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<SEC-DOCUMENT>0000276720-02-000018.txt : 20021017
<SEC-HEADER>0000276720-02-000018.hdr.sgml : 20021017
<ACCEPTANCE-DATETIME>20021017104250
ACCESSION NUMBER:		0000276720-02-000018
CONFORMED SUBMISSION TYPE:	10KSB/A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010831
FILED AS OF DATE:		20021017

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PURE CYCLE CORP
		CENTRAL INDEX KEY:			0000276720
		STANDARD INDUSTRIAL CLASSIFICATION:	REFRIGERATION & SERVICE INDUSTRY MACHINERY [3580]
		IRS NUMBER:				840705083
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		10KSB/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-08814
		FILM NUMBER:		02791063

	BUSINESS ADDRESS:	
		STREET 1:		8451 DELAWARE STREET
		CITY:			THORNTON
		STATE:			CO
		ZIP:			80260
		BUSINESS PHONE:		3032923456

	MAIL ADDRESS:	
		STREET 1:		8451 DELAWARE STREET
		CITY:			THORNTON
		STATE:			CO
		ZIP:			80260
</SEC-HEADER>
<DOCUMENT>
<TYPE>10KSB/A
<SEQUENCE>1
<FILENAME>pcy10k.txt
<TEXT>
                               UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                               Form 10-KSB

	 X  ANNUAL REPORT UNDER SECTION 13 OR 15 (D) OF
	        THE SECURITIES EXCHANGE ACT OF 1934

	    TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF
	  	  THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2001

Commission File Number   0-8814

PURE CYCLE CORPORATION
(Name of small business issuer as specified in its charter)

	Delaware				84-0705083
 (State of incorporation)      (I.R.S. Employer Identification No.)

8451 Delaware Street, Thornton, CO                  80260
(Address of principal executive office)         (Zip Code)

Issuer's telephone number:   (303) 292-3456


						      Name of each
                                                        exchange
Securities registered under          Title of Class  on which registered
Section 12(b)of the Exchange Act:       None                    None


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

Common Stock,
1/3 of $.01 par value
(Title of class)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [ ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB  [X]

Revenues for fiscal year ended August 31, 2001:	$ 869,255

Aggregate market value of voting stock held by non-affiliates:
$10,197,169 (based upon closing price on the OTC Bulletin Board
on November 8, 2001)

Number of shares of Common Stock outstanding, as of November 15,
2001:    78,439,763

Transitional Small Business Disclosure Format(Check One): Yes [ ] No [x]


Documents incorporated by reference:  None




Table of Contents

Part I

Item								Page

1.	Description of Business 	                          3

2.	Description of Property 	                          6

3.	Legal Proceedings	                                  6

4.	Submission of Matters to a Vote of Security Holders       6

	               Part II

5.	Market for Common Equity and
	Related Stockholder Matters	                          7

6.	Management's Discussion and Analysis 	                  7

7.	Financial Statements 	                                 13

8.	Changes in and Disagreements with Accountants
	on Accounting and Financial Disclosure 	                 23

	               Part III

9.	Directors, Executive Officers, Promoters and
	Control Persons; Compliance with Section 16(a)
	of the Exchange Act  	                                24

10.	Executive Compensation 	                                25

11.	Security Ownership of Certain Beneficial
	Owners and Management   	                        26

12.	Certain Relationships and Related
	Transactions  	                                        29

13.	Exhibits and Reports on Form 8-K 	                29

	Signatures 	                                        31

"SAFE HARBOR" STATEMENT UNDER THE UNITED STATES PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

	Statements that are not historical facts contained in this
Annual Report on Form 10-KSB are forward looking statements that
involve risk and uncertainties that could cause actual results
to differ from projected results.  Factors that could cause
actual results to differ materially include, among others: the
market price of water, changes in applicable statutory and
regulatory requirements, changes in technology, uncertainties in
the estimation of water available under decrees and timing and
cost of development and delivery, uncertainties in the
estimation of revenues and costs of construction projects, the
strength and financial resources of the Company's competitors,
the Company's ability to find and retain skilled personnel,
climatic conditions, labor relations, availability and cost of
material and equipment, delays in anticipated permit and start-
up dates, environmental risks, the results of financing efforts,
and general economic conditions.

PART I

Item 1. Description of Business

General

	Pure Cycle Corporation (the "Company") was incorporated in
Delaware in 1976. The Company is engaged in providing water and
wastewater services to customers located in Denver, Colorado.
The Company operates water and wastewater systems which include
designing, constructing, operating and maintaining systems
serving customers in the Denver metropolitan area. The Company
also owns patented water recycling technologies which are
capable of processing wastewater into pure potable drinking
water.  There have been no significant changes in the way the
Company does business during the year.  The Company's focus
continues to be to provide water and wastewater service to
customers within its service area and to expand its service to
other areas throughout the Denver metropolitan area and the
southwestern United States.

	In 1996, the Company entered into a landmark water
privatization agreement with the State of Colorado and the
Rangeview Metropolitan District (the "District") for the
development of over 26,000 acre feet of water in the Denver
metropolitan area.  The water privatization agreement enabled
the Company (i) to acquire ownership to a total gross volume of
1,165,000 acre feet of groundwater (with an annual usage right
of 11,650 acre feet per year), an option to substitute 1,650
acre feet of surface water in exchange for a total gross volume
of 165,000 acre feet of groundwater, and the use of surface
reservoir storage capacity (collectively referred to as the
"Export Water Supply"); (ii) the Company entered into two
eighty-five year water and wastewater privatization agreements
("Service Agreements") with the District to design, construct,
operate, and maintain the District's water and wastewater
systems to service customers within the District's 24,000 acre
service area which is located in the greater Denver metropolitan
area in Arapahoe County ("Service Area").  The District has
reserved approximately 14,350 acre feet per year of water and
surface reservoir storage capacity (collectively referred to as
the "Service Area Water Supply") for use within the District's
Service Area.

	The Company's water assets together with its Service
Agreements enable the Company to develop and market water and
wastewater service to cities, municipalities and special
districts in need of additional water supplies and to serve the
water and wastewater needs of customers within the District's
Service Area.  The Company will seek to utilize its patented
water recycling technologies to process the wastewater into pure
potable water for reuse applications.

Description of Company Assets

Rangeview Water Supply

	In 1996, as part of a comprehensive settlement agreement with
the State of Colorado ("Settlement Agreement"), the Company
purchased all of the District's outstanding bonds from the
holders of the securities and entered into a water privatization
agreement between the District and the Company.  As part of the
Settlement Agreement, the Company entered into the Service
Agreements and purchased the Export Water Supply, which consists
of a total gross volume of 1,165,000 acre feet (approximately
11,650 acre feet per year) of non-tributary groundwater, the
option to substitute 1,650 acre feet of tributary surface water
for a total gross volume of 165,000 acre feet of non-tributary
groundwater, and surface reservoir storage rights from the
District in exchange for all the District's outstanding bonds.
The Company is seeking to develop and market its Export Water
Supply to Denver area water providers that are in need of
additional water supplies.

Comprehensive Amendment Agreement

	In order to acquire the District's outstanding bonds to enable
the Company to enter into the Settlement Agreement and to
acquire the Export Water Supply, the Company negotiated
agreements with all the remaining bond holders and amended the
Water Commercialization Agreement ("WCA") and its agreements
with all prior investors in the WCA.  Pursuant to the
Comprehensive Amendment Agreement (the "CAA") entered into in
conjunction with the Settlement Agreement, such bond holders and
investors have a right to receive  a total of $31,807,000 from
the proceeds of a sale or other disposition of the Export Water
Supply (see Note 3 to the financial statements).

Service Agreements

	In 1996, the Company entered into an eighty-five year water
privatization agreement with the District to design, construct,
operate, and maintain the District's water system to provide
water service to customers within the Service Area.  The
District has reserved approximately 14,350 acre feet of water
per year, together with surface reservoir storage capacity for
the Company's use in providing water service to customers within
the District's Service Area.  In exchange for providing water
service to customers within the Service Area, the Company will
receive 95% of all amounts received by the District relating to
water services remaining after payment of royalties to the State
of Colorado Land Board.

	In January of 1997, the Company entered into an eighty-five
year Wastewater Service Agreement with the District which
provides for the Company to design, finance, construct, operate
and maintain the District's wastewater system to provide
wastewater service to customers within the Service Area.  In
exchange for providing wastewater service to customers within
the Service Area, the Company will receive 100% of the
District's wastewater tap fees, and 90% of the District's
wastewater usage fees.

	The Company supplies water and wastewater services to
customers within the 24,000 acres of property which constitute
the boundaries of the Service Area.  The Service Area is located
in southeastern Arapahoe County, Colorado, a  growing county
bordering Denver, Colorado.  Currently the majority of the
property is undeveloped land owned by the State of Colorado;
however, portions of the property are currently under
development.  Development of the property is dependent on
overall  growth in the Denver metropolitan area.

	Development of the Rangeview water supply is are divided into
two phases:  one phase is the development and distribution of
the Export Water Supply to Denver area water providers in need
of additional water supplies; and the second, is the development
of water and wastewater service to customers within the Service
Area.

Paradise Water Supply

	In 1987, the Company acquired certain water, water wells, and
related assets from Paradise Oil, Water and Land Development,
Inc., which constitute the "Paradise Water Supply".  The
Paradise Water Supply includes 70,000 acre feet of tributary
Colorado River decreed water, a right-of-way permit from the
United States Department of the Interior, Bureau of Land
Management for the construction of a 70,000 acre foot dam and
reservoir across federal lands, and four water wells ranging in
depth from 900 feet to 1,800 feet.  The water wells produce
approximately 7,500 - 9,400 gallons per minute or approximately
14,000 acre feet per well per year with an artesian pressure of
approximately 100 pounds per square inch.

Recycling Technology

	The Company developed and patented water recycling technology
which converts single-family home wastewater/sewage into pure
potable drinking water.  The Company manufactured, installed and
operated the single-family water recycling units in the late
1970's and early 1980's until halting production of the units in
1982.  The Company has shifted its strategic market for its
water recycling technology from its original single-family units
to large municipal wastewater treatment applications.  The
Company has not operated a large wastewater treatment plant
using its technologies and there can be no assurance that the
technology will be technically or economically feasible on a
large scale.  The Company, through its Wastewater Service
Agreement, will seek to apply its water recycling technology to
treat municipal wastewater into pure potable water for reuse.

The Business

	Beginning in fiscal 1987, and continuing through fiscal 2001,
the Company has acquired a portfolio of water assets which are
described above in the Description of Company Assets.  This
portfolio of water assets can be used to provide water service
to customers located throughout the Denver metropolitan area and
the Company has acquired the exclusive right to provide water
and wastewater service to customers located within the Service
Area.  The Company seeks to utilize its water assets and
wastewater treatment technologies to privatize other government
owned water and wastewater systems in Colorado and throughout
the western United States.

	The Rangeview Metropolitan District is a quasi-municipal,
political subdivision of the State of Colorado and is empowered
to provide water and wastewater services to approximately 24,000
acres of property located south and east of Denver metropolitan
area, most of which is owned by the State of Colorado (the
"Service Area").

	The development of the District's Service Area is dependent on
growth in the Denver metropolitan area, and on the State of
Colorado selling portions of its property located within the
Service Area to parties interested in the development of the
land.  The District has reserved approximately 14,350 acre feet
of water annually, together with surface reservoir storage
capacity, to provide water service to the property.  The
District completed a study in 1997 to analyze the future
development opportunities for the property and defined three
categories of land uses:  residential, commercial/light
industrial, and open space.  Approximately 10,000 acres is
suitable for residential development accommodating up to 70,000
single-family homes; approximately 2,200 acres is suitable for
commercial and light industrial development along the primary
access corridors; and the remaining 12,800 acres is suitable for
open space (i.e. parks, playing fields, and golf courses).

