-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 FT65tDJzAd/0etIIeqiRtVo4/eDLhEde5KCgNahTtC+RU4qMFeHzL/FoA63LmUs4
 1wb2WrCWBHVE6wOk+vL+4Q==

<SEC-DOCUMENT>0001104659-06-047355.txt : 20060718
<SEC-HEADER>0001104659-06-047355.hdr.sgml : 20060718
<ACCEPTANCE-DATETIME>20060717175346
ACCESSION NUMBER:		0001104659-06-047355
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20060531
FILED AS OF DATE:		20060718
DATE AS OF CHANGE:		20060717

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PURE CYCLE CORP
		CENTRAL INDEX KEY:			0000276720
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				840705083
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-08814
		FILM NUMBER:		06965860

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

	MAIL ADDRESS:	
		STREET 1:		8451 DELAWARE STREET
		CITY:			THORNTON
		STATE:			CO
		ZIP:			80260
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a06-16198_110q.htm
<DESCRIPTION>QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15(D)
<TEXT>
<html>

<head>






</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">
 <div style="border:none;border-top:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p style="border:none;margin:0pt 0pt .0001pt;padding:0pt;text-autospace:ideograph-numeric ideograph-other;"><a name="scotch"></a><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p> </div>

<p align="left" style="font-weight:bold;margin:0pt 0pt 12.0pt 396.0pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;text-indent:20.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">UNITED STATES</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">SECURITIES AND EXCHANGE COMMISSION</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Washington, D.C. 20549</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">Form&nbsp;10-Q</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>

<div style="line-height:9.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><hr size="1" width="160" noshade color="black" align="center" style="width:120.0pt;"></div>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div align="center">

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:11.02%;">
  <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading --><b>(Mark One)</b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:88.0%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:11.02%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Wingdings" style="font-size:10.0pt;font-weight:bold;">&#254;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:88.0%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">QUARTERLY REPORT PURSUANT TO SECTION&nbsp;13 OR
  15(d)&nbsp;OF THE SECURITIES EXCHANGE<br>
  ACT OF 1934</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:11.02%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:88.0%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:11.02%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:88.0%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">For the
  quarterly period ended: May&nbsp;31, 2006</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:11.02%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:88.0%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:11.02%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Wingdings" style="font-size:10.0pt;font-weight:bold;">o</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:88.0%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">TRANSITION REPORT PURSUANT TO SECTION&nbsp;13 OR
  15(d)&nbsp;OF THE SECURITIES EXCHANGE<br>
  ACT OF 1934</font></b></p>
  </td>
 </tr>
</table>

</div>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Commission
file number 0-8814</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">PURE CYCLE CORPORATION</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact name of small business issuer as specified in
its charter)</font></p>

<div align="center">

<table border="1" cellspacing="0" cellpadding="0" width="100%" style="border:none;border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:30.88%;">
  <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading --><b>Delaware</b></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:3.7%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:30.88%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:3.7%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">84-0705083</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:30.88%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State of
  incorporation)</font></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:3.7%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:30.88%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:3.7%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(I.R.S. Employer</font></p>
  </td>
 </tr>
 <tr>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:30.88%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:3.7%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:30.88%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:3.7%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Identification
  Number)</font></p>
  </td>
 </tr>
</table>

</div>

<p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;text-indent:40.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div align="center">

<table border="1" cellspacing="0" cellpadding="0" width="100%" style="border:none;border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">8451
  Delaware St., Thornton, CO</font></b><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:2.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:2.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">80260</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address of
  principal executive offices)</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:2.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:2.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Zip Code)</font></p>
  </td>
 </tr>
 <tr>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:2.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:2.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:2.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt .7pt;width:2.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

</div>

<p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;text-indent:20.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(303)
292-3456</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Registrant&#146;s telephone
number</font></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">N/A</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Former name, former address and former fiscal year,
if changed since last report.)</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Indicate by check
mark whether the registrant (1)&nbsp;has filed all reports required to be filed
by Section&nbsp;13 or 15(d)&nbsp;of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2)&nbsp;has been subject to such filing
requirements for the past 90 days.</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes </font><font face="Wingdings">&#254;</font>&#160; No <font face="Wingdings">o</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &#147;accelerated filer and large accelerated filer&#148; in rule&nbsp;12b-2 of the Exchange Act. (Check one):</font></p><p style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Large accelerated filer </font><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font><font size="2" style="font-size:10.0pt;"> &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Accelerated filer </font><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font
><font size="2" style="font-size:10.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Non-accelerated filer </font><font size="2" face="Wingdings" style="font-size:10.0pt;">&#254;</font></p><p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Indicate by check mark whether the registrant is a shell company filer (as defined in rule&nbsp;12b-2 of the Exchange Act). Yes </font><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font><font size="2" style="font-size:10.0pt;"> No </font><font size="2" face="Wingdings" style="font-size:10.0pt;">&#254;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Indicate the number of
shares outstanding of each of the issuer&#146;s classes of common stock, as of July&nbsp;14,
2006:</font></p>

<div align="center">

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="31%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt .7pt;width:31.7%;">
  <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading -->Common stock, 1/3 of $.01
  par value</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.46%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.7%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt .7pt;width:31.7%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,863,766</font></p>
  </td>
 </tr>
 <tr>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.7%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Class)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.46%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.7%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt .7pt;width:31.7%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Number of
  Shares)</font></p>
  </td>
 </tr>
</table>

</div>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>


 <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p style="border:none;margin:0pt 0pt .0001pt;padding:0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p> </div>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='',FILE='C:\fc\198112651375_D10496_1225863\16198-1-bc.htm',USER='jmsproofassembler',CD='Jul 17 11:27 2006' -->



<br clear="all" style="page-break-before:always;">

<div>
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PURE CYCLE
CORPORATION<br>
INDEX TO MAY&nbsp;31, 2006 FORM&nbsp;10-Q</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="94%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Page</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p align="center" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PART&nbsp;I - FINANCIAL INFORMATION</font></b></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#BalanceSheets_205035">Item 1 &#151; Financial Statements
  (unaudited)</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#BalanceSheets_205035">3</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#BalanceSheets_205035" title="Click to goto ">Balance
  Sheets &#151; May&nbsp;31, 2006 and August&nbsp;31, 2005</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#StatementsOfOperations_205122">Statements of Operations
  &#151; For the three months ended May&nbsp;31, 2006 and 2005</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#StatementsOfOperations_205204">Statements of Operations
  &#151; For the nine months ended May&nbsp;31, 2006 and 2005</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#StatementsOfCashFlows_205238">Statements of Cash Flows &#151;
  For the nine months ended May&nbsp;31, 2006 and 2005</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#NotesToFinancialStatements_205335" title="Click to goto ">Notes
  to Financial Statements</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item2_ManagementsDiscussionAndAna_205418">Item 2 &#151;
  Management&#146;s Discussion and Analysis of Financial Condition and Results of
  Operations</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item3_QuantitativeAndQualitativeD_205444">Item 3 &#151;
  Quantitative and Qualitative Disclosures About Market Risk</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">24</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item4_ControlsAndProcedures_205451">Item 4 &#151; Controls
  and Procedures</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">24</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p align="center" style="margin:24.0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;"><a href="#Partii_205509" title="Click to goto ">PART&nbsp;II &#151; OTHER INFORMATION</a></font></b></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:24.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:24.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item6_Exhibits_205513">Item 6 &#151; Exhibits</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">25</font></p>
  </td>
 </tr>
 <tr>
  <td width="94%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:94.04%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Signatures_205830">Signature
  Page</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.24%;">
  <p style="margin:12.0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p align="right" style="margin:12.0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">26</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0pt .9pt 12.0pt 0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


 <p style="margin:0pt -36.0pt .0001pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman" style="font-size:9.0pt;">&nbsp;</font></p> <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">2</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='2',FILE='C:\fc\195211058920_D11431_1223781\16198-1-bg.htm',USER='jmsproofassembler',CD='Jul 14 21:11 2006' -->



<br clear="all" style="page-break-before:always;">

<div>

<p align="center" style="margin:0pt .9pt 12.0pt 0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;"><font style="font-weight:bold;">PURE
CYCLE CORPORATION<br>
BALANCE SHEETS</font><a name="BalanceSheets_205035"></a></font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="72%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p align="left" style="font-weight:bold;line-height:10.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ASSETS:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">May&nbsp;31,<br>
  2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">August&nbsp;31,<br>
  2005</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Current assets:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">(unaudited)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash and cash
  equivalents</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">367,580</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,973,882</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Marketable
  securities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,020,572</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,481,035</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Trade accounts
  receivable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">68,450</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">50,059</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest
  receivable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">34,899</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">21,788</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Prepaid expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">27,550</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">38,667</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Export Water
  proceeds to be remitted to escrow agent</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">174,890</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total current
  assets</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,519,051</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,740,321</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Investments in water
  and water systems, net</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">22,042,640</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19,871,321</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred acquisition
  costs</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">111,413</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Property and equipment,
  net</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,990</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,088</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Note receivable &#151;
  Rangeview Metropolitan District, including accrued interest</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">446,353</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">430,722</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total assets</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">26,124,447</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">26,046,452</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">LIABILITIES:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Current liabilities:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accounts payable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">185,583</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">28,119</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accrued
  liabilities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">53,361</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">31,519</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred
  revenues</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">385,951</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">420,309</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Payable to
  contingent obligation holders</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">174,890</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Royalties
  payable to State Land Board</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">34,522</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total current
  liabilities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">624,895</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">689,359</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred construction
  funding</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">397,235</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">397,235</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Long-term debt &#151;
  related party, including accrued interest</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">551,661</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Long-term debt,
  including accrued interest</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">917,106</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">903,260</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Participating Interests
  in Export Water supply</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8,152,202</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8,152,202</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total
  liabilities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10,091,438</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10,693,717</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">COMMITMENTS AND CONTINGENCIES </font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">STOCKHOLDERS&#146; EQUITY:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Preferred stock:<br>
  Par value $.001 per share, 25 million shares authorized: Series&nbsp;B &#151;
  432,513 shares issued and outstanding (liquidation preference of $432,513)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">433</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">433</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common stock:<br>
  Par value 1/3 of $.01 per share: 40 million shares authorized; 14,971,420 and
  14,329,981 shares issued; and 14,863,766 and 14,256,827 shares outstanding</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">49,910</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">47,770</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Additional paid-in
  capital</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">41,721,088</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">40,050,159</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Treasury stock, at
  cost, 107,654 and 73,154 shares of common stock</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(809,529</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(554,939</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accumulated
  comprehensive (loss) income</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(21,022</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,453</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accumulated deficit</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(24,907,871</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(24,194,141</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total
  stockholders&#146; equity</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16,033,009</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.5%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15,352,735</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="72%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.0%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total liabilities and
  stockholders&#146; equity</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.5%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">26,124,447</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.5%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">26,046,452</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">See Accompanying Notes to
Financial Statements</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">3</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='3',FILE='C:\fc\19603711950_D11429_1224095\16198-1-fc.htm',USER='jmsproofassembler',CD='Jul 15 00:37 2006' -->



<br clear="all" style="page-break-before:always;">

<div>
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>

<p align="center" style="margin:0pt .9pt 12.0pt 0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PURE CYCLE CORPORATION<br>
STATEMENTS OF OPERATIONS<a name="StatementsOfOperations_205122"></a><br>
(unaudited)</font></b></p>

