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Pure Cycle (PCYO)

Document and Entity Information

Document and Entity Information - shares6 Months Ended
Feb. 28, 2021Apr. 01, 2021
Cover [Abstract]
Entity Registrant NamePURE CYCLE CORP
Entity Central Index Key0000276720
Current Fiscal Year End Date--08-31
Document Type10-Q
Amendment Flagfalse
Document Period End DateFeb. 28,
2021
Document Fiscal Year Focus2021
Document Fiscal Period FocusQ2
Entity Address, State or ProvinceCO
Entity Current Reporting StatusYes
Entity Interactive Data CurrentYes
Entity Filer CategoryNon-accelerated Filer
Entity Small Businesstrue
Entity Emerging Growth Companyfalse
Entity Shell Companyfalse
Entity Common Stock, Shares Outstanding23,905,644

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in ThousandsFeb. 28, 2021Aug. 31, 2020
Current assets:
Cash, cash equivalents and restricted cash $ 20,763 $ 21,797
Trade accounts receivable, net1,385 1,124
Prepaid expenses and other assets445 1,001
Income taxes receivable0 1,588
Total current assets23,059 25,991
Investments in water and water systems, net54,737 55,087
Land and mineral interests5,055 4,915
Other assets2,440 2,042
Long-term land investment451 451
Operating leases - right of use assets, less current portion159 196
Total assets108,526 89,761
Current liabilities:
Accounts payable137 180
Accrued liabilities563 1,391
Accrued liabilities - related parties374 1,212
Income taxes payable4,267 0
Deferred lot sale revenues995 1,635
Deferred oil and gas lease payment and water sales payment191 1,800
Total current liabilities6,527 6,218
Deferred oil and gas lease payment and water sales payment, less current portion69 165
Participating interests in export water supply326 328
Deferred tax liability957 886
OperatingLeaseLiabilityNoncurrent79 120
Total liabilities7,958 7,717
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)0 0
Common stock, Par value 1/3 of $.01 per share, 40 million shares authorized; 23,888,375 and 23,856,098 shares outstanding, respectively80 80
Additional paid-in capital173,254 172,927
Accumulated deficit(72,766)(90,963)
Total shareholders' equity100,568 82,044
Total liabilities and shareholders' equity108,526 89,761
Land Development - Phase 1 [Member]
Current assets:
Land development inventories0 481
Land Development - Phase 2 [Member]
Current assets:
Land development inventories151 0
Public Improvements Reimbursables - Phase 2 [Member]
Current assets:
Land development inventories315 0
Public Improvements Reimbursables - Phase 1 [Member]
Current assets:
Notes receivable - related parties, including accrued interest21,466 0
Other [Member]
Current assets:
Notes receivable - related parties, including accrued interest $ 1,159 $ 1,079

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in ThousandsFeb. 28, 2021Aug. 31, 2020
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 outstanding (in shares)23,888,375 23,856,098
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

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands3 Months Ended6 Months Ended
Feb. 28, 2021Feb. 29, 2020Feb. 28, 2021Feb. 29, 2020
Revenues:
Revenues $ 4,739 $ 3,519 $ 9,607 $ 13,979
Expenses:
Water service operations(213)(207)(758)(461)
Wastewater service operations(64)(38)(156)(64)
Land development construction costs(269)(1,817)(1,988)(9,880)
Depletion and depreciation(354)(383)(719)(602)
Other(363)(3)(387)(27)
Total cost of revenues(1,263)(2,448)(4,008)(11,034)
Gross profit3,476 1,071 5,599 2,945
General and administrative expenses(1,342)(1,037)(2,428)(1,838)
Depreciation(76)(95)(160)(180)
Operating income (loss)2,058 (61)3,011 927
Other income:
Recognition of public improvement reimbursables - related party18,894 0 18,894 0
Interest income1,448 84 1,463 138
Reimbursement of construction costs - related party485 0 485 6,276
Oil and gas royalty income, net76 269 151 539
Oil and gas lease income, net48 61 100 123
Other10 0 20 0
Income from operations before income taxes23,019 353 24,124 8,003
Income tax expense(5,667)(79)(5,927)(1,966)
Net income17,352 274 18,197 6,037
Unrealized holding losses0 0 0 (4)
Total comprehensive income $ 17,352 $ 274 $ 18,197 $ 6,033
Earnings per common share:
Basic (in dollars per share) $ 0.73 $ 0.01 $ 0.76 $ 0.25
Diluted (in dollars per share) $ 0.72 $ 0.01 $ 0.76 $ 0.25
Weighted average common shares outstanding:
Basic (in shares)23,882 23,846 23,874 23,836
Diluted (in shares)24,092 24,110 24,064 24,080
Metered Water Usage - Municipal Customers [Member]
Revenues:
Revenues $ 74 $ 37 $ 241 $ 140
Metered Water Usage - Oil and Gas Operations [Member]
Revenues:
Revenues583 20 1,782 57
Wastewater Treatment Fees [Member]
Revenues:
Revenues51 20 93 40
Water and Wastewater Tap Fees [Member]
Revenues:
Revenues1,583 1,173 2,666 2,845
Lot Sales [Member]
Revenues:
Revenues515 2,265 2,871 10,807
Project Management Fees - Recognized [Member]
Revenues:
Revenues1,548 0 1,548 0
Special Facility Projects and Other [Member]
Revenues:
Revenues $ 385 $ 4 $ 406 $ 90

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in ThousandsPreferred Stock [Member]Common Stock [Member]Additional Paid-in Capital [Member]Accumulated Other Comprehensive Income (Loss) [Member]Accumulated Deficit [Member]Total
Balance at Aug. 31, 2019 $ 0 $ 79 $ 172,361 $ 4 $ (97,713) $ 74,731
Balance (in shares) at Aug. 31, 2019433 23,827
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises $ 0 $ 0 35 0 0 35
Stock option exercises (in shares)0 13
Stock granted for services $ 0 $ 0 149 0 0 149
Stock granted for services (in shares)0 12
Share-based compensation $ 0 $ 0 204 0 0 204
Net income0 0 0 0 6,037 6,037
Unrealized holding loss on investments0 0 0 (4)0 (4)
Balance at Feb. 29, 2020 $ 0 $ 79 172,749 0 (91,676)81,152
Balance (in shares) at Feb. 29, 2020433 23,852
Balance at Nov. 30, 2019 $ 0 $ 79 172,466 0 (91,950)80,595
Balance (in shares) at Nov. 30, 2019433 23,827
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises $ 0 $ 0 35 0 0 35
Stock option exercises (in shares)0 13
Stock granted for services $ 0 $ 0 149 0 0 149
Stock granted for services (in shares)0 12
Share-based compensation $ 0 $ 0 99 0 0 99
Net income0 0 0 0 274 274
Unrealized holding loss on investments0
Balance at Feb. 29, 2020 $ 0 $ 79 172,749 0 (91,676)81,152
Balance (in shares) at Feb. 29, 2020433 23,852
Balance at Aug. 31, 2020 $ 0 $ 80 172,927 0 (90,963)82,044
Balance (in shares) at Aug. 31, 2020433 23,856
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises $ 0 $ 0 14 0 0 14
Stock option exercises (in shares)0 20
Stock granted for services $ 0 $ 0 136 0 0 136
Stock granted for services (in shares)0 12
Share-based compensation $ 0 $ 0 177 0 0 177
Net income0 0 0 0 18,197 18,197
Unrealized holding loss on investments0
Balance at Feb. 28, 2021 $ 0 $ 80 173,254 0 (72,766)100,568
Balance (in shares) at Feb. 28, 2021433 23,888
Balance at Nov. 30, 2020 $ 0 $ 80 173,013 0 (90,118)82,975
Balance (in shares) at Nov. 30, 2020433 23,868
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises $ 0 $ 0 14 0 0 14
Stock option exercises (in shares)0 8
Stock granted for services $ 0 $ 0 136 0 0 136
Stock granted for services (in shares)0 12
Share-based compensation $ 0 $ 0 91 0 0 91
Net income0 0 0 0 17,352 17,352
Unrealized holding loss on investments0
Balance at Feb. 28, 2021 $ 0 $ 80 $ 173,254 $ 0 $ (72,766) $ 100,568
Balance (in shares) at Feb. 28, 2021433 23,888

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands6 Months Ended
Feb. 28, 2021Feb. 29, 2020
Cash flows from operating activities:
Net income $ 18,197 $ 6,037
Adjustments to reconcile net income to net cash (used) provided by operating activities:
Depreciation and depletion879 782
Share-based compensation expense313 353
Deferred income taxes71 722
Interest added to receivable from related parties(21)(22)
Proceeds from CAB reimbursement applied to land development inventories0 4,230
Changes in operating assets and liabilities:
Trade accounts receivable(261)732
Prepaid expenses72 (92)
Land development inventories108 2,796
Taxes receivable1,588 0
Recognition of public improvement reimbursables(21,466)0
Taxes payable4,267 0
Accounts payable and accrued liabilities(1,432)204
Deferred revenues(2,346)655
Other assets and liabilities(56)145
Net cash (used) provided by operating activities(87)16,542
Cash flows from investing activities:
Investments in water, water systems and land(880)(4,245)
Purchase of property and equipment(79)(376)
Sale and maturities of short-term investments0 5,185
Purchase of short-term investments0 (1,720)
Net cash used by investing activities(959)(1,156)
Cash flows from financing activities:
Proceeds from exercise of options14 35
Payments to contingent liability holders(2)(4)
Net cash provided by financing activities12 31
Net change in cash, cash equivalents and restricted cash(1,034)15,417
Cash, cash equivalents and restricted cash - beginning of period21,797 4,478
Cash, cash equivalents and restricted cash - end of period20,763 19,895
Cash and cash equivalents20,482 19,895
Restricted cash281 0
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION AND NON-CASH ACTIVITIES
Transfer of land development costs to other assets484 0
Transfer of land development costs to inventory467 0
Changes in Land development inventories included in accounts payable and accrued liabilities374 1,211
Changes in Investments in water, water systems and land included in accounts payable and accrued liabilities90 1,591
Income taxes paid $ 0 $ 1,071

