The gross margin was negatively impacted by testing procedures required every three years as well as certain maintenance procedures performed on one of Pure Cycle’s water tanks in the first quarter of fiscal 2009. Operating expenses decreased as a result of reduced consulting expenses and the elimination of franchise fees to the State of as Delaware as a result of company’s reincorporation into the State of Colorado.
At February 28, 2009, Pure Cycle’s total assets include about $103.2 million of capitalized costs related to company’s water rights and water systems and its total liabilities include about $55.8 million related to the Tap Participation Fee liability which is a result of company’s acquisition of water rights from High Plains A&M, LLC in 2006.
