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                        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, 2002

                  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



Securities registered under                            Name of each exchange
Section 12(b) of the Exchange Act:    Title of Class	on which registered

					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, 2002:	$ 204,858

Aggregate market value of voting stock held by non-affiliates: $13,340,580
(based upon closing price on the OTC Bulletin Board on October 11, 2002)

Number of shares of Common Stock outstanding, as of
August 31, 2002:    78,474,004

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 	                                 14

8.	Changes in and Disagreements with Accountants
	on Accounting and Financial Disclosure 	                 25

	               Part III

9.	Directors, Executive Officers, Promoters and
	Control Persons; Compliance with Section 16(a)
	of the Exchange Act  	                                 26

10.	Executive Compensation 	                                 27

11.	Security Ownership of Certain Beneficial
	Owners and Management   	                         28

12.	Certain Relationships and Related
	Transactions  	                                         31

13.	Exhibits and Reports on Form 8-K 	                 32

	Signatures 	                                         34

         "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 involving 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, which the Company seeks
to utilize to enable it to reuse its water suppies.  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.

Description of Company Assets

Rangeview Water Supply

     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 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").
The Company also 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.
Development of the Rangeview water supply is divided into two opportunities:
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.  The Company also owns a right of first refusal to purchase
40 acres of real property which constitute the boundaries of the District, and
the Company's President and CEO serves as elected members of the Board of
Directors of the District.

Comprehensive Amendment Agreement

	In order to acquire theRangeview water supply, the Company negotiated
an agreement with the State of Colorado and all of the holders of the Rangeview
bonds (the "Settlement Agreement") and the Water Commercialization Agreement
(the "WCA") and similar agreements with all prior investors relating to the
development of the Rangeview water asset., Pursuant to this amendment known as
the Comprehensive Amendment Agreement (the "CAA") 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 inproviding 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.

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 are capable of producing 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 as more customers are added to
the system to treat municipal wastewater into pure potable water for reuse.

The Business

     Beginning in fiscal 1987, and continuing through fiscal 2002, 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, 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 11,800
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 Company's rates and charges are established pursuant to the Settlement
Agreement to 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.

     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
service contracts whereby the Company would 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
the Company, as part of its commitment to provide water and wastewater
services, would design, construct and operate the water and wastewater
systems. The Company would incur substantial capital expenditures to
construct the facilities necessary to provide its water and wastewater service.
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 two 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 is party to two eighty-five year water privatization
agreements with the Rangeview Metropolitan District which entitles the Company
to design, construct, operate and maintain the water and wastewater systems
which serve customers within the District's Service Area.  In exchange, the
Company receives 95% of all amounts received by the District relating to water
services ramaining after payment of royalties to the State of Colorado Board of
Land Commissioners, and 100% of the District?s wastewater tap fees and 90% of
the District's wastewater usage fees.

     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 quitclaim 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, 2002.



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 19, 2002, there were 3,858 holders of record of the Company's
Common stock.

	Fiscal Quarter		          Low	High

		2002	First	        $.08	$.15
			Second	        $.06	$.12
			Third	        $.06	$.21
			Fourth	        $.09	$.19

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



     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.

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
enables the Company to provide water and wastewater service to its Service Area
and other customers located throughout  the Denver area. The Company intends to
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 2002, the Company delivered approximately
54.5 million gallons of water and processed approximately 3.7 million gallons
of wastewater for 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 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 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 and developers 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 reviews its long-lived assets for impairment whenever events
or changes in circumstances indicated that the carrying amount of an asset may
not be recoverable.  The Company?s water assets are long-lived assets which
will deliver water to customers for periods in excess of 100 years.
Management believes the Company's impairment analysis for its Rangeview water
supply incorporates a reasonable development horizon for the District'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 a small portion of the property has 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
charged to new water and wastewater customers 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, which currently are $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 the Rangeview water supply 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 capitalized costs of the asset as of August 31, 2002.

     The Company's impairment analysis for its Paradise water supply projects
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 is users within the Denver metropolitan area; and second
is 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 that the cost to deliver the Paradise water to the
Denver metropolitan area through an exchange of water for use of existing
infrastructure owned by others 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 capitalized costs
of the asset as of August 31, 2002.