	Pursuant to the Company's water and wastewater Service
Agreements, the Company will develop, operate and maintain the
District's water and wastewater systems. In exchange for
developing, operating and maintaining the District's water
system, the Company receives 95% of the water tap fee and usage
fee revenues after payment of a twelve percent (12%) royalty to
the State Land Board.  In exchange for developing, operating and
maintaining the District's wastewater system the Company
receives 100% of the District's wastewater tap fees and 90% of
the District's wastewater usage fees.  The District is empowered
to set rates and charges for water and wastewater services.
Pursuant to the Settlement Agreement, the District's water rates
and charges must be the average of similar rates and charges of
the three surrounding municipal water providers.  Portions of
the Company's participation in the water and wastewater tap fees
and user fees are required to be used to finance the development
of facilities needed to furnish water and wastewater service.

	In 1998, the Company entered into an agreement to provide
water and wastewater service to a 400 acre development which now
include the construction of a 500-bed Academic Model Juvenile
Facility ("Model Facility").  The Model Facility paid a Water
System Development and Water Resource Charge based on estimated
water consumption, for the construction of water and wastewater
systems.  Pursuant to its Service Agreements, the Company has
received all water and wastewater fees pursuant to the
agreements totaling $2,013,495 for the construction of the water
and wastewater facilities.  Additionally, the Company received
$154,800 from the State of Colorado for the construction of
additional facilities related to the wastewater plant which the
Company constructed on behalf of the State of Colorado.  The
Company completed construction of the water and wastewater
facilities in July 2001, concurrent with the opening of the
Model Facility.

	The 40 largest municipal water providers in the Denver
metropolitan area deliver approximately 98% of the water
consumed by residents and businesses in the Denver metropolitan
area.  The Company is actively marketing the Export Water Supply
to each of the 40 largest providers. The Export Water Supply
could be sold for a lump sum amount or incrementally pursuant to
the service contracts whereby the Company will design,
construct, operate and maintain the water system to deliver the
water to customers.  The timing, terms, and conditions of sales,
if any, are dependent on the purchaser.

	The Company is also pursuing the sale of water from the
Paradise Water Supply to users in the Denver metropolitan area
and to cities, municipalities, and special districts in the
downstream states of Arizona, Nevada and California.  However,
there are certain restrictions under the Colorado River Compact
which relate to a reallocation of water from one state to
another, including a requirement that a court decree authorizing
the use of the water out of state be obtained, and compliance
with other interstate compacts or agreements, which would need
to be resolved or complied with before the Paradise Water Supply
can be sold to users outside of Colorado.

	The Company's business of providing water and wastewater
services is subject to competitive factors since alternative
providers are available.  The Company is aware of other private
water companies who are attempting to market competing service
to municipal water providers in the Denver area.  In addition,
municipal water providers seeking to acquire water evaluate
independent water owned by individuals, farmers, ranchers, and
others.  The principal factors affecting competition in this
regard include, but may not be limited to, the availability of
water for the particular purpose, the cost of delivering the
water to the desired location, the availability of water during
dry year periods, the quality and quanity of the water source,
and the reliability of the water supply.  The Company believes
that its water provides the Company with an advantage over its
competition because the water the Company owns has been
designated for municipal use by decrees issued by Colorado water
courts, and because of the quantity of water available, the
quality of water, its location relative to the Denver
metropolitan area, (and Paradise's location to deliver water to
either downstream users or Denver area water users through
exchanges or other transfers), and price.  The quantity of water
the Company has available for sale  has been determined by court
decrees of the Colorado water courts.  The Company has had the
quality and quantity of the Rangeview and Paradise Water Supply
evaluated by independent appraisers and water engineers. The
Rangeview water quality, without treatment, meets or exceeds all
current federal and state drinking water standards.

	Water processing and municipal water recycling are also
subject to competition from municipal water providers who also
provide wastewater/sewage processing, and from regional
wastewater/sewage processors.  The majority of wastewater/sewage
treatment in the Denver metropolitan area is processed by
approximately 10 major wastewater/sewage treatment providers.
The majority of Denver area water providers participate in the
Metropolitan Wastewater Authority which processes approximately
95% of the area's wastewater/sewage.  The Company is not aware
of any private companies providing wastewater/sewage treatment
services in the Denver metropolitan area.  The Company believes
that it could have a competitive advantage because its
wastewater treatment technology uses no toxic chemicals and the
water after processing exceeds stringent water quality standards
currently in effect. Additionally, residual material created in
the wastewater treatment process can be composted into a high
grade fertilizer for agricultural use.

	If the Company is successful in selling water, the
construction of wells, dams, pipelines and storage facilities
may require compliance with environmental regulations; however,
the Company believes that regulatory compliance would not
materially impact such a sale.  It is anticipated that a
purchaser of the Company's water would undertake to construct
the required facilities to deliver the water to its users,
however the Company would consider providing such infrastructure
as part of a water sale agreement. If the Company were to
ultimately agree to provide such facilities, the Company could
incur substantial capital expenditures to comply with
governmental regulations.  However, the Company cannot assess
such costs until the purchaser of the water and the nature of
the water delivery system required has been determined.
Similarly if the Company were to obtain a contract for treatment
of wastewater and sewage, governmental regulations concerning
drinking water quality and wastewater discharge quality may be
applicable.  However, until the Company has a contract proposal
specifying the quantity and type of wastewater to be treated and
the proposed use of such treated water, the cost of regulatory
compliance cannot be determined.

	The Company holds several patents in the United States and
abroad related to its water recycling system and its components.
The value to the Company of these patents is dependent upon the
Company's ability to adapt its water recycling system to larger
scale applications, or to develop other uses for the technology.

	The Company currently has three full time employees and one
part time employee.

Item 2. 	Description of Property

	The Company currently leases office facilities from a related
party at the address shown on the cover page.

	The Company owns a total gross volume of 1,165,000 acre feet
(approximately 11,650 acre feet per year) of non-tributary
groundwater, an option to substitute 1,650 acre feet of
tributary surface water in exchange for a total gross volume of
165,000 acre feet of non-tributary groundwater, and surface
storage rights from the District. See "Item 1. Description of
Business - Description of Company's Assets - Rangeview Water
Supply."

	The Company owns approximately 70,000 acre feet of conditional
water rights, water wells and related assets in the State of
Colorado by assignment and quit claim deed.  See "Item 1.
Description of Business - Description of Company's Assets -
Paradise Water Supply."

Item 3.	Legal Proceedings

	The Company has no legal proceedings.

Item 4.	Submission of Matters to a Vote of Security Holders

	No matters were submitted to a vote of stockholders during the
fourth quarter ended August 31, 2001.



PART II

Item 5.	Market for Common Equity and Related Stockholder
Matters

Markets

	The table below shows for the quarters indicated the high and
low bid prices of the Common Stock on the OTC Bulletin Board.
The Company's Common Stock is traded on the OTC Bulletin Board
under the trade symbol PCYL.  As of November 15, 2001, there
were 3,882 holders of record of the Company's Common stock.

	Fiscal Quarter		      Low	  High

		2001	        First	     $.0625	  $.12
				Second       $.05	  $.13
				Third	     $.08	  $.13
				Fourth       $.0625	  $.18

		2000	        First	     $.12	  $.19
				Second       $.10	  $.19
				Third	     $.125	  $.18
				Fourth      $.08	  $.15


	Quotations reflect inter-dealer prices, without retail mark-
up, mark-down or commission, and may not necessarily represent
actual transactions.

Dividends

	The Company has never paid any dividends on its common stock
and does not anticipate paying any dividends in the foreseeable
future.  Dividends cannot be paid on the common stock at any
time when there are unpaid accrued dividends owning on the
Company's outstanding Preferred Stock.

Recent Sales of Unregistered Securities

	In August 2001, the Company entered into a Plan of
Recapitalization and a Stock Purchase Agreement whereby the
Company issued 6,455,000 shares of Series D Preferred Stock to
the Company's CEO, Mr. Thomas Clark in exchange for 421,666
shares of common stock, 3,200,000 shares of Series C Preferred
Stock, 500,000 shares of Series C-1 Preferred Stock, 666,667
shares of Series C-2 Preferred Stock, and 1,666,667 shares of
Series C-3 Preferred Stock, all of which were owned by Mr.
Clark. The Company retired 3,200,000 shares of Series C
Preferred Stock, 500,000 shares of Series C-1 Preferred Stock,
666,667 shares of Series C-2 Preferred Stock, and 1,666,667
shares of Series C-3 Preferred Stock.  The Company sold 625,000
shares of the Company's Common Stock at $.16 per share to two
accredited investors.  Proceeds to the Company were $100,000.
The shares were issued under Section 4(2) of the Securities Act
of 1933.

	In December 2000, the Company sold 700,000 shares of the
Company's Common Stock to two accredited investors at $.15 per
share.  Proceeds to the Company were $105,000.

Item 6.	Management's Discussion and Analysis

General

	Pure Cycle is engaged in the privatization of municipal water
and wastewater systems in Colorado.  The Company seeks to use
its water and water technologies to enhance the availability and
quality of domestic drinking water.  The Company purchased
approximately 1,165,000 acre feet of water (11,650 acre feet
annually) and entered into two eighty-five  year water and
wastewater Service Agreements with the Rangeview Metropolitan
District which will enable the Company to provide water and
wastewater service to over 36 square miles of property located
in the Denver area. The Company will integrate its water
recycling technologies for processing wastewater into pure
potable water for reuse at its wastewater treatment facilitity
as wastewater flows increase from development within the
District's Service Area increases.

	The Company is aggressively pursuing the marketing and sale of
its water rights to municipal water providers in the Denver
metropolitan region as well as users in Arizona, Nevada and
California to generate current and long term revenue sources.
During fiscal year 2001, the Company recognized construction
revenues of $772,501 and delivered approximately 40 million
gallons of water to customers within the District's Service
Area. The Company continues to meet with developers and other
parties interested in developing portions of the District's
Service Area.  The District's Service Area is primarily
undeveloped land owned by the State of Colorado situated in the
growing Arapahoe County.  A portion of the property is currently
developed and the Company has constructed the water and
wastewater systems to serve customers on the property.

		In 1998, the Company entered into an agreement to provide
water and wastewater service to a 400 acre development which
includes a 500-bed Academic Model Juvenile Facility ("Model
Facility").  The Model Facility paid a Water System Development
and Water Resource Charge based on estimated water consumption,
for the construction of water and wastewater systems.  Pursuant
to its Service Agreements, the Company has received all fees
pursuant to the agreements totaling $2,013,495 for the
construction of the water and wastewater facilities.
Additionally, the Company received $154,800 from the State of
Colorado for the construction of additional facilities related
to the wastewater plant which the Company constructed on behalf
of the State of Colorado.  The Company completed construction of
the water and wastewater facilities in July 2001, concurrent
with the opening of the the Model Facility.

	In addition to the Company's Service Area activities, the
Company continues to meet with Denver area water providers to
develop and sell the Company's Export Water Supply. Denver area
water providers continue to experience strong regional growth
rates which continue to pressure their developed water supplies.
The Company is marketing its Export Water Supply to water
providers in need of supplemental water supplies.  Additionally,
the Company has presented water supply proposals to private and
municipal water providers in Nevada, Arizona and California for
the sale of the Company's 70,000 acre feet of Paradise Water
Supply, understanding that certain legal issues relating to
interstate water transfers may exist.  The Company continues to
discuss water supply arrangements with private companies and
municipal water providers to whom it has made proposals.  The
Company continues to identify and market its water to other
private companies and municipal water providers.

	The Company annually assess any potential impairment of
the Company's water assets.  The Company's water assets are
long lived assets which will deliver water to customers for
periods in excess of 100 years.  The Company's impairment
analysis for its Rangeview water supply incorporates a
reasonable development horizon for the Company's 24,000
acre Service Area. The Service Area is capable of
supporting between 60,000 and 100,000 single family
equivalent homes and will take between 30 and 40 years to
fully develop.  The Service Area is located at the edge of
the Denver metropolitan area and portions of the property
have already developed.

	Key assumptions used in the impairment analysis are as
follows: The Company is to receive revenues from two income
sources:  1) a one time access fee known as tap fees; and
2) an annual fee based on the amount of water delivered to
customers.  The Company's established fees are the average
of the three surrounding municipal water providers
currently $10,500 per tap and $2.25 per 1,000 gallons of
water delivered.  The Company's engineers have estimated
the cost to construct the infrastructure needed to deliver
water to customers within its Service Area, and operating
and maintenance costs of the water system.  Based upon
these key assumptions the Company's cash flow projections
 exceed the acquisition costs of the asset.

