Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 12, 2024

PURE CYCLE CORPORATION

(Exact name of registrant as specified in its charter)

Colorado

(State or other jurisdiction of incorporation)


0-8814		84-0705083
(Commission File Number)		(IRS Employer Identification No.)

34501 East Quincy Avenue, Building 65, Suite A, Watkins, CO 80137

(Address of principal executive offices) (Zip Code)


Registrant’s telephone, including area code	(303) 292-3456

N/A

(Former name or former address, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:


Common Stock 1/3 of $.01 par value	PCYO	The NASDAQ Stock Market
(Title of each class)	(Trading Symbol(s))	(Name of each exchange on which registered)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth Registrant as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth Registrant ☐

If an emerging growth Registrant, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

This current report on Form 8-K is filed by Pure Cycle Corporation (Registrant), a Colorado corporation, in connection with the matters described herein

Item 2.02 Results of Operations and Financial Condition.

On January 12, 2024, the Registrant issued a press release announcing its financial results for the three months ended November 30, 2023. A copy of the press release is furnished as Exhibit 99.1 hereto, and in incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the press release furnished as Exhibit 99.1 to this current report on Form 8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information or exhibit be deemed incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in any such filing.

Item 7.01Regulation FD Disclosure

On January 16, 2024, the Registrant presented and posted on its website a presentation summarizing Pure Cycle’s operations and financial results (Earnings Presentation). The Earnings Presentation is furnished as Exhibit 99.2 to this Form 8-K and is incorporated herein by reference.

The information contained in the Earnings Presentation is summary information and should be read in conjunction with Pure Cycle’s filings with the Securities and Exchange Commission and other public announcements that Pure Cycle may make by press release or otherwise from time to time. The Earnings Presentation will be posted in the Investor Relations section of Pure Cycle’s website, www.purecyclewater.com.

The information contained in this Item 7.01 of Form 8-K, including the accompanying Exhibit 99.2 is being furnished, and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liabilities of that section. The information contained in the presentation shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits


Exhibit No.		Description
99.1		Press Release dated January 12, 2024, announcing earnings for the three months ended November 30, 2023
99.2		Three months ended November 30, 2023 earnings presentation
104		Cover Page Interactive Data File (the cover page XBRL tags are embedded in the inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 16, 2024

Vice
	PURE CYCLE CORPORATION


	By:	/s/ Marc S. Spezialy
		Marc S. Spezialy
		Vice President and Chief Financial Officer

Exhibit 99.1

Pure Cycle Announces Financial Results

For the Three Months Ended November 30, 2023

DENVER, CO / ACCESSWIRE / January 12, 2024 – Pure Cycle Corporation (NASDAQ Capital Market: PCYO) announced its financial results for the three months ended November 30, 2023. Pure Cycle posted $2.1 million of net income for the three months ended November 30, 2023, which marks our eighteenth consecutive fiscal quarter with positive net income. Pure Cycle continues to develop its Sky Ranch Master Planned Community and for the three months ended November 30, 2023, recognized an increase in lot sale revenue of 270% compared to same period 2022 as a result of multiple on-going Phases of development. We also recognized over a 300% increase in water and wastewater revenue for the three months ended November 30, 2023, compared to 2022, due to an increase in oil and gas water sales.

Q1 2024 Highlights

Revenues of $5.4 million, which drove pre-tax income of $2.8 million;

Net income of $2.1 million;

EBITDA of $3.4 million (see table below for reconciliation of net income to EBITDA);

Cash totaled $21.8 million;

For the three months ended November 30, 2023, we delivered 623 acre-feet of water.

Net Income to EBITDA Reconciliation

We continue our profitability as shown in the table below:


	Three Months Ended
(In thousands)	November 30, 2023		November 30, 2022
Net Income	$	2,065	$	159
Add back:
Interest expense, net		108		50
Taxes		737		130
Depreciation / amortization		510		493
EBITDA	$	3,420	$	832

Fully diluted earnings per share	$	0.09	$	0.01

“Our Sky Ranch community continues to demonstrate solid growth with entry level homes and our great location directly off Interstate 70,” commented Mr. Harding, CEO of Pure Cycle. “We together with our homebuilder partners continue to balance our lot deliveries to match market demand, and we continue to see strong demand for affordable homes in the Denver market. With lot inventories and existing home sales well below historic levels Sky Ranch continues to out-perform other master planned communities in Denver. Also contributing was a record quarter for O&G water demand with a continued strong outlook for 2024,” continued Mr. Harding.

