##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended August 31, 2011
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 0-8814
 PURE CYCLE CORPORATION
  Colorado
    
    84-0705083(State or other jurisdiction of incorporation 
or organization)
    
    (I.R.S. Employer Identification No.)1490 Lafayette St, Suite 203, Denver, CO 80218
    
    (303) 292-3456(Address of principal executive offices) (Zip Code)
    
    (Registrants telephone number, including area code)
  Common Stock 1/3 of $.01 par value
    
    The NASDAQ Stock Market, LLC(Title of each class)
    
    (Name of each exchange on which registered)
 NONE
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




---



##### 



Table of Contents
 Item
    
    PagePart I1. Business
    
    
    51A. Risk Factors
    
    
    151B. Unresolved Staff Comments
    
    
    212. Properties
    
    
    213. Legal Proceedings
    
    
    22Part II5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    226. Selected Financial Data
    
    
    247. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    257A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    338. Financial Statements and Supplementary Data
    
    
    349. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    359A. Controls and Procedures
    
    
    359B. Other Information
    
    
    36Part III10. Directors, Executive Officers and Corporate Governance
    
    
    3711. Executive Compensation
    
    
    3712. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    3713. Certain Relationships and Related Transactions, and Director Independence
    
    
    3714. Principal Accounting Fees and Services
    
    
    37Part IV15. Exhibits, Financial Statement Schedules
    
    
    36Signatures
    
    
    39EX-23.1EX-31.1EX-32.1
   - 2 -




---



##### Table of Contents



SAFE HARBOR STATEMENT UNDER THE UNITED STATES PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
 Form 10-K,
 
    
    plans for the use of our water assets and reservoir sites;
 
    
    development plans for our Arkansas River water, our Rangeview Water Supply, the Lowry
Range and Sky Ranch, including the number of acre feet that may be available, the number of
SFEs that may be served and the timing, costs and funding of such development;
 
    
    anticipated revenues from full development of our Sky Ranch property;
 
    
    the anticipated market for our Paradise Water Supply;
 
    
    market demand for water for drilling and fracking oil and gas wells and our plans to
provide water for such drilling;
 
    
    anticipated timing and amount of, and sources of funding for, capital expenditures to
increase production capacities, comply with water, environmental and other regulations and
fund operations;
 
    
    the ability of our deep water well enhancement tool and process to increase efficiency of
wells and our plans to market that product to area water providers;
 
    
    our ability to assist Front Range, Colorado, water providers in meeting current and
future water needs;
 
    
    development plans for and design capabilities of our water and wastewater systems and our
ability to reduce the amount of up-front construction costs;
 
    
    hiring additional personnel for our operations;
 
    
    regional cooperation among area water providers in the development of new water supplies
and water storage, transmission and distribution systems as the most cost-effective way to
expand and enhance service capacities;
 
    
    estimated population increases in the Denver metropolitan area and the South Platte River
basin;
 
    
    anticipated increases in residential and commercial demand for water services;
 
    
    use of raw and reclaimed water for outdoor irrigation;
 
    
    the impact of water quality, solid waste disposal and environmental regulations on our
financial condition and results of operations;
 
    
    the impact of the downturn in the homebuilding and credit markets on our business and
financial condition;
 
    
    environmental clean-up at the Lowry Range by the U.S. Army Corps of Engineers;
 
    
    the adequacy of the provisions in the Lease for the Lowry Range to cover present and
future circumstances;
 
    
    potential opposition to, and anticipated requirements of, the water court in connection
with a change of use application for our Arkansas River water;
 
    
    factors that may impact labor and material costs;
 
    
    the recoverability of construction costs from rates;
 
    
    our belief that we are not a public utility under Colorado law;
 
    
    the location of the Paradise Water Supply storage facility;
 
    
    our ability to comply with permit requirements and the cost of such compliance;
 
    
    costs to treat contaminated water;
 
    
    the use of retained earnings to expand and develop our business;
 
    
    the impact of individual housing and economic cycles on the number of connections we can
serve with our water;
 
    
    the number of new water connections needed to recover the costs of our Rangeview Water
Supply and Arkansas River water assets;
 
    
    satisfaction of the diligence requirements to maintain our Paradise water rights;
 
    
    recoverability of the costs of our Paradise Water Supply assets;
 
    
    increases in future water tap fees;
  - 3 -




---



##### Table of Contents




    
    the amount of the Tap Participation Fee liability;
 
    
    the existence and likelihood of a default by HP A&M on its promissory notes;
 
    
    the sufficiency of our working capital and financing sources to fund our operations;
 
    
    intent not to hold marketable securities until maturity;
 
    
    impairments in carrying amounts of long-lived assets;
 
    
    changes in unrecognized tax positions;
 
    
    forfeitures of option grants and vesting of non-vested options;
 
    
    the impact of new accounting pronouncements; and
 
    
    the effectiveness of our disclosure controls and procedures and our internal controls over
financial reporting.
  
    
    the timing of new home construction and other development in the areas where we may sell
our water, which in turn may be impacted by credit availability;
 
    
    population growth;
 
    
    employment rates;
 
    
    general economic conditions;
 
    
    the market price of water;
 
    
    changes in customer consumption patterns;
 
    
    changes in applicable statutory and regulatory requirements;
 
    
    changes in governmental policies and procedures;
 
    
    uncertainties in the estimation of water available under decrees,
 
    
    uncertainties in the estimation of costs of delivery of water and treatment of wastewater;
 
    
    uncertainties in the estimation of the service life of our systems;
 
    
    uncertainties in the estimation of costs of construction projects;
 
    
    the strength and financial resources of our competitors;
 
    
    our ability to find and retain skilled personnel;
 
    
    climatic and weather conditions, including floods, droughts and freezing conditions;
 
    
    labor relations;
 
    
    availability and cost of labor, material and equipment;
 
    
    delays in anticipated permit and construction dates;
 
    
    environmental risks and regulations;
 
    
    our ability to raise capital;
 
    
    our ability to negotiate contracts with new customers; and
 
    
    uncertainties in water court rulings.
   - 4 -




---



##### Table of Contents



PART I
 
 Item 1  Business
 Summary
    Our Water Assets
 Arkansas River Water
and Land Sky Ranch Our Water Assets
  Glossary of terms
  
    
    Acre foot  approximately 326,000 gallons of water, or enough water to cover an acre of
ground with one foot of water. For some instances herein, as context dictates, the term acre
feet is used to designate an annual decreed amount of water available during a typical year.
 
    
    Consumptive Use  the amount of water that is evaporated, transpired, incorporated into
products or crops, consumed by humans or livestock, or otherwise removed from the immediate
water environment.
 
    
    Customer Facilities  facilities that carry potable water and reclaimed water to customers
from the retail water distribution system (see Retail Facilities below) and collect
wastewater from customers and transfer it to the retail wastewater collection system. Water
and wastewater service lines, interior plumbing, meters and other components are typical
examples of Customer Facilities. In many cases, portions of the Customer Facilities are
constructed by the developer, but they are owned and maintained by the customer.
 
    
    Non-Tributary Groundwater  water that is physically separated from surface water by
impermeable layers in an aquifer or located outside the boundaries of any designated
groundwater basin. The withdrawal of such water will not, within one hundred years of
continuous withdrawal, deplete the flow of a natural stream at an annual rate greater than
one-tenth of one percent of the annual rate of withdrawal.
 
    
    Not Non-Tributary Groundwater  water located within those portions of the Dawson, Denver,
Arapahoe, and Laramie-Fox Hills aquifers that are outside the boundaries of any designated
groundwater basin, the withdrawal of which will, within one hundred years, deplete the flow of
a natural stream at an annual rate of greater than one-tenth of one percent of the annual rate
of withdrawal.
 
    
    Retail Facilities  facilities that distribute water to and collect wastewater from an
individual subdivision or community. Developers are typically responsible for the funding and
construction of Retail Facilities. Once we certify that the Retail Facilities have been
constructed in accordance with our design criteria, the developer dedicates the Retail
Facilities to us or to a quasi-municipal political subdivision of the state and we operate and
maintain the facilities.
  - 5 -




---



##### Table of Contents




    
    Section  a parcel of land equal to one square mile and containing 640 acres.
 
    
    Single Family Equivalent unit (SFE)  One SFE is a customer  whether residential,
commercial or industrial  that imparts a demand on our water or wastewater systems similar
to the demand of a family of four persons living in a single family house on a standard sized
lot. One SFE is assumed to have a water demand of approximately 0.4 acre feet per year and to
contribute wastewater flows of approximately 300 gallons per day.
 
    
    Special Facilities  facilities that are required to extend services to an individual
development and are not otherwise classified as a typical Wholesale Facility or Retail
Facility. Temporary infrastructure required prior to construction of permanent water and
wastewater systems or transmission pipelines to transfer water from one location to another
are examples of Special Facilities. We typically design and construct the Special Facilities
using funds provided by the developer in addition to the normal rates, fees and charges that
we collect from our customers. We are typically responsible for the operation and maintenance
of the Special Facilities upon completion.
 
    
    Surface Water  water collecting on the ground or in a stream, river, lake, sea or ocean.
 
    
    Tributary Groundwater  all water located in an aquifer that is hydrologically connected
to a natural stream and is not considered non-tributary or not non-tributary.
 
