Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Aug. 31, 2022 | Nov. 11, 2022 | Feb. 28, 2022 | |
Cover Page | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Aug. 31, 2022 | ||
Entity File Number | 0-8814 | ||
Entity Registrant Name | PURE CYCLE CORPORATION | ||
Entity Incorporation, State or Country Code | CO | ||
Entity Tax Identification Number | 84-0705083 | ||
Entity Address, Address Line One | 34501 E. Quincy Avenue, Bldg. 65, Suite A | ||
Entity Address, City or Town | Watkins | ||
Entity Address, State or Province | CO | ||
Entity Address, Postal Zip Code | 80137 | ||
City Area Code | 303 | ||
Local Phone Number | 292 – 3456 | ||
Title of 12(b) Security | Common Stock 1/3 of $.01 par value | ||
Trading Symbol | PCYO | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 228,258,000 | ||
Entity Common Stock, Shares Outstanding | 23,841,728 | ||
Entity Central Index Key | 0000276720 | ||
Current Fiscal Year End Date | --08-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Amendment Flag | false | ||
Auditor Name | Plante & Moran, PLLC | ||
Auditor Location | Broomfield, CO | ||
Auditor Firm ID | 166 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Aug. 31, 2022 | Aug. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 34,894 | $ 20,117 |
Trade accounts receivable, net | 2,425 | 1,532 |
Prepaid expenses and other assets | 467 | 458 |
Land under development | 608 | |
Notes receivable - related party, reimbursable public improvements | 16,000 | |
Total current assets | 37,786 | 38,715 |
Restricted cash | 2,328 | 2,327 |
Investments in water and water systems, net | 58,763 | 53,786 |
Construction in progress | 1,224 | 3,304 |
Single-family rental units | 975 | |
Land and mineral rights: | ||
Held for development | 6,773 | 5,924 |
Held for investment purposes | 451 | 451 |
Other assets | 2,463 | 2,591 |
Operating leases - right of use assets, less current portion | 138 | 122 |
Total assets | 129,229 | 117,177 |
Current liabilities: | ||
Accounts payable | 849 | 1,787 |
Accrued liabilities | 2,029 | 1,224 |
Accrued liabilities - related parties | 560 | 2,881 |
Income taxes payable | 2,530 | 4,163 |
Deferred lot sale revenues | 4,275 | 1,995 |
Deferred water sales revenues | 570 | 410 |
Debt, current portion | 10 | |
Total current liabilities | 10,823 | 12,460 |
Participating interests in export water supply | 323 | 325 |
Debt, less current portion | 3,950 | |
Deferred tax liability, net | 1,075 | 1,615 |
Lease obligations - operating leases, less current portion | 62 | 37 |
Total liabilities | 16,233 | 14,437 |
Commitments and contingencies | ||
SHAREHOLDERS' EQUITY: | ||
Series B preferred shares par value $0.001 per share, 25 million authorized; 432,513 issued and outstanding (liquidation preference of $432,513) | ||
Common shares par value 1/3 of $.01 per share, 40.0 million authorized; 23,980,645 and 23,916,633 outstanding, respectively | 80 | 80 |
Additional paid-in capital | 174,150 | 173,513 |
Accumulated deficit | (61,234) | (70,853) |
Total shareholders' equity | 112,996 | 102,740 |
Total liabilities and shareholders' equity | 129,229 | 117,177 |
Reimbursable public improvements [Member] | ||
Current assets: | ||
Notes receivable - related parties, including accrued interest: | 17,208 | 8,794 |
Other [Member] | ||
Current assets: | ||
Notes receivable - related parties, including accrued interest: | $ 1,120 | $ 1,163 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Aug. 31, 2022 | Aug. 31, 2021 |
SHAREHOLDERS' EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0.003 | $ 0.003 |
Common stock, shares authorized (in shares) | 40,000,000 | |
Common stock, shares outstanding (in shares) | 23,980,645 | 23,916,633 |
Series B Preferred Stock [Member] | ||
SHAREHOLDERS' EQUITY: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 432,513 | 432,513 |
Preferred stock, shares outstanding (in shares) | 432,513 | 432,513 |
Liquidation preference | $ 432,513 | $ 432,513 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Revenues: | ||
Total revenues | $ 23,003 | $ 17,125 |
Expenses: | ||
Depletion and depreciation | 1,740 | 1,457 |
Other | 289 | 494 |
Total cost of revenues | 6,629 | 6,402 |
General and administrative expenses | 5,893 | 5,139 |
Depreciation | 385 | 315 |
Operating income | 10,096 | 5,269 |
Other income: | ||
Interest income - related party | 1,937 | 2,955 |
Recognition of public improvement reimbursables - related party | 17,262 | |
Reimbursement of construction costs - related party | 485 | |
Oil and gas royalty income, net | 498 | 324 |
Oil and gas lease income, net | 171 | 196 |
Other, net | 93 | 99 |
Interest expense, net | (90) | |
Income from operations before income taxes | 12,705 | 26,590 |
Income tax expense | 3,086 | 6,480 |
Net income | $ 9,619 | $ 20,110 |
Earnings per common share - basic and diluted | ||
Basic (in dollars per share) | $ 0.40 | $ 0.84 |
Diluted (in dollars per share) | $ 0.40 | $ 0.83 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 23,953,740 | 23,890,792 |
Diluted (in shares) | 24,155,990 | 24,110,918 |
Water Service Operations [Member] | ||
Expenses: | ||
Expenses | $ 1,910 | $ 1,546 |
Metered Water Usage - Municipal Customers [Member] | ||
Revenues: | ||
Total revenues | 440 | 339 |
Metered Water Usage-Commercial Customers [Member] | ||
Revenues: | ||
Total revenues | 4,107 | 3,299 |
Wastewater Service Operations [Member] | ||
Expenses: | ||
Expenses | 501 | 370 |
Wastewater Treatment Fees [Member] | ||
Revenues: | ||
Total revenues | 248 | 199 |
Land Development Construction Costs [Member] | ||
Expenses: | ||
Expenses | 1,990 | 2,535 |
Water and Wastewater Tap Fees [Member] | ||
Revenues: | ||
Total revenues | 4,922 | 5,163 |
Lot Sales [Member] | ||
Revenues: | ||
Total revenues | 12,187 | 5,840 |
Project Management Fees - Recognized [Member] | ||
Revenues: | ||
Total revenues | 683 | 1,629 |
Single Family Rentals [Member] | ||
Revenues: | ||
Total revenues | 82 | |
Expenses: | ||
Expenses | 23 | |
Special Facility Projects and Other [Member] | ||
Revenues: | ||
Total revenues | 334 | $ 656 |
Project Management Costs [Member] | ||
Expenses: | ||
Expenses | $ 176 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Aug. 31, 2020 | $ 80 | $ 172,927 | $ (90,963) | $ 82,044 | |
Balance (in shares) at Aug. 31, 2020 | 432,513 | 23,856,098 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises | 89 | 89 | |||
Stock option exercises (in shares) | 48,535 | ||||
Stock granted for services (in shares) | 12,000 | ||||
Share-based compensation | 497 | 497 | |||
Net income | 20,110 | 20,110 | |||
Balance at Aug. 31, 2021 | $ 80 | 173,513 | (70,853) | 102,740 | |
Balance (in shares) at Aug. 31, 2021 | 432,513 | 23,916,633 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises | 34 | 34 | |||
Stock option exercises (in shares) | 52,012 | ||||
Stock granted for services | 159 | 159 | |||
Stock granted for services (in shares) | 12,000 | ||||
Share-based compensation | 444 | 444 | |||
Net income | 9,619 | 9,619 | |||
Balance at Aug. 31, 2022 | $ 80 | $ 174,150 | $ (61,234) | $ 112,996 | |
Balance (in shares) at Aug. 31, 2022 | 432,513 | 23,980,645 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 9,619 | $ 20,110 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Deferred lot sale revenues | 2,280 | (1,199) |
Depreciation and depletion | 2,125 | 1,772 |
Land under development | 608 | (522) |
Share-based compensation expense | 603 | 497 |
Deferred water sales revenue | 160 | |
Prepaid expenses | (59) | 63 |
Other assets and liabilities | (83) | (36) |
Deferred income taxes | (540) | 729 |
Trade accounts receivable | (893) | (414) |
Accounts payable and accrued liabilities | (2,362) | 1,547 |
Taxes payable | (1,633) | 5,750 |
Activity for note receivable - related party, reimbursable public improvements: | ||
Payments received | 23,736 | 400 |
Net other activity | (16,150) | (25,194) |
Activity for note receivable - related party, other | ||
Payments received | 487 | |
Net other activity | (444) | (47) |
Net cash provided by operating activities | 17,454 | 3,456 |
Cash flows from investing activities: | ||
Construction costs of single-family rentals | (143) | |
Purchase of property and equipment | (157) | (383) |
Investments in future development phases at Sky Ranch | (849) | |
Investments in water and water systems | (5,519) | (2,513) |
Net cash used by investing activities | (6,668) | (2,896) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 4,000 | |
Proceeds from option exercises | 34 | 89 |
Payments to contingent liability holders | (2) | (2) |
Payments on notes payable | (40) | |
Net cash provided by financing activities | 3,992 | 87 |
Net change in cash, cash equivalents and restricted cash | 14,778 | 647 |
Cash, cash equivalents and restricted cash - beginning of period | 22,444 | 21,797 |
Cash, cash equivalents and restricted cash - end of period | 37,222 | 22,444 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Cash and cash equivalents | 34,894 | 20,117 |
Restricted cash | 2,328 | 2,327 |
Total cash, cash equivalents and restricted cash | 37,222 | 22,444 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for income taxes | 5,260 | |
Cash paid for interest | 55 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Change in reimbursable public improvements included in accounts payable and accrued liabilities | 536 | |
Issuance of stock for compensation | 159 | 136 |
Change in investments in water and water systems included in accounts payable and accrued liabilities | $ 157 | 3,277 |
Transfer of land development costs to other assets | 733 | |
Transfer of land development costs to land under development | 244 | |
Change in land under development included in accounts payable and accrued liabilities | 19 | |
Transfer of income taxes receivable to income taxes payable | $ 1,588 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Aug. 31, 2022 | |
ORGANIZATION | |
ORGANIZATION | NOTE 1 – ORGANIZATION Pure Cycle Corporation (Company or Pure Cycle) was incorporated in Delaware in 1976 and reincorporated in Colorado in 2008. Pure Cycle currently operates in two reportable business segments: (i) wholesale water and wastewater services and (ii) land development. During its fiscal 2021, Pure Cycle launched its single-family rental business which constructs and leases single-family homes in its Sky Ranch neighborhood. Management believes the single-family rental business will likely become its third operating segment, once material. Since its inception, Pure Cycle has accumulated valuable water and land interests and has developed an extensive network of wholesale water production, storage, treatment and distribution systems, and wastewater collection and treatment systems which serve domestic, commercial and industrial customers in the Denver metropolitan region. Pure Cycle’s land assets are located along the bustling and high-profile I-70 corridor in the Denver metropolitan region. Through its land development segment, Pure Cycle is developing Sky Ranch, a 930-acre master planned community located four miles south of Denver International Airport. Sky Ranch is planned to include a mix of 3,200 single-family and multifamily residential units and over two million square feet of commercial, retail, and industrial space. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Aug. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements of the Company include the accounts of Pure Cycle Corporation and its two wholly-owned and controlled subsidiaries, PCY Holdings, LLC and PCYO Home Rentals, LLC. Intercompany accounts and transactions have been eliminated in consolidation. Coronavirus (COVID-19) Since early 2020, COVID-19 has caused substantial disruption in international and U.S. economies and markets. The impacts of COVID-19 are continuing but have lessened as vaccines have become widely available in the U.S, although there have been periodic increases in the number of cases in the U.S. due to the spread of COVID-19 variants. COVID-19 has resulted in government restrictions of various degrees and effective at various times, including stay-at-home orders, bans on travel, limitations on the size of gatherings, limitations on the operations of businesses deemed non-essential, closures of work facilities, schools, public buildings and businesses, cancellation of events (including entertainment events, conferences, and meetings), quarantines, mask mandates and social distancing measures. Due to the outbreak of COVID-19 and related restrictions, Phase 2A of Sky Ranch was delayed due to the extended time taken to approve the platted lots through the county government. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used to account for certain items such as revenue recognition, reimbursable costs and expenses, costs of revenue for lot sales, share-based compensation, deferred tax asset valuation, and the useful lives and recoverability of long-lived assets. Actual results could differ from those estimates. During fiscal 2021, the Company determined the reimbursable public improvements, project management fees and interest income related to the Sky Ranch community being developed by Pure Cycle were probable of collectability. Historically, due to a lack of tax base and no operating history for the Sky Ranch Community Authority Board (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 cash was received. As a result of an established and growing tax base resulting from the success of the initial development, increases in housing values in Colorado, added mill levies, and additional unencumbered fees received by the Sky Ranch CAB, Pure Cycle believes repayment of the public improvements, payment of the project management fees, and interest income are deemed probable. Based on this Pure Cycle recognizes these items in the consolidated financial statements as they occur. The timing and amount of potential payments have been estimated based on growth trends utilizing current assessed values and historic growth rates which have been projected to current and contracted lot sales through the contractual obligation period. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less. The Company had no cash equivalents as of August 31, 2022 or 2021. At various times during the fiscal year ended August 31, 2022, the Company’s main operating account exceeded federally insured limits. To date, the Company has never suffered a loss due to such excess balance. Contract Asset Contract assets reflect revenue which has been earned but not yet invoiced. Contract assets are transferred to receivables when the Company has the right to bill such amounts and they are invoiced. Contract receivables are recorded at the invoiced amount and do not bear interest. Credit is extended based on the evaluation of a customer’s financial condition and collateral is not required. At August 31, 2022, August 31, 2021, and September 1, 2020, the Company had no contract assets. Land Under Development The land under development account primarily includes land stated at cost which Pure Cycle is developing and plans to sell. Pure Cycle began developing its Sky Ranch property in 2018. Pure Cycle capitalizes certain legal, engineering, design, permitting, land acquisition, and construction costs related to the development at Sky Ranch that meet the Company’s capitalization criteria for improvements to a lot. These costs are capitalized as incurred. The Company uses the specific identification method for purposes of accumulating land development costs and allocates costs to each lot to determine the cost basis for each lot sold. Prior to fiscal 2021, costs included in the land under development The Company measures land under development costs held for sale at the lower of the carrying value or net realizable value. In determining net realizable value, the Company primarily relies upon the most recent comparable sales prices. If recent sales prices are not available, the Company will consider several factors, including, but not limited to, current market conditions, nearby recent sales transactions, and market analysis studies. If the net realizable value is lower than the current carrying value, the land is written down to its net realizable value. Notes Receivable – Sky Ranch CAB As noted above and described in greater detail in Note Concentration of Credit Risk and Fair Value Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and investments. From time to time, the Company places its cash in money market instruments, certificates of deposit and U.S. government treasury obligations. To date, the Company has not experienced significant losses on any of these investments. The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of significant input to determine where within the fair value hierarchy the measurement falls. The estimated fair value measurements in Note 2 are based on Level 2 of the fair value hierarchy. Cash and cash equivalents – Trade accounts receivable – Restricted cash – Notes receivable – related parties – Accounts payable – Debt – Long-term financial liabilities – Unrecorded Instruments – Trade Accounts Receivable The Company records accounts receivable net of allowances for uncollectible accounts. The Company has recorded an allowance for uncollectible accounts in receivables from continuing operations totaling less than $0.1 million for the periods ended August 31, 2022 and 2021. The allowance for uncollectible accounts was determined based on a specific review of all past due accounts. Recoverability of Long-Lived Assets The Company evaluates its long-lived assets for impairment if the Company determines events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Estimates of future cash flows and timing of events for evaluating long-lived assets for impairment are based upon management’s assumptions and market conditions. If any of its long-lived assets are deemed to be impaired, the amount of impairment to be recognized is the excess of the carrying amount of the assets over its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During the years ended August 31, 2022 and 2021, the Company did not identify any indications of impairment loss. Capitalized Costs of Water and Wastewater Systems and Depreciation and Depletion Charges Costs to construct water and wastewater systems that meet the Company’s capitalization criteria are capitalized as incurred, including interest, if applicable, and depreciated on a straight-line basis over their estimated useful lives of up to 30 years. The Company capitalizes design and construction costs related to construction activities, and it capitalizes certain legal, engineering and permitting costs relating to the adjudication and improvement of its water assets. The Company depletes its water assets that are being utilized based on units produced (i.e., thousands of gallons sold) divided by the total volume of water adjudicated in the water decrees. Revenue Recognition The Company disaggregates revenue by major product line as reported on the consolidated statements of operations and comprehensive income. The Company currently generates revenues through its two business segments. Revenues are derived through its wholesale water and wastewater business and through the sale of developed land primarily for residential lots, both of which businesses are described below. Water and Wastewater Resource Development Segment Revenues Pure Cycle generates revenues through its wholesale water and wastewater business predominantly from the items described below. Because these items are separately delivered and distinct, Pure Cycle accounts for each of the items separately. Monthly water usage and wastewater treatment fees – Pure Cycle also sells raw water for industrial uses, mainly to oil and gas companies for use in the drilling processes (referred to as “O&G operations”). O&G operations revenues are recognized at a point in time upon delivering water to the customer, unless other special arrangements are made. During the years ended August 31, 2022 and 2021, the Company delivered 404.9 million and 257.8 million gallons of water to customers. Of this, 70% and 60% was sold to O&G operators. Pure Cycle recognizes wastewater treatment revenues monthly based on a flat monthly fee and actual usage charges. The monthly wastewater treatment fees are shown net of amounts retained by the Rangeview District. Costs of delivering water and providing wastewater service to customers are recognized as incurred. Water and wastewater tap fees and construction fees/special facility funding wastewater systems through a service line to a residential or commercial building or property, and once granted, the customer may make a physical tap into the wholesale line(s) to connect its property to Pure Cycle’s water and/or wastewater systems. The right stays with the property upon sale or transfer. Pure Cycle has no obligation to physically connect the property to the lines. Once connected to the water and/or wastewater systems, the customer has live service and the ability to receive metered water deliveries from Pure Cycle’s system and send wastewater into Pure Cycle’s system. Thus, once the connection right is granted, the customer has full control of the connection right as it can obtain all the benefits from this right. Therefore, management has determined that tap fees are separate and distinct performance obligations that are recognized at a point in time. Pure Cycle recognizes water and wastewater tap fee revenues when Pure Cycle grants the right for the customer to connect to the water or wastewater service line