     Alternatively, the delivery of the Paradise asset to the downstream
states' (i.e. Nevada and California) would be accomplished by using the
Colorado River as the delivery mechanism.  Use of the Colorado River as the
delivery mechanism to the 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 capitalized costs of the asset as
of August 31, 2002.

     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.

Critical Accounting Policies

    The Company's financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America
("GAAP") and our significant accounting policies are summarized in Note 2
to the accompanying consolidated financial statements. The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect reported amounts of assets, liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ significantly from those estimates.

    The Company has identified certain key accounting policies on which its
financial condition and results of operations are dependent. These key
accounting policies most often involve complex matters or are based on
subjective judgments or decisions. In the opinion of management, the Company's
most critical accounting policies are those related to revenue recognition,
water assets and other long-lived assets, depletion and depreciation and
income taxes. Management periodically reviews its estimates, including those
related to the recoverability and useful lives of assets. Changes in facts
and circumstances may result in revised estimates.

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 monthly based upon metered
water deliveries to customers.  The Company recognizes wastewater usage
revenues monthly based upon metered wastewater deliveries to the Wastewater
treatment facility.  Costs of delivering water and processing wastewater are
recognized as incurred.

Water Assets

    The Company reviews its water assets and other 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.

Depletion and Depreciation

    The Company depletes its water assets basis on units produced divided by
the total volume of water adjudicated in the water decrees.  Water systems have
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.

Results of Operations

    During fiscal year 2002, the Company delivered approximately 54.5 million
gallons of water generating water usage revenues from the sale of water to
customers within the Company?s Service Area of  $156,026, compared to
the delivery of 40 million gallons of water generating $96,754 for fiscal 2001.
The Company incurred approximately $13,896 in operating costs compared to
$11,181 for fiscal 2001. Also during fiscal year 2002, the Company processed
approximately 3.7 million gallons of wastewater generating wastewater usage
revenues of $48,832 and incurred $13,896 in wastewaer operating costs.  There
were no revenues or costs related to wastewater operatins in 2001.  The Company
recognized construction revenues of $772,501 in fiscal year 2001 and incurred
construction costs of $488,984.  There were no construction revenues or costs
in 2002.  The Company recognized revenues from construction based on
percentage-of-completion methodology.

     General, administrative and marketing expenses for fiscal year 2002 were
$233,131, or approximately $1,900 higher than for fiscal year 2001 due
primarily to higher professional fees.  Interest income decreased to $22,181 in
fiscal year 2002, compared to $41,464 for fiscal year 2001 due primarily to a
decrease in the average balance in the Company?s operating cash accounts.
Interest expense decreased approximately $37,000 to $194,651 as compared to
$231,368 in fiscal year 2001 due primarily to a decrease in the prime lending
rate.  Net loss for fiscal year 2002 of $245,147 was approximately $193,000
higher than for fiscal year 2001, primarily due to recognition of construction
revenues and related gross margin in 2001.

Liquidity and Capital Resources

     The Company's working capital at August 31, 2002 was $316,760. The
Company believes that at August 31, 2002, 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 a
cquire, 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 2002, cash used in operating activities was
approximately $39,000, compared to approximately $641,000 in fiscal 2001.
Payments to contractors in fiscal 2001 accounted for the cash used in
operations in fiscal 2001.  Operating costs increased due to additional costs
of operating the domestic 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 2003.

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


Investing  Activities

     Cash used in investing activities for fiscal 2002 was approximately
$109,000.  Costs of approximately $87,000 were capitalized to the Rangeview
and Paradise Water Supply projects during fiscal year ended August 31, 2002.
Cash used in investing activities for fiscal 2001 was approximately $64,000.
The Company capitalizes certain legal, engineering and permitting costs
relating to the improvement of its water assets.

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.

     Readers are cautioned that forward-looking statements contained in this
Form 10-KSB 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 April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This statement provides guidance on the classification of
gains and losses from the extinguishment of debt and on the accounting for
certain specified lease transactions.  SFAS No. 145 is not expected to have
a material impact on the Company.