Q1 2024 Financial Summary

Revenue

For the three months ended November 30, 2023, and 2022, we reported total revenues of $5.4 million and $1.3 million with $3.3 million and $0.8 million being generated in our water and wastewater resource development segment, $2.0 million and $0.5 million generated by our land development segment, and $0.1 million and less than $0.1 million reported in our single-family rental business.

For the three months ended November 30, 2023, and 2022, we sold 15 and 4 water and wastewater taps for $0.6 million and $0.2 million. We have sold 723 water and wastewater taps at Sky Ranch in Phases 1 and 2A. Based on current prices and engineering estimates, we believe Phase 2 of Sky Ranch will exceed $20.0 million in additional water and wastewater tap fee revenue and cash over the next 3-5 years.

For the three months ended November 30, 2023, we received certain milestone payments from our Lot Delivery Agreement from home builders, which accounted for $2.9 million in milestone payments for Phase 2B. We expect to be substantially complete with the delivery of all 211 Phase 2B lots during calendar 2024. We are approximately 95% completed, with some landscape construction activities to complete in Phase 2A.

As of November 30, 2023, the single-family rental business had 14 homes built and rented in Sky Ranch and 17 additional homes forecasted for construction in Phase 2B. As noted in the prior quarters, due to the overwhelming demand for rental homes at Sky Ranch, we expect to have a total of 91 homes in Phase 2 with the ability to add more than 200 homes as Sky Ranch builds out.

“With our diversified revenue streams, we were well positioned to take advantage of current market conditions to maximize revenue in the first quarter,” commented Marc Spezialy, CFO of Pure Cycle. “We are currently developing on multiple Phases within our Sky Ranch Master Planned Community, due to continued strong demand. We also experienced a significant increase in oil and gas drilling operations in our service area resulting in a substantial increase in commercial water sales,” concluded Mr. Spezialy.

Working Capital

We reported working capital (current assets less current liabilities) of $20.4 million as of November 30, 2023, with $22.0 million of cash and cash equivalents.

Q1 2024 Operational Summary

Water and Wastewater Resource Development

Water deliveries increased for the three months ended November 30, 2023, to a record 623 acre-feet delivered as compared to 207 acre-feet delivered in Q1 2023, primarily due to increased sales to oil and gas operators and new Sky Ranch customers. Oil and gas operations are highly variable and dependent on oil prices, demand for gas, and timing of development of other leases in our service areas; however our current expectation is for continued strong demand for oil and gas water sales through 2024. As Sky Ranch continues to develop, we anticipate continued growth in our residential water and wastewater service revenues. Water and wastewater tap sales increased in Q1 2024 compared to Q1 2023 due to the timing of closings at Sky Ranch. Tap sales are driven by building permit applications and are not contractually established with the builders.

Land Development

Lot sales revenue increased in Q1 2024 compared to Q1 2023 due to timing of construction in Phase 2B at Sky Ranch. Because lot sale revenue is recognized as construction progresses, revenue will fluctuate due to timing of construction activities.

Single Family Rentals

Q1 2024 represented our first quarter of rental income for our 14 completed homes. An additional 17 homes are forecasted for construction in Phase 2B in calendar 2024.

Earnings Call Information

Pure Cycle will host a conference call on Tuesday January 16, 2024, at 8:30AM Eastern (6:30AM Mountain) to discuss the financial results and answer questions. Call details are presented below. We will post a detailed slide presentation on our website, which will provide an overview of Pure Cycle and present summary financial results and can be accessed at www.purecyclewater.com.