to obtain service, and the customer pays the tap fee. During the years ended August 31, 2022 and 2021, Pure Cycle recognized $4.1 million and $4.4 million of water tap fee revenues. The water tap fees recognized are based on the amounts billed by the Rangeview District to customers, after deduction of royalties due to the Land Board for water taps, if applicable, and net of amounts paid to third parties pursuant to the CAA as further described in Note 7. During the years ended August 31, 2022 and 2021, the Company recognized $0.8 million and $0.8 million of wastewater tap fee revenues. Pure Cycle recognizes construction fees, including fees received to construct “special facilities,” over time as the construction is completed because the customer is generally able to use the property improvement to enhance the value of other assets during the construction period. Special facilities are facilities that enable water to be delivered to a single customer and are not otherwise classified as a typical wholesale facility or retail facility. Temporary infrastructure required prior to construction of permanent water and wastewater systems or transmission pipelines to transfer water from one location to another are examples of special facilities. Management has determined that special facilities are separate and distinct performance obligations because these projects are contracted to construct a specific water and wastewater system or transmission pipeline and typically do not include multiple performance obligations in a contract with a customer. For the years ended August 31, 2022 and 2021, Pure Cycle recognized $0.2 million and $0.4 million of special facilities revenue. As of August 31, 2022 and 2021, Pure Cycle had no contract liabilities related to tap and construction fee/special facility funding revenue. Consulting fees Land Development Segment Revenues Pure Cycle generates revenues through its land development business predominantly from the sources described below. Because these items are separately delivered and distinct, Pure Cycle accounts for each of the items separately. Sale of finished lots The timing of cash flows from Phase 2, consistent with Phase 1, includes 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. Pure Cycle sells lots at Sky Ranch pursuant to distinct agreements with each builder. These agreements require the same level of construction for all lots and builders, the primary difference in the agreements is the timing of payments and timing of the transfer of ownership of the lots. Pure Cycle’s lot sales agreements require payments under one of the two following structures: (1) Upon the substantial completion of the finished lot, whereby the builder pays for a ready-to-build finished lot and the sales price is paid in a lump-sum upon substantial completion of the finished lot (typically subject to completion of related public improvements by the Sky Ranch CAB) that is permit ready. Depending on timing of delivery of the finished lot to the builder, Pure Cycle may still have unfulfilled contract performance obligations related to the timing of completion of public improvements and other amenities. If these unfulfilled obligations are deemed other than insignificant, the company follows format 2 and recognizes revenue over time based on the estimated progress using overall costs incurred to date compared to total estimated costs from the period of time the lot is delivered until the remaining performance obligations are substantially completed. (2) As certain construction milestones are achieved, which include payments due as follows pursuant to a lot development agreement with the builder: (i) payment upon the delivery of platted lots (which requires Pure Cycle 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. Typically these lots are also subject to completion of related public improvements by the Sky Ranch CAB after all three payments have been received. Under the first payment structure, the builder (i.e., the customer) takes control/ownership of the lot at the time payment is received and the lot is substantially complete. Under the second payment structure, the builder takes control/ownership at the first closing, or delivery of the platted lots. Under both payment scenarios Pure Cycle has subsequent improvements to make to the lot to either improve the builder’s lot and/or complete its performance obligations of managing the public improvements required to complete the neighborhood, which includes items such as fencing, final utility installation, and landscaping. Because Pure Cycle has obligations remaining under the contracts, Pure Cycle accounts for lot sales revenue over time as construction progresses, with progress measured based upon costs incurred to date compared to total expected costs for a particular construction phase (i.e. for Phase 2A). 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. Pure Cycle does not have any material significant payment terms as all payments are expected to be received within a few months after invoicing. Pure Cycle adopted the practical expedient for financing components and does not need to account for a financing component of these lot sales as the delivery of lot sales is expected to occur within one year. For the years ended August 31, 2022 and 2021, Pure Cycle recognized $12.2 million and $5.8 million of lot sale revenue related to Phase 2A and Phase 1 at Sky Ranch for over time recognition of the performance obligations using the percentage-of-completion methods for each builder contract in each phase. Pure Cycle recognized $1.6 million of revenue at a point in time upon the delivery of finished lots to the builder for the year ended August 31, 2021. Since development of Sky Ranch began through August 31, 2022, Pure Cycle has received payments totaling $26.2 million related to the agreements with builders in Phase 1 and $18.4 million in Phase 2A. Of the amounts received for Phase 1, as of August 31, 2022, all $26.2 million has been recognized as revenue as Phase 1 is complete. Of the amounts received for Phase 2A, as of August 31, 2022, $14.1 million has been recognized as revenue as Phase 2A is approximately 76% complete. As of August 31, 2022, $4.3 million of revenue has been deferred related to Phase 2A contracts, which will be recognized over time as the Company completes its performance obligations of managing the completion of the public improvements in Phase 2A, which includes items such as fencing, final utility installation, and landscaping. Such completion is expected by the end of fiscal 2023. Reimbursable Costs for Public Improvements Pursuant to agreements between the Company and the Sky Ranch CAB (see Note 15), the Company is obligated to provide advance funding to the Sky Ranch CAB related to the construction of these public improvements pursuant to a note. Because public improvements are utilized by more than just a single home, the costs are typically reimbursed through property tax assessments, fees, and other funding mechanisms like municipal bonds. Although the Company is developing Sky Ranch in phases, the Sky Ranch CAB collects taxes and fees for the entire community and those funds are available to repay the Company regardless of the location of the public improvement (except for certain regional public improvements). Additional information about the amounts spent on public improvements as well as amounts repaid are further detailed in Note 5. The Company evaluates the notes receivable - related parties, reimbursable public improvements for indicators of impairment each reporting period and an impairment charge will be incurred for any amounts deemed uncollectible. The note receivable from the Sky Ranch CAB bears an interest rate of six percent (6%) per annum until paid. To date no impairment has been recorded for the reimbursable amounts on the note receivable. Project management services Construction support activities 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 control of lots are transferred to the homebuilder, generally from the period title to a lot is transferred until all construction activities (including public improvements the Company oversees) for that phase or subphase are completed and turned over to the governmental agency that will maintain the asset. As construction activities progress, which is measured based on amount of costs incurred to total expected costs of the project (i.e. Phase 2A) which management believes is a faithful representation of the transfer of goods and services to the customer. Prior to fiscal 2021, 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 was recognized on a straight-line basis over the agreement term. All up-front payments have 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. The Company recognized this revenue based either on actual usage each reporting period or based on amounts which had 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 $1.2 million. During fiscal 2022, the Company received up-front payments from an oil and gas industrial customer for future drilling needs. The customer paid deposits on three different occasions for an estimated 25% of future water usage to reduce future cash payments when drilling. The customer drilled, during fiscal 2022, wells utilizing two of the three deposits paid. For the year ended August 31, 2022, the Company had deferred revenue of $0.5 million for drilling activities expected to commence in early calendar year 2023. As of August 31, 2022 and 2021, the Company’s deferred revenues along with the changes in the deferred revenues are as follows: Year Ended August 31, 2022 Water and Wastewater Resource Development Land Development Total (In thousands) Balance at August 31, 2021 $ 410 $ 1,995 $ 2,405 Revenue recognized (791) (11,434) (12,225) Revenue deferred 951 13,714 14,665 Balance at August 31, 2022 $ 570 $ 4,275 $ 4,845 Year Ended August 31, 2021 Water and Wastewater Resource Development Land Development Total Balance at August 31, 2020 $ 1,965 $ 1,635 $ 3,600 Revenue recognized (4,521) (3,558) (8,079) Revenue deferred 2,966 3,918 6,884 Balance at August 31, 2021 $ 410 $ 1,995 $ 2,405 When recognized, the amounts reflected as unearned revenue will be recorded in lot sales, metered water usage from oil and gas operations, or Other income oil and gas lease income, net in the consolidated statements of operations and comprehensive income. Royalty and Other Obligations Revenues from the sale of Export Water are shown gross of royalties payable to the Land Board. Revenues from the sale of water on the Lowry Range are invoiced directly by the Rangeview District, and a percentage of such collections are then paid to the Company by the Rangeview District. Water revenue from such sales are shown net of royalties paid to the Land Board and amounts retained by the Rangeview District. Oil and Gas Lease Payments As further described in Note 4 below, on March 10, 2011, the Company entered a Paid-Up Oil and Gas Lease (Sky Ranch O&G Lease) and a Surface Use and Damage Agreement that have been assigned to various other oil and gas companies as a result of acquisitions. Six wells have been drilled within the Company’s mineral interest and placed into service (four new wells beginning in fiscal 2021) and are producing oil and gas and accruing royalties to the Company. During the years ended August 31, 2022, and 2021, the Company received $0.5 million and $0.3 million, in royalties attributable to these wells. The Company classifies income from lease and royalty payments as Other income in the consolidated statements of operations and comprehensive income as the Company does not consider these arrangements to be an operating business activity. Oil and gas operations, although material in certain years, are deemed a passive activity as the Chief Operating Decision Maker (CODM) does not actively allocate resources to these projects; therefore, this is not classified as a reportable segment. Share-based Compensation The Company maintains a stock option plan for the benefit of its employees and non-employee directors. The Company recognizes share-based compensation costs as expenses over the applicable vesting period of the stock award using the straight-line method. The compensation costs to be expensed are measured at the grant date based on the fair value of the award. The Company has adopted the alternative transition method for calculating the tax effects of share-based compensation, which allows for a simplified method of calculating the tax effects of employee share-based compensation. The impact on the income tax provision for the granting and exercise of stock options during each of the years ended August 31, 2022 and 2021, was immaterial. During the years ended August 31, 2022 and 2021, the Company recognized $0.6 million and $0.5 million of share-based compensation expense. Income Taxes The Company uses a “more-likely-than-not” threshold for the recognition and de-recognition of tax positions, including any potential interest and penalties relating to tax positions taken by the Company. The Company does not have any significant unrecognized tax benefits as of August 31, 2022. The Company records deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as operating losses and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company files income tax returns with the Internal Revenue Service and the State of Colorado. The tax years that remain subject to examination are fiscal 2017 through fiscal 2022. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of income tax expense. At August 31, 2022, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the year ended August 31, 2021. Earnings per Common Share Basic earnings per common share is computed by dividing net income by the weighted-average number of shares outstanding during each period. Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised and all unvested share-based payment awards were vested. 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). Recently Issued Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its consolidated financial statements and to ensure that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below: In 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 and is analyzing how the adoption of ASU 2016-13 might impact its notes receivable from the Sky Ranch CAB and the Rangeview District, but the Company does not anticipate ASU 2016-12 having a material impact on the Company’s consolidated financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. Reclassifications The Company has reclassified certain prior year information to conform to the current year presentation. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Aug. 31, 2022 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 3 – FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of significant inputs to determine the level in the fair value hierarchy which is applicable to the fair value measure. Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as The NASDAQ Stock Market. As of August 31, 2022 and August 31, 2021, the Company had no recurring Level 1 assets or liabilities. Level 2 — Valuations for assets and liabilities obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. As of August 31, 2022, the Company has two non-recurring Level 2 liabilities, the SFR Note and the Lost Creek Note (both defined in Note 8), for which the Company has determined the valuation of the liabilities can be obtained from readily available pricing sources via independent providers for market transactions involving similar liabilities. As of August 31, 2021, the Company had no Level 2 assets or liabilities 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 significant unobservable assumptions and projections in determining the fair value assigned to such assets or liabilities. As of August 31, 2022 and 2021, the Company had one Level 3 asset measured on a non-recurring basis, the notes receivable – related party, reimbursable public improvements, for which the Company did not record any unrealized gains or losses as the fair value, based on a discounted cash flow analysis, approximated the carrying value. As of August 31, 2022 and 2021, the Company had one Level 3 liability, the contingent portion of the CAA. The Company has determined that the contingent portion of the CAA does not have a readily determinable fair value (see Note 6). The Company maintains policies and procedures to value instruments using what management believes to be the best and most relevant data available. There were no transfers between Level 1, 2 or 3 categories during the years ended August 31, 2022 or 2021. |
WATER AND LAND ASSETS
WATER AND LAND ASSETS | 12 Months Ended |
Aug. 31, 2022 | |
WATER AND LAND ASSETS [Abstract] | |
WATER AND LAND ASSETS | NOTE 4 – WATER AND LAND ASSETS Investment in Water and Water Systems The Company’s water and water systems consist of the following: August 31, 2022 August 31, 2021 Accumulated Accumulated Depreciation Depreciation (In thousands) Costs and Depletion Costs and Depletion Rangeview water system $ 19,881 $ (2,099) $ 17,526 $ (1,470) Rangeview water supply 14,809 (17) 14,622 (17) Water supply – Other 7,612 (1,739) 7,569 (1,433) Sky Ranch water rights and other costs 7,764 (1,280) 7,338 (1,087) Sky Ranch pipeline 5,740 (984) 5,727 (793) Lost Creek water supply 7,041 — 3,374 — Fairgrounds water and water system 2,900 (1,415) 2,900 (1,327) Wild Pointe service rights 1,632 (1,082) 1,632 (775) Totals 67,379 (8,616) 60,688 (6,902) Net investments in water and water systems $ 58,763 $ 53,786 Construction in Progress The construction in progress account represents costs incurred on various construction projects currently underway that as of the balance sheet date have not been completed and placed into service. The construction in progress account consists primarily of water facilities being constructed which the Company anticipates will be placed in service during the next twelve months. During the year ended August 31, 2022, the Company incurred (1) $4.0 million of costs related to its construction projects, (2) completed various water infrastructure projects resulting in the capitalization of $5.1 million of costs, and (3) completed three single-family rental units resulting in the capitalization of $1.0 million of costs. Single-Family Rental Homes During the year ended August 31, 2021, the Company completed construction of the first three units being utilized in Pure Cycle’s single-family rental business. The costs of the units are capitalized and when applicable are depreciated over periods not exceeding thirty-years, which is dependent on the asset type. All three units were placed in service and leased effective November 1, 2021. During the year ended August 31, 2022, the Company contracted for construction of eleven additional rental units to be used in the rental business. The Company began construction on one single-family detached unit in March 2022 with an estimated completion in November 2022, with the remaining ten units, comprised of single-family detached houses, townhomes, and paired homes beginning construction in the summer of 2022 with estimated completion dates in the third and fourth quarter of fiscal 2023. The Company has reserved a total of 46 lots in Phase 2 (10 of which are in Phase 2A and under construction as of August 31, 2022) of Sky Ranch to build additional rental units. Depletion and Depreciation During the years ended August 31, 2022 and 2021, the Company recorded an immaterial amount of depletion charges, which relates entirely to the Rangeview Water Supply (as defined below). During the years ended August 31, 2022 and 2021, the Company recorded $2.1 million and $1.8 million of depreciation expense, which include $0.3 million and $0.3 million of depreciation expense for other equipment not included in the table above. The following table presents the estimated useful lives by asset class used for calculating depreciation and depletion charges: Assets Classes Estimated Useful Lives Wild Pointe Units of production depletion Rangeview water supply Units of production depletion Lost Creek water supply Units of production depletion Rangeview, Sky Ranch and WISE water systems 30 years ECCV wells 10 years Furniture and fixtures 5 years Trucks and heavy equipment 5 years Water system general (pumps, valves, etc.) 5 years Computers 3 years Water equipment 3 years Software 1 year Rangeview Water Supply and Water System The “Rangeview Water Supply” consists of approximately 27,000 acre-feet and is a combination of tributary surface water and groundwater rights along with certain storage rights associated with the Lowry Range, a 26,000-acre property owned by the Land Board located 16 miles southeast of Denver, Colorado. As of August 31, 2022, the Company has invested $19.9 million in facilities to extend water service to customers located on and off the Lowry Range. The recorded costs of the Rangeview Water Supply include payments to the sellers of the Rangeview Water Supply, design and construction costs and certain direct costs related to improvements to the asset, including legal and engineering fees. The Company acquired the Rangeview Water Supply in 1996 pursuant to the following agreements: ● 1996 Amended and Restated Lease Agreement between the Land Board and the Rangeview District, which was superseded by the 2014 Amended and Restated Lease Agreement, dated July 10, 2014 (Lease), between the Company, the Land Board, and the Rangeview District; ● The 1996 Service Agreement between