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
an Activity (including Certain Costs Incurred in a Restructuring).
Generally, SFAS No. 146 requires that a liability for a cost associated with
an exit or disposal activity be recognized as incurred, whereas EITF Issue No.
94-3 required such a liability to be recognized at the time that an entity
committed to an exit play. SFAS No. 145, which is effective for exit or
disposal activities that are initiated after December 31, 2002, is not
expected to have a material impact on the Company.



Item 7. Financial Statements


				                               Page

Independent Auditors' Report					13
Balance Sheets							14
Statements of Operations					15
Statements of Stockholders' Equity				16
Statements of Cash Flows					17
Notes to Financial Statements				 	18-24






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, 2002 and 2001, 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, 2002 and 2001 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
October 11, 2002


                         PURE CYCLE CORPORATION
                            BALANCE SHEETS

		                                     August 31,
ASSETS	                                             2002	2001

Current assets:
 Cash and cash equivalents	                  $ 287,720	$   435,660
 Trade accounts receivable	                     50,919	     33,255
 Prepaid expenses and other current assets	         --	     11,259
	Total current assets	                    338,639	    480,174

Investment in water and systems:
 Rangeview water supply (Note 3)	         13,566,777	 13,483,425
 Paradise water supply	                          5,491,423	  5,487,433
 Rangeview water system (Note 3)	            148,441	    126,611
 Investment in water and systems	         19,206,641	 19,097,469
  Accumulated depreciation & depletion	             (4,958)	         --
	Total water and water systems	         19,201,683	 19,097,469


Note receivable, including accrued
 interest (Note 5)	                            385,716	    369,806
Other assets	                                    102,241	    127,441
	                                       $ 20,028,279    $ 20,074,890

	LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

 Accounts payable	                       $      2,384     $        --
 Accrued liabilities	                             19,495	     17,994
	Total current liabilities		     21,879	     17,994

Long-term debt - related parties, including
 accrued interest (Note 6)	                  4,713,270	  4,518,619

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 D - 6,455,000 shares issued and
   outstanding	  	 	                      6,455	      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	 24,778,989
	Accumulated deficit	               ( 20,846,561)	(20,601,414)

	Total stockholders' equity	          4,202,500	  4,447,647
			                       $ 20,028,279    $ 20,074,890






See Accompanying Notes to Financial Statements

                     PURE CYCLE CORPORATION
                    STATEMENTS OF OPERATIONS




	     			             Years ended August 31,
			                            2002	2001
Water service revenue:
Construction revenue (Note 4)	              $       --   $  772,501
Water usage revenues	                         156,026       96,754
Wastewater processing revenues	                  48,832	   --
			                         204,858      869,255
Construction costs incurred (Note 4)	              --     (488,984)
Water service operating expense	                 (13,896)     (11,181)
Wastewater service operating expense	         (13,896)          --
Gross margin	                                 177,066      369,090

General and administrative expense	        (221,872)    (231,229)
Depreciation expense	                          (4,220)          --
Depletion expense	                         (   738)          --
Operating income (loss)	                         (45,764)     137,861


Other income (expense):
 Interest income	                           22,181	41,464
 Interest expense:
	Related parties	                         (194,651)    (231,368)
	Amortization of warrants	          (25,200)	    --
Other income	                                    2,287	    --
	Total other income (expense)	         (195,383)    (189,904)

		Net loss	                $(245,147)    $(52,043)

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


Weighted average common
 shares outstanding basic and diluted	       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, 2002 and 2001







			           Preferred Stock            Common Stock
			         Shares      Amount      Shares        Amount

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
Net loss	                     --           --	         --	    --
Balance at August 31, 2002    8,487,513       $8,488     78,439,763   $261,584



			             Treasury Stock
			           Shares      Amount


Balance at August 31, 2000        (903,334)    (135,500)
Preferred Stock issued in
  Exchanges, net (Note 8)         (421,666)     (69,500)
Common Stock
  issued from treasury stock
   (Note 8)                      1,325,000	205,000
Extension of warrants
Net loss                                -- 	     --
Balance at August 31, 2001
Net loss	                        --  	     --
Balance at August 31, 2002        $      0      $     0




	                                          Additional           Total
			            Paid-in       Accumulated      Stockholders'
			            Capital         Deficit	      Equity

