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<SEC-DOCUMENT>0001104659-07-055230.txt : 20070723
<SEC-HEADER>0001104659-07-055230.hdr.sgml : 20070723
<ACCEPTANCE-DATETIME>20070720174720
ACCESSION NUMBER:		0001104659-07-055230
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20070723
DATE AS OF CHANGE:		20070720

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:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-142335
		FILM NUMBER:		07992325

	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>424B3
<SEQUENCE>1
<FILENAME>a07-12189_5424b3.htm
<DESCRIPTION>424B3
<TEXT>
<html>

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<body lang="EN-US">

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

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

<p align="right" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Filed Pursuant to Rule 424(b)(3)</font></b><br>
<b>Registration No. 333-142335</b></p>

<p style="margin:0pt 0pt 12.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PROSPECTUS</font></b></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$15,000,000 (by Pure Cycle Corporation)</font></b></p>

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

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2,406,697 SHARES (by Selling Stockholders)</font></b></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PURE CYCLE CORPORATION</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">COMMON
STOCK</font></b></p>

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

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

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This prospectus relates
to (i)&nbsp;the potential offer by Pure Cycle Corporation of shares of common
stock, 1/3 of $.01 par value, with an initial aggregate offering price not to
exceed $15,000,000, and (ii)&nbsp;the resale by the selling stockholders of up
to 2,406,697<b>  </b>shares of common
stock.&#160; See &#147;Selling Stockholders.&#148;&#160; We will not receive any of the proceeds from
the shares of common stock sold by the selling stockholders.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pure Cycle Corporation&#146;s
common stock is listed on the NASDAQ Capital Market under the symbol &#147;PCYO.&#148;&#160; On July&nbsp;18, 2007, the last reported
sales price of our common stock on the NASDAQ Capital Market was $7.63 per
share.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">For a
discussion of certain risks that should be considered by prospective investors,
see &#147;Risk Factors&#148; beginning on page&nbsp;4 of this prospectus.</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The common stock offered
by this prospectus may be offered directly or through agents or dealers.&#160; See &#147;Plan of Distribution.&#148;&#160; The names of any underwriters, dealers or
agents will be included in a supplement to this prospectus, along with any
applicable fee, commission or discount arrangement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This prospectus may not
be used to consummate sales of shares of common stock to be newly issued by us
unless accompanied by the applicable prospectus supplement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete.&#160; Any representation
to the contrary is a criminal offense.</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The date of this
prospectus is July&nbsp;19, 2007.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;text-transform:uppercase;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">&nbsp;</font></b></p>

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

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

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;text-transform:uppercase;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">TABLE OF CONTENTS</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:92.28%;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="4%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Page</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#AboutThisProspectus_185156" title="Click to goto ">ABOUT THIS PROSPECTUS</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#ForwardlookingStatements_185202" title="Click to goto ">FORWARD-LOOKING STATEMENTS</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#ProspectusSummary_185227" title="Click to goto ">PROSPECTUS SUMMARY</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#RiskFactors_185525" title="Click to goto ">RISK FACTORS</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#SellingStockholders_190121" title="Click to goto ">SELLING STOCKHOLDERS</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#UseOfProceeds_190528" title="Click to goto ">USE OF PROCEEDS</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12</font></p>
  </td>
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  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#PlanOfDistribution_190538" title="Click to goto ">PLAN OF DISTRIBUTION</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12</font></p>
  </td>
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  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#LegalMatters_190827" title="Click to goto ">LEGAL MATTERS</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
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  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p>
  </td>
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  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Experts_190828" title="Click to goto ">EXPERTS</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#WhereYouCanFindMoreInformation_190836" title="Click to goto ">WHERE YOU CAN FIND MORE INFORMATION</a></font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.74%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15</font></p>
  </td>
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</table>