the Company and the Rangeview District, which was superseded by the Amended and Restated Service Agreement, dated July 11, 2014, between the Company and the Rangeview District (Lowry Service Agreement), which allows the Company to provide water service to the Rangeview District’s customers located on the Lowry Range; ● The Agreement for Sale of non-tributary and not non-tributary groundwater between the Company and the Rangeview District (Export Agreement), pursuant to which the Company purchased a portion of the Rangeview Water Supply referred to as the “Export Water” because the Export Agreement allows the Company to export this water from the Lowry Range to supply water to nearby communities; and ● The 1997 Wastewater Service Agreement between the Company and Rangeview District (Lowry Wastewater Agreement), which allows the Company to provide wastewater service to the Rangeview District’s customers on the Lowry Range. The Lease, the Lowry Service Agreement, the Export Agreement, and the Lowry Wastewater Agreement are collectively referred to as the Rangeview Water Agreements. In August 2019, the Company acquired 300 acre-feet of fully consumptive surface water in the Lost Creek Designated Ground Water Basin. In June 2022, the Company acquired 370 acre-feet of fully consumptive surface water through the acquisition of three wells located in the Lost Creek Designated Ground Water Basin (both acquisitions are referred to collectively as the Lost Creek Water). The Lost Creek Water is currently adjudicated for municipal/industrial use, and the Company has filed an application with the Colorado water court to change the use of the water to augment its municipal/industrial water supplies at the Lowry Range. The Company has consolidated the Lost Creek Water with the Rangeview Water Supply to provide service to the Rangeview District’s customers both on and off the Lowry Range. Pursuant to the Rangeview Water Agreements, the Company owns 11,650 acre-feet of water consisting of 10,000 acre-feet of groundwater and 1,650 acre-feet of average yield surface water which can be exported off the Lowry Range to serve area users (referred to as Export Water). The 1,650 acre-feet of surface rights are subject to completion of documentation by the Land Board related to the Company’s exercise of its right to substitute an aggregate gross volume of 165,000 acre-feet of its groundwater for 1,650 acre-feet per year of adjudicated surface water and to use this surface water as Export Water. Additionally, assuming completion of the substitution of groundwater for surface water, the Company has the exclusive right to provide water and wastewater service, through 2081, to all water users on the Lowry Range and the right to develop an additional 13,685 acre-feet of groundwater and 1,650 acre-feet of adjudicated surface water to serve customers either on or off the Lowry Range. The Rangeview Water Agreements also provide for the Company to use surface reservoir storage capacity in providing water service to customers both on and off the Lowry Range. Services on the Lowry Range – Rates and charges for all water and wastewater services on the Lowry Range, including tap fees and usage or monthly fees, are governed by the terms of the Rangeview Water Agreements. Rates and charges cannot exceed the average of similar rates and charges of three surrounding municipal water and wastewater service providers, which are reassessed annually. Pursuant to the Rangeview Water Agreements, the Land Board receives a royalty of 10% or 12% of gross revenues from the sale or disposition of the water, depending on the nature and location of the purchaser of the water, except that the royalty on tap fees shall be 2% (other than taps sold for Sky Ranch which are exempt). The Company also is required to pay the Land Board a minimum annual water production fee of $46,000 per year, which offsets earned royalties, and annual rent of $8,400 which amount is increased every five years based on the Consumer Price Index for Urban Customers. The Rangeview District retains 2% of the remaining revenues, and the Company receives 98% of the remaining revenues after the Land Board royalty. The Land Board does not receive a royalty on wastewater fees. The Company receives 100% of the Rangeview District’s wastewater tap fees and 90% of the Rangeview District’s wastewater treatment fees (the Rangeview District retains the other 10%). Export Water – WISE The WISE Partnership Agreement provides for the purchase of certain infrastructure (i.e., pipelines, water storage facilities, water treatment facilities, and other appurtenant facilities) to deliver water to and among the ten members of the SMWA, Denver Water and Aurora Water. Certain infrastructure has been constructed and other infrastructure will be constructed over the next several years. During each of the years ended August 31, 2022 and 2021, the Company made less than $0.1 million in capital investments in WISE. Capitalized terms used under this caption are defined in Note 8 below. The Arapahoe County Fairgrounds Water and Water System The Company owns 321 acre-feet of groundwater purchased pursuant to its agreement with Arapahoe County. The Company plans to use this water in conjunction with its Rangeview Water Supply in providing water to areas outside the Lowry Range. The $2.9 million of capitalized costs noted in the table Investment in Water and Water Systems above includes the costs to construct various wholesale and special facilities, including a new deep water well, a 500,000-gallon water tank and pipelines to transport water to the Arapahoe County fairgrounds. The Lost Creek Water Supply On June 27, 2022, Pure Cycle acquired 370 acre-feet of designated groundwater rights located in the Lost Creek basin in Weld County Colorado. The acquisition included three water wells and related well permits and structures. The total purchase price was $3.7 million, which was allocated entirely to the water rights as the other assets were deemed to not have determinable values. This acquisition of Lost Creek water was accounted for as an asset acquisition. In August 2019, the Company purchased 150 acre-feet of ditch water rights, 300 acre-feet of designated groundwater rights, 70 acre-feet of deep groundwater rights and 260 acres of land in the Lost Creek Basin in Weld County. Total consideration for the land, water and related costs was $3.5 million. The Company allocated the acquisition cost to the land and water rights based on estimates of each asset’s respective fair value at the acquisition date. The Lost Creek land and water acquisition was accounted for as an asset acquisition. Service to Customers Not on the Lowry Range Sky Ranch – Total consideration for the land, water, and acquisition related costs and fees was $7.6 million. The Company allocated the total acquisition cost to the land and water rights based on estimates of each asset’s respective fair value at the acquisition date. The purchase of the Sky Ranch land and water was accounted for as an asset acquisition. In June 2017, the Company completed and placed into service its Sky Ranch pipeline, which cost $5.7 million to construct, connecting its Sky Ranch water system to the Rangeview District’s water system. Wild Pointe – O&G Leases In 2011, the Company entered the Sky Ranch O&G Lease. Pursuant to the Sky Ranch O&G Lease, the Company received an up-front payment for the purpose of exploring for, developing, producing, and marketing oil and gas on 634 acres of mineral estate owned by the Company at its Sky Ranch property. The Sky Ranch O&G Lease is now held by production, entitling the Company to royalties based on production. In September 2017, the Company entered a three-year O&G Lease for the purpose of exploring for, developing, producing, and marketing oil and gas on 40 acres of mineral estate owned by the Company adjacent to the Lowry Range. This O&G lease would have expired during the year ended August 31, 2022, but the O&G Operator made a one year extension payment. Land and Mineral Rights As part of the Sky Ranch acquisition, the Company acquired approximately 930 acres of land, of which approximately 215 acres have been sold to home builders for the purpose of building residential homes. As of August 31, the costs allocated to the Company’s land is as follows: August 31, 2022 August 31, 2021 Sky Ranch land $ 2,482 $ 2,601 Sky Ranch development costs 4,073 3,105 Lost Creek land 218 218 Net land and mineral interests $ 6,773 $ 5,924 The Company also owns 700 acres of land in the Arkansas River valley which is held for investment purposes. |
REIMBURSABLE PUBLIC IMPROVEMENT
REIMBURSABLE PUBLIC IMPROVEMENTS AND NOTE RECEIVABLE FROM THE SKY RANCH CAB | 12 Months Ended |
Aug. 31, 2022 | |
REIMBURSABLE PUBLIC IMPROVEMENTS AND NOTE RECEIVABLE FROM THE SKY RANCH CAB | |
REIMBURSABLE PUBLIC IMPROVEMENTS AND NOTE RECEIVABLE FROM THE SKY RANCH CAB | NOTE 5 – REIMBURSABLE PUBLIC IMPROVEMENTS AND NOTE RECEIVABLE FROM THE SKY RANCH CAB The note receivable from the Sky Ranch CAB reports the balances owed by the Sky Ranch CAB to the Company for public improvements paid for by the Company which are reimbursable from the Sky Ranch CAB, project management fees, and interest accrued on the unpaid balances related to the ongoing development of the Sky Ranch master planned community. The Company has advanced funds to the Sky Ranch CAB for the cost of public improvements at Sky Ranch which are the ultimate responsibility of the Sky Ranch CAB. During the second quarter of fiscal 2021, the Company determined that the Sky Ranch CAB repayment to the Company for those improvements was probable, along with the project management fees and interest on these costs. Upon that determination, the Company began recording the reimbursable public improvements as a receivable from the Sky Ranch CAB (as opposed to the costs being expensed as land development construction costs) and began recognizing project management fee revenue and interest income on the entire note receivable from the Sky Ranch CAB. Prior to that date, payment was not deemed to be probable; therefore, the Company capitalized those costs as land under development and subsequently expensed the reimbursable public improvements and did not recognize any project management fees or interest income due to the uncertainty of collectability. During the year ended August 31, 2022, the Company spent $14.0 million on public improvements which are payable by the Sky Ranch CAB to the Company and were therefore added to the note receivable from the Sky Ranch CAB. Additionally, for the year ended August 31, 2022, project management fees owed to the Company of $0.7 million, and interest income on the outstanding note receivable of $1.9 million were also added to the note receivable. During the year ended August 31, 2022, the Sky Ranch CAB made three payments to the Company on the note totaling $24.1 million, which was applied to interest and principal on the note. Pursuant to the agreements with the Sky Ranch CAB, any payments received are initially applied to interest. The Sky Ranch CAB issued two municipal bonds in the summer of 2022, from which it remitted $23.6 million to the Company as partial repayment of the note, the other two payments were made from funds available at the Sky Ranch CAB resulting from excess fees and taxes eared by the Sky Ranch CAB. The following table summarizes the activity and balances associated with the note receivable from the Sky Ranch CAB: Year Ended August 31, 2022 August 31, 2021 Beginning balance $ 24,794 $ — Additions 16,550 3,328 Amounts recognized with release of contingency — 21,466 Payments received (24,136) — Ending balance $ 17,208 $ $ 24,794 The note receivable from the Sky Ranch CAB accrues interest at 6% per annum. Public improvements which are not probable of reimbursement at the time of being incurred are considered contract fulfillment costs and are recorded as land development construction costs as incurred. If public improvement costs are deemed probable of collection, the costs are recognized as notes receivable - related party. The Company assesses the collectability of the note receivable from the Sky Ranch CAB, which includes reimbursable public improvements, project management fees and the related interest income, when events or circumstances indicate the amounts may not be recoverable. The Sky Ranch CAB has an obligation to repay the Company, but the ability of the Sky Ranch CAB to do so before the contractual termination dates is dependent upon the establishment of a tax base or other fee generating activities sufficient to fund reimbursable costs incurred. |
PARTICIPATING INTERESTS IN EXPO
PARTICIPATING INTERESTS IN EXPORT WATER | 12 Months Ended |
Aug. 31, 2022 | |
PARTICIPATING INTERESTS IN EXPORT WATER [Abstract] | |
PARTICIPATING INTERESTS IN EXPORT WATER | NOTE 6 – PARTICIPATING INTERESTS IN EXPORT WATER The acquisition of the Rangeview Water Supply was finalized with the signing of the CAA in 1996. Upon entering the CAA, the Company recorded a liability of $11.1 million, which represented the cash the Company received from the participating interest holders that was used to purchase the Company’s Export Water (described in greater detail in Note 4). The Company agreed to remit a total of $31.8 million of proceeds received from the sale of Export Water to the participating interest holders in return for their initial $11.1 million investment. The obligation for the $11.1 million was recorded as debt, and the remaining $20.7 million contingent liability was (and is) not reflected on the Company’s balance sheet because the obligation to pay this is contingent on the sale of Export Water, the amounts and timing of which are not reasonably determinable. The CAA obligation is non-interest bearing, and if the Export Water is not sold, the parties to the CAA have no recourse against the Company. Additionally, if the Company does not sell the Export Water, the holders of the Series B Preferred Stock are not entitled to payment of any dividend and have no contractual recourse against the Company. As the proceeds from the sale of Export Water are received and the amounts are remitted to the CAA holders, the Company allocates a ratable percentage of each payment to the principal portion (the Participating Interests in Export Water Supply liability account), with the balance of the payment being charged to the contingent obligation portion. Because the original recorded liability, which was $11.1 million, was 35% of the original total liability of $31.8 million, approximately 35% of each payment remitted to the CAA holders is allocated to the recorded liability account. The remaining portion of each payment is allocated to the contingent obligation, which is recorded on a net revenue basis. Since entering the CAA, the Company has repurchased various portions of the CAA obligations, which retained their original priority. During the years ended August 31, 2022 and 2021, the Company did not make any CAA acquisitions. Because of these acquisitions, the Company is currently receiving 88% of the total proceeds from the sale of Export Water (after payment of the Land Board royalty). Additionally, as a result of the acquisitions, and the consideration from the cumulative sales of Export Water, at August 31, 2022, the remaining total potential third-party unrecorded contingent obligation is $0.6 million, while the recorded portion is $0.3 million. After August 31, 2022, prior to the issuance of this annual report, the Company acquired $0.7 million of the remaining $1.0 million of the CAA obligations for a cash payment of just over $0.1 million. The CAA includes contractually established priorities which call for payments to CAA holders in order of their priority. This means the first payees receive their full payment before the next priority level receives any payment and so on until full repayment. As a result of the CAA obligation acquisition after August 31, 2022, the Company will be entitled to all but $0.2 million of the proceeds from the sale of Export Water after deduction of the Land Board royalty. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Aug. 31, 2022 | |
ACCRUED LIABILITIES [Abstract] | |
ACCRUED LIABILITIES | NOTE 7 – ACCRUED LIABILITIES At August 31, 2022 and 2021, the Company’s current accrued liabilities are: (In thousands) August 31, 2022 August 31, 2021 Accrued compensation $ 1,325 $ 729 Other operating payables 308 248 WISE water 32 62 Operating lease obligation, current 76 84 Property taxes 164 50 Professional fees 115 51 Rental deposits 9 — Total accrued liabilities $ 2,029 $ 1,224 Land development costs due to the Sky Ranch CAB $ 536 $ 2,243 Due to Rangeview Metropolitan District 24 638 Total accrued liabilities - related parties $ 560 $ 2,881 The amounts due to the Sky Ranch CAB are included in notes receivable – related parties, including accrued interest or land under development. The amounts recorded in land under development will be subsequently expensed through Land development construction costs. In addition, the amounts payable to the Rangeview District relate to construction costs of water infrastructure, these costs are included in Investments in water and water systems. The remaining items that make up accrued liabilities are generally self-explanatory. |
DEBT AND OTHER LONG-TERM OBLIGA
DEBT AND OTHER LONG-TERM OBLIGATIONS | 12 Months Ended |
Aug. 31, 2022 | |
DEBT AND OTHER LONG-TERM OBLIGATIONS [Abstract] | |
DEBT AND OTHER LONG-TERM OBLIGATIONS | NOTE 8 – DEBT AND OTHER LONG-TERM OBLIGATIONS The total scheduled maturities of the Company’s loans for each of the years ending August 31 are as follows, with each loan described below the table: (In thousands) Scheduled principal payments Within 1 year $ 13 Year 2 14 Year 3 75 Year 4 386 Year 5 1,309 Thereafter 2,201 3,998 Deferred financing costs (38) Net $ 3,960 SFR Note On November 29, 2021, PCY Holdings, LLC, a wholly owned subsidiary of the Company, entered a Promissory Note (SFR Note) with its primary bank to reimburse amounts expended for the construction of the first three single-family rental units. The SFR Note has the following terms: ● Initial principal amount of $1.0 million ● Floating per annum interest rate equal to the Western Edition of the “Wall Street Journal” Prime Rate plus 0.5% ( 4.25% as of August 31, 2022), which has a floor of 3.75% and a ceiling of 4.25% . In the event of default, the interest rate on the SFR Note would be increased by adding an additional 2.0% ● Maturity date of December 1, 2026 ● Six interest only payments beginning January 1, 2022 ● Fifty-three principal and interest payments each month beginning July 1, 2022 in the amount of $4,600 each ● Estimated final principal and interest balloon payment of $0.9 million payable on December 1, 2026 ● Secured by the three single-family rental homes ● Required minimum debt service coverage ratio of 1.10 , measured annually based on audited financial statements, calculated as net operating income less distributions divided by required principal and interest payments, with net operating income defined as net income plus interest, depreciation, and amortization. The Company is working with its primary bank to provide similar financing for the rental units currently under construction. As of August 31, 2022, these loans have not been finalized. Lost Creek Note On June 28, 2022, the Company entered a loan with its primary bank to fund the acquisition of 370 acre-feet of water rights the Company acquired on June 27, 2022, in the Lost Creek region of Colorado (Lost Creek Note). The Lost Creek Note has a principal balance of $3.0 million, a ten-year maturity, monthly interest only payments averaging $12,000 per month for thirty-six months beginning on July 28, 2022, twenty-four monthly principal and interest payments of $42,000 beginning on July 28, 2025, fifty-nine monthly principal and interest payments of $32,000 beginning on July 28, 2027, and a balloon payment of less than $0.8 million plus unpaid and accrued interest due on June 28, 2032. The Lost Creek Note has a thirty-year amortization period and a fixed per annum interest rate equal to 4.90%. The Lost Creek Note is secured by the Lost Creek Water rights acquired with the note and any fees derived from the use of the Lost Creek Water rights. Working Capital Line of Credit On January 31, 2022, the Company entered into a Business Loan Agreement (Working Capital LOC) with its primary bank to provide a $5.0 million operating line of credit. The Working Capital LOC has a two-year maturity, monthly interest only payments if the line is drawn upon with unpaid principal and interest due at maturity, and a floating per annum interest rate equal to the rate published in the Western Edition of the Wall Street Journal as the Prime Rate plus 0.5% (6.0% as of August 31, 2022), which has a floor of 3.75%. In the event of default, the interest rate on the Working Capital LOC would be increased by adding an additional 2.0%. As of August 31, 2022, the Company has not drawn on the Working Capital LOC. Letters of Credit During the year August 31, 2021, the Company entered four Irrevocable Letters of Credit (LOCs). The LOCs are to guarantee the Company’s performance related to certain construction projects at Sky Ranch. As long as the Company performs on the contracts, which the Company has the full intent and ability to perform on the contracts, the LOC’s will expire at various dates from December 2023 through July 2024. As of August 31, 2022, these