PRESENTATION OF INTERIM INFORMA

PRESENTATION OF INTERIM INFORMATION6 Months Ended
Feb. 28, 2021
PRESENTATION OF INTERIM INFORMATION [Abstract]
PRESENTATION OF INTERIM INFORMATIONNOTE 1 – PRESENTATION OF INTERIM INFORMATION The February 28, 2021 condensed consolidated balance sheet, the condensed consolidated statements of operations and comprehensive income for the three and six months ended February 28, 2021 and February 29, 2020, the condensed consolidated statements of shareholders’ equity for the three and six months ended February 28, 2021 and February 29, 2020, and the condensed consolidated statements of cash flows for the six months ended February 28, 2021 and February 29, 2020 have been prepared by Pure Cycle Corporation (the “Company”) and have not been audited. The unaudited condensed consolidated financial statements include all adjustments that are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows at February 28, 2021, and for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. It is suggested that the accompanying condensed consolidated financial statements and notes be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2020 (the “2020 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on November 10, 2020. The results of operations for interim periods presented are not necessarily indicative of the operating results expected for the full fiscal year. The August 31, 2020 balance sheet was derived from the Company’s audited consolidated financial statements. Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) On March 27, 2020, Congress enacted the CARES Act to provide certain relief because of the recent outbreak of a novel strain of the coronavirus (“COVID-19”) pandemic. 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. There has not been a material impact to the Company's condensed consolidated financial statements as a result of the CARES Act. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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, timing and amount of reimbursable costs and expenses and the associated repayment, costs of revenue for lot sales, share-based compensation, deferred tax asset and liability valuation, depreciation and the recoverability of long lived assets. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to COVID-19. During the three months ended February 28, 2021, the Company revised its estimates to conclude that the reimbursable public improvements, project management revenue and interest income related to the first development phase at Sky Ranch are reasonably assured of payment. Historically, due to a lack of tax base and no operating history for the Sky Ranch CAB, the Company was unable to estimate when or if it would receive payment for these items and deferred recognition of them until the cash was received from the Sky Ranch CAB. As a result of an established and growing tax base resulting from the success of the initial filing, added mill levies, and additional unencumbered fees received by the Sky Ranch CAB, the Company believes repayment of the public improvements, payment of the project management fees and interest income are now reasonably assured. Based on this, the Company has recognized these items in the Company’s consolidated financial statements. The timing and amount of these potential payments have been estimated by the Company based on sales and growth trends utilizing current assessed home values and historic growth rates which have been projected to the current and contracted for lot sales through the contractual obligation period . Recently Issued Accounting Pronouncements The Company continually assesses 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 consequences 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 June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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, the Company does not expect the adoption of ASU 2016-13 to have a material impact on the Company’s consolidated financial statements.

RESTRICTED CASH

RESTRICTED CASH6 Months Ended
Feb. 28, 2021
RESTRICTED CASH [Abstract]
RESTRICTED CASHNOTE 2 – RESTRICTED CASH The Company has entered into a cash-secured performance standby letter of credit agreement with its primary bank to maintain a letter of credit related to the Company's performance obligations in the ordinary course of business. As of February 28, 2021, the Company had a letter of credit outstanding of $0.3 million and has restricted cash in the same amount.

REVENUE RECOGNITION AND REIMBUR

REVENUE RECOGNITION AND REIMBURSABLE COSTS6 Months Ended
Feb. 28, 2021
REVENUE RECOGNITION AND REIMBURSABLE COSTS [Abstract]
REVENUE RECOGNITION AND REIMBURSABLE COSTSNOTE 3 – REVENUE RECOGNITION AND REIMBURSABLE COSTS The Company disaggregates revenue by major product line as reported on the condensed consolidated statement of operations and comprehensive income, which the Company believes best depicts the nature, timing, and uncertainty of the Company’s revenue and cash flows. The Company primarily generates revenues through two lines of business, its water and wastewater resource development business and through the sale of finished lots in its land development business, both of which are described below. Water and Wastewater Resource Development Segment The Company’s water and wastewater resource development segment provides wholesale municipal water and wastewater services, through the Rangeview Metropolitan District (the “Rangeview District”) and Elbert and Highway 86 Metropolitan District (the “Elbert 86 District”) to end use customers for fees, described below. The Rangeview District services Sky Ranch and other customers on the Lowry Range. The Elbert 86 District services Wild Pointe, a subdivision in Elizabeth, Colorado. Monthly water usage and wastewater treatment fees The Company provides water to customers, collects wastewater from those customers and treats that wastewater which is reused for irrigation purposes. For these services, the Company charges customers monthly potable and reuse water fees that are comprised of a base charge and a usage charge based on actual amounts of water delivered to the customer using a tiered structure that results in higher fees for higher usage. Wastewater treatment services incur flat monthly fees. The Company recognizes these revenues at a point in time upon delivering water to the end use customers. Water and wastewater tap fees A tap constitutes a right to connect a residential or commercial building or property to the Company’s water and wastewater systems. Once granted, the customer may make a physical tap into the service line(s) to connect its property to the Company’s systems to obtain water and/or wastewater service. The right stays with the property. The Company has no obligation to physically connect the property to the lines, which is typically done by the home builder or commercial owner. Once connected to the water and/or wastewater systems, the customer has live service to receive metered water deliveries from the Company’s system and send wastewater to the Company. Thus, the customer has full control of the connection right as it can obtain all the benefits from this right. As such, tap fees are deemed separate and distinct performance obligations that are recognized as revenue at a point in time. Land Development Segment Sale of finished lots The Company sells lots at its Master Planned Community, 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 home builder 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. The second format is the sale of a finished lot pursuant to a lot development agreement with builders, whereby the Company receives payments in stages that include: (i) payment upon the delivery of a platted lot (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 lot passes to the builder once the Company closes the sale of the platted lots. Because the builder takes control and legal ownership 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. Reimbursable public improvement costs (the “Sky Ranch CAB”) is obligated to construct certain public improvements at Sky Ranch. Public improvements are items that are not associated with one lot or one home, but can be used by the public, whether living in Sky Ranch or not. Public improvements include items such as roads, curbs, sidewalks, landscaping, and parks but also includes items such as water distribution systems, sewer collection systems, storm water systems, and drainage improvements. These public improvements are constructed pursuant to design standards specified by local governmental jurisdictions including the , the Sky Ranch CAB and Arapahoe County, and, after inspection and acceptance, are turned over to the applicable governmental entity to operate and maintain. Pursuant to agreements between the Company and the Sky Ranch CAB (see Note 8 – Related Party Transactions For the second phase and beyond, the Company will continue to assess the collectability of reimbursable public improvement expenditures. The Sky Ranch CAB has an obligation to repay the Company but the ability of the Sky Ranch CAB to repay the Company before the contractual termination of December 31, 2060 is dependent upon the establishment of a tax base or other fee generating activities sufficient to recover reimbursable costs incurred. Public improvements are considered contract fulfillment costs and will be recognized in a separate Land development inventories account as funds are expended. Once collectability is deemed to be reasonably assured, the public reimbursable expenditures will be reclassified out of Land development inventories and into Notes receivable - related party. The Company will evaluate any balance in Notes receivable - related party for impairment each reporting period and an impairment charge will be incurred for any amounts deemed uncollectible. The reimbursable public improvement costs bear an interest rate of 6% per annum. Project management services the Company acts as the project manager and provides the services required to deliver the Sky Ranch CAB-eligible public improvements (see discussion of reimbursable public improvements above), including but not limited to Sky Ranch CAB compliance; planning design and approvals; project administration; contractor agreements; and construction management and administration. The Company is responsible for all expenses it incurs in the performance of the Project Management Agreements and is not entitled to any reimbursement or compensation except as set forth in the Project Management Agreements, unless otherwise approved in advance by the Sky Ranch CAB in writing. The Company receives a project management fee of five percent (5%) of actual construction costs of Sky Ranch CAB-eligible public improvements. . Construction support activities The Company performs certain construction activities at Sky Ranch. The activities performed include construction and maintenance of the grading erosion and sediment control best management practices and other construction-related services. These activities are invoiced to the Sky Ranch CAB upon completion and will be recognized as Land development inventories or Notes receivable – related party, dependent upon . The following table summarizes the amounts the Company paid, what was repaid by the Sky Ranch CAB and amounts still owed to the Company by the Sky Ranch CAB: As of February 28, 2021 Costs incurred to date Payments repaid by Sky Ranch CAB Amounts payable to Pure Cycle by the Sky Ranch CAB (In thousands) Phase 1 Public improvements $ 28,565 $ 10,505 $ 18,060 Accrued interest 1,433 400 1,033 Project management services 1,539 — 1,539 Construction support activities 834 — 834 Phase 1 reimbursable costs $ 32,371 $ 10,905 $ 21,466 Phase 2 Public improvements $ 315 $ — $ 315 Phase 2 reimbursable costs $ 315 $ — $ 315 Public improvements and construction support activities accrue interest of 6% per annum, which was not previously recognized as the interest payments were deemed contingent on a sufficient tax base and or the issuance of municipal bonds for collectability to be reasonably assured. This interest was recognized as a portion of the recognition of $21.5 million of reimbursable costs as collection is probable. Project management fees do not accrue interest. The Company expects to incur an additional $0.9 million through the end of the calendar year 2021, with an estimated $0.6 million for construction costs related to public improvements to complete the first development phase of the initial 506 lots and expects that amount to be reimbursed to the Company along with the amounts noted in the table above as the Sky Ranch CAB issues bonds, collects fees, or property tax assessments. Deferred Revenue As noted above, the Company recognizes certain lot sales over time as construction activities progress for lots sold pursuant to lot development agreements and not when payment is received. Based on this, the Company will frequently receive milestone payments before revenue can be recognized (i.e. prior to the Company completing cumulative progress which faithfully represents the transfer of goods and services to the customer) which results in the Company recording deferred revenue. The Company recognizes this revenue into income as construction activities progress measured based on costs incurred to total expected costs of the project which management believes is a faithful representation of the transfer of goods and services to the customer. In fiscal 2018 and 2019, the Company received up-front payments for certain oil and gas leases which permitted an oil and gas operator priority rights to water deliveries over a specified period of time. As the Company was not required to perform on its delivery obligations when the payments were received, recognition of revenue was deferred and is being recognized on a straight-line basis over the agreement term. The 2018 payment has been fully recognized as of the first quarter of fiscal 2021. The Company also received an up-front payment from an oil and gas industrial customer to reserve priority water for their operations, which the Company is recognizing this revenue based either on actual usage each reporting period or based on amounts which have expired pursuant to the agreement. The customer had up to one year from the invoice date to use such water. The customer did not use the water in the contract period which ended in January 2021, and such water was forfeited by the customer resulting in the Company recognizing revenue of $0.4 million. Deferred revenue by segment is as follows: February 28, 2021 August 31, 2020 (In thousands) Land development segment $ 995 $ 1,636 Water and wastewater resource development segment 260 1,965 Balance, end of period $ 1,255 $ 3,601 Changes in deferred revenue were as follows: February 28, 2021 (In thousands) Balance, August 31, 2020 $ 3,601 Deferral of revenue 2,231 Recognition of unearned revenue (4,577 ) Balance, February 28, 2021 $ 1,255 Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. During November 2020, the Company received the final payment of $2.2 million, including $1.6 million for outstanding open contracts in the first development filing at Sky Ranch, which represents the final lot sales in the first filing at Sky Ranch, and $0.6 million for neighborhood amenities.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS6 Months Ended
Feb. 28, 2021
FAIR VALUE MEASUREMENTS [Abstract]
FAIR VALUE MEASUREMENTSNOTE 4 – FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of significant input to determine fair value. Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as the NASDAQ Stock Market. The Company had no Level 1 assets or liabilities as of February 28, 2021 or August 31, 2020. Level 2 — Valuations for assets and liabilities obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company had no Level 2 assets or liabilities as of February 28, 2021 or August 31, 2020. Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker-traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. The Company had one Level 3 asset, Notes receivable - related party, and one liability, the contingent portion of the CAA, as of February 28, 2021. The Company has determined the fair value of the reimbursable public improvements note receivable to be $17.8 million, compared to a carrying value of $21.5 million. The Company determined the fair value by estimating future cash flows discounted by a market rate. This note receivable does not have a stated repayment schedule and the Company relies on Sky Ranch CAB budgets and forecasted property tax revenues to estimate future cash flows. The Other notes receivables do not have a determinable fair value as the borrowing and repayments from the Rangeview District and the Sky Ranch CAB cannot be reasonably estimated. The Company has determined that the contingent portion of the CAA does not have a determinable fair value (see Note 6 – Long-Term Obligations and Operating Lease ) The Company maintains policies and procedures to value instruments using what management believes to be the best and most relevant data available.

