Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING

v3.20.2
SEGMENT REPORTING
 12 Months Ended
Aug. 31, 2020
SEGMENT REPORTING [Abstract]  
SEGMENT REPORTING
NOTE 13 – SEGMENT REPORTING

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

Because of the methods used by the CODM to allocate resources, the Company has identified two operating segments which meet GAAP segment disclosure requirements, namely are the water and wastewater resource development segment and the land development segment.

The water and wastewater resource development business includes selling water services to customers, which water is provided by the Company using water rights owned or controlled by the Company, and developing infrastructure to divert, treat and distribute that water and collect, treat and reuse wastewater. The land development segment includes all the activities necessary to develop and sell finished lots, which as of August 31, 2020 and 2019, was done exclusively at the Company’s Sky Ranch Master Planned Community.

O&G operations, although material in certain years, are deemed a passive activity as the CODM does not actively allocate resources to these projects; therefore, this is not classified as a reportable segment.

The tables below present the measure of profit and assets the CODM uses to assess the performance of the segment for the periods presented:

   
Year Ended August 31, 2020
  
   
Water and
wastewater resource
development
    
Land
development
    
Corporate
    
Total
  
Total revenue
  
$
6,920,815
    
$
18,934,400
    
$
—
    
$
25,855,215
  
                                 
Cost of revenue
  

(1,074,450
)
  
(15,869,547
)
  
—
    
(16,943,997
)
Depletion and depreciation
    
(1,367,160
)
  
—
    
—
    
(1,367,160
)
Total cost of revenue
  

(2,441,610
)
  
(15,869,547
)
  
—
    
(18,311,157
)
           
     
     
   
Gross Margin
  

4,479,205
    
3,064,853
    
—
    
7,544,058
  
Reimbursement of construction costs - related party
  

—
    
6,275,500
    
—
    
6,275,500
  
Gross Margin after reimbursables
  
$
4,479,205
     $
9,340,353
     $
—
     $
13,819,558
  
                                 
Pretax operating income
  
$
4,479,205
    
$
3,064,853
    
$
(6,030,683
)
  
$
1,513,375
  
                                 
Total long-term assets
  
$
56,266,579
    
$
6,975,289
    
$
26,519,188
    
$
89,761,056
  

   
Year Ended August 31, 2019
  
   
Water and
wastewater resource
development
    
Land
development
    
Corporate
    
Total
  
Total revenue
  
$
8,405,520
    
$
11,955,989
    
$
0
    
$
20,361,509
  
                                 
Cost of revenue
  
(1,670,508
)
  
(11,304,962
)
  
—
    
(12,975,470
)
Depletion and depreciation
  
(968,229
)
  
—
    
—
    
(968,229
)
Total cost of revenue
  
(2,638,737
)
  
(11,304,962
)
  
—
    
(13,943,699
)
                                 
Gross Margin
  
$
5,766,783
    
$
651,027
    
$
—
    
$
6,417,810
  
                                 
Pretax operating income
  
$
5,766,783
    
$
651,027
    
$
(3,419,149
)
  
$
2,998,661
  
                                 
Total long-term assets
  
$
51,588,079
    
$
16,866,542
    
$
15,266,783
    
$
83,721,404