<p style="margin:12.0pt 0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As used in this prospectus, the terms &#147;Pure Cycle,&#148; &#147;we,&#148;
&#147;our,&#148; &#147;ours&#148; and &#147;us&#148; refer to Pure Cycle Corporation.&#160; When we refer to &#147;shares&#148; throughout this
prospectus, we include all rights attaching to our shares of common stock under
any stockholder rights plan then in effect.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ABOUT THIS
PROSPECTUS<a name="AboutThisProspectus_185156"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This prospectus is part
of a registration statement that we have filed with the Securities and Exchange
Commission (the &#147;SEC&#148;) using a shelf registration process.&#160; Under this shelf registration process, we may
sell shares of our common stock in one or more offerings up to a total dollar
amount of $15,000,000.&#160; Each time we sell
shares with this prospectus, we will provide you with a prospectus supplement
that will contain specific information about the terms of that offering
including, among other things, the number of shares sold and the price.&#160; The prospectus supplement may also add to,
update or change information in this prospectus.&#160; You should read carefully this prospectus,
any prospectus supplement, and the additional information described below.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This prospectus does not
contain all the information provided in the registration statement we filed
with the SEC.&#160; For further information
about us or the securities offered by this prospectus, you should refer to that
registration statement, which you can obtain from the SEC as described below
under the heading &#147;Where You Can Find More Information.&#148;</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">FORWARD-LOOKING
STATEMENTS<a name="ForwardlookingStatements_185202"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This prospectus,
including the information incorporated by reference, contains forward-looking
statements as defined in the Private Securities Litigation Reform Act of
1995.&nbsp; The use of any statements containing the words &#147;anticipate,&#148; &#147;believe,&#148;
&#147;estimate,&#148; &#147;expect,&#148; &#147;plan,&#148; &#147;intend&#148; and similar expressions, as they relate
to us, are intended to identify forward-looking statements.&#160; Such statements include comments regarding
our ability to market and sell our water in new communities.&#160; These statements reflect our current views
with respect to future events and are subject to certain risks, uncertainties
and assumptions.&nbsp; We cannot assure you that any of our expectations will
be realized.&#160; 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 we currently have 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,
general economic conditions and other risks detailed in this prospectus under
the heading &#147;Risk Factors&#148; and in our periodic report filings with the SEC.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;text-transform:uppercase;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">&nbsp;</font></b></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>
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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">PROSPECTUS SUMMARY<a name="ProspectusSummary_185227"></a></font></b></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The
Company</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pure Cycle Corporation is
an investor owned water and wastewater service provider engaged in the design,
construction, operation and maintenance of water and wastewater systems.&#160; We incorporated in 1976 in the State of
Delaware.&#160; Our theory is that water is a
precious commodity that is often undervalued and therefore used
inefficiently.&#160; We primarily operate in
the Denver, Colorado metropolitan area and have assets located in the Denver
area, in southeastern Colorado in the Arkansas River, and on the western slope
of Colorado.&#160; Our business practices are
centered on efficient and environmentally responsible water management programs
to ensure we have water to meet the long-term needs of our customers.&#160; Utilizing our water assets, we withdraw,
treat, store and deliver water to our customers.&#160; We then collect wastewater from our customers
which is treated and reused through dual distribution systems.&#160; A dual distribution system is one in which
domestic water demands and irrigation water demands are provided through
separate independent infrastructure.&#160; Our
dual distribution systems promote efficient water resource management and
reduce the amount of water that is &#147;wasted&#148; by traditional water systems which
enable us to maximize the use of our valuable water supplies and allow us the
ability to provide long-term water solutions on a regional basis.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our water assets are
comprised of the following annual entitlements:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</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;&#160;&#160; </font>Approximately
60,000 acre-feet of senior 1883 water rights in the Arkansas River and its
tributaries represented by over 21,600 shares of the Fort Lyon Canal Company;
(ii) approximately 17,500 acres of real property; and (iii) certain contract
rights, tangible personal property, mineral rights, and other water interests associated
with the real property;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</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;&#160;&#160; </font>We own
approximately 11,650 acre-feet of water located at the Lowry Range Property
located in Arapahoe County, Colorado, which we can &#147;Export&#148; from the Lowry
Range Property to supply water to nearby communities and developers in need of
additional water supplies (this water asset is referred to as our &#147;Export Water&#148;);</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</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;&#160;&#160; </font>We have the
exclusive rights to use, through 2081, approximately 17,620 acre-feet of water
located at the Lowry Range Property.&#160;
This water is required to be used specifically on the Lowry Range
Property (collectively we refer to the 17,620 acre-feet of water designated for
use on the Lowry Range Property and the 11,650 acre-feet of Export Water as our
&#147;Rangeview Water Supply&#148;);</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</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;&#160;&#160; </font>We own,
subject to receipt of a water rights deed, approximately 350 acre-feet of
groundwater pursuant to an Agreement for Water Service with Arapahoe County,
which will be added to our overall Denver metropolitan water supply portfolio;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</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;&#160;&#160; </font>We own
approximately 89 acre-feet of water located beneath Sky Ranch, which is a
property located north of our Lowry Range property along I-70 in
Colorado, together with the right to purchase an additional 671 acre-feet of
water (for a total of 760 acre-feet), which will be used to provide water service
to the initial 1,500 taps purchased at Sky Ranch; and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#149;</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;&#160;&#160; </font>We own
conditional water rights in western Colorado that entitle us to build a 70,000
acre-foot reservoir to store tributary water on the Colorado River; a
right-of-way permit from the U.S. Bureau of Land Management for property at the
dam and reservoir site; and four tributary water wells with a theoretical
capacity to produce approximately 56,000 acre-feet of water annually
(collectively known as the &#147;Paradise Water Supply&#148;).</p>


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<p style="margin:0pt 0pt 12.0pt 54.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Denver metropolitan
region continues to experience growth and with the limited availability of new
water supplies, many metropolitan planning agencies are requiring property
developers to demonstrate adequate water availability prior to any
consideration for zoning requests for property development.&nbsp; We believe we
are well positioned to market and sell our water and wastewater services to
municipalities, developers and homebuilders seeking to develop new communities
both within the Lowry Range Property as well as in other areas in the growing
Denver metropolitan region.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our corporate offices are
located at 8451 Delaware St., Thornton, Colorado 80260.&#160; Our telephone number is (303) 292-3456.&#160; Our web site is
http://www.purecyclewater.com.&#160; The
information on our website does not constitute part of this prospectus.</font></p>