WATER AND LAND ASSETS

WATER AND LAND ASSETS6 Months Ended
Feb. 28, 2021
WATER AND LAND ASSETS [Abstract]
WATER AND LAND ASSETSNOTE 5 – WATER AND LAND ASSETS The Company’s water rights and current water and wastewater service agreements, including capitalized terms not defined herein, are more fully described in Note 4 – Water and Land Assets Investment in Water and Water Systems The Company’s Investments in water and water systems consist of the following costs and accumulated depreciation and depletion at February 28, 2021 and August 31, 2020: February 28, 2021 August 31, 2020 Costs Accumulated Depreciation and Depletion Costs Accumulated Depreciation and Depletion (In thousands) Rangeview water supply $ 14,573 $ (16 ) $ 14,570 $ (15 ) Sky Ranch water rights and other costs 7,336 (995 ) 7,499 (981 ) Fairgrounds water and water system 2,900 (1,283 ) 2,900 (1,239 ) Rangeview water system 16,960 (1,157 ) 15,948 (789 ) Water supply – Other 7,548 (1,274 ) 7,550 (1,116 ) Wild Pointe service rights 1,632 (741 ) 1,632 (708 ) Sky Ranch pipeline 5,727 (698 ) 5,727 (602 ) Lost Creek water supply 3,374 — 3,372 — Construction in progress 851 — 1,339 — Totals 60,901 (6,164 ) 60,537 (5,450 ) Net investments in water and water systems $ 54,737 $ 55,087 Construction in progress primarily consists of additional water facilities at Sky Ranch. The Company anticipates the additional facilities will be placed in service during fiscal 2021.

LONG-TERM OBLIGATIONS AND OPERA

LONG-TERM OBLIGATIONS AND OPERATING LEASE6 Months Ended
Feb. 28, 2021
LONG-TERM OBLIGATIONS AND OPERATING LEASE [Abstract]
LONG-TERM OBLIGATIONS AND OPERATING LEASENOTE 6 – LONG-TERM OBLIGATIONS AND OPERATING LEASE The Participating interests in export water supply is an obligation of the Company that has no scheduled maturity date. Therefore, maturity of this liability is not disclosed in tabular form but is described below. Participating Interests in Export Water Supply The acquisition of the Rangeview Water Supply was finalized with the signing of the Comprehensive Amendment Agreement in 1996. The CAA is explained in greater detail in Note 5 to the 2020 Annual Report. The terms and conditions of the CAA, other than whom the amounts are payable too, have not been modified since signing. 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 they are either retained by the Company or remitted to various parties pursuant to the CAA. As of February 28, 2021, the recorded obligation of the CAA is $0.3 million and the contingent off-balance sheet portion is $0.6 million. The CAA includes contractually established priorities which call for payments to CAA holders in order of their priority. This means that the first payees receive their full payment before the next priority level receives any payment and so on until full repayment. Of the next $6.3 million of Export Water payouts, which based on current payout levels would occur over several years, the Company will receive $5.6 million of revenue. Thereafter, the Company will be entitled to all but $0.2 million of the proceeds from the sale of Export Water after deduction of the State Land Board royalty. Sky Ranch In November 2020 and February 2021, the Company entered into separate contracts with KB Home, Melody (a DR Horton Company), Challenger Homes, and Lennar Colorado, LLC to sell 789 single-family attached and detached residential lots at the Sky Ranch property. This next development phase of Sky Ranch will incorporate approximately 250 acres and is planned to be completed in four sub-phases. Due to the Company’s strong performance in the first phase of the Sky Ranch project, the Company was able to realize an approximate 30% increase in lot prices from $75,000 for a 50’ lot in phase one to $97,000 for the same 50’ lot in the first subphase of the second phase. The timing of cash flows will include 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. The Company began construction in February 2021 on the second phase at Sky Ranch, which is expected to include 895 residential lots. The 106 lots not currently under contract to home builders are being retained for use as long-term Build-to-Rent rental properties. WISE Partnership The South Metro WISE Authority (“SMWA”) is a group of ten governmental or quasi-governmental water providers including the Rangeview District, that was formed to enable its members to participate in a regional water supply project known as the Water Infrastructure Supply Efficiency partnership (“WISE”) created by the “WISE Partnership Agreement,” defined below. Each member of SMWA controls a contractually defined 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 ten members of the SMWA, and to “Denver Water” and “Aurora Water,” both defined below. Certain infrastructure has been constructed and other infrastructure will be constructed over the next several years. In December 2014, the Company, through the Rangeview District, consented to the waiver of all contingencies set forth in the Amended and Restated WISE Partnership – Water Delivery Agreement, dated December 31, 2013 (the “WISE Partnership Agreement”), among the City and County of Denver acting through its Board of Water Commissioners (“Denver Water”), the City of Aurora acting by and through its utility enterprise (“Aurora Water”). In December 2014, the Company and the Rangeview District entered the Rangeview/Pure Cycle WISE Project Financing and Service Agreement (the “WISE Financing Agreement”), which requires the Company to fund the Rangeview District’s participation in WISE. During the three months ended February 28, 2021 and February 29, 2020, the Company through the Rangeview District, purchased an additional 35 and 400 acre-feet of WISE water for less than $0.1 million and $0.6 million. See further discussion in Note 8 – Related Party Transactions. Lease Commitments In February 2018, the Company entered into an operating lease for 11,393 square feet of office and warehouse space in Watkins, Colorado. The lease has a three-year term with payments of $6,600 per month and an option to extend the primary lease term for a two-year period at a rate equal to a 12.5% increase over the primary base payments. For six months ended February 28, 2021 and February 29, 2020, the Company recorded less than $0.1 million of rent expense related to its office lease. During the six months ended February 28, 2021 and February 29, 2020, the Company paid less than $0.1 million against the Lease obligations — operating leases . Operating lease expense is generally recognized evenly over the term of the lease. Leases with an initial term of twelve months or less are not recorded on the condensed 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 August 31, 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 condensed consolidated balance sheet as follows: As of February 28, 2021 As of August 31, 2020 (In thousands) Operating leases - right of use assets $ 159 $ 196 Accrued liabilities $ 81 $ 74 Lease obligations - operating leases, net of current portion 79 120 Total lease liability $ 160 $ 194 Weighted average remaining lease term (in years) 1.9 2.4 Weighted average discount rate 6 % 6 %