    
    Wholesale Facilities  facilities that serve an entire service area or major regions or
portions thereof. Wells, treatment plants, pump stations, tanks, reservoirs, transmission
pipelines, and major sewage lift stations are typical examples of Wholesale Facilities. We
own, design, construct, operate, maintain and repair Wholesale Facilities which are typically
funded using rates, fees and charges that we collect from our customers.
 Our Water Assets
 Item 1A  Risk Factors, Item 7  Managements
Discussion and Analysis of Financial Condition and Results of Operation  Critical Accounting
Policies and Use of Estimates
  
  - 6 -




---



##### Table of Contents



Rangeview Water Supply and the Lowry Range
 Our Rangeview Water
    (i)
    
    The 1996 Amended and Restated Lease Agreement (the Lease) between the Land Board and the
District;
 (ii)
    
    The Agreement for Sale of Export Water between us and the District; and
 (iii)
    
    The Service Agreement between us and the District for the provision of water service to the
Districts customers.
    - 7 -




---



##### Table of Contents



The Lowry Range Property
  Arkansas River Water and Land
    Sky Ranch
    - 8 -




---



##### Table of Contents



Oil and Gas Lease
   Arapahoe County Fairgrounds Agreement for Water Service
   Paradise Water Supply
  Critical Accounting Policies
  - 9 -




---



##### Table of Contents



Well Enhancement and Recovery Systems
 rd
 Revenues
  Water and Wastewater Tap Fees
     Table A - Water System Tap Fees2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007Water tap fees per SFE
    
    $
    22,500
    
    
    $
    22,500
    
    
    $
    22,500
    
    
    $
    21,500
    
    
    $
    20,000Percentage Increase
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    4.7
    %
    
    
    7.5
    %
    
    
    18.8
    %Percentage increase
from 2007-2011
    
    
    13
    %
  Tap Participation Fee
 Item 7  Managements Discussion and Analysis of Financial Condition and
Results of Operations: Critical Accounting Policies and Use of Estimates
  - 10 -




---



##### Table of Contents



Construction Fees
  Monthly Service Fees
  Table B - Tiered Water Usage Pricing StructurePrice ($ per thousand gallons)Amount of consumption
    
    2011
    
    
    2010
    
    
    2009Base charge per SFE
    
    $
    27.62
    
    
    $
    27.62
    
    
    $
    25.110 gallons to 10,000 gallons
    
    $
    2.81
    
    
    $
    2.81
    
    
    $
    2.5510,001 gallons to 20,000
gallons
    
    $
    3.69
    
    
    $
    3.69
    
    
    $
    3.3520,001 gallons to 40,000
gallons
    
    $
    6.56
    
    
    $
    6.56
    
    
    $
    5.9640,001 gallons and above
    
    $
    8.93
    
    
    $
    8.93
    
    
    $
    8.12
    Land Board Royalties
  Lowry Range Customers
   - 11 -




---



##### Table of Contents



Export Water Customers
  Table C - Royalties for Export Water SalesRoyalty RatePrivate
    
    
    PublicNet Revenues
    
    Entity Buyer
    
    
    Entity Buyer$0 - $45,000,000
    
    
    12%
    
    
    
    10%$45,000,001 - $60,000,000
    
    
    24%
    
    
    
    20%$60,000,001 -  $75,000,000
    
    
    36%
    
    
    
    30%$75,000,001 - $90,000,000
    
    
    48%
    
    
    
    40%Over $90,000,000
    
    
    50%
    
    
    
    50%
 Significant Customers
  Our Projected Operations
 Item 1A  Risk Factors
      - 12 -




---



##### Table of Contents



Rangeview Metropolitan District
  Water and Growth in Colorado
   - 13 -




---



##### Table of Contents



Competition
  (i)
    
    The purchase of water and wastewater taps in exchange for our obligation to construct certain
Wholesale Facilities,
 (ii)
    
    The establishment of payment terms, timing, capacity and location of Special Facilities (if
any), and
 (iii)
    
    Specific terms related to our provision of ongoing water and wastewater services to our
local governmental customers as well as the governmental entitys end-use customers.
 Item 1A  Risk Factors
 Environmental, Health and Safety Regulation
    - 14 -




---



##### Table of Contents



Safe Drinking Water Act
   Clean Water Act
   Solid Waste Disposal
  Employees
  Available Information and Website Address
 www.purecyclewater.com
 www.sec.gov/edgar/searchedgar/companysearch.html 276720
 
 Item 1A  Risk Factors
   - 15 -




---



##### Table of Contents



We are dependent on the housing market and development in our targeted service areas for future
revenues.
   Development on the Lowry Range is not within our control and is subject to obstacles.
    Certain of our water rights are conditional decrees and require findings of reasonable diligence.
   - 16 -




---



##### Table of Contents



We are involved in on-going discussion with the Land Board to clarify our rights and obligations
with respect to our Rangeview Water Supply and such negotiations may not be successful.
  Our operations are affected by local politics and governmental procedures which are beyond our
control.
  In order to utilize our Arkansas River water, we must apply for a change of use with the water
court and this may take several years to complete.
  We may not be able to obtain sufficient capital to develop our water rights, in particular the
Arkansas River water.
   - 17 -




---



##### Table of Contents



Our net losses may continue and we may not have sufficient liquidity to pursue our business
objectives.
  The rates the District is allowed to charge customers on the Lowry Range are limited by the Lease
with the Land Board and our contract with the District and may not be sufficient to cover our costs
of construction and operation.
  In the event of default by HP A&M on the promissory notes secured by deeds of trust on our
properties, we would be required to cure the defaults or lose some of our properties and the water
rights associated with such properties.
  Our construction of water and wastewater projects may expose us to certain completion, performance
and financial risks.
   - 18 -




---



##### Table of Contents



We have a limited number of employees and may not be able to manage the increasing demands of our
expanding operations.
  We may be adversely affected by any future decision by the Colorado Public Utilities Commission to
regulate us as a public utility.
    - 19 -




---



##### Table of Contents



There are many obstacles to our ability to sell our Paradise Water Supply.
  Conflicts of interest may arise relating to the operation of the District.
  Water quality standards are subject to regulatory change.
   Contamination to our water supply may result in disruption in our services and litigation,
which could adversely affect our business, operating results and financial condition.
   - 20 -




---



##### Table of Contents



Our business is subject to seasonal fluctuations and weather conditions which could affect demand
for our water service and our revenues.
  A failure of the water wells or distribution networks that we own or control could result in losses
and damages that may affect our financial condition and reputation.
  
 Item 1B  Unresolved Staff Comments
  
 Item 2  Properties
  Item 1  Our Water Assets
  - 21 -




---



##### Table of Contents



Item 1  Our
Water Assets  Sky Ranch. Item 1  Our Water Assets  Arkansas River Water
  
 Item 3  Legal Proceedings
  
 PART II
 
 Item 5  Market for Registrants Common Equity,  Related Stockholder Matters and Issuer Purchases of Equity Securities
 (a) Market Information
  (b) Holders
  (c) Dividends
  (d) Securities authorized for issuance under equity compensation plans
 Table D - Securities Authorized for Issuance Under Equity Compensation PlansNumber of securitiesremaining available for futureNumber of securities to
    
    
    Weighted-average exercise
    
    
    issuance under equitybe issued upon exercise of
    
    
    price of outstanding
    
    
    compensation plansoutstanding options,
    
    
    options, warrants and
    
    
    (excluding securities reflectedPlan category
    
    warrants and rights
    
    
    rights
    
    
    in column (a)(a)
    
    
    (b)
    
    
    (c)Equity compensation plans:Approved by security holders
    
    
    280,000
    
    
    $
    6.10
    
    
    
    1,285,811Not approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    280,000
    
    
    $
    6.10
    
    
    
    1,285,811
  - 22 -




---



##### Table of Contents



(e) Performance Graph1
 2
 Cumulative Returns For the fiscal years ended August 31,2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Pure Cycle Corporation
    
    $
    35.79
    
    
    $
    36.40
    
    
    $
    39.30
    
    
    $
    73.04
    
    
    $
    92.38
    
    
    $
    100.00S&P 500
    
    $
    103.97
    
    
    $
    87.74
    
    
    $
    83.63
    
    
    $
    102.31
    
    
    $
    115.14
    
    
    $
    100.00Peer Group
    
    $
    108.69
    
    
    $
    95.96
    
    
    $
    85.85
    
    
    $
    91.89
    
    
    $
    104.50
    
    
    $
    100.00
 
 1.
    
    This performance graph is not soliciting material, is not deemed filed with the
Commission and is not to be incorporated by reference in any of our filings under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
whether made before or after the date hereof and irrespective of any general incorporation
language in any such filing.2.
    
