on the Lowry Range [Abstract] | ||||||
Costs | $ 5,727,300 | $ 5,723,700 | $ 5,723,700 | |||
Anadarko E&P Company, L.P [Member] | ||||||
Oil and Gas Lease Payments [Abstract] | ||||||
Mineral estate area owned (in acres) | a | 634 | |||||
Bison Oil and Gas, LLP [Member] | ||||||
Oil and Gas Lease Payments [Abstract] | ||||||
Mineral estate area owned (in acres) | a | 40 | |||||
Term period of lease | 3 years |
WATER AND LAND ASSETS, Land and
WATER AND LAND ASSETS, Land and Mineral Rights (Details) | 12 Months Ended | ||
Aug. 31, 2020USD ($)a | Aug. 31, 2019USD ($) | Aug. 31, 2010a | |
Land and Mineral Rights [Abstract] | |||
Area of land (in acres) | a | 930 | ||
Non-cash mineral interest impairment charge | $ 1,425,459 | $ 0 | |
Net land and mineral interests | $ 4,914,880 | 5,104,477 | |
Sky Ranch [Member] | |||
Land and Mineral Rights [Abstract] | |||
Area of land (in acres) | a | 930 | ||
Area of land sold (in acres) | a | 150 | ||
Land | $ 3,569,266 | 3,037,556 | |
Development costs | 1,127,476 | 423,324 | |
Lost Creek Land [Member] | |||
Land and Mineral Rights [Abstract] | |||
Development costs | $ 218,138 | 218,138 | |
Arkansas River Land [Member] | |||
Land and Mineral Rights [Abstract] | |||
Mineral estate area owned (in acres) | a | 13,900 | ||
Non-cash mineral interest impairment charge | $ 1,425,459 | 0 | |
Mineral rights | $ 0 | $ 1,425,459 |
PARTICIPATING INTERESTS IN EX_3
PARTICIPATING INTERESTS IN EXPORT WATER (Details) - USD ($) | 12 Months Ended | ||
Aug. 31, 2020 | Aug. 31, 2019 | Aug. 31, 2018 | |
PARTICIPATING INTERESTS IN EXPORT WATER [Abstract] | |||
Percentage of original recorded liability compared to original total liability | 35.00% | ||
Percentage of payment remitted to CAA holders allocated to recorded liability account | 35.00% | ||
Percentage of payment remitted to CAA holders allocated to contingent obligation | 65.00% | ||
Percentage of net proceeds from sale of export water allocated | 88.00% | ||
Export Water Proceeds Received [Roll Forward] | |||
Balance at beginning of period | $ 1,547,000 | $ 1,380,700 | $ 0 |
Acquisitions | 0 | ||
Relinquishment | 0 | ||
Option payments - Sky Ranch and The Hills at Sky Ranch | 110,400 | ||
Arapahoe County tap fees | 533,000 | ||
Export water sale payments | 106,600 | 166,300 | 737,300 |
Balance at end of period | 1,653,600 | 1,547,000 | 1,380,700 |
Initial Export Water Proceeds to Pure Cycle [Roll Forward] | |||
Balance at beginning of period | 29,491,600 | 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 | (373,100) | ||
Export water sale payments | (93,900) | (146,500) | (593,900) |
Balance at end of period | 29,397,700 | 29,491,600 | 29,638,100 |
Total Potential Third-Party Obligation [Roll Forward] | |||
Balance at beginning of period | 987,600 | 1,007,400 | 31,807,700 |
Acquisitions | (28,042,500) | ||
Relinquishment | (2,386,400) | ||
Option payments - Sky Ranch and The Hills at Sky Ranch | (68,100) | ||
Arapahoe County tap fees | (159,900) | ||
Export water sale payments | (12,700) | (19,800) | (143,400) |
Balance at end of period | 974,900 | 987,600 | 1,007,400 |
Participating Interests Liability [Roll Forward] | |||
Balance at beginning of period | 332,140 | 339,100 | 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 | (55,800) | ||
Export water sale payments | (4,500) | (6,900) | (49,800) |
Balance at end of period | 327,718 | 332,140 | 339,100 |
Contingency [Roll Forward] | |||
Balance at beginning of period | 655,400 | 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 | (104,100) | ||
Export water sale payments | (8,200) | (12,900) | (93,600) |
Balance at end of period | 647,200 | $ 655,400 | $ 668,300 |
Export Water [Abstract] | |||
Expected future export water payouts | 6,300,000 | ||
Revenue receivables from sale of export water | 5,600,000 | ||
Land Board Royalty expenses | $ 220,000 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
