NOTE 5 – WATER, LAND AND OTHER FIXED ASSETS

The Company’s water rights and current water and wastewater service agreements, including capitalized terms not defined herein, are more fully described in Note 4 to the financial statements in the 2025 Annual Report.

Investment in Water and Water Systems

The Company’s Investments in water and water systems consist of the following costs and accumulated depreciation and depletion:

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During the three and six months ended February 28, 2026, the Company’s Rangeview water supply increased $0.9 million related to the settlement of the Company’s and Rangeview District’s 2020 Water Court application. The settlement included the adjudication of 1,635 acre feet of water from the Box Elder Creek Alluvial aquifer along with other water right improvements. Increases in construction in progress and Rangeview water system primarily related to additions the Company made to the water and wastewater system within the Sky Ranch community to support future land development.

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Single-Family Rental Homes

As of February 28, 2026, Pure Cycle has 19 single-family homes, paired homes or townhomes rented or available for rent under separate lease agreements. Pure Cycle has contracts for the construction of 39 additional rental homes in Phases 2B and 2C, all of which the Company believes will be available for rent in fiscal 2026. As of February 28, 2026, the Company had reserved an additional four lots in Phases 2C and 2D of Sky Ranch for future rental units, which are not yet under contract for construction. When combined with the 19 units already built, these additions will bring the total single-family rentals to 62. The Company expects the majority of these homes to be built and rented in 2026, at which point Pure Cycle will evaluate the economics of the segment to determine the pace of future expansion into the rental market.