    The Peer Group consists of the following companies that have been selected on the basis
of industry focus or industry leadership: American States Water Company, Aqua America,
Inc., Artesian Resources Corp., California Water Service Group, Connecticut Water Service,
Inc., Middlesex Water Company, Pennichuck Corp., SJW Corp., and The York Water Company.  - 23 -




---



##### Table of Contents



(f) Recent Sales of Unregistered Securities; use of proceeds from registered securities
  (g) Purchase of equity securities by the issuer and affiliated purchasers
  
 Item 6  Selected Financial Data
 Table E - Selected Financial DataFor the Fiscal Years Ended August 31,In thousands (except per share data)
    
    2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007Summary Statement of Operations
items:Total revenues
    
    $
    282.1
    
    
    $
    264.1
    
    
    $
    260.2
    
    
    $
    282.4
    
    
    $
    265.7Net loss
    
    $
    (6,016.2
    )
    
    $
    (5,391.3
    )
    
    $
    (5,728.1
    )
    
    $
    (6,926.7
    )
    
    $
    (6,914.7
    )Basic and diluted loss per share
    
    $
    (0.26
    )
    
    $
    (0.27
    )
    
    $
    (0.28
    )
    
    $
    (0.34
    )
    
    $
    (0.37
    )Weighted average shares
outstanding
    
    
    23,169
    
    
    
    20,207
    
    
    
    20,207
    
    
    
    20,189
    
    
    
    18,590
 As of August 31,2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007Summary Balance Sheet Information:Current assets
    
    $
    5,065.6
    
    
    $
    1,819.6
    
    
    $
    3,990.4
    
    
    $
    5,502.2
    
    
    $
    7,288.4Total assets
    
    $
    116,122.7
    
    
    $
    106,377.8
    
    
    $
    108,091.1
    
    
    $
    109,899.4
    
    
    $
    111,891.9Current liabilities
    
    $
    658.3
    
    
    $
    171.3
    
    
    $
    138.1
    
    
    $
    163.9
    
    
    $
    183.3Long term liabilities
    
    $
    68,174.0
    
    
    $
    63,746.5
    
    
    $
    60,183.8
    
    
    $
    56,567.8
    
    
    $
    53,863.8Total liabilities
    
    $
    68,832.3
    
    
    $
    63,917.8
    
    
    $
    60,321.9
    
    
    $
    56,731.6
    
    
    $
    54,047.1Equity
    
    $
    47,290.3
    
    
    $
    42,460.0
    
    
    $
    47,769.2
    
    
    $
    53,167.8
    
    
    $
    57,844.8
  
    
    In fiscal 2011, 2010, 2009 and 2008, respectively, we imputed $3.8 million, $3.6 million,
$3.7 million and $4.4 million of interest related to the Tap Participation Fee payable to HP
A&M. As described below, this represents the difference between the net present value and the
estimated realizable value of the Tap Participation Fee, which is being charged to expense
using the effective interest method over the estimated development period utilized in the
valuation of the Tap Participation Fee. The Tap Participation Fee is payable when we sell
water taps and receive funds from such water tap sales or other dispositions of property
purchased from HP A&M.
 
    
    In fiscal 2011, we acquired 931 acres of land known as Sky Ranch for $7.0 million.
 
    
    In fiscal 2011, we sold a total of 3.8 million shares of common stock for a total of $10.8
million, which was used to acquire the Sky Ranch property and is being used for working
capital.
 
    
    In fiscal 2009, we recognized gains on the sale of non-irrigated land totaling $59,700.
 
    
    In fiscal 2008 and 2007, respectively, we recognized $273,700 of losses and $1.04 million
of gains related to the acquisition of certain Comprehensive Amendment Agreement No. 1 (the
CAA) interests (explained further in Note 5 to the accompanying financial statements). In
the 2007 acquisitions, certain of the parties were deemed related to the Company and
therefore, $765,100 of this gain was recorded as a contribution of capital in fiscal 2007.
The remaining $271,100 of gain is included in the statement of operations.
  - 24 -




---



##### Table of Contents



Item 7  Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Overview
 The discussion and analysis below includes certain forward-looking statements that are subject to
risks, uncertainties and other factors, as described in Risk Factors and elsewhere in this Annual
Report on Form 10-K, that could cause our actual growth, results of operations, performance,
financial position and business prospects and opportunities for this fiscal year and the periods
that follow to differ materially from those expressed in, or implied by, those forward-looking
statements. Readers are cautioned that forward-looking statements contained in this Form 10-K
should be read in conjunction with our disclosure under the heading: SAFE HARBOR STATEMENT UNDER
THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 on page 4.
 Part II, Item 8
 
    
    Revenue generated from providing water and wastewater services;
 
    
    Expenses associated with developing our water assets; and
 
    
    Cash available to continue development of our water rights and service agreements.
  Our Business 
 Critical Accounting Policies and Estimates 
 Results of Operations 
 Liquidity, Capital Resources and Financial Position 
 Our Business
  Critical Accounting Policies and Use of Estimates
    - 25 -




---



##### Table of Contents



Revenue Recognition
    Impairment of Water Assets and Other Long-Lived Assets
    Our Front Range and Arkansas River Water Rights
   - 26 -




---



##### Table of Contents



Our Paradise Water Rights
   Tap Participation Fee
     - 27 -




---



##### Table of Contents



Obligations Payable by HP A&M
  Share-based compensation
  Results of operations
 Executive Summary
  Table F - Summary Results of OperationsChangeFiscal Years Ended August 31,
    
    
    2011-2010
    
    
    2010-20092011
    
    
    2010
    
    
    2009
    
    
    $
    
    
    %
    
    
    $
    
    
    %Millions of gallons of water delivered
    
    
    34.5
    
    
    
    33.1
    
    
    
    33.9
    
    
    
    1.4
    
    
    
    4
    %
    
    
    (0.8
    )
    
    
    -2
    %Water revenues generated
    
    $
    157,500
    
    
    $
    140,700
    
    
    $
    137,400
    
    
    $
    16,800
    
    
    
    12
    %
    
    $
    3,300
    
    
    
    2
    %Water delivery operating costs incurred
(excluding depreciation and depletion)
    
    $
    51,900
    
    
    $
    52,400
    
    
    $
    54,700
    
    
    $
    (500
    )
    
    
    -1
    %
    
    $
    (2,300
    )
    
    
    -4
    %Water delivery gross margin %
    
    
    67
    %
    
    
    63
    %
    
    
    60
    %Wastewater treatment revenues
    
    $
    68,800
    
    
    $
    67,600
    
    
    $
    67,000
    
    
    $
    1,200
    
    
    
    2
    %
    
    $
    600
    
    
    
    1
    %Wastewater treatment operating costs incurred
    
    $
    19,200
    
    
    $
    20,800
    
    
    $
    20,200
    
    
    $
    (1,600
    )
    
    
    -8
    %
    
    $
    600
    
    
    
    3
    %Wastewater treatment gross margin %
    
    
    72
    %
    
    
    69
    %
    
    
    70
    %General and administrative expenses
    
    $
    2,212,000
    
    
    $
    1,808,200
    
    
    $
    1,942,200
    
    
    $
    403,800
    
    
    
    22
    %
    
    $
    (134,000
    )
    
    
    -7
    %Net losses
    
    $
    6,016,200
    
    
    $
    5,391,300
    
    
    $
    5,728,100
    
    
    $
    624,900
    
    
    
    12
    %
    
    $
    (336,800
    )
    
    
    -6
    %
 Changes in Water and Wastewater Revenues
   - 28 -




---



##### Table of Contents



Fiscal 2011 compared to Fiscal 2010
   Fiscal 2010 compared to Fiscal 2009
   General and Administrative Expenses
  Table G - G&A ExpensesChangeFiscal Years Ended August 31,
    
    
    2011-2010
    
    
    2010-20092011
    
    
    2010
    
    
    2009
    
    
    $
    
    
    %
    
    
    $
    
    
    %Significant G&A Expense items:Salary and salary related expenses
    
    $
    807,400
    
    
    $
    606,600
    
    
    $
    814,800
    
    
    $
    200,800
    
    
    
    33
    %
    
    $
    (208,200
    )
    
    
    -26
    %FLCC water assessment fees
    
    
    472,400
    
    
    
    362,800
    
    
    
    339,300
    
    
    
    109,600
    
    
    
    30
    %
    
    
    23,500
    
    
    
    7
    %Professional fees
    
    
    330,400
    
    
    
    244,500
    
    
    
    292,100
    
    
    
    85,900
    
    
    
    35
    %
    
    
    (47,600
    )
    
    
    -16
    %Fees paid to directors including insurance
    
    
    144,100
    
    
    
    124,100
    
    
    
    144,100
    
    
    
    20,000
    
    
    
    16
    %
    
    
    (20,000
    )
    
    
    -14
    %Costs associated with Sky Ranch
    
    
    136,500
    
    
    
    
    
    
    
    
    
    
    
    136,500
    
    
    
    100
    %
    
    
    
    
    
    
    0
    %Public entity related expenses
    
    
    92,500
    
    
    
    74,300
    
    
    
    61,100
    
    
    
    18,200
    
    
    
    24
    %
    
    
    13,200
    
    
    
    22
    %Consulting fees
    
    
    11,600
    
    
    
    55,700
    
    
    
    83,700
    
    
    
    (44,100
    )
    
    
    -79
    %
    
    
    (28,000
    )
    
    
    -33
    %All other compenents of G&A combined
    
    
    217,100
    
    
    
    340,200
    
    
    
    207,100
    
    
    
    (123,100
    )
    
    
    -36
    %
    
    
    133,100
    
    
    