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY6 Months Ended
Feb. 28, 2021
SHAREHOLDERS' EQUITY [Abstract]
SHAREHOLDERS' EQUITYNOTE 7 – SHAREHOLDERS’ EQUITY The Company maintains the 2014 Equity Incentive Plan (the “2014 Equity Plan”), which was approved by shareholders in January 2014 and became effective on April 12, 2014. Executives, eligible employees, consultants and non-employee directors are eligible to receive options and stock grants pursuant to the 2014 Equity Plan. Pursuant to the 2014 Equity Plan, options to purchase shares of stock and stock awards can be granted with exercise prices, vesting conditions and other performance criteria determined by the Compensation Committee of the board of directors. The Company has reserved 1.6 million shares of common stock for issuance under the 2014 Equity Plan. As of February 28, 2021 and August 30, 2020, there were 970,723 and 1,088,500 shares available for grant under the 2014 Equity Plan. The following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the six months ended February 28, 2021: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Approximate Aggregate Intrinsic Value (in thousands) Outstanding at August 31, 2020 661,500 $ 7.23 6.17 $ 1,831 Granted 115,000 $ 9.00 Exercised (5,000 ) 2.76 Net settlement exercised (24,500 ) $ 3.07 Outstanding at February 28, 2021 747,000 $ 7.64 6.68 3,078 Options exercisable at February 28, 2021 528,667 $ 6.78 5.61 2,634 On January 13, 2021 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 expense is equal to the closing price of the Company's common stock on the date of grant of $11.33. There is no vesting requirement for the unrestricted stock grants and the Company recognized the full expense of $0.1 million in the three months ended February 28, 2021. During the six months ended February 28, 2021, the Company had net settlement exercises of stock options, whereby the optionee did not pay cash for the options but instead received the number of shares equal to the difference between the exercise price and the market price on the date of exercise. Net settlement exercises during the three months ended February 28, 2021 resulted in 3,159 shares issued and 3,341 options cancelled in settlement of shares issued. Net settlement exercises during the six months ended February 28, 2021 resulted in 15,277 shares issued and 9,223 options cancelled in settlement of shares issued. There were no net settlement exercises during the six months ended February 29, 2020. The following table summarizes the combined activity and value of non-vested options under the 2004 Equity Plan and 2014 Incentive Plan as of and for the six months ended February 28, 2021: Number of Options Weighted Average Grant Date Fair Value Non-vested options outstanding at August 31, 2020 179,999 $ 4.31 Granted 115,000 $ 3.78 Vested (76,666 ) $ 4.27 Forfeited (a) — $ — Non-vested options outstanding at February 28, 2021 218,333 $ 4.04 (a) All non-vested options are expected to vest. For each three month periods ended February 28, 2021 and February 29, 2020, the Company recorded $0.2 million of stock-based compensation expense. For each six month periods ended February 28, 2021 and February 29, 2020, the Company recorded $0.3 million of stock-based compensation expense. At February 28, 2021, the Company had unrecognized compensation expenses totaling $0.7 million relating to non-vested options that are expected to vest. The weighted-average period over which these options are expected to vest is approximately three years.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS6 Months Ended
Feb. 28, 2021
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONSNOTE 8 – RELATED PARTY TRANSACTIONS The Rangeview District 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. On December 16, 2009, the Company entered into a Participation Agreement with the Rangeview District, whereby the Company agreed to provide funding to the Rangeview District in connection with the Rangeview District joining the South Metro Water Supply Authority (“SMWSA”). The Company provides funding pursuant to the Participation Agreement annually, which for fiscal 2021 and 2020 is an immaterial amount. Through the WISE Financing Agreement, the Company agreed to fund the Rangeview District’s cost of participating in the regional water supply project known as the WISE partnership. During the three months ended February 28, 2021 and February 29, 2020, the Company through the Rangeview District, purchased an additional 35 and 400 acre-feet of WISE water for less than $0.1 million and $0.6 million. 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, 2021, 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. To date, the Company has capitalized the funding provided pursuant to the WISE Financing Agreement because the funding has been provided to purchase capacity in the WISE infrastructure. The Company’s total investment in the WISE assets as of February 28, 2021, is $6.2 million. Additionally, the Rangeview District has entered into an agreement with WISE to construct a special facility during fiscal 2021. Pure Cycle will fund the construction of the special facility and Rangeview will remit 100% of the revenue to Pure Cycle. 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 February 28, 2021). The maturity date of the loan is December 31, 2020, at which time it will automatically renew for another 12 month term. In January 2014, the Rangeview District and the Company entered into a funding agreement that allows the Company to continue to provide funding to the Rangeview District for day-to-day operations and accrue the funding into a note that bears interest at a rate of 8% per annum and remains in full force and effect for so long as the 2014 Amended and Restated Lease Agreement remains in effect. Of the February 28, 2021 balance in Notes receivable - related parties, Notes receivable - related parties, Sky Ranch Community Authority Board 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 each of the Rangeview District, the Sky Ranch Districts and the Sky Ranch CAB consist of three employees of the Company and one independent board member. Pursuant to that certain Community Authority Board Establishment Agreement, as the same may be amended from time to time, Sky Ranch Metropolitan District Nos. 1 and 5 formed the 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. The Company and the Sky Ranch CAB entered into a Facilities Funding and Acquisition Agreement (the “FFAA”) effective November 2017, obligating the company to advance funding to the Sky Ranch CAB for specified public improvements constructed from 2018 to 2023. All amounts owed under the FFAA bear interest at a rate of 6% per annum. Any advances not paid or reimbursed by the Sky Ranch CAB by December 31, 2058 for first phase and December 31, 2060 for the second phase, shall be deemed forever discharged and satisfied in full. As of February 28, 2021, the balance of the Company’s advances for improvements, including interest, net of reimbursements from the Sky Ranch CAB, to the Sky Ranch CAB totaled $21.5 million. The advances have been used by the Sky Ranch CAB to pay for construction of public improvements. The Company submits specific costs for reimbursement to the Sky Ranch CAB which have been certified by an independent third-party. Previously, the reimbursable expenditures funded by the Company were expensed through Land development construction costs and project management revenue and interest income were not recognized For the second phase and beyond, the Company will continue to assess the collectability of reimbursable public improvement expenditures. The Sky Ranch CAB has an obligation to repay the Company but the ability of the Sky Ranch CAB to repay the Company before the contractual termination of December 31, 2060 is dependent upon the establishment of a tax base or other fee generating activities sufficient to recover reimbursable costs incurred. Costs incurred will be recognized as Land development inventories or Notes receivable – related party, dependent upon whether collectability is deemed to be reasonably assured Refer to Note 3 - Revenue Recognition 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. As of the February 28, 2021 and August 31, 2020, the balances included in Notes receivable – related parties ,

SIGNIFICANT CUSTOMERS

SIGNIFICANT CUSTOMERS6 Months Ended
Feb. 28, 2021
SIGNIFICANT CUSTOMERS [Abstract]
SIGNIFICANT CUSTOMERSNOTE 9 – SIGNIFICANT CUSTOMERS The Company has significant customers in its operations. For the water and wastewater resource development segment, the Company primarily provides water and wastewater services on behalf of Rangeview Metropolitan District. The significant end users include all Sky Ranch homes in aggregate, Crestone Peak Resources (oil & gas operations) and the WISE partnership related to a special facilities construction project. For the land development segment and water and wastewater tap fees, which are reported within the water and wastewater resource development segment, significant customers include Taylor Morrison, KB Home and Richmond Homes.

ACCRUED LIABILITIES

ACCRUED LIABILITIES6 Months Ended
Feb. 28, 2021
ACCRUED LIABILITIES [Abstract]
ACCRUED LIABILITIESNOTE 10 – ACCRUED LIABILITIES February 28, 2021 August 31, 2020 (In thousands) Accrued compensation $ 268 $ 767 Due to the Sky Ranch CAB - related party 193 1,169 Land development - warranty and other - related party 181 — Other operating payables 91 353 Operating lease obligations 81 74 WISE water 66 69 Property taxes 36 72 Professional fees 21 56 Due to Rangeview - related party - 43 Total $ 937 $ 2,603

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES6 Months Ended
Feb. 28, 2021
COMMITMENTS AND CONTINGENCIES [Abstract]
COMMITMENTS AND CONTINGENCIESNOTE 11 – COMMITMENTS AND CONTINGENCIES The Company has historically been involved in various claims, litigation and other legal proceedings that arise in the ordinary course of its business. The Company records an accrual for a material loss contingency when its occurrence is probable and damages can be reasonably estimated based on the anticipated most likely outcome or the minimum amount within a range of possible outcomes. The Company makes such estimates based on information known about the claims and experience in contesting, litigating and settling similar claims. Disclosures are also provided for reasonably possible losses that could have a material effect on the Company’s financial position, results of operations or cash flows. The Company is involved in certain legal proceedings as in the ordinary course of adjudicating and protecting its water and water rights. The Company had no contingencies where the risk of material loss was reasonably possible as of February 28, 2021, or August 31, 2020.

SEGMENT INFORMATION

SEGMENT INFORMATION6 Months Ended
Feb. 28, 2021
SEGMENT INFORMATION [Abstract]
SEGMENT INFORMATIONNOTE 12 – SEGMENT INFORMATION Because of the methods used by the Chief Operating Decision Maker (the “CODM”) to allocate resources, the Company has identified two operating segments which meet GAAP segment disclosure requirements, namely the water and wastewater resource development segment and the land development segment. A third segment, Build-to-Rent (“BTR”), will be presented once material to operations. 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 and for the six months ended February 28, 2021 and February 29, 2020, was done exclusively at the Company’s Sky Ranch Master Planned Community. Oil and gas 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: Three Months Ended February 28, 2021 Water and wastewater resource development Land development Corporate Total (In thousands) Total revenue $ 2,676 $ 2,063 $ — $ 4,739 Cost of revenue (640 ) (269 ) — (909 ) Depreciation and depletion (354 ) — — (354 ) Total cost of revenue (994 ) (269 ) — (1,263 ) Gross margin $ 1,682 $ 1,794 $ — $ 3,476 Three Months Ended February 29, 2020 Water and wastewater resource development Land development Corporate Total (In thousands) Total revenue $ 1,254 $ 2,265 $ — $ 3,519 Cost of revenue (248 ) (1,817 ) — (2,065 ) Depreciation and depletion (383 ) — — (383 ) Total cost of revenue (631 ) (1,817 ) — (2,448 ) Gross margin $ 623 $ 448 $ — $ 1,071 Six Months Ended February 28, 2021 Water and wastewater resource development Land development Corporate Total (In thousands) Total revenue $ 5,188 $ 4,419 $ — $ 9,607 Cost of revenue (1,301 ) (1,988 ) — (3,289 ) Depreciation and depletion (719 ) — — (719 ) Total cost of revenue (2,020 ) (1,988 ) — (4,008 ) Gross margin $ 3,168 $ 2,431 $ — $ 5,599 Six Months Ended February 29, 2020 Water and wastewater resource development Land development Corporate Total (In thousands) Total revenue $ 3,172 $ 10,807 $ — $ 13,979 Cost of revenue (552 ) (9,880 ) — (10,432 ) Depreciation and depletion (602 ) — — (602 ) Total cost of revenue (1,154 ) (9,880 ) — (11,034 ) Gross margin $ 2,018 $ 927 $ — $ 2,945 The following table summarizes total assets for the Company’s water and wastewater resource development business and land development business by segment. The assets consist of water rights and water and wastewater systems in the Company’s water and wastewater resource development segment and land, inventories and deposits in the Company’s land development segment. The Company’s other assets (“Corporate”) primarily consist of cash, cash equivalents and restricted cash, equipment, and related party notes receivables. February 28, 2021 August 31, 2020 (In thousands) Water and wastewater resource development $ 54,949 $ 56,267 Land development 6,338 6,975 Corporate 47,239 26,519 Total assets $ 108,526 $ 89,761