four LOCs totaled $2.3 million, which are secured by cash balances maintained in restricted cash accounts at the Company’s bank. The Participating Interests in Export Water Supply are obligations of the Company that have no scheduled maturity dates. Therefore, these liabilities are not disclosed in tabular format. However, the Participating Interests in Export Water Supply are described in Note 6. WISE Partnership During 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 (WISE Partnership Agreement), among the City and County of Denver acting through its Board of Water Commissioners (Denver Water), the City of Aurora acting by and through its utility enterprise (Aurora Water), and the South Metro WISE Authority (SMWA). SMWA was formed by the Rangeview District and nine other governmental or quasi-governmental water providers pursuant to the South Metro WISE Authority Formation and Organizational Intergovernmental Agreement, dated December 31, 2013 (SM-IGA), to enable the members of SMWA to participate in the regional water supply project known as the Water Infrastructure Supply Efficiency partnership (WISE) created by the WISE Partnership Agreement. The SM-IGA specifies each member’s pro rata share of WISE and the members’ rights and obligations with respect to WISE. The WISE Partnership Agreement provides for the purchase of certain infrastructure (i.e., pipelines, water storage facilities, water treatment facilities, and other appurtenant facilities) to deliver water to and among the members of SMWA, Denver Water and Aurora Water. Certain infrastructure has been constructed and other infrastructure will be constructed over the next several years. Pursuant to the terms of the Rangeview/Pure Cycle WISE Project Financing and Service Agreement (WISE Financing Agreement) between the Company and the Rangeview District, the Company has an agreement to fund the Rangeview District’s participation in WISE effective as of December 22, 2014. During each of the years ended August 31, 2022 and 2021, the Company, through the Rangeview District, purchased 360 acre-feet and 320 acre-feet of WISE water for $0.7 million and $0.6 million. See further discussion in Note 15 . Lease Commitments Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet. For lease agreements with an initial term of more than twelve months, the Company combines the lease and non-lease components in determining the lease liabilities and right-of-use (ROU) assets. Operating lease expense is generally recognized evenly over the term of the lease. Effective July 1, 2022, the Company entered a new operating lease for more than 11,400 square-feet of office and warehouse space in Watkins, Colorado. This lease replaces the Company’s prior office and warehouse lease when it moved to a new building in the same facility. The lease has an initial two-year term with payments of approximately $7,400 per month and an option to extend the lease term for up to two two-year periods. The monthly payment will increase 2.5% after twelve months. The prior office and warehouse lease had a year and half left on the term which was cancelled when the Company moved to the new office location. For the years ended August 31, 2022 and 2021, rent expense consisted of operating lease expense of less than $0.1 million. The Company paid less than $0.1 million against Lease obligations — operating leases during fiscal 2022. The Company did not enter any new leases in fiscal 2021. 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 six percent (6%) for its office and warehouse lease. ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the consolidated balance sheet as follows: (In thousands) August 31, 2022 August 31, 2021 Operating leases - ROU assets $ 138 $ 122 Accrued liabilities $ 76 $ 84 Lease obligations - operating leases, net of current portion 62 37 Total lease liability $ 138 $ 121 Weighted average remaining lease term (in years) 1.8 1.4 Weighted average discount rate 6 % 6 % |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Aug. 31, 2022 | |
SHAREHOLDERS' EQUITY [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 9 – SHAREHOLDERS’ EQUITY Preferred Stock The Company’s non-voting Series B Preferred Stock has a preference in liquidation of $1.00 per share less any dividends previously paid. Additionally, the Series B Preferred Stock is redeemable at the discretion of the Company for $1.00 per share less any dividends previously paid. In the event the proceeds from the sale or disposition of Export Water rights exceed $36.0 million the Series B Preferred Shareholders will receive the next $0.4 million of proceeds in the form of a dividend. The terms of the Series B Preferred Stock prohibit payment of dividends on common stock unless all dividends accrued on the Series B Preferred Stock have been paid. To date, no dividends have been accrued as this contingency has not been met. Equity Compensation Plan The Company maintains the 2014 Equity Incentive Plan (2014 Equity Plan), which was approved by shareholders in January 2014 and became effective April 12, 2014. Executives, eligible employees, consultants, and non-employee directors are eligible to receive options and stock grants pursuant to the 2014 Equity Plan. Options to purchase shares of stock and restricted stock awards can be granted with exercise prices, vesting conditions and other performance criteria determined by the Compensation Committee of the Company’s board of directors. The Company has reserved 1.6 million shares of common stock for issuance under the 2014 Equity Plan. As of August 31, 2022, stock awards and awards to purchase 755,500 shares of the Company’s common stock have been made under the 2014 Equity Plan, of which 712,500 remain outstanding. As of August 31, 2022, there were 912,953 shares available for grant under the 2014 Equity Plan. Prior to the effective date of the 2014 Equity Plan, the Company granted stock awards to eligible participants under its 2004 Incentive Plan (2004 Incentive Plan), which expired April 11, 2014. No additional awards may be granted pursuant to the 2004 Incentive Plan; however, 106,500 granted awards are outstanding as of August 31, 2022, which may be exercised in accordance with the terms of the 2004 Incentive Plan. The Company estimates the fair value of share-based payment awards on the date of grant using the Black-Scholes option-pricing model (Black-Scholes model). Using the Black-Scholes model, the value of the portion of the award that is ultimately expected to vest is recognized as a period expense over the requisite service period in the consolidated statements of operations and comprehensive income. Option forfeitures are to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company does not expect any forfeiture of its options; therefore, the compensation expense has not been reduced for estimated forfeitures. For the years ended August 31, 2022 and 2021, 3,333 options and zero options expired. The Company attributes the value of share-based compensation to expense using the straight-line single option method for all options granted. The Company’s determination of the estimated fair value of share-based payment awards on the date of grant is affected by the following variables and assumptions: ● The grant date exercise price – is the closing market price of the Company’s common stock on the date of grant; ● Estimated dividend rates – based on historical and anticipated dividends over the life of the option; ● Life of the option – based on historical experience, including actual and projected employee stock option exercise, option grants have lives of between five and ten 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. For the year ended August 31, 2022, the Company granted 105,000 stock options to executive officers with weighted-average grant-date fair values of $5.16, and three-year vesting terms which expire ten years from the grant date. In addition, the six non-employee Board members were each granted 2,000 unrestricted stock grants. The fair market value of the unrestricted shares for share-based compensation expensing is equal to the closing price of the Company’s common stock on the date of grant of $13.23. Stock-based compensation expense includes $0.2 million of expense related to these unrestricted stock grants. The unrestricted stock grants were fully expensed at the date of the grant because no vesting requirements existed for the unrestricted stock grants. For the year ended August 31, 2021, the Company granted 85,000 stock options to employees with weighted-average grant-date fair values of $3.93, and five-year vesting terms which expire ten years from the grant date. In addition, the Company granted 30,000 stock options to an executive officer with a weighted-average grant-date fair value of $3.37, a three-year vesting term and an expiration date of ten years from the grant date. Further, the six non-employee Board members were each granted 2,000 unrestricted stock grants. The fair market value of the unrestricted shares for share-based compensation expensing is equal to the closing price of the Company’s common stock on the date of grant of $11.33. Stock-based compensation expense includes $0.1 million of expense related to these unrestricted stock grants. The unrestricted stock grants were fully expensed at the date of the grant because no vesting requirements existed for the unrestricted stock grants. The assumptions used in the fair value calculations using the Black-Scholes model are as follows: Year Ended August 31, 2022 August 31, 2021 Expected term (years) 6.00 7.11 Risk-free interest rate 1.31 % 0.68 % Expected volatility 38.25 % 40.01 % Expected dividend yield — % — % Weighted average grant-date fair value $ 5.16 $ 3.78 During the years ended August 31, 2022 and 2021, 103,667 and 48,535 options were exercised. For the options exercised in 2022, the Company had options exercised for both cash and options exercised using a net settlement, 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. The Company received less than $0.1 million in cash on the exercise of 6,000 options. The net settlement exercises during the year ended August 31, 2022, resulted in 46,012 shares issued and 51,655 options cancelled in settlement of shares issued. For the options exercised in 2021, the Company had no options exercised for cash and only net settlement exercises of stock options. Net settlement exercises during the year ended August 31, 2021, resulted in 24,035 shares issued and 13,465 options cancelled in settlement of shares issued. The following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the year ended August 31, 2022: 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 6.2 $ 1,831 Granted 115,000 $ 9.00 Exercised (24,500) $ 3.66 Net settlement exercised (37,500) $ 3.99 Outstanding at August 31, 2021 714,500 $ 7.80 6.1 $ 5,107 Granted 105,000 $ 13.37 Exercised (103,667) $ 6.87 Forfeited / Expired (3,333) $ 10.45 Outstanding at August 31, 2022 712,500 $ 8.75 5.7 $ 1,489 Options exercisable at August 31, 2022 479,502 $ 7.56 4.5 $ 1,373 The following table summarizes the activity and value of non-vested options as of and for the year ended August 31, 2022: Number of Options Weighted Average Grant Date Fair Value Non-vested options outstanding at August 31, 2021 179,999 $ 4.31 Granted 115,000 $ 3.78 Vested (76,666) $ 4.27 Non-vested options outstanding at August 31, 2021 218,333 $ 4.04 Granted 105,000 $ 5.16 Vested (87,002) $ 4.21 Forfeited (3,333) $ 4.21 Non-vested options outstanding at August 31, 2022 232,998 $ 4.47 All non-vested options are expected to vest. For the years ended August 31, 2022 and 2021, the total fair value of options that vested during the year was $0.4 million and $0.3 million. For the years ended August 31, 2022 and 2021, the weighted-average grant-date fair value of options granted was $5.16 and $3.78. For the years ended August 31, 2022 and 2021, share-based compensation expense was $0.6 million and $0.5 million. As of August 31, 2022, the Company had unrecognized share-based compensation expenses totaling $0.6 million relating to non-vested options that are expected to vest. The weighted average period over which these options are expected to vest is two years. The Company has not recorded any excess tax benefits to additional paid-in capital. Warrants As of August 31, 2022, the Company had outstanding warrants to purchase 92 shares of common stock at an exercise price of $1.80 per share. These warrants expire six months from the earlier of: ● The date that all the Export Water is sold or otherwise disposed of, ● The date that the CAA is terminated with respect to the original holder of the warrant, or ● The date on which the Company makes the final payment pursuant to Section 2.1(r) of the CAA. No warrants were exercised during fiscal 2022 and 2021. |
SIGNIFICANT CUSTOMERS
SIGNIFICANT CUSTOMERS | 12 Months Ended |
Aug. 31, 2022 | |
SIGNIFICANT CUSTOMERS [Abstract] | |
SIGNIFICANT CUSTOMERS | NOTE 10 – SIGNIFICANT CUSTOMERS The Company has significant customers in its operations. The table below presents the percentage of total revenue for the reported customers for the years ended August 31, 2022 and 2021. For water and wastewater customers, the Company primarily provides services on behalf of the Rangeview District for which the significant end users include all Sky Ranch homes in the aggregate combined with the Sky Ranch CAB and two oil & gas operators. The home builders at Sky Ranch account for lot purchase revenue but also for water and wastewater tap fees revenues. Year Ended % of Total Revenue Generated From: August 31, 2022 August 31, 2021 Sky Ranch homes and Sky Ranch CAB in the aggregate 5% 14% Two oil & gas operators 16% — Lennar 18% — Challenger 14% — KB Home 10% 20% Richmond 6% 16% Taylor Morrison — 17% Additionally, at August 31, 2022, 34% of the trade accounts receivable balance was owed by Challenger for finished lot milestone payments. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Aug. 31, 2022 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 11 – INCOME TAXES For the year ended August 31, 2022, Pure Cycle recorded income tax expense of $3.1 million, which consisted of current income tax expense of $3.6 million and deferred income tax benefit of $0.5 million. The deferred tax benefit consists mainly of timing difference between book and tax depreciation of fixed assets. For the year ended August 31, 2021, Pure Cycle recorded income tax expense of $6.5 million, which consisted of current income tax expense of $5.8 million and deferred income tax expense of $0.7 million. The deferred tax expense consists of the usage of $0.6 million of net operating loss carryforwards and timing differences between book and tax depreciation of fixed assets. During the year ended August 31, 2022, Pure Cycle made Federal and State income tax installments of $4.4 million and $0.9 million. During the year ended August 31, 2021, the Company did not make any Federal or State Deferred income taxes reflect the tax effects of net operating loss carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of August 31 are as follows: (In thousands) August 31, 2022 August 31, 2021 Deferred tax assets (liabilities): Depreciation and depletion $ (2,061) $ (2,360) Non-qualified stock options 568 547 Accrued compensation 279 141 Deferred revenues 108 41 Other 31 16 Net deferred tax liability $ (1,075) $ (1,615) As of August 31, 2022 and 2021, the Company had no liability for unrecognized tax benefits. Income taxes computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following for the fiscal years ended August 31: Year Ended August 31, 2022 August 31, 2021 Expected benefit from federal taxes at statutory rate of 21% for the years 2022 and 2021 $ 2,668 $ 5,584 State taxes, net of federal benefit 456 973 Permanent and other differences 4 4 Stock Compensation 22 (77) Other (64) (4) Total income tax expense $ 3,086 $ 6,480 At August 31, 2022 and 2021, the Company had no net operating loss carryforwards available for income tax purposes. |
401(k) PLAN
401(k) PLAN | 12 Months Ended |
Aug. 31, 2022 | |
401(k) PLAN [Abstract] | |
401(k) PLAN | NOTE 12 – 401(k) PLAN The Company maintains the Pure Cycle Corporation 401(k) Profit Sharing Plan (401(k) Plan), a defined contribution retirement plan for the benefit of its employees. The Company matches employee contributions at the rate of 50% of the first 3% up to a maximum of $2,500 per annum. The contributions vest based on years of service - first anniversary 25%, second anniversary 50%, third anniversary 75% and the fourth anniversary 100%. The Company pays the annual administrative fees of the 401(k) Plan, and the 401(k) Plan participants pay the investment fees. The 401(k) Plan is open to all employees, age 18 or older, who have been employees of the Company for at least three months. For the years ended August 31, 2022 and 2021, the Company recorded less than $0.1 million of expenses related to the 401(k) Plan. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Aug. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES The Company has historically been involved in various claims, litigation and other legal proceedings that arise in the ordinary course of its business. The Company records an accrual for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the anticipated most likely outcome or the minimum amount within a range of possible outcomes. The Company makes such estimates based on information known about the claims and experience in contesting, litigating, and settling similar claims. Disclosures are also provided for reasonably possible losses that could have a material effect on the Company’s financial position, results of operations or cash flows. As of August 31, 2022, the Company had no contingencies where the risk of material loss was probable or reasonably possible of resulting in a material loss. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Aug. 31, 2022 | |
SEGMENT REPORTING [Abstract] | |
SEGMENT REPORTING | NOTE 14 – SEGMENT REPORTING An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the CODM, or decision-making group, to evaluate performance and make operating decisions. The Company has identified its CODM as its Chief Executive Officer. Based on the methods used by 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. The Company’s new single-family rental business will likely be presented as a third segment in future periods when it is material to the Company’s operations. The water and wastewater resource development segment provides water and wastewater services to customers for fees. The 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 resource development segment includes all the activities necessary to develop and sell finished lots, which as of August 31, 2022 and 2021, was done exclusively at the Company’s Sky Ranch Master Planned Community. O&G operations, although material in certain years, are deemed a passive activity as the CODM does not actively allocate resources to these projects; therefore, this is not classified as a reportable segment. The tables below present the measure of profit and assets the CODM uses to assess the performance of the segment for the periods presented: Year Ended August 31, 2022 (In thousands) Water and wastewater resource development Land development Single-family rental Total Total revenue $ 10,051 $ 12,870 $ 82 $ 23,003 Cost of revenue 2,700 2,166 23 4,889 Depreciation and depletion 1,740 — — 1,740 Total cost of revenue 4,440 2,166 23 6,629 Segment profit $ 5,611 $ 10,704 $ 59 $ 16,374 Year Ended August 31, 2021 (In thousands) Water and wastewater resource development Land development Single-family rental Total Total revenue $ 9,656 $ 7,469 $ — $ 17,125 Cost of revenue 2,410 2,535 — 4,945 Depreciation and depletion 1,457 — — 1,457 Total cost of revenue 3,867 2,535 — 6,402 Segment profit $ 5,789 $ 4,934 $ — $ 10,723 The following table summarizes the Company’s total assets by segment. The assets consist of water rights and water and wastewater systems in the Company’s water and wastewater resource development segment; land, land development costs and deposits in the Company’s land development segment; and the cost of the homes in the single-family rental line. The Company’s other assets (“Corporate”) primarily consist of cash, cash equivalents, restricted cash, equipment, and related party notes receivables. (In thousands) August 31, 2022 August 31, 2021 Water and wastewater resource development $ 63,064 $ 57,791 Land development 25,522 32,844 Single-family rental 1,715 — Corporate 38,928 26,542 Total assets $ 129,229 $ 117,177 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Aug. 31, 2022 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS 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). During the years ended August 31, 2022 and 2021, the Company provided funding of less than $0.1 million to the Rangeview District related to this Participation Agreement. Through the WISE Financing Agreement, to date the Company has made payments totaling $7.0 million to purchase certain rights to use existing water transmission and related infrastructure acquired by the WISE project and to construct the connection to the WISE system. At August 31, 2022, the amounts are included in Investments in water and water systems on the Company’s balance sheet. During the year ended August 31, 2022, the Company, through the Rangeview District, purchased 360 acre-feet of WISE water for $0.7 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 $5.98 per thousand gallons and such rate remained in effect through calendar 2021. Effective, January 1, 2022, WISE water increased to $6.13 per thousand gallons which will remain in effect through the end of calendar 2022. 