Balance at August 31, 2000       $24,583,910	   $(20,549,371)    $4,168,690
Preferred Stock issued in
  Exchanges, net (Note 8)             69,079	             --	            --
Common Stock
  Issued from treasury stock
   (Note 8)                               --                 --        205,000
Extension of warrants                126,000                 --        126,000
Net loss	                          -- 	        (52,043)       (52,043)
Balance at August 31, 2001       $24,778,989	   $(20,601,414)    $4,447,647
Net loss                                  -- 	       (245,147)      (245,147)
Balance at August 31, 2002       $24,778,989	   $(20,846,561)    $4,202,500














See Accompanying Notes to Financial Statements

                             PURE CYCLE CORPORATION
                            STATEMENTS OF CASH FLOWS




				                         Years ended August 31,

				                          2002		2001

Cash flows from operating activities:
  Net loss		                              $(245,147)     $( 52,043)
  Adjustments to reconcile
    net loss to net cash used in
     operating activities:
     Depreciation expense		                  4,220	            --
     Depletion expense		                            738	            --
     Increase in long-term debt - related parties,
      including accrued interest		        194,651	       231,368
     Changes in operating assets and liabilities:
	Trade accounts receivable		        (17,664)       (14,636)
        Prepaid expenses and other assets		 36,459		    --
	Billings in excess of costs and
         estimated earnings                                  --	      (772,500)
	Accounts payable and accrued liabilities	  3,885	       (10,653)
	Other non-current liabilities			     --	            --
	Net cash used in operating activities	 	(22,858)      (641,108)

Cash used in investing activities-
     Investments in water supply		        (87,342)       (63,856)
     Investments in water systems		        (21,830)	    --
     Increase in accrued interest on note receivable	(15,910)       (22,644)
          Net cash used in investing activities	       (125,082)       (63,856)

Cash flows from financing activities-
     Proceeds from sale of equity instruments		     --	       319,500

     Net decease in cash and cash equivalents	       (147,940)      (385,464)
     Cash and cash equivalents beginning of year	435,660	       821,124

     Cash and cash equivalents end of year	      $ 287,720	     $ 435,660
















See Accompanying Notes to Financial Statements


                           PURE CYCLE CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                           August 31, 2002 and 2001

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, 2002, 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.  The Company recognizes wastewater processing revenues based on
volumes processed, as wastewater is received and processed.  Costs of
delivering water and providing wastewater service to customers are recognized
as incurred.

Use of estimates

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United State of America 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.



PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 tobe 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 and water systems at August 31, 2002.

Depletion and Depreciation of water assets

    The Company depletes its water assets basis on units produced divided
by the total volume of water adjudicated in the water decrees.  Water
distribution systems have an estimated useful life of 30 years and are
depreciated based on a straight line depreciation method over the estimated
lives of the assets.

Water and wastewater systems

     The Company capitalizes certain legal, engineering and permitting
costs relating to the improvement of its water assets.

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 6.

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 aggregating
65,746,960 common share equivalents outstanding as of August 31, 2002 have
been excluded from the calculation of loss per share as their effect is
anti-dilutive.

NOTE 3 - RANGEVIEW WATER SUPPLY AND SYSTEM

    Beginning in 1988, the Company initiated the purchase of the Rangeview
water assets.  From 1988 through 2002, 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
legal and engineering costs totaling $1,528,616.



PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 3 - RANGEVIEW WATER SUPPLY AND SYSTEM (continued)

     In April 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?), a
related party, 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 54.5 and 40 million gallons
of water to customers in the Service Area in fiscal 2002 and 2001,
respectively.  The Company processed approximately 3.7 million gallons of
wastewater from customers within its Service Area.

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

    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.  After payment of
the $31,807,000 in participating interest pursuant to the CAA, LCH Inc., a
company affiliated with the Company's CEO, has the right to receive the next
$4,000,000 in proceeds in exchange for $950,000 in notes payable entered
into between LCH and the Company in 1987 and 1988.  The next $433,000 in
proceeds are payable to the holders of the Company's Series B Preferred
Stock.   In 1994, the Company issued the Series B Preferred Stock in
exchange for certain accounts payable totaling $433,000 to LC Holdings Inc.
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 if and when such sale occurs.

    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.

     During fiscal 2002 and 2001, the Company had revenues from a single
customer that accounted for 76% and 85% of total revenue, respectively.