ACCRUED LIABILITIES [Abstract] | ||
Accrued liabilities | $ 2,600,000 | $ 3,400,000 |
Accrued compensation | 766,800 | 460,500 |
Current operating lease obligations | 73,991 | |
Estimated property taxes | 72,200 | 94,000 |
Professional fees | 56,000 | 70,000 |
Operating payables | 1,700,000 | 2,800,000 |
Operating payables to CAB | 1,200,000 | 1,400,000 |
Payables for infrastructure capital projects | $ 42,800 | $ 930,900 |
LONG-TERM OBLIGATIONS AND OPE_3
LONG-TERM OBLIGATIONS AND OPERATING LEASE, Long-Term Obligations (Details) | 12 Months Ended | |
Aug. 31, 2020USD ($)Memberacre ft | Aug. 31, 2019USD ($)acre ft | |
LONG-TERM OBLIGATIONS AND OPERATING LEASE [Abstract] | ||
Long-term debt | $ | $ 0 | $ 0 |
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] | ||
Volume of water purchased | acre ft | 400 | 0 |
Purchase of water | $ | $ 582,200 | $ 0 |
LONG-TERM OBLIGATIONS AND OPE_4
LONG-TERM OBLIGATIONS AND OPERATING LEASE, Operating Lease (Details) | 12 Months Ended | |
Aug. 31, 2020USD ($)ft² | Aug. 31, 2019USD ($) | |
Lease Commitments [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% | |
Operating lease expense | $ 85,200 | $ 79,200 |
Payment against lease obligation, operating lease | 72,800 | |
ROU Lease Assets and Lease Liabilities [Abstract] | ||
Operating leases - ROU assets | 195,566 | 0 |
Lease obligations - operating leases, current portion | $ 73,991 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | |
Lease obligations - operating leases, net of current portion | $ 120,285 | $ 0 |
Total lease liability | $ 194,276 | |
Weighted average remaining lease term | 2 years 4 months 24 days | |
Weighted average discount rate | 6.00% |
SHAREHOLDERS' EQUITY, Preferred
SHAREHOLDERS' EQUITY, Preferred Stock (Details) - Series B Preferred Stock [Member] | 12 Months Ended |
Aug. 31, 2020USD ($)$ / shares | |
Preferred Stock [Abstract] | |
Liquidation preference (in dollars per share) | $ / shares | $ 1 |
Threshold for proceeds or sale of export water rights to be paid in the form of a dividend | $ 432,513 |
Minimum [Member] | |
Preferred Stock [Abstract] | |
Proceeds from sale or disposition of export water rights, trigger for payment in dividends | $ 36,026,232 |
SHAREHOLDERS' EQUITY, Equity Co
SHAREHOLDERS' EQUITY, Equity Compensation Plan (Details) | 12 Months Ended | ||
Aug. 31, 2020USD ($)BoardMember$ / sharesshares | Aug. 31, 2019USD ($)$ / sharesshares | Aug. 31, 2018USD ($)$ / sharesshares | |
Stock Options [Abstract] | |||
Share-based compensation expense | $ | $ 517,024 | $ 336,228 | |
2014 Equity Plan [Member] | |||
Shareholders' Equity [Abstract] | |||
Reserved shares of common stock for issuance (in shares) | 1,088,500 | 1,230,500 | |
Stock awards and awards to purchase shares of common stock (in shares) | 511,500 | ||
Options expired (in shares) | (6,500) | 0 | |
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Expected term | 6 years | 5 years 9 months 18 days | |
Risk-free interest rate | 1.71% | 2.93% | |
Expected volatility | 39.32% | 41.83% | |
Expected dividend yield | 0.00% | 0.00% | |
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 4.19 | $ 4.60 | |
Number of Options [Roll Forward] | |||
Exercised (in shares) | (17,500) | (62,500) | |
2014 Equity Plan [Member] | Minimum [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Expected term | 5 years | ||
2014 Equity Plan [Member] | Maximum [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Expected term | 10 years | ||
2014 Equity Plan [Member] | Employees [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 4.21 | ||
Number of Options [Roll Forward] | |||
Granted (in shares) | 80,000 | ||
Stock Options [Abstract] | |||
Vesting period | 3 years | ||
Expiration period | 10 years | ||
2014 Equity Plan [Member] | Executive Officer [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 4.16 | $ 5.06 | |