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. In fiscal 2021, the Company agreed to fund the construction of the WISE Rangeview pipeline extension through the Rangeview District. Per the agreement, the Rangeview District constructed the pipeline extension in exchange for $0.6 million. Because the Company is funding the entire project costs, the revenue from the agreement was recognized 100% by the Company. As of August 31, 2022, the Company has recognized the full amount in revenue related to this construction project as it was completed prior to the end of fiscal 2022. During the years ended August 31, 2022 and 2021, the Company provided $0.9 million and $1.1 million of financing to the Rangeview District to fund the Rangeview District’s obligation to purchase WISE water rights and pay for operational and construction charges. Ongoing funding requirements are dependent on the WISE water subscription amount and the Rangeview District’s allocated share of the operational and overhead costs of SMWA and construction activities related to delivery of WISE water. The Company has outstanding notes receivable of $18.3 million in the aggregate from the Rangeview District and the Sky Ranch CAB, which are related parties, as discussed below: The Rangeview District is a quasi-municipal corporation and political subdivision of Colorado formed in 1986 for the purpose of providing water and wastewater service to the Lowry Range and other approved areas. The Rangeview District is governed by an elected board of directors. Eligible voters and persons eligible to serve as a director of the Rangeview District must own an interest in property within the boundaries of the Rangeview District. The Company owns certain rights and real property interests which encompass the current boundaries of the Rangeview District. In 1995, the Company extended a loan to the Rangeview District. The loan provided for borrowings of up to $0.25 million, is unsecured, and bears interest based on the prevailing prime rate plus 2% (7.50% at August 31, 2022). The maturity date of the loan is December 31, 2022. Beginning in January 2014, the Rangeview District and the Company entered into a funding agreement that allows the Company to continue to provide funding to the Rangeview District for day-to-day operations and accrue the funding into a note that bears interest at a rate of 8% per annum and remains in full force and effect for so long as the Lease remains in effect. The August 31, 2022, balance in notes receivable - related parties, other totaled $1.1 million, which included borrowings of $1.1 million and accrued interest of less than $0.1 million. During the year ended August 31, 2022, the Rangeview District made payments totaling $0.5 million on the notes payable to the Company. The August 31, 2021, balance in notes receivable - related parties, other totaled $1.2 million, which included borrowings of $0.7 million and accrued interest of $0.5 million. Sky Ranch CAB Pursuant to a certain Community Authority Board Establishment Agreement, as the same may be amended from time to time, Sky Ranch Metropolitan District No. 1 and Sky Ranch Metropolitan District No. 5 formed the Sky Ranch CAB to, among other things, design, construct, finance, operate and maintain certain public improvements for the benefit of the property within the boundaries and/or service area of the Sky Ranch Districts. In order for the public improvements to be constructed and/or acquired, it is necessary for each Sky Ranch District, directly or through the Sky Ranch CAB, to be able to fund the improvements and pay its ongoing operations and maintenance expenses related to the provision of services that benefit the property. In November 2017, but effective as of January 1, 2018, the Company entered into a Project Funding and Reimbursement Agreement (PF Agreement) with the CAB for the Sky Ranch property. The PF Agreement required the Company to fund an agreed upon list of public improvements for Sky Ranch with respect to earthwork, erosion control, streets, drainage, and landscaping at an estimated cost of $13.2 million for calendar years 2018 and 2019. Each advance or reimbursable expense accrues interest at a rate of six percent (6%) per annum. The Company and the Sky Ranch CAB entered into a Facilities Funding and Acquisition Agreement (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 six percent (6%) per annum. Any advances not paid or reimbursed by the Sky Ranch CAB by December 31, 2058 for Phase 1 and December 31, 2060 for Phase 2, shall be deemed forever discharged and satisfied in full. As of August 31, 2022, the balance of the Company’s advances for improvements, including interest, net of reimbursements already received from the Sky Ranch CAB, totaled $17.2 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. Sky Ranch Metropolitan District Nos. 1, 3, 4, 5, 6, 7 and 8 (Sky Ranch Districts) and the Sky Ranch CAB are quasi-municipal corporations and political subdivisions of Colorado formed for the purpose of providing service to the Company’s Sky Ranch property. The current members of the board of directors of the Rangeview District, each Sky Ranch District, and the Sky Ranch CAB consist of four employees of the Company (including the Company’s CEO and CFO) and one independent board member. Nelson Pipeline Constructors LLC Through a competitive bidding process, the Sky Ranch CAB awarded Nelson Pipeline Constructors, LLC (Nelson) a contract to construct the wet utility pipelines in Phase 2A of Sky Ranch. As the project progressed, change orders were approved by the Sky Ranch CAB board upon review by an independent engineer hired by the Sky Ranch CAB to certify costs are reasonable and appropriate for the scope of work contemplated. During the years ended August 31, 2022 and August 31, 2021, the Sky Ranch CAB paid Nelson $8.2 million and $0.5 million related to this contract. Nelson is majority owned by the chair of the Company’s board of directors. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Aug. 31, 2022 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 16 – 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). No options were excluded for the fiscal years ended August 31, 2022 and 2021. Year Ended (In thousands, except share and per share amounts) August 31, 2022 August 31, 2021 Net income $ 9,619 $ 20,110 Basic weighted average common shares 23,953,740 23,890,792 Effect of dilutive securities 202,250 220,126 Weighted average shares applicable to diluted earnings per share 24,155,990 24,110,918 Earnings per share - basic $ 0.40 $ 0.84 Earnings per share - diluted $ 0.40 $ 0.83 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Aug. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements of the Company include the accounts of Pure Cycle Corporation and its two wholly-owned and controlled subsidiaries, PCY Holdings, LLC and PCYO Home Rentals, LLC. Intercompany accounts and transactions have been eliminated in consolidation. |
Coronavirus (COVID-19) | Coronavirus (COVID-19) Since early 2020, COVID-19 has caused substantial disruption in international and U.S. economies and markets. The impacts of COVID-19 are continuing but have lessened as vaccines have become widely available in the U.S, although there have been periodic increases in the number of cases in the U.S. due to the spread of COVID-19 variants. COVID-19 has resulted in government restrictions of various degrees and effective at various times, including stay-at-home orders, bans on travel, limitations on the size of gatherings, limitations on the operations of businesses deemed non-essential, closures of work facilities, schools, public buildings and businesses, cancellation of events (including entertainment events, conferences, and meetings), quarantines, mask mandates and social distancing measures. Due to the outbreak of COVID-19 and related restrictions, Phase 2A of Sky Ranch was delayed due to the extended time taken to approve the platted lots through the county government. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used to account for certain items such as revenue recognition, reimbursable costs and expenses, costs of revenue for lot sales, share-based compensation, deferred tax asset valuation, and the useful lives and recoverability of long-lived assets. Actual results could differ from those estimates. During fiscal 2021, the Company determined the reimbursable public improvements, project management fees and interest income related to the Sky Ranch community being developed by Pure Cycle were probable of collectability. Historically, due to a lack of tax base and no operating history for the Sky Ranch Community Authority Board (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 cash was received. As a result of an established and growing tax base resulting from the success of the initial development, increases in housing values in Colorado, added mill levies, and additional unencumbered fees received by the Sky Ranch CAB, Pure Cycle believes repayment of the public improvements, payment of the project management fees, and interest income are deemed probable. Based on this Pure Cycle recognizes these items in the consolidated financial statements as they occur. The timing and amount of potential payments have been estimated based on growth trends utilizing current assessed values and historic growth rates which have been projected to current and contracted lot sales through the contractual obligation period. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less. The Company had no cash equivalents as of August 31, 2022 or 2021. At various times during the fiscal year ended August 31, 2022, the Company’s main operating account exceeded federally insured limits. To date, the Company has never suffered a loss due to such excess balance. |
Contract Asset | Contract Asset Contract assets reflect revenue which has been earned but not yet invoiced. Contract assets are transferred to receivables when the Company has the right to bill such amounts and they are invoiced. Contract receivables are recorded at the invoiced amount and do not bear interest. Credit is extended based on the evaluation of a customer’s financial condition and collateral is not required. At August 31, 2022, August 31, 2021, and September 1, 2020, the Company had no contract assets. |
Land Under Development | Land Under Development The land under development account primarily includes land stated at cost which Pure Cycle is developing and plans to sell. Pure Cycle began developing its Sky Ranch property in 2018. Pure Cycle capitalizes certain legal, engineering, design, permitting, land acquisition, and construction costs related to the development at Sky Ranch that meet the Company’s capitalization criteria for improvements to a lot. These costs are capitalized as incurred. The Company uses the specific identification method for purposes of accumulating land development costs and allocates costs to each lot to determine the cost basis for each lot sold. Prior to fiscal 2021, costs included in the land under development The Company measures land under development costs held for sale at the lower of the carrying value or net realizable value. In determining net realizable value, the Company primarily relies upon the most recent comparable sales prices. If recent sales prices are not available, the Company will consider several factors, including, but not limited to, current market conditions, nearby recent sales transactions, and market analysis studies. If the net realizable value is lower than the current carrying value, the land is written down to its net realizable value. |
Notes Receivable - Sky Ranch CAB | Notes Receivable – Sky Ranch CAB As noted above and described in greater detail in Note |
Concentration of Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and investments. From time to time, the Company places its cash in money market instruments, certificates of deposit and U.S. government treasury obligations. To date, the Company has not experienced significant losses on any of these investments. |
Fair Value | The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of significant input to determine where within the fair value hierarchy the measurement falls. The estimated fair value measurements in Note 2 are based on Level 2 of the fair value hierarchy. Cash and cash equivalents – Trade accounts receivable – Restricted cash – Notes receivable – related parties – Accounts payable – Debt – Long-term financial liabilities – Unrecorded Instruments – |
Trade Accounts Receivable | Trade Accounts Receivable The Company records accounts receivable net of allowances for uncollectible accounts. The Company has recorded an allowance for uncollectible accounts in receivables from continuing operations totaling less than $0.1 million for the periods ended August 31, 2022 and 2021. The allowance for uncollectible accounts was determined based on a specific review of all past due accounts. |
Recoverability of Long-Lived Assets | Recoverability of Long-Lived Assets The Company evaluates its long-lived assets for impairment if the Company determines events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Estimates of future cash flows and timing of events for evaluating long-lived assets for impairment are based upon management’s assumptions and market conditions. If any of its long-lived assets are deemed to be impaired, the amount of impairment to be recognized is the excess of the carrying amount of the assets over its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During the years ended August 31, 2022 and 2021, the Company did not identify any indications of impairment loss. |
Capitalized Costs of Water and Wastewater Systems | Costs to construct water and wastewater systems that meet the Company’s capitalization criteria are capitalized as incurred, including interest, if applicable, and depreciated on a straight-line basis over their estimated useful lives of up to 30 years. The Company capitalizes design and construction costs related to construction activities, and it capitalizes certain legal, engineering and permitting costs relating to the adjudication and improvement of its water assets. |
Depreciation and Depletion Charges | The Company depletes its water assets that are being utilized based on units produced (i.e., thousands of gallons sold) divided by the total volume of water adjudicated in the water decrees. |
Revenue Recognition | Revenue Recognition The Company disaggregates revenue by major product line as reported on the consolidated statements of operations and comprehensive income. The Company currently generates revenues through its two business segments. Revenues are derived through its wholesale water and wastewater business and through the sale of developed land primarily for residential lots, both of which businesses are described below. Water and Wastewater Resource Development Segment Revenues Pure Cycle generates revenues through its wholesale water and wastewater business predominantly from the items described below. Because these items are separately delivered and distinct, Pure Cycle accounts for each of the items separately. Monthly water usage and wastewater treatment fees – Pure Cycle also sells raw water for industrial uses, mainly to oil and gas companies for use in the drilling processes (referred to as “O&G operations”). O&G operations revenues are recognized at a point in time upon delivering water to the customer, unless other special arrangements are made. During the years ended August 31, 2022 and 2021, the Company delivered 404.9 million and 257.8 million gallons of water to customers. Of this, 70% and 60% was sold to O&G operators. Pure Cycle recognizes wastewater treatment revenues monthly based on a flat monthly fee and actual usage charges. The monthly wastewater treatment fees are shown net of amounts retained by the Rangeview District. Costs of delivering water and providing wastewater service to customers are recognized as incurred. Water and wastewater tap fees and construction fees/special facility funding wastewater systems through a service line to a residential or commercial building or property, and once granted, the customer may make a physical tap into the wholesale line(s) to connect its property to Pure Cycle’s water and/or wastewater systems. The right stays with the property upon sale or transfer. Pure Cycle has no obligation to physically connect the property to the lines. Once connected to the water and/or wastewater systems, the customer has live service and the ability to receive metered water deliveries from Pure Cycle’s system and send wastewater into Pure Cycle’s system. Thus, once the connection right is granted, the customer has full control of the connection right as it can obtain all the benefits from this right. Therefore, management has determined that tap fees are separate and distinct performance obligations that are recognized at a point in time. Pure Cycle recognizes water and wastewater tap fee revenues when Pure Cycle grants the right for the customer to connect to the water or wastewater service line to obtain service, and the customer pays the tap fee. During the years ended August 31, 2022 and 2021, Pure Cycle recognized $4.1 million and $4.4 million of water tap fee revenues. The water tap fees recognized are based on the amounts billed by the Rangeview District to customers, after deduction of royalties due to the Land Board for water taps, if applicable, and net of amounts paid to third parties pursuant to the CAA as further described in Note 7. During the years ended August 31, 2022 and 2021, the Company recognized $0.8 million and $0.8 million of wastewater tap fee revenues. Pure Cycle recognizes construction fees, including fees received to construct “special facilities,” over time as the construction is completed because the customer is generally able to use the property improvement to enhance the value of other assets during the construction period. Special facilities are facilities that enable water to be delivered to a single customer and are not otherwise classified as a typical wholesale facility or retail facility. Temporary infrastructure required prior to construction of permanent water and wastewater systems or transmission pipelines to transfer water from one location to another are examples of special facilities. Management has determined that special facilities are separate and distinct performance obligations because these projects are contracted to construct a specific water and wastewater system or transmission pipeline and typically do not include multiple performance obligations in a contract with a customer. For the years ended August 31, 2022 and 2021, Pure Cycle recognized $0.2 million and $0.4 million of special facilities revenue. As of August 31, 2022 and 2021, Pure Cycle had no contract liabilities related to tap and construction fee/special facility funding revenue. Consulting fees Land Development Segment Revenues Pure Cycle generates revenues through its land development business predominantly from the sources described below. Because these items are separately delivered and distinct, Pure Cycle accounts for each of the items separately. Sale of finished lots The timing of cash flows from Phase 2, consistent with Phase 1, includes 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. Pure Cycle sells lots at Sky Ranch pursuant to distinct agreements with each builder. These agreements require the same level of construction for all lots and builders, the primary difference in the agreements is the timing of payments and timing of the transfer of ownership of the lots. Pure Cycle’s lot sales agreements require payments under one of the two following structures: (1) Upon the substantial completion of the finished lot, whereby the builder pays for a ready-to-build finished lot and the sales price is paid in a lump-sum upon substantial completion of the finished lot (typically subject to completion of related public improvements by the Sky Ranch CAB) that is permit ready. Depending on timing of delivery of the finished lot to the builder, Pure Cycle may still have unfulfilled contract performance obligations related to the timing of completion of public improvements and other amenities. If these unfulfilled obligations are deemed other than insignificant, the company follows format 2 and recognizes revenue over time based on the estimated progress using overall costs incurred to date compared to total estimated costs from the period of time the lot is delivered until the remaining performance obligations are substantially completed. (2) As certain construction milestones are achieved, which include payments due as follows pursuant to a lot development agreement with the builder: (i) payment upon the delivery of platted lots (which requires Pure Cycle 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. Typically these lots are also subject to completion of related public improvements by the Sky Ranch CAB after all three payments have been received. Under the first payment structure, the builder (i.e., the customer) takes control/ownership of the lot at the time payment is received and the lot is substantially complete. Under the second payment structure, the builder takes control/ownership at the first closing, or delivery of the platted lots. Under both payment scenarios Pure Cycle has subsequent improvements to make to the lot to either improve the builder’s lot and/or complete its performance obligations of managing the public improvements required to complete the neighborhood, which includes items such as fencing, final utility installation, and landscaping. Because Pure Cycle has obligations remaining under the contracts, Pure Cycle accounts for lot sales revenue over time as construction progresses, with progress measured based upon costs incurred to date compared to total expected costs for a particular construction phase (i.e. for Phase 2A). 