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

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">RISK FACTORS<a name="RiskFactors_185525"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our
business, operations, and financial condition are subject to significant
risks.&#160; We urge you to consider the
following risk factors in addition to the other information contained in, or
incorporated by reference into, this prospectus or any prospectus
supplement.&#160; If any of the following
risks actually occur, our business, financial condition, results of operations
or cash flows could be materially adversely affected.&#160; In any such case, the trading price of our
common stock could decline, and you could lose all, or a part, of your
investment.</font></b></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We
are dependent on the development of Sky Ranch, the Lowry Range Property and
other areas near our Rangeview Water Supply that are potential markets for our
Export Water.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We expect that our
principal source of future revenue will be from long term contracts with the
State of Colorado Board of Land Commissioners (the &#147;Land Board&#148;), which expire
in 2081 and entitle us to provide water service to approximately 24,000 of the
27,000 acres of the Lowry Range Property.&#160;
In addition to the Lowry Range, we have water service agreements with a
new master planned community situated on approximately 900 acres along
Interstate 70 known as Sky Ranch.&#160; The
timing and amount of these revenues will depend significantly on the
development of these areas.&#160; The Lowry
Range Property is owned by the Land Board, which has been considering various
development alternatives, including proposals for open space.&#160; In June 2007, the Land Board finalized an
agreement with Lend Lease Communities LLC to develop approximately 3,500 acres
of the Lowry Range.&#160; Of this, we have the
right to provide service to approximately 1,200 acres.&#160; With respect to the Lowry Range and Sky
Ranch, we are dependent on the development of the property prior to us
receiving revenues for water service, which development is under the control of
the developers.&#160; We are not able to
determine the timing of water sales or the timing of development.&#160; There can be no assurance that development
will occur or that water sales will occur on acceptable terms or in the amounts
or time required for us to support our costs of operation.&#160; There is currently no development occurring
at Sky Ranch, and the developer is considering options for the property which
include partnering or the sale of the entire property.&#160; Because of the prior use of the Lowry Range
Property as a military facility, environmental clean-up may be required prior
to development, including the removal of unexploded ordnance.&#160; There is often significant delay in adoption
of development plans, as the political process involves many constituencies
with differing interests.&#160; In the event
water sales are not forthcoming or development of the Lowry Range Property or
Sky Ranch is delayed, we may incur additional short or long-term debt
obligations or seek to sell additional equity to generate operating capital
until demand arises for our water assets.&#160;
If the Land Board determines to limit the use of significant portions of
the Lowry Range Property for open space, it may limit our ability to fully
develop our Rangeview Water Supply.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our operations are
significantly affected by the general economic conditions for real estate
development and the pace and location of real estate development activities in
the greater Denver metropolitan area, most particularly areas such as the Lowry
Range Property and Sky Ranch which are close to our Rangeview Water Supply and
are potential markets for our Export Water.&#160;
Increases in the number of our water and wastewater connections, our connection
fees and our billings and collections will depend on real estate development in
this area.&#160; We have no ability to control
the pace and location of real estate development activities which affect our
business.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We
are likely to be involved in on-going negotiation with the Land Board to
clarify our rights and obligations under contracts as they relate to specific
transactions we enter into or to deal with additional opportunities, and we may
be subject to adverse determinations if are required to arbitrate these
matters.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our rights and obligation
to our Rangeview Water Supply derive principally from an Amended and Restated
Lease (the &#147;Lease&#148;) between the Land Board and the Rangeview Metropolitan
District (the</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;District&#148;) entered into
in 1996 prior to any development of the Lowry Range or of areas outside the
Lowry Range that utilize our Export Water.&#160;
The terms of this agreement did not fully anticipate the specific
circumstances of the development that have arisen and may not clearly delineate
rights and responsibilities for the forms of transactions that may arise in the
future as we enter into and negotiate agreements for sale of water.&#160; We anticipate that we will engage in
negotiations with the State Land Board from time to time to clarify the applicability
of contract terms to circumstances that were not anticipated at the time the
agreements were entered into.&#160; Certain of
these provisions may be material and a determination, by an arbitrator or
otherwise, of positions that are not favorable to us could have a material
adverse effect on our financial results.&#160;
In addition, we discuss periodically with the State Land Board
opportunities for water utilization that were not available at the time of the
Lease, which opportunities could be incorporated into the Lease.&#160; We cannot assure you that we will pursue
additional opportunities or that such activities will be successful.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">In
order to utilize the Arkansas River water acquired in fiscal 2006, we have to
apply for a change of use with the Colorado water court and this may take
several years to complete.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The change of use of our
Arkansas River water requires a ruling by the Colorado water courts, which
could take several years and be a costly and contentious effort since it is
anticipated that many parties will oppose the transfer of the water.&#160; There are several conditions which must be
satisfied prior to our receiving a change of use decree for transfer of our
Arkansas River water.&#160; One condition that
we must satisfy is a showing of anti-speculation in which we, as the applicant
must demonstrate that we have contractual obligations to provide water service
to customers prior to the water court ruling on the transfer of a water
right.&#160; The water court is also expected
to limit the transfer to the &#147;consumptive use&#148; portion of the water right and
to address changing the historic use of the water from agricultural uses to
other uses such as municipal and industrial use.&#160; We expect to face opposition to any
consumptive use calculations of the historic agricultural uses of this
water.&#160; The water court may impose
conditions on our transfer of the water rights such as requiring us to mitigate
the loss of the farming tax base, imposing re-vegetation requirements to
convert soils from irrigated to non-irrigated, and imposing water quality
measures.&#160; Any such conditions will
likely increase the cost of transferring the water rights.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Valuation
of the &#147;Tap Participation Fees payable to HP A&amp;M&#148; contains estimates and
management assumptions.&#160; The actual
results could differ significantly from those estimates</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We estimated the fair
value of the &#147;Tap Participation Fees payable to HP A&amp;M&#148; using available
historic market information and estimated future market information.&#160; We believe the estimates we used reasonably
reflect the fair value of the Tap Participation Fees as of August&nbsp;31,
2006.&#160; Estimates involve matters of
uncertainty and judgment and interpreting relevant market data is inherently
subjective in nature.&#160; Many factors are
necessary to estimate future market conditions, including but not limited to,
supply and demand for new homes, population growth along the Front Range, cash
flows, tap fee increases at our rate-based districts, and other market forces
beyond our control.&#160; The actual results
could differ materially from our estimates and result in significantly higher
Tap Participation Fees being paid to HP A&amp;M than what are reflected in our
balance sheet and significantly higher imputed interest being reflected on our
future statements of operations associated with the Tap Participation Fees.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">In
the event of default by HP A&amp;M on promissory notes secured by deeds of
trust on our properties, we would be required to cure the defaults or lose the
properties.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As described in our
Annual Report on Form&nbsp;10-K, as amended, for the year ended
August&nbsp;31, 2006, certain of the properties we acquired from HP A&amp;M are
subject to promissory notes secured by deeds of trust on the properties we
own.&#160; Because the likelihood of HP
A&amp;M defaulting on the notes is deemed remote, these promissory notes are
not reflected on our balance sheet.&#160;
However, if HP A&amp;M defaults on</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the promissory notes, we
would be required to cure the notes, which have a balance of approximately
$14.3 million at May&nbsp;31, 2007, or lose the properties which are collateralizing
the promissory notes.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our
net losses may continue and we may not have sufficient liquidity to pursue our
business objectives.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We have experienced
significant net losses and could continue to incur net losses.&#160; For the years ended August&nbsp;31, 2006, 2005
and 2004, we had net losses of approximately $793,000, $1,051,000 and
$1,976,000, respectively, on revenues of approximately $271,700, $234,700 and
$205,000, in the respective periods.&#160; Our
cash flows from operations have been insufficient to fund our operations in the
past, and we have been required to raise debt and equity capital to remain in
operation.&#160; Since 1998, we have raised
approximately $10.1 million through the issuance of approximately 2.5 million
shares of common stock to support our operations.&#160; Our ability to fund our operational needs and
meet our business objectives will depend on our ability to generate cash from
future operations.&#160; If our future cash
flow from operations and other capital resources are insufficient to fund our
operations and the significant capital expenditure requirements to build our
water delivery systems, we may be forced to reduce or delay our business
activities, or seek to obtain additional debt or equity capital, which may not
be available on acceptable terms, or at all.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The
rates we are allowed to charge customers are limited by the District&#146;s contract
with the Land Board and our contract with the District and may be insufficient
to cover our costs of construction and operation.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The prices we can charge
for our water and wastewater services are subject to pricing regulations set in
the District&#146;s contract with the Land Board and our contract with the