    64
    %G&A Expenses as reported
    
    $
    2,212,000
    
    
    $
    1,808,200
    
    
    $
    1,942,200
    
    
    $
    403,800
    
    
    
    22
    %
    
    $
    (134,000
    )
    
    
    -7
    %Share-based compensation
    
    
    (94,500
    )
    
    
    (87,600
    )
    
    
    (325,500
    )
    
    
    (6,900
    )
    
    
    8
    %
    
    
    237,900
    
    
    
    -73
    %G&A Expenses less share-based compensation
    
    $
    2,117,500
    
    
    $
    1,720,600
    
    
    $
    1,616,700
    
    
    $
    396,900
    
    
    
    23
    %
    
    $
    103,900
    
    
    
    6
    %Note  salary and salary related expenses excluding share-based compensation:Salary and salary related expenses
    
    $
    712,800
    
    
    $
    518,900
    
    
    $
    489,300
    
    
    $
    193,900
    
    
    
    37
    %
    
    $
    29,600
    
    
    
    6
    %
 Fiscal 2011 compared to Fiscal 2010
    - 29 -




---



##### Table of Contents



Fiscal 2010 compared to Fiscal 2009
        - 30 -




---



##### Table of Contents



Other Income and Expense Items
 Table I - Other ItemsChangeFor the Fiscal Years Ended August 31,
    
    
    2011-2010
    
    
    2010-20092011
    
    
    2010
    
    
    2009
    
    
    $
    
    
    %
    
    
    $
    
    
    %Other expense items:Depreciation and depletion
expense
    
    $
    300,800
    
    
    $
    255,100
    
    
    $
    381,700
    
    
    $
    45,700
    
    
    
    18
    %
    
    $
    (126,600
    )
    
    
    -33
    %Imputed interest expense
    
    $
    3,847,000
    
    
    $
    3,620,000
    
    
    $
    3,733,000
    
    
    $
    227,000
    
    
    
    6
    %
    
    $
    (113,000
    )
    
    
    -3
    %Other income items:Oil and gas payments recognized
    
    $
    199,300
    
    
    $
    
    
    
    $
    
    
    
    $
    199,300
    
    
    
    100
    %
    
    $
    
    
    
    $
    0
    %Interest income
    
    $
    53,100
    
    
    $
    67,400
    
    
    $
    84,600
    
    
    $
    (14,300
    )
    
    
    -21
    %
    
    $
    (17,200
    )
    
    
    -20
    %
     Liquidity, capital resources and financial position
 Risk Factors
    - 31 -




---



##### Table of Contents



Summary Cash Flows Table
 Table J - Summary Cash Flows TableChangeFor the Fiscal Years Ended August 31,
    
    
    2011-2010
    
    
    2010-20092011
    
    
    2010
    
    
    2009
    
    
    $
    
    
    %
    
    
    $
    
    
    %Cash (used) provided by:Operating acitivites
    
    $
    (623,200
    )
    
    $
    (1,584,600
    )
    
    $
    (1,482,500
    )
    
    $
    961,400
    
    
    
    -61
    %
    
    $
    (102,100
    )
    
    
    7
    %Investing activities
    
    $
    (9,996,100
    )
    
    $
    806,900
    
    
    $
    (3,070,900
    )
    
    $
    (10,803,000
    )
    
    
    -1339
    %
    
    $
    3,877,800
    
    
    
    -126
    %Financing activities
    
    $
    10,679,100
    
    
    $
    84,600
    
    
    $
    19,500
    
    
    $
    10,594,500
    
    
    
    12523
    %
    
    $
    65,100
    
    
    
    334
    %
 Changes in Operating Activities
    Changes in Investing Activities
    - 32 -




---



##### Table of Contents



Changes in Financing Activities
  Off-Balance Sheet Arrangements
  Recently Adopted and Issued Accounting Pronouncements
  Total Contractual Cash Obligations
 Table K - Contractual Cash ObligationsPayments due by periodLess than
    
    
    1-3
    
    
    3-5
    
    
    More thanTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 yearsContractual obligationsOperating lease obligations
    
    $
    40,600
    
    
    $
    17,400
    
    
    $
    23,200
    
    
    
    (a)
    
    
    
    (a)Participating Interests in Export Water
    
    
    1,212,200
    
    
    
    (b)
    
    
    
    (b)
    
    
    
    (b)
    
    
    
    (b)Tap Participation Fee payable to HP A&M
    
    
    113,147,700
    
    
    
    (c)
    
    
    
    (c)
    
    
    
    (c)
    
    
    
    (c)Total
    
    $
    114,400,500
    
    
    $
    17,400
    
    
    $
    23,200
    
    
    $
    
    
    
    $
    
 (a)
    
    Our only operating lease is related to our office space. We signed this lease on December
28, 2010. It is a three year lease with monthly lease payments of $1,500 per month.(b)
    
    The participating interests liability is payable to the CAA holders upon the sale of Export
Water, and therefore, the timing of the payments is uncertain and not reflected in the above
table by period.(c)
    
    The Tap Participation Fee payable to HP A&M is payable upon the sale of water taps. Because
the timing of these water tap sales is not fixed and determinable, the estimated payments are
not reflected in the above table by period. The amount listed above includes an unamortized
discount of $48.2 million. The Tap Participation Fee is described in greater detail in Note
7 to the accompanying financial statements. 
 Item 7A  Quantitative and Qualitative Disclosures About Market Risk
 General
  Interest Rates
   - 33 -




---



##### Table of Contents



Item 8  Financial Statements and Supplementary Data
 Index to Financial Statements and Supplementary Data
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-1Balance Sheets
    
    
    F-2Statements of Operations
    
    
    F-3Statements of Shareholders Equity and Comprehensive Income (Loss)
    
    
    F-4Statements of Cash Flows
    
    
    F-5Notes to Financial Statements
    
    
    F-6Supplemental Data: Selected Quarterly Financial Information
    
    
    F-29
  - 34 -




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
  F-1




---



##### Table of Contents



August 31, 2011
    
    
    August 31, 2010ASSETS:Current assets:Cash and cash equivalents
    
    $
    71,795
    
    
    $
    12,017Marketable securities
    
    
    4,588,535
    
    
    
    1,435,054Trade accounts receivable
    
    
    98,484
    
    
    
    71,155Prepaid expenses
    
    
    242,000
    
    
    
    236,627Current portion of construction proceeds receivable
    
    
    64,783
    
    
    
    64,783Total current assets
    
    
    5,065,597
    
    
    
    1,819,636Investments in water and water systems, net
    
    
    106,472,051
    
    
    
    102,931,347Land  Sky Ranch
    
    
    3,743,305
    
    
    
    Construction proceeds receivable, less current portion
    
    
    292,493
    
    
    
    351,791Note receivable  related party:Rangeview Metropolitan District, including accrued interest
    
    
    531,873
    
    
    
    519,834Escrow and other items related to the Sky Ranch acquisition
    
    
    
    
    
    
    735,000Other assets
    
    
    17,333
    
    
    
    20,146Total assets
    
    $
    116,122,652
    
    
    $
    106,377,754LIABILITIES:Current liabilities:Accounts payable
    
    $
    69,330
    
    
    $
    44,818Accrued liabilities
    
    
    118,649
    
    
    
    70,704Deferred revenues
    
    
    55,800
    
    
    
    55,800Deferred oil and gas lease payment
    
    
    414,480
    
    
    
    Total current liabilities
    
    
    658,259
    
    
    
    171,322Deferred revenues, less current portion
    
    
    1,334,503
    
    
    
    1,390,305Deferred oil and gas lease payment, less current portion
    
    
    638,990
    
    
    
    Participating Interests in Export Water Supply
    
    
    1,212,232
    
    
    
    1,214,799Tap Participation Fee payable to HP A&M, net of $48.2 million and $52.0 million discount, respectively
    
    
    64,988,329
    
    
    
    61,141,329Total liabilities
    
    
    68,832,313
    
    
    
    63,917,755Commitments and ContingenciesSHAREHOLDERS EQUITY:Preferred stock:Series B  par value $.001 per share, 25 million shares
authorized;
432,513 shares issued and outstanding (liquidation preference of $432,513)
    
    
    433
    
    
    
    433Common stock:Par value 1/3 of $.01 per share, 40 million shares authorized;
24,037,596 and 20,206,566 shares outstanding, respectively
    
    
    80,130
    
    
    
    67,360Additional paid-in capital
    
    
    103,176,607
    
    
    
    92,341,555Accumulated comprehensive loss
    
    
    (2,903
    )
    
    
    (1,580
    )Accumulated deficit
    
    
    (55,963,928
    )
    
    
    (49,947,769
    )Total shareholders equity
    
    
    47,290,339
    
    
    
    42,459,999Total liabilities and shareholders equity
    
    $
    116,122,652
    
    
    $
    106,377,754
   F-2




---



##### Table of Contents



For the Fiscal Years Ended August 31,2011
    
    
    2010
    
    
    2009Revenues:Metered water usage
    
    $
    157,497
    
    
    $
    140,677
    
    
    $
    137,431Wastewater treatment fees
    
    
    68,833
    
    
    
    67,626
    
    
    
    66,976Special facility funding recognized
    
    
    41,508
    
    
    
    41,508
    
    
    
    41,508Water tap fees recognized
    
    
    14,296
    
    
    