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. Pure Cycle does not have any material significant payment terms as all payments are expected to be received within a few months after invoicing. Pure Cycle adopted the practical expedient for financing components and does not need to account for a financing component of these lot sales as the delivery of lot sales is expected to occur within one year. For the years ended August 31, 2022 and 2021, Pure Cycle recognized $12.2 million and $5.8 million of lot sale revenue related to Phase 2A and Phase 1 at Sky Ranch for over time recognition of the performance obligations using the percentage-of-completion methods for each builder contract in each phase. Pure Cycle recognized $1.6 million of revenue at a point in time upon the delivery of finished lots to the builder for the year ended August 31, 2021. Since development of Sky Ranch began through August 31, 2022, Pure Cycle has received payments totaling $26.2 million related to the agreements with builders in Phase 1 and $18.4 million in Phase 2A. Of the amounts received for Phase 1, as of August 31, 2022, all $26.2 million has been recognized as revenue as Phase 1 is complete. Of the amounts received for Phase 2A, as of August 31, 2022, $14.1 million has been recognized as revenue as Phase 2A is approximately 76% complete. As of August 31, 2022, $4.3 million of revenue has been deferred related to Phase 2A contracts, which will be recognized over time as the Company completes its performance obligations of managing the completion of the public improvements in Phase 2A, which includes items such as fencing, final utility installation, and landscaping. Such completion is expected by the end of fiscal 2023. Reimbursable Costs for Public Improvements Pursuant to agreements between the Company and the Sky Ranch CAB (see Note 15), the Company is obligated to provide advance funding to the Sky Ranch CAB related to the construction of these public improvements pursuant to a note. Because public improvements are utilized by more than just a single home, the costs are typically reimbursed through property tax assessments, fees, and other funding mechanisms like municipal bonds. Although the Company is developing Sky Ranch in phases, the Sky Ranch CAB collects taxes and fees for the entire community and those funds are available to repay the Company regardless of the location of the public improvement (except for certain regional public improvements). Additional information about the amounts spent on public improvements as well as amounts repaid are further detailed in Note 5. The Company evaluates the notes receivable - related parties, reimbursable public improvements for indicators of impairment each reporting period and an impairment charge will be incurred for any amounts deemed uncollectible. The note receivable from the Sky Ranch CAB bears an interest rate of six percent (6%) per annum until paid. To date no impairment has been recorded for the reimbursable amounts on the note receivable. Project management services Construction support activities |
Deferred Revenue | 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 control of lots are transferred to the homebuilder, generally from the period title to a lot is transferred until all construction activities (including public improvements the Company oversees) for that phase or subphase are completed and turned over to the governmental agency that will maintain the asset. As construction activities progress, which is measured based on amount of costs incurred to total expected costs of the project (i.e. Phase 2A) which management believes is a faithful representation of the transfer of goods and services to the customer. Prior to fiscal 2021, 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 was recognized on a straight-line basis over the agreement term. All up-front payments have 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. The Company recognized this revenue based either on actual usage each reporting period or based on amounts which had 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 $1.2 million. During fiscal 2022, the Company received up-front payments from an oil and gas industrial customer for future drilling needs. The customer paid deposits on three different occasions for an estimated 25% of future water usage to reduce future cash payments when drilling. The customer drilled, during fiscal 2022, wells utilizing two of the three deposits paid. For the year ended August 31, 2022, the Company had deferred revenue of $0.5 million for drilling activities expected to commence in early calendar year 2023. As of August 31, 2022 and 2021, the Company’s deferred revenues along with the changes in the deferred revenues are as follows: Year Ended August 31, 2022 Water and Wastewater Resource Development Land Development Total (In thousands) Balance at August 31, 2021 $ 410 $ 1,995 $ 2,405 Revenue recognized (791) (11,434) (12,225) Revenue deferred 951 13,714 14,665 Balance at August 31, 2022 $ 570 $ 4,275 $ 4,845 Year Ended August 31, 2021 Water and Wastewater Resource Development Land Development Total Balance at August 31, 2020 $ 1,965 $ 1,635 $ 3,600 Revenue recognized (4,521) (3,558) (8,079) Revenue deferred 2,966 3,918 6,884 Balance at August 31, 2021 $ 410 $ 1,995 $ 2,405 When recognized, the amounts reflected as unearned revenue will be recorded in lot sales, metered water usage from oil and gas operations, or Other income oil and gas lease income, net in the consolidated statements of operations and comprehensive income. |
Royalty and Other Obligations | Royalty and Other Obligations Revenues from the sale of Export Water are shown gross of royalties payable to the Land Board. Revenues from the sale of water on the Lowry Range are invoiced directly by the Rangeview District, and a percentage of such collections are then paid to the Company by the Rangeview District. Water revenue from such sales are shown net of royalties paid to the Land Board and amounts retained by the Rangeview District. |
Oil and Gas Lease Payments | Oil and Gas Lease Payments As further described in Note 4 below, on March 10, 2011, the Company entered a Paid-Up Oil and Gas Lease (Sky Ranch O&G Lease) and a Surface Use and Damage Agreement that have been assigned to various other oil and gas companies as a result of acquisitions. Six wells have been drilled within the Company’s mineral interest and placed into service (four new wells beginning in fiscal 2021) and are producing oil and gas and accruing royalties to the Company. During the years ended August 31, 2022, and 2021, the Company received $0.5 million and $0.3 million, in royalties attributable to these wells. The Company classifies income from lease and royalty payments as Other income in the consolidated statements of operations and comprehensive income as the Company does not consider these arrangements to be an operating business activity. Oil and gas operations, although material in certain years, are deemed a passive activity as the Chief Operating Decision Maker (CODM) does not actively allocate resources to these projects; therefore, this is not classified as a reportable segment. |
Share-based Compensation | Share-based Compensation The Company maintains a stock option plan for the benefit of its employees and non-employee directors. The Company recognizes share-based compensation costs as expenses over the applicable vesting period of the stock award using the straight-line method. The compensation costs to be expensed are measured at the grant date based on the fair value of the award. The Company has adopted the alternative transition method for calculating the tax effects of share-based compensation, which allows for a simplified method of calculating the tax effects of employee share-based compensation. The impact on the income tax provision for the granting and exercise of stock options during each of the years ended August 31, 2022 and 2021, was immaterial. During the years ended August 31, 2022 and 2021, the Company recognized $0.6 million and $0.5 million of share-based compensation expense. |
Income Taxes | Income Taxes The Company uses a “more-likely-than-not” threshold for the recognition and de-recognition of tax positions, including any potential interest and penalties relating to tax positions taken by the Company. The Company does not have any significant unrecognized tax benefits as of August 31, 2022. The Company records deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as operating losses and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company files income tax returns with the Internal Revenue Service and the State of Colorado. The tax years that remain subject to examination are fiscal 2017 through fiscal 2022. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of income tax expense. At August 31, 2022, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the year ended August 31, 2021. |
Earnings per Common Share | Earnings per Common Share Basic earnings per common share is computed by dividing net income by the weighted-average number of shares outstanding during each period. Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised and all unvested share-based payment awards were vested. 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). |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its consolidated financial statements and to ensure that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below: In 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 and is analyzing how the adoption of ASU 2016-13 might impact its notes receivable from the Sky Ranch CAB and the Rangeview District, but the Company does not anticipate ASU 2016-12 having a material impact on the Company’s consolidated financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
Reclassifications | Reclassifications The Company has reclassified certain prior year information to conform to the current year presentation. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Deferred Revenue and Changes in Deferred Revenue | Year Ended August 31, 2022 Water and Wastewater Resource Development Land Development Total (In thousands) Balance at August 31, 2021 $ 410 $ 1,995 $ 2,405 Revenue recognized (791) (11,434) (12,225) Revenue deferred 951 13,714 14,665 Balance at August 31, 2022 $ 570 $ 4,275 $ 4,845 Year Ended August 31, 2021 Water and Wastewater Resource Development Land Development Total Balance at August 31, 2020 $ 1,965 $ 1,635 $ 3,600 Revenue recognized (4,521) (3,558) (8,079) Revenue deferred 2,966 3,918 6,884 Balance at August 31, 2021 $ 410 $ 1,995 $ 2,405 |
WATER AND LAND ASSETS (Tables)
WATER AND LAND ASSETS (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
WATER AND LAND ASSETS [Abstract] | |
Investments in Water and Water Systems | The Company’s water and water systems consist of the following: August 31, 2022 August 31, 2021 Accumulated Accumulated Depreciation Depreciation (In thousands) Costs and Depletion Costs and Depletion Rangeview water system $ 19,881 $ (2,099) $ 17,526 $ (1,470) Rangeview water supply 14,809 (17) 14,622 (17) Water supply – Other 7,612 (1,739) 7,569 (1,433) Sky Ranch water rights and other costs 7,764 (1,280) 7,338 (1,087) Sky Ranch pipeline 5,740 (984) 5,727 (793) Lost Creek water supply 7,041 — 3,374 — Fairgrounds water and water system 2,900 (1,415) 2,900 (1,327) Wild Pointe service rights 1,632 (1,082) 1,632 (775) Totals 67,379 (8,616) 60,688 (6,902) Net investments in water and water systems $ 58,763 $ 53,786 |
Useful Life By Asset Class | The following table presents the estimated useful lives by asset class used for calculating depreciation and depletion charges: Assets Classes Estimated Useful Lives Wild Pointe Units of production depletion Rangeview water supply Units of production depletion Lost Creek water supply Units of production depletion Rangeview, Sky Ranch and WISE water systems 30 years ECCV wells 10 years Furniture and fixtures 5 years Trucks and heavy equipment 5 years Water system general (pumps, valves, etc.) 5 years Computers 3 years Water equipment 3 years Software 1 year |
Land and Mineral Interest | As of August 31, the costs allocated to the Company’s land is as follows: August 31, 2022 August 31, 2021 Sky Ranch land $ 2,482 $ 2,601 Sky Ranch development costs 4,073 3,105 Lost Creek land 218 218 Net land and mineral interests $ 6,773 $ 5,924 |
REIMBURSABLE PUBLIC IMPROVEME_2
REIMBURSABLE PUBLIC IMPROVEMENTS AND NOTE RECEIVABLE FROM THE SKY RANCH CAB (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
REIMBURSABLE PUBLIC IMPROVEMENTS AND NOTE RECEIVABLE FROM THE SKY RANCH CAB | |
Summary of activity and balances associated with note receivable | Year Ended August 31, 2022 August 31, 2021 Beginning balance $ 24,794 $ — Additions 16,550 3,328 Amounts recognized with release of contingency — 21,466 Payments received (24,136) — Ending balance $ 17,208 $ $ 24,794 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
ACCRUED LIABILITIES [Abstract] | |
Accrued Liabilities | (In thousands) August 31, 2022 August 31, 2021 Accrued compensation $ 1,325 $ 729 Other operating payables 308 248 WISE water 32 62 Operating lease obligation, current 76 84 Property taxes 164 50 Professional fees 115 51 Rental deposits 9 — Total accrued liabilities $ 2,029 $ 1,224 Land development costs due to the Sky Ranch CAB $ 536 $ 2,243 Due to Rangeview Metropolitan District 24 638 Total accrued liabilities - related parties $ 560 $ 2,881 |
DEBT AND OTHER LONG-TERM OBLI_2
DEBT AND OTHER LONG-TERM OBLIGATIONS (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
DEBT AND OTHER LONG-TERM OBLIGATIONS [Abstract] | |
Schedule of maturities of notes payable | The total scheduled maturities of the Company’s loans for each of the years ending August 31 are as follows, with each loan described below the table: (In thousands) Scheduled principal payments Within 1 year $ 13 Year 2 14 Year 3 75 Year 4 386 Year 5 1,309 Thereafter 2,201 3,998 Deferred financing costs (38) Net $ 3,960 |
ROU Lease Assets and Lease Liabilities | ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the consolidated balance sheet as follows: (In thousands) August 31, 2022 August 31, 2021 Operating leases - ROU assets $ 138 $ 122 Accrued liabilities $ 76 $ 84 Lease obligations - operating leases, net of current portion 62 37 Total lease liability $ 138 $ 121 Weighted average remaining lease term (in years) 1.8 1.4 Weighted average discount rate 6 % 6 % |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
SHAREHOLDERS' EQUITY [Abstract] | |
Variable Assumptions Used in Fair Value Calculations | The assumptions used in the fair value calculations using the Black-Scholes model are as follows: Year Ended August 31, 2022 August 31, 2021 Expected term (years) 6.00 7.11 Risk-free interest rate 1.31 % 0.68 % Expected volatility 38.25 % 40.01 % Expected dividend yield — % — % Weighted average grant-date fair value $ 5.16 $ 3.78 |
Stock Option Activity | The following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the year ended August 31, 2022: 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 6.2 $ 1,831 Granted 115,000 $ 9.00 Exercised (24,500) $ 3.66 Net settlement exercised (37,500) $ 3.99 Outstanding at August 31, 2021 714,500 $ 7.80 6.1 $ 5,107 Granted 105,000 $ 13.37 Exercised (103,667) $ 6.87 Forfeited / Expired (3,333) $ 10.45 Outstanding at August 31, 2022 712,500 $ 8.75 5.7 $ 1,489 Options exercisable at August 31, 2022 479,502 $ 7.56 4.5 $ 1,373 |
Non-Vested Options | The following table summarizes the activity and value of non-vested options as of and for the year ended August 31, 2022: Number of Options Weighted Average Grant Date Fair Value Non-vested options outstanding at August 31, 2021 179,999 $ 4.31 Granted 115,000 $ 3.78 Vested (76,666) $ 4.27 Non-vested options outstanding at August 31, 2021 218,333 $ 4.04 Granted 105,000 $ 5.16 Vested (87,002) $ 4.21 Forfeited (3,333) $ 4.21 Non-vested options outstanding at August 31, 2022 232,998 $ 4.47 |
SIGNIFICANT CUSTOMERS (Tables)
SIGNIFICANT CUSTOMERS (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
SIGNIFICANT CUSTOMERS [Abstract] | |
Significant Customers | Year Ended % of Total Revenue Generated From: August 31, 2022 August 31, 2021 Sky Ranch homes and Sky Ranch CAB in the aggregate 5% 14% Two oil & gas operators 16% — Lennar 18% — Challenger 14% — KB Home 10% 20% Richmond 6% 16% Taylor Morrison — 17% |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
INCOME TAXES [Abstract] | |
Deferred Tax Assets (Liabilities) | (In thousands) August 31, 2022 August 31, 2021 Deferred tax assets (liabilities): Depreciation and depletion $ (2,061) $ (2,360) Non-qualified stock options 568 547 Accrued compensation 279 141 Deferred revenues 108 41 Other 31 16 Net deferred tax liability $ (1,075) $ (1,615) |
Statutory to Effective Income Tax Reconciliation | Income taxes computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following for the fiscal years ended August 31: Year Ended August 31, 2022 August 31, 2021 Expected benefit from federal taxes at statutory rate of 21% for the years 2022 and 2021 $ 2,668 $ 5,584 State taxes, net of federal benefit 456 973 Permanent and other differences 4 4 Stock Compensation 22 (77) Other (64) (4) Total income tax expense $ 3,086 $ 6,480 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
SEGMENT REPORTING [Abstract] | |
Segment Reporting | The tables below present the measure of profit and assets the CODM uses to assess the performance of the segment for the periods presented: Year Ended August 31, 2022 (In thousands) Water and wastewater resource development Land development Single-family rental Total Total revenue $ 10,051 $ 12,870 $ 82 $ 23,003 Cost of revenue 2,700 2,166 23 4,889 Depreciation and depletion 1,740 — — 1,740 Total cost of revenue 4,440 2,166 23 6,629 Segment profit $ 5,611 $ 10,704 $ 59 $ 16,374 Year Ended August 31, 2021 (In thousands) Water and wastewater resource development Land development Single-family rental Total Total revenue $ 9,656 $ 7,469 $ — $ 17,125 Cost of revenue 2,410 2,535 — 4,945 Depreciation and depletion 1,457 — — 1,457 Total cost of revenue 3,867 2,535 — 6,402 Segment profit $ 5,789 $ 4,934 $ — $ 10,723 The following table summarizes the Company’s total assets by segment. The assets consist of water rights and water and wastewater systems in the Company’s water and wastewater resource development segment; land, land development costs and deposits in the Company’s land development segment; and the cost of the homes in the single-family rental line. The Company’s other assets (“Corporate”) primarily consist of cash, cash equivalents, restricted cash, equipment, and related party notes receivables. (In thousands) August 31, 2022 August 31, 2021 Water and wastewater resource development $ 63,064 $ 57,791 Land development 25,522 32,844 Single-family rental 1,715 — Corporate 38,928 26,542 Total assets $ 129,229 $ 117,177 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
EARNINGS PER SHARE [Abstract] | |
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). No options were excluded for the fiscal years ended August 31, 2022 and 2021. Year Ended (In thousands, except share and per share amounts) August 31, 2022 August 31, 2021 Net income $ 9,619 $ 20,110 Basic weighted average common shares 23,953,740 23,890,792 Effect of dilutive securities 202,250 220,126 Weighted average shares applicable to diluted earnings per share 24,155,990 24,110,918 Earnings per share - basic $ 0.40 $ 0.84 Earnings per share - diluted $ 0.40 $ 0.83 |
ORGANIZATION (Details)
ORGANIZATION (Details) ft² in Millions | 12 Months Ended |
Aug. 31, 2022 a segment item ft² | |
ORGANIZATION | |
Number of operating segments | segment | 2 |
Area of land (in acres) | a | 930 |
Number of single-family and multifamily residential units | item | 3,200 |
Number of Square Feet of Commercial, Retail, and Industrial Space | ft² | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Principles of Consolidation (Details) | 12 Months Ended |
Aug. 31, 2022 subsidiary | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Number of wholly-owned and controlled subsidiaries | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents (Details) - USD ($) | Aug. 31, 2022 | Aug. 31, 2021 | Sep. 01, 2020 |
Cash and Cash Equivalents [Abstract] | |||
Cash equivalents | $ 0 | $ 0 | |
Unbilled Contracts Receivable | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted Cash (Details) $ in Millions | 12 Months Ended |
Aug. 31, 2022 USD ($) LetterOfCredit | |
RESTRICTED CASH [Abstract] | |
Number of letters of credit | LetterOfCredit | 4 |
Letter of credit outstanding | $ | $ 2.3 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Trade Accounts Receivable (Details) - USD ($) $ in Millions | Aug. 31, 2022 | Aug. 31, 2021 |
Maximum [Member] | ||
Trade Accounts Receivable [Abstract] | ||