NOTE 4 - 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, 2002.
The balance of the note receivable at August 31, 2002 was $385,716, including
accrued interest.  The Company intends to extend the due date to December 31,
2003.  Accordingly, the note has been classified as non-current.

PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 5 - LONG-TERM DEBT

     Long-term debt, including accrued interest, at August 31, 2002 and 2001
is comprised of the following:

							  2002	     2001
Notes payable, including accrued interest to six
 related parties, due August 2007, interest at
 10.25%, unsecured				    $   484,876   $ 455,063
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		                                542,809     506,934
Note payable, to CEO, due October 2007,
 non-interest bearing, unsecured	                 26,542	     26,542
Notes payable, including accrued interest,
 to CEO due September 2007, interest at 8.36% to
 9.01%, unsecured				        487,581	    466,221
Notes payable, including accrued interest,
 to related party, due October, 2007, interest
 at the prime rate plus 3%, secured by shares
 of the Company's common stock owned by the
 President	                                      2,371,733	  2,296,326
Notes payable, including accrued interest,
 to a related party, due August 2007, interest
 ranging from 7.18% to 8.04%, unsecured	                799,729	    767,533
	Total long-term debt	                     $4,713,270	 $4,518,619

Aggregate maturities of long-term debt are as follows:

	Year Ending August 31,	           Amount
          2007	                         1,853,956
          thereafter	                 2,859,314
	     Total	               $ 4,713,270

     In 1996 and 1997, the Company entered into loan agreements with eleven
related party investors.  The loan balances total $1,009,684 at August 31,
2002, the loans are unsecured, and 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 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 are being
amortized over the revised term of the debt.  See further discussion of the
warrant in Note 8.

     As of August 31, 2002, the CEO 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.

NOTE 6 - 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.

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






PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 6 - STOCKHOLDERS' EQUITY (continued)

	Stock Options

     Pursuant to the Company's Equity Incentive Plan approved by stockholders
in June of 1992, 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.  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.  In connection with their extension of the
expiration dates and whereas the related options were fully vested in April
2001, and whereas these options were not in the money at the time of their
extension, no compensation expense was recognized for the extensions.  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 each 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 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, 2002 and 2001:

	Net loss:				    2002	   2001
	As Reported				$(  259,910)	(   52,043)
	Pro forma			         (       --)	(1,529,451)
	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 2002.

     A summary of the status of the Company?s Equity Incentive Plan and
other compensatory options as of August 31, 2002 and 2001, and changes
during the years then ended is presented below:

				      2002			     2001
				      Weighted average	       Weighted average
Fixed options		      Shares  exercise price	  Shares exercise price

Outstanding at beginning
of year		             26,000,000	      $.18	  23,000,000	$.18
Granted			             --	        --	   3,000,000	 .18
Outstanding at end of year   26,000,000	      $.18	  26,000,000	$.18

Options exercisable at year
end		             25,550,000       $.18	  25,250,000	$.18
Weighted average fair value
  of options granted during
  the year		                        --	                $.06



PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 6 - STOCKHOLDERS' EQUITY (continued)

     The following table summarizes information about the Equity Incentive
Plan and other compensatory options outstanding at August 31, 2002:

	Options Outstanding			    Options Exercisable

			   Weighted average   Weighted		     Weighted
Range of       Number	    remaining	      average   Number	     average
exercise     outstanding    contractual       exercise  exercisable  remaining
Price	                     life	       Price                 contract
                                                                     life price

 .18	     25,500,000	         6		.18	 25,500,000	6


No options were exercised during the years ended August 31, 2002 and 2001.

		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,
2002.  In 1996, the WCA was amended andretitled to the Comprehensive
Amendment Agreement ("CAA") and all interests held in the WCA were
subsequently converted into participating interests in 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 Company
which aggregate a total of $1,009,684, as of August 31, 2002, extended the
maturity date of notes from 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 following assumptions: 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 as the imputed consideration relating to the
extension of the debt terms.

   No warrants were exercised during the years ended August 31, 2002 and 2001.