    14,296
    
    
    
    14,296Total revenues
    
    
    282,134
    
    
    
    264,107
    
    
    
    260,211Expenses:Water service operations
    
    
    (51,882
    )
    
    
    (52,439
    )
    
    
    (54,668
    )Wastewater service operations
    
    
    (19,224
    )
    
    
    (20,805
    )
    
    
    (20,162
    )Depletion and depreciation
    
    
    (88,587
    )
    
    
    (88,564
    )
    
    
    (88,576
    )Total cost of revenues
    
    
    (159,693
    )
    
    
    (161,808
    )
    
    
    (163,406
    )Gross margin
    
    
    122,441
    
    
    
    102,299
    
    
    
    96,805General and administrative expenses
    
    
    (2,212,026
    )
    
    
    (1,808,167
    )
    
    
    (1,942,225
    )Depreciation
    
    
    (212,184
    )
    
    
    (166,513
    )
    
    
    (293,113
    )Operating loss
    
    
    (2,301,769
    )
    
    
    (1,872,381
    )
    
    
    (2,138,533
    )Other income (expense):Oil and gas lease
    
    
    199,257
    
    
    
    
    
    
    
    Interest income
    
    
    53,133
    
    
    
    67,432
    
    
    
    84,636Other
    
    
    31,887
    
    
    
    24,283
    
    
    
    (844
    )Gain on sale of assets
    
    
    
    
    
    
    9,404
    
    
    
    59,671Interest expensed on Convertible Note  Related Party
    
    
    (151,667
    )
    
    
    
    
    
    
    Interest imputed on the Tap Participation Fees
payable to HP A&M
    
    
    (3,847,000
    )
    
    
    (3,620,000
    )
    
    
    (3,733,000
    )Net loss
    
    $
    (6,016,159
    )
    
    $
    (5,391,262
    )
    
    $
    (5,728,070
    )Net loss per common share  basic and diluted
    
    $
    (0.26
    )
    
    $
    (0.27
    )
    
    $
    (0.28
    )Weighted average common shares outstanding  basic
and diluted
    
    
    23,168,450
    
    
    
    20,206,566
    
    
    
    20,206,566
   F-3




---



##### Table of Contents



Additional
    
    
    AccumulatedPreferred Stock
    
    
    Common Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Income (loss)
    
    
    Deficit
    
    
    TotalAugust 31, 2008 balance:
    
    
    432,513
    
    
    $
    433
    
    
    
    20,206,566
    
    
    $
    67,360
    
    
    $
    91,928,398
    
    
    $
    
    
    
    $
    (38,828,437
    )
    
    $
    53,167,754Share-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    325,518
    
    
    
    
    
    
    
    
    
    
    
    325,518Unrealized gain on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,986
    
    
    
    
    
    
    
    3,986Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,728,070
    )
    
    
    (5,728,070
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,724,084
    )August 31, 2009 balance:
    
    
    432,513
    
    
    
    433
    
    
    
    20,206,566
    
    
    
    67,360
    
    
    
    92,253,916
    
    
    
    3,986
    
    
    
    (44,556,507
    )
    
    
    47,769,188Share-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87,639
    
    
    
    
    
    
    
    
    
    
    
    87,639Unrealized loss on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,566
    )
    
    
    
    
    
    
    (5,566
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,391,262
    )
    
    
    (5,391,262
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,396,828
    )August 31, 2010 balance:
    
    
    432,513
    
    
    $
    433
    
    
    
    20,206,566
    
    
    $
    67,360
    
    
    $
    92,341,555
    
    
    $
    (1,580
    )
    
    $
    (49,947,769
    )
    
    $
    42,459,999Sale of common stock, less fees and
expenses of approximately $145,200
    
    
    
    
    
    
    
    
    
    
    1,848,931
    
    
    $
    6,163
    
    
    $
    5,395,442
    
    
    
    
    
    
    
    
    
    
    
    5,401,605Issuance of restricted common stock upon
conversion of Convertible Debt
    
    
    
    
    
    
    
    
    
    
    1,982,099
    
    
    $
    6,607
    
    
    $
    5,345,060
    
    
    
    
    
    
    
    
    
    
    
    5,351,667Share-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    94,550
    
    
    
    
    
    
    
    
    
    
    
    94,550Unrealized loss on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,323
    )
    
    
    
    
    
    
    (1,323
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,016,159
    )
    
    
    (6,016,159
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,017,482
    )August 31, 2011 balance:
    
    
    432,513
    
    
    $
    433
    
    
    
    24,037,596
    
    
    $
    80,130
    
    
    $
    103,176,607
    
    
    $
    (2,903
    )
    
    $
    (55,963,928
    )
    
    $
    47,290,339
   F-4




---



##### Table of Contents



For the Fiscal Years Ended August 31,2011
    
    
    2010
    
    
    2009Cash flows from operating activities:Net loss
    
    $
    (6,016,159
    )
    
    $
    (5,391,262
    )
    
    $
    (5,728,070
    )Adjustments to reconcile net loss to net cash
used for operating activities:Imputed interest on Tap Participation Fees payable to
HP A&M
    
    
    3,847,000
    
    
    
    3,620,000
    
    
    
    3,733,000Depreciation, depletion and other non-cash items
    
    
    297,212
    
    
    
    258,872
    
    
    
    390,794Interest expensed on Convertible Note  Related Party
    
    
    151,667
    
    
    
    
    
    
    
    Share-based compensation expense
    
    
    94,550
    
    
    
    87,639
    
    
    
    325,518Gain on sale of fixed assets
    
    
    
    
    
    
    (9,404
    )
    
    
    (59,671
    )Interest added to note receivable  related partyRangeview Metropolitan District
    
    
    (12,039
    )
    
    
    (12,039
    )
    
    
    (12,996
    )Interest added to construction proceeds receivable
    
    
    (22,899
    )
    
    
    (26,343
    )
    
    
    (29,588
    )Changes in operating assets and liabilities:Trade accounts receivable
    
    
    (27,329
    )
    
    
    (7,761
    )
    
    
    8,007Interest receivable and prepaid expenses
    
    
    (5,373
    )
    
    
    (81,699
    )
    
    
    (27,910
    )Accounts payable and accrued liabilities
    
    
    72,457
    
    
    
    33,226
    
    
    
    (25,767
    )Deferred income  oil and gas lease
    
    
    1,053,470
    
    
    
    
    
    
    
    Deferred revenues
    
    
    (55,802
    )
    
    
    (55,803
    )
    
    
    (55,802
    )Net cash used for operating activities
    
    
    (623,245
    )
    
    
    (1,584,574
    )
    
    
    (1,482,485
    )Cash flows from investing activities:Sales and maturities of marketable securities
    
    
    3,202,373
    
    
    
    1,561,588
    
    
    
    Purchase of marketable securities
    
    
    (6,357,177
    )
    
    
    
    
    
    
    (2,998,222
    )Investments in water, water systems and land
    
    
    (6,841,255
    )
    
    
    (19,649
    )
    
    
    (110,354
    )Sale of property and equipment
    
    
    
    
    
    
    10,000
    
    
    
    59,671Other investing activities
    
    
    
    
    
    
    (10,000
    )
    
    
    (7,000
    )Escrow payment for Sky Ranch acquisition
    
    
    
    
    
    
    (735,000
    )
    
    
    Purchase of property and equipment
    
    
    
    
    
    
    
    
    
    
    (14,992
    )Net cash (used) provided by investing activities
    
    
    (9,996,059
    )
    
    
    806,939
    
    
    
    (3,070,897
    )Cash flows from financing activities:Net proceeds from equity offering
    
    
    5,401,606
    
    
    
    
    
    
    
    Issuance of Convertible Note  Related Party
    
    
    5,200,000
    
    
    
    
    
    
    
    Arapahoe County construction proceeds
    
    
    82,196
    
    
    
    89,046
    
    
    
    82,196Payments to contingent liability holders
    
    
    (4,720
    )
    
    
    (4,477
    )
    
    
    (3,033
    )Tap Participation Fee payments to HP A&M
    
    
    
    
    
    
    
    
    
    
    (59,671
    )Net cash provided by financing activities
    
    
    10,679,082
    
    
    
    84,569
    
    
    
    19,492Net change in cash and cash equivalents
    
    
    59,778
    
    
    
    (693,066
    )
    
    
    (4,533,890
    )Cash and cash equivalents  beginning of year
    
    
    12,017
    
    
    
    705,083
    
    
    
    5,238,973Cash and cash equivalents  end of year
    
    $
    71,795
    
    
    $
    12,017
    
    
    $
    705,083
  F-5




---



##### Table of Contents



ORGANIZATION
     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Use of Estimates
  Cash and Cash Equivalents
  Financial Instruments  Concentration of Credit Risk and Fair Value
    F-6




---



##### Table of Contents



Current Assets and Liabilities
   Notes Receivable and Construction Proceeds Receivable
  Long-term Financial Liabilities
   Cash Flows
  Marketable Securities
   Accounts receivable
   F-7




---



##### Table of Contents



Long-Lived Assets
  Capitalized Costs of Water and Wastewater Systems and Depreciation and Depletion Charges
   Tap Participation Fee Liability and Imputed Interest Expense
   Revenue Recognition
  Tap and Construction Fees
      F-8