When: 8:30AM Eastern (6:30AM Mountain) on Tuesday January 16, 2024

Call in number: 888-506-0062 (access code: 711415)

International call-in number: 973-528-0011 (access code: 711415)

Replay numbers: 877-481-4010 | 919-882-2331 (passcode: 49672)

Replay available until: January 30, 2024 at 8:30AM ET

Event link:https://www.webcaster4.com/Webcast/Page/2247/49672

Other Important Information

The table below presents our consolidated results of operations for the three months ended November 30, 2023 and 2022 (unaudited):


	Three Months Ended
(In thousands, except share information)	November 30, 2023		November 30, 2022
Revenues:
Metered water usage from:
Municipal customers	$	202	$	121
Commercial customers		2,132		392
Wastewater treatment fees		86		63
Water and wastewater tap fees		581		150
Lot sales		1,896		513
Project management fees		100		8
Single-family rentals		109		25
Special facility projects and other		280		68
Total revenues		5,386		1,340

Expenses:
Water service operations		553		479
Wastewater service operations		159		138
Land development construction costs		688		143
Project management costs		79		72
Single-family rental costs		57		10
Depletion and depreciation		362		378
Other		146		106
Total cost of revenues		2,044		1,326

General and administrative expenses		1,438		1,388
Depreciation		148		115
Operating (loss) income		1,756		(1,489)

Other income (expense):
Interest income - related party		724		247
Interest income - Investments		308		228
Oil and gas royalty income, net		34		116
Oil and gas lease income, net		18		19
Other, net		70		1,218
Interest expense, net		(108)		(50)
Income from operations before income taxes		2,802		289
Income tax expense		737		130
Net income	$	2,065	$	159

Earnings per common share - basic and diluted
Basic	$	0.09	$	0.01
Diluted	$	0.09	$	0.01
Weighted average common shares outstanding:
Basic		24,078,544		23,985,788
Diluted		24,153,662		24,087,893

The following table presents our consolidated financial position as of November 30, 2023 (unaudited) and August 31, 2023 (audited):


(In thousands, except shares)	November 30, 2023		August 31, 2023
ASSETS:		(unaudited)
Current assets:
Cash and cash equivalents	$	21,784	$	26,012
Short term investments		167		—
Trade accounts receivable, net		4,778		1,092
Land under development		2,164		1,726
Income taxes receivable		—		551
Prepaid expenses and other assets		249		346
Total current assets		29,142		29,727
Restricted cash		2,880		2,475
Investments in water and water systems, net		57,698		57,798
Construction in progress		5,865		5,457
Single-family rental units		5,227		4,490
Land and mineral rights:
Held for development		4,871		4,652
Held for investment purposes		451		451
Other assets		1,234		1,359
Notes receivable – related parties, including accrued interest
Reimbursable public improvements and project management fees		28,270		24,999
Other		1,481		1,451
Operating leases - right of use assets		210		357
Total assets	$	137,329	$	133,216

LIABILITIES:
Current liabilities:
Accounts payable	$	2,783	$	1,960
Accrued liabilities		1,015		1,761
Accrued liabilities – related parties		906		1,021
Income taxes payable		200		—
Deferred lot sale revenues		3,791		1,661
Deferred water sales revenues		50		69
Debt, current portion		34		31
Total current liabilities		8,779		6,503
Debt, less current portion		6,874		6,885
Deferred tax liability, net		1,352		1,352
Lease obligations - operating leases, less current portion		142		242
Total liabilities		17,147		14,982
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; 24,066,720 and 24,078,720 outstanding, respectively		80		80
Additional paid-in capital		174,770		174,689
Accumulated deficit		(54,668)		(56,535)
Total shareholders’ equity		120,182		118,234
Total liabilities and shareholders’ equity	$	137,329	$	133,216

Company Information

Pure Cycle continues to grow and strengthen its operations, grow its balance sheet, and drive recurring revenues. We operate in three distinct business segments, each of which complements the other. At our core, we are an innovative and vertically integrated wholesale water and wastewater service provider. In 2017, we launched our land development segment which develops master planned communities on land we own and to which we provide water and wastewater services. In 2021, we launched our newest line of business, the rental of single-family homes located at Sky Ranch, which provides long-term recurring revenues, furthers our land development operations, and adds more customers to our water resource segment.