<p align="center" style="margin:0pt .9pt 12.0pt 0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="74%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="22%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:22.12%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;Months&nbsp;Ended&nbsp;May&nbsp;31,</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Revenues:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Metered water
  usage</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">42,846</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">34,611</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Wastewater
  treatment fees</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,752</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,285</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sky Ranch
  options</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10,058</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19,527</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total revenues</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">67,656</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">68,423</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Expenses:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Water service
  operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4,983</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4,579</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Wastewater
  service operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2,249</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2,216</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Depletion</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(232</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(175</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total cost of
  revenues</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(7,464</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(6,970</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gross margin</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">60,192</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">61,453</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">General and
  administrative expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(304,942</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(314,162</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Depreciation</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3,097</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1,770</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operating loss</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(247,847</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(254,479</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other income (expense):</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest income</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">51,020</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">47,045</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest expense
  &#151; related party</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(5,340</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest expense</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(5,023</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3,527</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net loss</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(201,850</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(216,301</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net loss per
  common share <br>
  &#151; basic and diluted</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(.01</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(.02</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.66%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Weighted average common
  shares outstanding <br>
  &#151; basic and diluted</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,863,766</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.88%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13,798,430</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">See Accompanying Notes to
Financial Statements</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">4</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='4',FILE='C:\fc\19811272734_D10496_1225863\16198-1-fe.htm',USER='jmsproofassembler',CD='Jul 17 11:27 2006' -->



<br clear="all" style="page-break-before:always;">

<div>

<p style="font-weight:bold;line-height:10.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">PURE CYCLE CORPORATION<br>
STATEMENTS OF OPERATIONS<a name="StatementsOfOperations_205204"></a><br>
(unaudited)</font></b></p>

<p align="center" style="margin:0pt .9pt 12.0pt 0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="75%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="21%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:21.3%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Nine&nbsp;Months&nbsp;Ended&nbsp;May&nbsp;31,</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Revenues:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Metered water
  usage</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">109,567</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">97,483</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Wastewater
  treatment fees</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">44,256</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">42,856</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sky Ranch
  options</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">34,358</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19,527</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,335</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total revenues</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">188,181</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">163,201</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Expenses:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Water service
  operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(12,302</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(13,798</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Wastewater
  service operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(7,111</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(6,649</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Depletion</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(583</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(470</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2,858</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total cost of
  revenues</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(19,996</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(23,775</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gross margin</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">168,185</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">139,426</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">General and
  administrative expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1,001,517</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(942,654</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Depreciation</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(8,857</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4,962</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operating loss</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(842,189</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(808,190</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other income (expense):</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest income</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">149,425</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">113,071</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest expense
  &#151; related party</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(7,120</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(16,019</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest expense</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(13,846</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(8,887</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net loss</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(713,730</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(720,025</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net loss per
  common share <br>
  &#151; basic and diluted</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(.05</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(.05</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Weighted average common
  shares outstanding <br>
  &#151; basic and diluted</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,625,298</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13,552,449</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">See Accompanying Notes to
Financial Statements</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">5</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='5',FILE='C:\fc\198112757438_D10496_1225863\16198-1-fg.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->



<br clear="all" style="page-break-before:always;">

<div>

<p align="center" style="margin:0pt .9pt 12.0pt 0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PURE
CYCLE CORPORATION<br>
STATEMENTS OF CASH FLOWS<a name="StatementsOfCashFlows_205238"></a><br>
(unaudited)</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="75%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="21%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:21.3%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Nine&nbsp;Months&nbsp;Ended&nbsp;May&nbsp;31,</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash flows from
  operating activities:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net loss</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(713,730</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(720,025</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Adjustments to
  reconcile net loss to net cash used by operating activities:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stock-based
  compensation expense included with general and administrative expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">155,271</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest accrued
  on long-term debt</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13,846</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8,887</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest accrued
  on long-term debt &#151; related party</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7,120</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16,019</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Depreciation</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8,857</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,962</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Depletion</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">583</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">470</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest added
  to note receivable<br>
  &#151; Rangeview Metropolitan District</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(15,631</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(12,293</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Changes in
  operating assets and liabilities:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 40.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Export water
  proceeds to be remitted to escrow agent</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">174,890</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 40.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Trade accounts
  receivable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(18,391</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,183</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 40.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest
  receivable and prepaid expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1,994</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,992</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 40.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accounts payable
  and accrued liabilities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(23,315</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(120,426</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 40.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred
  revenues</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(34,358</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(11,159</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net cash used by
  operating activities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(446,852</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(823,390</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash flows from
  investing activities:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Investments in
  water and water systems</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2,101,505</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(147,205</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Purchase of
  marketable securities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3,885,238</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3,946,462</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Maturities of
  marketable securities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,321,226</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,596,350</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred
  acquisition costs</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(20,689</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Purchase of
  property and equipment</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2,781</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(5,660</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net cash used by
  investing activities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1,688,987</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(502,977</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash flows from
  financing activities:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Proceeds from
  the sale of common stock</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">900,000</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">310,500</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Payments made to
  contingent obligation holders</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(174,890</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1,088</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Payments on
  related party debt</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(195,573</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Reimbursement to
  former CEO</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(50,555</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net cash
  provided by financing activities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">529,537</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">258,857</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net change in cash and
  cash equivalents</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1,606,302</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1,067,510</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash and cash
  equivalents &#151; beginning of period</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,973,882</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,574,201</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash and cash
  equivalents &#151; end of period</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">367,580</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:8.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">506,691</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="75%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:75.48%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">See Accompanying Notes to
Financial Statements</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">6</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='6',FILE='C:\fc\19603830311_D11429_1224095\16198-1-fi.htm',USER='jmsproofassembler',CD='Jul 15 00:38 2006' -->



<br clear="all" style="page-break-before:always;">

<div>

<p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PURE CYCLE CORPORATION<br>
NOTES TO FINANCIAL STATEMENTS<a name="NotesToFinancialStatements_205335"></a><br>
(unaudited)</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTE 1 -
ACCOUNTING PRINCIPLES</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The balance sheet as of May&nbsp;31, 2006, the
statements of operations for the three and nine months ended May&nbsp;31, 2006
and 2005 and the statements of cash flows for the nine months ended May&nbsp;31,
2006 and 2005 have been prepared by Pure Cycle Corporation (the &#147;Company&#148;) and
have not been audited. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments necessary to present fairly the
financial position, results of operations and cash flows at May&nbsp;31, 2006
and for all periods presented have been appropriately made.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America (&#147;GAAP&#148;) have
been condensed or omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Company&#146;s Annual Report on Form&nbsp;10-KSB for the year ended August&nbsp;31,
2005. The results of operations for interim periods presented are not
necessarily indicative of the operating results for the full year.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The August&nbsp;31, 2005 balance sheet presented was
derived from the Company&#146;s audited financial statements.</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Stock-based
compensation</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective September&nbsp;1, 2005, the Company adopted
Statement of Financial Accounting Standards No.&nbsp;123 (revised 2004), <i><font style="font-style:italic;">Share-Based Payment</font></i>, (&#147;SFAS 123(R)&#148;) which
requires the measurement and recognition of compensation expense for all
share-based payment awards made to employees and directors, including employee
stock options, based on estimated fair values. SFAS 123(R)&nbsp;supersedes the
Company&#146;s previous accounting under Accounting Principles Board Opinion No.&nbsp;25,
<i><font style="font-style:italic;">Accounting for Stock Issued to Employees </font></i>(&#147;APB
25&#148;) for periods beginning on or after September&nbsp;1, 2005. In March&nbsp;2005,
the Securities and Exchange Commission issued Staff Accounting Bulletin No.&nbsp;107
(&#147;SAB 107&#148;) relating to SFAS 123(R). The Company has applied the provisions of
SAB 107 in its adoption of SFAS 123(R).</font></p>

<h5 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company
adopted SFAS 123(R)&nbsp;using the modified prospective transition method,
which requires the application of the accounting standard as of September&nbsp;1,
2005, the first day of the Company&#146;s fiscal 2006. The Company&#146;s financial
statements as of and for the three and nine months ended May&nbsp;31, 2006
reflect the impact of SFAS 123(R). In accordance with the modified prospective
transition method, the Company&#146;s financial statements for prior periods have
not been restated to reflect, and do not include, the impact of SFAS 123(R). SFAS
123(R)&nbsp;requires companies to estimate the fair value of share-based
payment awards on the date of grant using an option-pricing model. The value of
the portion of the award that is ultimately expected to vest is recognized as
expense over the requisite service periods in the Company&#146;s statement of
operations. Stock-based compensation expense recognized under SFAS 123(R)&nbsp;for
the three and nine months ended May&nbsp;31, 2006, was $53,233 and $155,271,
respectively. There was no stock-based compensation expense related to employee
stock options recognized during the three and nine months ended May&nbsp;31,
2005.</font></h5>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stock-based compensation expense recognized during the
period is based on the value of the portion of share-based payment awards that
is ultimately expected to vest during the period. Stock-based compensation
expense recognized in the Company&#146;s statements of operations for the three and
nine months ended May&nbsp;31, 2006 included compensation expense for
share-based payment awards granted prior to, but not yet vested as of, September&nbsp;1,
2005, based on the grant date fair value estimated in accordance with the pro
forma provisions of Statement of Financial Accounting Standards No.&nbsp;123, <i><font style="font-style:italic;">Accounting for Stock-Based Compensation </font></i>(&#147;SFAS
123&#148;), and compensation expense for the share-based payment awards granted
subsequent to September&nbsp;1, 2005 based on the grant date fair value
estimated in accordance with the provisions of SFAS 123(R). In accordance with
SFAS 123(R)&nbsp;stock-based compensation expense recognized in the statements
of operations for the three and nine months ended May&nbsp;31, 2006 is based on
awards ultimately expected to vest. The Company does not expect any forfeitures
of its prior option grants and therefore the compensation expense has not been
reduced for estimated forfeitures. No options were forfeited by option holders
during the three or nine months ended May&nbsp;31, 2006. SFAS 123(R)&nbsp;requires
forfeitures to be estimated at the time of grant and revised, if necessary, in
subsequent periods if actual forfeitures differ from those estimates. In the
Company&#146;s pro forma information required under SFAS 123 for the periods prior
to fiscal 2006 presented below, the Company accounted for forfeitures as they
occurred. The </font></p>


