Pure Cycle Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Aug. 31, 2013

Significant components of the Company’s deferred tax assets as of August 31 are as follows:

	For the Fiscal Years Ended August 31,
	2013			2012
Deferred tax assets:
Net operating loss carryforwards	$	6,080,000		$	5,948,300
Imputed interest on Tap Participation Fee		10,074,200			8,852,500
Deferred revenue		494,600			560,700
Impairment charges		—			2,408,800
Depreciation and depletion		4,899,800			2,425,700
Other		43,600			45,000
Valuation allowance		(21,592,200	)		(20,241,000	)
Net deferred tax asset	$	—		$	—

Schedule of income tax reconciliation

Income taxes computed using the federal statutory income tax rate differs from our effective tax rate primarily due to the following for the fiscal years ended August 31:

	For the Fiscal Years Ended August 31,
	2013			2012			2011
Expected benefit from federal taxes at statutory rate of 34%	$	(1,411,200	)	$	(5,922,300	)	$	(2,045,500	)
State taxes, net of federal benefit		(137,000	)		(574,800	)		(198,500	)
Expiration of net operating losses		147,400			90,000			121,000
Permanent and other differences		27,400			25,800			37,800
Change in valuation allowance		1,373,400			6,381,300			2,085,200
Total income tax expense / benefit	$	—		$	—		$	—