Number of Options [Roll Forward] | |||
Granted (in shares) | 50,000 | 50,000 | |
Stock Options [Abstract] | |||
Vesting period | 3 years | 3 years | |
Expiration period | 10 years | 10 years | |
2014 Equity Plan [Member] | Non-Employee Board Members [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Weighted average grant-date fair value | $ | $ 126,700 | ||
Number of Options [Roll Forward] | |||
Granted (in shares) | 2,000 | 32,500 | |
Stock Options [Abstract] | |||
Vesting period | 1 year | ||
Expiration period | 10 years | ||
Number of board members | BoardMember | 6 | ||
Stock price (in dollars per share) | $ / shares | $ 12.45 | ||
Share-based compensation expense | $ | $ 149,400 | $ 0 | |
2004 Incentive Plan and 2014 Equity Plan [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 4.19 | $ 4.60 | |
Number of Options [Roll Forward] | |||
Outstanding, beginning of period (in shares) | 555,500 | 535,500 | |
Granted (in shares) | 130,000 | 82,500 | |
Exercised (in shares) | (17,500) | (62,500) | |
Forfeited or expired (in shares) | (6,500) | 0 | |
Outstanding, end of period (in shares) | 661,500 | 555,500 | 535,500 |
Options exercisable (in shares) | 481,501 | ||
Weighted Average Exercise Price [Roll Forward] | |||
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 6.33 | $ 5.31 | |
Granted (in dollars per share) | $ / shares | 10.41 | 10.48 | |
Exercised (in dollars per share) | $ / shares | 2.81 | 3.09 | |
Forfeited or expired (in dollars per share) | $ / shares | 6.08 | 0 | |
Outstanding, end of period (in dollars per share) | $ / shares | 7.23 | $ 6.33 | $ 5.31 |
Options exercisable (in dollars per share) | $ / shares | $ 6.08 | ||
Stock Options [Abstract] | |||
Weighted average remaining contractual term | 6 years 2 months 1 day | 6 years 3 months 7 days | 6 years 14 days |
Weighted average remaining contractual term, options exercisable | 5 years 2 months 19 days | ||
Approximate aggregate intrinsic value | $ | $ 1,831,075 | $ 2,527,590 | $ 3,180,990 |
Approximate aggregate intrinsic value, options exercisable | $ | 1,795,076 | ||
Share-based compensation expense | $ | $ 517,000 | $ 336,200 |
SHAREHOLDERS' EQUITY, Combined
SHAREHOLDERS' EQUITY, Combined Activity and Value of Non-vested Options (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Stock Options [Abstract] | ||
Share-based compensation expense | $ 517,024 | $ 336,228 |
2004 Incentive Plan and 2014 Equity Plan [Member] | ||
Number of Options [Roll Forward] | ||
Non-vested options outstanding, beginning of period (in shares) | 152,499 | |
Granted (in shares) | 130,000 | 82,500 |
Vested (in shares) | (102,500) | |
Forfeited (in shares) | 0 | |
Non-vested options outstanding, end of period (in shares) | 179,999 | 152,499 |
Weighted Average Grant Date Fair Value [Abstract] | ||
Non-vested options outstanding, beginning of period (in dollars per share) | $ 4.03 | |
Granted (in dollars per share) | 4.19 | $ 4.60 |
Vested (in dollars per share) | 3.75 | |
Forfeited (in dollars per share) | 0 | |
Non-vested options outstanding, end of period (in dollars per share) | $ 4.31 | $ 4.03 |
Stock Options [Abstract] | ||
Fair value of options vested | $ 384,400 | $ 297,100 |
Share-based compensation expense | 517,000 | $ 336,200 |
Unrecognized compensation expenses | $ 461,100 | |
Weighted-average period for options expected to vest | 3 years |
SHAREHOLDERS' EQUITY, Warrants
SHAREHOLDERS' EQUITY, Warrants (Details) - $ / shares | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
SHAREHOLDERS' EQUITY [Abstract] | ||
Outstanding warrants to purchase common stock (in shares) | 92 | |
Warrants exercise price (in dollars per share) | $ 1.80 | |
Warrants expiration period | 6 months | |
Warrants exercised (in shares) | 0 | 0 |
SIGNIFICANT CUSTOMERS (Details)
SIGNIFICANT CUSTOMERS (Details) | 12 Months Ended | ||