Additional information, including our recent press releases and SEC filings, is available at www.purecyclewater.com, or you may contact our President, Mark W. Harding, or our CFO, Marc Spezialy, at 303-292-3456 or info@purecyclewater.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are all statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, such as statements about the following: our positioning to continue to grow through this market cycle; the completion and delivery of our rental units; timing of development at Sky Ranch; future tap sales and revenues; future home sales by our home builder customers; the affordability of our products; the strength of the Sky Ranch market; forecasts about our fiscal 2024 sales of water to oil and gas operators; our sales of lots; and our expected financial results. The words "anticipate," "likely," "may," "should," "could," "will," "believe," "estimate," "expect," "plan," "intend" and similar expressions are intended to identify forward-looking statements. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ from projected results include, without limitation: home mortgage interest rates, inflation, and other factors impacting the housing market and home sales; the risk factors discussed in Part I, Item 1A of our most recent Annual Report on Form 10-K for the fiscal year ended August 31, 2023; and those factors discussed from time to time in our press releases, public statement and documents filed or furnished with the U.S. Securities and Exchange Commission. Except as required by law, we disclaim any obligation to update publicly any forward-looking statements, whether because of new information, future events or otherwise.

SOURCE: Pure Cycle Corporation

Q1-2024 EARNINGS PRESENTATION PURE CYCLE CORPORATION Presented by: Mark Harding Exhibit 99.2

FORWARD-LOOKING STATEMENTS 2 Statements that are not historical facts contained or incorporated by reference in this presentation are “forward-looking statements” (“FLS”) within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934 as amended. FLS involve risks and uncertainties that could cause actual results to differ from projected results. The words “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend” and similar expressions, as they relate to us, are intended to identify FLS. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. We are not able to predict all factors that may affect future results. We cannot assure you that any of our expectations will be realized. Our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such FLS include, without limitation: the risk factors discussed in our most recent Annual Report on Form 10-K; the timing of new home construction and other development in the areas where we may sell our water, which in turn may be impacted by credit availability; population growth; employment rates; general economic conditions; the market price of water; changes in customer consumption patterns; changes in applicable statutory and regulatory requirements; changes in governmental policies and procedures; uncertainties in the estimation of water available under decrees; uncertainties in the estimation of costs of delivery of water and treatment of wastewater; uncertainties in the estimation of the service life of our systems; uncertainties in the estimation of costs of construction projects; uncertainties in the amount and timing of reimbursable public improvement payments: uncertainty in the single family home rental market and our ability to rent homes in a timely manner or at the amount we project; the strength and financial resources of our competitors; our ability to find and retain skilled personnel; climatic and weather conditions, including flood, droughts and freezing conditions; labor relations; availability and cost of labor, material and equipment; delays in anticipated permit and construction dates; environmental risks and regulations; our ability to raise capital; our ability to negotiate contracts with new customers; and uncertainties in water court rulings; and other factors discussed from time to time in our press releases, public statements and documents filed or furnished with the SEC. 0 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 2

OUR STRATEGIES OUR PERFORMANCE ASSETS TRAJECTORY IMPORTANT UPDATES QUARTERLY REVIEW: Q1-2024 RESULTS 1 2 3 4 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 3

Visionary Leadership of a Strong and Dedicated Team REFLECTING ON OUR STRATEGIES LEADERSHIP & DEDICATED TEAM STRONG DIVERSIFIED BOARD WITH DECADES OF INDUSTRY EXPERIENCE COMPLIMENTARY SEGMENTS STRATEGIC INVESTMENT AND STRONG ASSET PORTFOLIO www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 4

RACHELLE BEAUDRY Head of Marketing EFFECTIVE LEADERSHIP MARK W. HARDING MARC SPEZIALY President, CEO, and Director VP, CFO, Principal Accounting Officer, Principal Financial Officer SCOTT LEHMAN DIRK LASHNITS Vice President, Engineering Vice President, Land Development Dirk is a seasoned leader with a Civil Engineering background and over two decades of local land development experience. He skillfully guides land development, entitlements, and construction, playing a vital role in advancing corporate objectives, risk management, and project success. Scott brings four decades of experience as a Professional Engineer (PE) to the role. His expertise encompasses planning, design, construction, and operation of water and wastewater systems. With educational foundations from the University of Colorado and Stanford University, he plays a pivotal role in shaping our strategies and operations in this vital sector. Marc brings over 20 years of financial expertise. He manages our financial operations and single-family rentals. Marc obtained his bachelor's degree in Accounting and Finance from the University of San Francisco and is a licensed Certified Public Accountant. Mark is an exceptional leader who has significantly shaped Pure Cycle's success. Under his 33 year tenure, the company has successfully acquired over $130 million in water and land interests. His vision and strategic acumen have been instrumental in the company's growth and impact. Dedicated Team Employee Retention in 2023 1 Rentention rate is calculated for employees with 1+ year tenure 1 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 5