---



##### Table of Contents



Monthly Wholesale Usage and Service Fees
       F-9




---



##### Table of Contents



Royalty and other obligations
  Oil and Gas Lease Payments
   Share-based Compensation
   Income Taxes
    Loss per Common Share
   F-10




---



##### Table of Contents



Recently Issued Accounting Pronouncements
  Comprehensive Income (Topic 220)  Presentation of Comprehensive Income
 Business Combinations (Topic 805), Disclosure of
Supplementary Pro forma Information for Business Combinations a consensus of the FASB Emerging
Issues Task Force
 Improving Disclosures about Fair Value Measurements
 Multiple-Deliverable Revenue Arrangements  a
Consensus of the FASB Emerging Issues Task Force Recognition
  F-11




---



##### Table of Contents



Consolidations: Improvements to Financial Reporting by
Enterprises Involved with Variable Interest Entities Consolidation"
 Reclassifications
  
       Level 2 Asset  Marketable Securities Measured on a Recurring Basis.
 Level 3 Liability  Tap Participation Fee.
  F-12




---



##### Table of Contents



Fair Value Measurement Using:Quoted Prices in
    
    
    Significant Other
    
    
    Significant
    
    
    TotalActive Markets for
    
    
    Observable
    
    
    Unobservable
    
    
    UnrealizedCost / Other
    
    
    Identical Assets
    
    
    Inputs
    
    
    Inputs
    
    
    Gains andFair Value
    
    
    Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    (Losses)Marketable
securities
    
    $
    4,588,500
    
    
    $
    4,591,400
    
    
    $
    
    
    
    $
    4,588,500
    
    
    $
    
    
    
    $
    (2,900
    )Tap Participation
Fee
    
    $
    64,988,300
    
    
    $
    64,988,300
    
    
    $
    
    
    
    $
    
    
    
    $
    64,988,300
    
    
    $
    
  Fair Value Measurement using Significant UnobservableInputs (Level 3)Discount - toTap
    
    
    be imputed asGross Estimated
    
    
    Participation
    
    
    interestTap Participation
    
    
    Fee Reported
    
    
    expense inFee Liability
    
    
    Liability
    
    
    future periodsBalance at August 31, 2010
    
    $
    113,147,700
    
    
    $
    61,141,300
    
    
    $
    52,006,400Total gains and losses (realized and unrealized):Imputed interest recorded as Other Expense
    
    
    
    
    
    
    3,847,000
    
    
    
    (3,847,000
    )Increase in estimated value (to be realized in
future periods)
    
    
    
    
    
    
    
    
    
    
    Purchases, sales, issuances, payments, and settlements
    
    
    
    
    
    
    
    
    
    
    Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    Balance at August 31, 2011
    
    $
    113,147,700
    
    
    $
    64,988,300
    
    
    $
    48,159,400
  Cash and Cash Equivalents
 Accounts Receivable and Accounts Payable
 Notes Receivable and Construction Proceeds Receivable:
 Off-Balance Sheet Instruments
  F-13




---



##### Table of Contents



WATER ASSETS
  August 31, 2011
    
    
    August 31, 2010Accumulated
    
    
    
    
    
    
    AccumulatedDepreciation
    
    
    
    
    
    
    DepreciationCosts
    
    
    and Depletion
    
    
    Costs
    
    
    and DepletionArkansas River Valley assets
    
    $
    81,318,800
    
    
    $
    (1,144,100
    )
    
    $
    81,318,700
    
    
    $
    (972,400
    )Rangeview water supply
    
    
    14,299,700
    
    
    
    (6,600
    )
    
    
    14,285,700
    
    
    
    (6,000
    )Paradise water supply
    
    
    5,540,200
    
    
    
    
    
    
    
    5,536,500
    
    
    
    Sky Ranch water rights and other costs
    
    
    3,915,200
    
    
    
    (21,800
    )
    
    
    100,000
    
    
    
    Fairgrounds water and water system
    
    
    2,899,900
    
    
    
    (446,400
    )
    
    
    2,899,900
    
    
    
    (358,400
    )Rangeview water system
    
    
    167,700
    
    
    
    (62,400
    )
    
    
    167,700
    
    
    
    (57,200
    )Water supply  other
    
    
    25,600
    
    
    
    (13,700
    )
    
    
    25,700
    
    
    
    (8,900
    )Totals
    
    
    108,167,100
    
    
    
    (1,695,000
    )
    
    
    104,334,200
    
    
    
    (1,402,900
    )Net investments in water and water
systems
    
    $
    106,472,100
    
    
    
    
    
    
    $
    102,931,300
 Depletion and Depreciation
   Arkansas River Valley Assets
 Arkansas River Water
   (i)
    
    a provision of anti-speculation in which the applicant must have contractual obligations to
provide water service to customers prior to the water court ruling on the transfer of a water
right,
 (ii)
    
    the applicant can only transfer the consumptive use portion of its water rights (the
Company expects to face opposition to any consumptive use calculation of the historic
agricultural uses of its water),
 (iii)
    
    applicants likely would be required to mitigate the loss of tax base in the basin of origin,
 (iv)
    
    applicants would likely have re-vegetation requirements to restore irrigated soils to
non-irrigated, and
 (v)
    
    applicants would be required to meet water quality measures which would be included in the
cost of transferring the water rights.
  F-14




---



##### Table of Contents



Fort Lyon Canal Company (FLCC) Shares
   Arkansas River Valley Land
     F-15




---



##### Table of Contents



Rangeview Water Supply and Water System
   (i)
    
    The District entered into the Amended and Restated Lease Agreement with the Land Board,
which owns the Lowry Range;
 (ii)
    
    The Company entered into the Agreement for Sale of Export Water with the District, a
quasi-municipal political subdivision of the State of Colorado;
 (iii)
    
    The Company entered into the Service Agreement with the District for the provision of water
service to the Lowry Range; and
 (iv)
    
    In 1997, the Company entered into the Wastewater Service Agreement with the District for the
provision of wastewater service to the Districts service area (collectively these agreements
are referred to as the Rangeview Water Agreements).
   F-16




---



##### Table of Contents



Services on the Lowry Range
   Export Water
  The County Fairgrounds Water and Water System
  Sky Ranch
    F-17




---



##### Table of Contents



Total ValuesAssigned toEstimated Fair
    
    
    % of Total
    
    
    Allocable
    
    
    Fair Value
    
    
    Costs Specific
    
    
    IdentifiableAsset
    
    Value
    
    
    Fair Value
    
    
    Acquisition Costs
    
    
    Allocation
    
    
    to Land 1
    
    
    AssetsLand
    
    $
    10,637,900
    
    
    
    48.13
    %
    
    $
    7,187,900
    
    
    $
    3,459,800
    
    
    $
    279,100
    
    
    $
    3,738,900Water 2
    
    
    11,462,700
    
    
    
    51.87
    %
    
    
    7,187,900
    
    
    
    3,728,100
    
    
    
    
    
    
    
    3,728,100$
    22,100,600
    
    
    
    100
    %
    
    
    
    
    
    $
    7,187,900
    
    
    $
    279,100
    
    
    $
    7,467,000Costs of acquisition 3
    
    
    
    
    
    
    87,100Total capitalized costs related to Sky Ranch
    
    
    
    
    
    $
    7,554,100
 Table Notes
 1.
    
    Includes $71,000 of property taxes.
 2.
    
    The water rights value does not include the $100,000 of costs already capitalized on the
Companys balance sheet related to the 89 acre feet of water acquired from the prior owner of
the land and not pursuant to the Loan Sale Agreement.
 3.
    
    The amounts recorded as costs of acquisition consist of professional fees and other related
costs.
   Issuance and Conversion of the Convertible Note  Related Party
   F-18




---



##### Table of Contents



Sale of common stock pursuant to the shelf registration statement
  O&G Lease
  Paradise Water Supply
   PARTICIPATING INTERESTS IN EXPORT WATER
   Participating Interests in Export Water Supply
  F-19




---



##### Table of Contents



Export Water
    
    
    Initial Export
    
    
    Total Potential
    
    
    PaticipatingProceeds
    
    
    Water Proceeds
    
    
    Third party
    
    
    InterestsReceived
    
    
    to Pure Cycle
    
    
    Obligation
    
    
    Liability
    
    
    ContingencyOriginal balances
    
    $
    
    
    
    $
    218,500
    
    
    $
    31,807,732
    
    
    $
    11,090,630
    
    
    $
    20,717,102Activity from inception until
August 31, 2010:Acquisitions
    
    
    
    
    
    
    28,077,500
    
    
    
    (28,077,500
    )
    
    
    (9,789,983
    )
    
    
    (18,287,517
    )Option payments  Sky Ranch
and The Hills at Sky Ranch
    
    
    110,400
    
    
    
    (42,280
    )
    
    
    (68,120
    )
    
    
    (23,754
    )
    
    
    (44,366
    )Arapahoe County tap fees *
    
    
    532,968
    
    
    
    (373,078
    )
    
    
    (159,890
    )
    
    
    (55,754
    )
    
    
    (104,136
    )Export Water sale payments
    
    
    60,584
    
    
    
    (42,408
    )
    
    
    (18,176
    )
    
    
    (6,340
    )
    