Allowance for uncollectible accounts receivable | $ 0.1 | $ 0.1 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Recoverability of Long-Lived Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Long-Lived Assets Impairment Loss [Abstract] | ||
Impairment of long- lived assets | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Capitalized Costs of Water and Wastewater Systems and Depreciation and Depletion Charges (Details) | 12 Months Ended |
Aug. 31, 2022 | |
Maximum [Member] | |
Capitalized Costs of Water and Wastewater Systems and Depletion and Depreciation of Water Assets [Abstract] | |
Estimated Useful lives | 30 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details) gal in Millions | 12 Months Ended | ||
Aug. 31, 2022 USD ($) a item segment agreement payment gal | Aug. 31, 2021 USD ($) gal | Aug. 31, 2020 USD ($) | |
Revenue Recognition [Abstract] | |||
Number of business lines | segment | 2 | ||
Revenues | $ 23,003,000 | $ 17,125,000 | |
Land [Abstract] | |||
Contract with Customer, Liability | $ 4,845,000 | 2,405,000 | $ 3,600,000 |
Area of land (in acres) | a | 930 | ||
Deferred revenue | $ 4,845,000 | $ 2,405,000 | $ 3,600,000 |
Sky Ranch CAB [Member] | |||
Revenue Recognition [Abstract] | |||
Number of milestone payments | payment | 3 | ||
Land [Abstract] | |||
Number of service agreements for project management services | agreement | 2 | ||
Metered Water Usage [Member] | |||
Revenue Recognition [Abstract] | |||
Water delivered to customers | gal | 404.9 | 257.8 | |
Percentage of water used for oil and gas exploration | 70% | 60% | |
Water Tap Fees [Member] | |||
Revenue Recognition [Abstract] | |||
Revenues | $ 4,100,000 | $ 4,400,000 | |
Wastewater Tap Fees [Member] | |||
Revenue Recognition [Abstract] | |||
Revenues | 800,000 | 800,000 | |
Special Facility Funding Recognized [Member] | |||
Revenue Recognition [Abstract] | |||
Revenues | 200,000 | 400,000 | |
Water Tap and Construction Fee [Member] | |||
Land [Abstract] | |||
Contract with Customer, Liability | 0 | 0 | |
Deferred revenue | 0 | 0 | |
Consulting Fees [Member] | Maximum [Member] | |||
Revenue Recognition [Abstract] | |||
Revenues | 100,000 | 100,000 | |
Lot Sales [Member] | |||
Revenue Recognition [Abstract] | |||
Revenues | $ 12,187,000 | 5,840,000 | |
Lot Sales - Agreement with Builder [Member] | |||
Revenue Recognition [Abstract] | |||
Number of milestone payments | payment | 3 | ||
Lot Sales - Agreement with Builder [Member] | Maximum [Member] | |||
Land [Abstract] | |||
Expected delivery period for lots sold | 1 year | ||
Lot Sales - Agreement with Builder [Member] | Point in time | |||
Revenue Recognition [Abstract] | |||
Revenues | 1,600,000 | ||
Phase 2A | |||
Revenue Recognition [Abstract] | |||
Revenues | $ 12,200,000 | 12,200,000 | |
Deferred revenue related to lots sold | 4,300,000 | ||
Phase 1 Development | |||
Land [Abstract] | |||
Proceeds from sale of lots | $ 26,200,000 | ||
Number of lots | item | 509 | ||
Finished lots sold | item | 505 | ||
Cumulative revenue recognized | $ 26,200,000 | ||
Phase 1 Development | Homebuilder [Member] | Sky Ranch CAB [Member] | |||
Land [Abstract] | |||
Number of Customers | item | 3 | ||
Phase 2 Development | |||
Revenue Recognition [Abstract] | |||
Revenues | $ 5,800,000 | $ 5,800,000 | |
Land [Abstract] | |||
Proceeds from sale of lots | $ 18,400,000 | ||
Number of lots | item | 850 | ||
Number of lots under contract with homebuilder | item | 804 | ||
Number of lots retained for use in build-to-rent business | item | 46 | ||
Number of subphases | item | 4 | ||
Cumulative revenue recognized | $ 14,100,000 | ||
Percentage of completion of buildings. | 76% | ||
First Subphase | |||
Land [Abstract] | |||
Number of lots under contract with homebuilder | item | 219 | ||
Number of lots retained for use in build-to-rent business | item | 10 | ||
Number of lots to be constructed in a subphase | item | 229 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Reimbursable Costs Incurred to Date (Details) - Sky Ranch CAB [Member] | 12 Months Ended |
Aug. 31, 2022 | |
Reimbursable Costs, Net [Abstract] | |
Interest rate | 6% |
Project management fee | 5% |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Deferred Revenue by Segment (Details) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2022 USD ($) item | Aug. 31, 2021 USD ($) | Aug. 31, 2020 USD ($) | |
Deferred Revenue [Abstract] | |||
Term to use reserve priority water | 1 year | ||
Revenues | $ 23,003 | $ 17,125 | |
Number of customer deposits | item | 3 | ||
Percentage of future water usage for customer deposit | 25% | ||
Number of deposits utilized for drilling | item | 2 | ||
Deferred revenue | $ 4,845 | 2,405 | $ 3,600 |
Forfeited Water - Oil and Gas Operations [Member] | |||
Deferred Revenue [Abstract] | |||
Revenues | 1,200 | ||
Special Facility Projects [Member] | |||
Deferred Revenue [Abstract] | |||
Revenues | 100 | 100 | |
Drilling Activities [Member] | |||
Deferred Revenue [Abstract] | |||
Deferred water sales revenues | 500 | ||
Land Development Segment [Member] | |||
Deferred Revenue [Abstract] | |||
Revenues | 12,870 | 7,469 | |
Deferred revenue | 4,275 | 1,995 | 1,635 |
Water and Wastewater Resource Development Segment [Member] | |||
Deferred Revenue [Abstract] | |||
Revenues | 10,051 | 9,656 | |
Deferred revenue | $ 570 | $ 410 | $ 1,965 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Changes in Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Deferred Revenue [Abstract] | ||
Balance | $ 2,405 | $ 3,600 |
Revenue recognized | (12,225) | (8,079) |
Revenue deferred | 14,665 | 6,884 |
Balance | 4,845 | 2,405 |
Water and Wastewater Resource Development Segment | ||
Deferred Revenue [Abstract] | ||
Balance | 410 | 1,965 |
Revenue recognized | (791) | (4,521) |
Revenue deferred | 951 | 2,966 |
Balance | 570 | 410 |
Land Development | ||
Deferred Revenue [Abstract] | ||
Balance | 1,995 | 1,635 |
Revenue recognized | (11,434) | (3,558) |
Revenue deferred | 13,714 | 3,918 |
Balance | $ 4,275 | $ 1,995 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Oil and Gas Lease Payments (Details) $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 USD ($) item | Aug. 31, 2021 USD ($) | |
Oil and Gas Lease Payments [Abstract] | ||
Number of wells that have been drilled | 6 | |
Number of wells placed into service | 4 | |
Oil and gas royalty income, net | $ | $ 498 | $ 324 |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Share-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Share-Based Compensation [Abstract] | ||
Share-based compensation expense | $ 603 | $ 497 |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Income Taxes [Abstract] | ||
Accrued interest on unrecognized tax benefits | $ 0 | |
Accrued penalties on unrecognized tax benefits | 0 | |
Interest expense on unrecognized tax benefits | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) | Aug. 31, 2022 item Asset | Aug. 31, 2021 Asset item |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements [Abstract] | ||
Number of assets | Asset | 0 | 0 |
Number of liabilities | item | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements [Abstract] | ||
Number of assets | Asset | 0 | |
Number of liabilities | item | 2 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements [Abstract] | ||
Number of assets | Asset | 1 | 1 |
Number of liabilities | item | 1 | 1 |
WATER AND LAND ASSETS - Schedul
WATER AND LAND ASSETS - Schedule of investment in water and water systems (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Investment in Water and Water Systems [Abstract] | ||
Water And Water Systems, Gross | $ 67,379 | $ 60,688 |
Accumulated depreciation and depletion | (8,616) | (6,902) |
Net investments in water and water systems | 58,763 | 53,786 |
Depletion and Amortization [Abstract] | ||
Depreciation | 2,100 | 1,800 |
Rangeview Water System [Member] | ||
Investment in Water and Water Systems [Abstract] | ||
Water And Water Systems, Gross | 19,881 | 17,526 |
Accumulated depreciation and depletion | (2,099) | (1,470) |
Rangeview Water Supply [Member] | ||
Investment in Water and Water Systems [Abstract] | ||
Water And Water Systems, Gross | 14,809 | 14,622 |
Accumulated depreciation and depletion | (17) | (17) |
Water Supply - Other [Member] | ||
Investment in Water and Water Systems [Abstract] | ||
Water And Water Systems, Gross | 7,612 | 7,569 |
Accumulated depreciation and depletion | (1,739) | (1,433) |
Sky Ranch Water Rights and Other Costs [Member] | ||
Investment in Water and Water Systems [Abstract] | ||
Water And Water Systems, Gross | 7,764 | 7,338 |
Accumulated depreciation and depletion | (1,280) | (1,087) |
Sky Ranch Pipeline [Member] | ||
Investment in Water and Water Systems [Abstract] | ||
Water And Water Systems, Gross | 5,740 | 5,727 |
Accumulated depreciation and depletion | (984) | (793) |
Lost Creek Water Supply [Member] | ||
Investment in Water and Water Systems [Abstract] | ||
Water And Water Systems, Gross | 7,041 | 3,374 |
Fairgrounds Water And Water System [Member] | ||
Investment in Water and Water Systems [Abstract] | ||
Water And Water Systems, Gross | 2,900 | 2,900 |
Accumulated depreciation and depletion | (1,415) | (1,327) |
Wild Pointe Service Rights [Member] | ||
Investment in Water and Water Systems [Abstract] | ||
Water And Water Systems, Gross | 1,632 | 1,632 |
Accumulated depreciation and depletion | $ (1,082) | (775) |
Rangeview Sky Ranch And Wise Water Systems [Member] | ||
Depletion and Amortization [Abstract] | ||
Estimated useful lives | P30Y | |
Eccv Wells [Member] | ||
Depletion and Amortization [Abstract] | ||
Estimated useful lives | P10Y | |
Furniture and Fixtures [Member] | ||
Depletion and Amortization [Abstract] | ||
Estimated useful lives | P5Y | |
Trucks and Heavy Equipment [Member] | ||
Depletion and Amortization [Abstract] | ||
Estimated useful lives | P5Y | |
Water System General (Pumps, Valves, etc.) [Member] | ||
Depletion and Amortization [Abstract] | ||
Estimated useful lives | P5Y | |
Computers [Member] | ||
Depletion and Amortization [Abstract] | ||
Estimated useful lives | P3Y | |
Water Equipment [Member] | ||
Depletion and Amortization [Abstract] | ||
Estimated useful lives | P3Y | |
Software [Member] | ||
Depletion and Amortization [Abstract] | ||
Estimated useful lives | P1Y | |
Other Equipment [Member] | ||
Depletion and Amortization [Abstract] | ||
Depreciation | $ 300 | $ 300 |
WATER AND LAND ASSETS (Details)
WATER AND LAND ASSETS (Details) $ in Thousands | 12 Months Ended | ||||
Aug. 31, 2022 USD ($) | Aug. 31, 2022 USD ($) | Aug. 31, 2022 USD ($) item | Aug. 31, 2022 USD ($) home | Aug. 31, 2021 USD ($) | |
Investment in Water and Water Systems [Abstract] | |||||
Construction costs incurred | $ 4,000 | ||||
Construction in progress | $ 1,224 | 1,224 | $ 1,224 | $ 1,224 | $ 3,304 |
Single-family rental units | $ 975 | 975 | 975 | $ 975 | |
Number of Single Family Rental Houses Construction Contracted | home | 11 | ||||
Number of Units of Single Family Rental House Construction Commenced | home | 1 | ||||
Number of single family rental houses unit construction Yet to Commence | home | 10 | ||||
Maximum [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Estimated Useful lives | 30 years | ||||
Construction in Progress [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Construction in progress | $ 5,100 | 5,100 | 5,100 | $ 5,100 | |
Single Family Rental Homes [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Single-family rental units | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | |
Single family houses construction completed | 3 | 3 | |||
Single Family Rental Homes [Member] | Maximum [Member] | |||||
Investment in Water and Water Systems [Abstract] | |||||
Estimated Useful lives | 30 years | ||||
Phase 2 Development | |||||
Investment in Water and Water Systems [Abstract] | |||||
Number of Lots Reserved for Single Family Rental Units | item | 46 | ||||
Phase 2A | |||||
Investment in Water and Water Systems [Abstract] | |||||
Number of Lots Reserved for Single Family Rental Units | item | 10 |
WATER AND LAND ASSETS - Rangevi
WATER AND LAND ASSETS - Rangeview Water Supply and Water System (Details) | 1 Months Ended | 12 Months Ended | |||
Jun. 27, 2022 item | Jun. 30, 2022 item acre ft | Aug. 31, 2019 a acre ft | Aug. 31, 2022 USD ($) a item acre ft | Aug. 31, 2021 USD ($) | |
Rangeview Water Supply and Water System [Abstract] | |||||
Area of land (in acres) | a | 930 | ||||
Maximum [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Operating Lease, Expense | $ | $ 100,000 | $ 100,000 | |||
SMWA [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Number of members | item | 10 | ||||
Rangeview District [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Percentage of remaining gross revenue retained | 2% | ||||
Percentage of wastewater usage fees recognized as income | 10% | ||||
Rangeview Water Agreements [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Volume of Water Purchased | 11,650 | ||||
Number of surrounding municipal water and wastewater service providers used as a benchmark for rates and charges | item | 3 | ||||
Royalty on tap fees percentage | 2% | ||||
Operating Lease, Expense | $ | $ 8,400 | ||||
Period of time when there is no increase in annual rent | 5 years | ||||
Percentage of remaining gross revenue retained | 98% | ||||
Percentage of wastewater tap fees recognized as income | 100% | ||||
Percentage of wastewater usage fees recognized as income | 90% | ||||
Rangeview Water Agreements [Member] | Minimum [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Royalty as a percentage of gross revenues | 10% | ||||
Annual royalty payments | $ | $ 46,000 | ||||
Rangeview Water Agreements [Member] | Maximum [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Royalty as a percentage of gross revenues | 12% | ||||
Rangeview Water Agreements [Member] | Ground Water [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Volume of Water Purchased | 10,000 | ||||
Aggregate gross volume | 165,000 | ||||
Additional volume of water | 13,685 | ||||
Rangeview Water Agreements [Member] | Export Water [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Royalty on tap fees percentage | 2% | ||||
Rangeview Water Agreements [Member] | Export Water [Member] | Minimum [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Royalty as a percentage of gross revenues | 10% | ||||
Rangeview Water Agreements [Member] | Export Water [Member] | Maximum [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Royalty as a percentage of gross revenues | 12% | ||||
Rangeview Water Agreements [Member] | Surface Water [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Volume of Water Purchased | 1,650 | ||||
Additional volume of water | 1,650 | ||||
Rangeview Water Agreements [Member] | SMWA [Member] | Maximum [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Investment in infrastructure | $ | $ 100,000 | $ 100,000 | |||
Rangeview Water Supply [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Volume of Water Purchased | 27,000 | ||||
Lowry Range [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Area of land (in acres) | a | 26,000 | ||||
Approximately investments in water and water systems | $ | $ 19,900,000 | ||||
Lost Creek Water Supply [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Number of Water Wells Permits and Structure | item | 3 | 3 | |||
Area of land (in acres) | a | 260 | ||||
Lost Creek Water Supply [Member] | Ground Water [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Volume of Water Purchased | 370 | ||||
Lost Creek Water Supply [Member] | Surface Water [Member] | |||||
Rangeview Water Supply and Water System [Abstract] | |||||
Volume of Water Purchased | 300 |
WATER AND LAND ASSETS - The Ara
WATER AND LAND ASSETS - The Arapahoe County Fairgrounds Water and Water System (Details) - Fairgrounds Water And Water System [Member] $ in Millions | 12 Months Ended |
Aug. 31, 2022 USD ($) gal acre ft | |
The Arapahoe County Fairgrounds Water and Water System [Abstract] | |
Capitalized costs | $ | $ 2.9 |
Capacity of water tank | gal | 500,000 |
Ground Water [Member] | |
The Arapahoe County Fairgrounds Water and Water System [Abstract] | |
Volume of Water Purchased | acre ft | 321 |
WATER AND LAND ASSETS - The Los
WATER AND LAND ASSETS - The Lost Creek Water Supply (Details) $ in Millions | 1 Months Ended | |||
Jun. 27, 2022 USD ($) item acre ft | Jun. 30, 2022 item | Aug. 31, 2019 USD ($) a acre ft | Aug. 31, 2022 a | |
The Lost Creek Water Supply [Abstract] | ||||
Area of land (in acres) | a | 930 | |||
Lost Creek Water Supply [Member] | ||||
The Lost Creek Water Supply [Abstract] | ||||
Number of Water Wells Permits and Structure | item | 3 | 3 | ||
Area of land (in acres) | a | 260 | |||
Cost of water and land portions of asset acquisition | $ | $ 3.7 | $ 3.5 | ||
Lost Creek Water Supply [Member] | Ditch Water [Member] | ||||
The Lost Creek Water Supply [Abstract] | ||||
Volume of Water Purchased | acre ft | 370 | 150 | ||
Lost Creek Water Supply [Member] | Deep Ground Water [Member] | ||||
The Lost Creek Water Supply [Abstract] | ||||
Volume of Water Purchased | acre ft | 70 |
WATER AND LAND ASSETS - Service
WATER AND LAND ASSETS - Service to Customers Not on the Lowry Range (Details) $ in Millions | 12 Months Ended | |||
Aug. 31, 2010 USD ($) a acre ft | Aug. 31, 2022 a item | Jun. 30, 2017 USD ($) | Dec. 15, 2016 USD ($) | |
Service to Customers Not on the Lowry Range [Abstract] | ||||
Area of land (in acres) | a | 930 | |||
Sky Ranch Water Rights and Other Costs [Member] | ||||
Service to Customers Not on the Lowry Range [Abstract] | ||||
Area of land (in acres) | a | 930 | |||
Volume of Water Purchased | acre ft | 830 | |||
Capitalized costs | $ 13.5 | |||
Costs | $ 7.6 | |||
Wild Pointe Service Rights [Member] | ||||
Service to Customers Not on the Lowry Range [Abstract] | ||||
Costs | $ 1.6 | |||
Percentage of wastewater tap fees recognized as income | 100% | |||
Percentage of remaining gross revenue retained | 98% | |||
Number of single family equivalent water connections | item | 205 | |||
Sky Ranch Pipeline [Member] | ||||
Service to Customers Not on the Lowry Range [Abstract] | ||||
Costs | $ 5.7 |
WATER AND LAND ASSETS - O&G Lea
WATER AND LAND ASSETS - O&G Leases (Details) - a | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Aug. 31, 2022 | Aug. 31, 2011 | |
Anadarko E&P Company, L.P [Member] | |||
Oil and Gas Lease Payments [Abstract] | |||
Mineral estate area owned (in acres) | 634 | ||
Bison Oil and Gas LLP [Member] | |||
Oil and Gas Lease Payments [Abstract] | |||
Mineral estate area owned (in acres) | 40 | ||
Term period of lease | 3 years | ||
Lease Extension Term | 1 year |
WATER AND LAND ASSETS - Land an
WATER AND LAND ASSETS - Land and Mineral Rights (Details) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2022 USD ($) a | Aug. 31, 2021 USD ($) | Aug. 31, 2010 a | |
Land and Mineral Rights [Abstract] | |||
Area of land (in acres) | a | 930 | ||
Net land and mineral interests | $ | $ 6,773 | $ 5,924 | |
Sky Ranch [Member] | |||
Land and Mineral Rights [Abstract] | |||
Area of land (in acres) | a | 930 | ||
Area of land sold (in acres) | a | 215 | ||
Land | $ | $ 2,482 | 2,601 | |
Development costs | $ | 4,073 | 3,105 | |
Lost Creek Land [Member] | |||
Land and Mineral Rights [Abstract] | |||
Land | $ | $ 218 | $ 218 | |
Arkansas River Land [Member] | |||
Land and Mineral Rights [Abstract] | |||
Mineral estate area owned (in acres) | a | 700 |
REIMBURSABLE PUBLIC IMPROVEME_3
REIMBURSABLE PUBLIC IMPROVEMENTS AND NOTE RECEIVABLE FROM THE SKY RANCH CAB (Details) $ in Thousands | 12 Months Ended |
Aug. 31, 2022 USD ($) item payment | |
Related Party Transaction [Line Items] | |
Less current portion - beginning balance | $ 16,000 |
Reimbursable public improvements [Member] | |
Related Party Transaction [Line Items] | |
Beginning balance | 8,794 |
Ending balance | $ 17,208 |
Sky Ranch CAB [Member] | |
Related Party Transaction [Line Items] | |
Interest rate | 6% |
Amounts payable - ending balance | $ 17,200 |
Beginning balance | 24,794 |
Ending balance | 17,208 |
Reimbursable public improvement costs | 14,000 |
Project Management Fees Receivable, Related Party | 700 |
Interest Income, Related Party | 1,900 |
Proceeds from Related Party Debt | $ 24,136 |
Number of milestone payments | payment | 3 |
Number of municipal bonds issued | item | 2 |
Number of other payments made | payment | 2 |
Sky Ranch CAB [Member] | Bonds [Member] | |
Related Party Transaction [Line Items] | |
Face amount | $ 23,600 |
REIMBURSABLE PUBLIC IMPROVEME_4
REIMBURSABLE PUBLIC IMPROVEMENTS AND NOTE RECEIVABLE FROM THE SKY RANCH CAB - Note Receivable (Details) - Sky Ranch CAB [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Beginning balance | $ 24,794 | |
Additions | 16,550 | $ 3,328 |
Amounts recognized with release of contingency | 21,466 | |
Payments received | (24,136) | |
Ending balance | $ 17,208 | $ 24,794 |
PARTICIPATING INTERESTS IN EX_2
PARTICIPATING INTERESTS IN EXPORT WATER (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2017 | |
Asset Acquisition [Line Items] | |||
Percentage of original recorded liability compared to original total liability | 35% | ||
Percentage of payment remitted to CAA holders allocated to recorded liability account | 35% | ||
Total Potential Third-Party Obligation [Roll Forward] | |||
Total Potential Third-Party Obligation | $ 31,800 | ||
Participating Interests Liability [Roll Forward] | |||
Participating interests liability | $ 323 | $ 325 | 11,100 |
Contingency [Roll Forward] | |||
Contingency | $ 20,700 | ||
Rangeview Water Supply [Member] | |||