 <p style="margin:0pt -36.0pt .0001pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman" style="font-size:9.0pt;">&nbsp;</font></p> <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">7</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='7',FILE='C:\fc\19603931112_D11429_1224095\16198-1-fk.htm',USER='jmsproofassembler',CD='Jul 15 00:39 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Company attributes the value of stock-based
compensation to expense using the straight-line single option method for
options granted prior and subsequent to September&nbsp;1, 2005.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Prior to the adoption of SFAS 123(R), the Company
accounted for stock-based awards to employees and directors using the intrinsic
value method in accordance with APB 25 as allowed under SFAS 123. Under the
intrinsic value method, no stock-based compensation expense had been recognized
in the Company&#146;s statements of operations. If the Company had recognized
stock-based compensation expense pursuant to SFAS 123 in its statements of
operations, the results would have been as follows:</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="60%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.02%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="20%" colspan="3" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:20.86%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;months&nbsp;ended&nbsp;<br>
  May&nbsp;31,&nbsp;2005</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.96%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="13%" colspan="4" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:13.92%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Nine&nbsp;months&nbsp;ended&nbsp;<br>
  May&nbsp;31,&nbsp;2005</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.66%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="60%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:60.02%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net loss as
  reported</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.26%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="19%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:19.6%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(216,301</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.96%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" colspan="3" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.36%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.56%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(720,025</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.66%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="60%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:60.02%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Employee and
  director stock-based compensation expense determined under fair value based
  method</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="20%" colspan="3" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:20.86%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(38,993</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:3.96%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="13%" colspan="4" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:13.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(109,311</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.66%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="60%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:60.02%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pro-forma net
  loss</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.26%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="19%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:19.6%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(255,294</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:3.96%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.24%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.68%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(829,336</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:.66%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="60%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:60.02%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Weighted average
  common shares outstanding &#151; basic and diluted</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="20%" colspan="3" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:20.86%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13,798,430</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.96%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" colspan="4" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:13.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13,552,449</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.66%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="60%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:60.02%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pro-forma basic and
  diluted earnings per share</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.58%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.12%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="19%" colspan="2" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:19.74%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(.02</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:3.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.12%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="12%" colspan="3" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:12.78%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(.06</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:.66%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="449" style="border:none;"></td>
  <td width="4" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
  <td width="146" style="border:none;"></td>
  <td width="29" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
  <td width="95" style="border:none;"></td>
  <td width="5" style="border:none;"></td>
 </tr>
</table>

<p style="margin:12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company uses
the Black-Scholes-Merton option-pricing model (&#147;Black-Scholes model&#148;) for the
pro forma information required under SFAS 123 as well as the compensation
expense recorded pursuant to SFAS 123(R). The Company&#146;s determination of fair
value of share-based payment awards on the date of grant using an
option-pricing model is affected by the Company&#146;s stock price as well as
assumptions regarding a number of highly complex and subjective variables.
These variables include, but are not limited to the Company&#146;s expected stock
price volatility over the expected life of the awards, and actual and projected
employee stock option exercise behaviors. In April&nbsp;2006 the Company
granted its directors options to purchase 10,000 shares of the Company&#146;s common
stock pursuant to the 2004 Incentive Plan. The options vest one year from the
date of grant and expire ten years from the date of grant. The Company
calculated the fair value of these options pursuant to SFAS 123(R)&nbsp;at
approximately $116,000 using the Black-Scholes model with the following
variables: weighted average exercise price of $13.25; estimated option life of eight
years; estimated dividend rate of 0%; weighted average risk-free interest rate
of 4.93%; and an estimated forfeiture rate of 0%. The $116,000 of stock-based
compensation expense calculated pursuant to SFAS 123(R)&nbsp;will be expensed
monthly over the vesting period.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On November&nbsp;10, 2005, the Financial Accounting
Standards Board (&#147;FASB&#148;) issued FASB Staff Position No.&nbsp;FAS 123(R)-3
<i><font style="font-style:italic;">Transition Election Related to Accounting
for Tax Effects of Share-Based Payment Awards</font></i>. The Company is
considering whether to adopt the alternative transition method provided in the
FASB Staff Position for calculating the tax effects of stock-based compensation
pursuant to SFAS 123(R). The alternative transition method includes simplified
methods to establish the beginning balance of the additional paid-in capital
pool (&#147;APIC pool&#148;) related to the tax effects of employee stock-based
compensation, and to determine the subsequent impact on the APIC pool and
statements of cash flows of the tax effects of employee stock-based compensation
awards that are outstanding upon adoption of SFAS 123(R). Because the Company
has a full valuation allowance on its deferred tax assets, the exercise of
stock options during the nine months ended May&nbsp;31, 2006 had no impact on
the income tax provision.</font></p>

<p style="margin:0pt .7pt 12.0pt 0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Business segments</font></i></b></p>

