10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A

(Amendment No. 1)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-8814

PURE CYCLE CORPORATION

(Exact name of registrant as specified in its charter)

Colorado	84-0705083
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1490 Lafayette St, Suite 203, Denver, CO 80218	(303) 292-3456
(Address of principal executive offices) (Zip Code)	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock 1/3 of $.01 par value	The NASDAQ Stock Market, LLC
(Title of each class)	(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No   x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $28,579,500

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: November 21, 2012: 24,037,596

DOCUMENTS INCORPORATED BY REFERENCE

None.

Explanatory Note

This Amendment No. 1 (the “Amendment”) on Form 10-K/A to amend its Annual Report on Form 10-K for the fiscal year ended August 31, 2012 (the “Original Filing”) that was filed with the Securities and Exchange Commission on November 28, 2012, is solely for the purpose of furnishing Exhibit 101 – Interactive Data File (XBRL Exhibit) required by Rule 405 of Regulation S-T, which was not included with the Original Filing.

This Amendment does not reflect any subsequent events occurring after the original filing date of the Report and does not modify or update in any way disclosures made in the Report except to furnish the exhibit described above.

Item 15. Exhibits and Financial Statement Schedules

3. Exhibits. The following exhibits of the Company are included herein.

Exhibit No.	Description
31.1	Certification under Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**

* Previously filed.

** In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 hereto is “furnished” and not “filed.”

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PURE CYCLE CORPORATION

By:	/s/ Mark W. Harding
Mark W. Harding, President and Chief Financial Officer
December 27, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Mark W. Harding	President, Chief Financial Officer and Director	December 27 2012
Mark W. Harding	(Principal Executive Officer, Principal Financial and Accounting Officer)
/s/ Harrison H. Augur
Harrison H. Augur	Chairman, Director	December 27, 2012
/s/ Arthur G. Epker III
Arthur G. Epker III	Director	December 27, 2012
/s/ Richard L. Guido
Richard L. Guido	Director	December 27, 2012
/s/ Peter C. Howell
Peter C. Howell	Director	December 27, 2012
/s/ George M. Middlemas
George M. Middlemas	Director	December 27, 2012

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Note 5 - Participating Interests in Export Water (Detail) - Potential Third Party Obligations (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011
Arapahoe County tap fees *	$ 34,522
Export Water Proceeds Received [Member]
Original balances		0
Acquisitions		0
Option payments - Sky Ranch and The Hills at Sky Ranch		110,400
Arapahoe County tap fees *		532,968
Export Water sale payments	26,163	85,123
Balance	754,654	728,491
Initial Export Water Proceeds To Pure Cycle [Member]
Original balances		218,500
Acquisitions		28,077,500
Option payments - Sky Ranch and The Hills at Sky Ranch		(42,280)
Arapahoe County tap fees *		(373,078)
Export Water sale payments	(18,314)	(59,585)
Balance	27,802,743	27,821,057
Total Potential Third Party Obligation [Member]
Original balances		31,807,732
Acquisitions		(28,077,500)
Option payments - Sky Ranch and The Hills at Sky Ranch		(68,120)
Arapahoe County tap fees *		(159,890)
Export Water sale payments	(7,849)	(25,538)
Balance	3,468,835	3,476,684
Participating Interests Liability [Member]
Original balances		11,090,630
Acquisitions		(9,789,983)
Option payments - Sky Ranch and The Hills at Sky Ranch		(23,754)
Arapahoe County tap fees *		(55,754)
Export Water sale payments	(3,304)	(8,907)
Balance	1,208,928	1,212,232
Contingency [Member]
Original balances		20,717,102
Acquisitions		(18,287,517)
Option payments - Sky Ranch and The Hills at Sky Ranch		(44,366)
Arapahoe County tap fees *		(104,136)
Export Water sale payments	(4,545)	(16,631)
Balance	$ 2,259,907	$ 2,264,452

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Note 10 - Income Taxes (Detail) - Significant Components of Deferred Tax Assets (USD $)	Aug. 31, 2012	Aug. 31, 2011
Deferred tax assets:
Net operating loss carryforwards	$ 5,948,300	$ 5,259,200
Imputed interest on Tap Participation Fee	8,852,500	7,558,000
Deferred revenue	560,700	702,000
Impairment charges	2,408,800
Depreciation and depletion	2,425,700	301,600
Other	45,000	38,900
Valuation allowance	$ (20,241,000)	$ (13,859,700)

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Note 9 - Significant Customer (Detail)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2010
The District [Member]
Entity-Wide Revenue, Major Customer, Percentage	86.00%	91.00%	94.00%
Entity-Wide Accounts Receivable, Major Customer, Percentage	87.00%	16.00%
Ridgeview Youth Services Center on Behalf of The District [Member]
Entity-Wide Revenue, Major Customer, Percentage	53.00%	60.00%	64.00%
Entity-Wide Accounts Receivable, Major Customer, Percentage	13.00%	74.00%

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Note 3 - Fair Value Measurements (Detail) - Assets and Liabilities Measured at Fair Value (USD $)	12 Months Ended
	Aug. 31, 2012
Maketable Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value	$ 1,101,367
Maketable Securities [Member]
Fair Value	1,101,367
Cost / Other Value	1,101,367
Total Unrealized Gains (Losses)	(1,081)
Tap Participation Fees [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value	68,269,176
Tap Participation Fees [Member]
Fair Value	68,269,176
Cost / Other Value	$ 68,269,176

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Note 4 - Water Assets (Tables)

12 Months Ended

Aug. 31, 2012

Property, Plant and Equipment [Table Text Block]

	August 31, 2012					August 31, 2011
	Costs		Accumulated Depreciation and Depletion			Costs		Accumulated Depreciation and Depletion
Arkansas River Valley assets	$	69,112,300	$	(1,315,900	)	$	81,318,800	$	(1,144,100	)
Rangeview water supply		14,376,100		(7,100	)		14,299,700		(6,600	)
Paradise water supply		-					5,540,200		–
Sky Ranch water rights and other costs		3,924,100		(50,800	)		3,915,200		(21,800	)
Fairgrounds water and water system		2,899,900		(534,500	)		2,899,900		(446,400	)
Rangeview water system		167,700		(67,600	)		167,700		(62,400	)
Water supply – other		25,600		(19,400	)		25,600		(13,700	)
Totals		90,505,700		(1,995,300	)		108,167,100		(1,695,000	)
Net investments in water and water systems	$	88,510,400				$	106,472,100

Schedule of Purchase Price Allocation [Table Text Block]

Asset	Estimated Fair Value		% of Total Fair Value			Allocable Acquisition Costs		Fair Value Allocation		Costs Specific to Land 1		Total Values Assigned to Identifiable Assets
Land	$	10,637,900		48.13	%	$	7,187,900	$	3,459,800	$	279,100	$	3,738,900
Water 2		11,462,700		51.87	%		7,187,900		3,728,100		-		3,728,100
	$	22,100,600		100	%			$	7,187,900	$	279,100	$	7,467,000
Costs of acquisition 3													87,100
Total capitalized costs related to Sky Ranch												$	7,554,100

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Note 11 - 401(k) Plan (Detail) (USD $)	12 Months Ended		14 Months Ended
	Aug. 31, 2011	Aug. 31, 2010	Oct. 31, 2012
Defined Contribution Plan, Administrative Expenses	$ 2,600	$ 2,400	$ 3,400

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Note 7 - Long-Term Debt and Operating Lease (Detail) - Future Maturities (USD $)	Aug. 31, 2012	Aug. 31, 1996
Mortgage notes	$ 9,550,300
Less: current portion	(5,340,900)
Total long-term mortgage payable	4,209,400
2013	5,340,900
2014	1,064,500
2015	1,064,500
2016	1,064,500
2017	1,015,900
Total	9,550,300	31,800,000
Held and Defaulted on by HP A&M [Member]
Mortgage notes	5,093,400
Mortgage Notes [Member]
Mortgage notes	$ 4,456,900

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Note 4 - Water Assets (Detail) - Allocation of Acquisition Costs and Relative Fair Values (USD $)								12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2012 Land [Member] Sky Ranch [Member]	Aug. 31, 2010 Land [Member] Sky Ranch [Member]	Aug. 31, 2012 Water [Member] Sky Ranch [Member]	Aug. 31, 2012 Water Assets Total [Member] Sky Ranch [Member]	Aug. 31, 2010 Water Assets Total [Member] Sky Ranch [Member]	Aug. 31, 2012 Sky Ranch [Member]
Estimated Fair Value	$ 111,582,080	$ 116,122,652	$ 10,637,900		$ 11,462,700	$ 22,100,600
% of Total Fair Value			48.13%		51.87%	100.00%
Allocable Acquisition Costs			7,187,900		7,187,900
Fair Value Allocation			3,459,800		3,728,100	7,187,900
Costs Specific to Land				279,100			279,100
Total Values Assigned to Identifiable Assets			3,738,900		3,728,100	7,467,000
Costs of acquisition 3								87,100
Total capitalized costs related to Sky Ranch	$ 100,000							$ 7,554,100

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Note 14 - Related Party Transactions (Detail) (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 30, 2011	Aug. 31, 2011	Aug. 31, 2012 The District [Member]	Aug. 31, 2011 The District [Member]	Aug. 31, 2012 HP A And M [Member]	Aug. 31, 2011 HP A And M [Member]	Aug. 31, 2010 HP A And M [Member]	Aug. 31, 2012 Borrowings [Member]	Aug. 31, 2011 Borrowings [Member]
Related Party Transaction, Amounts of Transaction				$ 115,500	$ 25,000	$ 8,100	$ 7,100	$ 16,700
Related Party Transaction, Description of Transaction		$250,000				50%
Increase (Decrease) in Due to Related Parties, Current	7,000						9,600
Related Party Transaction, Rate	5.25%
Notes Receivable, Related Parties	543,900		531,900						229,300	229,300
Related Party Accrued Interest	$ 314,600		$ 302,600

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Note 10 - Income Taxes (Detail) (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2010	Oct. 31, 2012
Operating Loss Carryforwards				$ 16,000,000
Net Operating Loss Carryforwards, Expired	$ 241,200	$ 324,500	$ 396,500

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Note 2 - Summary Of Significant Accounting Policies

12 Months Ended

Aug. 31, 2012

Significant Accounting Policies [Text Block]

NOTE 2:               SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less. The Company’s cash equivalents are comprised entirely of money market funds maintained at a high quality financial institution in an account which as of August 31, 2012, did not exceed federally insured limits.  At various times during the year ended August 31, 2012, the Company’s main operating account exceeded federally insured limits.

Financial Instruments – Concentration of Credit Risk and Fair Value

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents and marketable securities. The Company places its cash equivalents and investments with high quality financial institutions. At various times throughout the year ended August 31, 2012, cash deposits have exceeded federally insured limits. The Company invests its idle cash primarily in certificates of deposit, money market instruments, commercial paper obligations, corporate bonds and US government treasury obligations. To date, the Company has not experienced significant losses on any of these investments.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.

Current Assets and Liabilities

The amounts reported on the balance sheets for cash and cash equivalents, trade receivables and trade payables approximate their fair values because of the relatively short maturity of these instruments.

The amount reported on the balance sheets for marketable securities represents the fair value of the underlying instruments as reported by the financial institutions where the funds are held as of August 31, 2012 and 2011.  The Company has recorded net unrealized losses on its marketable securities of $1,100 and $2,900 at August 31, 2012 and August 31, 2011, respectively.  The Company did not realize any gains or losses on its marketable securities during each of the three years ended August 31, 2012, 2011 and 2010.

Notes Receivable and Construction Proceeds Receivable

The amounts reported on the balance sheet for the Company’s notes receivable and construction proceeds receivable approximate their fair values as they bear interest at rates which are comparable to current market rates.

Long-term Financial Liabilities

The Comprehensive Amendment Agreement No. 1 the “CAA” is comprised of a recorded balance and an off-balance sheet or “contingent” obligation associated with the Company’s acquisition of its “Rangeview Water Supply” (defined in Note 4 below).  The amount payable is a fixed amount but is repayable only upon the sale of “Export Water” (defined in Note 4 below).  Because of the uncertainty of the sale of Export Water, the Company has determined that the contingent portion of the CAA does not have a determinable fair value.  The CAA is described further in Note 5 – Participating Interests in Export Water.

The recorded balance of the “Tap Participation Fee” liability (as described below) is its estimated fair value determined by projecting new home development in the Company’s targeted service area over an estimated development period.

Notes Payables and Related Party Accounts Receivable

In conjunction with HP A&M defaulting on certain promissory notes, the Company has the right to collect from HP A&M any amounts the Company spends to cure the defaulted notes.  Accordingly the Company has recorded the entire amount of the HP A&M notes as a receivable from HP A&M.  The total receivable from HP A&M is $9.6 million with $4.6 million as current and $5.0 million as long term.  The short term portion of the receivable represents the amount of the defaulted promissory notes payable by HP A&M which were purchased by the Company which the Company will pursue remedies under the Asset Purchase Agreement (the "Arkansas River Agreement" described in more detail in Note 4) over the next 12 months.

Subsequent to fiscal 2012, the Company began acquiring the defaulted and non-defaulted promissory notes that are payable by HP A&M.   The majority of the notes issued by the Company have a five-year term, bear interest at an annual rate of five percent (5%) and require semi-annual payments with a straight-line amortization schedule.

Cash Flows

The Company did not pay any interest or income taxes during the fiscal years ended August 31, 2012, 2011 and 2010, respectively.

Marketable Securities

At August 31, 2012, the Company’s marketable securities are comprised entirely of certificates of deposit maintained at various financial institutions, each of which have invested balances below federally insured limits and pay interest at stated rates through maturity.  The certificates mature at various dates through May 2013; however, these securities represent temporary investments and it is management’s intent to hold these securities available for current operations and not hold them until maturity, therefore they are classified as available-for-sale securities and are recorded at fair value.  The Company has no investments in equity instruments.

The Company’s marketable securities are recorded as available-for-sale and therefore any unrecognized changes in the fair value of these marketable securities is included as a component of accumulated comprehensive income (loss).

Accounts Receivable

The Company records accounts receivable net of allowances for uncollectible accounts.  The Company recorded $20,400 and $0 as of August 31, 2012 and 2011 respectively for allowances for uncollectible accounts. The allowance for uncollectible accounts was determined based on specific review of all past due accounts.  The August 31, 2012 allowance for uncollectible accounts is entirely due to the assumed farm accounts receivable (see Note 7) from HP A&M.

Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the eventual use of the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Based on the Company’s procedures the Company believes there are impairments to its “Paradise Water Supply” asset (defined in Note 4 below) and land and water rights held for sale related to the Arkansas River Assets.  There was no impairment in the carrying amounts of the remaining long-lived assets at August 31, 2012 and 2011.  See further discussion in Note 4 below under sections “Paradise Water Supply” and “Arkansas River Assets”.

Capitalized Costs of Water and Wastewater Systems and Depreciation and Depletion Charges

Costs to construct water and wastewater systems that meet the Company’s capitalization criteria are capitalized as incurred, including interest, and depreciated on a straight-line basis over their estimated useful lives of up to thirty years.  The Company capitalizes design and construction costs related to construction activities and it capitalizes certain legal, engineering and permitting costs relating to the adjudication and improvement of its water assets.

The Company depletes its water assets that are being utilized on the basis of units produced (i.e. thousands of gallons sold) divided by the total volume of water adjudicated in the water decrees.

Tap Participation Fee Liability and Imputed Interest Expense

The Tap Participation Fee liability, as described in Note 7 – Long Term Debt and Operating Lease, represents the discounted fair value of the amounts the Company estimates it will pay HP A&M pursuant to the asset purchase agreement (the “Arkansas River Agreement”) described in more detail in Note 4.  The Company imputes interest expense on the unpaid Tap Participation Fee using the effective interest method over the estimated development period utilized in the valuation of the liability. The Company imputed interest of $3.5 million, $3.8 million and $3.6 million during the years ended August 31, 2012, 2011 and 2010, respectively.

The Tap Participation Fee is due and payable once the Company has sold a water tap and received the consideration due for such water tap. The Company did not sell any water taps during the years ended August 31, 2012, 2011 or 2010.  As of August 31, 2012, 19,427 water taps remain subject to the Tap Participation Fee.