INCOME TAXES

INCOME TAXES6 Months Ended
Feb. 28, 2021
INCOME TAXES [Abstract]
INCOME TAXESNOTE 13 – INCOME TAXES The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items. As of February 28, 2021 the Company is estimating an annual effective tax rate of approximately 25%. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to various factors. The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. Income tax information for the three and six months ended February 28, 2021 and February 29, 2020 are as follows: Three Months Ended Six Months Ended February 28, 2021 February 29, 2020 February 28, 2021 February 29, 2020 (In thousands) Effective income tax rate 24.7 % 22.3 % 24.7 % 24.6 % Income tax expense (benefit): Current $ 5,723 $ 76 $ 5,856 $ 1,244 Deferred (56 ) 3 71 722 Total $ 5,667 $ 79 $ 5,927 $ 1,966 Income taxes paid: Federal $ — $ 877 $ — $ 877 State — 194 — 194 Total $ — $ 1,071 $ — $ 1,071 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 liability as of February 28, 2021 and August 31, 2020 are as follows: February 28, 2021 August 31, 2020 Deferred tax assets (liabilities): (In thousands) Depreciation and depletion (1,654 ) (1,701 ) Non-qualified stock options 522 491 Accrued compensation 66 167 Deferred revenues 64 89 Other 45 45 Net operating loss carryforwards $ — $ 23 Net deferred tax liability $ (957 ) $ (886 )

EARNINGS PER SHARE

EARNINGS PER SHARE6 Months Ended
Feb. 28, 2021
EARNINGS PER SHARE [Abstract]
EARNINGS PER SHARENOTE 14 – EARNINGS PER SHARE Certain outstanding options are excluded from the diluted earnings per share calculation because they are anti-dilutive (i.e., their assumed conversion into common stock would increase rather than decrease earnings per share). The options excluded totaled 0 and 130,000 for the three and six months ended February 28, 2021. There were no excluded options for the three and six months ended February 29, 2020. Three Months Ended Six Months Ended February 28, 2021 February 29, 2020 February 28, 2021 February 29, 2020 (In thousands, except share and per share amounts) Net income $ 17,352 $ 274 $ 18,197 $ 6,037 Basic weighted average common shares 23,881,655 23,846,265 23,874,198 23,836,431 Effect of dilutive securities 210,693 263,273 190,216 243,685 Weighted average shares applicable to diluted earnings per share 24,092,349 24,109,538 24,064,414 24,080,116 Earnings per share - basic $ 0.73 $ 0.01 $ 0.76 $ 0.25 Earnings per share - diluted $ 0.72 $ 0.01 $ 0.76 $ 0.25

SUBSEQUENT EVENT

SUBSEQUENT EVENT6 Months Ended
Feb. 28, 2021
SUBSEQUENT EVENT [Abstract]
SUBSEQUENT EVENTNOTE 15 – SUBSEQUENT EVENT The Company announced in March 2021 the launch of a new line of business which will be referred to as Build-to-Rent (“BTR”). BTR is expected to represent as a separate reporting segment and will be presented once material. Previously reported financial information for the current segments will not change as a result of the new segment. During the initial development phase of Sky Ranch, the Company retained ownership of three residential lots, on which the Company has begun building three single family homes which Pure Cycle will own, maintain and rent to qualified renters. The Company has contracted out the construction to a local construction company and expects these three homes to be completed and ready for renters in the fall of 2021. After the successful completion and operational start up of the three houses in the first phase, the Company intends to expand this BTR line in the second development phase of Sky Ranch by building and renting homes on the 106 lots that were not sold to the Company's home builder partners. Grading on the second phase of Sky Ranch has begun, and once complete the Company will look to partner with certain builders to construct additional BTR units as the second development phase of Sky Ranch is completed.

PRESENTATION OF INTERIM INFOR_2

PRESENTATION OF INTERIM INFORMATION (Policies)6 Months Ended
Feb. 28, 2021
PRESENTATION OF INTERIM INFORMATION [Abstract]
Basis of PresentationThe February 28, 2021 condensed consolidated balance sheet, the condensed consolidated statements of operations and comprehensive income for the three and six months ended February 28, 2021 and February 29, 2020, the condensed consolidated statements of shareholders’ equity for the three and six months ended February 28, 2021 and February 29, 2020, and the condensed consolidated statements of cash flows for the six months ended February 28, 2021 and February 29, 2020 have been prepared by Pure Cycle Corporation (the “Company”) and have not been audited. The unaudited condensed consolidated financial statements include all adjustments that are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows at February 28, 2021, and for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. It is suggested that the accompanying condensed consolidated financial statements and notes be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2020 (the “2020 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on November 10, 2020. The results of operations for interim periods presented are not necessarily indicative of the operating results expected for the full fiscal year. The August 31, 2020 balance sheet was derived from the Company’s audited consolidated financial statements.
Use of EstimatesUse of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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, timing and amount of reimbursable costs and expenses and the associated repayment, costs of revenue for lot sales, share-based compensation, deferred tax asset and liability valuation, depreciation and the recoverability of long lived assets. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to COVID-19. During the three months ended February 28, 2021, the Company revised its estimates to conclude that the reimbursable public improvements, project management revenue and interest income related to the first development phase at Sky Ranch are reasonably assured of payment. Historically, due to a lack of tax base and no operating history for the Sky Ranch CAB, the Company was unable to estimate when or if it would receive payment for these items and deferred recognition of them until the cash was received from the Sky Ranch CAB. As a result of an established and growing tax base resulting from the success of the initial filing, added mill levies, and additional unencumbered fees received by the Sky Ranch CAB, the Company believes repayment of the public improvements, payment of the project management fees and interest income are now reasonably assured. Based on this, the Company has recognized these items in the Company’s consolidated financial statements. The timing and amount of these potential payments have been estimated by the Company based on sales and growth trends utilizing current assessed home values and historic growth rates which have been projected to the current and contracted for lot sales through the contractual obligation period .
Recently Issued Accounting PronouncementsRecently Issued Accounting Pronouncements The Company continually assesses 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 consequences 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 June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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, the Company does not expect the adoption of ASU 2016-13 to have a material impact on the Company’s consolidated financial statements.

REVENUE RECOGNITION AND REIMB_2

REVENUE RECOGNITION AND REIMBURSABLE COSTS (Tables)6 Months Ended
Feb. 28, 2021
REVENUE RECOGNITION AND REIMBURSABLE COSTS [Abstract]
Reimbursable CostsThe following table summarizes the amounts the Company paid, what was repaid by the Sky Ranch CAB and amounts still owed to the Company by the Sky Ranch CAB: As of February 28, 2021 Costs incurred to date Payments repaid by Sky Ranch CAB Amounts payable to Pure Cycle by the Sky Ranch CAB (In thousands) Phase 1 Public improvements $ 28,565 $ 10,505 $ 18,060 Accrued interest 1,433 400 1,033 Project management services 1,539 — 1,539 Construction support activities 834 — 834 Phase 1 reimbursable costs $ 32,371 $ 10,905 $ 21,466 Phase 2 Public improvements $ 315 $ — $ 315 Phase 2 reimbursable costs $ 315 $ — $ 315
Deferred Revenue and Changes in Deferred RevenueDeferred revenue by segment is as follows: February 28, 2021 August 31, 2020 (In thousands) Land development segment $ 995 $ 1,636 Water and wastewater resource development segment 260 1,965 Balance, end of period $ 1,255 $ 3,601 Changes in deferred revenue were as follows: February 28, 2021 (In thousands) Balance, August 31, 2020 $ 3,601 Deferral of revenue 2,231 Recognition of unearned revenue (4,577 ) Balance, February 28, 2021 $ 1,255

WATER AND LAND ASSETS (Tables)

WATER AND LAND ASSETS (Tables)6 Months Ended
Feb. 28, 2021
WATER AND LAND ASSETS [Abstract]
Investments in Water and Water SystemsThe Company’s Investments in water and water systems consist of the following costs and accumulated depreciation and depletion at February 28, 2021 and August 31, 2020: February 28, 2021 August 31, 2020 Costs Accumulated Depreciation and Depletion Costs Accumulated Depreciation and Depletion (In thousands) Rangeview water supply $ 14,573 $ (16 ) $ 14,570 $ (15 ) Sky Ranch water rights and other costs 7,336 (995 ) 7,499 (981 ) Fairgrounds water and water system 2,900 (1,283 ) 2,900 (1,239 ) Rangeview water system 16,960 (1,157 ) 15,948 (789 ) Water supply – Other 7,548 (1,274 ) 7,550 (1,116 ) Wild Pointe service rights 1,632 (741 ) 1,632 (708 ) Sky Ranch pipeline 5,727 (698 ) 5,727 (602 ) Lost Creek water supply 3,374 — 3,372 — Construction in progress 851 — 1,339 — Totals 60,901 (6,164 ) 60,537 (5,450 ) Net investments in water and water systems $ 54,737 $ 55,087