<p style="margin:0pt .7pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The operating segments reported below are the segments
of the Company for which separate discrete financial information is available
and for which results are evaluated by the Company&#146;s President in deciding how
to allocate resources and in assessing performance. The accounting policies of
the segments are the same as those of the Company as described in Note 2 to the
Company&#146;s Annual Report on Form&nbsp;10-KSB for the year ended August&nbsp;31,
2005.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">8</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='8',FILE='C:\fc\19603931112_D11429_1224095\16198-1-fk.htm',USER='jmsproofassembler',CD='Jul 15 00:39 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt .7pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company principally has two core business segments
(i)&nbsp;the design and construction of water and wastewater systems, and (ii)&nbsp;the
provision of water and wastewater services, which includes the operation and
maintenance of water and wastewater systems, to customers within the Company&#146;s
service area. &#160;The Company evaluates the
performance of its construction segment based on gross construction margins
before corporate and unallocated shared expenses, if any, and evaluates its
service provider segment based on gross margins before corporate and unallocated
shared expenses, if any.</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In August&nbsp;2005, the Company began construction on
the facilities required to extend water service to the new Arapahoe County
Fairgrounds (the &#147;Fairgrounds&#148;). Construction of the &#147;Special Facilities&#148; for
the Fairgrounds is being funded by construction fees charged to Arapahoe County
pursuant to the Agreement for Water Service (the &#147;County Agreement&#148;) with
Arapahoe County, and construction of the &#147;Wholesale Facilities&#148; is being funded
partially by water tap fees paid to the Company by Arapahoe County. Special and
Wholesale Facilities are described in detail in the Company&#146;s Annual Report on Form&nbsp;10-KSB
for the year ended August&nbsp;31, 2005. As of May&nbsp;31, 2006, with the
exception of the $2,372,488 recorded as construction in progress, the results
of operations and balance sheet information presented relate entirely to the
water and wastewater service provider segment.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Reclassifications</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certain amounts included in the prior period financial
statements have been reclassified to conform to the current period
presentation.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTE
2 &#151; MARKETABLE SECURITIES</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Management
determines the appropriate classification of investments in debt and equity
securities at the time of purchase and reevaluates such determinations each
reporting period. Debt securities are classified as held-to-maturity when the
Company has the positive intent and ability to hold the securities to maturity.
The Company had no investments classified as held-to-maturity at May&nbsp;31,
2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Debt
securities for which the Company does not have the positive intent or ability
to hold to maturity are classified as available-for-sale, along with any
investments in equity securities (the Company had no investments in equity
securities at May&nbsp;31, 2006). Securities classified as available-for-sale
are marked-to-market at each reporting period. Changes in value on such
securities are recorded as a component of <i><font style="font-style:italic;">Accumulated</font> comprehensive (loss) income.</i> The cost of securities sold is based
on the specific identification method.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
following is a summary of such securities at May&nbsp;31, 2006:</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="53%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:53.54%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman"><font style="font-size:8.0pt;"><br>
  </font>Cost&nbsp;Basis</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Gross<br>
  Unrealized<br>
  Gains</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Gross<br>
  Unrealized<br>
  Losses</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman"><font style="font-size:8.0pt;"><br>
  </font>Estimated<br>
  Fair&nbsp;Value</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.54%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Commercial paper</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.24%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">323,654</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.24%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">323,654</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.54%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">U.S. government
  debt securities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,594,195</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(11,966</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,582,229</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.54%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">U.S. corporate
  debt securities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,447,399</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">134</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(9,190</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,438,343</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.54%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total
  investments</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,365,248</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">134</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(21,156</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,344,226</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.54%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Less cash
  equivalents</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">323,654</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.06%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">323,654</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.54%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total marketable
  securities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.24%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,041,594</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.08%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">134</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.08%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.24%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,020,572</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
aggregate fair value of investments with unrealized gains and unrealized losses
as of May&nbsp;31, 2006 was approximately $100,000 and $2.9 million,
respectively.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTE
3 &#151; EXPORT WATER PROCEEDS TO BE REMITTED TO ESCROW AGENT</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At August&nbsp;31, 2005, the Company had cash which was to be remitted to
an escrow agent and paid to external parties as required by the Comprehensive
Amendment Agreement No.&nbsp;1 (the &#147;CAA&#148;), which totaled $174,890. This
consisted of (i)&nbsp;$159,890 of proceeds received by the Company from
Arapahoe County for Export Water sales (see Note 4 below), and (ii)&nbsp;$15,000
of proceeds received by the Company from Sky Ranch (see Note 5 below). Both </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">9</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='9',FILE='C:\fc\19603931112_D11429_1224095\16198-1-fk.htm',USER='jmsproofassembler',CD='Jul 15 00:39 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">amounts were remitted to the escrow agent in September&nbsp;2005 and paid
to the CAA holders in accordance with the CAA.</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTE 4 &#151; INVESTMENTS
IN WATER AND WATER SYSTEMS</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company&#146;s
investments in water and water systems consisted of the following amounts at May&nbsp;31,
2006 and August&nbsp;31, 2005:</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="49%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="22%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:22.68%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">May&nbsp;31,&nbsp;2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="22%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:22.68%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">August&nbsp;31,&nbsp;2005</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="49%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Costs</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Accumulated<br>
  Depletion&nbsp;and<br>
  Depreciation</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Costs</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Accumulated<br>
  Depletion&nbsp;and<br>
  Depreciation</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Rangeview water
  supply</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.24%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13,910,137</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3,496</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.24%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13,885,213</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2,913</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Paradise water
  supply</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,519,439</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,515,133</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Construction in
  progress</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,372,488</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">222,500</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Rangeview water
  system</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">167,720</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(26,569</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">167,720</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(19,692</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sky Ranch water
  supply</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">100,000</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">100,000</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Water supply &#151;
  other</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,022</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(101</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.22%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,360</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Totals</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.24%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">22,072,806</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(30,166</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.24%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19,893,926</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.08%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(22,605</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.04%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net Investments in
  water and water systems</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.24%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">22,042,640</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.24%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19,871,321</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:10.08%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<h2 style="font-weight:normal;margin:12.0pt 0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Construction
in Progress</font></i></b></h2>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On August&nbsp;3,
2005, the Company entered into the County Agreement with Arapahoe County to
design and construct a water system for, and provide water services to, the
Fairgrounds. Pursuant to the County Agreement: (i)&nbsp;Arapahoe County
purchased water taps for 38.5 Single Family Equivalent units for $567,490, or
$14,740 per tap; (ii)&nbsp;the Company agreed to design and construct the
required &#147;Special Facilities&#148;, for which Arapahoe County agreed to provide
funding of $1,245,168; and (iii)&nbsp;upon adjudication of the water rights by
Arapahoe County the Company agreed to acquire rights to approximately 363
acre-feet of groundwater from Arapahoe County valued at $293,013. As of May&nbsp;31,
2006, Arapahoe County was continuing the adjudication of the water rights and
thus the deed for the groundwater rights (the &#147;Water Rights Deed&#148;) has not been
received by the Company, and therefore, the cost of the acquired water has not
been capitalized on the accompanying balance sheet.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Since
the Company will utilize its Export Water (this is water located at the Lowry
Range Property which the Company owns and is permitted to &#147;Export&#148; to
developments outside of the Lowry Range Property) to provide water service to
the Fairgrounds, the sale of the water taps generated a royalty payment to the
State of Colorado Board of Land Commissioners (the &#147;State Land Board&#148;). The
agreement with the State Land Board requires royalty payments on Export Water
sales based on net revenues. Net revenues are defined as proceeds from the sale
of Export Water less direct and indirect costs, including reasonable overhead
charges, associated with the withdrawal, treatment and delivery of Export Water.
Based on this, in September&nbsp;2005, the Company made a royalty payment to
the State Land Board of $34,522, which is 10% of the net revenues received from
Arapahoe County. The royalty payable was shown as a liability at August&nbsp;31,
2005.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
addition, tap fees under service agreements in which Export Water will be
utilized, are subject to the CAA, which is described in more detail in Note 4
of the Annual Report on Form&nbsp;10-KSB for the year ended August&nbsp;31,
2005. Net tap fees subject to the CAA totaling $532,968, which are the tap fees
received from Arapahoe County less the $34,522 State Land Board royalty, were
distributed to the escrow agent in September&nbsp;2005 pursuant to the CAA. As
a result of the 2004 CAA acquisitions the Company made (which are described in
the Company&#146;s August&nbsp;31, 2005 Annual Report), in September&nbsp;2005 the
Company received $373,078, or 70%, of the distribution and external parties
received $159,890, or 30%. The $159,890 paid to the escrow agent and
subsequently paid to external parties in September&nbsp;2005 was included in
the line <i><font style="font-style:italic;">Export Water proceeds to be remitted to escrow
agent </font></i>and <i><font style="font-style:italic;">payable to contingent
obligation holders </font></i>at August&nbsp;31, 2005.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The tap fees retained by
the Company will be used to fund construction of the Wholesale Facilities
required to extend water service to the Fairgrounds. In accordance with GAAP,
as of May&nbsp;31, 2006, $375,894 of tap fees received from Arapahoe County is
deferred and will be recognized as revenue when the Wholesale Facilities are </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">10</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='10',FILE='C:\fc\19603931112_D11429_1224095\16198-1-fk.htm',USER='jmsproofassembler',CD='Jul 15 00:39 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">placed into service
(expected to occur during the fourth quarter of the Company&#146;s fiscal 2006). The
amount deferred at May&nbsp;31, 2006 is comprised of the tap fees received by
the Company of $567,490, decreased by (i)&nbsp;the tap fee credits for the
purchase of 27 acre-feet of groundwater from Arapahoe County valued at $52,938
(which will be recorded as additional deferred revenue or revenue upon
satisfactory delivery of the Water Rights Deed); (ii)&nbsp;royalties to the
State Land Board of $34,522; and (iii)&nbsp;65% of the total payments made to
external CAA holders or $104,136. The 65% allocation is consistent with the
initial accounting for the CAA and is more fully explained in Note 4 to the
Annual Report on Form&nbsp;10-KSB for the year ended August&nbsp;31,
2005.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Funding
of $1,245,168 for the construction of the Special Facilities will come from
Arapahoe County and will be provided as follows: &#160;(i)&nbsp;an initial payment of $397,235
(received in August&nbsp;2005), (ii)&nbsp;credits for Arapahoe County selling
the Company 336 acre-feet of groundwater valued at $240,075 (the water asset
will be recorded in the balance sheet upon satisfactory delivery of the Water
Rights Deed), and (iii)&nbsp;$607,858 paid over ten years, which will include
interest at 6%. These funds will be used to construct the Special Facilities,
which the Company will own and operate. In accordance with GAAP, construction
funding of $397,235 provided by Arapahoe County has been deferred and will be
recognized as revenue over the expected service period, which is also the
estimated useful life of the Special Facilities being constructed with the
funds.</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Due to the
location of the Fairgrounds, the Company is building additional pipelines and
increased storage and withdrawal capacities in order to enhance its existing
system and provide additional infrastructure for further development in and
around the Fairgrounds.</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company
estimates that the Wholesale and Special Facilities required to extend water
service to the Fairgrounds, along with the expanded infrastructure, will cost a
total of approximately $2.3 million. As of May&nbsp;31, 2006, the Company has
completed the construction of the water tank and pipelines and is in the final
stages of completing the deep water well. The majority of the infrastructure
required for the Fairgrounds are complete and awaiting final testing and
inspection procedures. Upon completion of the final inspections the Company expects
to provide water services to the Fairgrounds for its anticipated opening date
on July&nbsp;21, 2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company entered into five contracts with third parties related to this project,
with contractual payments totaling approximately $2,273,000. These contracts
consist of the following: (i)&nbsp;a $900,000 contract to construct a 500,000-gallon
water tank, payable based on contractual milestones - as of May&nbsp;31, 2006,
the Company has paid approximately $899,000 pursuant to this contract;&#160; (ii)&nbsp;two pipeline contracts with
contractual payments totaling approximately $706,000 due upon the completion of
various milestones throughout construction - as of May&nbsp;31, 2006, the
Company has capitalized approximately $600,000 related to these contracts; and (iii)&nbsp;two
contracts for the design and drilling of a deep water well with contractual
payments totaling approximately $667,000 - as of May&nbsp;31, 2006, the Company
has paid approximately $647,000 related to these contracts.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
addition to these contractual payments, the Company has capitalized other costs
directly related to the construction of the facilities totaling $226,500.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTE 5 &#151; SKY RANCH OPTION PAYMENTS</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Water Service
Agreements with Sky Ranch, which are described in more detail in the Company&#146;s
Annual Report on Form&nbsp;10-KSB for the year ended August&nbsp;31,
2005, provide the developer of Sky Ranch the right to use a combined 1,450
acre-feet of Export Water per year at Sky Ranch after a defined number of taps
have been purchased for use at Sky Ranch. The developer can utilize the Company&#146;s
Export Water as long as the developer exercises the Export Water options
available to it pursuant to the Sky Ranch Water Service Agreements. The Sky
Ranch Water Service Agreements include two options, both of which are payable
in equal annual installments over five years: (i)&nbsp;the &#147;Sky Ranch Option,&#148;
which is annual installments of $50,000 each year, and (ii)&nbsp;the &#147;Hills
Option,&#148; which is annual installments of $10,400 each year. Option fees
received before the options are exercised or allowed to expire will not be
refunded.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Sky Ranch and Hills
Option payments are subject to the CAA. The portion of the option payments
retained by the Company, along with 35% of the portion paid to outside parties,
is recorded as deferred revenue and recognized </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">11</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='11',FILE='C:\fc\19603931112_D11429_1224095\16198-1-fk.htm',USER='jmsproofassembler',CD='Jul 15 00:39 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ratably into income until
the next option payment is due. The 35% allocation is more fully described in
Note 4 to the Company&#146;s Form&nbsp;10-KSB for the year ended August&nbsp;31,
2005.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In August&nbsp;2005, the
developer remitted the second $50,000 Sky Ranch Option payment (the first was
received in fiscal 2004), which was distributed in order of priority to the CAA
holders. Of this distribution, the Company received $35,000 in September&nbsp;2005,
and outside parties received $15,000. The Company received a distribution
because it had reacquired certain CAA interests in fiscal 2004. The $15,000
paid to external parties in September&nbsp;2005, was included in the <i><font style="font-style:italic;">Export Water proceeds to be remitted to escrow agent</font></i> and P<i><font style="font-style:italic;">ayable to contingent obligation holder </font></i>accounts at August&nbsp;31,
2005.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In February&nbsp;2005,
the developer remitted the first $10,400 Hills Option payment which was
distributed in order of priority to the CAA holders. The second $10,400 Hills
Option was due and payable in February&nbsp;2006 but has not yet been received.
The Company expects to receive this option payment before its fiscal year ended
August&nbsp;31, 2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For the three and nine
months ended May&nbsp;31, 2006, respectively, the Company recognized $10,058
and $34,358 of income related to these options. As of May&nbsp;31, 2006,
$10,058 of the second Sky Ranch Option payment is deferred and will be
recognized into income in the fourth quarter of the Company&#146;s fiscal 2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTE 6 &#151; STOCKHOLDERS&#146; EQUITY</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Stock Options</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There were no options exercised during the three
months ended May&nbsp;31, 2006. During the nine months ended May&nbsp;31, 2006,
the Company issued 641,439 shares of common stock upon the exercise of stock
options. The options were exercised at a price of $1.80 per share. The exercise
price for 52,167 shares acquired pursuant to the options exercised was paid for
by the option holder utilizing 15,000 shares of Company common stock that was
held by the option holder more than six months with a market value at the date
of exercise totaling $93,900, which is included on the line <i><font style="font-style:italic;">Treasury Stock </font></i>on the accompanying balance sheet. The
exercise price for 89,272 shares acquired pursuant to the options exercised was
paid for by the option holder utilizing 19,500 shares of Company common stock
that was held by the option holder more than six months with a market value at
the date of exercise totaling $160,690, which is included on the line <i><font style="font-style:italic;">Treasury Stock </font></i>on the accompanying balance sheet.</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Loss
per Common Share</font></i></b></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Loss per common share is
computed by dividing net loss by the weighted average number of shares
outstanding during each period. Common stock options and warrants aggregating
891,952 and 1,908,690 common share equivalents as of May&nbsp;31, 2006 and
2005, respectively, have been excluded from the calculation of loss per common
share as their effect is anti-dilutive.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Comprehensive
Loss</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
addition to net loss, comprehensive
loss includes the unrecognized changes in the fair value of marketable
securities that are classified as available-for-sale as noted in the following
table:</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="56%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:56.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="19%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:19.12%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;Months&nbsp;Ended<br>
  May&nbsp;31,</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="19%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:19.12%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Nine&nbsp;Months&nbsp;Ended<br>
  May&nbsp;31,</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:56.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="8%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:8.36%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="8%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:8.36%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="8%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:8.36%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="8%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:8.36%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="56%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:56.22%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net loss</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.98%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="7%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:7.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(201,850</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.98%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="7%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:7.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(216,301</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.98%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="7%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:7.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(713,730</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.98%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="7%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:7.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(720,025</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr>
  <td width="56%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:56.22%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Unrealized loss
  on marketable securities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.36%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(8,618</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="8%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.36%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">281</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.36%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(24,475</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="8%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:8.36%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(28,011</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="56%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:56.22%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Comprehensive loss</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:.98%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="7%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:7.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(210,468</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 2.25pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="0%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:.98%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="7%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:7.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(216,020</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 2.25pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="0%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:.98%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="7%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:7.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(738,205</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 2.25pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="0%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:.98%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="7%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:7.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(748,036</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 2.25pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">12</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='12',FILE='C:\fc\19603931112_D11429_1224095\16198-1-fk.htm',USER='jmsproofassembler',CD='Jul 15 00:39 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTE 7 &#151; RELATED PARTY TRANSACTIONS</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On December&nbsp;29,
2005, the Company and the estate of its former CEO agreed to terms whereby the
Company paid the estate $195,573 in full consideration of notes payable and
accrued interest totaling $558,781. Because the estate of our former CEO is
deemed a related party, the Company recorded the $363,208 gain as a
contribution of capital.</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company leases
office space from the son of its former CEO, who is also the sole manager of
TPC Ventures, LLC which is a greater than 5% holder of the Company&#146;s common
stock. The Company leases the office space on a month-to-month basis for $1,000
per month.</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTE 8 &#151; ARKANSAS RIVER
WATER ACQUISITION</font></p>

<p style="margin:0pt 4.5pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective May&nbsp;10, 2006, the Company entered into
an Asset Purchase Agreement (the &#147;Agreement&#148;) with High Plains A&amp;M, LLC
(the &#147;Seller&#148;) to acquire from the Seller (i)&nbsp;certain water interests in
the Arkansas River and its tributaries represented by real property interests
and shares of stock in the Fort Lyon Canal Company (&#147;FLCC&#148;) (collectively these
are referred to as the &#147;Water Rights&#148;), (ii)&nbsp;certain real property located
in Bent, Otero and Prowers counties, Colorado (the &#147;Properties&#148;), and (iii)&nbsp;certain
contract rights, tangible personal property, mineral rights, and other water
interests related to the Water Rights and Properties (collectively the Water
Rights, Properties, and related assets are referred to as the &#147;Acquired Assets&#148;).</font></p>