Aug. 31, 2020BuilderCustomer | Aug. 31, 2019Builder | ||
Significant Customers [Abstract] | |||
Number of home builders | 3 | ||
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Metered Services [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 90.00% | 80.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Metered Services [Member] | Ridgeview Youth Services [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 14.00% | 3.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Metered Services [Member] | Conoco/Crestone Peak (O&G Operations) [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 45.00% | 74.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Metered Services [Member] | All Sky Ranch Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | [1] | 22.00% | 0.00% |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Metered Services [Member] | All Wild Pointe Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | [2] | 9.00% | 3.00% |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Metered Services [Member] | Taylor Morrison [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 0.00% | 0.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Metered Services [Member] | KB Home [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 0.00% | 0.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Metered Services [Member] | Richmond Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 0.00% | 0.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Tap Fees [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 100.00% | 100.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Tap Fees [Member] | Ridgeview Youth Services [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 0.00% | 0.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Tap Fees [Member] | Conoco/Crestone Peak (O&G Operations) [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 0.00% | 0.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Tap Fees [Member] | All Sky Ranch Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | [1] | 0.00% | 0.00% |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Tap Fees [Member] | All Wild Pointe Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | [2] | 4.00% | 6.00% |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Tap Fees [Member] | Taylor Morrison [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 28.00% | 26.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Tap Fees [Member] | KB Home [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 38.00% | 29.00% | |
Revenue [Member] | Significant Customer [Member] | Water and Wastewater Tap Fees [Member] | Richmond Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 31.00% | 38.00% | |
Revenue [Member] | Significant Customer [Member] | Land Development Activities (Lot Sales Recognized) [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 100.00% | 100.00% | |
Revenue [Member] | Significant Customer [Member] | Land Development Activities (Lot Sales Recognized) [Member] | Ridgeview Youth Services [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 0.00% | 0.00% | |
Revenue [Member] | Significant Customer [Member] | Land Development Activities (Lot Sales Recognized) [Member] | Conoco/Crestone Peak (O&G Operations) [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 0.00% | 0.00% | |
Revenue [Member] | Significant Customer [Member] | Land Development Activities (Lot Sales Recognized) [Member] | All Sky Ranch Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | [1] | 0.00% | 0.00% |
Revenue [Member] | Significant Customer [Member] | Land Development Activities (Lot Sales Recognized) [Member] | All Wild Pointe Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | [2] | 0.00% | 0.00% |
Revenue [Member] | Significant Customer [Member] | Land Development Activities (Lot Sales Recognized) [Member] | Taylor Morrison [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 32.00% | 34.00% | |