LONG-TERM OBLIGATIONS AND OPE_2

LONG-TERM OBLIGATIONS AND OPERATING LEASE (Tables)6 Months Ended
Feb. 28, 2021
LONG-TERM OBLIGATIONS AND OPERATING LEASE [Abstract]
ROU Lease Assets and Lease LiabilitiesROU lease assets and lease liabilities for the Company’s operating leases were recorded in the condensed consolidated balance sheet as follows: As of February 28, 2021 As of August 31, 2020 (In thousands) Operating leases - right of use assets $ 159 $ 196 Accrued liabilities $ 81 $ 74 Lease obligations - operating leases, net of current portion 79 120 Total lease liability $ 160 $ 194 Weighted average remaining lease term (in years) 1.9 2.4 Weighted average discount rate 6 % 6 %

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)6 Months Ended
Feb. 28, 2021
SHAREHOLDERS' EQUITY [Abstract]
Stock Option ActivityThe following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the six months ended February 28, 2021: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Approximate Aggregate Intrinsic Value (in thousands) Outstanding at August 31, 2020 661,500 $ 7.23 6.17 $ 1,831 Granted 115,000 $ 9.00 Exercised (5,000 ) 2.76 Net settlement exercised (24,500 ) $ 3.07 Outstanding at February 28, 2021 747,000 $ 7.64 6.68 3,078 Options exercisable at February 28, 2021 528,667 $ 6.78 5.61 2,634
Non-Vested OptionsThe following table summarizes the combined activity and value of non-vested options under the 2004 Equity Plan and 2014 Incentive Plan as of and for the six months ended February 28, 2021: Number of Options Weighted Average Grant Date Fair Value Non-vested options outstanding at August 31, 2020 179,999 $ 4.31 Granted 115,000 $ 3.78 Vested (76,666 ) $ 4.27 Forfeited (a) — $ — Non-vested options outstanding at February 28, 2021 218,333 $ 4.04 (a) All non-vested options are expected to vest.

ACCRUED LIABILITIES (Tables)

ACCRUED LIABILITIES (Tables)6 Months Ended
Feb. 28, 2021
ACCRUED LIABILITIES [Abstract]
Accrued Liabilities February 28, 2021 August 31, 2020 (In thousands) Accrued compensation $ 268 $ 767 Due to the Sky Ranch CAB - related party 193 1,169 Land development - warranty and other - related party 181 — Other operating payables 91 353 Operating lease obligations 81 74 WISE water 66 69 Property taxes 36 72 Professional fees 21 56 Due to Rangeview - related party - 43 Total $ 937 $ 2,603

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)6 Months Ended
Feb. 28, 2021
SEGMENT INFORMATION [Abstract]
Segment InformationThe tables below present the measure of profit and assets the CODM uses to assess the performance of the segment for the periods presented: Three Months Ended February 28, 2021 Water and wastewater resource development Land development Corporate Total (In thousands) Total revenue $ 2,676 $ 2,063 $ — $ 4,739 Cost of revenue (640 ) (269 ) — (909 ) Depreciation and depletion (354 ) — — (354 ) Total cost of revenue (994 ) (269 ) — (1,263 ) Gross margin $ 1,682 $ 1,794 $ — $ 3,476 Three Months Ended February 29, 2020 Water and wastewater resource development Land development Corporate Total (In thousands) Total revenue $ 1,254 $ 2,265 $ — $ 3,519 Cost of revenue (248 ) (1,817 ) — (2,065 ) Depreciation and depletion (383 ) — — (383 ) Total cost of revenue (631 ) (1,817 ) — (2,448 ) Gross margin $ 623 $ 448 $ — $ 1,071 Six Months Ended February 28, 2021 Water and wastewater resource development Land development Corporate Total (In thousands) Total revenue $ 5,188 $ 4,419 $ — $ 9,607 Cost of revenue (1,301 ) (1,988 ) — (3,289 ) Depreciation and depletion (719 ) — — (719 ) Total cost of revenue (2,020 ) (1,988 ) — (4,008 ) Gross margin $ 3,168 $ 2,431 $ — $ 5,599 Six Months Ended February 29, 2020 Water and wastewater resource development Land development Corporate Total (In thousands) Total revenue $ 3,172 $ 10,807 $ — $ 13,979 Cost of revenue (552 ) (9,880 ) — (10,432 ) Depreciation and depletion (602 ) — — (602 ) Total cost of revenue (1,154 ) (9,880 ) — (11,034 ) Gross margin $ 2,018 $ 927 $ — $ 2,945 The following table summarizes total assets for the Company’s water and wastewater resource development business and land development business by segment. The assets consist of water rights and water and wastewater systems in the Company’s water and wastewater resource development segment and land, inventories and deposits in the Company’s land development segment. The Company’s other assets (“Corporate”) primarily consist of cash, cash equivalents and restricted cash, equipment, and related party notes receivables. February 28, 2021 August 31, 2020 (In thousands) Water and wastewater resource development $ 54,949 $ 56,267 Land development 6,338 6,975 Corporate 47,239 26,519 Total assets $ 108,526 $ 89,761

INCOME TAXES (Tables)

INCOME TAXES (Tables)6 Months Ended
Feb. 28, 2021
INCOME TAXES [Abstract]
Provision for Income TaxesThe provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. Income tax information for the three and six months ended February 28, 2021 and February 29, 2020 are as follows: Three Months Ended Six Months Ended February 28, 2021 February 29, 2020 February 28, 2021 February 29, 2020 (In thousands) Effective income tax rate 24.7 % 22.3 % 24.7 % 24.6 % Income tax expense (benefit): Current $ 5,723 $ 76 $ 5,856 $ 1,244 Deferred (56 ) 3 71 722 Total $ 5,667 $ 79 $ 5,927 $ 1,966 Income taxes paid: Federal $ — $ 877 $ — $ 877 State — 194 — 194 Total $ — $ 1,071 $ — $ 1,071
Deferred Tax Assets (Liabilities)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 liability as of February 28, 2021 and August 31, 2020 are as follows: February 28, 2021 August 31, 2020 Deferred tax assets (liabilities): (In thousands) Depreciation and depletion (1,654 ) (1,701 ) Non-qualified stock options 522 491 Accrued compensation 66 167 Deferred revenues 64 89 Other 45 45 Net operating loss carryforwards $ — $ 23 Net deferred tax liability $ (957 ) $ (886 )

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)6 Months Ended
Feb. 28, 2021
EARNINGS PER SHARE [Abstract]
Earnings per ShareCertain outstanding options are excluded from the diluted earnings per share calculation because they are anti-dilutive (i.e., their assumed conversion into common stock would increase rather than decrease earnings per share). The options excluded totaled 0 and 130,000 for the three and six months ended February 28, 2021. There were no excluded options for the three and six months ended February 29, 2020. Three Months Ended Six Months Ended February 28, 2021 February 29, 2020 February 28, 2021 February 29, 2020 (In thousands, except share and per share amounts) Net income $ 17,352 $ 274 $ 18,197 $ 6,037 Basic weighted average common shares 23,881,655 23,846,265 23,874,198 23,836,431 Effect of dilutive securities 210,693 263,273 190,216 243,685 Weighted average shares applicable to diluted earnings per share 24,092,349 24,109,538 24,064,414 24,080,116 Earnings per share - basic $ 0.73 $ 0.01 $ 0.76 $ 0.25 Earnings per share - diluted $ 0.72 $ 0.01 $ 0.76 $ 0.25

RESTRICTED CASH (Details)

RESTRICTED CASH (Details) - USD ($) $ in ThousandsFeb. 28, 2021Feb. 29, 2020
RESTRICTED CASH [Abstract]
Letter of credit outstanding $ 300
Restricted cash $ 281 $ 0

REVENUE RECOGNITION AND REIMB_3

REVENUE RECOGNITION AND REIMBURSABLE COSTS, Reimbursable Costs (Details) $ in Thousands1 Months Ended3 Months Ended6 Months Ended
Nov. 30, 2019USD ($)Feb. 28, 2021USD ($)LotFeb. 29, 2020USD ($)Feb. 28, 2021USD ($)SegmentFormatAgreementLotFeb. 29, 2020USD ($)Aug. 31, 2020USD ($)
Revenue Recognition and Reimbursable Costs [Abstract]
Number of operating segments | Segment2
Number of formats used for selling finished lots to home builders | Format2
Revenues $ 4,739 $ 3,519 $ 9,607 $ 13,979
Interest income1,448 84 1,463 138
Recognition of public improvement reimbursables $ 18,894 0 18,894 0
Recognition of public improvement reimbursables $ 21,466
Number of initial lots | Lot506 506
Project Management Fees - Recognized [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Revenues $ 1,548 $ 0 $ 1,548 $ 0
Phase 1 Reimbursable Costs [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Amounts payable to Pure Cycle by the Sky Ranch CAB21,466 21,466 $ 0
Sky Ranch CAB [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Reimbursement for advances made to fund construction of public improvements $ 10,500
Reimbursement for advances made to fund construction of public improvements with proceeds from unencumbered funds400
Interest income1,000 1,000
Recognition of public improvement reimbursables18,894 $ 18,894
Interest rate6.00%
Number of service agreements for project management services | Agreement2
Project management fee5.00%
Sky Ranch CAB [Member] | Bonds [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Face amount $ 13,200
Sky Ranch CAB [Member] | Project Management Fees - Recognized [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Revenues1,548 $ 1,548
Sky Ranch CAB [Member] | Phase 1 Reimbursable Costs [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Costs incurred to date32,371 32,371
Payments repaid by Sky Ranch CAB10,905 10,905
Amounts payable to Pure Cycle by the Sky Ranch CAB21,466 21,466
Additional costs to be incurred through the end of calendar year 2021900 900
Sky Ranch CAB [Member] | Phase 1 Public Improvements, Including Construction Support Activities [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Costs incurred to date29,400 29,400
Sky Ranch CAB [Member] | Phase 1 Public Improvements [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Costs incurred to date28,565 28,565
Payments repaid by Sky Ranch CAB10,505 10,505
Amounts payable to Pure Cycle by the Sky Ranch CAB18,060 18,060
Additional costs to be incurred through the end of calendar year 2021600 600
Sky Ranch CAB [Member] | Phase 1 Accrued Interest [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Costs incurred to date1,433 1,433
Payments repaid by Sky Ranch CAB400 400
Amounts payable to Pure Cycle by the Sky Ranch CAB1,033 1,033
Sky Ranch CAB [Member] | Phase 1 Project Management Services [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Costs incurred to date1,539 1,539
Payments repaid by Sky Ranch CAB0 0
Amounts payable to Pure Cycle by the Sky Ranch CAB1,539 1,539
Sky Ranch CAB [Member] | Phase 1 Construction Support Activities [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Costs incurred to date834 834
Payments repaid by Sky Ranch CAB0 0
Amounts payable to Pure Cycle by the Sky Ranch CAB834 834
Sky Ranch CAB [Member] | Phase 2 Reimbursable Costs [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Costs incurred to date315 315
Payments repaid by Sky Ranch CAB0 0
Amounts payable to Pure Cycle by the Sky Ranch CAB315 315
Sky Ranch CAB [Member] | Phase 2 Public Improvements [Member]
Revenue Recognition and Reimbursable Costs [Abstract]
Costs incurred to date315 315
Payments repaid by Sky Ranch CAB0 0
Amounts payable to Pure Cycle by the Sky Ranch CAB $ 315 $ 315