District.&#160; Both the tap fees and our
usage rates and charges are based on the average of the rates of our rate-based
districts.&#160; Annually we survey the tap
fees and rates of our rate-based districts and set our tap fees and rates and
charges based on the average of those charged by this group.&#160; Our costs associated with the construction of
water delivery systems and the production, treatment and delivery of our water
are subject to market conditions and other factors, which may increase at a
significantly greater rate than the prices charged by our rate-based
districts.&#160; Factors beyond our control
and which cannot be predicted, such as drought, water contamination and severe
weather conditions, like tornadoes and floods, may result in additional labor
and material costs that may not necessarily be recoverable under our operations
and maintenance contracts, creating additional differences from the costs of
our rate-based districts.&#160; Increased
customer demand can also increase the overall cost of our operations.&#160; If the costs for construction and operation
of our water services, including the cost of extracting our groundwater, exceed
our revenues, we may petition the Land Board for rate increases.&#160; There can be no assurance that the Land Board
would approve a rate increase beyond the average of the rate-based districts.&#160; Our profitability could be negatively
impacted if we experience an imbalance of costs and revenues and are not
successful in receiving approval for rate increases.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We
only have three employees and may not be able to manage the increasing demands
of our expanding operations.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We expect our activities
relating to the Lowry Range and/or the Sky Ranch Agreements to significantly
expand our business, and we are actively pursuing additional development
opportunities in areas near Sky Ranch, as well as opportunities near our
recently acquired Arkansas River water. &#160;We currently have only three employees to
administer our existing assets, interface with applicable governmental bodies,
market our services and plan for the construction and development of our future
assets.&#160; We may not be able to maximize
the value of our water assets because of our limited manpower.&#160; We depend significantly on the services of
Mark W. Harding, our President.&#160; The loss
of Mr. Harding would cause a significant interruption of our operations.&#160; The success of our future business
development and ability to capitalize</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">on growth opportunities
depends on our ability to attract and retain additional experienced and
qualified persons to operate and manage our business.&#160; State regulations set the training,
experience and qualification standards required for our employees to operate
specific water and wastewater facilities.&#160;
Failure to find state-certified and qualified employees to support the
operation of our facilities could put us at risk, among other things, for
operational errors at the facilities, for improper billing and collection
processes, and for loss of contracts and revenues.&#160; We cannot assure you that we can successfully
manage our assets and our growth.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our
business is subject to governmental regulation and permitting
requirements.&#160; We may be adversely
affected by any future decision by the Colorado Public Utilities Commission to
regulate us as a public utility and to impose regulation.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Colorado Public
Utilities Commission (&#147;CPUC&#148;) regulates investor-owned water companies that
hold themselves out to the public as serving, or ready to serve, all of the
public in a service area.&#160; The CPUC
regulates many aspects of public utilities&#146; operations, including the location
and construction of facilities, establishing water rates and fees, initiating
inspections, enforcement and compliance activities and assisting consumers with
complaints.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Although we act as a
service provider under contracts with quasi-municipal metropolitan districts
that are exempt by statute from regulation by the CPUC, the CPUC could decide
to regulate us as a public utility.&#160; If
this were to occur, we might incur significant expense challenging the CPUC&#146;s
assertion of authority, and we may be unsuccessful.&#160; In the future, existing regulations may be
revised or reinterpreted, and new laws and regulations may be adopted or become
applicable to us or our facilities.&#160; If
we become regulated as a public utility, our ability to generate profits could
be limited and we might incur significant costs associated with regulatory compliance.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">There
are many obstacles to our ability to sell our Paradise Water Supply.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We currently earn no
revenues from our Paradise Water Supply, which as of May&nbsp;31, 2007 has a
recorded cost of approximately $5.5 million.&#160;
Our ability to convert our Paradise Water Supply into an income
generating asset is limited.&#160; Due to the
nature of the Paradise Water rights and agreements with other western slope
water interests, our use of the Paradise Water Supply is limited to opportunities
along the western slope.&#160; As part of our
water court decree for the Paradise Water Supply, we are permitted to construct
a storage facility on the Colorado River.&#160;
However, due to the strict regulatory requirements for constructing an
on-channel reservoir, completing the conditional storage right at its decreed
location could be difficult.&#160; As a
result, we cannot assure you that we will ever be able to make use of this
asset or sell the water profitably.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our Paradise Water Supply
is also conditioned on a Finding of Reasonable Diligence from the water court
every six years.&#160; To arrive at that
finding, a water court must determine that we continue to diligently pursue the
development of the water rights, either by us or by some third party who has a
contractual commitment for its use. &#160;If
the water court is unable to make such a finding, our right to the Paradise
Water Supply would be lost and we would be required to impair the Paradise
Water Supply asset and incur a $5.5 million charge against earnings.&#160; The State Engineers office began its latest
review of our conditional water rights in fiscal 2005.&#160; At this time we are unable to estimate when
the review will be complete or the outcome of this review.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Conflicts
of interest may arise relating to the operation of the District.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our officers, employees
and a significant stockholder constitute a majority of the directors of the
District, and Pure Cycle, along with our officers, employees, significant
stockholder and one unrelated individual, own as tenants in common, the 40
acres that form the District.&#160; Pursuant
to State law, directors receive</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$75 for each board
meeting or a maximum compensation of $1,200 per year.&#160; We have made loans to the District to fund
its operations.&#160; At May&nbsp;31, 2007,
total principal and interest owed to us by the District was approximately
$469,800.&#160; The District is a party to our
agreements with the Land Board and receives fees of 5% of the revenues from the
sale of water on the Lowry Range Property and will hold title to the retail
water distribution system at the Sky Ranch development.&#160; Proceeds from the fee collections will
initially be used to repay the District&#146;s obligations to us, but after these
loans are repaid, the District is not required to use the funds to benefit Pure
Cycle.&#160; We have received benefits from
our activities undertaken in conjunction with the District, but conflicts may
arise between our interests and those of the District, and with our officers
who are acting in dual capacities in negotiating contracts to which both we and
the District are parties.&#160; We expect that
the District will expand when more properties are developed and become part of
the District, and our officers acting as directors of the District will have
fiduciary obligations to those other constituents.&#160; There can be no assurance that all conflicts
will be resolved in the best interests of Pure Cycle and its stockholders.&#160; In addition, other landowners coming into the
District will be eligible to vote and to serve as directors of the District.&#160; There can be no assurances that our officers
and employees will remain as directors of the District or that the actions of a
subsequently elected board would not have an adverse impact on our operations.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We
are required to maintain stringent water quality standards and are subject to
regulatory and environmental risks.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We must provide water
that meets all federal and state regulatory water quality standards and operate
our water and wastewater facilities in accordance with these standards.&#160; We face contamination and pollution issues
regarding our water supplies.&#160; Improved
detection technology, increasingly stringent regulatory requirements, and
heightened consumer awareness of water quality issues contribute to an
environment of increased focus on water quality.&#160; In contrast with other providers in Colorado,
we are combining the water delivery and wastewater treatment processes, which
may introduce technical treatment issues that make compliance with water
quality standards more difficult.&#160; We
cannot assure you that we will be able in the future to reduce the amounts of
contaminants in our water to acceptable levels.&#160;
In addition, the standards that we must meet are constantly changing and
becoming more stringent.&#160; For example, in
February 2002, the U.S. Environmental Protection Agency lowered the arsenic
standard in drinking water from 50 parts per billion to 10 parts per
billion.&#160; Future changes in regulations
governing the supply of drinking water and treatment of wastewater may have a
material adverse impact on our financial results.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We handle certain
hazardous materials at our water treatment facilities, primarily sodium
hypochlorite.&#160; Any failure of our
operation of the facilities in the future, including sewage spills,
noncompliance with water quality standards, hazardous materials leaks and
spills, and similar events could expose us to environmental liabilities, claims
and litigation costs.&#160; We cannot assure
you that we will successfully manage these issues, and failure to do so could
have a material adverse effect on our future results of operations by
increasing our costs for damages and cleanup.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our
contracts for the construction of water and wastewater projects may expose us
to certain completion and performance risks.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We intend to rely on
independent contractors to construct our water and wastewater facilities.&#160; These construction activities may involve
risks, including shortages of materials and labor, work stoppages, labor
relations disputes, weather interference, engineering, environmental, permitting
or geological problems and unanticipated cost increases.&#160; These issues could give rise to delays, cost
overruns or performance deficiencies, or otherwise adversely affect the
construction or operation of our water and wastewater delivery systems.</font></p>