Revenue [Member] | Significant Customer [Member] | Land Development Activities (Lot Sales Recognized) [Member] | KB Home [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 26.00% | 34.00% | |
Revenue [Member] | Significant Customer [Member] | Land Development Activities (Lot Sales Recognized) [Member] | Richmond Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 42.00% | 32.00% | |
Accounts Receivable [Member] | Water and Wastewater Services [Member] | |||
Significant Customers [Abstract] | |||
Number of customers | Customer | 3 | ||
Number of home builders | 3 | 3 | |
Accounts Receivable [Member] | Significant Customer [Member] | Rangeview District [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 81.00% | 40.00% | |
Accounts Receivable [Member] | Significant Customer [Member] | All Sky Ranch Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 17.00% | ||
Accounts Receivable [Member] | Significant Customer [Member] | All Wild Pointe Homes [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 14.00% | 26.00% | |
Accounts Receivable [Member] | Significant Customer [Member] | Conoco [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 57.00% | ||
Accounts Receivable [Member] | Significant Customer [Member] | Three Homebuilders [Member] | |||
Significant Customers [Abstract] | |||
Concentration risk percentage | 42.00% | 5.00% | |
[1] | This represents the water and wastewater fees for all homes combined at Sky Ranch and not one individual home | ||
[2] | This represents the water and wastewater metered services and water and wastewater tap fees for all homes combined at Wild Pointe and not one individual home |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
INCOME TAXES [Abstract] | ||
Current income tax expense | $ 0 | |
Deferred income tax expense (benefit) | 2,168,878 | $ (1,284,066) |
Operating loss carryforwards utilized | $ 2,200,000 | |
Effective tax rate | 24.40% | 36.40% |
Deferred Tax Assets (Liabilities) [Abstract] | ||
Net operating loss carryforwards | $ 22,922 | $ 609,439 |
AMT credit carryforward | 0 | 0 |
Accrued compensation | 166,948 | 113,559 |
Deferred revenues | 88,994 | 149,895 |
Depreciation and depletion | (1,700,771) | (46,408) |
Non-qualified stock options | 490,952 | 410,633 |
Other | 45,323 | 46,128 |
Valuation allowance | 0 | 0 |
Net deferred tax liability | (885,632) | |
Net deferred tax asset | 1,283,246 | |
Unrecognized tax benefits | 0 | 0 |
Effective Income Tax Rate Reconciliation [Abstract] | ||
Expected benefit from federal taxes at statutory rate | 1,873,021 | 740,870 |
State taxes, net of federal benefit | 326,441 | 129,123 |
Permanent and other differences | 2,137 | 10,388 |
NOL true up | (8,240) | 225,067 |
Non-qualified stock options adjustment | 0 | (348,441) |
Other | (24,566) | (26,202) |
Change in valuation allowance | 0 | (2,014,000) |
Total income tax expense / (benefit) | $ 2,168,793 | $ (1,283,195) |
Statutory federal tax rate | 21.00% | 21.00% |
Net Operating Loss Carryforwards [Abstract] | ||
Net operating loss carryforwards | $ 109,200 | $ 2,500,000 |
Income taxes paid | 1,022,310 | $ 0 |
Federal [Member] | ||
Net Operating Loss Carryforwards [Abstract] | ||
Income taxes paid | $ 1,089,700 | |
Federal [Member] | Minimum [Member] | ||
Net Operating Loss Carryforwards [Abstract] | ||
Net operating loss carryforwards, expiration date | Aug. 31, 2036 | |
Federal [Member] | Maximum [Member] | ||
Net Operating Loss Carryforwards [Abstract] | ||
Net operating loss carryforwards, expiration date | Aug. 31, 2038 | |
State [Member] | ||
Net Operating Loss Carryforwards [Abstract] | ||
Income taxes paid | $ 215,500 | |
State [Member] | Minimum [Member] | ||
Net Operating Loss Carryforwards [Abstract] | ||
Net operating loss carryforwards, expiration date | Aug. 31, 2035 | |
State [Member] | Maximum [Member] | ||