Own nearly 30K acre-feet of water rights (surface and ground water) Sustainable water rights we estimate can serve up to 60,000 SFEs Denver metro land development requires developers to have water service as a condition of zoning, offering us a competitive edge Provide industrial and oil and gas customers with water Own and reuse our reclaimed water Own highly-appreciated property in attractive and easily accessible I-70 Corridor of Denver, Colorado Developing nearly 930 acres of a full Master Planned community known as Sky Ranch Sky Ranch can have around 3,200 residential units and over 2 million square feet of retail, commercial and industrial uses (Equivalent of 1,800 residential units) Developing residential and commercial land for which we are the sole water and wastewater service provider Build single family homes in the Denver metro area in neighborhoods we are developing Receive rental income in growing housing market Benefit from immediate asset appreciation and positive cash flows Provide water and wastewater service to rental properties Water and Wastewater Resource Development Segment Land Development Segment Single-Family Home Rentals WATER & WASTEWATER LAND DEVELOPMENT RENTALS SINGLE-FAMILY WE OPERATE MULTIPLE COMPLIMENTARY SEGMENTS www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 6

STRONG ASSET PORTFOLIO WATER/WASTEWATER $40m in Water Systems $9.5m in Waste Water Systems $14.6m Water Rights Portfolio Our water rights portfolio can provide water to as many as 60,000 connections. This would allow ample room for growth within our current water system, which presently supports roughly 2,500 connections. LAND DEVELOPMENT SINGLE FAMILY RENTALS $4.43m of Land for Development Land used for developing the 930 acre Sky Ranch Community which can accommodate up to 3,200 residential lots and up to 2M sq. ft. of commercial development 15 miles east of downtown Denver and 4 miles south of DIA Pure Cycle contracts to build single family homes in it's Sky Ranch Master Planned Community to hold for rentals. Lot development costs fully recovered (horizontal costs and tap fees) Each unit covers financing costs and provides positive cash flows Segment provides excellent asset appreciation positive cash flows. $64m Total Water Assets $5.4m in Constructed Rental Assets $7.2m Fair Market Value of Homes www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 7

MAJOR LEARNINGS FINANCIAL RESULTS PERFORMANCE METRICS Financial Results and Key Performance Indicators MEASURING OUR PERFORMANCE www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 8

Financial Results Q1-2021 Q1-2022 Q1-2023 Q1-2024 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Q1-2021 Q1-2022 Q1-2023 Q1-2024 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Revenue (000's) Gross Profit (000's) $3,342 $5,387 0 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 9

Financial Results Q1-2021 Q1-2022 Q1-2023 Q1-2024 $0 $500 $1,000 $1,500 $2,000 $2,500 Q1-2021 Q1-2022 Q1-2023 Q1-2024 $0 $0.02 $0.04 $0.06 $0.08 $0.1 Net Income (000's) EPS $2,067 $0.09 0 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 10

MEASURING OUR PERFORMANCE Water/WasteWater 56.2% Land Development 41.8% Single Family Rental 2% REVENUE BY SEGMENT Water/Wastewater Land Development Single Family Rentals Q1-2021 Q1-2022 Q1-2023 Q1-2024 -1,000 0 1,000 2,000 3,000 4,000 GROSS PROFIT QOQ BY SEGMENT (000'S) LAND DEV 60 % Gross Margin WATER 64% Gross Margin SFR 47% Gross Margin 1 1 Gross Margin for Water and Wastewater excludes depreciation www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 11

WATER/WASTEWATER SEGMENT RECURRING CUSTOMER GROWTH Actual Projected 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0 1,000 2,000 3,000 4,000 5,000 20% Customer CAGR Avg Customer Annual Revenue $1,500 Water/Wastewater O&G Tap Fees Q1 2021 Q1 2022 Q1 2023 Q1 2024 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 WATER/WASTEWATER SEGMENT REVENUES (000'S) www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 12