	The Company's impairment analysis for its Paradise water
supply incorporates the development and sale of 70,000 acre
feet of its Colorado River water supply over a 30 year
period.  The Company has two principal markets for the
Paradise asset: one are users within the Denver
metropolitan area; and second are users in the downstream
states of Nevada and California.  Infrastructure currently
exists to transport Colorado River water to the Denver
metropolitan area.  The Company would seek to deliver it's
Paradise water to reservoirs which it owns as part of the
Rangeview water supply and deliver Paradise water through
its Rangeview water system.  The key assumption used in the
impairment analysis is the sale of water to users in the
Denver market, based on the same terms as those used for
the Rangeview asset, receiving revenues from tap fees, and
annual water usage fees from delivered water.

	The Company estimates the cost to deliver the water to the
Denver metropolitan area through an exchange of water for
use of existing infrastructure may consume up to 50% of the
Paradise water supply, thus allowing for the delivery of
approximately 35,000 acre feet of Paradise water to the
Rangeview water system.  Based upon these key assumptions
the Company's cash flow projections exceed the acquisition
costs of the asset.

	Alternatively, the downstream states' (i.e. Nevada and
California) use of the Paradise asset would use the
Colorado River as the delivery mechanism to deliver the
water.  Use of the Colorado River as the delivery mechanism
to our farthest deliverable point in southern California
could result in water losses (primarily due to evaporation)
of up to 50%. The key assumption used in the impairment
analysis is the sale of water to users in the downstream
states based on comparable wholesale water supply
agreements generating approximately $400 per acre foot per
year.  Based upon these assumptions for delivery of water
to users in the downstream states, the Company's cash flow
projections exceed the acquisition costs of the asset.

	At this time the Company is not able to determine the timing
of water sales or the timing of development of the property
within the District's Service Area.  There can be no assurance
that these sales can be made on terms acceptable to the Company
or that development will occur.  In the event water sales are
not forthcoming or development of the property within the
District's Service Area is delayed, the Company may sell
additional portions of its profits interest, incur additional
short or long-term debt obligations or seek to sell additional
shares of common stock, preferred stock or stock purchase
warrants as deemed necessary by the Company to generate
operating capital.  The Company's ability to ultimately realize
its investment in its two primary water assets is dependent on
its ability to successfully market the water.  Under the
provisions of the CAA, the other investors in the Rangeview
project are to receive the first $31,807,000 from the sale or
other disposition of the Export Water Supply.  The Company has
agreed to pay the next $4,000,000 in proceeds to LCH, Inc., a
company affiliated with the Company's president.  The next
$433,000 in proceeds are payable to the holders of the Company's
Series B Preferred Stock.  The Company retains 100% of the
proceeds in excess of $36,240,000 from the sale or other
disposition of the Export Water Supply.

Results of Operations

During fiscal year 2001, the Company generated water usage
revenues from the sale of water to customers within the
Company's Service Area of  $96,754 compared to $53,886 for
fiscal 2000, and incurred approximately $11,181 in operating
costs compared to $8,690 for fiscal 2000. The Company recognized
construction revenues of $772,501 in fiscal year 2001 and
incurred construction costs of $488,984 compared to revenues and
costs of $916,601 and $700,142, respectively, in fiscal year
2000.  The Company recognized revenues from construction based
on percentage-of-completion methodology.  Gross margins improved
from 27% in fiscal year 2000 to 42% in fiscal year 2001 due
primarily to the settlement of $95,000 in liquidated damages as
a resultof the late completion of certain water facilities by
the Company's contractor for the Model Facility.

	General, administrative and marketing expenses for fiscal year
2001 were $231,229, or approximately $42,000 lower than for
fiscal year 2000 due primarily due to  a decrease in overhead
salaries and the Company's lower cost for office space.
Interest income decreased to $41,464 in fiscal year 2001, as
compared to $50,842 for fiscal year 2000 due primarily to a
decrease in the average balance in the Company's cash operating
accounts.  Interest expense decreased approximately $35,000 to
$231,368 as compared to $266,074 in fiscal year 2000 due
primarily to a decrease in the prime lending rate.  Net loss for
fiscal year 2001 of $52,043 was approximately $31,000 lower than
for fiscal year 2000, primarily due to recognition of
construction revenues.




Liquidity and Capital Resources

	The Company's working capital at August 31, 2001 was $462,180.
The Company believes that at August 31, 2001, it has sufficient
working capital to fund its operations for the next year or
longer.  There can be no assurances, however, that the Company
will be successful in marketing the water from its two primary
water projects in the near term.  In the event sales of these
assets are not achieved, the Company may sell additional
participating interests in its water projects, incur additional
short or long-term debt or seek to sell additional shares of
common or preferred stock or stock purchase warrants, as deemed
necessary by the Company, to generate working capital.

	Development of any of the water that the Company has, or is
seeking to acquire, will require substantial capital investment
by the Company.  Any such additional capital for the development
of the water is anticipated to be financed by the municipality
purchasing such water, through the sale of water taps and water
delivery charges. A water tap charge refers to a charge imposed
by a municipality  or in this case, the Company, to permit a
water user access to a water delivery system (i.e. a single-
family home's tap into the municipal water system), and a water
delivery charge refers to a water user's monthly water bill,
generally charged per 1,000 gallons of water consumed.

Operating Activities

	During fiscal 2001, cash used in operating activities was
approximately $641,000, compared to approximately $139,000 in
fiscal 2000.  Payments to contractors in fiscal 2001 accounted
for the cash used in operations in fiscal 2001.  Future
operating costs are expected to increase due to additional costs
of operating the water and wastewater systems, and it is
anticipated that a similar level of cash will be used in the
Company's general and administration functions during fiscal
2002.

	In August 1998, the Company entered into an agreement to
provide water and wastewater service to a 400 acre development
which now includes the 500-bed Model Facility. The Company
designed, constructed, and now operates and maintains the water
and wastewater systems that provide service to the Model
Facility.

	During fiscal year 2001, the Company delivered approximately
40 million gallons of water to customers in the Service Area
compared to 37 million gallons in fiscal year 2000.

Investing  Activities

	Cash used in investing activities for fiscal 2001 was
approximately $64,000.  Costs of approximately $64,000 were
capitalized to the Rangeview and Paradise Water Supply projects.
Cash used in investing activities for fiscal 2000 was
approximately $142,000.

Financing Activities

	In August 2001, the Company entered into a Plan of
Recapitalization and a Stock Purchase Agreement whereby the
Company issued 6,455,000 shares of Series D Preferred Stock to
the Company's CEO, Mr. Thomas Clark in exchange for 421,666
shares of common stock, 3,200,000 shares of Series C Preferred
Stock, 500,000 shares of Series C-1 Preferred Stock, 666,667
shares of Series C-2 Preferred Stock, and 1,666,667 shares of
Series C-3 Preferred Stock, all of which were owned by Mr.
Clark.  The Company sold 625,000 shares of the Company's Common
Stock at $.16 per share to two accredited investorS.  Proceeds
to the Company were $100,000.  The Company retired 3,200,000
shares of Series C Preferred Stock, 500,000 shares of Series C-1
Preferred Stock, 666,667 shares of Series C-2 Preferred Stock,
and 1,666,667 shares of Series C-3 Preferred Stock.

	In December 2000, the Company sold 700,000 shares of the
Company's Common Stock to two accredited investors at $.15 per
share.  Proceeds to the Company were $105,000.

	In August 2000, the Company entered into a Plan of
Recapitalization and a Stock Purchase Agreement whereby the
Company issued 1,666,667 shares of Series C-3 Preferred Stock to
Mr. Thomas Clark in exchange for 1,666,667 shares of common
stock owned by Mr. Clark.

	In August 2000, the Company committed to issue, and four
acredited investors comitted to purchase, a total of 763,333
shares of common stock, at $.15 per share.  Payment was received
from these investors subsequent to year end as follows:  $10,000
on September 28, 2000, $4,500 on October 2, 2000, $50,000 on
October 26, 2000, and $50,000 on October 27, 2000.  The Company
issued the 763,333 shares of Common Stock on November 22, 2000.

	Readers are cautioned that forward-looking statements
contained in this Form 10KSB should be read in conjunction with
the Company's disclosure under the heading: "SAFE HARBOR
STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995" on page 2.

Impact of Recently Issued Accounting Pronouncements

In August, 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 143,
Accounting for Asset Retirement Obligations, which addresses
financial accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS No. 143 requires an
enterprise to record the fair value of an asset retirement
obligation as a liability in the period in which it incurs a
legal obligation associated with the retirement of tangible long-
lived assets. Adoption of SFAS No. 143 may result in increases in
liabilities, assets, and expense recognition in financial
statements. The Company does not anticipate a material impact on
its financial condition or results of operations as a result of
implementing this standard. SFAS No. 143 is effective for fiscal
years beginning after June 15, 2002.

The Financial Accounting Standards Board recently issued FASB
Statement No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets.
Statement No. 144 supersedes the accounting and reporting
provisions of Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
with respect to when certain asset impairment losses must be
measured and recorded. Statement No. 144 also supersedes the
accounting and reporting provisions of APB Opinion No. 30,
Reporting the Results of Operations--Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions, for the
disposal of a segment of a business. However, it retains the
requirement in Opinion 30 to report separately discontinued
operations and extends that reporting to a component of an entity
that either has been disposed of (by sale, abandonment, or in a
distribution to owners) or is classified as held for sale. The
Company does not anticipate a material impact on its financial
condition or results of operations as a result of implementing
this standard.  Statement No. 144 is effective for fiscal years
beginning after December 15, 2001 and interim periods within
those fiscal years.


Item 7. Financial Statements


					                      Page

Independent Auditors' Report					12
Balance Sheets							13
Statements of Operations					14
Statements of Stockholders' Equity				15
Statements of Cash Flows					16
Notes to Financial Statements					17-22





Independent Auditors' Report

The Board of Directors
Pure Cycle Corporation:

We have audited the accompanying balance sheets of Pure Cycle
Corporation ("the Company") as of August 31, 2001 and 2000, and
the related statements of operations, stockholders' equity, and
cash flows for the years then ended.  These financial statements
are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America.  Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Pure Cycle Corporation as of August 31, 2001 and 2000 and the
results of its operations and its cash flows for the years then
ended, in conformity with accounting principles generally
accepted in the United States of America.