Revenue Recognition

The Company generates revenues mainly from (i) one time water and wastewater tap fees, (ii) construction fees,  and (iii) monthly wholesale water usage fees and wastewater service fees.  Because these items are separately delivered, the Company accounts for each of the items separately, as described below.

Tap and Construction Fees

Tap fees, also called system development fees, are received in advance, are non-refundable and are typically used to fund construction of certain facilities and defray the acquisition costs of obtaining water rights.

Construction fees are fees used by the Company to construct assets that are typically required to be constructed by developers or home builders.

Proceeds from tap fees and construction fees are deferred upon receipt and recognized in income either upon completion of construction of infrastructure or ratably over time, depending on whether the Company owns the infrastructure constructed with the proceeds or a customer owns the infrastructure constructed with the proceeds.

Tap and construction fees derived from agreements in which the Company will not own the assets constructed with the fees are recognized as revenue using the percentage-of-completion method.  Costs of construction of the assets when the Company will not own the assets are recorded as construction costs.

Tap and construction fees derived from agreements for which the Company will own the infrastructure are recognized as revenues ratably over the estimated accounting service life of the facilities constructed, starting at completion of construction, which could be in excess of thirty years.  Costs of construction of the assets when the Company will own the assets are capitalized and depreciated over their estimated economic lives.

In August 2005, the Company entered into the Water Service Agreement (the “County Agreement”) with Arapahoe County (the “County”) to provide water service to the County’s fairgrounds (the “Fairgrounds”).  Pursuant to the County Agreement, the Company sold the County 38.5 water taps for consideration of $567,490.  In July 2006, upon completion of the construction of the “Wholesale Facilities” (which were paid for with the water tap fee proceeds), the Company began ratably recognizing $428,000 of water tap fees into income.  The $428,000 is the net of the water tap fees received by the Company of $567,490, decreased by (i) royalties to the Colorado State Board of Land Commissioners (the “Land Board” which owns the “Lowry Range”) of $34,522; and (ii) 65% of the total payments made to external CAA holders or $104,136.  In each of the three fiscal years ended August 31, 2012, 2011 and 2010, the Company recognized $14,300 of tap fee revenue.  At August 31, 2012, $341,900 of these tap fees are still deferred.

The Company recognized $41,500 of “Special Facilities” funding as revenue in each of the three fiscal years ended August 31, 2012 and 2011 respectively. These construction revenues also relate to the County Agreement entered into in August 2005.

As of August 31, 2012, the Company has deferred recognition of $1.3 million of tap and construction fee revenue from the County, which will be recognized as revenue ratably through 2036.

In addition to the tap fee revenues and the construction revenues, the Company also records interest income from the County using the effective interest method.  Pursuant to the County Agreement, the County is making payments to the Company totaling $82,200 per year for the construction of the Special Facilities at the Fairgrounds.  These payments will continue through 2015 and include interest at 6% per annum.  The Company recognized $19,200, $22,900 and $26,300 of interest income from the County during the fiscal years ended August 31, 2012, 2011 and 2010, respectively.

In August 2012, the Company entered into an agreement with Front Range Pipeline which grants Front Range Pipeline easement rights for a period of three years to construct a pipeline for total consideration of $28,700.  As of August 31, 2012, the Company had $28,500 in deferred revenue from Front Range Pipeline.

Monthly Wholesale Usage and Service Fees

Monthly wholesale water usage charges are assessed to the Company’s customers based on actual metered usage each month plus a base monthly service fee assessed per single family equivalent (“SFE”) unit served.  One SFE is a customer, whether residential, commercial or industrial, that imparts a demand on the Company’s water or wastewater systems similar to the demand of a family of four persons living in a single family house on a standard sized lot.  One SFE is assumed to have a water demand of approximately 0.4 acre feet per year and to contribute wastewater flows of approximately 300 gallons per day.  Water usage pricing uses a tiered pricing structure.  The Company recognizes wholesale water usage revenues upon delivering water to its customers or its governmental customers’ end-use customers, as applicable.  The water revenues recognized by the Company are shown net of royalties to the Land Board and, when applicable, amounts retained by the Rangeview Metropolitan District (the “District”).

The Company recognizes wastewater processing revenues monthly based on usage. The monthly wastewater service fees are shown net of amounts retained by the District.

Amounts recognized for water and wastewater services during the fiscal years ended August 31, 2012, 2011 and 2010, are presented in the statements of operations.

Costs of delivering water and providing wastewater service to customers are recognized as incurred.

The Company delivered 34.2 million, 34.5 million and 33.1 million gallons of water to customers during the fiscal years ended August 31, 2012, 2011 and 2010, respectively.

Royalty and other obligations

Revenues from the sale of Export Water are shown net of royalties payable to the Land Board. Revenues from the sale of water on the “Lowry Range” are shown net of the royalties to the Land Board and the amounts retained by the District.  See further description of the “Lowry Range” in Note 4 – Water Assets under section “Rangeview Water Supply and Water System”.

Oil and Gas Lease Payments

As further described in Note 4 below, on March 10, 2011, the Company entered into a Paid-Up Oil and Gas Lease (the “O&G Lease”) and a Surface Use and Damage Agreement (the “Surface Use Agreement”) with Anadarko E&P Company, L.P. (“Anadarko”) a wholly owned subsidiary of Anadarko Petroleum Company.  Pursuant to the O&G Lease on March 10, 2011, the Company received an up-front payment of $1,243,400 from Anadarko for the purpose of exploring for, developing, producing and marketing oil and gas on approximately 634 acres of mineral estate owned by the Company at its Sky Ranch property.  The Company began recognizing the up-front payment from Anadarko as income on a straight-line basis over three years (the initial term of the O&G Lease) on March 10, 2011.  During the years ended August 31, 2012 and 2011, the Company recognized $423,000 and $199,000 respectively, of income related to the up-front payments received pursuant to the O&G Lease.

As of August 31, 2012, the Company has deferred recognition of $639,000 of income related to the O&G Lease, which will be recognized into income ratably through February 2014.

Share-based Compensation

The Company maintains a stock option plan for the benefit of its employees and directors.  The Company records share-based compensation costs which are measured at the grant date based on the fair value of the award and are recognized as expense over the applicable vesting period of the stock award using the straight-line method.  The Company has adopted the alternative transition method for calculating the tax effects of share-based compensation which allows for a simplified method of calculating the tax effects of employee share-based compensation.  Because the Company has a full valuation allowance on its deferred tax assets, the granting and exercise of stock options during the fiscal years ended August 31, 2012 and 2011 had no impact on the income tax provisions.

The Company recognized $54,600, $94,600 and $87,600 of share-based compensation expenses during the fiscalyears ended August 31, 2012, 2011 and 2010, respectively.

Income Taxes

The Company uses a “more-likely-than-not” threshold for the recognition and de-recognition of tax positions, including any potential interest and penalties relating to tax positions taken by the Company.  The Company does not have any significant unrecognized tax benefits as of August 31, 2012.

The Company files income tax returns with the Internal Revenue Service and the State of Colorado. The tax years that remain subject to examination are fiscal 2009 through fiscal 2011. The Company does not believe there will be any material changes in its unrecognized tax positions over the next twelve months.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.  At August 31, 2012, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the fiscal years ended August 31, 2012, 2011 or 2010.

Loss per Common Share

Loss per common share is computed by dividing net loss by the weighted average number of shares outstanding during each period. Common stock options and warrants aggregating 215,100, 280,100 and 262,600 common share equivalents as of August 31, 2012, 2011 and 2010, respectively, have been excluded from the calculation of loss per common share as their effect is anti-dilutive.

Recently Issued Accounting Pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability.  Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change.  A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, the Company has not determined whether implementation of such proposed standards would be material to the Company’s financial statements.  New pronouncements assessed by the Company recently are discussed below:

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, Comprehensive Income (Topic 220) – Presentation of Comprehensive Income (“ASU 2011-05”).  ASU 2011-05 requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. ASU 2011-05 is effective for fiscal years and interim periods beginning after December 15, 2011 (September 1, 2012 for the Company).  The Company does not expect the adoption of ASU 2011-04 to have a material impact on its results of operations, financial condition, or cash flows.

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Note 8 - Shareholders' Equity (Detail) (USD $)	1 Months Ended			12 Months Ended
	Jan. 31, 2012	Jan. 31, 2011	Jan. 31, 2010	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2010	Sep. 29, 2010	Apr. 30, 2004
Preferred Stock, Liquidation Preference Per Share (in Dollars per share)				$ 1.00
Preferred Stock, Redemption Price Per Share (in Dollars per share)				$ 1.00
Preferred Stock, Dividend Payment Terms				$36,026,232
Dividends, Preferred Stock (in Dollars)				$ 432,513
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)								1,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)				1,350,811
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period (in Shares)				29,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period (in Shares)				48,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year	12500 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)				12,500
Share Based Compensation Expiration	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value (in Dollars)	15,400			66,000	74,700	79,700
Fair Value Assumptions, Exercise Price (in Dollars per share)	$ 1.85	$ 3.67	$ 2.88
Fair Value Assumptions, Expected Term	10 years	10 years	10 years
Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%	0.00%
Fair Value Assumptions, Risk Free Interest Rate	1.87%	3.37%	3.74%
Fair Value Assumptions, Expected Volatility Rate	73.20%	84.70%	88.40%
Fair Value Expected Foreiture Rate	0.00%	0.00%	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share)	$ 15,400	$ 54,500	$ 31,200	$ 1.23	$ 3.11	$ 2.49
Share Price (in Dollars per share)			$ 2.49	$ 2.35			$ 3.00
Allocated Share-based Compensation Expense (in Dollars)				54,600	94,600	87,600
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)				92
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item)				1.80
Number Of Shares				1,500,000
Proceeds from Sale of Equity Method Investments (in Dollars)				3,500,000
Proceeds From Equity Method Investments Per Share (in Dollars per share)				$ 2.35
Arkansas River Agreement [Member]
Number Of Shares				750,000
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				8 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				10 years
NonEmployee Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)	12,500	17,500	12,500
Unrecognized [Member]
Allocated Share-based Compensation Expense (in Dollars)				$ 13,200

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Note 10 - Income Taxes (Tables)

12 Months Ended

Aug. 31, 2012

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	For the Fiscal Years Ended August 31,
	2012			2011
Deferred tax assets:
Net operating loss carryforwards	$	5,948,300		$	5,259,200
Imputed interest on Tap Participation Fee		8,852,500			7,558,000
Deferred revenue		560,700			702,000
Impairment charges		2,408,800			-
Depreciation and depletion		2,425,700			301,600
Other		45,000			38,900
Valuation allowance		(20,241,000	)		(13,859,700	)
Net deferred tax asset	$	-		$	-

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	For the Fiscal Years Ended August 31,
	2012			2011			2010
Expected benefit from federal taxes at statutory rate of 34%	$	(5,922,300	)	$	(2,045,500	)	$	(1,833,000	)
State taxes, net of federal benefit		(574,800	)		(198,500	)		(177,900	)
Expiration of net operating losses		90,000			121,000			147,900
Permanent and other differences		25,800			37,800			(27,100	)
Change in valuation allowance		6,381,300			2,085,200			1,890,100
Total income tax expense / benefit	$	-		$	-		$	-

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Note 8 - Shareholders' Equity (Tables)

12 Months Ended

Aug. 31, 2012

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Approximate Aggregate Instrinsic Value
Oustanding at beginning of period		280,000		$	6.10
Granted		12,500		$	1.85
Exercised		-		$	–
Forfeited or expired		(77,500	)	$	6.03
Outstanding at August 31, 2012		215,000		$	5.88	$	4.98		*
Options exercisable at August 31, 2012		192,500		$	6.12	$	4.59		*

Schedule of Nonvested Share Activity [Table Text Block]

	Number of Options			Weighted-Average Grant Date Fair Value
Non-vested options oustanding at beginning of period		49,500		$	2.86
Granted		12,500			1.23
Vested		(22,500	)		3.11
Forfeited		(17,000	)		2.83
Non-vested options outstanding at August 31, 2012		22,500		$	1.72

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Note 8 - Shareholders' Equity (Detail) - Equity Plan Stock Option Activity (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011
Number of Options	215,000	280,000
Weighted Average Exercise Price (in Dollars per share)	$ 5.88	$ 6.10
Weighted Average Remaining Contractual Term	4 years 357 days
Options exercisable at August 31, 2012	192,500
Options exercisable at August 31, 2012 (in Dollars per share)	$ 6.12
Options exercisable at August 31, 2012	4 years 215 days
Granted	12,500
Granted (in Dollars per share)	$ 1.85
Exercised	0
Exercised (in Dollars per share)	$ 0
Forfeited or expired	(77,500)
Forfeited or expired (in Dollars per share)	$ 6.03

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Note 13 - Supplemental Disclosure Of Non-cash Activities (Tables)

12 Months Ended

Aug. 31, 2012

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	For the Fiscal Years Ended August 31,
	2012		2011		2010
Mortgage payable and related party receivable recorded up HP A&M default		9,550,200
Farm revenue allocated against the Tap Participation Fee liability and additional paid in capital thru August 3, 2012		189,700
Issuance of shares of restricted common stock upon conversion of the Convertible Note - Related Party			5,351,700.00		-
	$	9,739,900.0	$	5,351,700.0	$	-

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Note 1 - Organization (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Aug. 31, 2012	Sep. 29, 2010	Jan. 31, 2010
Investments and Cash	$ 2.7
Working Capital	1.4
Number Of Shares	1,500,000
Proceeds from Sale of Equity Method Investments (in Dollars)	3.5
Share Price (in Dollars per share)	$ 2.35	$ 3.00	$ 2.49
Subsequent To Year End [Member]
Number Of Shares	1,500,000
Proceeds from Sale of Equity Method Investments (in Dollars)	$ 3.5
Share Price (in Dollars per share)	$ 2.35

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Note 1 - Organization

12 Months Ended

Aug. 31, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1:               ORGANIZATION

Pure Cycle Corporation (the “Company”) was incorporated in Delaware in 1976 and reincorporated in Colorado in 2008. The Company owns water assets in the Denver, Colorado metropolitan area, in the Arkansas River Valley in southern Colorado, and on the western slope of Colorado. The Company is currently using its water assets located in the Denver metropolitan area to provide wholesale water and wastewater services to customers located in the Denver metropolitan area.

The Company provides a full line of water and wastewater services which includes designing and constructing water and wastewater systems as well as operating and maintaining such systems. The Company’s business focus is to provide wholesale water and wastewater services, predominately to local governmental entities, which provide services to their end-use customers throughout the Denver metropolitan area as well as along the Colorado Front Range.

The Company believes it has sufficient working capital and financing sources to fund its operations for at least the next fiscal year, because at August 31, 2012, the Company had $2.7 million of cash, cash equivalents and marketable securities, and $1.4 million of working capital.  Subsequent to fiscal year end 2012, the Company sold the 1.5 million shares of Pure Cycle common stock issued to High Plains A&M, LLC (“HP A&M”), which were pledged as security for certain debt obligations, in a foreclosure sale for $3.5 million or $2.35 per share.

The Company’s ability to generate working capital from its water and wastewater projects is dependent on its ability to successfully market its water, or in the event it is unsuccessful, to sell the underlying water assets. In the event increased sales are not achieved or the Company is unable to sell its water assets at a sufficient level, the Company may have to issue additional short or long-term debt or seek to sell additional shares of the Company’s common or preferred stock to generate sufficient working capital.  There can be no assurance that the Company will be successful in marketing its water on terms that are acceptable to the Company.