NOTE 7 -  SIGNIFICANT CUSTOMERS

     The Company had accounts receivable from two significant customers
totaling approximately $158,600 and $29,300, respectively, as of August 31,
2002 and $697,000 and $24,000, respectively, as of August 31, 2001.  The same
customers accounted for approximately 76% and 14%, respectively of the
Company's revenue during the year ended August 31, 2002 and approximately 80%
and 3%, respectively of the Company's revenue during the year ended August 31,
2001.

NOTE 8 - 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, 2002 and 2001
are presented below.

		                                       2002	2001
	Deferred tax assets:
	Net operating loss carry forwards	$ 2,423,000 	$ 2,355,000
	Less valuation allowance	         (2,423,000)	(2,355,000)
	  Net deferred tax asset	        $        --	$       --

     The valuation allowance for deferred tax assets as of August 31, 2002 was
$2,423,000.  The net change in the valuation allowance for the year ended
August 31, 2002 was  a net increase of $68,000, primarily attributable to
the net operating loss incurred during the year and difference in amortization.
The deferred tax asset at August 31, 2002, for which a valuation allowance has
been recorded, will be recognized when realization is more likely than not.


PURE CYCLE CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 8 - INCOME TAXES (continued)

     At August 31, 2002, the Company has net operating loss carry forwards
for federal income tax purposes of  approximately $6,228,000, which are
available to offset future federal taxable income, if any, through fiscal 2022.

NOTE 9 - 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 of the
Company, described in 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, 2002 and 2001 is as follows:

			2002	         	    		    2001

			       Water		               Water
	       Construction  Service	 Total	Construction  Service	 Total
Revenues	$    --    $204,858  $204,858  $  772,501  $96,754   $ 869,255
Gross margin	     --     177,066   177,066     283,517   85,573     369,090
Total assets	     --  20,028,279 20,028,279       --  20,074,890 20,074,890
Capital
 expenditures	     --     109,172   109,172        --     63,856      63,856


NOTE 10 - Related party transactions

  During the years ended August 31, 2002 and 2001, the Company has occupied
office space from a related party at no cost to the Company.



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, 2002:


             Name	                Age	Position(s) with the
                                                Company

	Harrison H. Augur	        60	Chairman
	Margaret S. Hansson . . . 	78	Director, Vice President
	Fletcher L. Byrom . . . .	84	Director
	Thomas P. Clark . . . . .	66	Director, CEO
	George M. Middlemas . . .     	56	Director
	Richard L. Guido  . . . .      	58	Director
	Mark W. Harding . . . . .	39	President, CFO

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 has been 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 LLB 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,
Vice President since 1992, and Chairman from 1983 to 2001, 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
2001. 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: Manager Micasu Tingsten LLC, Micasu Farms LLC, and
President of Micasu Corporation and Micasu Charitable Foundation Inc.

GEORGE M. MIDDLEMAS

     George M. Middlemas has been a Director of the Company since April 1993.
Mr. Middlemas has been a general partner with the Apex Investment Partners
since 1991, 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
has been with Inco since 1980, and is currently 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, 2002 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
Mark W. Harding
President, CFO	        2001	80,000	  0	     0
			2000	80,000	  0	     0
			1999	80,000	  0	     0


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, 2002, 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)
8451 Delaware St
Thornton, CO  80260

George Middlemas	      1,333,333     	1.7%    (1)
225 W. Washington, #1500	                        (11)
Chicago, IL  60606

Richard L. Guido
Inco Securities Corporation           0		 0%
145 King St. West, #1500
Toronto, Onterio
Canada  M5H4B7

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

Fletcher L. Byrom             7,100,000		8.3%   (3)
305 Village Heights Dr. #328
State College, PA 16801

Mark W. Harding		      9,710,000		11.0% (4)
8451 Delaware St
Thornton, CO  80260

INCO Securities Corporation   4,700,000    	5.7%  (5)
145 King St. West, #1500
Toronto, Onterio
Canada  M5H4B7

Apex Investment Fund II L.P. 17,087,833 	19.2% (6)
225 W. Washington, #1500	                      (11)
Chicago, IL  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    53,654,187	48.6%   (12)
as a group (6 persons)				        (18)






Preferred Stock

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

Thomas P. Clark		                                346,000      80.0% (14)
8451 Delaware St
Thornton, CO  80260