Net Operating Loss Carryforwards [Abstract] | ||
Net operating loss carryforwards, expiration date | Aug. 31, 2036 |
401(k) PLAN (Details)
401(k) PLAN (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
401(k) PLAN [Abstract] | ||
Employer matching 401(k) contribution percentage | 1.50% | |
Employee 401(k) contribution percentage | 3.00% | |
Maximum employee contribution | $ 2,500 | |
Vesting percentage after first anniversary | 25.00% | |
Vesting percentage after second anniversary | 50.00% | |
Vesting percentage after third anniversary | 75.00% | |
Vesting percentage after fourth anniversary | 100.00% | |
Minimum age of employees to participate in 401(k) plan | 18 years | |
Minimum requisite service period to participate in 401(k) plan | 3 months | |
Total expense recorded | $ 28,900 | $ 6,000 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) | 12 Months Ended | |
Aug. 31, 2020USD ($)Segment | Aug. 31, 2019USD ($) | |
SEGMENT REPORTING [Abstract] | ||
Number of operating segments | Segment | 2 | |
Segment Information [Abstract] | ||
Total revenue | $ 25,855,215 | $ 20,361,509 |
Cost of revenue | (16,943,997) | (12,975,470) |
Depletion and depreciation | (1,367,160) | (968,229) |
Total cost of revenues | (18,311,157) | (13,943,699) |
Gross profit | 7,544,058 | 6,417,810 |
Reimbursement of construction costs - related party | 6,275,500 | |
Gross Margin after reimbursables | 13,819,558 | |
Pretax operating income | 1,513,375 | 2,998,661 |
Total long-term assets | 89,761,056 | 83,721,404 |
Water and Wastewater Utility Services [Member] | ||
Segment Information [Abstract] | ||
Total revenue | 6,920,815 | 8,405,520 |
Cost of revenue | (1,074,450) | (1,670,508) |
Depletion and depreciation | (1,367,160) | (968,229) |
Total cost of revenues | (2,441,610) | (2,638,737) |
Gross profit | 4,479,205 | 5,766,783 |
Reimbursement of construction costs - related party | 0 | |
Gross Margin after reimbursables | 4,479,205 | |
Pretax operating income | 4,479,205 | 5,766,783 |
Total long-term assets | 56,266,579 | 51,588,079 |
Land Development [Member] | ||
Segment Information [Abstract] | ||
Total revenue | 18,934,400 | 11,955,989 |
Cost of revenue | (15,869,547) | (11,304,962) |
Depletion and depreciation | 0 | 0 |
Total cost of revenues | (15,869,547) | (11,304,962) |
Gross profit | 3,064,853 | 651,027 |
Reimbursement of construction costs - related party | 6,275,500 | |
Gross Margin after reimbursables | 9,340,353 | |
Pretax operating income | 3,064,853 | 651,027 |
Total long-term assets | 6,975,289 | 16,866,542 |
Corporate [Member] | ||
Segment Information [Abstract] | ||
Total revenue | 0 | 0 |
Cost of revenue | 0 | 0 |
Depletion and depreciation | 0 | 0 |
Total cost of revenues | 0 | 0 |
Gross profit | 0 | 0 |
Reimbursement of construction costs - related party | 0 | |
Gross Margin after reimbursables | 0 | |
Pretax operating income | (6,030,683) | (3,419,149) |
Total long-term assets | $ 26,519,188 | $ 15,266,783 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 12 Months Ended | ||||
Aug. 31, 2020USD ($)BoardMemberEmployeeacre ft | Aug. 31, 2019USD ($)acre ft | Aug. 31, 2018USD ($) | Jan. 01, 2020USD ($) | Sep. 18, 2018USD ($) | |
Sky Ranch Community Authority Board [Member] | |||||
Related Party Transactions [Abstract] | |||||
Related party advances | $ 17,700,000 | $ 2,300,000 | |||
Related party repayment amount | $ 857,900 | ||||
Related party terminated amount | 3,300,000 | ||||
Facilities Funding and Acquisition Agreement [Member] | |||||
Related Party Transactions [Abstract] | |||||
Interest rate | 6.00% | ||||
Notes receivable | $ 28,600 | 27,100 | |||
Notes receivable, principal | 25,500 | 25,500 | |||
Notes receivable, accrued interest | 3,100 | 1,600 | |||
Estimated cost | 30,000,000 | ||||
Related party advances | 20,000,000 | ||||
Related party terminated amount | $ 2,400,000 | ||||