/s/  KPMG LLP

Denver, Colorado
November 6, 2001

                 PURE CYCLE CORPORATION
                    BALANCE SHEETS
		         August 31,

      ASSETS	                        2001	           2000

Current assets:
  Cash and cash equivalents	         $ 435,660	$   821,124
  Trade accounts receivable	            33,255	     18,619
  Accounts receivable -
   stock subscriptions	                      --	    114,500
  Prepaid expenses and other
   current assets	                    11,259	     11,259
	Total current assets	           480,174	    965,502

Investment in water and systems:
  Rangeview water supply (Note 3)       13,483,425	 13,422,134
  Paradise water supply	                 5,487,433	  5,484,868
  Rangeview water system (Note 3)          126,611	    126,611
	Total investment in water
        and systems	                19,097,469	 19,033,613

Note receivable, including accrued
 interest (Note 5)	                   369,806          347,162
Other assets	                           127,441	      1,441
	                              $ 20,074,890     $ 20,347,718

	LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable	               $       --	$     6,955
  Billings in excess of costs and
   estimated earnings (Note 4)	               --           772,500
  Accrued liabilities	                   17,994	     21,692
	Total current liabilities	   17,994           801,147

Long-term debt - related parties,
  including accrued interest(Note 6)    4,518,619	  4,287,251

Participating interests in Rangeview
 water supply (Note 3)                 11,090,630	 11,090,630

Stockholders' equity (Notes 8):
  Preferred stock, par value $.001 per
   share; authorized - 25,000,000 shares:
    Series A1 1,600,000 shares issued
     and outstanding	                    1,600             1,600
    Series B-432,513 shares issued
     and outstanding                          433		433
    Series C-0 and 3,200,000 shares
     issued and outstanding                    --	      3,200
    Series C-1-0 and 500,000 shares
     issued and outstanding                    --	        500
    Series C-2 -0 and 666,667 shares
      issued and outstanding                   --	        667
    Series C-3 -0 and 1,666,667 shares
      issued and outstanding                   --	      1,667
    Series D - 6,455,000 and 0 shares
      issued and outstanding                6,455	         --

Common stock, par value 1/3 of $.01 per
  share; 135,000,000 shares authorized;
  78,439,763 shares issued and
  outstanding                             261,584	    261,584
Additional paid-in capital	       24,778,989	 24,583,910
Accumulated deficit	             ( 20,601,414)	(20,549,371)

Treasury stock at cost; 0 and
 903,334 shares	                               --	   (135,500)
	Total stockholders' equity	4,447,647	  4,168,690
			             $ 20,074,890      $ 20,347,718








                See Accompanying Notes to Financial Statements

                       PURE CYCLE CORPORATION
                      STATEMENTS OF OPERATIONS




	     						Years ended
							August 31,
			        		    2001	   2000
Water service revenue:
	Construction revenue (Note 4)		  $ 772,501   $  916,601
	Water usage fees	                     96,754	  53,886
			                            869,255	 970,487

Construction costs incurred (Note 4)	           (488,984)    (700,142)
Water service operating expense	                    (11,181)      (8,690)
Gross Margin	                                    369,090	 261,655

General and administrative expense	           (231,229)    (272,875)
Operating income	                            137,861    (  11,220)

Other income (expense):
	Other income (Note 7)	                        --	 128,123
	Interest income				    41,464	  50,842
	Interest expense:
		Related parties			  (231,368)     (266,074)
		Other     	         	        --	  15,374

		Net loss			  $(52,043)     $(82,955)

Basic and diluted net
	loss per common share	         	  $    *        $    *


Weighted average common
	shares outstanding	                78,439,763     78,439,763

* Less than $.01 per share





















               See Accompanying Notes to Financial Statements

                        PURE CYCLE CORPORATION
                  STATEMENTS OF STOCKHOLDERS' EQUITY
                  Years Ended August 31, 2001 and 2000






			         Preferred Stock        Common Stock
			         Shares    Amount      Shares   Amount
Balance at August 31,1999      5,732,513 $5,733     78,439,763  $261,584
Preferred Stock issued in
  exchanges (Note 8)           2,333,334  2,334             --	      --
Common Stock Issued and
 subscribed (Note 8)                  --     --	            --	      --
Net loss     			      --     --             --	      --
Balance at August 31,2000      8,065,847 $8,067     78,439,763  $261,584

Preferred Stock issued in
 Exchanges, net (Note 8)         421,666    421	            --	      --
Common Stock Issued from
treasury stock (Note 8)               --     --             --        --
Extension of warrants
Net loss                              --     --	            --	      --
Balance at August 31,2001      8,487,513 $8,488     78,439,763   $261,584





			           			Additional
				  Treasury Stock    	Paid-in
			         Shares	    Amount	Capital
Balance at August 31,1999      	         0   $     0	$24,216,244
Preferred Stock issued in
  exchanges (Note 8)            (2,333,334) (370,000) 	    367,666
Common Stock Issued and
 subscribed (Note 8)             1,430,000   234,500             --
Net loss     			        --        --             --
Balance at August 31,2000         (903,334) (135,500)   $24,583,910

Preferred Stock issued in
 Exchanges, net (Note 8)          (421,666)  (69,500)        69,079
Common Stock Issued from
treasury stock (Note 8)          1,325,000   205,000             --
Extension of warrants
Net loss                                --        --             --
Balance at August 31,2001                0   $     0    $24,778,989


			          	              Total
				    Accumulated	    Stockholders'
			            Deficit	      Equity
Balance at August 31,1999      $(20,466,416)       $4,017,145
Preferred Stock issued in
  exchanges (Note 8)                     --		   --
Common Stock Issued and
 subscribed (Note 8)                     --           234,500
Net loss     			    (82,955)          (82,955)
Balance at August 31,2000      $(20,549,371)        $4,168,690

Preferred Stock issued in
 Exchanges, net (Note 8)                 --                --
Common Stock Issued from
treasury stock (Note 8)                  --           205,000
Extension of warrants
Net loss                            (52,043)          (52,043)
Balance at August 31,2001      $(20,601,414)      $4,447,647





            See Accompanying Notes to Financial Statements

                     PURE CYCLE CORPORATION
                    STATEMENTS OF CASH FLOWS





                                            Years ended August 31,
				                   2001		2000

Cash flows from operating activities:
  Net loss		                         $(52,043)    $( 82,955)
  Adjustments to reconcile net loss to
   net cash used in operating activities:
  Increase in accrued interest on note
   receivable					  (22,644)     ( 25,368)
  Increase in accrued interest on long
   term debt, including accrued interest	  231,368	266,074
  Changes in operating assets and liabilities:
	Accounts receivable		          (14,636)      (12,513)
	other assets		                       --        21,155
      Billings in excess of costs and
       estimated earnings	                 (772,500)     (122,879)
	Accounts payable and other accrued
       liabilities			          (10,653)	(53,078)
	Other non-current liabilities	               --      (128,123)
	Net cash used in operating activities    (641,108)     (138,687)

Cash used in investing activities-
		Investments in water supply	  (63,856)     (142,214)

Cash flows from financing activities-
	Proceeds from sale of common stock	  319,500	120,000

	Net decease in cash and cash
       equivalents		                 (385,464)     (159,901)

	Cash and cash equivalents beginning
       of year	      	                          821,124	981,025

	Cash and cash equivalents end
       of year		                        $ 435,660      $821,124

























See Accompanying Notes to Financial Statements

PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS
August 31, 2001 and 2000

NOTE 1 - ORGANIZATION AND BUSINESS

	Pure Cycle Corporation owns certain water assets and is
providing water and wastewater services to customers located in
the Denver metropolitan area.  The Company operates water and
wastewater systems and its operating activities include
designing, constructing, operating and maintaining systems
serving customers in the Denver metropolitan area. The Company
also owns patented water recycling technologies which are
capable of processing wastewater into pure potable drinking
water. The Company's focus continues to be to provide water and
wastewater service to customers within its service area and the
Company expects to expand its service to other areas throughout
the Denver metropolitan area and the southwest.

	Although the Company believes it will be successful in
marketing the water from one or both of its water projects,
there can be no assurance that sales can be made on terms
acceptable to the Company.  The Company's ability to ultimately
realize its investment in its two primary water projects is
dependent on its ability to successfully market the water, or in
the event it is unsuccessful, to sell the underlying water
assets.

	The Company believes that at August 31, 2001, it has
sufficient working capital and financing sources to fund its
operations for the next year or longer.  There can be no
assurances, however, that the Company will be successful in
marketing the water from its two primary water projects in the
near term.  In the event sales are not achieved, the Company may
sell additional participating interests in its water projects,
incur additional short or long-term debt or seek to sell
additional shares of common or preferred stock or stock purchase
warrants, as deemed necessary by the Company, to generate
working capital.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue recognition

	The company recognizes construction project income using the
percentage-of-completion method, measured by the contract costs
incurred to date as a percentage of the estimated total contract
costs.  Contract costs include all direct material, labor, and
equipment costs and those indirect costs related to contract
performance such as indirect labor and supplies costs.  If the
construction project revenue is not fixed, the Company estimates
revenues that are most likely to occur.  Provisions for
estimated losses on uncompleted contracts are made in the period
in which such losses are determined.  Billings in excess of
costs and estimated earnings represent payments received on
construction projects under which the work has not been
completed.  These amounts, if any, are recognized as
construction progresses in accordance with the percentage-of-
completion method.

	The Company recognizes water usage revenues upon delivering
water to customers.  Costs of delivering water to customers are
recognized as incurred.

Use of estimates

	The preparation of financial statements in conformity with
generally accepted accounting principles 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.  Actual results could differ from those estimates.

Cash equivalents

	Cash and cash equivalents include all liquid debt instruments
with an original maturity of three months or less.

Long lived assets

	The Company reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future
undiscounted net cash flows expected to be generated by the
asset.  If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceed the fair market value
of the assets.  Assets to be disposed of are reported at the
lower of the carrying amount or fair value less costs to sell.
The Company believes there are no impairments in the carrying
amounts of its investments in water at August 31, 2001.

PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock-Based Compensation

	As allowed by Statement of Financial Accounting Standards No.
123, Accounting for Stock-Based Compensation (SFAS 123), the
Company continues to measure compensation costs for these plans
using the intrinsic value method of accounting as prescribed in
Accounting Pronouncement Bulletin Opinion No. 25, Accounting for
Stock Issued to Employees (APB 25).  The pro forma disclosure of
net loss and loss per share required by SFAS 123 are included in
Note 9.

Income taxes

	The Company uses the asset and liability method of accounting
for income taxes. Under the asset and liability method, deferred
tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases.  Deferred tax assets
and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the
enactment date.

Loss per common share

	Loss per common share is computed by dividing net loss by the
weighted average number of shares outstanding during each
period.  Convertible preferred stock and common stock options
and warrants have been excluded from the calculation of loss per
share as their effect is anti-dilutive.

Reclassifications

	No reclassifications were made to the financial statements.

NOTE 3 - RANGEVIEW WATER SUPPLY AND SYSTEM

	Beginning in 1988, the Company initiated the purchase of
the Rangeview water assets.  From 1988 through 2001, the Company
made payments to the sellers of the Rangeview water assets
and capitalized costs incurred relating to the acquisition of
the water assets totaling $12,038,161, and capitalized certain
direct costs relating to improvements to the asset which include
certain legal and engineering costs totaling $1,445,264.

	In April of 1996, the Company completed the purchase of
the Rangeview water assets and entered into a water
privatization agreement with the State of Colorado and the
Rangeview Metropolitan District (the "District") which enabled
the Company to acquire ownership rights to a total gross volume
of 1,165,000 acre feet of groundwater (approximately 11,650 acre
feet per year), an option to substitute 1,650 acre feet of
surface water in exchange for a total gross volume of 165,000
acre feet of groundwater, and the use of surface reservoir
storage capacity (collectively referred to as the "Export Water
Supply").

	In addition to the Export Water Supply, the Company entered
into a water and wastewater service agreement ("The Service
Agreements") with the District which grants the Company an
eighty-five year exclusive right to design, construct, operate
and maintain the District's water and wastewater systems.  In
exchange for designing, constructing, operating and maintaining
the District's water and wastewater system, the Company will
receive 95% of the District's water revenues remaining after
payment of royalties totaling 12% of gross revenues to the State
Land Board, 100% of the District's wastewater system development
charges and 90% of the District's wastewater usage charges. The
Company delivered approximately 40 and 37 million gallons of
water to customers in the Service Area in fiscal 2001 and 2000,
resepctively.  Currently there are no wastewater customers
within the Service Area.

	The Company capitalizes certain legal, engineering and other
costs relating to the acquisition of the Rangeview Water Supply
due to the improvements of the water assets through adjudication
and engineering services.

	The Participating Interests in the Comprehensive Amendment
Agreement (the "CAA"), in the aggregate, have the right to
receive the first approximately $31,807,000 from the proceeds of
a sale or other disposition of the Export Water Supply.  As monies
from the sale of the Export Water are received, they are required
to be paid to the holders of the CAA participation interests on a
pari pasu basis for the first $31,807,000.  LCH Inc., a company
affiliated with the Company's CEO has the right to receive the next
$4,000,000 in proceeds, and the next $433,000 in proceeds is payable
to the holders of the Company's Series B Preferred Stock.  The total
obligation of $36,240,000 is non-interest bearing, and if the Export
Water is not sold, the parties to the agreement have no recourse
against the Company.  If the Company does not sell the Export Water,
the holders of the Series A-1, and Series B Preferred Stock are not
entitled to payment of any dividend and have no contractual recourse
against the Company.