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Note 2 - Summary Of Significant Accounting Policies (Detail) (USD $)	1 Months Ended		12 Months Ended
	Oct. 18, 2010	Aug. 31, 2005	Aug. 31, 2012 Mcf gal	Aug. 31, 2011	Aug. 31, 2010	Aug. 31, 1996
Debt Instrument, Maturity Date Range, End			Dec. 31, 2008
Unrealized Loss on Securities			$ 1,100	$ 2,900
Related Party Transaction, Due from (to) Related Party (in Dollars)			9,600,000
Related Party Transaction, Due from (to) Related Party, Current			4,600,000
Related Party Transaction, Due from (to) Related Party, Noncurrent			5,000,000
Allowance for Doubtful Accounts Receivable, Current			20,400	0
Finite-Lived Intangible Asset, Useful Life			30 years
Imputed Interest On Liability			3,500,000	3,800,000	3,600,000
Water Taps		38.5	19,427			40,000
Period Revenue To Be Recognized			30 years
Proceeds from Sale of Water Systems		567,490
Revenue Recognition Water Tap Fees		428,000	14,300
Payments for Royalties		34,522
Percentage of Participating Policies, Disclosure		65%
Payments for Fees	554,100	104,136
Deferred Revenue			28,500
Recognition of Deferred Revenue			41,500
Interest Income, Other			(19,241)	(22,899)	(26,343)
Receivable with Imputed Interest, Effective Yield (Interest Rate)			6.00%
Interest Income, Operating			19,200	22,900	26,300
Water Demand In Acre Feet (in Thousands of Cubic Feet)			0.4
Gallons Per Day (in US Gallons)			300
Prepayment Fees on Advances, Net			1,243,400
Period To Recognize Deferred Revenue			3 years
Revenues			284,384	282,134	264,107
Deferred Revenue, Leases, Net				639,000
Allocated Share-based Compensation Expense (in Dollars)			54,600	94,600	87,600
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)			215,100,280,100
Tap Fees [Member]
Deferred Revenue			341,900
County Tap And Construction Fee Deferred Revenue [Member]
Deferred Revenue			1,300,000
Front Range Pipeline Consideration [Member]
Deferred Revenue			28,700
Deferred Compensation, Share-based Payments [Member]
Allocated Share-based Compensation Expense (in Dollars)			54,600	94,600	87,600
Common Share Equivalents [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)					262,600
Special Facilities at the Fairgrounds [Member]
Interest Income, Other			82,200
Deferred O And G Lease Revenue [Member]
Revenues			$ 423,000	$ 199,000

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Note 6 - Accrued Liabilities (Detail) (USD $)	Aug. 31, 2012	Aug. 31, 2011
Accounts Payable and Accrued Liabilities	$ 172,600	$ 118,600
Estimated Property Taxes [Member]
Accounts Payable and Accrued Liabilities	60,500	62,400
Professional Fees [Member]
Accounts Payable and Accrued Liabilities	56,800
Accounts Payable and Other Accrued Liabilities		49,500
Prepaid Farm Lease [Member]
Accounts Payable and Accrued Liabilities	33,500
Operating Payables [Member]
Accounts Payable and Accrued Liabilities	$ 21,800	$ 6,700

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Note 15 - Subsequent Events (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Aug. 31, 2012 sqm	Sep. 29, 2010	Jan. 31, 2010
Related Party Transaction, Due from (to) Related Party (in Dollars)	$ 9.6
Number of Acres (in Square Meters)	14,000
Number of FLCC Shares	16,882
Proceeds from Sale of Equity Method Investments (in Dollars)	3.5
Share Price (in Dollars per share)	$ 2.35	$ 3.00	$ 2.49
Number Of Shares	1,500,000
Percent of Shares Owned	6.00%
Sale of Stock, Percentage of Ownership before Transaction	10.00%
Proceeds from Notes Payable (in Dollars)	$ 5.1
Long-term Debt, Description	five-year term
Debt Instrument, Interest Rate, Stated Percentage	5.00%
HP A And M [Member]
Number of Acres (in Square Meters)	14,000
Number of FLCC Shares	16,882

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Balance Sheets (USD $)	Aug. 31, 2012	Aug. 31, 2011
Current assets:
Cash and cash equilvalents	$ 1,623,517	$ 71,795
Marketable securities	1,101,367	4,588,535
Trade accounts receivable	135,458	98,484
Current portion of related party receivable - HP A&M	4,456,857
Prepaid expenses	279,782	242,000
Current portion of construction proceeds receivable	64,783	64,783
Total current assets	7,661,764	5,065,597
Investments in water and water systems, net	88,510,359	106,472,051
Land - Sky Ranch	3,778,464	3,743,305
Land and water held for sale	5,748,633
Construction proceeds receivable, less current portion	226,879	292,493
Note receivable - related party:
Rangeview Metropolitan District, including accrued interest	543,945	531,873
Related party receivable - HP A&M	5,093,365
Other assets	18,671	17,333
Total assets	111,582,080	116,122,652
Current liabilities:
Accounts payable	261,383	69,330
Current portion mortgages payable	5,340,890
Accrued liabilities	172,630	118,649
Deferred revenues	65,384	55,800
Deferred oil and gas lease payment	414,480	414,480
Total current liabilities	6,254,767	658,259
Deferred revenues, less current portion	1,297,605	1,334,503
Deferred oil and gas lease payment, less current portion	224,510	638,990
Mortgages payable	4,209,329
Participating interests in Export Water Supply	1,208,928	1,212,232
Tap Participation Fee payable to HP A&M net of $44.8 million and $48.2 million discount respectively	68,269,176	64,988,329
Total liabilities	81,464,315	68,832,313
Preferred stock:
Series B - par value $.001 per share, 25 milllion shares authorized 432,513 shares issued and outstanding (liquidation perference of $432,513)	433	433
Par value 1/3 of $.01 per share, 40 million shares authorized; 24,037,596 shares issued outstanding	80,130	80,130
Additional paid in capital	103,420,869	103,176,607
Accumulated comprehensive loss	(1,081)	(2,903)
Accumulated deficit	(73,382,589)	(55,963,928)
Total shareholders' equity	30,117,762	47,290,339
Total liabilities and shareholders' equity	$ 111,582,077	$ 116,122,652

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Note 8 - Shareholders' Equity (Detail) - Non-Vested Options Activity (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011
Non-vested options outstanding	22,500	49,500
Non-vested options outstanding (in Dollars)	$ 1.72	$ 2.86
Granted	12,500
Granted (in Dollars)	1.23
Vested	(22,500)
Vested (in Dollars)	3.11
Forfeited	(17,000)
Forfeited (in Dollars)	$ 2.83

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Statements of Shareholders' Equity and Comprehensive Income (Loss) (Parentheticals) (Additional Paid-in Capital [Member], USD $)	12 Months Ended
	Aug. 31, 2011
Additional Paid-in Capital [Member]
Common stock issuance costs	$ 145,200

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Note 4 - Water Assets (Detail) (USD $)	1 Months Ended	0 Months Ended	1 Months Ended					12 Months Ended										12 Months Ended		1 Months Ended		12 Months Ended	1 Months Ended	12 Months Ended			0 Months Ended							12 Months Ended
	Oct. 18, 2010	Feb. 10, 2010 sqm	Sep. 29, 2010	Sep. 30, 2010	Jul. 30, 2010 acre	May 31, 2006	Aug. 31, 2005	Aug. 31, 2012 acre	Aug. 31, 2011	Aug. 31, 2010	Dec. 31, 1987	Mar. 10, 2011 acre	Dec. 31, 2010	Jan. 31, 2010	Aug. 31, 2012 Arkansas River Agreement [Member] acre	Aug. 31, 2012 Rangeview Water Supply And Water System [Member] Acre Feet [Member]	Aug. 31, 2012 Rangeview Water Supply And Water System [Member] acre	Aug. 31, 2012 Lowry Range [Member] acre	Aug. 31, 2012 County Fairgrounds Water And Water System [Member]	Oct. 18, 2010 Sky Ranch [Member]	Dec. 31, 1987 Paradise Water Supply [Member] acre	Aug. 31, 2012 Export Water [Member]	Sep. 29, 2010 Sold At Par [Member]	Aug. 31, 2012 Senior Water Rights [Member]	Aug. 31, 2012 Non-Agricultural [Member]	Aug. 31, 2012 Groundwater [Member]	Mar. 10, 2011 Exploring Developing And Producing [Member]	Mar. 10, 2011 Surface Use And Damage [Member]	Jan. 11, 2011 Unregistered [Member]	Aug. 31, 2011 Minimum [Member]	Aug. 31, 2011 Maximum [Member]	Sep. 30, 2010 Working Capital And General Corporate [Member]	Aug. 31, 2012 Land Board [Member]	Aug. 31, 2012 PureCycle [Member]	Aug. 31, 2012 The District [Member]
Depletion								$ 500
Depreciation, Depletion and Amortization, Nonproduction								309,200	300,800	255,100
Number of Acre Feet	820							1,650 acre feet		89								13,400 acre feet	321			11,650 acre feet		60,000 acre feet	40,000 acre feet	165,000 acre feet
Stock Issued During Period, Shares, Purchase of Assets (in Shares)						3,000,000
Investment Owned, Balance, Shares (in Shares)								21,800
Area of Land (in Acres)					931			1,486				634			16,000		28,350	27,000			70,000
Percentage Of Tap Participation Fee Liability								26.90%
Rental Income, Nonoperating								71,100
Area of Real Estate Property (in Square Meters)		4
Proceeds from Sale of Property, Plant, and Equipment		10,000								10,000
Allocated Carrying Value		600
Gain (Loss) on Sale of Property Plant Equipment								1,016		9,404
Number of FLCC Shares								16,882								3,377
Real Estate, Gross								12,200,000
Sales of Real Estate								5,700,000
Gains (Losses) on Sales of Other Real Estate								6,500,000
Property, Plant and Equipment, Other, Gross								14,400,000
RoyaltyPercentageOfRevenues																														10.00%	50.00%		12.00%	5.00%
Percent Of Gross Revenuem, Net								95.00%
Percent Of Wastewater Tap Fees								100.00%
Percent Of Wastewater Usage Fees																																		90.00%	10.00%
Payments to Acquire Water Systems								2,900,000			5,500,000
Water Tank Volume								500,000 gallon
Payments to Acquire Property, Plant, and Equipment					7,000,000			3,894		100,000										6,300,000
Escrow Deposits Related to Property Sales					700,000
Payments for Fees	554,100						104,136
Real Estate Tax Expense	71,000
Capitalized Costs, Proved Properties								100,000
Convertible Notes Payable, Noncurrent				5,200,000
Equity Method Investment, Ownership Percentage				5.00%
Common Stock, Shares, Issued (in Shares)				1,800,000																									1,982,099
Proceeds from Issuance of Common Stock				5,500,000
Notes Payable, Noncurrent				10,700,000																												4,400,000
Debt Instrument, Interest Rate Terms				10%
Deposit Liabilities, Accrued Interest													151,700
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement				5,350,000
Debt Conversion, Converted Instrument, Rate				2.70%
Stock Issued During Period, Shares, New Issues (in Shares)			1,848,931																				930,600
Stock Issued During Period, Value, New Issues			5,500,000						5,401,605														2,800,000
Share Price (in Dollars per share)			$ 3.00					$ 2.35						$ 2.49
Shelf Registration Statment			10,000,000
Potential Issue of Additional Common Stock			4,450,000
Payments to Explore and Develop Oil and Gas Properties																											1,243,400	9,000
Number Of Water Wells											4
Asset Impairment Charges								$ 5,500,000

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Note 15 - Subsequent Events

12 Months Ended

Aug. 31, 2012

Subsequent Events [Text Block]

NOTE 15:             SUBSEQUENT EVENTS

As described in Note 7 – Long Term Debt and Operating Lease, HP A&M began defaulting on promissory notes secured by deeds of trust on the Company’s Arkansas River properties and water rights in June 2012.  On July 2, 2012, the Company formally notified HP A&M that its failure to pay the promissory notes constituted an Event of Default under the Seller Pledge Agreement and a default of a material covenant under the Arkansas River Agreement.  On August 3, 2012, the Company formally terminated the Property Management Agreement.  The consequences of such termination are described in more detail below.

As of the date of this filing, HP A&M has defaulted on over 50% of the notes and informed the Company that it does not intend to pay any of the remaining notes.  HP A&M currently owes approximately $9.6 million of principal and accrued interest on notes secured by approximately 14,000 acres of farm land and 16,882 FLCC shares representing water rights owned by the Company.

Foreclosure Sale of Common Stock Pledged by HP A&M

Due to the default by HP A&M in fiscal 2012 on the promissory notes secured by the Company’s Arkansas River properties, the Company foreclosed on the Pledged Shares.  The Pledged Shares were sold at an auction open only to pre-qualified accredited investors for $3.5 million, or $2.35 per share, on September 27, 2012.

After the sale of the HP A&M Pledged Shares, HP A&M is no longer considered to be a related party of the Company.  Subsequent to the sale of the Pledged Shares, HP A&M owns 1.5 million shares of the Company’s common stock which is approximately 6%.  This 6% ownership level falls short of the 10% criteria to continue to be considered a related party of the Company.

Refinancing of HP A&M Mortgages

Subsequent to fiscal 2012,  the Company began acquiring the defaulted and non-defaulted promissory notes that are payable by HP A&M.  As of the filing date, the Company has successfully acquired $5.1 million of the notes payable by HP A&M in exchange for a combination of cash and secured notes.  The majority of the notes issued by the Company have a five-year term, bear interest at an annual rate of five percent (5%) and require bi-annual payments with a straight-line amortization schedule.  The notes purchased by the Company continue to be due and payable by HP A&M to the Company as the new note holder.

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Note 4 - Water Assets (Detail) - Water and Water Systems Costs and Accumulated Depreciation (USD $)	Aug. 31, 2012	Aug. 31, 2011
Costs	$ 90,505,700	$ 108,167,100
Accumulated Depreciation and Depletion	(1,995,300)	(1,695,000)
Net investments in water and water systems	88,510,359	106,472,051
Arkansas River Valley Assets [Member]
Costs	69,112,300	81,318,800
Accumulated Depreciation and Depletion	(1,315,900)	(1,144,100)
Rangeview Water Supply [Member]
Costs	14,376,100	14,299,700
Accumulated Depreciation and Depletion	(7,100)	(6,600)
Paradise Water Supply [Member]
Costs		5,540,200
Sky Ranch Water Rights and Other Costs [Member]
Costs	3,924,100	3,915,200
Accumulated Depreciation and Depletion	(50,800)	(21,800)
Fairgrounds Water and Water System [Member]
Costs	2,899,900	2,899,900
Accumulated Depreciation and Depletion	(534,500)	(446,400)
Rangeview Water System [Member]
Costs	167,700	167,700
Accumulated Depreciation and Depletion	(67,600)	(62,400)
Water Supply - Other [Member]
Costs	25,600	25,600
Accumulated Depreciation and Depletion	$ (19,400)	$ (13,700)

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Note 3 - Fair Value Measurements (Tables)

12 Months Ended

Aug. 31, 2012

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

					Fair Value Measurement Using:
	Fair Value		Cost / Other Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Unrealized Gains and (Losses)
Marketable securities	$	1,101,367	$	1,101,367	$	-	$	1,101,367	$	-	$	(1,081	)
Tap Participation Fee	$	68,269,176	$	68,269,176	$	-	$	-	$	68,269,176	$	-

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Fair Value Measurement using Significant Unobservable Inputs (Level 3)
	Gross Estimated Tap Participation Fee Liability			Tap Participation Fee Reported Liability			Discount - to be imputed as interest expense in future periods
Balance at August 31, 2011	$	113,147,700		$	64,988,300		$	48,159,400
Total gains and losses (realized and unrealized):
Imputed interest recorded as "Other Expense"		-			3,470,500			(3,470,500	)
Purchases, sales, issuances, payments, and settlements		(189,700	)		(189,700	)		-
Transfers in and/or out of Level 3		-			-			-
Balance at August 31, 2012	$	112,958,000		$	68,269,100		$	44,688,900