    
    (11,836
    )Balance at August 31, 2010
    
    
    703,952
    
    
    
    27,838,234
    
    
    
    3,484,046
    
    
    
    1,214,799
    
    
    
    2,269,247Fiscal 2011 activity:Export Water sale payments
    
    
    24,539
    
    
    
    (17,177
    )
    
    
    (7,362
    )
    
    
    (2,567
    )
    
    
    (4,795
    )Balance at August 31, 2011
    
    $
    728,491
    
    
    $
    27,821,057
    
    
    $
    3,476,684
    
    
    $
    1,212,232
    
    
    $
    2,264,452
 *
    
    The Arapahoe County tap fees are less $34,522 in royalties paid to the Land
Board.  ACCRUED LIABILITIES
   LONG-TERM DEBT AND OPERATING LEASE
    F-20




---



##### Table of Contents



Tap Participation Fee payable to HP A&M
 Note 14: Subsequent Events
      Promissory Notes Payable by HP A&M
   F-21




---



##### Table of Contents



Operating Lease
  SHAREHOLDERS EQUITY
 Sale of common stock and issuance of common stock upon conversion of Convertible Note  Related
Party
  Preferred Stock
  Equity Compensation Plan
    F-22




---



##### Table of Contents




    
    The grant date exercise price  is the closing market price of the Companys common stock
on the date of grant;
 
    
    Estimated option lives  based on historical experience with existing option holders;
 
    
    Estimated dividend rates  based on historical and anticipated dividends over the life of
the option;
 
    
    Life of the option based on historical experience option grants have lives between 8 and
10 years;
 
    
    Risk-free interest rates  with maturities that approximate the expected life of the
options granted;
 
    
    Calculated stock price volatility  calculated over the expected life of the options
granted, which is calculated based on the weekly closing price of the Companys common stock
over a period equal to the expected life of the option; and
 
    
    Option exercise behaviors  based on actual and projected employee stock option exercises
and forfeitures.
      F-23




---



##### Table of Contents



Weighted-Average
    
    
    ApproximateWeighted-
    
    
    Remaining
    
    
    AggregateNumber of
    
    
    Average
    
    
    Contractual
    
    
    InstrinsicOptions
    
    
    Exercise Price
    
    
    Term
    
    
    ValueOustanding at beginning of period
    
    
    262,500
    
    
    $
    6.26Granted
    
    
    17,500
    
    
    $
    3.67Exercised
    
    
    
    
    
    $
    Forfeited or expired
    
    
    
    
    
    $
    Outstanding at August 31, 2011
    
    
    280,000
    
    
    $
    6.10
    
    
    
    6.0
    
    
    
    *Options exercisable at August
31, 2011
    
    
    230,500
    
    
    $
    6.70
    
    
    
    5.4
    
    
    
    *
 *
    
    Intrinisic value less than $0  Weighted-Average GrantNumber of
    
    
    Date FairOptions
    
    
    ValueNon-vested options oustanding at beginning of
period
    
    
    60,500
    
    
    $
    2.67Granted
    
    
    17,500
    
    
    
    3.11Vested
    
    
    (28,500
    )
    
    
    2.62Forfeited
    
    
    
    
    
    
    Non-vested options outstanding at August 31, 2011
    
    
    49,500
    
    
    $
    2.86
    F-24




---



##### Table of Contents



Warrants
  (i)
    
    The date all of the Export Water is sold or otherwise disposed of,
 (ii)
    
    The date the CAA is terminated with respect to the original holder of the warrant, or
 (iii)
    
    The date on which the Company makes the final payment pursuant to Section 2.1(r) of the CAA.
  Pledged Common Stock Owned by HP A&M
  Registration Rights Agreement
    Voting Rights Agreement
  Shelf Registration Statement
   F-25




---



##### Table of Contents



SIGNIFICANT CUSTOMER
   INCOME TAXES
  For the Fiscal Years Ended August 31,2011
    
    
    2010Deferred tax assets:Net operating loss carryforwards
    
    $
    5,259,200
    
    
    $
    5,059,800Imputed interest on Tap Participation Fee
    
    
    7,558,000
    
    
    
    6,123,100Deferred revenue
    
    
    702,000
    
    
    
    372,900Depreciation and depletion
    
    
    301,600
    
    
    
    177,600Other
    
    
    38,900
    
    
    
    41,100Valuation allowance
    
    
    (13,859,700
    )
    
    
    (11,774,500
    )Net deferred tax asset
    
    $
    
    
    
    $
    
   For the Fiscal Years Ended August 31,2011
    
    
    2010
    
    
    2009Expected benefit from federal
taxes at statutory rate of 34%
    
    $
    (2,045,500
    )
    
    $
    (1,833,000
    )
    
    $
    (1,947,500
    )State taxes, net of federal benefit
    
    
    (198,500
    )
    
    
    (177,900
    )
    
    
    (189,000
    )Expiration of net operating losses
    
    
    121,000
    
    
    
    147,900
    
    
    
    142,800Permanent and other differences
    
    
    37,800
    
    
    
    (27,100
    )
    
    
    121,900Change in valuation allowance
    
    
    2,085,200
    
    
    
    1,890,100
    
    
    
    1,871,800Total income tax expense / benefit
    
    $
    
    
    
    $
    
    
    
    $
    
   F-26




---



##### Table of Contents



401(k) PLAN
  SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES
 For the Fiscal Years Ended August 31,2011
    
    
    2010
    
    
    2009Increase in estimated Tap Participation Fee
liability and
related discount
    
    $
    
    
    
    $
    
    
    
    $
    4,758,038Issuance of shares of restricted common stock upon
conversion of the Convertible Note  Related Party
    
    $
    5,351,700
    
    
    $
    
    
    
    $
    
 RELATED PARTY TRANSACTIONS
       F-27




---



##### Table of Contents



SUBSEQUENT EVENTS
   (i)
    
    An increase in the net realizable value of the Tap
Participation Fee of $7.5 million (from
$113.1 million to $120.6 million);
 (ii)
    
    A decrease in the imputed effective interest rate from 6.3% to 5.3%; and
 (iii)
    
    A decrease in the imputed interest expense for the three months ending November 31, 2011
and the fiscal year ending August 31, 2012 of $147,800 and
$620,900, respectively.
This equates to $.01 and $.03 per basic and diluted share for the three months ending
November 30, 2011 and the fiscal year ending August 31, 2012 (calculated using the weighted
average shares outstanding for the fiscal year ended August 31, 2011).
  F-28




---



##### Table of Contents



NOTE 15:
    
    SUPPLEMENTAL DATA: SELECTED QUARTERLY FINANCIAL INFORMATION

(unaudited)
 In thousands, except per share amountsFiscal 2011 quarters ended:
    
    August 31
    
    
    May 31
    
    
    February 28
    
    
    November 30Total revenues
    
    $
    93.5
    
    
    $
    63.6
    
    
    $
    57.0
    
    
    $
    68.0Gross margin
    
    $
    47.6
    
    
    $
    25.2
    
    
    $
    23.1
    
    
    $
    26.5Net loss
    
    $
    1,411.6
    
    
    $
    1,362.8
    
    
    $
    1,781.0
    
    
    $
    1,460.8Earnings per share  basic and diluted
    
    $
    (0.05
    )
    
    $
    (0.06
    )
    
    $
    (0.08
    )
    
    $
    (0.07
    )Market price of common stockHigh
    
    $
    3.49
    
    
    $
    4.80
    
    
    $
    5.25
    
    
    $
    3.91Low
    
    $
    2.80
    
    
    $
    3.40
    
    
    $
    3.23
    
    
    $
    2.64
 Fiscal 2010 quarters ended:
    
    August 31
    
    
    May 31
    
    
    February 28
    
    
    November 30Total revenues
    
    $
    95.3
    
    
    $
    58.0
    
    
    $
    51.2
    
    
    $
    59.6Gross margin
    
    $
    49.2
    
    
    $
    22.3
    
    
    $
    13.7
    
    
    $
    17.1Net loss
    
    $
    (1,264.9
    )
    
    $
    (1,333.4
    )
    
    $
    (1,514.3
    )
    
    $
    (1,278.7
    )Earnings per share  basic
and diluted
    
    $
    (0.06
    )
    
    $
    (0.07
    )
    
    $
    (0.07
    )
    
    $
    (0.06
    )Market price of common stockHigh
    
    $
    3.15
    
    
    $
    3.27
    
    
    $
    3.24
    
    
    $
    3.68Low
    
    $
    2.22
    
    
    $
    2.30
    
    
    $
    2.00
    
    
    $
    2.13
   F-29




---



##### Table of Contents



Item 9  Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A  Controls and Procedures
 (a) Evaluation of Disclosure Controls and Procedures
  (b) Managements Report on Internal Control Over Financial Reporting
  
    
    Pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of our assets;
    
    Provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that our
receipts and expenditures are being made only in accordance with authorizations of
our management and our directors; and
    
    Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.
    - 35 -




---



##### Table of Contents



(c) Changes in Internal Controls
  
 Item 9B  Other Information
  
 PART III
  
 PART IV
 
 Item 15  Exhibits and Financial Statement Schedules
 (a)
    
    Financial Statements1.
    
    See Index to Financial Statements and Supplementary Data in Part
II, Item 8 of this Form 10-K.2.
    