	The participating interests liability of $11.1 million
represents the obligation recorded by the Company relating to actual
cash financings received and costs incurred to acquire the Rangeview
water supply.  The remainder of the participating interests ($20.7
million)represent a contingent return to financing investors and
certain preferred stock holders that will only be payable from the
sale of Export Water and will be recognized as it occurs similar to a
profits interest.

	The Rangeview water supply is depleted on the basis of units
produced, based on the volumes of water expected to be produced.
The Rangeview water system has an estimated useful life of 30 years
and is depreciated based on a straight line depreciation method over
the shorter of the estimated lives of the assets or the estimated
recoverable volumes.




	PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 4 - CONSTRUCTION REVENUE

The following summarizes the status of the Company's
construction contracts at August 31,

						2001	    2000
Costs incurred on uncompleted contracts  $      --	  $1,059,151
Estimated earnings				--        $  166,363
					        --         1,225,514
Less billings to date		                --       ( 1,998,014)
					        --          (772,500)

	During fiscal 2001 and 2000, the Company had revenues from a
single customer that accounted for 85% and 93% of total revenue,
respectively.

NOTE 5 - NOTE RECEIVABLE

	In 1995, the Company extended a line of credit to the
District.  The loan provides for borrowings of up to $250,000,
is unsecured, bears interest based on the prevailing prime rate
plus 2% and, matures on December 31, 2001.  The balance of the
note receivable at August 31, 2001 was $369,806, including
accrued interest.  The Company intends to extend the due date to
December 31, 2002.  Accordingly, the note has been classified as
non-current.

NOTE 6 - LONG-TERM DEBT

Long-term debt, including accrued interest, at August 31, 2001
and 2000 is comprised of the following:

						   2000		2001
Notes payable, including accrued interest to
 six related parties, due August 2007,
 interest at 10.25%, unsecured		       $ 455,063  $  425,438
Notes payable, including accrued interest to
 five related parties, due August 2007,
 interest at 10.25%, unsecured net of unamortized
 discount of $9,000 and $18,000, respectively	 506,934     462,059
Note payable, to CEO, due October 2003, non-
 interest bearing, unsecured	                  26,542      26,542
Notes payable, including accrued interest, to
 CEO due September 2003, interest at 8.36% to
 9.01%, unsecured                                466,221     444,861
Notes payable, including accrued interest, to
 related party, due October, 2003, interest at
 the prime rate plus 3%, secured by shares of
 the Company's common stock owned by the
 President 	                               2,296,326   2,193,014
Notes payable, including accrued interest, to
 a related party, due August 2003, interest
 ranging from 7.18% to 8.04%, unsecured	         767,533     735,337
	Total long-term debt	              $4,518,619  $4,287,251

Aggregate maturities of long-term debt are as follows:
		Year Ending August 31,		Amount
			2002                 $         --
			2003 			3,556,622
			2007	                  961,997
			       Total	     $  4,518,619

	In 1996 and 1997, the Company entered into loan agreements
with eleven related party investors.  The loan balances total
$961,997 at August 31, 2001, the loans are unsecured, bear
interest at the rate of 10.25%.  In connection with the loan
agreements, the Company issued warrants to purchase 2,100,000
shares of the Company's common stock at $.18 per share.  A
portion of the proceeds received under the agreement ($45,000)
was attributed to the estimated fair value of the warrants
issued.  The resulting discount is being amortized straight-line
over the term of the loan.  In 2001, the term of the warrants
and debt was extended to 2007.  The fair value of the warrant
extension will be amortized over the revised term of the debt.

	As of August 31, 2001, the President and stockholder of the
Company has pledged a total of 20,000,000 shares of the
Company's common stock from his personal holdings as collateral
on certain of the above notes payable.



	PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - OTHER INCOME

	During fiscal 2000, the Company wrote off $128,123 of
liabilities that represented amounts owed to creditors for debts
incurred prior to 1986.  Such amounts reached their statute of
limitations during fiscal 2000 and thus were written off to
other income.

NOTE 8 - STOCKHOLDERS' EQUITY

		Preferred and Common Stock

	In August 2001, the Company entered into a Plan of
Recapitalization and a Stock Purchase Agreement whereby the
Company issued 6,455,000 shares of Series D Preferred Stock to
the Company's CEO, Mr. Thomas Clark in exchange for 421,666
shares of common stock, 3,200,000 shares of Series C Preferred
Stock, 500,000 shares of Series C-1 Preferred Stock, 666,667
shares of Series C-2 Preferred Stock, and 1,666,667 shares of
Series C-3 Preferred Stock, all of which were owned by Mr.
Clark.  None of the Series D Convertible Preferred Stock pay
dividends.  The Company subsequently retired 3,200,000 shares
of Series C Preferred Stock, 500,000 shares of Series C-1
Preferred Stock, 666,667 shares of Series C-2 Preferred Stock,
and 1,666,667 shares of Series C-3 Preferred Stock.

	In fiscal year ended August 31, 2000, the Company entered
into two seperate Plans of Recapitalization and Stock Purchase
Agreements.  The first plan was in September 1999 whereby the
Company issued 666,667 shares of Series C-2 Preferred Stock to
Mr. Thomas Clark in exchange for 666,667 shares of common stock
owned by Mr. Clark.  The Company subsequently sold 666,667 shares
of the Company's Common Stock at $.18 per share to three accredited
investors.  Proceeds to the Company were $120,000.  In August 2000,
the Company sold 763,333 shares at $.15 per share to four
accredited investors generating proceeds of $114,500.

	The second plan was in August 2000 whereby the Company
issued1,666,667 shares of Series C-3 Preferred Stock to Mr. Thomas
Clarkin exchange for 1,666,667 shares of common stock owned by Mr.
Clark.In three transactions, beginning in December 2000, the Company
sold700,000 shares of the Company's Common Stock at $.15 per share to
two accredited investors, generating proceeds to the Company of
$105,000. In August 2001, the Company also sold 625,000 shares at
$.16 per shareto two accredited investors generating proceeds of
$100,000.

All the shares were issued under Section 4(2) of the Securities
Act of 1933.

	During years prior to 1994, the Company was charged for the
reimbursement of costs, administrative services and rent expense
by a company related through common ownership.  On May 25, 1994,
the Company issued 1,600,000 shares of Series A Preferred Stock,
$.001 par value to eight accredited investors which are entitled
to be paid a dividend amount equal to $2.00 per share for a
total of $3,200,000.  On August 31, 1994, the Company issued
432,513 shares of Series B Preferred Stock, $.001 par value, to
a related party corporation, in satisfaction of the payable for
these charges of $432,513. The holder of the Series B Preferred
Stock is entitled to be paid a dividend amount equal to $1.00
per share for a total of $432,513 to be paid from the proceeds
from a disposition of the Rangeview Water Supply after the
Participating Interests in the CAA and the dividend obligation
on the Series A Convertible Preferred Stock have been satisfied.

	Stock Options

	Pursuant to the Company's Equity Incentive Plan, as of
August 31,2000, the Company had granted Mr. Fletcher Byrom, Ms.
Margaret Hansson, Mr. George Middlemas, and Mr. Mark Harding
options to purchase 7,000,000, 8,000,000, 1,000,000, and
7,000,000 shares of common stock respectively at an exercise
price of $.18 per share which expire in 2002.  In April of 2001,
the Board extended the expiration date of options granted to Mr.
Fletcher Byrom, Ms. Margaret Hansson, Mr. George Middlemas, and
Mr. Mark Harding from August 2002, to August 2007.  Also in
April 2000, the Board granted Mr. Harding options pursuant to
employment arrangements outside the Equity Incentive Plan to
purchase an additional 3,000,000 shares of common stock at an
exercise price of $.18 per share of which 2,250,000 vested
immediately and 250,000 shares vest on the anniversary date of
the grant over the next three years.   Mr. Harding's new options
also expire in August 2007.

	The Company applies APB Opinion 25 and related
interpretations in accounting for its plans.  Accordingly, no
compensation cost has been recognized for stock options granted
to key employees under the Equity Incentive Plan.  Had
compensation costs for the Company's two stock-based compensation
plans been determined based on the fair market value at the grant
dates for awards and the extension of the expiration dates of
certain options under those

	PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 8 - STOCKHOLDERS' EQUITY (continued)

plans consistent with the method prescribed in FASB Statement
123, the Company's net loss and loss per share would have been
increased to the pro forma amounts indicated below for the years
ended August 31, 2001 and 2000:

Net loss:				    2001	     2000
	As Reported			$(  52,043)	  ( 82,955)
	Pro forma			(1,529,451)	  (297,168)
Loss per share:
	As Reported			     * 		      *
	Pro forma			   (.02)              *

*   Less than $.01 per share

	The fair value of each option grant is estimated on the date
of the grant using the Black-Scholes option-pricing model with
the following weighted average assumptions used for grants in
fiscal year 2001:  no dividend yield; annualized expected
volatility of 101%; and a weighted average risk-free interest
rate of 4.65%.  No options were granted in fiscal year 2000.

	A summary of the status of the Company's Equity Incentive Plan
and other compensatory options as of August 31, 2001 and 2000,
and changes during the years then ended is presented below:

				2001		    2000
			   Weighted average       Weighted average
     			   Shares   exercise      Shares   exercise
				    price		   price
Fixed options
Outstanding at beginning
 of year		   23,000,000	$.18	  23,000,000  $.18
Granted			    3,000,000	 .18	          --    --
Outstanding at end
 of year		   26,000,000	$.18	  23,000,000  $.18

Options exercisable at
 year end		   26,000,000		  23,000,000
Weighted average of fair
 value of options granted
 during the year		         --                     --

	The following table summarizes information about Equity
Incentive Plan and other compensatory options outstanding at
August 31, 2001:

	   Options Outstanding	         Options Exercisable
			Weighted
                        average       Weighted	            Weighted
Range of 	   	remaining     average               average
exercise       Number   contractual   exercise Number       exercise
Price       outstanding    life       price    exercisable  price

  .18	    25,250,000	    6	      .18      25,250,000    .18

	No options were exercised during the years ended August 31,
2001 and 2000.

		Warrants

	In addition to the warrants discussed in Note 6, the Company
from 1990 through 1996 issued warrants to purchase 22,303,000
shares of the Company's stock at $.18 per share in connection with
the sale of profits interests in the Rangeview WCA, which remain
outstanding as of August 31, 2001.  In 1996, the WCA was amended and
retitled to the Comprehensive Amendment Agreement ("CAA") and all
interests held in the WCA were subsequently converted into
participating interestsin the CAA.The warrants expire 6 months after
the payment of the participating interests in the CAA.

	Certain related parties, which hold notes payable from the
Companywhich aggregated a total of $961,997, extended the maturity
date of notesfrom August 2002 to April 2007.  In connection with the
extension of the maturity of the notes, the expiration date of the
warrants was extended to April 2007.  The $126,000 recorded in
connection with extension of the warrants'expiration date is the fair
value of the warrants as of August 31, 2002, calculated using a
Black-Scholes option-pricing model with the followingassumptions:
no dividend yield; annualized expected volatility of 101%; and a
weighted average risk-free interest rate of 4.65%.  This amount is
being amortized straight-line over the period August 2002 to April
2007 asthe imputed consideration relating to the extension of the
debt terms.

	No warrants were exercised during the years ended August 31,
2001 and 2000.

NOTE 9 - INCOME TAXES

	The tax effects of the temporary differences that give rise to
significant portions of the deferred tax assets and liabilities
at August 31, 2001 and 2000 are presented below.

						2001	     2000
Deferred tax assets:
	Net operating loss carry forwards   $ 2,752,000   $ 2,735,000
	Less valuation allowance	     (2,752,000)   (2,735,000)
		Net deferred tax asset	    $        --   $        --
	PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 9 - INCOME TAXES (continued)

	The valuation allowance for deferred tax assets as of August
31, 2001 was $2,752,000.  The net change in the valuation
allowance for the year ended August 31, 2001 was  a net increase
of $17,000, attributable to the net operating loss incurred
during the year and difference in amortization.  The deferred
tax asset at August 31, 2001, for which a valuation allowance
has been recorded, will be recognized when realization is more
likely than not.

