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

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Aug. 31, 2018

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

	For the Fiscal Years Ended August 31,
	2018			2017
Deferred tax assets:
Net operating loss carryforwards	$	2,009,800		$	2,893,600
AMT credit carryforward		282,000			—
Deferred revenue		28,600			316,400
Depreciation and depletion		(104,900	)		289,200
Other		80,500			88,000
Valuation allowance		(2,014,000	)		(3,587,200	)
Net deferred tax asset	$	282,000		$	—

Income Tax Reconciliation

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

	For the Fiscal Years Ended August 31,
	2018			2017			2016
Expected benefit from federal taxes at statutory rate of 21% and 34% for the years 2017 and 2016	$	34,100		$	(571,500	)	$	(420,300	)
State taxes, net of federal benefit		4,600			(55,500	)		(40,700	)
Permanent and other differences		97,800			90,300			84,500
Change in tax rate		1,196,464			—			—
NOL true up		17,589			—			—
Temporary difference true up		240,352			—			—
AMT credit carryforward		(282,000	)		—			—
Other		(17,705	)		—			—
Change in valuation allowance		(1,573,200	)		536,700			376,500
Total income tax expense / (benefit)	$	(282,000	)	$	—		$	—