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Statements of Cash Flows (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2010
Net loss	$ (17,418,661)	$ (6,016,159)	$ (5,391,262)
Share-based compensation expense	54,588	94,550	87,639
Depreciation, depletion and other non-cash items	307,507	297,212	258,872
Imputed interest on Tap Participation Fees payable to HP A&M	3,470,523	3,847,000	3,620,000
Impairment of water assets	5,544,022
Impairment of land and water rights held for sale	(5,544,022)
Interest expensed on Convertible Note-Related Party		151,667
Rangeview Metropolitan District	(12,072)	(12,039)	(12,039)
Interest added to construction proceeds receivable	(19,241)	(22,899)	(26,343)
Gain on sale of fixed assets	(1,016)		(9,404)
Trade accounts receivable	(36,974)	(27,329)	(7,761)
Interest receibable and prepaid expenses	(37,782)	(5,373)	(81,699)
Accounts payable and accrued liabilities	246,034	72,457	33,226
Deferred revenue	(27,314)	(55,802)	(55,803)
Deferred income - oil and gas lease	(414,480)	1,053,470
Net cash used for operating activities	(1,887,106)	(623,245)	(1,584,574)
Investments in water, water systems and land	(132,221)	(6,841,255)	(19,649)
Purchases of marketable securities	(1,235,857)	(6,357,177)
Sales and maturities of marketable securities	4,724,847	3,202,373	1,561,588
Proceeds from sale of land	1,099
Sale of property and equipment			10,000
Other investing activities			(10,000)
Excrow payment for Sky Ranch acquisition			(735,000)
Purchase of property and equipment	(3,894)		(100,000)
Net cash (used) provided by investing activities	3,353,974	(9,996,059)	806,939
Net proceeds from equity offering		5,401,606
Issuance of Convertible Note - Related Party		5,200,000
Arapahoe County construction proceeds	84,854	82,196	89,046
Payment to contingent liability holders		(4,720)	(4,477)
Net cash provided by financing activities	84,854	10,679,082	84,569
Net change in cash and cash equivalents	1,551,722	59,778	(693,066)
Cash and cash equivalents - beginning of year	71,795	12,017	705,083
Cash and cash equivalents - end of year	1,623,517	71,795	12,017
Assets Held-for-sale [Member]
Impairment of land and water rights held for sale	$ 6,457,760

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Balance Sheets (Parentheticals) (USD $)	Aug. 31, 2012	Aug. 31, 2011
Tap Participation Fee payable to HP A&M, Discount (in Dollars)	$ 44,800,000	$ 48,200,000
Series B — par value (in Dollars per share)	$ 0.001	$ 0.001
Series B — shares authorized	25,000,000	25,000,000
Series B — shares issued	432,513	432,513
Series B — shares outstanding	432,513	432,513
Series B — liquidation preference (in Dollars)	$ 432,513	$ 432,513
Par value: 1/3 of $.01 per share (in Dollars per share)	$ 0.003333	$ 0.003333
Shares authorized	40,000,000	40,000,000
Shares outstanding	24,037,596	23,168,450

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Note 10 - Income Taxes

12 Months Ended

Aug. 31, 2012

Income Tax Disclosure [Text Block]

NOTE 10:             INCOME TAXES

There is no provision for income taxes, because the Company has incurred operating losses. Deferred income taxes reflect the tax effects of net operating loss carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of August 31 are as follows:

	For the Fiscal Years Ended August 31,
	2012			2011
Deferred tax assets:
Net operating loss carryforwards	$	5,948,300		$	5,259,200
Imputed interest on Tap Participation Fee		8,852,500			7,558,000
Deferred revenue		560,700			702,000
Impairment charges		2,408,800			-
Depreciation and depletion		2,425,700			301,600
Other		45,000			38,900
Valuation allowance		(20,241,000	)		(13,859,700	)
Net deferred tax asset	$	-		$	-

The Company has recorded a valuation allowance equal to the excess of the deferred tax assets over the deferred tax liability as the Company is unable to reasonably determine if it is more likely than not that deferred tax assets will ultimately be realized.

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,
	2012			2011			2010
Expected benefit from federal taxes at statutory rate of 34%	$	(5,922,300	)	$	(2,045,500	)	$	(1,833,000	)
State taxes, net of federal benefit		(574,800	)		(198,500	)		(177,900	)
Expiration of net operating losses		90,000			121,000			147,900
Permanent and other differences		25,800			37,800			(27,100	)
Change in valuation allowance		6,381,300			2,085,200			1,890,100
Total income tax expense / benefit	$	-		$	-		$	-

At August 31, 2012, the Company has $16 million of net operating loss carryforwards available for income tax purposes, which expire between fiscal 2013 and 2032. Utilization of these net operating loss carryforwards may be subject to substantial annual ownership change limitations provided by the Internal Revenue Code. Such an annual limitation could result in the expiration of the net operating loss carryforwards before utilization.

Net operating loss carryforwards of $241,200, $324,500 and $396,500 expired during the fiscal years ended August 31, 2012, 2011 and 2010, respectively.

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Document And Entity Information (USD $)	12 Months Ended
	Aug. 31, 2012	Nov. 21, 2012	Feb. 29, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	PURE CYCLE CORP
Document Type	10-K
Current Fiscal Year End Date	--08-31
Entity Common Stock, Shares Outstanding		24,037,596
Entity Public Float			$ 28,579,500
Amendment Flag	false
Entity Central Index Key	0000276720
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Aug. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

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Note 11 - 401(k) Plan

12 Months Ended

Aug. 31, 2012

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE 11:             401(k) PLAN

Effective July 25, 2006, the Company adopted the Pure Cycle Corporation 401(k) Profit Sharing Plan (the “Plan”), a defined contribution retirement plan for the benefit of its employees. The Plan is currently a salary deferral only plan, and at this time the Company does not match employee contributions. The Company pays the annual administrative fees of the Plan, and the Plan participants pay the investment fees. The Plan is open to all employees, age 21 or older, who have been employees of the Company for at least six months. During the fiscal years ended August 31, 2012, 2011 and 2010, the Company paid fees of $3,400, $2,600 and $2,400, respectively, for the administration of the Plan.

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Statements of Operations (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2010
Metered water usage	$ 182,802	$ 157,497	$ 140,677
Wastewater treatment fees	45,778	68,833	67,626
Special facility funding recognized	41,508	41,508	41,508
Water tap fees recognized	14,296	14,296	14,296
Total revenues	284,384	282,134	264,107
Other	(1,995)
Depletion and depreciation	(88,576)	(88,587)	(88,564)
Total cost of revenues	(187,984)	(159,693)	(161,808)
Gross margin	96,400	122,441	102,299
General and administrative expenses	(2,374,106)	(2,212,026)	(1,808,167)
Impairment of land and water rights held for sale	5,544,022
Impairment of water assets	(5,544,022)
Depreciation	(220,657)	(212,184)	(166,513)
Operating loss	(14,500,145)	(2,301,769)	(1,872,381)
Oil and gas lease income, net	422,999	199,257
Interest income	53,339	53,133	67,432
Other	3,552	31,887	24,283
Gain on sale of assets	1,016		9,404
Interest expensed on Convertible Note - Related Party		(151,667)
Interest imputed on the Tap Participation Fees payable to HP A&M	(3,470,523)	(3,847,000)	(3,620,000)
Net loss	(17,418,661)	(6,016,159)	(5,391,262)
Net loss per common share – basic and diluted (in Dollars per share)	$ (0.72)	$ (0.26)	$ (0.27)
Weighted average common shares outstanding – basic and diluted (in Shares)	24,037,596	23,168,450	20,206,566
Assets Held-for-sale [Member]
Impairment of land and water rights held for sale	(6,457,760)
Impairment of water assets	6,457,760
Farm Cost of Services [Member]
Farm income, net	71,101
Water Service [Member]
Service Operations	(78,144)	(51,882)	(52,439)
Wastewater Service [Member]
Service Operations	$ (19,269)	$ (19,224)	$ (20,805)

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Note 5 - Participating Interests in Export Water

12 Months Ended

Aug. 31, 2012

Business Combination Disclosure [Text Block]

NOTE 5:               PARTICIPATING INTERESTS IN EXPORT WATER

The Company acquired its Rangeview Water Supply through various amended agreements entered into in the early 1990’s. The acquisition was consummated with the signing of the CAA in 1996. Upon entering into the CAA, the Company recorded an initial liability of $11.1 million, which represents the cash the Company received and used to purchase its Export Water.  In return, the Company agreed to remit a total of $31.8 million of proceeds received from the sale of Export Water to the participating interest holders.  The obligation for the $11.1 million was recorded as debt, and the remaining $20.7 million contingent liability was not reflected on the Company’s balance sheet because the obligation to pay this is contingent on sales of Export Water, the amounts and timing of which are not reasonably determinable.  See further discussion regarding the Export Water in Note 4 – Water Assets.

The CAA obligation is non-interest bearing, and if the Export Water is not sold, the parties to the CAA have no recourse against the Company.  If the Company does not sell the Export Water, the holders of the Series B Preferred Stock are also not entitled to payment of any dividend and have no contractual recourse against the Company.

As the proceeds from the sale of Export Water are received and the amounts are remitted to the external CAA holders, the Company allocates a ratable percentage of this payment to the principal portion (the Participating Interests in Export Water Supply liability account) with the balance of the payment being charged to the contingent obligation portion.  Because the original recorded liability, which was $11.1 million, was 35% of the original total liability of $31.8 million, 35% of each payment remitted to the CAA holders is allocated to the recorded liability account.  The remaining portion of each payment, or 65%, is allocated to the contingent obligation, which is recorded on a net revenue basis.

In fiscal years 2007 and 2008, in order to reduce the long term impact of the CAA, the Company repurchased various portions of the CAA obligations in priority.  The Company did not make any CAA acquisitions during the fiscal years ended August 31, 2012, 2011 and 2010.  As a result of the acquisitions, and due to the sale of Export Water, as detailed in the table below, the remaining potential third party obligation as of August 31, 2012 is $3.5 million.

	Export Water Proceeds Received		Initial Export Water Proceeds to Pure Cycle			Total Potential Third party Obligation			Paticipating Interests Liability			Contingency
Original balances	$	-	$	218,500		$	31,807,732		$	11,090,630		$	20,717,102
Activity from inception until August 31, 2011:
Acquisitions		–		28,077,500			(28,077,500	)		(9,789,983	)		(18,287,517	)
Option payments - Sky Ranch and The Hills at Sky Ranch		110,400		(42,280	)		(68,120	)		(23,754	)		(44,366	)
Arapahoe County tap fees *		532,968		(373,078	)		(159,890	)		(55,754	)		(104,136	)
Export Water sale payments		85,123		(59,585	)		(25,538	)		(8,907	)		(16,631	)
Balance at August 31, 2011		728,491		27,821,057			3,476,684			1,212,232			2,264,452
Fiscal 2012 activity:
Export Water sale payments		26,163		(18,314	)		(7,849	)		(3,304	)		(4,545	)
Balance at August 31, 2012	$	754,654	$	27,802,743		$	3,468,835		$	1,208,928		$	2,259,907

  *  The Arapahoe County tap fees are less $34,522 in royalties paid to the Land Board.

The CAA includes contractually established priorities which call for payments to CAA holders in order of their priority.  This means the first three payees receive their full payment before the next priority level receives any payment and so on until full repayment.  The Company will receive $5.1 million of the first priority payout.  The remaining entire first priority payout totals $7.3 million as of August 31, 2012.

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Note 4 - Water Assets

12 Months Ended

Aug. 31, 2012

Property, Plant and Equipment Disclosure [Text Block]

NOTE 4:               WATER ASSETS

The Company’s water and water systems consist of the following approximate costs and accumulated depreciation and depletion as of August 31:

	August 31, 2012					August 31, 2011
	Costs		Accumulated Depreciation and Depletion			Costs		Accumulated Depreciation and Depletion
Arkansas River Valley assets	$	69,112,300	$	(1,315,900	)	$	81,318,800	$	(1,144,100	)
Rangeview water supply		14,376,100		(7,100	)		14,299,700		(6,600	)
Paradise water supply		-					5,540,200		–
Sky Ranch water rights and other costs		3,924,100		(50,800	)		3,915,200		(21,800	)
Fairgrounds water and water system		2,899,900		(534,500	)		2,899,900		(446,400	)
Rangeview water system		167,700		(67,600	)		167,700		(62,400	)
Water supply – other		25,600		(19,400	)		25,600		(13,700	)
Totals		90,505,700		(1,995,300	)		108,167,100		(1,695,000	)
Net investments in water and water systems	$	88,510,400				$	106,472,100

Depletion and Depreciation

The Company recorded $500 of depletion charges during each of the three fiscal years ended August 31, 2012, 2011 and 2010, respectively.  This related entirely to the Rangeview Water Supply (defined below). No depletion is taken against the Arkansas River water or Sky Ranch Water Supply (all are defined below) because the water located at these locations are not yet being utilized for their intended purpose as of August 31, 2012.

The Company recorded $309,200, $300,800 and $255,100 of depreciation expense in each of the fiscal years ended August 31, 2012, 2011 and 2010, respectively.  These figures include depreciation for other equipment not included in the table above.

Arkansas River Assets

Arkansas River Water

The Company owns 60,000 acre feet of senior water rights in the Arkansas River and its tributaries in Southeastern Colorado.  The Company anticipates that of this, 40,000 acre feet may be available for non-agricultural uses along the front range of Colorado sometime in the future.  The Company acquired its Arkansas River assets from HP A&M pursuant to the Arkansas River Agreement entered into on May 10, 2006.

In order to utilize the Arkansas River water in the Company’s service areas, the Company will be required to convert this water to municipal and industrial uses. Change of water use must be done through the Colorado water court and several conditions must be present prior to the water court granting an application for transfer of a water right. A transfer case would be expected to include the following provisions:

(i) a provision of anti-speculation in which the applicant must have contractual obligations to provide water service to customers prior to the water court ruling on the transfer of a water right,

(ii) the applicant can only transfer the “consumptive use” portion of its water rights (the Company expects to face opposition to any consumptive use calculation of the historic agricultural uses of its water),

(iii) applicants likely would be required to mitigate the loss of tax base in the basin of origin,

(iv) applicants would likely have re-vegetation requirements to restore irrigated soils to non-irrigated, and

(v) applicants would be required to meet water quality measures which would be included in the cost of transferring the water rights.

The value of the assets was recorded based on the determined fair value of the consideration paid at the acquisition date, because the value of the consideration was deemed a more reliable criterion of value than the value of the acquired assets.  The consideration paid was comprised of equity (3.0 million shares of the Company’s common stock) and the Tap Participation Fee.  Because the estimated value of the consideration paid was less than the total estimated fair value of the assets acquired by the Company, the relative values assigned to the assets were ratably reduced.  For a discussion of promissory notes owed by HP A&M to third parties which are secured by the Company’s Arkansas River water rights, see “Arkansas River  Land” section below, Note 7 – Long Term Debt and Operating Lease, and Note 15 – Subsequent Events.

Fort Lyon Canal Company (“FLCC”) Shares

The Arkansas River water rights are represented by over 21,800 shares of the FLCC, which is a non-profit mutual ditch company established in the late 1800’s that operates and maintains the 110 mile Fort Lyon Canal between La Junta, Colorado and Lamar, Colorado.  The shares in the FLCC represent the amount of water the Company owns in the Fort Lyon Canal.

Pursuant to the Arkansas River Agreement, the Company pledged to HP A&M: (i) one-half of the FLCC shares purchased by the Company, (ii) all shares of FLCC hereafter issued to the Company by means of any dividend or distribution in respect of the shares pledged hereunder (together with the shares identified in (i), the “Company’s Pledged Shares”), (iii) the certificates representing the Company’s Pledged Shares, (iv) the land associated with the water represented by the Company’s Pledged Shares, and (v) all rights to money or property which the Company now has or hereafter acquires in respect of the Company’s Pledged Shares.  This pledge agreement will terminate upon payment of the Tap Participation Fee.

Arkansas River  Land

The Company owns 16,000 acres of real property which is being used for agricultural purposes and was acquired from HP A&M in 2006 in connection with the water acquisition described above.  The land is located in the counties of Bent, Otero and Prowers in southern Colorado.  The Company also owns certain contract rights, tangible personal property, mineral rights, and other water interests related to the Arkansas River water and land.