At August 31, 2001, the Company has net operating loss carry
forwards for federal income tax purposes of  approximately
$7,074,000, which are available to offset future federal taxable
income, if any, through fiscal 2021.

NOTE 10 - INFORMATION CONCERNING BUSINESS SEGMENTS

The Company has two lines of business:  one is the design and
construction of water and wastewater systems pursuant to the
Service Agreements to provide water and wastewater service to
customers within the Service Area; and the second is the
operation and maintenance of the water and wastewater systems
which serve customers within the Service Area.

The accounting policies of the segments are the same as those
described in the Summary of Significant Accounting Policies (see
Note 2).  The Company evaluates the performance of its segments
based on gross margins of the respective business units.

Segment information for the years ended August 31, 2001 and 2000
is as follows:



			  2001	         	    2000
		       Water			    Water
	 Construction  Service Total   Construction Service Total

Revenues $ 772,501   $96,754  $869,255 $ 916,601   $53,886 $970,487
Gross
Margin	    83,517   85,573  369,090   216,459	   45,196  261,655
Total
Assets	       -- 20,074,890 20,074,890    --  20,347,718 20,347,718
Capital
Expenditures    --   63,856   63,856   	  --    142,214   142,214


NOTE 11 - Related party transactions

	Prior to July 2000, the Company leased office facilities
from a third party under an operating lease agreement.  Since July
2000, the Company has occupied office space in buildings owned
by related parties.  The related parties have not charged the
Company for rent during this time.  Rent expense for the years
ended August 31, 2001 and 2000 was $0 and $15,000 resepctively.


Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

Not applicable.



PART III

Item 9.	Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act

	The following are the officers and directors of the Company as
of August 31, 2001:

			Name	Age	Position(s) with the
Company
	Harrison H. Augur	        59	Chairman
	Margaret S. Hansson . . . 	77	Director, Vice President
	Fletcher L. Byrom . . . .	83	Director
	Thomas P. Clark . . . . .	65	Director, CEO, Treasurer
	George M. Middlemas . . .       55	Director
	Richard L. Guido  . . . .       57	Director
	Mark W. Harding . . . . .	38	President, Chief
     						Financial
                                                Officer, Secretary

HARRISON H. AUGUR

	Mr. Augur was elected Chairman of the Board of Directors in
April 2001.    For the past 20 years, Mr. Augur has been
involved with investment management and venture capital
investment groups.  Mr. Augur is a General Partner of  CA
Partners since 1987, and General Partner of Patience Partners
LLC since 1999.  Mr. Augur received a Bachelor of Arts degree
from Yale University in 1964, a Juris Doctor degree from
Columbia Univetsity School of Law, and his LLM degree from New
York University School of Law in 1987.

MARGARET S. HANSSON

	Ms. Hansson has been a Director of the Company since April
1977 and Chairman since September 23, 1983, and was the Chief
Executive Officer of the Company from September 23, 1983 to
January 31, 1984.  From 1976 to May 1981, she was President of
GENAC, Inc., a Boulder, Colorado firm, which she founded.  From
1960 to 1975, Ms. Hansson was CEO and Chairman of Gerry Baby
Products Company (formerly Gerico, Inc.), now a division of
Evenflo.  She is a Director of Wells Fargo Bank, Boulder
Colorado, Wells Fargo Banks, PC, Colorado Capital Alliance,
Realty Quest, Inc. (now RQI, Inc.), and the Boulder Technology
Incubator.  Ms. Hansson is currently President of two companies,
Adrop, LLC, and Erth, LLC.  Ms. Hansson received her Bachelor of
Arts degree from Antioch College.

THOMAS P. CLARK

	Thomas P. Clark was appointed Chief Executive Officer of
the Company in April 2001.  Prior to his appointment as Chief
Executive Officer, Mr. Clark served as President and Treasurer
of the Company from 1987 to April 200.1 Mr. Clark is primarily
involved in the management of the Company.  His business
activities include:  President, LC Holdings, Inc. (business
development), 1983 to present and, Partner, through a wholly
owned corporation, of Resource Technology Associates
(development of mineral and energy technologies), 1982 to
present.  Mr. Clark received his Bachelor of Science degree in
Geology and Physics from Brigham Young University, Provo, Utah.

MARK W. HARDING

	Mark W. Harding joined the Company in February 1990 as
Corporate Secretary and Chief Financial Officer.  He was
appointed President of the Company in April 2001. He brings a
background in public finance and management consulting
experience.  From 1988 to 1990, Mr. Harding worked for Price
Waterhouse in Management Consulting Services where he assisted
clients in Public Finance services and other investment banking
related services.  Mr. Harding has a B.S. Degree in Computer
Science, and a Masters in Business Administration in Finance
from the University of Denver.

FLETCHER L. BYROM

	Fletcher L. Byrom has been a Director of the Company since
April 22, 1988.  He is a retired Chairman (1970-1982) and Chief
Executive Officer (1967-1982) of Koppers Company, Inc.  Mr.
Byrom presently serves in the following positions: President and
Director of MICASU Corporation.

GEORGE M. MIDDLEMAS

	George M. Middlemas has been a Director of the Company since
April 1993.  Mr. Middlemas is a general partner with the Apex
Investment Partners, a diversified venture capital management
group.  From 1985 to 1991, Mr. Middlemas was Senior Vice
President of Inco Venture Capital Management, primarily involved
in venture capital investments for Inco.  From 1979 to 1985, Mr.
Middlemas was a Vice President and a member of the Investment
Committee of Citicorp Venture Capital Ltd., where he sourced,
evaluated and completed investments for Citicorp.  Mr. Middlemas
is a director of Online Resources & Communications Corporation,
Tut Systems, Data Critical Corporation., and Pennsylvania State
University - Library Development Board.  Mr. Middlemas received
Bachelor degrees in History and Political Science from
Pennsylvania State University, a Masters degree in Political
Science from the University of Pittsburgh and a Master of
Business Administration from Harvard Business School.


RICHARD L. GUIDO

	Mr. Guido has been a Director of the Company since July 1996.
Mr. Guido is Associate General Counsel of Inco Limited and
President, Chief Legal Officer and Secretary of Inco United
States, Inc.  Mr. Guido is a Director on the American-Indonesia
Chamber of Commerce, and the Canada-United States Law Institute.
Mr. Guido received a Bachelor of Science degree from the United
States Air Force Academy, a Master of Arts degree from
Georgetown University, and a Juris Doctor degree from the
Catholic University of America.

	None of the above persons is related to any other officer or
director of the Company.  All directors are elected for one-year
terms which expire at the annual meeting of stockholders or
until their successors are elected and qualified.  The Company's
officers are elected annually by the board of directors and hold
office until their successors are elected and qualified.

Section 16(a) Beneficial Ownership Reporting Compliance

	The Company's directors and executive officers and persons
who are beneficial owners of more than 10% of the Company's Common
Stock are required to file reports of their holdings and
transactions in Common Stock with the Securities and Exchange
Commission and furnish the Company with such reports.  Based
solely upon its review of the copies the Company has received or
upon written representations from these persons, the Company
believes that, as of November 16, 2001 all of the Company's
directors, executive officers, and 10% beneficial owners had
complied with the applicable Section 16 (a) filing requirements.

Item 10. Executive Compensation

			Annual Compensation
					    Other
Name			                    Annual
and					    Compen-
Principal	  Fiscal   Salary   Bonus   sation
Position	  Year	    ($)	     ($)     ($)

Thomas P. Clark
CEO		   2001	  60,000	0	0
		   2000	  60,000	0	0
		   1999	  60,000	0	0


	For all other executive officers, consisting of two
persons, total annual salary and bonuses were less than $100,000.

	Directors do not receive any compensation for serving on
the Board.

Item 11.	 Security Ownership of Certain Beneficial Owners
and Management

	The following table sets forth, as of November 16, 2001,
the beneficial ownership of the Company's issued and outstanding
Common Stock, Series A-1 Preferred Stock, Series B Preferred
Stock, and Series D Preferred Stock, by each person who owns of
record (or is known by the Company to own beneficially) 5% or
more of each such class of stock, by each director of the
Company, each executive officer and by all directors and
executive officers as a group.  Except as otherwise indicated,
the Company believes that each of the beneficial owners of the
stock listed has sole investment and voting power with respect
to such shares, based on information provided by such holders.

Common Stock

Name and Address of		Number of Common	Percent of
Beneficial Owner		Stock Shares		Outstanding
                                                	Common Shares
Thomas P. Clark		        27,264,854  		34.8%  (18)
5650 York Street, Commerce
City, Colorado 80022

George Middlemas		 1,333,333     		1.7%    (1)
2440 N. Lakeview Ave	                                	(11)
Chicago, IL  60614

Richard L. Guido			 0		 0%
Park 80 West - Plaza Two
Saddle Brook, New Jersey 07663

Margaret S. Hansson		 8,246,000		 9.5%   (2)
2220 Norwood Avenue
Boulder, Colorado 80304

Fletcher L. Byrom                7,100,000		 8.3%   (3)
P.O. Box 1055
Carefree, AZ  85377

Mark W. Harding			 9,460,000		 10.8% (4)
5650 York Street, Commerce
City, Colorado 80022

INCO Securities Corporation      4,700,000    	         5.7%  (5)
One New York Plaza
New York, New York  10004

Apex Investment Fund II L.P.	17,087,833 	   	19.2% (6)
233 S. Wacker Drive,	          			      (11)
Suite 9600		          			      (13)
Chicago, Illinois  60606

Environmental Venture 		  6,278,181   	   	7.7%  (7)
Fund, L.P.		       			              (11)
233 S. Wacker Drive, Suite 9600
Chicago, Illinois  60606

Environmental Private Equity 	  7,142,320		 8.6%  (13)
Fund II, L.P.		        			       (16)
233 S. Wacker Drive, Suite 9600
Chicago, Illinois  60606

The Productivity 		  4,781,846		 6.0%  (8)
Fund II, L.P.		        			       (11)
233 S. Wacker Drive, Suite 9600
Chicago, Illinois  60606

Proactive Partners L.P.		  3,579,052    	   	4.4%  (13)
50 Osgood Place, Penthouse                                    (17)
San Francisco, California 94133

All Officers and Directors	 53,404,187	        48.5% (12)
as a group (6 persons)				              (18)








                    Preferred Stock

	              Number of 		 Number of
	              Series A    Percentage	 Series B   Percentage
Name and Address     Preferred	  Outstanding    Preferred  Outstanding
Beneficial Owner       Shares	  Shares	 Shares	    Shares

Thomas P. Clark					 346,000     80.0% (14)
5650 York Street,
Commerce City,
Colorado 80022

Apex Investment
Fund II L.P.	        408,000	     25.5%
233 S. Wacker Drive,
Suite 9600
Chicago,
Illinois 60606

Environmental Private
Equity Fund II,L.P.     600,000      37.5%
Fund II, L.P.
233 S. Wacker Drive,
Suite 9600
Chicago,
Illinois  60606

Proactive Partners L.P.	500,000      31.5%
50 Osgood Place,
Penthouse
San Francisco,
California 94133

LC Holdings, Inc.				   432,513	100.0%
5650 York Street,
Commerce City, Colorado

LCH, Inc.				            86,503   20.0% (15)
5650 York Street,
Commerce City, Colorado

	              	Number of
	             	Series D        Percentage
Name and Address    	Preferred	Outstanding
Beneficial Owner	  Shares	  Shares

Thomas P. Clark		6,455,000	100.0% (18)
5650 York Street,
Commerce City,
Colorado 80022


(1)	Includes 1,000,000 shares purchasable by Mr. Middlemas under
currently exercisable options.

(2)	Includes 8,000,000 shares purchasable by Ms. Hansson under
currently exercisable options.

(3)	Includes 3,000,000 shares purchasable under a currently
exercisable option by MICASU Aluminum, LLC which Mr. Byrom
controls as a manager and member and 1,000,000 shares
purchasable under a currently exercisable option by MICASU
Corporation which Mr. Byrom controls as President, Chief
Executive Officer, and controlling shareholder and 3,000,000
shares purchasable by Mr. Byrom under currently exercisable
options..

(4)	Includes 9,250,000 shares purchasable by Mr. Harding under a
currently exercisable option.