<p style="margin:0pt 4.5pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">After the due diligence period specified in the
Agreement, as consideration for the Acquired Assets, the Company will:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 4.5pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Issue
the Seller a defined number of shares (in any event no more than 3.0 million)
of Pure Cycle Common Stock, and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 4.5pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Provide
the Seller the right to receive ten percent (10%) of the Company&#146;s gross
proceeds, or the equivalent thereof, from the future sale of 40,000 water taps
(the &#147;Tap Participation Fee&#148;). The Tap Participation Fee will be due and
payable once the Company has sold a water tap subject to the Agreement and
received the consideration due for such water tap. After five years, under
circumstances defined in the Agreement, the Tap Participation Fee can increase
to 20% and the number of water taps subject to the fee would be correspondingly
reduced. The entire Tap Participation Fee is subject to acceleration in the
event of a merger, reorganization, sale of substantially all assets, or similar
transactions and in the event of bankruptcy and insolvency events.</p>

<p style="margin:0pt 4.5pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Agreement is subject to a 90 day due diligence
period, during which, the Company and/or Seller may terminate the Agreement for
reasons specified in the Agreement. The closing, should one occur is
anticipated to be August&nbsp;31, 2006.</font></p>

<p style="margin:0pt 4.5pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Properties are each subject to lease agreements
which permit the lessees to farm the Properties and to use the Water Rights for
irrigation purposes. Upon closing the Company will assume these leases and
enter into a management agreement with the Seller as described below. Certain
of the Properties are subject to outstanding promissory notes which are secured
by deeds of trust on the Properties. The Company will not assume any of the
promissory notes or be responsible for any of the required payments.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Agreement
permits the Seller to maintain a designated director on the Company&#146;s board of
directors following the closing. Such director must be qualified pursuant to
the Company&#146;s Nominating and Corporate Governance Charter and the requirements
of NASDAQ.</font></p>

<p style="margin:0pt 4.5pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Upon the closing, the Company and the Seller will
enter into the following agreements, forms of which are included as Exhibits to
the Agreement (the Agreement and related Exhibits were filed as an attachment
to a Form&nbsp;8-K filed with the Securities and Exchange Commission on May&nbsp;16,
2006):</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>A
pledge agreement, whereby the Seller pledges, transfers, assigns and grants to
the Company a security interest in and to (a)&nbsp;1,475,000 shares of Pure
Cycle Common Stock (subject to adjustment), (b)&nbsp;all shares of Pure Cycle
Common Stock hereafter issued to Seller by means of any dividend or
distribution in respect of the </p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">13</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='13',FILE='C:\fc\19603931112_D11429_1224095\16198-1-fk.htm',USER='jmsproofassembler',CD='Jul 15 00:39 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>shares
pledged hereunder (together with the shares identified in subsection&nbsp;(a),
the &#147;Pledged Shares&#148;), (c)&nbsp;the certificates representing the Pledged
Shares, and (d)&nbsp;all rights to money or property which Seller now has or
hereafter acquires in respect of the Pledged Shares;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>A
pledge agreement, whereby the Company pledges to Seller: (i)&nbsp;one-half of
the shares of FLCC being purchased by the Company, (ii)&nbsp;all shares of FLCC
hereafter issued to Company by means of any dividend or distribution in respect
of the shares pledged hereunder (together with the shares identified in
subparagraph (1), the &#147;Company&#146;s Pledged Shares&#148;), (iii)&nbsp;the certificates
representing the Company&#146;s Pledged Shares, (iv)&nbsp;the Properties associated
with the water represented by the Company&#146;s Pledged Shares, and (v)&nbsp;all
rights to money or property which the Company now has or hereafter acquires in
respect of the Company&#146;s Pledged Shares;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>A
property management agreement with Seller, pursuant to which the Seller will
manage the Properties and take care of all of the Company&#146;s obligations under
the assumed leases, including property taxes, in exchange for the rental income
from the assumed leases;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>A
nonsolicitation agreement with each of the owners of the Seller, pursuant to
which each of the named parties agrees (i)&nbsp;not to solicit the Company&#146;s
customers or potential customers to provide water in the Company&#146;s service
areas or potential service areas, (ii)&nbsp;not to solicit employees of
Company, (iii)&nbsp;not to engage in certain activities competitive with the
Company and (iv)&nbsp;not to engage in purchase of water or water rights
without first offering such water or water rights to the Company;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>A
registration rights agreement, pursuant to which the Company will grant the
Seller one demand right to register 750,000 Acquisition Shares and piggyback
rights to register an additional 750,000 Acquisition Shares; and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>A
voting agreement, pursuant to which Mr.&nbsp;Mark Harding, the Company&#146;s
President, agrees to vote shares of Pure Cycle Common Stock owned by him for the
Seller&#146;s designated board member.</p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company will not recognize any Acquired Assets or liabilities related to the
Agreement until the closing date, anticipated to be August&nbsp;31, 2006. The
Company has incurred $111,413 of legal fees (as of May&nbsp;31, 2006, $90,724
of these fees were accrued in <i><font style="font-style:italic;">accounts payable</font></i>
on the accompanying balance sheet and were paid subsequent to May&nbsp;31,
2006) in connection with the signing of the Agreement which have been recorded
as <i><font style="font-style:italic;">Deferred acquisition costs </font></i>in the
accompanying balance sheet. These fees will be included as a component of the
cost of the Acquired Assets pursuant to Statement of Financial Accounting
Standards No.&nbsp;141 <i><font style="font-style:italic;">Business Combinations </font></i>or
expensed if the Agreement is not consummated.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">14</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='14',FILE='C:\fc\19603931112_D11429_1224095\16198-1-fk.htm',USER='jmsproofassembler',CD='Jul 15 00:39 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTE 9 &#151;
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES</font></p>

<p align="center" style="margin:0pt .9pt 12.0pt 0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="74%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:74.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="22%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:22.7%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Nine&nbsp;Months&nbsp;Ended&nbsp;May&nbsp;31,</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:74.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.16%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="10%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.16%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.58%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;Gain on
  extinguishment of related party debt accounted for as contributed capital</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">363,208</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.58%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Treasury stock accepted upon exercise of stock
  options with mature shares used as consideration</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">254,590</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">227,400</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.58%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;Capitalizable
  legal fees incurred in connection with pending Arkansas River water
  acquisition included with accounts payable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">90,724</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.58%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Investments in water and water systems included with
  accounts payable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">77,375</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="74%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:74.58%;">
  <p style="margin:12.0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Restricted
  common stock issued to former CEO in satisfaction of reimbursement obligation</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:12.0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:12.0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.16%;">
  <p style="margin:12.0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,415,000</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0pt .9pt 12.0pt 0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*****</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">15</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='15',FILE='C:\fc\19603931112_D11429_1224095\16198-1-fk.htm',USER='jmsproofassembler',CD='Jul 15 00:39 2006' -->



<br clear="all" style="page-break-before:always;">

<div>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 2.</font></b>&#160;&#160;&#160; <b><u style="font-weight:bold;">Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations</u></b><a name="Item2_ManagementsDiscussionAndAna_205418"></a></p>

<h5 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">The following discussion should be read in
conjunction with the accompanying unaudited financial statements and related
notes thereto and the financial statements and the notes thereto contained in
our 2005 Annual Report on Form&nbsp;10-KSB.</font></i></h5>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Disclosure
Regarding Forward-Looking Statements</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certain statements
in this Quarterly Report, other than purely historical information, including
estimates, projections, forecasts, and assumptions are &#147;forward-looking
statements&#148; within the meaning of the Private Securities Litigation Reform Act
of 1995, Section&nbsp;27A of the Securities Act of 1933 and Section&nbsp;21E of
the Securities Exchange Act of 1934. The words &#147;anticipate,&#148; &#147;believe,&#148; &#147;estimate,&#148;
&#147;expect,&#148; &#147;plan,&#148; &#147;intend,&#148; &#147;would&#148; and similar expressions, as they relate to
us, are intended to identify forward-looking statements. Such statements
reflect our current views with respect to future events and are subject to
certain risks, uncertainties and assumptions. We cannot assure you that any of
our expectations will be realized. Factors that may cause actual results to
differ materially from those contemplated by such forward-looking statements
include, without limitation, the timing of development of the areas where we
may sell our water, including uncertainties related to the development of
projects the Company currently has under contract, the market price of water,
changes in applicable statutory and regulatory requirements, uncertainties in
the estimation of water available under decrees, costs of delivery of water and
treatment of wastewater, uncertainties in the estimation of costs of
construction projects, the strength and financial resources of our competitors,
our ability to find and retain skilled personnel, climatic and weather
conditions, labor relations, availability and cost of material and equipment,
delays in anticipated permit and construction dates, environmental risks, the
results of financing efforts and the ability to meet capital requirements, and
general economic conditions. We undertake no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.</font></p>

<h5 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Our Business</font></i></b></h5>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pure
Cycle is an investor owned water and wastewater service provider engaged in the
design, operation and maintenance of water and wastewater systems. We primarily
operate in the Denver metropolitan area, but also have assets available to
serve areas in the southwestern United States. Our business practices are
centered on efficient and environmentally responsible water management programs
to ensure we have sufficient water to meet the long-term needs of our customers.
One example of our commitment to responsible water management is our
requirement that our water systems be designed and operated as dual
distribution water systems. A dual distribution water system is one in which
domestic water demands and irrigation demands are provided through separate
independent infrastructure. Our dual distribution system promotes efficient
water resource management and reduces the amount of water that is &#147;wasted&#148; by
traditional water systems, enabling us to maximize the use of our valuable
water supplies and allowing us the ability to provide long-term water
solutions.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
currently own approximately 1.2 million acre-feet of water (11,650 acre-feet
annually) located in the Denver metropolitan area and 70,000 acre-feet of water
on the western slope of Colorado. We also have the exclusive rights to use
17,620 acre-feet of water on the Lowry Range Property through the year 2081.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our
assets, located in the Denver area, were acquired in 1996 when we entered into
two 85 year water and wastewater Service Agreements with the Rangeview
Metropolitan District (the &#147;District&#148;) and the State of Colorado Board of Land
Commissioners (the &#147;State Land Board&#148;) which enable us to provide water and
wastewater services to the District&#146;s service area and other customers located
throughout the Denver area.</font></p>

<p style="margin:0pt 4.5pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective May&nbsp;10, 2006, we entered into an Asset
Purchase Agreement (the &#147;Agreement&#148;) to acquire&nbsp;(i)&nbsp;approximately
60,000 acre-feet of senior 1883 water rights in the Arkansas River and its
tributaries represented by &#160;over 21,700
shares of the Fort Lyon Canal Company;&nbsp;(ii)&nbsp;approximately 17,500
acres of real property located in Bent, Otero and Prowers counties, Colorado;
and (iii)&nbsp;certain contract rights, tangible personal property, mineral
rights, and other water interests associated with the real property. The
Agreement is subject to a 90 day due diligence period. Upon the satisfactory
completion of the due diligence period, we will own all the assets listed in
the Agreement. Currently we anticipate the closing date to be August&nbsp;31,
2006.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">16</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='16',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 4.5pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 4.5pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective with the closing, as consideration for the
assets we will acquire, we will issue the seller a defined number of shares of
unregistered Pure Cycle common stock and grant the seller a &#147;Tap Participation
Fee.&#148;&#160; The number of shares to be issued
is dependant on various factors including the market price of our common stock
and the number of shares outstanding at closing, but in any case will be no
more then 3.0 million shares. The Tap Participation Fee grants the seller the
right to receive ten percent (10%) of the gross proceeds from the future sale
of 40,000 water taps, which will be due and payable once we sell water taps
subject to the Agreement and receive consideration for said tap sales. The
number of shares to be issued and the Tap Participation Fee are more fully
described in Note 8 to the accompanying financial statements.</font></p>