Q1 Q2 Q3 Q4 $0 $1,000 $2,000 $3,000 $4,000 FY 2024 FY 2023 FY 2022 FY 2021 FY 2020 With existing systems, we are able to provide water to O&G operators. We have also made strategic investments in our system to further our ability to provide water when it is needed, where it is needed in the future. WE PROVIDE RAW WATER TO O&G OPERATORS FOR DRILLING 140 WELLS DRILLED TO DATE AVERAGE $250,000 OF WATER SALES PER WELL OIL RIG CAN DRILL 20 WELLS PER YEAR WE CAN PROVIDE WATER TO MORE THAN 200 SQUARE MILES IN ADAMS & ARAPAHOE COUNTIES REVENUE (000'S) $1,988 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 13

100% 95% 43% Phase 2b 84.1% Phase 2a 15.9% Q1-2021 Q1-2022 Q1-2023 Q1-2024 0 500 1,000 1,500 2,000 2,500 3,000 3,500 LAND DEVELOPMENT Phase 1 Phase 2a Phase 2b SKY RANCH DEVELOPMENT PROGRESS LAND DEVELOPMENT REVENUE LAND DEVELOPMENT REVENUE QOQ (000'S) Phase 2c 18% www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 14

HOMES RENTED 14 Book FMV 2022 2023 $0 $2,000 $4,000 $6,000 $8,000 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Q1-2024 $0 $20 $40 $60 $80 $100 $120 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 15 SINGLE FAMILY RENTALS BOOK ASSETS & FMV (000'S) Rent Revenue $109,000 RENT REVENUE Q/Q (000S) 32.08% CAGR 14 homes

www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 16 SFR Projections Phase 1 (+4 Homes) Phase 2a (+10 homes) Phase 2b (+17 Homes) Phase 2c (+38 Homes) Phase 2d (+26 Homes) Cumulative Homes 4 14 31 69 95 Rental income 131 459 1,017 2,263 3,116 Direct operating costs 48 168 372 828 1,140 Interest and depreciation expense 50 174 384 856 1,178 Net operating income $33.60 $117.60 $260 $580 $798 Add back non-cash items 37 129 285 635 874 Cash flows before G&A & tax $70.40 $246.40 $546 $1,214 $1,672 SFR - Cumulative Pro Forma P&L by Phase (000s) Based on actual results 14 completed homes Sky Ranch Phase 2

www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 17 Book Assets FMV Phase 1 Phase 2a Phase 2b Phase 2c Phase 2d $0 $10,000 $20,000 $30,000 $40,000 $50,000 Rental Income Cash flows before G&A & tax Phase 1 Phase 2a Phase 2b Phase 2c Phase 2d 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Completed Phases Completed Phases SFR Phase PrOjections Recurring Income Growth (000s) Asset Growth (000s)

ASSETS TRAJECTORY WATER CUSTOMERS & CAPACITY OIL & GAS INFRASTRUCTURE WATER PRODUCTION CAPACITY TAP FEES - WATER PORTFOLIO LAND DEVELOPMENT PROJECTIONS SINGLE FAMILY RENTAL PROJECTIONS Portfolio Utilization and Projections www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 18

Water & Wastewater WATER PORTFOLIO - 60,000 CONNECTIONS WATER SYSTEMS CAN SERVICE 3,600 TAPS STATE OF THE ART WASTEWATER FACILITY Land Development Single Family Rentals 930 ACRE MASTER DEVELOPMENT UP TO 3,200 RESIDENTIAL LOTS UP TO 2M SQFT OF COMMERCIAL DEVELOPMENT 14 COMPLETED/RENTED HOMES 200 PLANNED HOMES IN SKY RANCH EXPANDING OUR PRODUCT MIX TO INCLUDE: FRONT LOAD DETACHED HOMES PAIRED HOMES ALLEY LOAD HOMES WELL POSITIONED FOR GROWTH Capacity Greater than Utilization www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 19 • ..,_.......-◄ --

www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 20 CURRENT SYSTEM CAPACITY Based on 2023 water deliveries and results Supply 3.232 Total MGD From Wells 1.584 MGD Available Capacity Carrent Demand Demand The remaining supply available for use for future tap capacity is ~2.88 MGD with the potential to generate an additional $18m annual revenue. $3m in revenue generated in 2023 from 1 5% of system production capacity