The land owned by the Company is divided into 80 separate properties, each of which is being leased to area farmers.  Most of the operating leases expire on December 31, 2014, while the remaining leases have a variety of expiration dates.   Pursuant to a property management agreement between HP A&M and the Company (the “Property Management Agreement”), HP A&M had the right to pursue leasing of the land and Arkansas River water to interested parties and all lease income associated with leasing the land and Arkansas River water, together with all costs associated with these activities, were the sole opportunity and obligation of HP A&M.  The Property Management Agreement’s initial term expired on August 31, 2011 and beginning September 1, 2011, the Property Management Agreement entered into the “Extended Term” which could extend the Property Management Agreement until September 2014 at the latest.  During the Extended Term, HP A&M was to continue to manage the leases and receive all lease payments from the lessees as a management fee.  Beginning September 1, 2011, until the Property Management Agreement was terminated the Company allocated 26.9% (calculated pursuant to the Property Management Agreement based on consideration paid to HP A&M since the signing of the Arkansas River Agreement) of the net revenues paid to HP A&M (which is the lease payments HP A&M retains less expenses for employees, reasonable overhead and actual expenses paid to manage the farm leases) against the Tap Participation Fee liability.  Because the Company did not have the risk of loss associated with the leases (HP A&M’s management fee was equal to all lease income and contractually HP A&M had the risk of loss on the leases), the lease income and management fees are reflected on a net basis throughout the initial and Extended Terms of the Property Management Agreement until termination on August 3, 2012.

The Property Management Agreement was terminated on August 3, 2012 due to defaults by HP A&M on certain promissory notes secured by deeds of trust on the Company’s land and water.  The Company terminated the Property Management Agreement with HP A&M effective August 3, 2012.  On July 23, 2012, the Company notified all the farm lessees that HP A&M had notified the Company that HP A&M intended to default on its obligations under the promissory notes issued by HP A&M to purchase farms and water rights in the Fort Lyon Canal system. The lessees were informed that all lease payments would be billed directly by and paid directly to the Company from the date of the notice forward.  All other terms of the leases remained unchanged.  Under the farm lease agreements, the farmers are billed twice a year in November and March.  During fiscal 2012, the Company received lease income from farm leases of approximately $71,100.  The allocation of 26.9% of the net revenues against the Tap Participation Fee, the termination of the Property Management and the defaults by HP A&M are described in greater detail in Note 7 – Long-Term Debt and Operating Lease.

On February 10, 2010, the Company sold four acres of its Arkansas River Valley land for $10,000 in cash.  The land had an allocated carrying value of $600, which resulted in a gain of $9,400 being recorded during 2010.  The Company maintained all water rights associated with the acreage that was sold.  

Land and Water Shares Held for Sale

Prior to fiscal year end 2012, management decided to sell certain farms in order to have the cash flow sufficient to acquire the notes defaulted upon by HP A&M and to meet the future obligations on the promissory notes the Company intends to issue as consideration to purchase the notes owed by HP A&M. Management is anticipating selling approximately 1,486 acres of land along with 3,377 FLCC shares associated with this land.  The net book value of the assets held for sale is $12.2 million.  The negotiated sale price for these assets is $5.7 million resulting in a loss of $6.5 million. See Note 15 - Subsequent Events - Sale of Assets Held for Sale.

Rangeview Water Supply and Water System

The “Rangeview Water Supply” consists of 28,350 acre feet and is a combination of tributary surface water and groundwater rights along with certain storage rights associated with the Lowry Range, a 27,000-acre property owned by the Land Board located 16 miles southeast of Denver, Colorado.  The $14.4 million on the Company’s balance sheet as of August 31, 2012, represents the costs of assets acquired or facilities constructed to extend water service to customers located on and off the Lowry Range. The recorded costs of the Rangeview Water Supply include payments to the sellers of the Rangeview Water Supply, design and construction costs and certain direct costs related to improvements to the asset including legal and engineering fees.

The Company acquired the Rangeview Water Supply beginning in 1996 when:

(i) The District entered into the Amended and Restated Lease Agreement with the Land Board, which owns the Lowry Range;

(ii) The Company entered into the Agreement for Sale of Export Water with the District, a quasi-municipal political subdivision of the State of Colorado;

(iii) The Company entered into the Service Agreement with the District for the provision of water service to the Lowry Range; and

(iv) In 1997, the Company entered into the Wastewater Service Agreement with the District for the provision of wastewater service to the District’s service area (collectively these agreements are referred to as the “Rangeview Water Agreements”).

Pursuant to the Rangeview Water Agreements, the Company has the exclusive right, through 2081, to use 13,400 acre feet of the Rangeview Water Supply specifically on the Lowry Range.  The Rangeview Water Agreements also provide for the Company to use surface reservoir storage capacity in providing water service to customers both on and off the Lowry Range. The Company owns the rights to use the remaining 11,650 acre feet groundwater, which can be exported off the Lowry Range to serve area users (referred to as “Export Water”). The Company also has the option with the Land Board to exchange an aggregate gross volume of 165,000 acre feet of groundwater for 1,650 acre feet per year of adjudicated surface water and to use this surface water as Export Water.

Services on the Lowry Range

Pursuant to the Rangeview Water Agreements, the Company designs, finances, constructs, operates and maintains the District’s water and wastewater systems to provide service to the District’s customers on the Lowry Range.  The Company will operate both the water and the wastewater systems during the contract period and the District owns both systems. After 2081, ownership of the water system will revert to the Land Board, with the District retaining ownership of the wastewater system.

Rates and charges for all water and wastewater services on the Lowry Range, including tap fees and usage or monthly fees, are governed by the terms of the Rangeview Water Agreements.  Rates and charges are required to be less than the average of similar rates and charges of three surrounding municipal water and wastewater service providers, which are reassessed annually.  Pursuant to the Rangeview Water Agreements the Land Board receives a 12% royalty on all gross revenues received from water sales to customers on the Lowry Range.  The District retains 5% of the remaining gross revenues and the Company receives 95% of the remaining gross revenues after the Land Board Royalty.  The Land Board does not receive a royalty on wastewater fees.  The Company receives 100% of the District’s wastewater tap fees and 90% of the District’s wastewater usage fees (the District retains the other 10%).

Export Water

The Company owns the Export Water and uses and intends to use it to provide water and wastewater services to customers off the Lowry Range. The Company will own all facilities required to extend water and wastewater services using its Export Water. The Company anticipates contracting with third parties for the construction of these facilities.  If the Company sells Export Water, the Company is required to pay royalties to the Land Board ranging from 10% of gross revenues to 50% of net revenue after deducting certain costs.

The County Fairgrounds Water and Water System

The Company owns 321 acre feet of groundwater purchased pursuant to the County Agreement.  The Company plans to use this water in conjunction with its Rangeview Water Rights in providing water to areas outside the Lowry Range.  The $2.9 million of capitalized costs includes the costs to construct various Wholesale and Special Facilities, including a new deep water well, a 500,000 gallon water tank and pipelines to transport water to the Fairgrounds.

Sky Ranch

Effective July 30, 2010, the Company entered into a Loan Sale and Assignment Agreement (the “Loan Sale Agreement”) with the Bank of America, N.A. (“BofA”), to acquire from BofA loan instruments secured by 931 acres of undeveloped land known as Sky Ranch.  The Company acquired the promissory note payable by Sky Ranch, LLC (a wholly owned subsidiary of Neumann Homes, Inc.), and the deed of trust granted by Sky Ranch, LLC, to secure the promissory note from the BofA for cash payments totaling $7.0 million.  Concurrent with the signing of the Loan Sale Agreement, during fiscal 2010, the Company made an escrow payment totaling $700,000 to BofA.  The balance of the acquisition price, or $6.3 million, was paid to BofA in connection with the closing, which was on October 18, 2010.  The property includes 820 acre feet of water, of which the Company already owned 89 acre feet purchased pursuant to the agreements entered into with the former developer, which was acquired for $100,000 prior to fiscal 2011.  On October 26, 2010, the United States Bankruptcy Court, Northern District of Illinois, entered an order granting the Company’s motion requesting that title to the Sky Ranch property be deeded to the Company free and clear of all bankruptcy claims.  Pursuant to the order, the Company owns the Sky Ranch property effective as of November 2, 2010.

Total consideration for the land and water included the $7.0 million purchase price, plus direct costs and fees of $554,100.  The Company allocated the total acquisition cost to the land and water rights based on estimates of each asset’s respective fair value, as described in the table below. Because the total acquisition cost was less than the total estimated fair value of the assets acquired by the Company, the relative values assigned to the land and water have been ratably reduced (allocated values are detailed in the table below).  The estimated fair value of the land and water rights were determined by internal analysis of estimated future cash flows from land and water rights sales and supplemented with an external appraisal of the land acquired.  See further discussion regarding the exclusivity of the water rights in Note 12 – Litigation Loss Contingencies.

The following table presents the allocation of the acquisition costs (and the relative fair values of each asset), including professional fees and other costs related to the acquisition, to the land and water based on their relative fair values:

Asset	Estimated Fair Value		% of Total Fair Value			Allocable Acquisition Costs		Fair Value Allocation		Costs Specific to Land 1		Total Values Assigned to Identifiable Assets
Land	$	10,637,900		48.13	%	$	7,187,900	$	3,459,800	$	279,100	$	3,738,900
Water 2		11,462,700		51.87	%		7,187,900		3,728,100		-		3,728,100
	$	22,100,600		100	%			$	7,187,900	$	279,100	$	7,467,000
Costs of acquisition 3													87,100
Total capitalized costs related to Sky Ranch												$	7,554,100

Table Notes

1. Includes $71,000 of property taxes.

2. The water rights value does not include the $100,000 of costs already capitalized on the Company’s balance sheet related to the 89 acre feet of water acquired from the prior owner of the land and not pursuant to the Loan Sale Agreement.

3. The amounts recorded as costs of acquisition consist of professional fees and other related costs.

The assets acquired by the Company are being depreciated consistent with the Company’s depreciation policies.

The funding for this acquisition was completed in September 2010, when the Company entered into the $5.2 million Convertible Negotiable Promissory Note (the “Convertible Note – Related Party”) with PAR Investment Partners, L.P. (“PAR”), a greater than 5% shareholder of the Company, and sold 1.8 million shares of its common stock for $5.5 million.  Both financing transactions are described below, including the conversion of the Convertible Note – Related Party on January 11, 2011.  Of the combined $10.7 million raised by the Company, $6.3 million was used to complete the Loan Sale Agreement with BofA and the remaining funds, $4.4 million, are being used for working capital and other general corporate purposes.  

Issuance and Conversion of the Convertible Note – Related Party

The Company issued the $5.2 million Convertible Note – Related Party to PAR on September 28, 2010.  The Company’s shareholders authorized conversion of the Convertible Note – Related Party at the January 11, 2011 annual shareholders’ meeting.  Following the meeting, PAR surrendered the Convertible Note – Related Party for conversion, and the Company issued 1,982,099 unregistered shares of its common stock to PAR.  From issuance until conversion, the Convertible Note – Related Party accrued interest at a rate of 10% per annum.  During the fiscal year ended August 31, 2011, the Company accrued $151,700 of interest on the Convertible Note – Related Party.  The number of shares issued was based on the outstanding balance of $5.35 million (principal and accrued interest) divided by a conversion rate of $2.70.  Since the Convertible Note – Related Party included a conversion feature that was a standard conversion feature not subject to change, the Company determined this was not an embedded derivative.  Additionally, at the date of issuance, the market price of the Company’s common stock was less than the conversion price; therefore, the Company determined that the instrument did not contain a beneficial conversion feature.  In conjunction with the Convertible Note – Related Party, the Company granted PAR one demand right and piggyback rights to register the shares of common stock issuable upon conversion of the Convertible Note – Related Party.

Sale of common stock pursuant to the shelf registration statement

On September 29, 2010, the Company sold 1,848,931 shares of its common stock for $5.5 million or $3.00 per share.  These shares were sold pursuant to a $10.0 million shelf registration statement (Registration Number 333-168160) filed with the SEC, which became effective on July 28, 2010.  The Company may issue up to an additional $4.45 million of its common stock pursuant to this shelf registration statement.  930,600 shares of common stock sold in this offering were sold at PAR for $2.8 million or $3.00 per share.

O&G Lease

On March 10, 2011, the Company entered into the O&G Lease and the Surface Use Agreement with Anadarko.  Pursuant to the O&G Lease, the Company received an up-front payment of $1,243,400 from Anadarko for the purpose of exploring for, developing, producing and marketing oil and gas on 634 acres of mineral estate owned by the Company at its Sky Ranch property.  The Company also received $9,000 in surface use and damage payments.

Paradise Water Supply

In 1987, the Company acquired water, water wells, and related assets from Paradise Oil, Water and Land Development, Inc., which constitute the “Paradise Water Supply.” The $5.5 million of capitalized costs includes costs to acquire the Paradise Water Supply, as well as certain direct legal and engineering costs relating to improvements to the asset. The Paradise Water Supply includes 70,000 acre feet of conditionally decreed tributary Colorado River water, a right-of-way permit from the United States Department of the Interior, Bureau of Land Management, for the construction of a 70,000 acre foot dam and reservoir across federal lands, and four unrelated water wells.

Every six years the Paradise Water Supply is subject to a finding of reasonable diligence review by the water court and the State Engineer.  For a favorable finding, the Company must demonstrate that it is diligently pursuing the development of the water rights. If the Company does not receive a favorable finding of reasonable diligence, it will lose its right to the Paradise Water Supply.  The most recent diligence review was started in our fiscal 2005 and was completed in 2008, but not without objectors and not without the Company having to agree to certain stipulations to remove the objections.  In order to continue to maintain the Paradise water right, by 2014 the Company must (i) select an alternative reservoir site; (ii) file an application in water court to change the place of storage; (iii) identify specific end users and places of use for the water; and (iv) identify specific source(s) of the water rights for use.  Management does not intend to spend the resources needed to find an alternative reservoir site without a specific use for the water.  The Company has been unable to find potential customers for this water and cannot be certain that a customer will commit to use the water within the next two years.  Since the Company does not have a customer that will commit to use the water and the Company will not commit the resources necessary to move the reservoir site in the absence of a customer, the Company expects to lose these conditional water rights.  Accordingly during the fourth quarter of fiscal 2012, the Company has determined the Paradise Water Supply is fully impaired and an impairment charge of $5.5 million was recorded.

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Accounting Policies, by Policy (Policies)

12 Months Ended

Aug. 31, 2012

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less. The Company’s cash equivalents are comprised entirely of money market funds maintained at a high quality financial institution in an account which as of August 31, 2012, did not exceed federally insured limits.  At various times during the year ended August 31, 2012, the Company’s main operating account exceeded federally insured limits.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Financial Instruments – Concentration of Credit Risk and Fair Value

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents and marketable securities. The Company places its cash equivalents and investments with high quality financial institutions. At various times throughout the year ended August 31, 2012, cash deposits have exceeded federally insured limits. The Company invests its idle cash primarily in certificates of deposit, money market instruments, commercial paper obligations, corporate bonds and US government treasury obligations. To date, the Company has not experienced significant losses on any of these investments.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.

Current Assets and Liabilities

The amounts reported on the balance sheets for cash and cash equivalents, trade receivables and trade payables approximate their fair values because of the relatively short maturity of these instruments.

The amount reported on the balance sheets for marketable securities represents the fair value of the underlying instruments as reported by the financial institutions where the funds are held as of August 31, 2012 and 2011.  The Company has recorded net unrealized losses on its marketable securities of $1,100 and $2,900 at August 31, 2012 and August 31, 2011, respectively.  The Company did not realize any gains or losses on its marketable securities during each of the three years ended August 31, 2012, 2011 and 2010.

Notes Receivable and Construction Proceeds Receivable

The amounts reported on the balance sheet for the Company’s notes receivable and construction proceeds receivable approximate their fair values as they bear interest at rates which are comparable to current market rates.

Long-term Financial Liabilities

The Comprehensive Amendment Agreement No. 1 the “CAA” is comprised of a recorded balance and an off-balance sheet or “contingent” obligation associated with the Company’s acquisition of its “Rangeview Water Supply” (defined in Note 4 below).  The amount payable is a fixed amount but is repayable only upon the sale of “Export Water” (defined in Note 4 below).  Because of the uncertainty of the sale of Export Water, the Company has determined that the contingent portion of the CAA does not have a determinable fair value.  The CAA is described further in Note 5 – Participating Interests in Export Water.

The recorded balance of the “Tap Participation Fee” liability (as described below) is its estimated fair value determined by projecting new home development in the Company’s targeted service area over an estimated development period.