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 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p>
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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, we may
experience quality problems in the construction of our systems and facilities,
including equipment failures.&#160; We cannot
assure you that we will not face claims from customers or others regarding product
quality and installation of equipment placed in service by contractors.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certain of our contracts
may be fixed-price contracts, in which we may bear all or a significant portion
of the risk for cost overruns.&#160; Under
these fixed-price contracts, contract prices are established in part based on
fixed, firm subcontractor quotes on contracts and on cost and scheduling
estimates.&#160; These estimates may be based
on a number of assumptions, including assumptions about prices and availability
of labor, equipment and materials, and other issues.&#160; If these subcontractor quotations or cost
estimates prove inaccurate, or if circumstances change, cost overruns may
occur, and our financial results would be negatively impacted.&#160; In many cases, the incurrence of these additional
costs would not be within our control.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We may have contracts in
which we guarantee project completion by a scheduled date.&#160; At times, we may guarantee that the project,
when completed, will achieve certain performance standards.&#160; If we fail to complete the project as
scheduled, or if we fail to meet guaranteed performance standards, we may be
held responsible for cost impacts and/or penalties to the customer resulting
from any delay or for the costs to alter the project to achieve the performance
standards.&#160; To the extent that these events
occur and are not due to circumstances for which the customer accepts
responsibility or cannot be mitigated by performance bonds or the provisions of
our agreements with contractors, the total costs of the project could exceed
our original estimates and our financial results would be negatively impacted.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our customers may require
us to secure performance and completion bonds for certain contracts and
projects.&#160; The market environment for
surety companies has become more risk averse.&#160;
We secure performance and completion bonds for our contracts from these
surety companies.&#160; To the extent we are
unable to obtain bonds, we may not be awarded new contracts.&#160; We cannot assure you that we can secure
performance and completion bonds where required.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We may operate
engineering and construction activities for water and wastewater facilities
where design, construction or system failures could result in injury to third
parties or damage to property.&#160; Any
losses that exceed claims against our contractors, the performance bonds and
our insurance limits at facilities so managed could result in claims against
us.&#160; In addition, if there is a customer
dispute regarding performance of our services, the customer may decide to delay
or withhold payment to us.</font></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Weaknesses
in the Company&#146;s internal controls and procedures could have a material adverse
effect on the Company.</font></b></h2>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Management is responsible
for establishing and maintaining adequate internal control over financial
reporting.&#160; Our internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements in accordance with U.S.&nbsp;generally accepted accounting
principles (&#147;GAAP&#148;).&#160; In making its
assessment of internal control over financial reporting as of August&nbsp;31,
2006, management used the criteria described in &#147;Internal
Control&nbsp;&#151;&nbsp;Integrated Framework&#148; issued by the Committee of Sponsoring
Organizations of the Treadway Commission.&#160;
A material weakness is a control deficiency, or combination of control
deficiencies, that results in a more than remote likelihood a material
misstatement of the annual or interim financial statements will not be
prevented or detected.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Management determined
that a&nbsp;material weaknesses in our internal control over financial
reporting existed as of August&nbsp;31, 2006.&#160;
See Item&nbsp;9A&nbsp;&#151;&nbsp;Controls and Procedures&nbsp;&#151;&nbsp;of our
Annual Report on Form&nbsp;10-K, as amended, for the year ended
August&nbsp;31, 2006, for a description of this material weakness.</font></p>