www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 21 TAP FEES - PORTFOLIO CAPACITY (60,000) Supply 30,000 Acre Feet Combined Water Supply Demand/Capacity 60,000 Connections Available Capacity Current System Capacity Results $2.3 Billion At Buildout Remaining Capacity Type Water Tap SewerTaP-, Total Fee Per SFE $30,977 $_7_250 $38,227 We own or control the water rights and infrastructure required to withdraw, treat. store, deliver and collect water and wastewater for an estimated 60,000 single-family equivalents (SFEs} at buildout The current system supports roughly ~ $95.5m in tap revenues.

www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 22 SKY RANCH CAPACITY PROJECTIONS Under Construction Development $58om 1,800 SFEs Commercial Residential1.850 SFEs Progress 5,000 SFEs Remaining Sold Not Started Results Sky Ranch is zoned to accommodate up to 3,200 single- and multi-family homes, and over 2 million square feet of retail. commercial. and light industrial space - which is the equivalent of 1,800 residential lots for a total of 5,000 SFEs The first 2 development phases of Sky Ranch have generated ~ $55m in lot Revenue with and~ $44m in reimbursable costs with ~ $34m reimbursed to date The remaining development phases are estimated to produce $167m from residential lots and $432m from commercial development.

www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 23 SINGLE FAMILY RENTALS - SKY RANCH Strategy is to retain the equity value in the land and water and deliver affordable rental units in our Sky Ranch Master Planned Community Each unit delivers positive cash flows with a 65% LTV On average each unit carries $150,000 fair market value equity roll forward Results Annual Revenues $6.6 million Future Phases Phase 2c Phase 2b Phase 2d I Phase2a - Progress 200 Units Planned Rentals 47% ..l!l Completed ·c: :::, 7% l

Executing our strategic approach to growing our integrated water utility, land development, and single-family rentals to maximize returns for years to come Strengthening our ability to take advantage of investment opportunities and single-family rentals while systematically developing in land and water Clear path to maximize returns with our large asset portfolio with low cost based assets in each segment allowing us to generate above market returns and substantial organic growth year after year Key Takeaways GROSS MARIN ROA ASSET CAGR 5 Years 1 1 ROA Calculated Pre-Tax W/ Depreciation added back on Active Segment Assets Annuallized www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 24 62% 10.04% 8.88%

www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 25 IMPORTANT UPDATES Updates and Q&A CORPORATE INFORMATION STOCK REPURCHASE PROGRAM Q&A

Period Total Number of Shares Purchased Average Price Paid per Share September 2023 15,000 $10.06 October 2023 5,000 $9.49 Q2 2024 2,000 $9.93 Total 22,000 $9.78 As announced in the press release on November 14, 2022, our board approved an open-ended stock repurchase program which authorizes our CEO and CFO to repurchase up to 200,000 shares in the open market. 20,000 shares have been purchased to date STOCK REPURCHASE PROGRAM UPDATE www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 26

Board of Directors Mark W. Harding Marc Spezialy Patrick J. Beirne Peter C. Howell Jeffrey G. Sheets Wanda J. Abel Daniel R. Kozlowski Fredrick A. Fendel III. President and CEO Vice President and CFO Chair of the Board Director and Chair of the Audit Committee Director Director Director and Chair of the Compensation Committee Director and Chair of the Nominating and Governance Committee 0 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 27

Q&A PURE CYCLE CORPORATION www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 28

Document and Entity Information	Jan. 12, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jan. 12, 2024
Securities Act 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, State or Province	CO
Entity Address, Address Line One	34501 East Quincy Avenue, Building 65, Suite A
Entity Address, City or Town	Watkins
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
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000276720
Amendment Flag	false

N-2	Jan. 12, 2024
Cover [Abstract]
Entity Central Index Key	0000276720
Amendment Flag	false
Securities Act File Number	0-8814
Document Type	8-K
Entity Registrant Name	PURE CYCLE CORPORATION
Entity Address, Address Line One	34501 East Quincy Avenue, Building 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
Entity Emerging Growth Company	false