Rangeview District [Member] | WISE Partnership [Member] | |||||
Related Party Transactions [Abstract] | |||||
Funding pursuant to participation agreement | 17,400 | $ 22,200 | |||
Investments in the WISE assets | $ 6,316,600 | ||||
Volume of water purchased | acre ft | 400 | 0 | |||
Purchase of water | $ 582,200 | $ 0 | |||
Water rate | $ 5.77 | ||||
Financing to related party | $ 2,800,000 | 1,500,000 | |||
Rangeview District [Member] | Water and Wastewater Services [Member] | |||||
Related Party Transactions [Abstract] | |||||
Number of employee board of directors | Employee | 3 | ||||
Number of independent board of directors | BoardMember | 1 | ||||
Rangeview District [Member] | Water and Wastewater Services [Member] | Loans Receivable [Member] | |||||
Related Party Transactions [Abstract] | |||||
Interest rate | 5.25% | ||||
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 | ||||
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% | ||||
Notes receivable | $ 1,050,000 | 961,700 | |||
Notes receivable, principal | 598,500 | 546,500 | |||
Notes receivable, accrued interest | 451,500 | $ 414,800 | |||
Sky Ranch District [Member] | Water and Wastewater Services [Member] | Notes Receivable [Member] | |||||
Related Party Transactions [Abstract] | |||||
Loan outstanding | 0 | ||||
Notes receivable | 0 | ||||
Sky Ranch District [Member] | Sky Ranch Community Authority Board [Member] | |||||
Related Party Transactions [Abstract] | |||||
Interest rate | 6.00% | 6.00% | |||
Estimated cost | $ 13,200,000 | $ 13,200,000 | |||
Advances, net of reimbursed costs | 15,900,000 | ||||
Advances included in land development inventories | 500,000 | ||||
Advances expensed through land development construction costs | 15,400,000 | ||||
Rangeview District and the Sky Ranch CAB [Member] | |||||
Related Party Transactions [Abstract] | |||||
Notes receivable | $ 1,078,600 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | Nov. 03, 2020USD ($) | Nov. 02, 2020USD ($)Lot | Nov. 02, 2020USD ($)BuilderLot | Oct. 30, 2020 |
Forecast [Member] | ||||
Subsequent Events [Abstract] | ||||
Cost of finished lots to be developed for second Sky Ranch filing | $ 65.6 | $ 65.6 | ||
Projected sales proceeds for all lots in second Sky Ranch filing | $ 72.6 | $ 72.6 | ||
Subsequent Event [Member] | ||||
Subsequent Events [Abstract] | ||||
Initial period of time to obtain final approval of entitlements for property after expiration of due diligence period | 9 months | |||
Extension period for obtaining final approval of entitlements for property | 6 months | |||
Number of finished lots to be developed for second Sky Ranch filing | Lot | 900 | 900 | ||
Number of remaining lots in Sky Ranch retained for future use | Lot | 100 | 100 | ||
Subsequent Event [Member] | Builders [Member] | ||||
Subsequent Events [Abstract] | ||||
Period of time for homebuilder to make earnest money deposit after execution of Purchase and Sale Contract | 7 days | |||
Number of builders with Purchase and Sales Contracts in second Sky Ranch filing | Builder | 4 | |||
Number of finished lots included in Purchase and Sales Contracts | Lot | 789 | |||
Sales proceeds from sale of finished lots | $ 63.4 | |||
Subsequent Event [Member] | KB Home [Member] | ||||
Subsequent Events [Abstract] | ||||
Due diligence period | 60 days | |||
Subsequent Event [Member] | Meritage Home [Member] | ||||
Subsequent Events [Abstract] | ||||
Due diligence period | 60 days | |||
Subsequent Event [Member] | Challenger [Member] | ||||
Subsequent Events [Abstract] | ||||
Due diligence period | 75 days | |||
Subsequent Event [Member] | Melody Home [Member] | ||||
Subsequent Events [Abstract] | ||||
Due diligence period | 75 days | |||
Subsequent Event [Member] | Builders in Initial Sky Ranch Filing [Member] | ||||
Subsequent Events [Abstract] | ||||
Sales proceeds from sale of finished lots | $ 1.6 |