(5)	Includes 4,700,000 shares purchasable by Inco Securities
Corporation ("Inco") under currently exercisable warrants.

(6)	Includes 8,506,198 shares purchasable by Apex Investment
Fund II, L.P. ("Apex") under a currently exercisable warrants.

(7)	Includes 2,596,620 shares purchasable by Environmental
Venture Fund, L.P. ("EVFund") under a currently exercisable
warrants.

(8)	Includes 1,776,166 shares purchasable by Productivity Fund
II, L.P. ("PFund") under currently exercisable warrants.

(9)	Intentionally omitted.

(10)	  Intentionally omitted.

(11)	  Each of the Apex, EVFund, PFund, and EPFund (the "Apex
Partnerships") is controlled through one or more partnerships.
The persons who have or share control of such stockholders after
looking through one or more intermediate partnerships are
referred to herein as "ultimate general partners."  The ultimate
general partners of Apex are:  First Analysis Corporation, a
Delaware corporation ("FAC"), Stellar Investment Co.
("Stellar"), a corporation controlled by James A. Johnson
("Johnson"); George Middlemas ("Middlemas"); and Chartwell
Holdings Inc. ("Chartwell"), a corporation controlled by Paul J.
Renze ("Renze").  The ultimate general partners of EVFund are:
FAC; F&G Associates ("F&G"); William D. Ruckelshaus Associates,
a Limited Partnership ("WDRA"); and Banc America Robertson,
Stephens & Co. ("BARS").  The ultimate general partners of PFund
are FAC and Bret R. Maxwell ("Maxwell").  The ultimate general
partners of EPFund are FAC, Maxwell, BA, RS, Argentum
Environmental Corporation ("AEC") and Schneur Z. Genack, Inc.
("SZG").

	The business address of FAC, Stellar, Johnson, Middlemas, and
Maxwell is 233 S. Wacker Drive, Suite 9600. Chicago Illinois
60606.  The business address of Renze and Chartwell is 20 N
Wacker Dr., Suite 2200, Chicago IL 60606.  Each of AEC and SZG
maintains its business address c/o The Argentum Group ("TAG"),
405 Lexington Avenue, 54th Floor New York, New York 10174.  The
persons who take actions on behalf of AEC and SZG with respect
to their functioning as ultimate general partners of EPEF are
Schenur Z. Genack ("Genack"), Daniel Raynor ("Raynor") and
Walter H. Barandiaran ("Barandiaran").  Each of Raynor and
Barandiaran is principally employed as an executive of TAG and
maintains his business address at the TAG address.  TAG's
principal business is merchant banking.  SZG is principally
employed as a private investor and maintains his business
address at 18 East 48th Street, Suite 1800, New York, New York
10017.  The business address of F&G and Harvey G. Felsen
("Felsen") who takes actions on behalf of F&G with respect to
its functioning as a ultimate general partner of EVFund, is 123
Grove Avenue, Suite 118, Cedarhurst, New York 11516.  WDRA and
Paul B. Goodrich the person who takes action on behalf of WDRA
with respect to its functions on behalf of WDRA with respect to
its functioning as general partner of EVFund, maintains its
business address at 1201 Third Avenue, 39th Floor, Seattle,
Washington 98101.  BARS maintains its business address at One
Embarcadero Center, San Francisco, California 94111. BARS
maintains its business address at 555 California St., San
Francisco, CA 94111.  The person who takes actions on behalf of
BARS with respect to its functioning as an ultimate general
partner of EVF and EPEF is Charles R. Hamilton ("Hamilton").
Hamilton is principally employed as a partner is BARS and
maintains his principal business address at BARS.

	By reason of its status as a general partner or ultimate
general partner of each of Apex Partnerships, FAC may be deemed
to be the indirect beneficial owner of 35,290,180 shares of
Common Stock, or 36.3% of such shares.  By reason of his status
as the majority stockholder of FAC, F. Oliver Nicklin may also
be deemed to be the indirect beneficial owner of such shares. By
reason of their status as ultimate general partners of Apex,
Stellar (and through Stellar, Johnson, Middlemas, Chartwell and
through Chartwell and Renze) may be deemed to be the indirect
beneficial owners of 17,087,833 shares of Common Stock, or 19.2%
of such shares.  When these shares are combined with his
personal holdings of 333,333 shares and his currently
exercisable option to purchase 1,000,000 shares of Common Stock,
Middlemas may be deemed to be the beneficial owner (directly
with respect to his shares and the option shares and indirectly
as to the balance) of 18,421,166 shares of Common Stock, or
20.4% of such shares.

	By reason of his status as an ultimate general partner of
PFund and EPFund, Maxwell may be deemed to be the indirect
beneficial owner of 11,924,166 shares of Common Stock, or 14.2%
of such shares.

	By reason of F&G's and WDRA's status as an ultimate general
partners of EVFund, F&G, WDRA and their respective controlling
persons may be deemed to be the indirect beneficial owners of
6,278,181 shares of Common Stock, or 7.7% of such shares.  By
reason of AEC's and SZG's status as ultimate general partners of
EPFund, AEC, SZG and their and their controlling persons may be
deemed to be the indirect beneficial owners of 7,142,320 shares
of Common Stock, or 8.7% of such shares.  By reason of Genack's
interest in F&G, AEC and SZG, he may be deemed to be the
indirect beneficial owner of 13,420,501 shares of Common Stock,
or 15.8% of such shares.

	By reason of BARS's status as a general partner of EVFund and
an ultimate general partner of EPFund, BARS and its controlling
persons may be deemed to be the indirect beneficial owners of
13,420,501 shares of Common Stock, or 15.8% of such shares.

	Each of the Apex Partnerships disclaims beneficial ownership
of all shares of Common Stock described herein except those
shares that are owned by that entity directly.  The Company
understands that each of the other persons named as an officer,
director, partner or other affiliate of any Apex Partnership
herein disclaims beneficial ownership of all the shares of
Common Stock described herein, except for Middlemas with respect
to the option to purchase 1,000,000 shares held by him.

	Each of the Apex Partnerships disclaims the existence of a
"group" among any or all of them and further disclaims the
existence of a "group" among any or all of them and any or all
of the other persons named as an officer, director, partner or
those affiliate of any of them, in each case within the meaning
of Section 13(d) (3) of the 1934 Act.

 (12) Includes 25,250,000, shares purchasable by directors and
officers under currently exercisable options.

(13)	Includes the conversion of 1,600,000 shares of Series A-1
Preferred Stock to Common Stock.  Apex Investment Fund II, L.P.,
owning 408,000 shares of Series A Convertible Preferred Stock
which are currently convertible into 2,266,685 shares of Common
Stock, The Environmental Private Equity Fund II, L.P., owning
600,000 shares of Series A Convertible Preferred Stock which are
currently convertible into 3,333,360 shares of Common Stock, and
Proactive Partners, L.P., owning 500,000 shares of Series A-1
Convertible Preferred Stock which are currently convertible to
2,777,800 shares of Common Stock.

(14)	Includes 346,010 shares of Series B Preferred Stock which
Mr. Clark. the Company's president, may be deemed to hold
beneficially by reason of his ownership of 80% of the common
stock of LC Holdings, Inc., the owner of 100% of the Series B
Preferred Stock.

(15)	Includes 86,503 shares of Series B Preferred Stock which
LCH, Inc. may be deemed to hold beneficially by reason of its
ownership of 20% of the common stock of LC Holdings, Inc., the
owner of 100% of the Series B Preferred Stock.

(16)	Includes 322,264 shares purchasable by the Environmental
Private Equity Fund under a currently exercisable warrant.

(17) Includes 801,252 shares purchasable by Proactive Partners,
L.P. under a currently exercisable warrant.

(18) Includes 6,455,000 shares of Series D Preferred Stock,
which Mr. Clark, the Company's CEO owns which are convertible to
6,455,000 shares of common stock if the Company has sufficent
authorized but unissued shares of common stock.


Item 12.  Certain Relationships and Related Transactions

	From time to time since December 6, 1987, Thomas P. Clark, a
Director and President of the Company, loaned funds to the
Company to cover operating expenses.  These funds have been
treated by the Company as unsecured debt, and the promissory
notes with interest at 8.36% to 9.01% per annum, issued to Mr.
Clark on various dates are payable October 15, 2002.  To date,
Mr. Clark has loaned the Company $310,720 of which $43,350 has
been repaid, leaving a balance of $267,370.  As of August 31,
2001, accrued interest on the Notes totaled $204,032.  All loans
were made on terms determined by the board members, other than
Mr. Clark, to be at market rates.

	Additionally, LCH, Inc., a Delaware corporation which owns 20%
of LC Holdings, Inc. and is thereby affiliated with Mr. Clark,
who owns 80% of LC Holdings, Inc., loaned the Company a total of
$950,000 between November, 1988 and February, 1989.  These funds
were represented by two Demand Promissory Notes (the "Notes")
with interest at a rate equal to the rate announced from time to
time by Mellon Bank, Pittsburgh, Pennsylvania as its "prime
rate" plus 300 basis points from the date of the first advance
thereunder until maturity, payable quarterly beginning on the
first day of April, 1989 and continuing thereafter on the first
day of each subsequent calendar quarter.  No payments were made
on the Notes.  An April 25, 1989 Assumption of Obligations
Agreement assigned the entire debt of $950,000 to Rangeview
Development Corp., which was a wholly-owned subsidiary of the
Company until it was dissolved in fiscal 1997 and further
assigned $750,000 of that $950,000 to Rangeview Company, L.P a
limited partnership in which LCH held a 45% interest and
Rangeview Development Corporation held a 55% interest.  In
February of 1991, LCH transferred its interest in Rangeview
Company, L.P. to the Company in exchange for a $4,000,000
profits interest in the Rangeview Project paid subsequent to the
first $31,807,000 profits interest allocated to other investors.
In connection with the Settlement Agreement, LCH consented to be
paid its $4,000,000 profits interest from the sale or other
disposition of the Export Water subsequent to payment of
$31,807,000 owed under the CAA.  During fiscal year ended August
31, 1998, the Company reached an agreement with LCH, Inc. to
defer payment of the principal amount of the Notes, plus
interest until October 15, 2003.  No additional consideration is
due to LCH, Inc. for the deferral.  The board members, other
than Mr. Clark, determined the transactions are at fair market
value taking into consideration the risk to LCH, Inc.


Item 13. Exhibits and Reports on Form 8-K.

	(a)	Exhibits

	3(a)	Certificate of Incorporation of Registrant -
Incorporated by reference from Exhibit 4-A to Registration Statement
No. 2-65226.

	3(a).1	Certificate of Amendment to Certificate of
Incorporation, filed August 31, 1987 - Incorporated by
reference from Annual Report on Form 10-K for the fiscal
year ended August 31, 1987.

	3(a).2	Certificate of Amendment to Certificate of
Incorporation, filed May 27, 1988. Incorporated by
reference from Proxy Statement for the Annual Meeting
held April 22, 1988.

	3(a).4	Certificates of Amendment to Certificate of
Incorporation filed April 13, 1993.  Incorporated by
reference from Proxy Statement for Annual Meeting held
April 2, 1993.

	3(a).6	Certificates of Amendment to Certificate of
Incorporation filed May 25, 1994 (Series A).
Incorporated by reference from Annual Report on Form 10-K
for the fiscal year ended August 31, 1994.

	3(a).7	Certificates of Amendment to Certificate of
Incorporation filed August 31, 1994 (Series B).
Incorporated by reference from Annual Report on Form 10-K
for the fiscal year ended August 31, 1994

	3(a).8	Certificates of Designation for the Series A-1
Preferred Stock Filed July 21, 1998.*

	3(a).9	Certificates of Amendment to Certificate of
Incorporation filed September 2, 1999 (Series C).*

	3(a).10	Certificates of Amendment to Certificate of
Incorporation filed November 5, 1999 (Series C1),
Incorporated by reference from Annual Report on form
10KSB for the fiscal year ended August 31, 1999.

	3(a).11	Certificates of Amendment to Certificate of
Incorporation filed November 5, 1999 (Series C2),
Incorporated by reference from Annual Report on form
10KSB for the fiscal year ended August 31, 1999.