<p style="margin:0pt 4.5pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The real property is comprised of approximately 80
farms, which are subject to operating lease agreements permitting the lessees
to farm the land and use the water rights for irrigation purposes. Certain of
the properties are subject to outstanding promissory notes which are secured by
deeds of trust on the properties. We will not assume these promissory notes and
will not be responsible for making the required minimum payments.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Also
upon closing, Pure Cycle and the seller will enter into other related
agreements which are described in more detail in Note 8 to the accompanying
financial statements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
acquisition of this large portfolio of senior water rights gives us a
substantial amount of renewable surface water which will compliment our
existing portfolio of Denver based surface and groundwater assets and enhance
our ability to supply long-term regional water services. This acquisition will
allow us to more effectively market our water and wastewater services to
customers in the Denver metropolitan market as well as other markets such as
Colorado Springs. By utilizing tap fees generated by our existing water assets
in the Denver market, we have the ability to fund the required development
costs of converting the Arkansas River water from agricultural use to municipal
use and transporting it to the Colorado Springs and Denver markets. We can also
potentially use this water to consolidate other groundwater based water service
providers, increasing our target service areas beyond the Denver metropolitan
area.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We continue to
market our services to developers and homebuilders in the Denver metropolitan
region to generate current and long term revenues. As a result of the
continuing growth of the Denver metropolitan region and the limited
availability of new water supplies, many metropolitan planning agencies are
requiring property developers to first demonstrate adequate water availability
prior to any consideration for zoning requests on property development. This
has resulted in us marketing our water to area developers and homebuilders
seeking to develop new projects, as well as other municipal water providers in
need of additional water supplies. With the addition of the Arkansas River
water, we will be able to more effectively market our balanced portfolio to the
developers as they continue to demand more surface water in our long-term water
supply solutions.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
also market our 70,000 acre-feet of Paradise Water Supply to private and
municipal users in Nevada, Arizona and California, although significant legal
issues relating to interstate water transfers exist. We continue to identify,
market and discuss our water supply arrangements with private companies and
municipal water providers to whom we have made proposals. However, due to the
strict regulatory requirements for constructing an on-channel reservoir at its
current decreed location, which is required for us to utilize this asset, we
cannot assure you that we will ever be able to make use of this asset or sell
the water profitably. See discussion of impairment analysis in the <i>Critical Accounting Policies </i>section below.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">17</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='17',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Executive Level Summary</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
results of our operations for the three and nine months ended May&nbsp;31, 2006
and 2005 were as follows:</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="53%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="20%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:20.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;months&nbsp;ended<br>
  May&nbsp;31,</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="20%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:20.74%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Nine&nbsp;months&nbsp;ended<br>
  May&nbsp;31,</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Millions of
  gallons of water delivered</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16.0</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.3</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">37.9</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">32.5</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Water revenues</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">42,800</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">34,600</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">109,600</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">97,500</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Water delivery
  operating costs</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,000</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,600</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12,300</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13,800</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Wastewater
  treatment revenues</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,800</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,300</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">44,300</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">42,900</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Wastewater
  treatment operating costs</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,200</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,200</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7,100</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6,600</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:53.58%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">General and
  administrative expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">304,900</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">314,200</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.26%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,001,500</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">942,700</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our water revenues
are subject to seasonal changes and the precipitation received in our service
area. Through May&nbsp;31, 2006 the Denver area has experienced below average
precipitation and above average temperatures, which results in additional water
used for irrigation purposes and therefore increased water usage revenues.</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Results
of Operations</font></b></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Water</font></i></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The increase in water
usage revenues for the three and nine months ended May&nbsp;31, 2006 over the
comparable periods in 2005 is mainly attributable to rate increases effective July&nbsp;1,
2005 and increases in the amount of water that was delivered during peak usage
times due to the below average precipitation in our service area. Our water
service charges are based on a tiered pricing structure that is sensitive to
the date and volume of water use. Our tiered pricing structure is controlled
through a market-driven pricing mechanism pursuant to which our rates and
charges may not exceed similar rates and charges of three nearby communities
(referred to as our &#147;rate-based&#148; districts).</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In February&nbsp;2006,
the Company announced that due to increases at its rate-based districts,
effective July&nbsp;1, 2006 Pure Cycle&#146;s water usage rates will increase an
average of 3%.</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The increase in
the costs of delivering water for the three months ended May&nbsp;31, 2006 over
the comparable period in 2005 is due mainly to timing of various water quality
testing procedures and normal fluctuations in costs due to variations in the
climate year over year. The decrease in the costs of delivering water for the
nine month period ended May&nbsp;31, 2006 over the same period in 2005 is due
to tank cleaning and inspection services performed in the prior period which
did not recur in the current period and are not anticipated to recur for
several more years.</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Wastewater</font></i></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our wastewater
customers are charged a flat monthly fee of $34.80 per connection per month,
which was increased approximately 3% effective July&nbsp;1, 2005. This will
remain unchanged in 2006/2007.</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Wastewater
treatment costs increased slightly during the nine months ended May&nbsp;31,
2006 over the comparable period in 2005 due mainly to timing of various
wastewater treatment testing procedures.</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">General
and administrative expenses</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">General and
administrative expenses for the three and nine months ended May&nbsp;31, 2006
were impacted by the adoption of Statement of Financial Accounting Standards No.&nbsp;123
(revised 2004) <i>Share Based Payment </i>(&#147;SFAS 123(R)&#148;).
For the three and nine months ended May&nbsp;31, 2006, we recorded stock-based
compensation expense of $53,200 and $155,300, respectively. Without stock-based
compensation expenses general and administrative expenses are $251,700 and
$846,200, respectively. This is a decrease in general and administrative
expenses of </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">18</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='18',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$62,500 and $96,500 over
the three and nine months ended May&nbsp;31, 2005, respectively, prior to the
addition of the stock-based compensation expenses.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other increases in
general and administrative expenses for the three and nine months ended May&nbsp;31,
2006 over the comparable periods in 2005 are due mainly to the following
factors:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:2.0pt 0pt 12.0pt 36.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Salaries
and related expenses (including SFAS 123(R)&nbsp;expenses and healthcare costs)
totaled $173,400 for the three month period, and $505,800 for the nine month
period ended May&nbsp;31, 2006, respectively. This represents an increase of
$26,600 and $86,700, over the comparable periods in 2005, respectively. Without
the effects of SFAS 123(R), salary and related expenses decreased $26,600 and
$68,600 for the three and nine month periods ended May&nbsp;31, 2006 versus
2005, respectively. This decrease is mainly attributable to reduced salary and
healthcare expenses due to the passing away of our former CEO in June&nbsp;2005.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:2.0pt 0pt 12.0pt 36.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Professional
fees totaled $41,300 for the three month period, and $152,200 for the nine
month period ended May&nbsp;31, 2006, respectively. This is an increase of
$4,400 and $30,700, over the comparable periods in 2005, respectively. This is
a result of higher audit and audit related fees.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:2.0pt 0pt 12.0pt 36.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Fees
paid to our directors totaled $16,000 for the three month period, and $101,800 for
the nine month period ended May&nbsp;31, 2006, respectively. This is a decrease
of $33,900 for the three months ended May&nbsp;31, 2006 compared to 2005 and an
increase of $15,500, for the comparable nine month period in 2005. The nine
months ended May&nbsp;31, 2006 over 2005 increase is mainly due to the addition
of new board committees which require annual retainers be paid to the directors
and payment of director fees for attendance at the annual board and committee
meetings. The decrease in the expenses for the three months ended May&nbsp;31,
2006 compared to 2005 is due mainly to timing of payments of the annual
retainers due to the Company moving the date of the annual stockholders&#146;
meeting.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:2.0pt 0pt 12.0pt 36.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
above increases are offset by:</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:2.0pt 0pt 12.0pt 72.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">o</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>A decrease in
public entity costs. Public entity costs totaled $23,600 for the three month
period and $66,200 for the nine month period ended May&nbsp;31, 2006,
respectively. This is a decrease of $5,000 and $55,600, over the comparable
periods in 2005, respectively. This decrease is due to a reduction in the
franchise taxes paid to the State of Delaware due to a reduction of the number
of authorized shares of the Company&#146;s common stock in fiscal 2005.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:2.0pt 0pt 12.0pt 72.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">o</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>$18,000 of
non-recurring recruiting expenses incurred in September&nbsp;2004 related to
the recruiting process for our controller, and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:2.0pt 0pt 12.0pt 72.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">o</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Decreases in
funding requests by the District. The expensed portions of the funding requests
decreased by $6,800 (to $9,900) and $22,500 (to $42,500), during the three and
nine months ended May&nbsp;31, 2006, respectively.</p>

