Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING

v3.19.3
SEGMENT REPORTING
 12 Months Ended
Aug. 31, 2019
SEGMENT REPORTING [Abstract]  
SEGMENT REPORTING
NOTE 13 – SEGMENT REPORTING

An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, to evaluate performance and make operating decisions. The Company has identified its CODM as the Chief Executive Officer.

During the year 2018, the Company began construction of lots at Sky Ranch, which the Company has identified as a segment. Currently, the Company operates its wholesale water and wastewater services segment and land development activities at Sky Ranch as its two lines of business.

The wholesale water and wastewater services business includes selling water service to customers, which water is provided by the Company using water rights owned or controlled by the Company, and developing infrastructure to divert, treat and distribute that water and collect, treat and reuse wastewater.

As part of the Company’s land development activities at Sky Ranch, the Company entered into contracts for the sale of lots (see Note 2 – Summary of Significant Accounting Policies). The Company has identified land development and lot sales as a separate segment beginning in the fiscal year 2018.

Oil and gas royalties and licenses are a passive activity and not an operating business activity and, therefore, are not classified as a segment.

The following table summarizes wholesale water and wastewater services and land development revenue information by segment (1):

   
For the Fiscal Years Ended August 31,
  
   
2019
    
2018
  
Wholesale water and wastewater services
  
$
8,405,520
    
$
4,794,749
  
Land development activities
    
11,955,989
      
2,164,450
  
Total wholesale water and wastewater services and land development revenues
  
$
20,361,509
    
$
6,959,199
  

(1) The Company had other income from non-segment sources (oil and gas, interest and other) of $529,293 and $441,407 for the fiscal years ended August 31, 2019 and 2018, respectively.

The following table summarizes wholesale water and wastewater services and land development pretax income by segment:

   
For the Fiscal Years Ended August 31,
  
   
2019
    
2018
  
Wholesale water and wastewater services
  
$
5,766,783
    
$
2,646,988
  
Land development activities
    
651,027
      
150,610
  
Depreciation, general and administrative expenses
    
(3,419,149
)
    
(3,106,325
)
Total income (loss) from operations
  
$
2,998,661
    
$
(308,727
)

The following table summarizes total assets for the Company’s wholesale water and wastewater services business and land development business by segment.  The assets consist primarily of water rights and water and wastewater systems in the Company’s wholesale water and wastewater services segment and land, inventories and deposits in the Company’s land development segment.  The Company’s other assets (“Corporate”) primarily consist of cash and cash equivalents, equipment, mineral rights, related party notes receivables and a deferred tax asset.

   
August 31, 2019
    
August 31, 2018
  
Wholesale water and wastewater services
  
$
51,588,079
    
$
36,721,884
  
Land development activities
    
16,866,542
      
9,497,106
  
Corporate
    
15,266,783
      
25,687,625
  
Total assets
  
$
83,721,404
    
$
71,906,615
  

For the years ended August 31, 2019 and 2018, the Company had asset additions of $14.1 million and $2.9 million, respectively, in the wholesale water and wastewater services segment.
 
For the years ended August 31, 2019 and 2018, the Company had asset additions of $18.6 million and $4.7 million, respectively, in the land development activities segment. The Company allocated $4.8 million from other water and wastewater to its land development activities segment in fiscal 2018.