REVENUE RECOGNITION AND REIMB_4

REVENUE RECOGNITION AND REIMBURSABLE COSTS, Deferred Revenue by Segment (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Feb. 28, 2021Feb. 29, 2020Feb. 28, 2021Feb. 29, 2020Aug. 31, 2020
Deferred Revenue [Abstract]
Term to use reserve priority water1 year
Revenues $ 4,739 $ 3,519 $ 9,607 $ 13,979
Deferred revenue1,255 1,255 $ 3,601
Metered Water Usage - Oil and Gas Operations [Member]
Deferred Revenue [Abstract]
Revenues583 20 1,782 57
Forfeited Water - Oil and Gas Operations [Member]
Deferred Revenue [Abstract]
Revenues400
Land Development Segment [Member]
Deferred Revenue [Abstract]
Revenues2,063 2,265 4,419 10,807
Deferred revenue995 995 1,636
Water and Wastewater Resource Development Segment [Member]
Deferred Revenue [Abstract]
Revenues2,676 $ 1,254 5,188 $ 3,172
Deferred revenue $ 260 $ 260 $ 1,965

REVENUE RECOGNITION AND REIMB_5

REVENUE RECOGNITION AND REIMBURSABLE COSTS, Changes in Deferred Revenue (Details) - USD ($) $ in Thousands1 Months Ended6 Months Ended
Nov. 30, 2020Feb. 28, 2021
Deferred Revenue [Abstract]
Balance $ 3,601
Deferral of revenue2,231
Recognition of unearned revenue(4,577)
Balance $ 1,255
Sky Ranch CAB [Member]
Deferred Revenue [Abstract]
Final payment received $ 2,200
Proceeds from sale of lots1,600
Proceeds received for neighborhood amenities $ 600

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) $ in MillionsFeb. 28, 2021USD ($)AssetLiabilityAug. 31, 2020AssetLiability
Level 1 [Member]
Fair Value Measurements [Abstract]
Number of assets | Asset0 0
Number of liabilities | Liability0 0
Level 2 [Member]
Fair Value Measurements [Abstract]
Number of assets | Asset0 0
Number of liabilities | Liability0 0
Level 3 [Member]
Fair Value Measurements [Abstract]
Number of assets | Asset1
Number of liabilities | Liability1
Fair Value [Member] | Level 3 [Member]
Fair Value Measurements [Abstract]
Notes receivable | $ $ 17.8
Carrying Value [Member]
Fair Value Measurements [Abstract]
Notes receivable | $ $ 21.5

WATER AND LAND ASSETS (Details)

WATER AND LAND ASSETS (Details) - USD ($) $ in ThousandsFeb. 28, 2021Aug. 31, 2020
Investment in Water and Water Systems [Abstract]
Costs $ 60,901 $ 60,537
Accumulated depreciation and depletion(6,164)(5,450)
Net investments in water and water systems54,737 55,087
Rangeview Water Supply [Member]
Investment in Water and Water Systems [Abstract]
Costs14,573 14,570
Accumulated depreciation and depletion(16)(15)
Sky Ranch Water Rights and Other Costs [Member]
Investment in Water and Water Systems [Abstract]
Costs7,336 7,499
Accumulated depreciation and depletion(995)(981)
Fairgrounds Water And Water System [Member]
Investment in Water and Water Systems [Abstract]
Costs2,900 2,900
Accumulated depreciation and depletion(1,283)(1,239)
Rangeview Water System [Member]
Investment in Water and Water Systems [Abstract]
Costs16,960 15,948
Accumulated depreciation and depletion(1,157)(789)
Water Supply - Other [Member]
Investment in Water and Water Systems [Abstract]
Costs7,548 7,550
Accumulated depreciation and depletion(1,274)(1,116)
Wild Pointe Service Rights [Member]
Investment in Water and Water Systems [Abstract]
Costs1,632 1,632
Accumulated depreciation and depletion(741)(708)
Sky Ranch Pipeline [Member]
Investment in Water and Water Systems [Abstract]
Costs5,727 5,727
Accumulated depreciation and depletion(698)(602)
Lost Creek Water Supply [Member]
Investment in Water and Water Systems [Abstract]
Costs3,374 3,372
Accumulated depreciation and depletion0 0
Construction in Progress [Member]
Investment in Water and Water Systems [Abstract]
Costs851 1,339
Accumulated depreciation and depletion $ 0 $ 0

LONG-TERM OBLIGATIONS AND OPE_3

LONG-TERM OBLIGATIONS AND OPERATING LEASE, Long-Term Obligations (Details) $ in Thousands3 Months Ended4 Months Ended6 Months Ended
Feb. 28, 2021USD ($)Lotacre ftFeb. 29, 2020USD ($)acre ftFeb. 28, 2021USD ($)aLotSubphaseftFeb. 28, 2021USD ($)LotMemberAug. 31, 2020USD ($)
Participating Interests in Export Water Supply [Abstract]
Participating interests in export water supply $ 326 $ 326 $ 326 $ 328
Contingent off-balance sheet liability600 600 600
Expected future export water payouts6,300
Revenue receivables from sale of export water5,600 $ 5,600 5,600
Expected proceeds from sale of export water after deduction of Land Board royalty200
Sky Ranch [Abstract]
Number of residential lots sold in second phase of Sky Ranch | Lot789
Area of land included in second phase of development of Sky Ranch | a250
Number of sub-phases for second phase of development of Sky Ranch | Subphase4
Percentage increase in price of lots30.00%
Lot price in phase one75 $ 75 75
Front footage of lot | ft50
Lot price in second phase $ 97 $ 97 $ 97
Number of residential lots included in second phase of Sky Ranch | Lot895 895 895
Number of lots not currently under contract to home builders | Lot106 106 106
WISE Partnership [Abstract]
Number of governmental or quasi-governmental water providers included in SMWA | Member10
Rangeview District [Member] | WISE Partnership [Member]
WISE Partnership [Abstract]
Volume of water purchased | acre ft35 400
Purchase of water $ 600
Rangeview District [Member] | WISE Partnership [Member] | Maximum [Member]
WISE Partnership [Abstract]
Purchase of water $ 100

LONG-TERM OBLIGATIONS AND OPE_4

LONG-TERM OBLIGATIONS AND OPERATING LEASE, Operating Lease (Details)6 Months Ended
Feb. 28, 2021USD ($)ft²Feb. 29, 2020USD ($)Nov. 30, 2020Aug. 31, 2020USD ($)
Lease Commitments [Abstract]
Area of office and warehouse | ft²11,393
Operating lease term3 years
Monthly base rent of operating lease $ 6,600
Operating lease extension term2 years
Percentage of increase in primary base payment for operating lease12.50%
ROU Lease Assets and Lease Liabilities [Abstract]
Operating leases - right of use assets $ 159,000 $ 196,000
Lease Liabilities [Abstract]
Lease obligations - operating leases, current portion81,000 74,000
Lease obligations - operating leases, net of current portion79,000 120,000
Total lease liability $ 160,000 $ 194,000
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]AccruedLiabilitiesCurrentAccruedLiabilitiesCurrent
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]Lease obligations - operating leases, net of current portionLease obligations - operating leases, net of current portion
Weighted average remaining lease term1 year 10 months 24 days2 years 4 months 24 days
Weighted average discount rate6.00%6.00%
Maximum [Member]
Lease Commitments [Abstract]
Operating lease expense $ 100,000 $ 100,000
Payment against lease obligation, operating lease $ 100,000 $ 100,000

SHAREHOLDERS' EQUITY, Stock Opt

SHAREHOLDERS' EQUITY, Stock Option Activity (Details) $ / shares in Units, $ in ThousandsJan. 13, 2021BoardMember$ / sharessharesFeb. 28, 2021USD ($)$ / sharessharesFeb. 29, 2020USD ($)Feb. 28, 2021USD ($)$ / sharessharesFeb. 29, 2020USD ($)sharesAug. 31, 2020USD ($)$ / sharessharesAug. 30, 2020shares
Stock Options [Abstract]
Share-based compensation expense | $ $ 313 $ 353
2014 Equity Plan [Member]
Shareholders' Equity [Abstract]
Shares reserved for issuance (in shares)1,600,000 1,600,000
Shares available for grant (in shares)970,723 970,723 1,088,500
2004 Incentive Plan and 2014 Equity Plan [Member]
Number of Options [Roll Forward]
Outstanding, beginning of period (in shares)661,500
Granted (in shares)115,000
Exercised (in shares)(5,000)
Net settlement exercised (in shares)(24,500)0
Outstanding, end of period (in shares)747,000 747,000 661,500
Options exercisable (in shares)528,667 528,667
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning of period (in dollars per share) | $ / shares $ 7.23
Granted (in dollars per share) | $ / shares9
Exercised (in dollars per share) | $ / shares2.76
Net settlement exercised (in dollars per share) | $ / shares3.07
Outstanding, end of period (in dollars per share) | $ / shares $ 7.64 7.64 $ 7.23
Options exercisable (in dollars per share) | $ / shares $ 6.78 $ 6.78
Stock Options [Abstract]
Weighted average remaining contractual term6 years 8 months 5 days6 years 2 months 1 day
Weighted average remaining contractual term, options exercisable5 years 7 months 10 days
Approximate aggregate intrinsic value, outstanding | $ $ 3,078 $ 3,078 $ 1,831
Approximate aggregate intrinsic value, options exercisable | $2,634 2,634
Share-based compensation expense | $ $ 200 $ 200 $ 300 $ 300
Shares issued (in shares)3,159 15,277
Options cancelled (in shares)3,341 9,223
2004 Incentive Plan and 2014 Equity Plan [Member] | Non-Employee Board Members [Member]
Number of Options [Roll Forward]
Granted (in shares)2,000
Stock Options [Abstract]
Number of board members | BoardMember6
Stock price (in dollars per share) | $ / shares $ 11.33
Share-based compensation expense | $ $ 100