Notes Payables and Related Party Accounts Receivable [Policy Text Block]

Notes Payables and Related Party Accounts Receivable

In conjunction with HP A&M defaulting on certain promissory notes, the Company has the right to collect from HP A&M any amounts the Company spends to cure the defaulted notes.  Accordingly the Company has recorded the entire amount of the HP A&M notes as a receivable from HP A&M.  The total receivable from HP A&M is $9.6 million with $4.6 million as current and $5.0 million as long term.  The short term portion of the receivable represents the amount of the defaulted promissory notes payable by HP A&M which were purchased by the Company which the Company will pursue remedies under the Asset Purchase Agreement (the "Arkansas River Agreement" described in more detail in Note 4) over the next 12 months.

Subsequent to fiscal 2012, the Company began acquiring the defaulted and non-defaulted promissory notes that are payable by HP A&M.   The majority of the notes issued by the Company have a five-year term, bear interest at an annual rate of five percent (5%) and require semi-annual payments with a straight-line amortization schedule.

Inventory, Cash Flow Policy [Policy Text Block]

Cash Flows

The Company did not pay any interest or income taxes during the fiscal years ended August 31, 2012, 2011 and 2010, respectively.

Marketable Securities, Policy [Policy Text Block]

Marketable Securities

At August 31, 2012, the Company’s marketable securities are comprised entirely of certificates of deposit maintained at various financial institutions, each of which have invested balances below federally insured limits and pay interest at stated rates through maturity.  The certificates mature at various dates through May 2013; however, these securities represent temporary investments and it is management’s intent to hold these securities available for current operations and not hold them until maturity, therefore they are classified as available-for-sale securities and are recorded at fair value.  The Company has no investments in equity instruments.

The Company’s marketable securities are recorded as available-for-sale and therefore any unrecognized changes in the fair value of these marketable securities is included as a component of accumulated comprehensive income (loss).

Receivables, Policy [Policy Text Block]

Accounts Receivable

The Company records accounts receivable net of allowances for uncollectible accounts.  The Company recorded $20,400 and $0 as of August 31, 2012 and 2011 respectively for allowances for uncollectible accounts. The allowance for uncollectible accounts was determined based on specific review of all past due accounts.  The August 31, 2012 allowance for uncollectible accounts is entirely due to the assumed farm accounts receivable (see Note 7) from HP A&M.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the eventual use of the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Based on the Company’s procedures the Company believes there are impairments to its “Paradise Water Supply” asset (defined in Note 4 below) and land and water rights held for sale related to the Arkansas River Assets.  There was no impairment in the carrying amounts of the remaining long-lived assets at August 31, 2012 and 2011.  See further discussion in Note 4 below under sections “Paradise Water Supply” and “Arkansas River Assets”.

Depreciation, Depletion, and Amortization [Policy Text Block]

Capitalized Costs of Water and Wastewater Systems and Depreciation and Depletion Charges

Costs to construct water and wastewater systems that meet the Company’s capitalization criteria are capitalized as incurred, including interest, and depreciated on a straight-line basis over their estimated useful lives of up to thirty years.  The Company capitalizes design and construction costs related to construction activities and it capitalizes certain legal, engineering and permitting costs relating to the adjudication and improvement of its water assets.

The Company depletes its water assets that are being utilized on the basis of units produced (i.e. thousands of gallons sold) divided by the total volume of water adjudicated in the water decrees.

Interest Expense, Policy [Policy Text Block]

Tap Participation Fee Liability and Imputed Interest Expense

The Tap Participation Fee liability, as described in Note 7 – Long Term Debt and Operating Lease, represents the discounted fair value of the amounts the Company estimates it will pay HP A&M pursuant to the asset purchase agreement (the “Arkansas River Agreement”) described in more detail in Note 4.  The Company imputes interest expense on the unpaid Tap Participation Fee using the effective interest method over the estimated development period utilized in the valuation of the liability. The Company imputed interest of $3.5 million, $3.8 million and $3.6 million during the years ended August 31, 2012, 2011 and 2010, respectively.

The Tap Participation Fee is due and payable once the Company has sold a water tap and received the consideration due for such water tap. The Company did not sell any water taps during the years ended August 31, 2012, 2011 or 2010.  As of August 31, 2012, 19,427 water taps remain subject to the Tap Participation Fee.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company generates revenues mainly from (i) one time water and wastewater tap fees, (ii) construction fees,  and (iii) monthly wholesale water usage fees and wastewater service fees.  Because these items are separately delivered, the Company accounts for each of the items separately, as described below.

Tap and Construction Fees

Tap fees, also called system development fees, are received in advance, are non-refundable and are typically used to fund construction of certain facilities and defray the acquisition costs of obtaining water rights.

Construction fees are fees used by the Company to construct assets that are typically required to be constructed by developers or home builders.

Proceeds from tap fees and construction fees are deferred upon receipt and recognized in income either upon completion of construction of infrastructure or ratably over time, depending on whether the Company owns the infrastructure constructed with the proceeds or a customer owns the infrastructure constructed with the proceeds.

Tap and construction fees derived from agreements in which the Company will not own the assets constructed with the fees are recognized as revenue using the percentage-of-completion method.  Costs of construction of the assets when the Company will not own the assets are recorded as construction costs.

Tap and construction fees derived from agreements for which the Company will own the infrastructure are recognized as revenues ratably over the estimated accounting service life of the facilities constructed, starting at completion of construction, which could be in excess of thirty years.  Costs of construction of the assets when the Company will own the assets are capitalized and depreciated over their estimated economic lives.

In August 2005, the Company entered into the Water Service Agreement (the “County Agreement”) with Arapahoe County (the “County”) to provide water service to the County’s fairgrounds (the “Fairgrounds”).  Pursuant to the County Agreement, the Company sold the County 38.5 water taps for consideration of $567,490.  In July 2006, upon completion of the construction of the “Wholesale Facilities” (which were paid for with the water tap fee proceeds), the Company began ratably recognizing $428,000 of water tap fees into income.  The $428,000 is the net of the water tap fees received by the Company of $567,490, decreased by (i) royalties to the Colorado State Board of Land Commissioners (the “Land Board” which owns the “Lowry Range”) of $34,522; and (ii) 65% of the total payments made to external CAA holders or $104,136.  In each of the three fiscal years ended August 31, 2012, 2011 and 2010, the Company recognized $14,300 of tap fee revenue.  At August 31, 2012, $341,900 of these tap fees are still deferred.

The Company recognized $41,500 of “Special Facilities” funding as revenue in each of the three fiscal years ended August 31, 2012 and 2011 respectively. These construction revenues also relate to the County Agreement entered into in August 2005.

As of August 31, 2012, the Company has deferred recognition of $1.3 million of tap and construction fee revenue from the County, which will be recognized as revenue ratably through 2036.

In addition to the tap fee revenues and the construction revenues, the Company also records interest income from the County using the effective interest method.  Pursuant to the County Agreement, the County is making payments to the Company totaling $82,200 per year for the construction of the Special Facilities at the Fairgrounds.  These payments will continue through 2015 and include interest at 6% per annum.  The Company recognized $19,200, $22,900 and $26,300 of interest income from the County during the fiscal years ended August 31, 2012, 2011 and 2010, respectively.

In August 2012, the Company entered into an agreement with Front Range Pipeline which grants Front Range Pipeline easement rights for a period of three years to construct a pipeline for total consideration of $28,700.  As of August 31, 2012, the Company had $28,500 in deferred revenue from Front Range Pipeline.

Monthly Wholesale Usage and Service Fees

Monthly wholesale water usage charges are assessed to the Company’s customers based on actual metered usage each month plus a base monthly service fee assessed per single family equivalent (“SFE”) unit served.  One SFE is a customer, whether residential, commercial or industrial, that imparts a demand on the Company’s water or wastewater systems similar to the demand of a family of four persons living in a single family house on a standard sized lot.  One SFE is assumed to have a water demand of approximately 0.4 acre feet per year and to contribute wastewater flows of approximately 300 gallons per day.  Water usage pricing uses a tiered pricing structure.  The Company recognizes wholesale water usage revenues upon delivering water to its customers or its governmental customers’ end-use customers, as applicable.  The water revenues recognized by the Company are shown net of royalties to the Land Board and, when applicable, amounts retained by the Rangeview Metropolitan District (the “District”).

The Company recognizes wastewater processing revenues monthly based on usage. The monthly wastewater service fees are shown net of amounts retained by the District.

Amounts recognized for water and wastewater services during the fiscal years ended August 31, 2012, 2011 and 2010, are presented in the statements of operations.

Costs of delivering water and providing wastewater service to customers are recognized as incurred.

The Company delivered 34.2 million, 34.5 million and 33.1 million gallons of water to customers during the fiscal years ended August 31, 2012, 2011 and 2010, respectively.

Revenue Recognition, Services, Royalty Fees [Policy Text Block]

Royalty and other obligations

Revenues from the sale of Export Water are shown net of royalties payable to the Land Board. Revenues from the sale of water on the “Lowry Range” are shown net of the royalties to the Land Board and the amounts retained by the District.  See further description of the “Lowry Range” in Note 4 – Water Assets under section “Rangeview Water Supply and Water System”.

Oil and Gas Properties Policy [Policy Text Block]

Oil and Gas Lease Payments

As further described in Note 4 below, on March 10, 2011, the Company entered into a Paid-Up Oil and Gas Lease (the “O&G Lease”) and a Surface Use and Damage Agreement (the “Surface Use Agreement”) with Anadarko E&P Company, L.P. (“Anadarko”) a wholly owned subsidiary of Anadarko Petroleum Company.  Pursuant to the O&G Lease on March 10, 2011, the Company received an up-front payment of $1,243,400 from Anadarko for the purpose of exploring for, developing, producing and marketing oil and gas on approximately 634 acres of mineral estate owned by the Company at its Sky Ranch property.  The Company began recognizing the up-front payment from Anadarko as income on a straight-line basis over three years (the initial term of the O&G Lease) on March 10, 2011.  During the years ended August 31, 2012 and 2011, the Company recognized $423,000 and $199,000 respectively, of income related to the up-front payments received pursuant to the O&G Lease.

As of August 31, 2012, the Company has deferred recognition of $639,000 of income related to the O&G Lease, which will be recognized into income ratably through February 2014.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Share-based Compensation

The Company maintains a stock option plan for the benefit of its employees and directors.  The Company records share-based compensation costs which are measured at the grant date based on the fair value of the award and are recognized as expense over the applicable vesting period of the stock award using the straight-line method.  The Company has adopted the alternative transition method for calculating the tax effects of share-based compensation which allows for a simplified method of calculating the tax effects of employee share-based compensation.  Because the Company has a full valuation allowance on its deferred tax assets, the granting and exercise of stock options during the fiscal years ended August 31, 2012 and 2011 had no impact on the income tax provisions.

The Company recognized $54,600, $94,600 and $87,600 of share-based compensation expenses during the fiscalyears ended August 31, 2012, 2011 and 2010, respectively.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company uses a “more-likely-than-not” threshold for the recognition and de-recognition of tax positions, including any potential interest and penalties relating to tax positions taken by the Company.  The Company does not have any significant unrecognized tax benefits as of August 31, 2012.

The Company files income tax returns with the Internal Revenue Service and the State of Colorado. The tax years that remain subject to examination are fiscal 2009 through fiscal 2011. The Company does not believe there will be any material changes in its unrecognized tax positions over the next twelve months.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.  At August 31, 2012, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the fiscal years ended August 31, 2012, 2011 or 2010.

Earnings Per Share, Policy [Policy Text Block]

Loss per Common Share

Loss per common share is computed by dividing net loss by the weighted average number of shares outstanding during each period. Common stock options and warrants aggregating 215,100, 280,100 and 262,600 common share equivalents as of August 31, 2012, 2011 and 2010, respectively, have been excluded from the calculation of loss per common share as their effect is anti-dilutive.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability.  Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change.  A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, the Company has not determined whether implementation of such proposed standards would be material to the Company’s financial statements.  New pronouncements assessed by the Company recently are discussed below:

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, Comprehensive Income (Topic 220) – Presentation of Comprehensive Income (“ASU 2011-05”).  ASU 2011-05 requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. ASU 2011-05 is effective for fiscal years and interim periods beginning after December 15, 2011 (September 1, 2012 for the Company).  The Company does not expect the adoption of ASU 2011-04 to have a material impact on its results of operations, financial condition, or cash flows.

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Note 12 - Litigation Loss Contingencies

12 Months Ended

Aug. 31, 2012

Legal Matters and Contingencies [Text Block]

NOTE 12:             LITIGATION LOSS CONTINGENCIES

The Company is involved in various claims, litigation and other legal proceedings that arise in the ordinary course of its business.  In accordance with ASC 450, Contingencies, an accrual is recorded for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the anticipated most likely outcome or the minimum amount within a range of possible outcomes. The Company makes such estimates based on information known about the claims, and experience in contesting, litigating and settling similar claims. Disclosures are also provided for reasonably possible losses that could have a material effect on the Company's financial position, results of operations or cash flows.  

Because each of the lawsuits below involves complex legal issues and uncertainties and are in the early stages, the Company has recorded no accrual for loss related to the lawsuit and is unable to estimate a reasonably possible loss or range of loss.

As discussed in a Form 8-K filed on December 19, 2011, on that date the Company and the District filed a lawsuit against the State of Colorado by and through the Land Board. The complaint was filed with the District Court, City and County of Denver, State of Colorado. The Company and the District are claiming that the Land Board breached, and will breach, agreements entered into by the Land Board with the Company and the District in connection with a 1996 settlement agreement. Those agreements include (i) the Amended and Restated Water Lease, dated as of April 4, 1996, between the Land Board and the District and (ii) the Service Agreement of the same date between the Company and the District. As initially reported in a Current Report on Form 8-K filed on November 29, 2011, the Land Board issued a Request for Proposal that included a draft lease agreement related to oil and gas rights at the Land Board’s Lowry Range.  The Company believes the draft lease agreement did not adequately address or protect the Company’s exclusive right to provide water to the Lowry Range.  The Land Board subsequently entered into an oil and gas lease for the Lowry Range, which, like the draft lease, does not protect the Company’s exclusive rights.  As a result of this breach, the Company and the District are claiming damages which will be proven at trial.

As disclosed in two Form 8-K’s, one filed on February 16, 2012 and one filed on February 29, 2012, HP A&M initiated a lawsuit against the Company in District Court, City and County of Denver, State of Colorado on February 27, 2012 alleging breaches of representations made in connection with the Arkansas River Agreement.  The HP A&M claims relate to the issues currently being litigated between the Company and the Land Board regarding the Company’s exclusive right to provide water service to the Land Board’s Lowry Range property.  The Company believes the allegations are without merit, and intends to vigorously defend against them.

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Note 8 - Shareholders' Equity

12 Months Ended

Aug. 31, 2012

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8:               SHAREHOLDERS’ EQUITY

Sale of common stock and issuance of common stock upon conversion of Convertible Note – Related Party

See Note 4 above regarding the issuance of the common stock and the issuance of stock upon conversion of the Convertible Note – Related Party, both done in connection with the Sky Ranch acquisition.

Preferred Stock

The Company’s non-voting Series B Preferred Stock has a preference in liquidation of $1.00 per share less any dividends previously paid. Additionally, the Series B Preferred Stock is redeemable at the discretion of the Company for $1.00 per share less any dividends previously paid. In the event that the Company’s proceeds from sale or disposition of Export Water rights exceed $36,026,232, the Series B Preferred Stock holders will receive the next $432,513 of proceeds in the form of a dividend.

Equity Compensation Plan

The Company maintains the 2004 Incentive Plan (the “Equity Plan”), which was approved by shareholders in April 2004.  Executives, eligible employees and non-employee directors are eligible to receive options and restricted stock grants pursuant to the Equity Plan. Under the Equity Plan, options to purchase shares of stock and restricted stock awards can be granted with exercise prices and vesting periods determined by the Compensation Committee of the Board.  The Company initially reserved 1.6 million shares of common stock for issuance under the Equity Plan. At August 31, 2012, the Company had 1,350,811 shares that can be granted to eligible participants pursuant to the Equity Plan.