<p style="margin:2.0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Other income and expenses</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest income totaled
$51,000 for the three month period and $149,400 for the nine month period ended
May&nbsp;31, 2006, respectively. This is an increase of $3,900 and $36,300,
over the comparable periods in 2005, respectively. This increase is due to
higher interest earned on our temporary investments in marketable securities.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest expense on notes
payable totaled $5,000 for the three month period and $13,900 for the nine
month period ended May&nbsp;31, 2006, respectively. This is an increase of
$1,500 and $5,000, over the comparable periods in 2005, respectively. The
interest rate on these notes is based on the Applicable Federal Rate for short
term loans which has been increasing throughout 2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest expense on
related party notes payable totaled $0 for the three month period and $7,100
for the nine month period ended May&nbsp;31, 2006, respectively. This is a
decrease of $5,300 and $8,900, over the comparable periods in 2005,
respectively. The decrease is due to the early extinguishment of approximately
$240,800 of principal and $318,000 of accrued interest payable to the estate of
our former CEO. This early extinguishment resulted in the recording of $362,200
of gain to contributed capital during the three months ended February&nbsp;28,
2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our net loss for the
three and nine months ended May&nbsp;28, 2006, respectively was $201,800 and
$713,700. Which is a decrease of $14,500 and $6,300, over the comparable
periods in 2005, respectively. The decreased net loss for </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">19</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='19',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">both periods is primarily
related to the increase in water usage revenues, the decrease in interest
expense due to the extinguishment of the related party notes, offset by the
general and administrative expenses noted above.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Stock-based
compensation expense</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective September&nbsp;1,
2005, we adopted SFAS 123(R)&nbsp;which requires the measurement and
recognition of compensation expense for all share-based payment awards made to
employees and directors including employee stock options based on estimated
fair values. Additional information regarding the adoption of SFAS 123(R)&nbsp;and
its impact on our financial statements is included in Note 1 to the
accompanying financial statements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Income Taxes</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There is no provision for income taxes because we
continue to incur operating losses. Deferred income taxes reflect the tax
effects of net operating loss carryforwards and temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Due to the continued net losses,
we have recorded a valuation allowance equal to the excess of the deferred tax
assets over the deferred tax liability since we are unable to reasonably
determine if it is more likely than not that deferred tax assets will
ultimately be realized.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Liquidity and Capital Resources</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our
working capital, defined as current assets less current liabilities, at May&nbsp;31,
2006 was approximately $2.9 million, and we had cash and cash equivalents and
marketable securities on hand totaling $3.4 million at May&nbsp;31, 2006. We
believe that at May&nbsp;31, 2006, we have sufficient working capital to fund
our operations for the next year. However, there can be no assurances that we
will be successful in marketing the water from our primary water projects in
the near term. In the event increased revenues and cash flows from providing
water services are not achieved, we may incur additional short or long-term
debt or seek to sell additional equity securities to generate working capital
to support our operations.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Development
of any of the water that we have, or are seeking to acquire, will require
substantial capital investments. We anticipate that additional capital for the
development of the water will be financed by the entity purchasing such water
through the sale of water taps to developers and water delivery charges to
users. A water tap charge refers to a charge we impose to fund construction of &#147;Wholesale
Facilities&#148; and permit access to a water delivery system (e.g., a single-family
home&#146;s tap into our water system), and a water service charge refers to a water
customer&#146;s monthly water bill, generally charged per 1,000 gallons of water
delivered to the customer. Annually, the developer must purchase not less than
a minimum number of taps, the proceeds from which are used to expand the
capacity of our Wholesale Facilities to deliver water to additional customers
in the development. We anticipate that the system tap fees will be sufficient
to generate funds with which we can design and construct the necessary
Wholesale Facilities. However, once we receive tap fees from a developer, we
are contractually obligated to construct the Wholesale Facilities for the taps
paid for, even if our costs are not covered by the fees we receive. We can not
make any assurance that our sources of cash will be sufficient to cover our
capital costs.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On
May&nbsp;10, 2006, we entered into an Asset Purchase Agreement with High Plains
A&amp;M, LLC to acquire their water rights, farm land and shares in the Fort
Lyon Canal Company. Pursuant to this agreement, we are required to issue the
Seller up to &#160;&#160;3,000,000 million shares of our common stock
and pay the Seller ten percent (10%) of the gross proceeds from the future sale
of 40,000 water taps once we receive tap fees from developers. Additionally,
there are numerous approvals required prior to us using the to be acquired
water in our metropolitan Denver service area, including obtaining a change of
use approval from the Colorado Water Courts and constructing a 150 mile
pipeline to deliver the water to the Denver market. We anticipate using a
portion of the tap fees charged to developers to fund the construction of the
pipeline but can make no assurances that those funds will be sufficient to
cover our capital costs.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On
August&nbsp;3, 2005, we entered into an Agreement for Water Service with
Arapahoe County to provide water service to the new Arapahoe County Fairgrounds
(the &#147;Fairgrounds&#148;). Pursuant to this agreement we have designed and are
building certain facilities which are required to extend water service to the
Fairgrounds. The majority of the infrastructure required for the Fairgrounds
are complete and awaiting final testing and inspection procedures. Upon
completion, we expect the system to provide full water service to the
Fairgrounds for its anticipated opening date in </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">20</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='20',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">July&nbsp;2006.
Additional information on the construction contracts we have entered into
related to this agreement can be found in Note 4 to the accompanying financial
statements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On October&nbsp;31,
2003, and then on May&nbsp;14, 2004, we entered into the Sky Ranch Agreements
with the developer of Sky Ranch. Pursuant to the Sky Ranch Agreements we will
provide water for all homes and buildings to be constructed at Sky Ranch, which
could include up to 4,850 SFE units, for which the developer must purchase at
least 400 water taps before occupancy of the first home. The Sky Ranch
Agreements permit the developer to add additional taps annually, with at least
310 taps to be purchased each year. This schedule is designed to provide us
with adequate funds with which to construct the Wholesale Facilities needed to
provide water service to the areas being developed.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">To
the extent that water service is provided using Export Water, we are required
to pay a royalty to the State Land Board equal to 12% of the net revenue after
deducting our costs. If the developer exercises its option to purchase Export
Water, we expect to dedicate approximately 1,200 acre-feet, or approximately
10%, of our Export Water supply (which is about 4.2% of our overall Rangeview
Water Supply) for this project. We estimate we will spend approximately $25.0
million for infrastructure costs related to the development and delivery of
water to the Sky Ranch development, which will be funded with tap sales to the
developer.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Marketable Securities</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
invest excess cash primarily in money market instruments, commercial paper
obligations, corporate bonds and US government treasury obligations. Our
investments in marketable securities are described in more detail in <i>Note 2 &#151; Marketable Securities</i> in the accompanying financial
statements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Contractual Obligations</font></i></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our contractual
obligations with defined maturities consist entirely of our long-term debt,
which mature as follows:</font></p>

<div align="center" style="font-family:Times New Roman;">

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;">
 <tr>
  <td width="441" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:330.5pt;">
  <p align="left" style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableCenter -->Year&nbsp;Ending&nbsp;August&nbsp;31,</p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Total</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="441" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:330.5pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2007</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="45" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:34.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">890,564</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="441" valign="top" style="padding:0pt .7pt 0pt 0pt;width:330.5pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2008</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">26,542</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="441" valign="top" style="padding:0pt .7pt 0pt 0pt;width:330.5pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">917,106</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="441" valign="top" style="padding:0pt .7pt 0pt 0pt;width:330.5pt;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Less amounts representing accrued interest</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">466,064</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="441" valign="top" style="padding:0pt .7pt 0pt 0pt;width:330.5pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total principal</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="45" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:34.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">451,042</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

</div>

<p style="margin:12.0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Of the principal
balance, $424,500 bears simple interest at the Applicable Federal Rate for
short-term obligations (4.85% at May&nbsp;31, 2006), and $26,542 bears no interest.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
holder of the notes due in August&nbsp;2007 is a party to the CAA and has
agreed that if its CAA interests are paid by the maturity date of the notes,
the notes will be cancelled.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest
is not payable on a current basis, but does accrue and is added to the
principal monthly.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On
December&nbsp;29, 2005, we retired $318,000 of accrued interest along with
$240,800 of principal payable to the estate of our former CEO (total debt
retired was $558,800) for a lump-sum payment of $195,600. As a result we recorded
a gain on the early extinguishment of debt totaling $363,200, which was
recorded as contributed capital.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We have approximately $127,000 payable to five
contractors upon the satisfactory completion of various construction milestones
related to the construction of the facilities required to extend water service
to the Fairgrounds. We anticipate paying the $127,000 in July&nbsp;and August&nbsp;of
2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are also contingently liable for payments to third
parties totaling $23.4 million upon the sale of Export Water, which is more
fully described in our Annual Report on Form&nbsp;10-KSB for the year
ended August&nbsp;31, 2005. The timing of these payments is determined based on
sales of Export Water. Therefore, it is unknown if and when these payments will
ultimately be made.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">21</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='21',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Operating Activities</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operating
activities include revenues we receive from the sale of water and wastewater
services to our customers, costs incurred in the delivery of those services,
general and administrative expenses, and depletion/depreciation expenses.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">During
the nine months ended May&nbsp;31, 2006, cash used by operating activities was
approximately $448,900, which consisted mainly of $155,300 of non-cash related
stock compensation expense pursuant to SFAS 123(R), $25,400 of cash payments
made against trade payables and accruals, and $21,000 of interest accrued on
notes payable, which was offset by an increase in receivables totaling $18,400.
Additionally, the cash used by operating activities includes $174,900 of cash
paid to an escrow agent which was then remitted to the CAA holders; this
transaction is more fully described in Note 3 in the accompanying financial
statements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
will continue to provide domestic water and wastewater service to customers in
our service area, and we will continue to operate and maintain our water and
wastewater systems with our own employees.</font></p>

<h5 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Investing Activities</font></i></h5>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
continue to invest in the acquisition, development and maintenance of both the
Rangeview and Paradise water assets and intend to acquire the next 20% of the
Sky Ranch groundwater under the Denver Groundwater Purchase Agreement for
$50,000 in fiscal 2006. These investments include legal and engineering fees
associated with adjudicating additional water through the Colorado Water Court
system, as well as right-of-way permit fees to the Department of Interior
Bureau of Land Management for our Paradise Water Supply. With the anticipated
completion of the construction of the facilities required to provide water
service to the Fairgrounds, we anticipate cash required by investing activities
to decrease in the fourth quarter of fiscal 2006. However, we anticipate
additional acquisition costs to be incurred during the fourth quarter of our
fiscal 2006 related to the Arkansas River water acquisition.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash
used by investing activities for the nine months ended May&nbsp;31, 2006 was
approximately $1.69 million. During the nine months ended May&nbsp;31, 2006, we
expended $2.1 million of cash for the construction of the water system required
to provide water service to the Fairgrounds. We expect to spend an additional
$100,000 to complete the construction of the water system required to provide
water service to the Fairgrounds and additional facilities/capacity to increase
our existing capacity as described above. This was offset by the release of
approximately $436,000 of funds from our investment account to fund the
construction activity.</font></p>

<h5 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Financing Activities</font></i></h5>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash
provided by financing during the nine months ended May&nbsp;31, 2006 was
$529,500, which consists mainly of proceeds received from the exercise of stock
options offset by payments made to the CAA holders due to the proceeds received
in the prior year pursuant to the County Agreement and the Sky Ranch Option,
which is more fully described in Note 3 in the accompanying financial statements.
Additionally, in December&nbsp;2005, we extinguished debt and accrued interest
payable to the estate of our former CEO for a lump sum payment totaling
$195,600.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Off-Balance
Sheet Arrangements</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other than the CAA, which
is more fully described in our Annual Report on Form&nbsp;10-KSB for the
year ended August&nbsp;31, 2005, we do not have any material off-balance sheet
arrangements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Critical Accounting
Policies</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our
financial statements are prepared in accordance with Accounting Principles
Generally Accepted in the United States of America (&#147;GAAP&#148;), which requires
management to make estimates and assumptions that affect reported amounts of
assets and liabilities and disclosure of contingent 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.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">22</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='22',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
have identified certain key accounting policies on which our 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, our most critical accounting policies
are those related to revenue recognition, impairment of water assets and other
long-lived assets, depletion and depreciation, accounting for Participating
Interests in Export Water, royalty and other obligations, 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.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Revenue Recognition</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our
revenues consist mainly of tap fees, construction fees and monthly service fees.
Emerging Issues Task Force Issue No.&nbsp;00-21 <i>Revenue
Arrangements with Multiple Deliverables </i>(&#147;EITF 00-21&#148;),
governs how to identify when goods or services, or both, that are separately
delivered but included in a single sales arrangement should be accounted for
individually. Based on the criteria of EITF 00-21, we account for each of
the items contained in our service agreements individually. That is, we
determine the proper revenue recognition for tap fees, construction fees and
service fees independent of one another.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
recognize revenues relating to the sale of water and wastewater taps as income
upon receipt of payment if the Wholesale Facilities required to provide the
service are in place and operational. If the Wholesale Facilities are not in
place and operational, we defer recognition of the tap fee revenue until the
required facilities are completed and placed in service. We recognize
construction reimbursement fees received to build assets that we will own as
income over the estimated service life, which is also the estimated useful life
of the assets. Additionally, we capitalize construction costs and amortize
those as costs of revenue over the assets&#146; estimated useful life. We recognize
water and wastewater service revenues in the month in which the services are
performed. Water service fees are based upon metered water deliveries to
customers. Wastewater customers are charged flat monthly fees.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Impairment of Water Assets and Other Long-Lived
Assets</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
review our long-lived assets for impairment at least annually, or whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. We measure recoverability of assets to be held
and used by a comparison of the carrying amount of an asset to the future
undiscounted net cash flows we expect to be generated by the eventual use of
the asset (the asset&#146;s fair value). 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 exceeds the net present value of the expected
cash flows produced by the assets unless another more appropriate measure of
fair value is determined. We report assets to be disposed of at the lower of
the carrying amount or fair value less costs to sell.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As
disclosed in our Annual Report on Form&nbsp;10-KSB for the year ended August&nbsp;31,
2005, our Paradise Water Supply is subject to a Finding of Reasonable Diligence
every six years. The latest review of our conditional Paradise Water rights
began in fiscal 2005. Subsequent to the filing of our Quarterly Report on Form&nbsp;10-Q
for the three months ended November&nbsp;30, 2005, we learned of two objectors
to our Paradise Water rights. In May&nbsp;2006, we had a status conference with
the objectors and provided the objectors additional information regarding the
development efforts we have taken over the past six years regarding the
proposed use of our Paradise Water Supply. Even with this status conference, as
of the date of this filing, we are unaware of the reasons for the objections or
the impact this may have on the ultimate outcome of the review. In each of the
past four reviews, our Paradise Water rights have had objectors, and each time
the objectors have withdrawn their objections before the review was remitted to
the Water Court. We intend to vigorously defend our Paradise Water Supply
throughout this review process and believe that the fair value of the Paradise
Water Supply is not impaired.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Accounting for Contingent Obligation Payments</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
balance sheet liability captioned &#147;Participating Interests in Export Water
Supply&#148; (the &#147;Participating Interests&#148;) represents an obligation that arose
under the Water Commercialization Agreement, as amended by the CAA.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Upon
entering the CAA, we recorded an initial liability of approximately $11.1
million, which represents the cash we received and used to purchase our Export
Water Supply. In return we agreed to remit a total of $31.8 million of proceeds
received from the sale of Export Water to the Participating Interest holders. The
obligation for the $11.1 million was recorded as debt, and the remaining $20.7
million contingent liability is not reflected on our balance </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">23</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='23',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">sheet
because the obligation to pay this is contingent on our ability to sell Export
Water, for which the amounts and the timing are not reasonably determinable.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As
of May&nbsp;31, 2006, the remaining Participating Interests liability reflected
on our balance sheet totaled $8.2 million, and the contingent liability not
reflected on our balance sheet totaled $15.2 million. For more information see
our Annual Report on Form&nbsp;10-KSB for the year ended August&nbsp;31,
2005.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Royalty and other obligations</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Revenues
from the sale of Export Water are shown net of royalties payable to the State
Land Board. Revenues from the sale of water on the Lowry Range Property are
shown net of the royalties to the State Land Board and the fees retained by the
District.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Depletion and depreciation of water assets</font></i></p>