Asset Acquisition [Line Items] | |||
Percentage of net proceeds from sale of export water allocated | 88% | ||
Acquired amount | $ 700 | ||
Remaining obligation | 1,000 | ||
Cash payment for a CAA obligations | 100 | ||
Total Potential Third-Party Obligation [Roll Forward] | |||
Total Potential Third-Party Obligation | 600 | ||
Participating Interests Liability [Roll Forward] | |||
Participating interests liability | 300 | ||
Export Water [Abstract] | |||
Land Board Royalty expenses | $ 200 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | Aug. 31, 2021 |
Accrued Liabilities, Current [Line Items] | ||
Accrued compensation | $ 1,325 | $ 729 |
Other operating payables | 308 | 248 |
WISE water | 32 | 62 |
Operating lease obligations | $ 76 | $ 84 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Property taxes | $ 164 | $ 50 |
Professional fees | 115 | 51 |
Rental deposits | 9 | |
Total accrued liabilities | 2,029 | 1,224 |
Accrued liabilities - related parties | 560 | 2,881 |
Sky Ranch CAB [Member] | ||
Accrued Liabilities, Current [Line Items] | ||
Accrued liabilities - related parties | 536 | 2,243 |
Rangeview District [Member] | ||
Accrued Liabilities, Current [Line Items] | ||
Accrued liabilities - related parties | $ 24 | $ 638 |
DEBT AND OTHER LONG-TERM OBLI_3
DEBT AND OTHER LONG-TERM OBLIGATIONS - Maturities (Details) - Single-Family Rental Home Notes [Member] $ in Thousands | Aug. 31, 2022 USD ($) |
Debt Instrument [Line Items] | |
Within 1 year | $ 13 |
Year 2 | 14 |
Year 3 | 75 |
Year 4 | 386 |
Year 5 | 1,309 |
Thereafter | 2,201 |
Gross | 3,998 |
Deferred financing costs | (38) |
Net | $ 3,960 |
DEBT AND OTHER LONG-TERM OBLI_4
DEBT AND OTHER LONG-TERM OBLIGATIONS (Details) | 12 Months Ended | ||
Nov. 29, 2021 USD ($) item installment | Jan. 31, 2021 USD ($) | Aug. 31, 2022 home item | |
Debt Instrument [Line Items] | |||
Number of Single Family Homes Being Constructed | item | 3 | ||
Number of Single Family Rental Houses Construction Contracted | home | 11 | ||
Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 6% | ||
Floor interest rate | 3.75% | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | ||
Debt Instrument, Term | 2 years | ||
Debt Instrument , Percentage of Default Interest Rate | 2% | ||
Single-Family Rental Home Notes [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 1,000,000 | ||
Effective interest rate | 4.25% | ||
Floor interest rate | 3.75% | ||
Ceiling interest rate | 4.25% | ||
Additional interest rate | 2% | ||
Number of interest only payments | installment | 6 | ||
Number of principal and interest payments | installment | 53 | ||
Periodic interest and principal payments | $ 4,600 | ||
Balloon payment | $ 900,000 | ||
Single family rental homes secured for debt | item | 3 | ||
Debt service coverage ratio | 1.10 | ||
Prime Rate [Member] | Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Prime Rate [Member] | Single-Family Rental Home Notes [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% |
DEBT AND OTHER LONG-TERM OBLI_5
DEBT AND OTHER LONG-TERM OBLIGATIONS - Lost Creek Loan (Details) - Lost Creek Loan [Member] | Jun. 28, 2022 USD ($) M acre ft |
Debt Instrument [Line Items] | |
Water Rights Acquired In Volume | acre ft | 370 |
Debt Instrument, Face Amount | $ 3,000,000 |
Debt Instrument, Term | 10 years |
Monthly interest only payments | $ 12,000 |
Debt Instrument, Number of Interest Only Payments | M | 36 |
Debt Instrument, Amortization Period | 30 years |
Debt Instrument, Interest Rate, Stated Percentage | 4.90% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 800,000 |
Payment Beginning on July 28, 2025 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Number of Principal and Interest Payments | M | 24 |
Debt Instrument, Periodic Payment | $ 42,000 |
Payment Beginning on July 28, 2027 [Member] | |
Debt Instrument [Line Items] | |
Monthly interest only payments | $ 32,000 |
Debt Instrument, Number of Principal and Interest Payments | M | 59 |
DEBT AND OTHER LONG-TERM OBLI_6
DEBT AND OTHER LONG-TERM OBLIGATIONS - Obligations (Details) $ in Millions | 12 Months Ended | |
Aug. 31, 2022 USD ($) item acre ft | Aug. 31, 2021 USD ($) acre ft | |
WISE Partnership [Member] | ||
Debt Instrument [Line Items] | ||
Number of governmental or quasi-governmental water providers included in SMWA | item | 9 | |
SMWA [Member] | ||
Debt Instrument [Line Items] | ||
Number of members | item | 10 | |
Rangeview District [Member] | Wise Partnership 360 Acre Feet [Member] | ||
Debt Instrument [Line Items] | ||
Volume of received metered water | acre ft | 360 | |
Payments for water | $ | $ 0.7 | |
Rangeview District [Member] | Wise Partnership 320 Acre Feet [Member] | ||
Debt Instrument [Line Items] | ||
Volume of received metered water | acre ft | 320 | |
Payments for water | $ | $ 0.6 |
DEBT AND OTHER LONG-TERM OBLI_7
DEBT AND OTHER LONG-TERM OBLIGATIONS - Lease Commitments (Details) | 12 Months Ended | ||
Jul. 01, 2022 USD ($) ft² item | Aug. 31, 2022 USD ($) | Aug. 31, 2021 USD ($) | |
Lease Commitments [Abstract] | |||
Area of office and warehouse | ft² | 11,400 | ||
Operating lease term | 2 years | ||
Monthly base rent of operating lease | $ 7,400 | ||
Number of option to extend in lease term | item | 2 | ||
Operating lease extension term | 2 years | ||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||
Percentage of increase in monthly payment after 12 months | 2.50% | ||
ROU Lease Assets and Lease Liabilities [Abstract] | |||
Operating leases - right of use assets | $ 138,000 | $ 122,000 | |
Lease Liabilities [Abstract] | |||
Lease obligations - operating leases, current portion | 76,000 | 84,000 | |
Lease obligations - operating leases, net of current portion | 62,000 | 37,000 | |
Total lease liability | $ 138,000 | $ 121,000 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | Accrued Liabilities, Current | |
Weighted average remaining lease term | 1 year 9 months 18 days | 1 year 4 months 24 days | |
Weighted average discount rate | 6% | 6% | |
Maximum [Member] | |||
Lease Commitments [Abstract] | |||
Operating lease expense | $ 100,000 | $ 100,000 | |
Payment against lease obligation, operating lease | $ 100,000 |
SHAREHOLDERS' EQUITY - Preferre
SHAREHOLDERS' EQUITY - Preferred Stock (Details) - Series B Preferred Stock [Member] $ / shares in Units, $ in Millions | 12 Months Ended |
Aug. 31, 2022 USD ($) $ / shares | |
Preferred Stock [Abstract] | |
Liquidation preference (in dollars per share) | $ / shares | $ 1 |
Threshold for proceeds or sale of export water rights to be paid in the form of a dividend | $ 0.4 |
Minimum [Member] | |
Preferred Stock [Abstract] | |
Proceeds from sale or disposition of export water rights, trigger for payment in dividends | $ 36 |
SHAREHOLDERS' EQUITY - Equity C
SHAREHOLDERS' EQUITY - Equity Compensation Plan (Details) | 12 Months Ended | ||
Aug. 31, 2022 USD ($) item $ / shares shares | Aug. 31, 2021 USD ($) item $ / shares shares | Aug. 31, 2020 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Share-based compensation expense | $ | $ 603,000 | $ 497,000 | |
Proceeds from option exercises | $ | $ 34,000 | $ 89,000 | |
2014 Equity Plan [Member] | |||
Shareholders' Equity [Abstract] | |||
Shares reserved for issuance (in shares) | 1,600,000 | ||
Reserved shares of common stock for issuance (in shares) | 912,953 | ||
Shares issued (in shares) | 755,500 | ||
Shares available for grant (in shares) | 712,500 | ||
Options expired (in shares) | 3,333 | 0 | |
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Expected term | 6 years | 7 years 1 month 9 days | |
Risk-free interest rate | 1.31% | 0.68% | |
Expected volatility | 38.25% | 40.01% | |
Expected dividend yield | 0% | 0% | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 5.16 | $ 3.78 | |
Number of Options [Roll Forward] | |||
Exercised (in shares) | (103,667) | (48,535) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Exercised (in shares) | 103,667 | 48,535 | |
2014 Equity Plan [Member] | Minimum [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Expected term | 5 years | ||
2014 Equity Plan [Member] | Maximum [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Expected term | 10 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Proceeds from option exercises | $ | $ 100,000 | ||
2014 Equity Plan [Member] | Employees [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 3.93 | ||
Number of Options [Roll Forward] | |||
Granted (in shares) | 85,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Vesting period | 5 years | ||
Expiration period | 10 years | ||
2014 Equity Plan [Member] | Executive Officer [Member] | |||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 5.16 | $ 3.37 | |
Number of Options [Roll Forward] | |||
Granted (in shares) | 105,000 | 30,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Vesting period | 3 years | 3 years | |
Expiration period | 10 years | 10 years | |
2014 Equity Plan [Member] | Non-Employee Board Members [Member] | |||
Number of Options [Roll Forward] | |||
Granted (in shares) | 2,000 | 2,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Number of board members | item | 6 | 6 | |
Stock price (in dollars per share) | $ / shares | $ 13.23 | $ 11.33 | |
Share-based compensation expense | $ | $ 200,000 | $ 100,000 | |
2004 Incentive Plan [Member] | |||
Number of Options [Roll Forward] | |||
Exercised (in shares) | (6,000) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Exercised (in shares) | 6,000 | ||
2004 Incentive Plan and 2014 Equity Plan [Member] | |||
Shareholders' Equity [Abstract] | |||
Shares issued (in shares) | 46,012 | 24,035 | |
Shares available for grant (in shares) | 106,500 | ||
Variable Assumptions Used in Fair Value Calculations [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 5.16 | $ 3.78 | |
Number of Options [Roll Forward] | |||
Outstanding, beginning of period (in shares) | 714,500 | 661,500 | |
Granted (in shares) | 105,000 | 115,000 | |
Exercised (in shares) | (103,667) | (24,500) | |
Net settlement exercised (in shares) | (37,500) | ||
Forfeited or expired (in shares) | (3,333) | ||
Outstanding, end of period (in shares) | 712,500 | 714,500 | 661,500 |
Options exercisable (in shares) | 479,502 | ||
Weighted Average Exercise Price [Roll Forward] | |||
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 7.80 | $ 7.23 | |
Granted (in dollars per share) | $ / shares | 13.37 | 9 | |
Exercised (in dollars per share) | $ / shares | 6.87 | 3.66 | |
Net settlement exercised (in dollars per share) | $ / shares | 3.99 | ||
Forfeited or expired (in dollars per share) | $ / shares | 10.45 | ||
Outstanding, end of period (in dollars per share) | $ / shares | 8.75 | $ 7.80 | $ 7.23 |
Options exercisable (in dollars per share) | $ / shares | $ 7.56 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years 8 months 12 days | 6 years 1 month 6 days | 6 years 2 months 12 days |
Weighted average remaining contractual term, options exercisable | 4 years 6 months | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ | $ 1,489 | $ 5,107 | $ 1,831 |
Approximate aggregate intrinsic value, options exercisable | $ | $ 1,373 | ||
Share-based compensation expense | $ | 500,000 | ||
Proceeds from option exercises | $ | $ 0 | ||
Exercised (in shares) | 103,667 | 24,500 | |
Options cancelled (in shares) | 51,655 | 13,465 |
SHAREHOLDERS' EQUITY - Combined
SHAREHOLDERS' EQUITY - Combined Activity and Value of Non-vested Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Share-based compensation expense | $ 603 | $ 497 |
2004 Incentive Plan and 2014 Equity Plan [Member] | ||
Number of Options [Roll Forward] | ||
Non-vested options outstanding, beginning of period (in shares) | 218,333 | 179,999 |
Granted (in shares) | 105,000 | 115,000 |
Vested (in shares) | (87,002) | (76,666) |
Forfeited (in shares) | (3,333) | |
Non-vested options outstanding, end of period (in shares) | 232,998 | 218,333 |
Weighted Average Grant Date Fair Value [Abstract] | ||
Non-vested options outstanding, beginning of period (in dollars per share) | $ 4.04 | $ 4.31 |
Granted (in dollars per share) | 5.16 | 3.78 |
Vested (in dollars per share) | 4.21 | 4.27 |
Forfeited (in dollars per share) | 4.21 | |
Non-vested options outstanding, end of period (in dollars per share) | $ 4.47 | $ 4.04 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Fair value of options vested | $ 400 | $ 300 |
Share-based compensation expense | $ 500 | |
Unrecognized compensation expenses | $ 600 | |
Weighted-average period for options expected to vest | 2 years |
SHAREHOLDERS' EQUITY - Warrants
SHAREHOLDERS' EQUITY - Warrants (Details) - $ / shares | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
SHAREHOLDERS' EQUITY [Abstract] | ||
Outstanding warrants to purchase common stock (in shares) | 92 | |
Warrants exercise price (in dollars per share) | $ 1.80 | |
Warrants expiration period | 6 months | |
Warrants exercised (in shares) | 0 | 0 |
SIGNIFICANT CUSTOMERS (Details)
SIGNIFICANT CUSTOMERS (Details) - Customer Concentration Risk [Member] - customer | 12 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2022 | Aug. 31, 2021 | |
Revenue [Member] | Sky Ranch homes and Sky Ranch CAB in the aggregate[Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 5% | 14% | |
Revenue [Member] | Two oil & gas operators [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 16% | ||
Revenue [Member] | Lennar [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 18% | ||
Revenue [Member] | Challenger [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 14% | ||
Revenue [Member] | KB Home [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10% | 20% | |
Revenue [Member] | Richmond [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 6% | 16% | |
Revenue [Member] | Taylor Morrison [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 17% | ||
Revenue [Member] | Water and Wastewater Resource Development Segment [Member] | Two oil & gas operators [Member] | |||
Concentration Risk [Line Items] | |||
Number of customers | 2 | ||
Accounts Receivable [Member] | Challenger [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 34% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Income Tax Expense (Benefit) [Abstract] | ||
Current income tax expense | $ 3,600,000 | $ 5,800,000 |
Deferred income tax expense | 500,000 | 700,000 |
Operating loss carryforwards utilized | 600,000 | |
Unrecognized tax benefits | 0 | 0 |
Income Taxes Paid [Abstract] | ||
Cash paid for income taxes | 5,260,000 | |
Deferred Tax Assets (Liabilities) [Abstract] | ||
Depreciation and depletion | (2,061,000) | (2,360,000) |
Non-qualified stock options | 568,000 | 547,000 |
Accrued compensation | 279,000 | 141,000 |
Deferred revenues | 108,000 | 41,000 |
Other | 31,000 | 16,000 |
Net deferred tax liability | (1,075,000) | (1,615,000) |
Effective Income Tax Rate Reconciliation [Abstract] | ||
Expected benefit from federal taxes at statutory rate | 2,668,000 | 5,584,000 |
State taxes, net of federal benefit | 456,000 | 973,000 |
Permanent and other differences | 4,000 | 4,000 |
Stock Compensation | 22,000 | (77,000) |
Other | (64,000) | (4,000) |
Total income tax expense | $ 3,086,000 | $ 6,480,000 |
Statutory federal tax rate | 21% | 21% |
Net Operating Loss Carryforwards [Abstract] | ||
Net operating loss carryforwards | $ 0 | $ 0 |
Federal [Member] | ||
Income Taxes Paid [Abstract] | ||
Cash paid for income taxes | 4,400,000 | 0 |
State [Member] | ||
Income Taxes Paid [Abstract] | ||
Cash paid for income taxes | $ 900,000 | $ 0 |
401(k) PLAN (Details)
401(k) PLAN (Details) | 12 Months Ended | |
Aug. 31, 2022 USD ($) Y | Aug. 31, 2021 USD ($) | |
401(k) PLAN | ||
Employer matching 401(k) contribution percentage | 50% | |
Employee 401(k) contribution percentage | 3% | |
Maximum employee contribution | $ 2,500 | |
Vesting percentage after first anniversary | 25% | |
Vesting percentage after second anniversary | 50% | |
Vesting percentage after third anniversary | 75% | |
Vesting percentage after fourth anniversary | 100% | |
Minimum age of employees to participate in 401(k) plan | Y | 18 | |
Minimum requisite service period to participate in 401(k) plan | 3 months | |
Maximum [Member] | ||
401(k) PLAN | ||
Total expense recorded | $ 100,000 | $ 100,000 |
SEGMENT REPORTING, Revenue by S
SEGMENT REPORTING, Revenue by Segments (Details) $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 USD ($) segment | Aug. 31, 2021 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 2 | |
Segment Information [Abstract] | ||
Total revenues | $ 23,003 | $ 17,125 |
Cost of revenue | 4,889 | 4,945 |
Depreciation and depletion | 1,740 | 1,457 |
Total cost of revenues | 6,629 | 6,402 |
Segment profit | 16,374 | 10,723 |
Water and Wastewater Resource Development Segment [Member] | ||
Segment Information [Abstract] | ||
Total revenues | 10,051 | 9,656 |
Cost of revenue | 2,700 | 2,410 |
Depreciation and depletion | 1,740 | 1,457 |
Total cost of revenues | 4,440 | 3,867 |
Segment profit | 5,611 | 5,789 |
Land Development Segment [Member] | ||
Segment Information [Abstract] | ||
Total revenues | 12,870 | 7,469 |
Cost of revenue | 2,166 | 2,535 |
Total cost of revenues | 2,166 | 2,535 |
Segment profit | 10,704 | $ 4,934 |
Single Family Rentals [Member] | ||
Segment Information [Abstract] | ||
Total revenues | 82 | |
Cost of revenue | 23 | |
Total cost of revenues | 23 | |
Segment profit | $ 59 |
SEGMENT REPORTING, Corporate As
SEGMENT REPORTING, Corporate Assets (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | Aug. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 129,229 | $ 117,177 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 38,928 | 26,542 |
Water and Wastewater Resource Development Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 63,064 | 57,791 |
Land Development Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 25,522 | $ 32,844 |
Single Family Rentals [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 1,715 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 12 Months Ended | |||||
Aug. 31, 2022 USD ($) item employee acre ft | Aug. 31, 2021 USD ($) | Jan. 01, 2022 $ / gal | Jan. 01, 2021 $ / gal | Aug. 31, 2019 USD ($) | Aug. 31, 2018 USD ($) | |
Related Party Transactions [Abstract] | ||||||
Investments in the WISE infrastructure | $ 58,763 | $ 53,786 | ||||
Purchase of water | $ 5,519 | 2,513 | ||||
Facilities Funding and Acquisition Agreement [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Interest rate | 6% | |||||
Rangeview District [Member] | WISE Partnership [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | $ 7,000 | |||||
Water rate | $ / gal | 6.13 | 5.98 | ||||
Percentage of revenue to be reimbursement | 100% | |||||
Payments to Fund Long-Term Loans to Related Parties | $ 900 | 1,100 | ||||
Pipeline Extension Payments To Be Made | 600 | |||||
Rangeview District [Member] | WISE Partnership [Member] | Maximum [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Related Party Transaction, Amounts of Transaction | $ 100 | 100 | ||||
Rangeview District [Member] | Loan Receivable [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.50% | |||||
Rangeview District [Member] | Loan Receivable [Member] | Maximum [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Loan extended, Maximum Capacity | $ 250 | |||||
Rangeview District [Member] | Loan Receivable [Member] | Prime Rate [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Basis spread on variable rate | 2% | |||||
Rangeview District [Member] | Note Receivable [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 8% | |||||
Payments received | $ 500 | |||||
Notes receivable | 1,100 | 1,200 | ||||
Borrowings under notes receivable | 1,100 | 700 | ||||
Accrued interest on notes receivable | 500 | |||||
Rangeview District [Member] | Note Receivable [Member] | Maximum [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Accrued interest on notes receivable | $ 100 | |||||
Rangeview District [Member] | Water And Wastewater Services [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Number of Employee Board of Directors | employee | 4 | |||||
Number of Independent Board of Directors | item | 1 | |||||
Rangeview District [Member] | Wise Partnership 360 Acre Feet [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Volume of received metered water | acre ft | 360 | |||||
Payments for water | $ 700 | |||||
Sky Ranch CAB [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Interest rate | 6% | |||||
Payments received | $ 24,136 | |||||
Notes receivable | 17,200 | |||||
Sky Ranch CAB [Member] | Nelson Pipeline Constructors, LLC [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Amount of payment to construct utility pipelines | 8,200 | $ 500 | ||||
Sky Ranch [Member] | Community Authority Board [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 6% | 6% | ||||
Related Party Estimated Cost | $ 13,200 | $ 13,200 | ||||
Range view District And Sky Ranch Community Authority Board [Member] | ||||||
Related Party Transactions [Abstract] | ||||||
Notes receivable | $ 18,300 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
EARNINGS PER SHARE [Abstract] | ||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 |
Earnings Per Share [Abstract] | ||
Net income | $ 9,619 | $ 20,110 |
Basic weighted average common shares (in shares) | 23,953,740 | 23,890,792 |
Effect of dilutive securities (in shares) | 202,250 | 220,126 |
Weighted average shares applicable to diluted earnings per share (in shares) | 24,155,990 | 24,110,918 |
Earnings per share - basic (in dollars per share) | $ 0.40 | $ 0.84 |
Earnings per share - diluted (in dollars per share) | $ 0.40 | $ 0.83 |