The Company estimates the fair value of share-based payment awards on the date of grant using the Black-Scholes option-pricing model (“Black-Scholes model”).  Using the Black-Scholes model, the value of the portion of the award that is ultimately expected to vest is recognized as a period expense over the requisite service period in the statement of operations.  Option forfeitures are to be estimated at the time of grant and revised if necessary, in subsequent periods if actual forfeitures differ from those estimates.  The Company does not expect any forfeiture of its option grants and therefore the compensation expense has not been reduced for estimated forfeitures.  During fiscal year 2012, 29,500 options were forfeited by option holders and an additional 48,000 options expired.  No options were forfeited during the two fiscal years ended August 31, 2011 and 2010.  The Company attributes the value of share-based compensation to expense using the straight-line single option method for all options granted.

The Company’s determination of the estimated fair value of share-based payment awards on the date of grant is affected by the following variables and assumptions:

· The grant date exercise price – is the closing market price of the Company’s common stock on the date of grant;

· Estimated option lives – based on historical experience with existing option holders;

· Estimated dividend rates – based on historical and anticipated dividends over the life of the option;

· Life of the option ­–based on historical experience option grants have lives between 8 and 10 years;

· Risk-free interest rates – with maturities that approximate the expected life of the options granted;

· Calculated stock price volatility – calculated over the expected life of the options granted, which is calculated based on the weekly closing price of the Company’s common stock over a period equal to the expected life of the option; and

· Option exercise behaviors – based on actual and projected employee stock option exercises and forfeitures.

In January 2012, the Company granted its non-employee directors options to purchase a combined 12,500 shares of the Company’s common stock pursuant to the Equity Plan.  The options vest one year from the date of grant and expire ten years from the date of grant.  The Company calculated the fair value of these options at $15,400 using the Black-Scholes model with the following variables: weighted average exercise price of $1.85 (which was the closing sales price of the Company’s common stock on the date of the grant); estimated option lives of ten years; estimated dividend rate of 0%; weighted average risk-free interest rate of 1.87%; weighted average stock price volatility 73.2%; and an estimated forfeiture rate of 0%. The $15,400 of stock-based compensation is being expensed monthly over the vesting periods.

In January 2011, the Company granted its non-employee directors options to purchase a combined 17,500 shares of the Company’s common stock pursuant to the Equity Plan.  12,500 of the options vest one year from the date of grant and expire ten years from the date of grant.  5,000 of the options vest one-half at the first anniversary of the grant date and one-half at the second anniversary of the grant date.  The Company calculated the fair value of these options at $54,500 using the Black-Scholes model with the following variables: weighted average exercise price of $3.67 (which was the closing sales price of the Company’s common stock on the date of the grant); estimated option lives of ten years; estimated dividend rate of 0%; weighted average risk-free interest rate of 3.37%; weighted average stock price volatility of 84.7%; and an estimated forfeiture rate of 0%. The $54,500 of stock-based compensation is being expensed monthly over the vesting periods.

In January 2010, the Company granted its non-employee directors options to purchase a combined 12,500 shares of the Company’s common stock pursuant to the Equity Plan. The options vested one year from the date of grant and expire ten years from the date of grant. The Company calculated the fair value of these options at $31,200 ($2.49 per option) using the Black-Scholes model with the following variables: weighted average exercise price of $2.88 (which was the closing sales price of the Company’s common stock on the date of the grant); estimated option lives of ten years; estimated dividend rate of 0%; weighted average risk-free interest rate of 3.74%; weighted average stock price volatility of 88.4%; and an estimated forfeiture rate of 0%. The $31,200 of stock-based compensation was expensed monthly over the vesting period.

No options were exercised during the fiscal years ended August 31, 2012 or 2011.

The following table summarizes the stock option activity for the Equity Plan for the fiscal year ended August 31, 2012:

	Number of Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Approximate Aggregate Instrinsic Value
Oustanding at beginning of period		280,000		$	6.10
Granted		12,500		$	1.85
Exercised		-		$	–
Forfeited or expired		(77,500	)	$	6.03
Outstanding at August 31, 2012		215,000		$	5.88	$	4.98		*
Options exercisable at August 31, 2012		192,500		$	6.12	$	4.59		*

*  Intrinisic value less than $0

The following table summarizes the activity and value of non-vested options as of and for the fiscal year ended August 31, 2012:

	Number of Options			Weighted-Average Grant Date Fair Value
Non-vested options oustanding at beginning of period		49,500		$	2.86
Granted		12,500			1.23
Vested		(22,500	)		3.11
Forfeited		(17,000	)		2.83
Non-vested options outstanding at August 31, 2012		22,500		$	1.72

All non-vested options are expected to vest.  The total fair value of options vested during the fiscal years ended August 31, 2012, 2011 and 2010 was $66,000, $74,700 and $79,700, respectively.  The weighted average grant date fair value of options granted during the fiscal years ended August 31, 2012, 2011 and 2010 was $1.23, $3.11 and $2.49, respectively.

Share-based compensation expense for the fiscal years ended August 31, 2012, 2011 and 2010, was $54,600, $94,600 and $87,600, respectively.

At August 31, 2012, the Company had unrecognized expenses relating to non-vested options that are expected to vest totaling $13,200. The weighted-average period over which these options are expected to vest is less than two years. The Company has not recorded any excess tax benefits to additional paid in capital.

Warrants

As of August 31, 2012, the Company had outstanding warrants to purchase 92 shares of common stock at an exercise price of $1.80 per share. These warrants expire six months from the earlier of:

(i) The date all of the Export Water is sold or otherwise disposed of,

(ii) The date the CAA is terminated with respect to the original holder of the warrant, or

(iii) The date on which the Company makes the final payment pursuant to Section 2.1(r) of the CAA.

No warrants were exercised during fiscal 2012, 2011 or 2010.

Pledged Common Stock Owned by HP A&M

Pursuant to the Arkansas River Agreement, HP A&M pledged, transferred, assigned and granted to the Company a security interest in and to the Pledged Shares, consisting of 1,500,000 shares of Pure Cycle common stock and the proceeds there from.  Due to the HP A&M default, subsequent to fiscal 2012 the Pledged Shares were sold pursuant to a foreclosure sale for $3.5 million or $2.35 per share.  See Note 15 – Subsequent Events below.

Registration Rights Agreement

Pursuant to the Arkansas River Agreement the Company granted HP A&M one demand right to request the registration of 750,000 shares of Pure Cycle common stock and piggyback rights, which were exercised in 2007, to register an additional 750,000 shares of Pure Cycle common stock.  The demand rights expired August 31, 2011.

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Note 6 - Accrued Liabilities

12 Months Ended

Aug. 31, 2012

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

NOTE 6:               ACCRUED LIABILITIES

At August 31, 2012, the Company had accrued liabilities of $172,600, of which $60,500 was for estimated property taxes on the Sky Ranch property, $56,800 was for professional fees, $33,500 for prepaid farm lease payments and the remaining $21,800 was related to operating payables.

At August 31, 2011, the Company had accrued liabilities of $118,600, of which $62,400 was for estimated property taxes on the Sky Ranch property, $49,500 was for professional fees, and the remaining $6,700 was related to operating payables.

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Note 7 - Long-Term Debt and Operating Lease

12 Months Ended

Aug. 31, 2012

Debt and Capital Leases Disclosures [Text Block]

NOTE 7:               LONG-TERM DEBT AND OPERATING LEASE

As of August 31, 2012, the Company has no debt with contractual maturity dates.

The Participating Interest in Export Water supply and the Tap Participation Fee payable to HP A&M are obligations of the Company that have no scheduled maturity dates. Therefore, these liabilities are not disclosed in tabular format.  However, the Participating Interest in Export Water supply is described in Note 5 – Participating Interest in Export Water and the Tap Participation Fee is described below in section “Tap Participation Fee Payable to HP A&M”.

Tap Participation Fee Payable to HP A&M

The Company’s Tap Participation Fee liability represents the estimated discounted fair value of the Company’s obligation to pay HP A&M twenty percent (20%) of the Company’s gross proceeds, or the equivalent thereof, from the sale of the next 19,427 water taps sold by the Company.  This was initially an obligation to pay ten percent (10%) from the sale of 40,000 water taps sold after the date of the Arkansas River Agreement.  The 40,000 water taps were reduced to 19,427 as a result of (i) sales of Arkansas River land in 2006 and 2009, (ii) the sale of unutilized water rights owned by the Company in the Arkansas River Valley in 2007, (iii) the election made by HP A&M effective September 1, 2011 pursuant to the terms of the Arkansas River Agreement to increase the Tap Participation Fee percentage from ten percent (10%) to twenty percent (20%) and take a corresponding fifty percent (50%) reduction in the number of taps subject to the Tap Participation Fee, and (iv) the allocation of 26.9% of net revenues received by HP A&M from management of the farm leasing operations as described below.

At the acquisition date, the Company valued the Tap Participation Fee at $45.6 million using a discounted cash flow analysis of the projected future payments to HP A&M.  The $68.3 million balance at August 31, 2012, includes $22.7 million of imputed interest, recorded using the effective interest method.  The value of the Tap Participation Fee is estimated by projecting new home development in the Company’s targeted service area over an estimated development period.  Projecting new home development in the Company’s targeted service area involved the utilization of third party historical and projected housing and population growth data for the Denver, Colorado metropolitan area, which was applied to an estimated development pattern, supported by historical development patterns of certain master planned communities in the Denver, Colorado metropolitan area. This estimated development pattern was then applied to projected future water tap fees, which were estimated using historical water tap fees.  The Company updated its estimated discounted cash flow analysis as of September 1, 2011.  The Company completed an update to its analysis of the fair value of the Tap Participation Fee as of August 31, 2012, at which time it determined that changes in the projected estimated discounted cash flows did not materially impact the Tap Participation Fee liability as of August 31, 2012, or the amount recorded as imputed interest during the year ended August 31, 2012.  Based on a lack of material changes, no change in valuation was deemed necessary at August 31, 2012.

Actual new home development in the Company’s service area and actual future tap fees inevitably will vary significantly from the Company’s estimates, which could have a material impact on the Company’s financial statements as well as its results of operations. An important component in the Company’s estimate of the value of the Tap Participation Fee, which is based on historical trends, is that the Company reasonably expects water tap fees to continue to increase in the coming years. Tap fees are market based and the continued increase in tap fees reflects, among other things, the increasing costs to acquire and develop new water supplies.  Tap fees thus are partially indicative of the increasing value of the Company’s water assets.  The Company continues to assess the value of the Tap Participation Fee liability and updates its valuation analysis whenever events or circumstances indicate the assumptions used to estimate the value of the liability have changed materially. The difference between the net present value and the estimated realizable value will be imputed as interest expense using the effective interest method over the estimated development period utilized in the valuation of the Tap Participation Fee.

Payment of the Tap Participation Fee may be accelerated in the event of a merger, reorganization, sale of substantially all assets, or similar transactions and in the event of bankruptcy and insolvency events.

The Tap Participation Fee is due and payable once the Company has sold a water tap and received the consideration due for such water tap. The Company did not sell any water taps during the fiscal years ended August 31, 2012 or 2011.  However, beginning September 1, 2011, until the Property Management Agreement was terminated on August 3, 2012, the Company allocated 26.9% (calculated pursuant to the Property Management Agreement based on consideration paid to HP A&M since the signing of the Arkansas River Agreement) of the net revenues paid to HP A&M (which is equal to the lease payments HP A&M retains less expenses for employees, reasonable overhead and actual expenses paid to manage the farm leases) against the Tap Participation Fee liability.  Because the Company did not have the risk of loss associated with the leases (HP A&M’s management fee was equal to all lease income and contractually HP A&M had the risk of loss on the leases), the lease income and management fees have been reflected on a net revenue basis throughout the initial and Extended Terms of the Property Management Agreement.  This allocation is 26.9% of the net revenues against the Tap Participation Fee and reduced the 2012 taps subject to the Tap Participation Fee to 19,427 as of August 31, 2012.  Because HP A&M defaulted on certain obligations under the Arkansas River Agreement, the Company terminated the Property Management Agreement effective as of August 3, 2012.  Accordingly, the allocation of the 26.9% of the net revenues as a reduction of the Tap Participation Fee will no longer be applicable in fiscal 2013.

Promissory Notes Payable by HP A&M in default

60 of the 80 properties the Company acquired from HP A&M are subject to outstanding promissory notes payable to third parties with principal and accrued interest totaling $9.6 million and $10.0 million at August 31, 2012 and 2011, respectively.  These promissory notes are secured by deeds of trust on the Company’s properties and water rights, as well as mineral interests, up to 25% of which are owned by the Company and up to 75% of which are currently owned by HP A&M. The Company did not assume any of these promissory notes and is not legally responsible for making any of the required payments under these notes. This responsibility remains solely with HP A&M.  In the event of default by HP A&M, at the Company’s sole discretion, the Company may make payments on any or all of the notes and cure any or all of the defaults. If the Company does not cure the defaults, it will lose the properties and water rights securing the defaulted notes.

As of fiscal year end 2012 and since that date, HP A&M has defaulted on over 50% of the notes and informed the Company that it does not intend to pay any of the remaining notes.  HP A&M owes approximately $9.6 million of principal and accrued interest secured by approximately 14,000 acres of farm land and 16,882 FLCC shares representing water rights owned by the Company.

On July 2, 2012, the Company formally notified HP A&M that its failure to pay the promissory notes constituted an Event of Default under the Seller Pledge Agreement (as defined below) and a default of a material covenant under the Arkansas River Agreement and that unless such defaults were cured within thirty days, the Property Management Agreement would be terminated and the Company would proceed to exercise certain rights and remedies under the Arkansas River Agreement, the Seller Pledge Agreement, and the Property Management Agreement to protect its assets.  The Company’s remedies at law and under the Arkansas River Agreement and related agreements include, but are not limited to, the right to (i) foreclose on 1,500,000 shares of Pure Cycle common stock issued to HP A&M and the proceeds there from (the “Pledged Shares”) which were pledged by HP A&M pursuant to a pledge agreement (the “Seller’s Pledge Agreement”) to secure the payment and performance by HP A&M of the promissory notes described above; (ii) reduce the Tap Participation Fee; (iii) terminate the Property Management Agreement; and (iv) recover damages caused by the defaults, including certain costs and attorneys’ fees.

On August 3, 2012, the Company formally terminated the Property Management Agreement.  Additionally, subsequent to fiscal 2012 year end, the Pledged Shares were sold at auction in a foreclosure sale for $2.35 per share, yielding approximately $3.5 million to the Company.

Subsequent to fiscal year end 2012,  the Company began acquiring the defaulted and non-defaulted notes that are payable by HP A&M.  See Note 15 – Subsequent Events below for details regarding these note acquisitions.

Future Maturities

Mortgage notes held and defaulted on by HP A&M	$	5,093,400
Mortgage notes, interest at 5%, due various dates in 2017		4,456,900
Total		9,550,300
Less: current portion		(5,340,900	)
Total long-term mortgage payable	$	4,209,400
Future Maturities
2013	$	5,340,900
2014		1,064,500
2015		1,064,500
2016		1,064,500
2017		1,015,900
Total	$	9,550,300

Operating Lease

Effective December 29, 2010, the Company entered into an operating lease for 1,200 square feet of office space.  The lease has a three year term with payments of $1,500 per month.

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Note 9 - Significant Customer

12 Months Ended

Aug. 31, 2012

Concentration Risk Disclosure [Text Block]

NOTE 9:               SIGNIFICANT CUSTOMER

The Company sells wholesale water and wastewater services to the District pursuant to the Rangeview Water Agreements.  Sales to the District accounted for 86%, 91%, and 94% of the Company’s total revenues for the years ended August 31, 2012, 2011 and 2010, respectively.  The District had one significant customer, the Ridgeview Youth Services Center.  Pursuant to the Rangeview Water Agreements the Company is providing water and wastewater services to this customer on behalf of the District.  The District’s significant customer accounted for 53%, 60% and 64% of the Company’s total revenues for the years ended August 31, 2012, 2011 and 2010, respectively.

