NOTE 14 – SUBSEQUENT EVENTS

The Company, Rangeview District and the State Land Board filed a Water Court Application on December 31, 2020 seeking to: (1) adjudicate 1,635 acre feet of water from the Box Elder Creek Alluvial aquifer (a new water right), (2) consolidate and enlarge certain reservoirs on the Lowry Ranch, (3) approve new places of use for existing water rights, (4) approve new places of storage for certain water rights, and (5) approve a new alternate diversion point for certain existing water rights. On February 7, 2025, the Water Court initially denied the application regarding the new water rights and the reservoir enlargement. While this ruling did not impact the Company’s existing water rights or reservoir storage sites, the Company accrued an estimated $0.5 million liability for probable legal expense reimbursement claims from opposing parties. The Company and all opposing parties continued to work together on a resolution and reached a settlement agreement, which was approved by the Water Court on December 9, 2025. The settlement replaces the February 7, 2025 court ruling and grants the Company and the Rangeview Metropolitan District the new water rights, with certain stipulated conditions, and approves the remaining requests in their application.

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Under the terms of the settlement, the Company agreed to pay $0.9 million to the opposing parties to cover certain costs relating to the water court. As of November 30, 2025, the Company reversed the previously recorded $0.5 million legal accrual, as the payment of opposing parties' legal expenses is no longer probable outside of the agreed settlement terms. The Company will record the new water asset in the second quarter of fiscal 2026, capitalizing the $0.9 million settlement payment as part of the cost basis of the new water right, coinciding with the Company obtaining the legal right to use the adjudicated water.