Apex Investment Fund
II L.P.	225 W. 		   408,000	  25.5%
Washington, #1500
Chicago, IL  60606

Environmental Private
Equity Fund II L.P.	   600,000        37.5%
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%
8451 Delaware St
Thornton, CO  80260

LCH, Inc.				                   86,503   20.0% (15)
8451 Delaware St
Thornton, CO  80260


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

Thomas P. Clark			6,455,000	  100.0%(18)
8451 Delaware St
Thornton, CO  80260

(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 2,333,334 shares purchasable under a currently exercisable
     option by Mr. Fletcher L. Byrom Jr., 2,333,333 shares purchasable under
     a currently exercisable option by Susan Byrom Evans, and 2,333,333 shares
     purchasable under a currently exercisable option by Carol Byrom Conrad.

(4)  Includes 9,500,000 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 25,500,000, 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, 2007.  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, 2002, accrued interest on the Notes
totaled $246,752.  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, 2007.  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	Certificate 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	Certificate 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	Certificate 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	Certificate of Designation for the Series A-1 Preferred
Stock Filed July 21, 1998.*

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

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

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

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

	3(a).13	Certificate of Amendment to Certificate of Incorporation
files October 16, 2001 (Series D)..  Incorporated by reference from Annual
Report on Form 10-KSB for the fiscal year ended August 31, 2001

	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
Statement 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. **

99.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*   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 2002.

Item 14. - Controls and Procedures

Evaluatin of Disclosure Controls and Procedures

The Company's chief executive officer and chief financial officer have
concluded that the Company?s disclosure controls (as defined in Exchange
Act Rule 13a-14(c)) are sufficiently effective to ensure that the information
required to be disclosed by the Company in the reports it files under the
Exchange Act is gathered, analyzed and disclosed with adequate timeliness,
accuracy and completeness, based on an evaluation of such controls and
procedures conducted within 90 days prior to the date hereof.

Changes in Internal Controls

There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect these controls
subsequent to the date of the evaluation referred to above.


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/ Thomas P. Clark		            /s/ Mark W. Harding
Thomas P. Clark Chief Executive Officer     Mark W. Harding, President,
                                            Chief Financial Officer


Date:    November 29, 2002   	            November 29, 2002



  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/ Harrison H. Augur	    Chairman, Director	        November 29, 2002
Harrison H. Augur

/s/ Margaret S. Hansson	    Vice President,  	        November 29, 2002
Margaret S. Hansson	    Director


/s/ Thomas P. Clark         CEO, Director	        November 29, 2002
Thomas P. Clark


/s/ Mark W. Harding	    President, CFO	        November 29, 2002
Mark W. Harding


/s/ Fletcher L. Byrom	    Director	                November 29, 2002
Fletcher L. Byrom


/s/ George M. Middlemas	    Director	                November 29, 2002
George M. Middlemas


/s/ Richard L. Guido	    Director	                November 29, 2002
Richard L. Guido


CERTIFICATION

I, Thomas P. Clark, certify that:

1. I have reviewed this annual report on Form 10-KSB of PureCycle Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:a)
designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and c) presented in
this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing
the equivalent function): a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal
controls; and b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 29, 2002
/s/ Thomas P. Clark
Chief Executive Officer


CERTIFICATION

I, Mark W. Harding, certify that:

1. I have reviewed this annual report on Form 10-KSB of PureCycle Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:a)
designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and c) presented in
this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing
the equivalent function): a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal
controls; and b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date November 29, 2002

/s/ Mark W. Harding
President, Chief Financial Officer


CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of PureCycle Corporation (the "Company"),
on Form 10-KSB for the period ending August 31, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"),
I, Thomas P. Clark, Chief Executive Officer of the Company, certify, pursuant
to 18 U.S.C. - 1350, as adopted pursuant to ? 906 of the Sarbanes-Oxley Act
of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.

/s/ Thomas P. Clark

Chief Executive Officer

November 29, 2002



CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of PureCycle Corporation (the "Company"),
on Form 10-KSB for the period ending August 31, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Mark Harding, President, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. - 1350, as adopted pursuant to - 906 of the Sarbanes
-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of
the Company.

/s/ Mark W. Harding

Chief Financial Officer

November 29, 2002

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