SHAREHOLDERS' EQUITY, Non-Veste

SHAREHOLDERS' EQUITY, Non-Vested Options (Details) - USD ($) $ / shares in Units, $ in Thousands3 Months Ended6 Months Ended
Feb. 28, 2021Feb. 29, 2020Feb. 28, 2021Feb. 29, 2020
Stock Options [Abstract]
Share-based compensation expense $ 313 $ 353
2004 Incentive Plan and 2014 Equity Plan [Member]
Number of Options [Roll Forward]
Non-vested options outstanding, beginning of period (in shares)179,999
Granted (in shares)115,000
Vested (in shares)(76,666)
Forfeited (in shares)[1]0
Non-vested options outstanding, end of period (in shares)218,333 218,333
Weighted Average Grant Date Fair Value [Abstract]
Non-vested options outstanding, beginning of period (in dollars per share) $ 4.31
Granted (in dollars per share)3.78
Vested (in dollars per share)4.27
Forfeited (in dollars per share)[1]0
Non-vested options outstanding, end of period (in dollars per share) $ 4.04 $ 4.04
Stock Options [Abstract]
Share-based compensation expense $ 200 $ 200 $ 300 $ 300
Unrecognized compensation expenses $ 700 $ 700
Weighted-average period for options expected to vest3 years
[1]All non-vested options are expected to vest.

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) $ in Thousands3 Months Ended6 Months Ended
Feb. 28, 2021USD ($)BoardMemberEmployeeacre ftFeb. 29, 2020USD ($)acre ftFeb. 28, 2021USD ($)BoardMemberEmployeeFeb. 29, 2020USD ($)Jan. 01, 2021$ / ThousandGallonsAug. 31, 2020USD ($)
Related Party Transactions [Abstract]
Investments in the WISE assets $ 54,737 $ 54,737 $ 55,087
Number of employees on board of directors | Employee3 3
Number of independent members on board of directors | BoardMember1 1
Revenues $ 4,739 $ 3,519 $ 9,607 $ 13,979
Interest income1,448 84 1,463 138
Recognition of public improvement reimbursables18,894 0 18,894 0
Project Management Fees - Recognized [Member]
Related Party Transactions [Abstract]
Revenues $ 1,548 $ 0 $ 1,548 $ 0
FFAA [Member]
Related Party Transactions [Abstract]
Interest rate6.00%
Rangeview District [Member] | WISE Partnership [Member]
Related Party Transactions [Abstract]
Volume of water purchased | acre ft35 400
Purchase of water $ 600
Water rate | $ / ThousandGallons5.77
Investments in the WISE assets $ 6,200 $ 6,200
Percentage of revenue to be remitted100.00%100.00%
Rangeview District [Member] | WISE Partnership [Member] | Maximum [Member]
Related Party Transactions [Abstract]
Purchase of water $ 100
Rangeview District [Member] | Loan Receivable [Member]
Related Party Transactions [Abstract]
Maximum borrowing capacity250 $ 250
Interest rate5.25%
Renewal term12 months
Rangeview District [Member] | Loan Receivable [Member] | Prime Rate [Member]
Related Party Transactions [Abstract]
Basis spread on variable rate2.00%
Rangeview District [Member] | Note Receivable [Member]
Related Party Transactions [Abstract]
Interest rate8.00%
Notes receivable1,100 $ 1,100 1,100
Borrowings under notes receivable700 700 600
Accrued interest on notes receivable400 $ 400 $ 500
Sky Ranch CAB [Member]
Related Party Transactions [Abstract]
Interest rate6.00%
Notes receivable21,500 $ 21,500
Interest income1,000 1,000
Recognition of public improvement reimbursables18,894 18,894
Sky Ranch CAB [Member] | Project Management Fees - Recognized [Member]
Related Party Transactions [Abstract]
Revenues $ 1,548 $ 1,548

ACCRUED LIABILITIES (Details)

ACCRUED LIABILITIES (Details) - USD ($) $ in ThousandsFeb. 28, 2021Aug. 31, 2020
ACCRUED LIABILITIES [Abstract]
Accrued compensation $ 268 $ 767
Due to the Sky Ranch CAB - related party193 1,169
Land development - warranty and other - related party181 0
Other operating payables91 353
Operating lease obligations81 74
WISE water66 69
Property taxes36 72
Professional fees21 56
Due to Rangeview - related party0 43
Total $ 937 $ 2,603

SEGMENT INFORMATION, Revenue by

SEGMENT INFORMATION, Revenue by Segments (Details) $ in Thousands3 Months Ended6 Months Ended
Feb. 28, 2021USD ($)Feb. 29, 2020USD ($)Feb. 28, 2021USD ($)SegmentFeb. 29, 2020USD ($)
SEGMENT INFORMATION [Abstract]
Number of operating segments | Segment2
Segment Information [Abstract]
Total revenue $ 4,739 $ 3,519 $ 9,607 $ 13,979
Cost of revenue(909)(2,065)(3,289)(10,432)
Depreciation and depletion(354)(383)(719)(602)
Total cost of revenues(1,263)(2,448)(4,008)(11,034)
Gross profit3,476 1,071 5,599 2,945
Corporate [Member]
Segment Information [Abstract]
Total revenue0 0 0 0
Cost of revenue0 0 0 0
Depreciation and depletion0 0 0 0
Total cost of revenues0 0 0 0
Gross profit0 0 0 0
Water and Wastewater Resource Development [Member]
Segment Information [Abstract]
Total revenue2,676 1,254 5,188 3,172
Cost of revenue(640)(248)(1,301)(552)
Depreciation and depletion(354)(383)(719)(602)
Total cost of revenues(994)(631)(2,020)(1,154)
Gross profit1,682 623 3,168 2,018
Land Development [Member]
Segment Information [Abstract]
Total revenue2,063 2,265 4,419 10,807
Cost of revenue(269)(1,817)(1,988)(9,880)
Depreciation and depletion0 0 0 0
Total cost of revenues(269)(1,817)(1,988)(9,880)
Gross profit $ 1,794 $ 448 $ 2,431 $ 927

SEGMENT INFORMATION, Corporate

SEGMENT INFORMATION, Corporate Assets (Details) - USD ($) $ in ThousandsFeb. 28, 2021Aug. 31, 2020
Segment Information [Abstract]
Total assets $ 108,526 $ 89,761
Corporate [Member]
Segment Information [Abstract]
Total assets47,239 26,519
Water and Wastewater Resource Development [Member]
Segment Information [Abstract]
Total assets54,949 56,267
Land Development [Member]
Segment Information [Abstract]
Total assets $ 6,338 $ 6,975

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended12 Months Ended
Feb. 28, 2021Feb. 29, 2020Feb. 28, 2021Feb. 29, 2020Aug. 31, 2021Aug. 31, 2020
Income Taxes [Abstract]
Effective income tax rate24.70%22.30%24.70%24.60%
Income Tax Expense (Benefit) [Abstract]
Current $ 5,723 $ 76 $ 5,856 $ 1,244
Deferred(56)3 71 722
Total5,667 79 5,927 1,966
Income Taxes Paid [Abstract]
Income taxes paid0 1,071 0 1,071
Deferred Tax Assets (Liabilities) [Abstract]
Depreciation and depletion(1,654)(1,654) $ (1,701)
Non-qualified stock options522 522 491
Accrued compensation66 66 167
Deferred revenues64 64 89
Other45 45 45
Net operating loss carryforwards0 0 23
Net deferred tax liability(957)(957) $ (886)
Forecast [Member]
Income Taxes [Abstract]
Effective income tax rate25.00%
Federal [Member]
Income Taxes Paid [Abstract]
Income taxes paid0 877 0 877
State [Member]
Income Taxes Paid [Abstract]
Income taxes paid $ 0 $ 194 $ 0 $ 194

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands3 Months Ended6 Months Ended
Feb. 28, 2021Feb. 29, 2020Feb. 28, 2021Feb. 29, 2020
EARNINGS PER SHARE [Abstract]
Anti-dilutive securities excluded from computation of earnings per share (in shares)0 0 130,000 0
Earnings Per Share [Abstract]
Net income $ 17,352 $ 274 $ 18,197 $ 6,037
Basic weighted average common shares (in shares)23,882,000 23,846,000 23,874,000 23,836,000
Effect of dilutive securities (in shares)210,693 263,273 190,216 243,685
Weighted average shares applicable to diluted earnings per share (in shares)24,092,000 24,110,000 24,064,000 24,080,000
Earnings per share - basic (in dollars per share) $ 0.73 $ 0.01 $ 0.76 $ 0.25
Earnings per share - diluted (in dollars per share) $ 0.72 $ 0.01 $ 0.76 $ 0.25

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details)Mar. 31, 2021LotHomeFeb. 28, 2021Lot
Subsequent Event Abstract]
Number of lots not currently under contract to home builders at Sky Ranch106
Subsequent Event [Member]
Subsequent Event Abstract]
Number of residential lots retained from initial development phase in Sky Ranch3
Number of single family homes being constructed at Sky Ranch | Home3
Number of lots not currently under contract to home builders at Sky Ranch106