NOTE 8 – RELATED PARTY TRANSACTIONS

The Rangeview Metropolitan District

The Rangeview Metropolitan District (“Rangeview District”) and the Company’s agreements with the Rangeview District are described in greater detail in Note 15 to the 2023 Annual Report.

The Rangeview District and the Company have entered into two loan agreements. In 1995, the Company extended a loan to the Rangeview District for borrowings of up to $0.25 million, which is unsecured, and bears interest based on the prevailing prime rate plus 2% (10.5% at May 31, 2024). The maturity date of the loan is December 31, 2024, at which time it automatically renews through December 31, 2025. Beginning in January 2014, the Rangeview District and the Company entered into a funding agreement that allows the Company to continue to provide funding to the Rangeview District for day-to-day operations and accrue the funding into a note that bears interest at a rate of 8% per annum and remains in full force and effect for so long as the 2014 Amended and Restated Lease Agreement among the Rangeview District, the Company, and the State Board of Land Commissioners remains in effect. At May 31, 2024, balance in notes receivable - related parties, other totaled $1.4 million, which included borrowings of $1.3 million and accrued interest of $0.1 million. As of August 31, 2023, the principal and interest on both loan agreements totaled $1.5 million, which included $1.4 million of borrowings and less than $0.1 million of accrued interest. During the three and nine months ended May 31, 2024, the Company received interest and principal payments totaling $0 and $0.1 million from the Rangeview District. During the three and nine months ended May 31, 2023, the Company did not receive any interest or principal payments from the Rangeview District.

Additionally, the Company provides funding to the Rangeview District for the Rangeview District’s participation in the “Wise Partnership.” The WISE Partnership and capitalized terms related to WISE not defined herein are defined in Note 8 to the 2023 Annual Report. During the three months ended May 31, 2024 and 2023, the Company, through the Rangeview District, received metered water deliveries of 32 acre-feet and 87 acre-feet of WISE water, paying $0.1 million and $0.2 million for this water. During the nine months ended May 31, 2024 and 2023, the Company, through the Rangeview District, received metered water deliveries of 98 acre-feet and 199 acre-feet of WISE water, paying $0.3 million and $0.4 million for this water. The cost of WISE water to the members is based on the

water rates charged by Aurora Water and can be adjusted each January 1. As of January 1, 2024, WISE water was approximately $6.55 per thousand gallons and such rate will remain in effect through calendar 2024.

Sky Ranch Community Authority Board

The Sky Ranch CAB and the Company’s agreements with the Sky Ranch CAB are described in greater detail in Note 15 to the 2023 Annual Report.

The Sky Ranch Districts and the Sky Ranch CAB are quasi-municipal corporations and political subdivisions of Colorado formed for the purpose of providing service to Sky Ranch. The Sky Ranch CAB was formed to, among other things, design, construct, finance, operate and maintain certain public improvements for the benefit of the property within the boundaries and/or service area of the Sky Ranch Districts. For the public improvements to be constructed and/or acquired, it is necessary for each Sky Ranch District, directly or through the Sky Ranch CAB, to be able to fund the improvements and pay its ongoing operations and maintenance expenses related to the provision of services that benefit the property. To fund these improvements, the Company and the Sky Ranch CAB entered into various funding agreements obligating the Company to advance funds to the Sky Ranch CAB for specified public improvements constructed from 2018 to 2024. All amounts owed under the agreements bear interest at a rate of 6% per annum. Any advances not paid or reimbursed by the Sky Ranch CAB by December 31, 2058 for the first phase and December 31, 2060 for the second phase shall be deemed forever discharged and satisfied in full.  The Company has received cumulative, project-to-date payments of $35.8 million from the Sky Ranch CAB for payments on the note receivable including both principal and interest payments.

As of May 31, 2024, the balance of the Company’s advances to the Sky Ranch CAB for improvements, including interest, net of reimbursements from the Sky Ranch CAB total $33.5 million. The advances have been used by the Sky Ranch CAB to pay for construction of public improvements. The Company submits specific costs for reimbursement to the Sky Ranch CAB that have been certified by an independent third-party. The Company anticipates providing additional funding of approximately $4.7 million for construction of public improvements to the Sky Ranch CAB during the remainder of fiscal 2024 related to Phase 2A, Phase 2B and Phase 2C of the Sky Ranch development.  Payments from Sky Ranch CAB are made based on available cashflow from operations or from proceeds from the issuance of bonds.

In fiscal 2022, through a competitive bidding process, the Sky Ranch CAB awarded the Company a contract to construct fencing around Phase 2A of the Sky Ranch Master Planned Community. The contracted bid price is $0.4 million, which is being recognized as revenue as the construction of the fence progresses. Through the same process, the Sky Ranch CAB awarded the Company in fiscal 2024, a contract to construct fencing around Phase 2B of the Sky Ranch Master Planned Community.  The contracted bid price is $0.2 million, which is being recognized as revenue as the construction of the fence progresses.  During the three months ended May 31, 2024 and 2023, the Company recognized $0.1 and less than $0.1 million of revenue related to these contracts. During the nine months ended May 31, 2024 and 2023, the Company recognized $0.2 million and $0.1 million of revenue related to these contracts.

Nelson Pipeline Constructors LLC

Through a competitive bidding process, the Sky Ranch CAB awarded Nelson Pipeline Constructors, LLC (“Nelson”), a contract to construct the wet utility pipelines in Phase 2A of Sky Ranch. During the three months ended May 31, 2024 and 2023, the Sky Ranch CAB paid Nelson $0 and $0.2 million related to this contract. During the nine months ended May 31, 2024 and 2023, the Sky Ranch CAB paid Nelson $0.1 million and $1.1 million related to this contract Nelson is majority owned by the chair of the Company’s Board of Directors.