    Financial Statement Schedules: None3.
    
    Exhibits: The exhibits listed in the accompanying Index to
Exhibits are filed or incorporated by reference as part of this
Form 10-K
 
 Index to Exhibits
 Exhibit No.
    
    Description3.1
    
    
    Articles of Incorporation of Pure Cycle Corporation. Incorporated
by reference to Appendix B to the Proxy Statement on Schedule 14A
filed December 14, 2007.3.2
    
    
    Bylaws of Pure Cycle Corporation. Incorporated by reference to
Appendix C to the Proxy Statement on Schedule 14A filed December
14, 2007.4.1
    
    
    Specimen Stock Certificate. Incorporated by reference to Exhibit
4.1 to Quarterly Report on Form 10-Q for the fiscal quarter ended
May 31, 2010.10.1
    
    
    Right of First Refusal Agreement dated August 12, 1992 between INCO
Securities Corporation and Richard F. Myers, Mark W. Harding,
Thomas P. Clark, Thomas Lamm and Rowena Rogers. Incorporated by
Reference to Exhibit 10.2 to the Registration Statement on Form
SB-2, filed April 19, 2004, Registration No. 333-114568.10.2
    
    
    2004 Equity Incentive Plan, Incorporated by reference to Exhibit F
to the Proxy Statement for the Annual Meeting held April 12, 2004.
**10.3
    
    
    Service Agreement, dated April 11, 1996, by and between Pure Cycle
Corporation and the Rangeview Metropolitan District. Incorporated
by reference to Exhibit 10.2 to the Quarterly Report on Form 10-QSB
for the period ended May 31, 1996.10.4
    
    
    Wastewater Service Agreement, dated January 22, 1997, by and
between Pure Cycle Corporation and the Rangeview Metropolitan
District. Incorporated by reference to Exhibit 10.3 to the Annual
Report on Form 10-KSB for the fiscal year ended August 31, 1998.
  - 36 -




---



##### Table of Contents



Exhibit No.
    
    Description10.5
    
    
    Comprehensive Amendment Agreement No. 1, dated April 11, 1996, by
and among ISC, the Company, the Bondholders, Gregory M. Morey,
Newell Augur, Jr., Bill Peterson, Stuart Sundlun, Alan C. Stormo,
Beverlee A. Beardslee, Bradley Kent Beardslee, Robert Douglas
Beardslee, Asra Corporation, International Properties, Inc., and
the Land Board. Incorporated by reference to Exhibit 10.7 to the
Quarterly Report on Form 10-QSB for the period ended May 31, 1996.10.6
    
    
    Agreement for Sale of Export Water dated April 11, 1996 by and
among the Company and the District. Incorporated by reference to
Exhibit 10.3 to the Quarterly Report on Form 10-QSB for the fiscal
quarter ended May 31, 1996.10.7
    
    
    Water Service Agreement for the Sky Ranch PUD dated October 31,
2003 by and between Airpark Metropolitan District, Icon Investors
I, LLC, the Company and the District. Incorporated by reference to
Exhibit 10.9 to the Registration Statement on Form SB-2, filed
April 19, 2004, Registration No. 333-114568.10.8
    
    
    Amendment to Water Service Agreement for the Sky Ranch PUD dated
January 6, 2004. Incorporated by reference to Exhibit 10.13 to
Amendment No. 1 to Registration Statement on Form SB-2, filed June
7, 2004, Registration No. 333-114568.10.9
    
    
    Agreement to Amend Water Service Agreement for the Sky Ranch PUD
dated January 30, 2004. Incorporated by reference to Exhibit 10.14
to Amendment No. 1 to Registration Statement on Form SB-2, filed
June 7, 2004, Registration No. 333-114568.10.10
    
    
    Agreement to Amend Option Agreement for Export Water Service for
the Sky Ranch PUD dated January 30, 2004. Incorporated by reference
to Exhibit 10.15 to Amendment No. 1 to Registration Statement on
Form SB-2, filed June 7, 2004, Registration No. 333-114568.10.11
    
    
    Second Amendment to Water Service Agreement for the Sky Ranch PUD
dated March 5, 2004. Incorporated by reference to Exhibit 10.15 to
the original Annual Report on Form 10-K for the fiscal year ended
August 31, 2007.10.12
    
    
    Amended and Restated Lease Agreement between the Land Board and the
District dated April 4, 1996. Incorporated by reference to Exhibit
10.17 to Amendment No. 1 to Registration Statement on Form SB-2,
filed June 7, 2004, Registration No. 333-114568.10.13
    
    
    Bargain and Sale Deed among the Land Board, the District and the
Company dated April 11, 1996. Incorporated by reference to Exhibit
10.18 to Amendment No. 1 to Registration Statement on Form SB-2,
filed June 7, 2004, Registration No. 333-114568.10.14
    
    
    Mortgage Deed, Security Agreement, and Financing Statement between
the Land Board and the Company dated April 11, 1996. Incorporated
by reference to Exhibit 10.19 to Amendment No. 1 to Registration
Statement on Form SB-2, filed June 7, 2004, Registration No.
333-114568.10.15
    
    
    Water Service Agreement for the Hills at Sky Ranch Water dated May
14, 2004 among Icon Land II, LLC, a Colorado limited liability
company, the Company, and the District. Incorporated by reference
to Exhibit 10.1 to the Current Report on Form 8-K filed on May 21,
2004.10.16
    
    
    Agreement for Water Service dated August 3, 2005 among Pure Cycle
Corporation, Rangeview Metropolitan District and Arapahoe County
incorporated by reference to Exhibit 10.24 to the Current Report on
Form 8-K filed on August 4, 2005.10.17
    
    
    Arkansas River Agreement dated May 10, 2006, between Pure Cycle
Corporation and High Plains A&M, LLC, and the Seller Pledge
Agreement, Pure Cycle Corporation Pledge Agreement, Property
Management Agreement, and Registration Rights Agreement, attached
as exhibits thereto, entered into between Pure Cycle Corporation
and High Plains A&M, LLC dated August 31, 2010. Incorporated by
reference to Exhibit 10.25 to the Current Report on Form 8-K filed
on May 16, 2006.10.18
    
    
    Amendment No. 1 to Agreement for Water Service dated August 25,
2008, between Pure Cycle Corporation and Arapahoe County.
Incorporated by reference to Exhibit 10.36 to the Annual Report on
Form 10-K for the fiscal year ended August 31, 2009.
  - 37 -




---



##### Table of Contents



Exhibit No.
    
    Description10.19
    
    
    Loan Sale and Assignment Agreement dated July 30, 2010, between
Pure Cycle Corporation and Bank of America, N.A. Incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed
on August 4, 2010.10.20
    
    
    License Agreement between Pure Cycle Corporation and Sky Ranch LLC,
a Colorado limited liability company, Debtor-in-Possession.
Incorporated by reference to Exhibit 10.2 to the Current Report on
Form 8-K filed on August 4, 2010.10.21
    
    
    Convertible Negotiable Note Payable dated September 28, 2010,
between Pure Cycle Corporation and PAR Investment Partners, L.P.
Incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on September 29, 2010.10.22
    
    
    Registration Rights Agreement dated September 28, 2010, between
Pure Cycle Corporation and PAR Investment Partners, L.P.
Incorporated by reference to Exhibit 10.2 to the Current Report on
Form 8-K filed on September 29, 2010.10.23
    
    
    Paid-Up Oil and Gas Lease dated March 14, 2011, between Pure Cycle
Corporation and Anadarko E&P Company, L.P. Incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed
on March 15, 2011.10.24
    
    
    Surface Use and Damage Agreement dated March 14, 2011, between Pure
Cycle Corporation and Anadarko E&P Company, L.P. Incorporated by
reference to Exhibit 10.2 to the Current Report on Form 8-K filed
on March 15, 2011.14
    
    
    Code of Ethics as amended August 2, 2007. Incorporated by
reference to Exhibit 14 to the Annual Report on Form 10-K for the
fiscal year ended August 31, 2009.23.1
    
    
    Consent of GHP Horwath, P.C. *31.1
    
    
    Certification under Section 302 of the Sarbanes-Oxley Act of 2002. *32.1
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
 *
    
    Filed herewith**
    
    Indicates management contract or compensatory plan or arrangement
in which directors or executive officers are eligible to
participate.  - 38 -




---



##### Table of Contents



SIGNATURES
   By:
    
    /s/ Mark W. Harding

Mark W. Harding, President and Chief Financial Officer
   Signature
    
    Title
    
    Date/s/ Mark W. Harding

Mark W. Harding
    
    President,
Chief Financial Officer and Director (Principal
Executive Officer,
Principal Financial and Accounting
Officer)
    
    November 14, 2011/s/ Harrison H. Augur

Harrison H. Augur
    
    Chairman,
Director
    
    November 14 , 2011/s/ Arthur G. Epker III

Arthur G. Epker III
    
    Director
    
    November 14, 2011/s/ Richard L. Guido

Richard L. Guido
    
    Director
    
    November 14, 2011/s/ Peter C. Howell

Peter C. Howell
    
    Director
    
    November 14, 2011/s/ George M. Middlemas

George M. Middlemas
    
    Director
    
    November 14, 2011
  - 39 -