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

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The material weakness
identified resulted in an adverse opinion by our independent registered public
accounting firm on the effectiveness of our internal control over financial
reporting.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are developing a
remediation plan and intend to implement remediation measures during fiscal
2007, designed to remediate the material weakness in our internal controls by
August&nbsp;31, 2007.&#160; We cannot assure
you as to when the remediation plan will be fully implemented, nor can we assure
you that additional material weaknesses will not be identified by our
management or independent accountants in the future.&#160; In addition, even after the remedial measures
are fully implemented, our internal controls may not prevent all potential
error and fraud, because any control system, no matter how well designed, can
only provide reasonable and not absolute assurance that the objectives of the
control system will be achieved.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">SELLING
STOCKHOLDERS<a name="SellingStockholders_190121"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The common stock
registered on behalf of the selling stockholders in the registration statement
of which this prospectus is a part consists of the following:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>750,000
shares of common stock that have been issued to High Plains A&amp;M, LLC (&#147;HP
A&amp;M&#148;) pursuant to the Asset Purchase Agreement dated May&nbsp;10, 2006 by
and between us and HP A&amp;M (the &#147;Arkansas River Agreement&#148;) representing a
portion of the purchase price of our Arkansas River water rights and related
real property.&#160; In connection with the
Arkansas River Agreement, we entered into a Registration Rights Agreement dated
August&nbsp;31, 2006 granting HP A&amp;M the right to include up to 750,000
shares in a registration statement we file, subject to certain conditions.&#160; The 750,000 shares owned by HP A&amp;M are
being registered hereunder pursuant to the terms of that Registration Rights
Agreement.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>242,169
shares of common stock that have been issued to Inco Securities Corporation (&#147;Inco&#148;)
pursuant to the Purchase and Sale Agreement dated August 28, 2006 by and
between us and Inco in exchange for (1)&nbsp;Inco&#146;s rights to receive
$4,698,001 pursuant to the Comprehensive Amendment Agreement No.&nbsp;1, dated
as of April&nbsp;11, 1996 (the &#147;CAA&#148;), between us and certain investors
(including Inco), and (2)&nbsp;the return to us of two Amended Term Notes, due
in August 2007, for cancellation.&#160; The
Amended Term Notes had principal balances totaling $424,500 and accrued unpaid
interest totaling $471,476.&#160; The 242,169
shares owned by Inco are being registered hereunder pursuant to the terms of
the Purchase and Sale Agreement.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>1,414,528
shares of common stock sold by the issuer to the remaining selling stockholders
at fair market value pursuant to stock purchase agreements entered into between
1991 and 1996 and pursuant to the exercise of warrants in 2004, which warrants
were issued in connection with loans made to us by the selling stockholders.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following table sets
forth certain information regarding the beneficial ownership of shares of our
common stock, as of July&nbsp;2, 2007, by the selling stockholders.&#160; The information in the table below is based upon
information provided to us by the selling stockholders.&#160; The selling stockholders may sell all, some
or none of their shares in this offering.&#160;
See &#147;Plan of Distribution.&#148; Unless otherwise noted, the person
identified possesses sole voting and investment power with respect to the
offered shares.</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><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 style="page-break-inside:avoid;">
  <td width="42%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:42.52%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><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;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><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;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><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;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="25%" colspan="3" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:25.46%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Ownership&nbsp;After&nbsp;Offering(2)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="42%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:42.52%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Name</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;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number&nbsp;of&nbsp;<br>
  Shares<br>
  Beneficially<br>
  Owned&nbsp;(1)</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;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number&nbsp;of&nbsp;<br>
  Shares&nbsp;that&nbsp;<br>
  May&nbsp;Be&nbsp;Sold</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;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number<br>
  Shares</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;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" 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:11.54%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Percent</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="42%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:42.52%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Apex Investment
  Fund&nbsp;II, L.P.(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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">677,239</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">677,239</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.82%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="42%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:42.52%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Environmental
  Private Equity Fund&nbsp;II Liquidating Trust(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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">309,371</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">309,371</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.82%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="42%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:42.52%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Environmental
  Venture Fund Liquidating Trust(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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">241,362</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">241,362</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.82%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="42%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:42.52%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">High Plains
  A&amp;M, LLC(4)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,000,000</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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">750,000</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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,250,000</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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.2</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.82%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="42%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:42.52%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Inco Securities
  Corporation(5)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">242,169</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">242,169</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.82%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="42%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:42.52%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Productivity
  Fund&nbsp;II Liquidating Trust(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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">186,556</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">186,556</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><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;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.82%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="42%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:42.52%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,656,697</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,406,697</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,250,000</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.54%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><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:1.82%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<div style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><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; </font>The
shares of common stock considered beneficially owned by the selling
stockholders are indicated.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><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; </font>Assumes
the sale of all of the shares offered by the selling stockholder pursuant to
this prospectus and the sale of no shares by us.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><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; </font>The
persons who have or share investment and voting control of the shares owned by
Apex Investment Fund&nbsp;II, L.P. (&#147;Apex&#148;), after looking through one or more
intermediate partnerships are George Middlemas; Paul&nbsp;J. Renze; Stellar
Investment Co., an S corporation 100% owned by James&nbsp;A. Johnson; and First
Analysis Corporation, a Delaware corporation (&#147;FAC&#148;).&#160; FAC is controlled by its majority stockholder
and President, F.&nbsp;Oliver Nicklin, Jr.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><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;&#160;&#160;&#160; </font>The persons who have or
share investment and voting control of the shares owned by Environmental
Private Equity Fund II Liquidating Trust (&#147;EPFund&#148;) after looking through one
or more intermediate partnerships are FAC (controlled by F. Oliver Nicklin,
Jr.), Bret&nbsp;R. Maxwell, and Mark&nbsp;T. Koulogeorge.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><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;&#160;&#160;&#160; </font>FAC (controlled by F. Oliver
Nicklin, Jr.) has investment and voting control of the shares owned by
Environmental Venture Fund Liquidating Trust (&#147;EVFund&#148;).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><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;&#160;&#160;&#160; </font>The persons who have or
share investment and voting control of the shares owned by The Productivity
Fund II Liquidating Trust (&#147;PFund II&#148;) after looking through one or more
intermediate partnerships are FAC (controlled by F. Oliver Nicklin, Jr.) and
Bret&nbsp;R. Maxwell.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><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;&#160;&#160;&#160; </font>We understand that each of
the persons named above as an officer, director, partner or other affiliate of
Apex, EPFund, EVFund, and PFund II disclaims beneficial ownership of the shares
of common stock described herein.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><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; </font>The
persons who have or share investment and voting control of the shares owned by
HP A&amp;M are Mark&nbsp;D. Campbell, H. Hunter White and M. Walker Baus.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><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; </font>Inco
is a Delaware corporation and an indirect wholly-owned subsidiary of CVRD Inco
Limited, a corporation organized under the laws of Canada.&#160; CVRD Inco Limited is a wholly-owned
subsidiary of Companhia Vale do Rio Doce (&#147;CVRD&#148;), a corporation organized
under the laws of Brazil.&#160; CVRD shares
are traded on the Sao Paulo Stock Exchange, the New York Stock Exchange and the
Madrid Stock Exchange-Latibex.&#160; CVRD has ultimate
investment and voting control of the shares owned by Inco.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Except as described
below, none of the selling stockholders has, or has had within the last three
years, any position, office or material relationship with us.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As a result of the
Arkansas River Agreement, HP A&amp;M owns 16.3% of our common stock.&#160; The members and managers of HP A&amp;M,
namely Mark&nbsp;D. Campbell, H. Hunter White and M. Walker Baus, are also
deemed indirectly to own 16.3% of our common stock.&#160; In addition, Mr.&nbsp;Campbell was appointed to
our board of directors on August&nbsp;31, 2006 pursuant to the terms of the
Arkansas River Agreement.&#160; As of the date
of this filing, HP A&amp;M (and indirectly its members) is entitled to receive
10% of our tap fees received on the sale of the next 38,965 water taps.&#160; HP A&amp;M is also entitled to the lease
income from the real property we purchased pursuant to that agreement until
August&nbsp;31, 2011.&#160; As of May 31,
2007, we have estimated the value of the Tap Participation Fees payable to HP
A&amp;M at approximately</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$48.2&nbsp;million (which
includes imputed interest of approximately $3.5&nbsp;million) based on a
discounted cash flow valuation analysis.&#160;
HP A&amp;M and its members had no affiliation with us prior to the
closing of the Arkansas River Agreement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Apex is controlled by several
general partners including George Middlemas, a Pure Cycle director.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">EPFund was a party to a
voting agreement, which obligated Margaret Hansson and Fletcher Byrom (both
retired directors), TPC Ventures, LLC (as transferee of shares owned by former
director Thomas Clark), Apex, EVFund, and PFund&nbsp;II to vote all of their
shares of common stock in favor of a director candidate designated by
EPFund.&#160; The EPFund director candidate
was George Middlemas.&#160; The voting
agreement is no longer in effect.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Each of the selling
stockholders or their affiliates, other than HP A&amp;M, have at various dates
prior to 1996 made an investment in Pure Cycle which resulted in the selling
stockholder being entitled to a contingent return on such selling stockholder&#146;s
investment from the proceeds of the sale of Export Water pursuant to our
CAA.&#160; Inco sold all such rights to us as
of August&nbsp;28, 2006.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><a name="UseOfProceeds_190528"></a><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">USE OF PROCEEDS</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Unless a prospectus
supplement indicates otherwise, the net proceeds we receive from the sale of
the offered shares will be used to pay outstanding indebtedness, for water
system expenditures, and for working capital and other general corporate
purposes, including acquisitions.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will not receive any
of the proceeds from the sale of the offered shares by the selling stockholders.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">PLAN OF
DISTRIBUTION<a name="PlanOfDistribution_190538"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We and the selling
stockholders and their successors (which includes their pledgees, donees,
partnership distributees and other transferees receiving the offered shares in
non-sale transfers) may sell the offered shares directly to purchasers or
through underwriters, broker-dealers or agents.&#160;
Underwriters, broker-dealers or agents may receive compensation in the
form of discounts, concessions or commissions from us, the selling stockholders
or the purchasers.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The offered shares may be
sold in one or more transactions:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>at
fixed prices;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>at
prevailing market prices at the time of sale;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>at
varying prices determined at the time of sale; or</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>at
negotiated prices.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">These sales may be
effected in transactions, which may involve crosses or block transactions, in
the following manner:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>on
any national securities exchange or quotation service on which our common stock
may be listed or quoted at the time of sale;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>in
the over-the-counter market;</p>