The Company had accounts receivable from the District which accounted for 16% and 87% of the Company’s trade receivables balances at August 31, 2011 and 2010, respectively.  Accounts receivable from the District’s largest customer accounted for 13% and 74% of the Company’s trade receivables as of August 31, 2012 and 2011, respectively.

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Note 3 - Fair Value Measurements (Detail) - Changes in the Tap Participation Fee (USD $)	12 Months Ended
	Aug. 31, 2012
Gross Estimated Tap Participation Fee Liability [Member]
Balance at August 31, 2011	$ 113,147,700
Total gains and losses (realized and unrealized):
Purchases, sales, issuances, payments, and settlements	(189,700)
Balance at August 31, 2012	112,958,000
Tap Participation Fee Report Liability [Member]
Balance at August 31, 2011	64,988,300
Total gains and losses (realized and unrealized):
Imputed interest recorded as "Other Expense"	3,470,500
Purchases, sales, issuances, payments, and settlements	(189,700)
Balance at August 31, 2012	68,269,100
Discount To Be Imputed As Interest Expense In Future Periods [Member]
Balance at August 31, 2011	48,159,400
Total gains and losses (realized and unrealized):
Imputed interest recorded as "Other Expense"	(3,470,500)
Balance at August 31, 2012	$ 44,688,900

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Note 13 - Supplemental Disclosure Of Non-cash Activities (Detail) - Non-cash Activities Schedule (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011
Mortgage payable and related party receivable recorded up HP A&M default	$ 9,550,200
Farm revenue allocated against the Tap Participation Fee liability and additional paid in capital thru August 3, 2012	189,674
Issuance of shares of restricted common stock upon conversion of the Convertible Note - Related Party		5,351,700.00
	$ 9,739,900.0	$ 5,351,700.0

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Note 14 - Related Party Transactions

12 Months Ended

Aug. 31, 2012

Related Party Transactions Disclosure [Text Block]

NOTE 14:             RELATED PARTY TRANSACTIONS

On December 16, 2009, the Company entered into a Participation Agreement with the District, whereby the Company agreed to provide funding to the District in connection with the District joining the South Metro Water Supply Authority (“SMWSA”).  During the year ended August 31, 2012, the Company provided funding of $115,500.  During the year ended August 31, 2011, the Company provided funding of $25,000.    The $115,500 and $25,000 of funding were expensed in the general and administrative expenses lines in the accompanying statements of operations for the years ended August 31, 2012, and 2011, respectively.

The Company  incurred an expense related to HP A&M in the amount of  $8,100, $7,100, and $16,700 during the fiscal years ended August 31, 2012, 2011 and 2010, respectively.  This is predominately due to the Company paying 50% of the salary and expenses for work performed by an HP A&M employee on behalf of the Company related to operations of the agricultural property owned by the Company in the Arkansas River Valley.  The amount paid to HP A&M in fiscal 2012 versus fiscal 2011 decreased $7,000 and the amount paid to HP A&M in fiscal 2011 versus fiscal 2010 decreased $9,600, due mainly to the HP A&M employee becoming an employee of the Company on January 1, 2010, and on that date HP A&M began reimbursing the Company for half of said employee’s salary and expenses.  Effective as of the first quarter 2013, HP A&M will no longer be considered a related party due to the foreclosure sale of the Pledged Shares.  See additional information regarding the HP A&M default and sale of the Pledged Shares in Note 15 – Subsequent Events.

In 1995, the Company extended a loan to the District, a related party. The loan provided for borrowings of up to $250,000, is unsecured, bears interest based on the prevailing prime rate plus 2% (5.25% at August 31, 2012) and matures on December 31, 2012. The $543,900 balance of the note receivable at August 31, 2012 includes borrowings of $229,300 and accrued interest of $314,600.  The $531,900 balance of the note receivable at August 31, 2011 includes borrowings of $229,300 and accrued interest of $302,600. The Company extended the due date to December 31, 2013, and accordingly the note has been classified as non-current.

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Note 5 - Participating Interests in Export Water (Tables)

12 Months Ended

Aug. 31, 2012

	Export Water Proceeds Received		Initial Export Water Proceeds to Pure Cycle			Total Potential Third party Obligation			Paticipating Interests Liability			Contingency
Original balances	$	-	$	218,500		$	31,807,732		$	11,090,630		$	20,717,102
Activity from inception until August 31, 2011:
Acquisitions		–		28,077,500			(28,077,500	)		(9,789,983	)		(18,287,517	)
Option payments - Sky Ranch and The Hills at Sky Ranch		110,400		(42,280	)		(68,120	)		(23,754	)		(44,366	)
Arapahoe County tap fees *		532,968		(373,078	)		(159,890	)		(55,754	)		(104,136	)
Export Water sale payments		85,123		(59,585	)		(25,538	)		(8,907	)		(16,631	)
Balance at August 31, 2011		728,491		27,821,057			3,476,684			1,212,232			2,264,452
Fiscal 2012 activity:
Export Water sale payments		26,163		(18,314	)		(7,849	)		(3,304	)		(4,545	)
Balance at August 31, 2012	$	754,654	$	27,802,743		$	3,468,835		$	1,208,928		$	2,259,907

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Note 10 - Income Taxes (Detail) - Reconciliation of Federal Statutory Income Tax Rate and our Effective Tax Rate (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2010
Expected benefit from federal taxes at statutory rate of 34%	$ (5,922,300)	$ (2,045,500)	$ (1,833,000)
State taxes, net of federal benefit	(574,800)	(198,500)	(177,900)
Expiration of net operating losses	90,000	121,000	147,900
Permanent and other differences	25,800	37,800	(27,100)
Change in valuation allowance	$ 6,381,300	$ 2,085,200	$ 1,890,100

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Note 7 - Long-Term Debt and Operating Lease (Detail) (USD $)	1 Months Ended	12 Months Ended
	Dec. 29, 2010	Aug. 31, 2012 acre sqm	Aug. 31, 2011	Mar. 10, 2011 acre	Jul. 30, 2010 acre	Aug. 31, 2005	Aug. 31, 1996
Water Taps		19,427				38.5	40,000
Reduction In Taps Percentage		50.00%
Percentage of Net Revenues		26.90%
Tap Participation Fee (in Dollars)		$ 68,300,000					$ 45,600,000
Imputed Interest (in Dollars)		22,700,000
Line of Credit Facility, Amount Outstanding (in Dollars)		9,600,000	10,000,000
Related Party Transaction, Due from (to) Related Party (in Dollars)		9,600,000
Number of Acres (in Square Meters)		14,000
Number of FLCC Shares		16,882
Number Of Shares		1,500,000
Proceeds From Equity Method Investments Per Share (in Dollars per share)		$ 2.35
Proceeds from Sale of Other Investments (in Dollars)		3,500,000
Area of Land (in Square feet)		1,486		634	931
Description of Lessee Leasing Arrangements, Operating Leases	three
Operating Leases, Rent Expense (in Dollars)	$ 1,500
Office Building [Member]
Area of Land (in Square feet)	1,200
Minimum [Member]
Water Taps		19,427
Tap Participation Fee Percentage		10.00%
Maximum [Member]
Percentage of Gross Proceeds		20.00%
Water Taps		19,427
Tap Participation Fee Percentage		20.00%
PureCycle [Member]
Percentage Of Defaulted Promissory Note Responsibility		25.00%
HP A And M [Member]
Percentage Of Defaulted Promissory Note Responsibility		75.00%

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Statements of Shareholders' Equity and Comprehensive Income (Loss) (USD $)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]	Total
Balance at Aug. 31, 2009
Share-based compensation			$ 87,639			$ 87,639
Unrealized loss on investments				(5,566)		(5,566)
Net loss					(5,391,262)	(5,391,262)
Comprehensive loss						(5,396,828)
Balance at Aug. 31, 2010	433	67,360	92,341,555	(1,580)	(49,947,769)	42,459,999
Balance (in Shares) at Aug. 31, 2010	432,513	20,206,566
Sale of common stock, less fees and expenses of approximately $145,200		6,163	5,395,442			5,401,605
Sale of common stock, less fees and expenses of approximately $145,200 (in Shares)		1,848,931
Issuance of restricted common stock upon conversion of Convertible Debt		6,607	5,345,060			5,351,667
Issuance of restricted common stock upon conversion of Convertible Debt (in Shares)		1,982,099
Share-based compensation			94,550			94,550
Unrealized loss on investments				(1,323)		(1,323)
Net loss					(6,016,159)	(6,016,159)
Comprehensive loss						(6,017,482)
Balance at Aug. 31, 2011	433	80,130	103,176,607	(2,903)	(55,963,928)	47,290,339
Balance (in Shares) at Aug. 31, 2011	432,513	24,037,596
Share-based compensation			54,588			54,588
Allocation of net revenues to TPF			189,674			189,674
Unrealized loss on investments				1,822		1,822
Net loss					(17,418,661)	(17,418,661)
Comprehensive loss						(17,416,839)
Balance at Aug. 31, 2012	$ 433	$ 80,130	$ 103,420,869	$ (1,081)	$ (73,382,589)	$ 30,117,762
Balance (in Shares) at Aug. 31, 2012	432,513	24,037,596

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Note 3 - Fair Value Measurements

12 Months Ended

Aug. 31, 2012

Fair Value Disclosures [Text Block]

NOTE 3 – FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.

Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. The Company had none of these instruments at August 31, 2012 or 2011.

Level 2 — Valuations for assets and liabilities obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company had one Level 2 asset at August 31, 2012 and 2011, its marketable securities.  The Company’s principal markets for these securities are the secondary institutional markets and valuations are based on observable market data in those markets.

Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions.  Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. The Company had one Level 3 liability at August 31, 2012 and 2011, the Tap Participation Fee liability, which is described in greater detail in Note 2 – Summary of Significant Accounting Policies and Note 7 – Long-Term Debt And Operating Lease.

The Company maintains policies and procedures to value instruments using the best and most relevant data available.

The Company’s non-financial assets measured at fair value on a non-recurring basis consist entirely of its investments in water and water systems and other long-lived assets.  See Note 4 for impairment of water rights and land with the associated water  rights held for sale

Level 2 Asset – Marketable Securities Measured on a Recurring Basis.The Company’s marketable securities are the Company’s only financial assets measured on a recurring basis.  The fair values of the marketable securities are based on the values reported by the financial institutions where the funds are held.These securities include only federally insured certificates of deposit.

Level 3 Liability – Tap Participation Fee.  The Company’s Tap Participation Fee liability is the Company’s only financial liability measured on a non-recurring basis.  The Tap Participation Fee liability is valued by projecting new home development in the Company’s targeted service area over an estimated development period. Due to the long-term nature of the Tap Participation Fee, the valuation of the Tap Participation Fee is not sensitive to minor changes.  See further description of the Tap Participation Fee in Note 7 – Long-Term Debt and Operating Lease.

The following table provides information on the assets and liabilities measured at fair value as of August 31, 2012:

					Fair Value Measurement Using:
	Fair Value		Cost / Other Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Unrealized Gains and (Losses)
Marketable securities	$	1,101,367	$	1,101,367	$	-	$	1,101,367	$	-	$	(1,081	)
Tap Participation Fee	$	68,269,176	$	68,269,176	$	-	$	-	$	68,269,176	$	-

Although not required, the Company deems the following table, which presents the changes in the Tap Participation Fee for the year ended August 31, 2012, to be helpful to the users of its financial statements:

	Fair Value Measurement using Significant Unobservable Inputs (Level 3)
	Gross Estimated Tap Participation Fee Liability			Tap Participation Fee Reported Liability			Discount - to be imputed as interest expense in future periods
Balance at August 31, 2011	$	113,147,700		$	64,988,300		$	48,159,400
Total gains and losses (realized and unrealized):
Imputed interest recorded as "Other Expense"		-			3,470,500			(3,470,500	)
Purchases, sales, issuances, payments, and settlements		(189,700	)		(189,700	)		-
Transfers in and/or out of Level 3		-			-			-
Balance at August 31, 2012	$	112,958,000		$	68,269,100		$	44,688,900

The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value are discussed above. The methodologies for other financial assets and liabilities are discussed below.

Cash and Cash Equivalents:  The Company’s cash and cash equivalents are reported using the values as reported by the financial institution where the funds are held.  These securities primarily include balances in the Company’s operating and savings accounts.  The carrying amount of cash and cash equivalents approximate fair value.

Accounts Receivable and Accounts Payable:  The carrying amounts of accounts receivable and accounts payable approximate fair value due to the relatively short period to maturity for these instruments.

Notes Receivable and Construction Proceeds Receivable:  The carrying amounts of the Company’s notes receivable and construction proceeds receivable approximate fair value as they bear interest at rates which are comparable to current market rates.

Related Party Receivable – HP A&M: In conjunction with HP A&M defaulting on certain promissory notes, the Company has the right to collect from HP A&M any amounts the Company spends to cure the defaulted notes.  Accordingly the Company has recorded the entire amount of the HP A&M notes as a receivable from HP A&M.  Due to the fact that HP A&M is a related party the fair value of the accounts receivable is not practical to determine.

Notes Payable: Subsequent to fiscal 2012, the Company began acquiring the defaulted and non-defaulted promissory notes that are payable by HP A&M.   The majority of the notes issued by the Company have a five-year term, bear interest at an annual rate of five percent (5%) and require bi-annual payments with a straight-line amortization schedule.  The carrying value of the notes payable approximate the fair value as the rates are comparable to market rates.

Farm Accounts Receivable and Future Farm Income: The Company terminated the Property Management Agreement with HP A&M effective August 3, 2012, and all future farm income is now payable directly to the Company instead of HP A&M. On July 23, 2012, the Company notified all the farm lessees that all lease payments would be billed directly by and paid directly to the Company from the date of the notice forward. All other terms of the leases remained unchanged. Under the farm lease agreements, the farmers are billed twice a year in November and March. The unpaid balances from prior billings (performed by HP A&M) were recorded on the Company's books as accounts receivable less an allowance for uncollectible accounts. The allowance was determined by the Company's specific review of all past due accounts.

Off-Balance Sheet Instruments:  The Company’s off-balance sheet instruments consist entirely of the contingent portion of the CAA.  Because repayment of this portion of the CAA is contingent on the sale of Export Water, which is not reasonably estimable, the Company has determined that the contingent portion of the CAA does not have a determinable fair value.  See further discussion in Note 5 – Participating Interests In Export Water.

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Note 7 - Long-Term Debt and Operating Lease (Tables)

12 Months Ended

Aug. 31, 2012

Schedule of Debt [Table Text Block]

Mortgage notes held and defaulted on by HP A&M	$	5,093,400
Mortgage notes, interest at 5%, due various dates in 2017		4,456,900
Total		9,550,300
Less: current portion		(5,340,900	)
Total long-term mortgage payable	$	4,209,400
Future Maturities
2013	$	5,340,900
2014		1,064,500
2015		1,064,500
2016		1,064,500
2017		1,015,900
Total	$	9,550,300

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Note 5 - Participating Interests in Export Water (Detail) (USD $)	12 Months Ended
	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2010	Aug. 31, 1996
Long-term Debt	$ 9,550,300			$ 31,800,000
Contingent Liability				20,700,000
Business Acquisition, Cost of Acquired Entity, Cash Paid				3,500,000
Tap Participation Fee Payments	34,522
Revenues	284,384	282,134	264,107
Borrowings [Member]
Long-term Debt				11,100,000
Percentage of Liability				35.00%
Contingent [Member]
Percentage of Liability				65.00%
First Priority Payout [Member]
Revenues	5,100,000
Remaining First Priortiy Payout [Member]
Revenues	$ 7,300,000

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Note 13 - Supplemental Disclosure Of Non-cash Activities

12 Months Ended

Aug. 31, 2012

Cash Flow, Supplemental Disclosures [Text Block]

NOTE 13:             SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES

	For the Fiscal Years Ended August 31,
	2012		2011		2010
Mortgage payable and related party receivable recorded up HP A&M default		9,550,200
Farm revenue allocated against the Tap Participation Fee liability and additional paid in capital thru August 3, 2012		189,700
Issuance of shares of restricted common stock upon conversion of the Convertible Note - Related Party			5,351,700.00		-
	$	9,739,900.0	$	5,351,700.0	$	-