	3(a).12  Certificates of Amendment to Certificate of
Incorporation filed August 29, 2000 (Series C3).
Incorporated by reference from Annual Report on Form
10KSB for the fiscal year ended August 31, 2000

	3(a).13	Series D filed herewith.

	3(b)	Bylaws of Registrant - Incorporated by reference from
Exhibit 4.c to Registration Statement No. 2-62483.

	3(b).1	Amendment to Bylaws effective April 22, 1988.
Incorporated by reference from Annual Report on Form 10-K
for the fiscal year ended August 31, 1989.

	4.1	Specimen Stock Certificate - Incorporated by reference to
Registration Statement No. 2-62483.

10.2 Equity Incentive Plan.  Incorporated by references from
Proxy State for Annual Meeting held April 2, 1993.

	10(h).2	Service Agreement, dated April 19, 1996, by and
between the Company, and the District. **

	10(h).3	Wastewater Service Agreement, dated January 22,
1998, by and between the Company, and the District.**

	10(h).4	Comprehensive Amendment Agreement No. 1, dated
April 11, 1996, by and among ISC, the Company, the
Bondholders, Gregory M. Morey, Newell Augur, Jr., Bill
Peterson, Stuart Sundlun, Alan C. Stormo, Beverlee A.
Beardslee, Bradley Kent Beardslee, Robert Douglas
Beardslee, Asra Corporation, International Properties,
Inc., and the Land Board. **

*	Incorporated by reference from Annual Report on Form 10-
KSB for fiscal year ended August 31, 1998.
**	Incorporated by reference from Quarterly Report on Form
10-QSB for the period ended May 31, 1996.
(b)	The Company has not filed any reports on form 8-K
during the last quarter of fiscal 2000.

Signatures

	In accordance with Section 13 or 15(d) of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

PURE CYCLE CORPORATION



By:	/s/ Mark W. Harding
	Mark W. Harding, President


Date:	    November 29, 2001



	In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:


Signature		   Title			Date

/s/ Harrision H Augur	  Chairman, Director	November 29, 2001
Harrison H. Augur

/s/ Margaret S. Hansson	  Vice    		November 29, 2001
Margaret S. Hansson	  President, Director


/s/ Thomas P. Clark       CEO,
			  Treasurer,		November 29, 2001
Thomas P. Clark		  Director


/s/ Mark W. Harding	  President, CFO,	November 29, 2001
Mark W. Harding		  Secretary


/s/ Fletcher L. Byrom	  Director		November 29, 2001
Fletcher L. Byrom


/s/ George M. Middlemas	  Director		November 29, 2001
George M. Middlemas


/s/ Richard L. Guido	  Director		November 29, 2001
Richard L. Guido

..	CERTIFICATE OF THE DESIGNATIONS, POWERS, PREFERENCES
AND RIGHTS OF

SERIES D CONVERTIBLE PREFERRED STOCK
($.001 Par Value)

of

PURE CYCLE CORPORATION

______________________

Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
______________________


	PURE CYCLE CORPORATION, a Delaware corporation (the
"Corporation"), does hereby certify that the following
resolutions were duly adopted by the board of directors of the
Corporation pursuant to authority conferred upon the board of
directors by Article IV of the Certificate of Incorporation of
the Corporation, which authorizes the issuance of up to
25,000,000 shares of Preferred Stock, at a meeting of the board
of directors duly held on August  22, 2001

	RESOLVED, that one series of the class of authorized
Preferred Stock, $.001 par value, of the Corporation is hereby
created and that the designations, powers, preferences and
relative, participating, optional or other special rights of the
shares of such series, and qualifications, limitations or
restrictions thereof, are hereby fixed as follows:

1.	Number of Shares and Designation. 6,455,000 shares of
the Preferred Stock, $.001 par value, of the Corporation are
hereby constituted as a series of the Preferred Stock designated
as Series D Convertible Preferred Stock (the "Series D Preferred
Stock").

2.	Liquidation.

	A.	Upon any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of
the Series D Preferred Stock will be entitled to share in any
distribution or payment made to the holders of Common Stock on a
pro rata basis with the holders of the Common Stock determined as
if such holders had converted their Series D Preferred Stock to
Common Stock pursuant to Section 4 hereof immediately prior to
such liquidation, dissolution or winding up.


	B.	The Corporation will mail written notice of any
distribution in connection with such liquidation, dissolution or
winding up, not less than 60 days prior to the payment date
stated therein, to each record holder of Series D Preferred
Stock.  Neither the consolidation or merger of the Corporation
into or with any other corporation or corporations, nor the sale
or transfer by the Corporation of all or any part of its assets,
nor the reduction of the capital stock of the Corporation, will
be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 2.

3.	Dividends.	The holders of the Series D Preferred
Stock will be entitled to share in any dividend or distribution
or payment made to the holders of Common Stock on a pro rata
basis with the holders of the Common Stock determined as if such
holders had converted their Series D Preferred Stock to Common
Stock pursuant to Section 4 hereof immediately prior to such
dividend or distribution.

4.	Conversion.

	A.	Right to Convert.  Each share of Series D
Preferred Stock shall be convertible, at the option of the holder
thereof, at any time, into 1 fully paid and non-assessable share
of Common Stock (the "Conversion Rate"), provided that the
Corporation has authorized but unissued shares of Common Stock to
deliver to the holders of the Series D Preferred Stock at the
time of such conversion.

	B.	Fractional Shares.  In the event the aggregate
number of shares of Series D Preferred Stock being converted by a
holder thereof is convertible into a number of shares of Common
Stock which would require the issuance of a fractional interest
in a share of Common Stock, the Corporation shall deliver cash in
the amount of the fair market value of such fractional interest.

	C.	Accrued Dividends.  If, at the time the holder of
shares of Series D Preferred Stock exercises its right of
conversion under Section 4.A, such holder's shares of Series D
Preferred Stock have accrued dividends which remain unpaid at the
time of such conversion, such holder's right to receive dividends
on the shares so converted, to the extent accrued but unpaid on
the date of conversion, shall continue.

	D.	Mechanics of Conversion.  Before any holder of the
Series D Preferred Stock shall be entitled to voluntarily convert
the same into shares of Common Stock, such holder shall surrender
the certificate or certificates therefor, duly endorsed, at the
office of the Corporation, in the case of a conversion pursuant
to Section 4.A above, shall give written notice to the
Corporation at such office that he or she elects to convert the
same and shall state therein his or her name or the name or names
of his or her nominees in which he or she wishes the certificate
or certificates for shares of Common Stock to be issued.  The
Corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of the Series D Preferred
Stock, or to his or her nominee or nominees, a certificate or
certificates for the number of shares of Common Stock to which he
or she shall be entitled as aforesaid.  Any conversion shall be
deemed to have taken place at 5:01 Mountain Time on the date of
such surrender of the shares to be converted, and the person or
persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such
date; provided, however, that the right to receive dividends on
the shares so converted, to the extent accrued but unpaid on the
date of such conversion (whether or not declared), shall
continue.

	E.	Adjustment for Combinations or Consolidations of
Common Stock.  In the event the Corporation at any time or from
time to time after the date of issuance of any Series D Preferred
Stock effects a subdivision, combination or reclassification of
its outstanding shares of Common Stock into a greater or lesser
number of shares, then and in each such event the Conversion Rate
shall be increased or decreased proportionately.

	F.	Adjustments for Merger or Reorganization, etc.  In
case of any consolidation or merger of the Corporation with or
into another corporation or the conveyance of all or
substantially all of the assets of the Corporation to another
corporation or other person, provision shall be made so that each
share of the Series D Preferred Stock shall thereafter be
convertible into the number of shares of stock or other
securities or property to which a holder of the number of shares
of Common Stock of the Corporation deliverable upon conversion of
such Series D Preferred Stock would have been entitled upon such
consolidation, merger or conveyance; and, in any such case,
appropriate adjustment (as determined by the board of directors)
shall be made in the application of the provisions herein set
forth with respect to the rights and interest thereafter of the
holders of the Series D Preferred Stock, to the end that the
provisions set forth herein (including provisions with respect to
changes in and other adjustments of the Conversion Rate) shall
thereafter be applicable, as nearly as they reasonably may be, in
relation to any shares of stock or other securities or property
thereafter deliverable upon the conversion of the Series D
Preferred Stock.

 5.	Voting.

	A.	Holders of the Series D Preferred Stock shall have
the right to vote together with the Common Stock, and not
separately as a class, for the election of directors and upon all
other matters to be voted on by the holders of the Common Stock
of the Corporation.  Every holder of shares of the Series D
Preferred Stock shall have the number of votes equal to the
number of shares of Common Stock that his or her shares of Series
D Preferred Stock would be convertible into pursuant to Section 4
on the record date of the meeting at which such shares are being
voted.

	B.	At each meeting or at any adjournment thereof at
which the holders of the Series D Preferred Stock have the right
to vote as a class, the presence, in person or by proxy, of the
holders of a majority of the Series D Preferred Stock then
outstanding will be required to constitute a quorum.  The vote of
a majority of such quorum will be required to take any action at
such meeting.  Cumulative voting by holders of Series D Preferred
Stock is prohibited.  In the absence of a quorum, a majority of
the holders present in person or by proxy of the Series D
Preferred Stock shall have the power to adjourn the portion of
the meeting related to that particular series for a period of up
to 30 days without notice other than announcement at the meeting
until a quorum shall be present.

6.	Corporation's Right to Purchase Series D Preferred
Stock.

	A.	The Corporation shall have the right at any time
to acquire any Series D Preferred Stock from the owner of such
shares on such terms as may be agreeable to such owner.  Shares
of Series D Preferred Stock may be acquired by the Corporation
from any stockholder pursuant to this Section 6.A without
offering any other stockholder an equal opportunity to sell his
stock to the Corporation, and no purchase by the Corporation from
any stockholder pursuant to this Section 6.A shall be deemed to
create any right on the part of any stockholder to sell any
shares of Series D Preferred Stock (or any other stock) to the
Corporation.  The purchase by the Corporation of shares of Series
D Preferred Stock pursuant to this Section 6.A shall not be
deemed for any purpose to be a redemption.  Such shares shall not
be entitled to receive dividends while held by the Company.

	B.	Notwithstanding the foregoing provisions of this
Section 6, if a dividend upon any shares of Series D Preferred
Stock is past due, the Corporation shall not purchase or
otherwise acquire any shares of Series D Preferred Stock, except
(i) pursuant to a purchase or exchange offer made on the same
terms to all holders of the Series D Preferred Stock, or (ii) by
conversion of shares of Series D Preferred Stock into, or
exchange of such shares for, Common Stock.

7.	Preemptive Rights.  The holders of shares of Series D
Preferred Stock are not entitled to any preemptive or
subscription rights in respect of any securities of the
Corporation.

8.	Notices.  Any notice required hereby to be given to the
holders of shares of Series D Preferred Stock shall be
sufficiently given if sent by telecopier, registered or certified
mail, postage prepaid, by express mail or by other express
courier addressed to each holder of record at his address
appearing on the books of the Corporation.  All notices and other
communications shall be effective (i) if mailed, when received or
three (3) days after mailing, whichever is earlier; (ii) if sent
by express mail or courier, when delivered; and (iii) if
telecopied, when received by the telecopier to which transmitted
(a machine-generated transaction report produced by sender
bearing recipient's telecopier number being prima facie proof of
receipt).

9.	Transfer Costs.  The Corporation shall pay any and all
documentary stamp and other transaction taxes attributable to the
issuance or delivery of shares of Common Stock upon conversion of
any shares of Series D Preferred Stock; provided, however, that
the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue or
delivery of shares of Common Stock in a name other than that of
the holder of the Series D Preferred Stock to be converted and no
such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Corporation the
amount of any such tax or has established, to the satisfaction of
the Corporation, that such tax has been paid.


	IN WITNESS WHEREOF, the undersigned have executed this
Certificate of Designation this 22 day of August, 2001.


					PURE CYCLE CORPORATION



					By:

	       				Thomas P. Clark, CEO

ATTEST:



By:
     Mark W. Harding, Secretary








9

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