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<p style="margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>in
transactions other than on these exchanges or services or in the
over-the-counter market;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>through
the writing and exercise of options and warrants, whether these options and
warrants are listed on an option or warrant exchange or otherwise; or</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>through
the settlement of short sales.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, any
securities covered by this prospectus that qualify for sale pursuant to Rule
144 or Rule&nbsp;144A under the Securities Act may be sold under Rule 144 or
Rule 144A rather than pursuant to this prospectus.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We and/or the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the offered
shares and deliver these shares to close out short positions or loan or pledge
the underlying shares to broker-dealers that in turn may sell these shares.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The selling stockholders
may also sell shares of common stock short and deliver shares of common stock
covered by this prospectus to close out short positions, provided that the
short sale is made after the registration statement is declared effective.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The selling stockholders
may pledge or grant a security interest in some or all of the shares of common
stock owned by it and, if it defaults in the performance of its secured
obligations, the pledgees or secured parties may offer and sell the shares of
common stock from time to time pursuant to this prospectus.&#160; The selling stockholders also may transfer or
donate the shares of common stock in other circumstances, in which case the
transferees, donees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The aggregate proceeds to
us or the selling stockholders, as applicable, from the sale of the offered
shares will be the purchase price of the shares less any discounts and
commissions.&#160; We will not receive any of
the proceeds from the sale of the offered shares by the selling stockholders.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The shares will be sold
only through registered or licensed brokers or dealers if required under
applicable state securities laws.&#160; In addition,
in certain states, the shares may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The selling stockholders
and any underwriters, broker-dealers or agents that participate in the sale of
the offered shares may be deemed to be &#147;underwriters&#148; within the meaning of
Section 2(11) of the Securities Act of 1933 (the &#147;Securities Act&#148;).&#160; Any commissions paid, or discounts or
concessions allowed, to any broker-dealer in connection with any distribution
of the offered shares may be deemed to be underwriting discounts and
commissions under the Securities Act.&#160; At
the time a particular offering of the shares is made, a prospectus supplement,
if required, will be distributed which will set forth the aggregate number of
shares of common stock being offered and the terms of the offering, including
the name or names of any broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from us or the selling stockholders
and any discounts or commissions allowed or paid to broker-dealers.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Underwriters and agents
may be entitled to indemnification by us or the selling stockholders against
some civil liabilities, including liabilities under the Securities Act, or to
contributions with respect to payments which the underwriters or agents may be
required to make relating to these liabilities.&#160;
Underwriters and agents may be customers of, engage in transactions
with, or perform services for, us or the selling stockholders in the ordinary
course of business.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;text-transform:uppercase;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">&nbsp;</font></b></p>