<p style="margin:0pt .9pt 12.0pt 0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Water supplies that are being
utilized are depleted on the basis of units produced divided by the total
volume of water adjudicated in the water decrees. Water systems are depreciated
on a straight-line basis over their estimated useful lives.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Income taxes</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
use 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 we expect to recover or settle those temporary differences. 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. A valuation allowance is
provided for deferred tax assets until realization is more likely than not.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Quantitative and
Qualitative Disclosures About Market Risk</u></font></b><a name="Item3_QuantitativeAndQualitativeD_205444"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our operations are
exposed to market risks primarily as a result of changes in interest rates in
our cash equivalents, investments in marketable securities, and certain notes
payable. Additionally, the rates we are allowed to charge our customers for tap
fees and usage fees are limited to the average of three surrounding communities
as defined in the Amended Lease Agreement with the State Land Board. All of the
items exposed to market risk noted above have been entered into for purposes
other than active trading purposes. To manage these risks, we place cash
equivalents and investments with a high credit-quality financial institution
and we invest excess cash primarily in money market instruments, commercial
paper obligations, corporate bonds and US government treasury obligations. To
date, we have not experienced significant losses on any of these investments. Notes
payable with principal balances totaling $425,000 bear simple interest at the
Applicable Federal Rate for short-term obligations, which was 4.85% at May&nbsp;31,
2006. For each percentage increase in the Applicable Federal Rate, we incur an
additional $4,250 of interest annually. Remaining notes payable to related
parties were paid in full on December&nbsp;29, 2005.</font></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 4. &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Controls and Procedures</u></font></b><a name="Item4_ControlsAndProcedures_205451"></a></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Evaluation
of Disclosure Controls and Procedures</font></i></p>

<p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our disclosure controls and procedures are designed to ensure that
information required to be disclosed in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the rules&nbsp;and forms of the Securities and
Exchange Commission, and that such information is accumulated and communicated
to management, to allow timely decisions regarding required disclosure. We
necessarily apply judgment in assessing the costs and benefits of such controls
and procedures that, by their nature, can only provide reasonable assurance
regarding management&#146;s control objectives. The President and CFO has reviewed
the effectiveness of our disclosure controls and procedures as of May&nbsp;31,
2006, and based on this evaluation has concluded that the disclosure controls
and procedures were effective as of such date.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">24</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='24',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->
<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>


<p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:6.0pt .7pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Changes
in Internal Controls</font></i></p>

<p style="margin:6.0pt .7pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There have been no
significant changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the date of the evaluation
referred to above.</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Part&nbsp;II</font></b><a name="Partii_205509"></a></p>

<p style="margin:0pt .9pt 12.0pt 0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Exhibits </u></font></b><a name="Item6_Exhibits_205513"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Exhibits</font></u></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">31 - Certification
pursuant to section 302 of the Sarbanes-Oxley Act of 2002 - Filed herewith.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">32 - Certification
pursuant to section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">25</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='25',FILE='C:\fc\198112832215_D10496_1225863\16198-1-fm.htm',USER='jmsproofassembler',CD='Jul 17 11:28 2006' -->



<br clear="all" style="page-break-before:always;">

<div style="font-family:Times New Roman;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SIGNATURES<a name="Signatures_205830"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PURE
CYCLE CORPORATION</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="18%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:18.84%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;">/s/ Mark W. Harding</p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="56%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:56.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="31%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.74%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mark W. Harding</font></p>
  </td>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="56%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:56.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="31%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.74%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">President and Chief Financial Officer</font></p>
  </td>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="56%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:56.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="31%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.74%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="56%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:56.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="31%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.74%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">July&nbsp;17, 2006</font></p>
  </td>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="56%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:56.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="31%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.74%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="56%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:56.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font face="Times New Roman">26</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='26',FILE='C:\fc\195205838141_D11431_1223781\16198-1-jc.htm',USER='jmsproofassembler',CD='Jul 14 20:58 2006' -->


</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>a06-16198_1ex31.htm
<DESCRIPTION>EX-31
<TEXT>
<html>

<head>






</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>

<p align="right" style="margin:0pt 0pt 12.0pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXHIBIT
31</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">CERTIFICATIONS</font></b></p>

<p style="margin:6.0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><br>
&nbsp;I, Mark W. Harding, certify that:</font></p>

<p style="margin:6.0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">I have reviewed this quarterly report on Form&nbsp;10-Q
of Pure Cycle Corporation;</font></p>

<p style="margin:6.0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Based on my knowledge, this 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 report;</font></p>

<p style="margin:6.0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Based on my knowledge, the financial statements, and
other financial information included in this 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 report;</font></p>

<p style="margin:6.0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">I am responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e)&nbsp;and
15d-15(e)) for the registrant and I have:</font></p>

<p style="margin:6.0pt 0pt 12.0pt 36.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Designed such disclosure controls and
procedures, or caused such disclosure controls and procedures to be designed
under my supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to me by
others within those entities, particularly during the period in which this
quarterly report is being prepared;</font></p>

<p style="margin:6.0pt 0pt 12.0pt 36.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Evaluated the effectiveness of the
registrant&#146;s disclosure controls and procedures and presented in this report my
conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation;
and</font></p>

<p style="margin:6.0pt 0pt 12.0pt 36.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Disclosed in this report any change in
the registrant&#146;s internal control over financial reporting that occurred during
the registrant&#146;s most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant&#146;s internal control over
financial reporting.</font></p>

<p style="margin:6.0pt 0pt 12.0pt 18.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">I have disclosed, based on my most recent
evaluation of internal control over financial reporting, to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s board of directors (or
persons performing the equivalent functions):</font></p>

<p style="margin:6.0pt 0pt 12.0pt 36.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">All significant deficiencies and material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant&#146;s
ability to record, process, summarize and report financial information; and</font></p>

<p style="margin:6.0pt 0pt 12.0pt 36.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Any fraud, whether or not material, that
involves management or other employees who have a significant role in the
registrant&#146;s internal control over financial reporting.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="48%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.68%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;">Dated:&nbsp;&nbsp; July&nbsp;17, 2006</p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.94%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="41%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:41.4%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.68%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.94%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="41%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:41.4%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.68%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.94%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="41%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:41.4%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.68%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.94%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="41%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:41.4%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="17%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:17.88%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Mark W. Harding</font></p>
  </td>
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.8%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.94%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="41%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:41.4%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.68%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">President and Chief Financial Officer</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.94%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="41%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:41.4%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.68%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Principal executive officer and principal financial
  officer)</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.94%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="41%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:41.4%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="134" style="border:none;"></td>
  <td width="230" style="border:none;"></td>
  <td width="74" style="border:none;"></td>
  <td width="310" style="border:none;"></td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='',FILE='C:\fc\195203750267_D11431_1223781\16198-1-nc.htm',USER='jmsproofassembler',CD='Jul 14 20:37 2006' -->


</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>3
<FILENAME>a06-16198_1ex32.htm
<DESCRIPTION>EX-32
<TEXT>
<html>

<head>






</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"></p>

<p align="right" style="margin:0pt 0pt 12.0pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXHIBIT
32</font></b></p>

<p align="center" style="margin:5.0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CERTIFICATION PURSUANT TO
18 U.S.C. SECTION&nbsp;1350, <br>
AS ADOPTED PURSUANT TO <br>
SECTION&nbsp;906 OF THE SARBANES-OXLEY ACT OF 2002</font></p>

<p style="margin:5.0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned, the
President and Chief Financial Officer of Pure Cycle Corporation (the &#147;Company&#148;),
certifies that to his knowledge on the date hereof:</font></p>

<p style="margin:5.0pt 0pt 12.0pt 18.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">The Quarterly Report on Form&nbsp;10-Q of the
Company for the quarterly period ended May&nbsp;31, 2006 filed on the date
hereon with the Securities and Exchange Commission (the &#147;Report&#148;) fully
complies with the requirements of section 13(a)&nbsp;or 15(d)&nbsp;of the
Securities Exchange Act of 1934; and</font></p>

<p style="margin:5.0pt 0pt 12.0pt 18.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Information contained in the Report fairly presents,
in all material respects, the financial condition and result of operations of
the Company.</font></p>

<p style="margin:5.0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dated:&#160;&#160;&#160; July&nbsp;17, 2006</font></p>

<p style="margin:5.0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="18%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:18.82%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;">/s/ Mark W. Harding</p>
  </td>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.74%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="18%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:18.14%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="33%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:33.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.56%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">President and Chief Financial Officer</font></p>
  </td>
  <td width="18%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:18.14%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="33%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:33.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.56%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Principal executive officer and principal financial
  officer)</font></p>
  </td>
  <td width="18%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:18.14%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="33%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:33.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='',FILE='C:\fc\195204538103_D11431_1223781\16198-1-ne.htm',USER='jmsproofassembler',CD='Jul 14 20:45 2006' -->


</body>

</html>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