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<div>


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

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Each selling stockholder
has represented to us that at the time of receipt of its shares and at the time
of filing the registration statement with the SEC, such selling stockholder had
no agreements or understandings, directly or indirectly, with any person to
distribute the shares.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There can be no assurance
that we or the selling stockholders will sell any or all of the shares of
common stock registered pursuant to the registration statement of which this
prospectus is a part.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If the selling
stockholders use this prospectus for any sale of the common stock, they will be
subject to the prospectus delivery requirements of the Securities Act, and they
will be responsible for complying with applicable provisions of the Securities
Act and the Securities and Exchange Act of 1934 (the &#147;Exchange Act&#148;) and the
rules and regulations promulgated thereunder, including Regulation&nbsp;M.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The selling stockholders
will pay all underwriting discounts and selling commissions, if any, associated
with the sale of their shares.&#160; We will
pay all of the other expenses related to the registration, offering, and sale
of shares on behalf of all of the selling stockholders, other than HP
A&amp;M.&#160; With respect to the shares
registered on behalf of HP A&amp;M, we and HP A&amp;M have agreed to bear all
expenses incurred pursuant to this registration statement (excluding attorneys&#146;
fees and disbursements) on a pro rata basis based on the number of shares
offered by each party in the registration.&#160;
For purposes of computing HP A&amp;M&#146;s pro rata portion, all shares
registered on behalf of the other selling stockholders are deemed shares
offered by us.&#160; Each of HP A&amp;M and us
is responsible for our own attorneys&#146; fees and disbursements.&#160; We have also agreed to indemnify Inco and HP
A&amp;M against some specified liabilities, including some that may arise under
the Securities Act.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We have agreed to keep
the registration statement, of which this prospectus is a part, effective for
Inco until the earlier of (i)&nbsp;the second anniversary of the effective date
of the registration statement or (ii)&nbsp;the date on which all of the shares
owned by Inco have been sold or otherwise transferred.&#160; We have agreed to keep the registration
statement, of which this prospectus is a part, effective for HP A&amp;M until
the earlier of (i)&nbsp;the date as of which the shares owned by HP A&amp;M may
be transferred under Rule&nbsp;144(k) of the Securities Act or (ii)&nbsp;all of
the shares registered hereunder for HP A&amp;M have been sold or otherwise
transferred (except transfers to certain permitted assignees under the
Registration Rights Agreement).&#160; We
intend to keep this prospectus effective until we have fulfilled our
obligations to the selling stockholders or we have sold all the shares of
common stock registered on our behalf hereunder, whichever is later.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">LEGAL MATTERS<a name="LegalMatters_190827"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The validity of the
securities offered by this prospectus will be passed upon by Davis Graham &amp;
Stubbs LLP, Denver, Colorado.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXPERTS<a name="Experts_190828"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our audited financial
statements as of August&nbsp;31, 2006 and 2005 and for the years ended
August&nbsp;31, 2006 and 2005 and management&#146;s report on the effectiveness of
internal control over financial reporting included in our Annual Report on Form
10-K, as amended on Form&nbsp;10-K/A-1 and Form&nbsp;10-K/A-2,
incorporated by reference herein (which reports (1)&nbsp;express an unqualified
opinion on the financial statements and include an explanatory paragraph
referring to the restatement of our 2006 financial statements and change in
accounting for stock-based compensation expense in 2006, (2)&nbsp;express an
unqualified opinion on management&#146;s assessment regarding the effectiveness of
internal control over financial reporting, and (3)&nbsp;express an adverse
opinion on the effectiveness of internal control over financial reporting),
have been audited by Anton Collins Mitchell LLP, an independent registered
public accounting firm, to the extent and for the period set forth in its
reports, and are incorporated herein in reliance upon such reports given upon
the authority of that firm as experts in accounting and auditing.</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The statements of
operations, stockholders&#146; equity and comprehensive loss, and cash flows of Pure
Cycle Corporation for the year ended August&nbsp;31, 2004, have been
incorporated by reference herein in reliance upon the report of KPMG LLP,
independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">WHERE YOU CAN FIND
MORE INFORMATION<a name="WhereYouCanFindMoreInformation_190836"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We file annual, quarterly
and special reports, proxy statements and other information with the SEC.&#160; You may read and copy any of these documents
at the SEC&#146;s public reference room at 100 F Street N.E., Room 1580, Washington,
D.C. 20549.&#160; Please call the SEC at
1-800-SEC-0330 for further information on the public reference room.&#160; Our SEC filings are also available to the
public at the SEC&#146;s website at http://www.sec.gov.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
SEC allows us to &#147;incorporate by reference&#148; the information we file with the
SEC, which means that we can disclose important information to you by referring
you to those documents.&#160; The information
incorporated by reference is considered part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede, as applicable, the information in this prospectus.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
following documents, which were previously filed with the SEC pursuant to the
Exchange Act, are hereby incorporated by reference:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>our
Annual Report on Form 10-K, as amended on Form&nbsp;10-K/A-1 and
Form&nbsp;10-K/A-2, for the year ended August&nbsp;31, 2006;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>our Quarterly Report on Form&nbsp;10-Q, as
amended on Form 10-Q/A-1, for the quarter ended November&nbsp;30, 2006;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>our Quarterly Report on Form 10-Q for the quarter
ended February 28, 2007;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>our Quarterly Report on Form 10-Q for the quarter
ended May&nbsp;31, 2007;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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>our Current Reports on Form 8-K filed on the
following dates:</p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">September 1, 2006 (2 reports)<br>
November 21, 2006<br>
December 18, 2006<br>
January 16, 2007</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;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 description of our common stock contained
in&#160; our Registration Statement on
form SB-2 (SEC File No. 333-114568) filed with the SEC on April 19, 2004.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All
reports and other documents filed by us pursuant to Sections&nbsp;13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this prospectus and
prior to the termination of this offering shall be deemed to be incorporated by
reference into this prospectus and shall be a part hereof from the date of
filing of such reports and documents.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any
statement contained in a document incorporated or deemed to be incorporated by
reference in this prospectus shall be deemed modified, superseded or replaced
for purposes of this prospectus to the extent that a statement contained in
this prospectus, or in any subsequently filed document that also is deemed to
be incorporated by reference in this prospectus, modifies, supersedes or
replaces such statement.&#160; Any statement
so modified, superseded or replaced shall not be deemed, except as so</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">modified,
superseded or replaced, to constitute a part of this prospectus.&#160; Subject to the foregoing, all information
appearing in this prospectus is qualified in its entirety by the information
appearing in the documents incorporated by reference.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Statements
contained in this prospectus as to the contents of any contract or other
document are not necessarily complete, and in each instance we refer you to the
copy of the contract or document filed as an exhibit to the registration
statement or the documents incorporated by reference in this prospectus, each
such statement being qualified in all respects by such reference.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You may receive a copy of any of these filings, at no cost,
by writing, calling, or emailing Pure Cycle Corporation at 8451 Delaware St.,
Thornton, Colorado 80260, telephone: 303-292-3456, email:
info@purecyclewater.com,</font><b>  </b>and directed to the attention of Mark Harding,
our President and CFO.</p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;text-transform:uppercase;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">&nbsp;</font></b></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16</font></p>
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<div>
 <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;"><a name="scotch"></a><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p> </div>

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

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">You
should rely only on the information incorporated by reference or provided in
this prospectus or any supplement to this prospectus.&#160; We and the selling stockholders have not
authorized anyone to provide you with different information.&#160; Neither we nor the selling stockholders are
making an offer to sell these securities in any jurisdiction where the offer or
sale is not permitted or to any person to whom an offer or sale is not
permitted.&#160; You should not assume that
the information in this prospectus is accurate as of any date other than the
date on the front of this prospectus.</font></b></p>

<p align="center" style="margin:12.0pt 0pt;text-align:center;"><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:12.0pt 0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PURE CYCLE CORPORATION</font></b></p>

<p align="center" style="margin:12.0pt 0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">COMMON STOCK</font></b></p>

<p align="center" style="margin:12.0pt 0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

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

<p align="center" style="margin:12.0pt 0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PROSPECTUS</font></b></p>

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

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-transform:uppercase;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">&nbsp;</font></b></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;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p> </div>
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