Good morning. I'd like to welcome you all to our second quarter fiscal year 2025 earnings call. For those of you that are listening on the phone, I think most of you have connected through this through our website, but we do have a deck for this that is on our landing page of the website. If you go to purecyclewater.com, you can click on that link, and that'll take you directly to the presentation, and I can walk you through the presentation as we move through our slides. With me today is our CFO, Marc Spezialy, as well as our Controller, Cyrena Finnegan. I'd like to thank them for joining us early morning and really want to welcome you all to the call. I'll get started. First thing we'll do is, and it's a slide here, talk a little bit about our forward-looking statements, statements that are not historical facts contained or incorporated by reference in this presentation, our forward-looking statements. I think you're all familiar with the forward-looking statements. With that said, I certainly want to highlight our leadership team. The success was driven by the people that we get to work with, both in terms of our management as well as our board of directors. We have a great board of directors which bring a tremendous amount of experience and guidance and leadership to the company. It certainly helps to be at the helm in calm waters and rough seas. I'm not exactly sure where we are with this market, but it is comforting to have a great leadership team as well as a great board of directors to help steward the company through managing these assets. I want to jump right into the financials here and see if we can't highlight our second quarter. We had a terrific quarter. We really want to highlight our financial performance. Again, just continuing to execute on monetizing our assets, both our water assets as well as our land assets and then our single-family rental assets. Taking a look at it, Q2 quarter, about $4 million in revenue, about $1.5 million, about a 38% gross margin. A large portion of that margin is really going to be from the royalty income. We continue to see a very strong performance out of our mineral royalties that we had when we acquired the Sky Ranch property. Really flowing down to the bottom line with continued net income and earnings per share. Both our three months and our six months year to date, we're about $10 million, $9.7 million in revenue, gross profit. Again, a very solid gross margin around 50%+, and continuing growth in our earnings per share. Taking a look at that, it's Qo Q. This kind of gives you a performance. As most of you know who follow the company, our second quarter is usually our softest quarter. It really is a seasonal issue. We are in the construction business where we construct and deliver lots for our homebuilder customers. That's a little bit more challenging in Colorado in the winter months. Again, we see solid performance on this quarter over our trending quarters for the last three years. The profit in that's probably going to be a seasonally adjusted issue, and that's kind of a timing of how we're recognizing some of this revenue on a percent complete basis. Nothing really of concern on the Q o Q on the gross profit, just really continuing to develop these lots. We've got three phases under construction simultaneously. Really investing in that segment for us so that we can continue to drive revenue. Taking a look at net income, again, that's really going to be a solid performer, really indicative of both having three phases under construction at the same time, as well as some of that royalty income that's coming in from oil and gas, just because that's a high, it's almost a 100% profit margin for us on that. We get to roll that right down to the bottom line on that. Continued growth on earnings per share. That's a quarter-over-quarter performance on earnings per share. This will really drive into year to date and really kind of showing you year to date, both in terms of prior fiscal year as well as our guidance. We had guidance for fiscal 2025 at around close to $31 million. We're about $10 million into that. That's about where we are. We're on track to meet that goal, knowing that Q2 is that seasonally adjusted, and Q3 and Q4 are usually our high growth areas just because of how we sequence our lot deliveries on each of these phases. Taking a look at gross profit also, we're on track for that in terms of our guidance as well. Year to date net income, again, really solid continuing performance in all segments of the business, whether that's land development, water utilities, as well as single-family rentals, and then earnings per share. We had about $0.20 earnings per share, a little bit shy of about 50% of our guidance, but really looking to meet that guidance through our fiscal year end. If we want to break this down by each individual segment, taking a look at our water utility segment, very good quarter for us on that. That's largely driven by the receipt of tap fees. As we open up each new phase of our development, that's when we start to recognize a lot of those capital fees that we have for the water business. We get those tap fees in. Those are paid by our homebuilder customers at the time of building permit applications. We have probably about half of the tap fees receipted from Filing 5, which we delivered sort of end of last fiscal year last summer. I'd say we've got close to maybe 75 vertical homes in there. The builders are very aggressive. They're getting out there, building a number of spec homes as well as homes that are sold. They have model homes up in both the Filing 4, which is our phase 2A, as well as some of those in 2B, which is the more active one. What you'll note in this segment for water utilities is oil and gas deliveries are a little bit weak. That's what we did forecast. We knew that that was going to be a little bit weaker than we had last year. That was predominantly because of most of our operators really working on a large block of well permits. I think there's more than 200 well permits under production, both for the Lowry Ranch and the surrounding areas of the Lowry Range. We have a lot of that activity that is going to occur in fiscal 2025, which will start drilling probably late 2025, early 2026 to see a bit more of that activity in fiscal year 2026. The water utility segment is doing great, continuing to add new customers to the segment. We continue to build that recurring revenue segment for that. This is kind of a little bit of a comparison of the oil and gas, which we did forecast that was going to be a bit softer. You see that by comparison over year-over-year activities. Oil and gas, as you know, is a very, very, it is a variable segment. A lot of times it really is both a global price comparison to how the price of oil is, to how quickly these operators dial this up. The field itself continues to just perform great for all of the operators. I think that it is de-risked. They have a very high degree of certainty as to how each of these wells perform. We can see that in terms of our royalties off of the wells that were drilled on Sky Ranch in 2024. You see a lot of that continuing activity where they will continue to invest in that based on their permits and kind of their internal processes to how they want to deploy their capital. Very good segment for us, very high margins for us. It continues to allow us to monetize and pull forward some of that infrastructure that we continue to invest in our water utility segment. Moving on to land development, this kind of highlights each of the phases. We have four phases that actually we expanded. We added another fifth phase. You will see a 2E coming up in the presentation in our second round of investments into infrastructure for Sky Ranch. This really illustrates where we're at in terms of three phases concurrently going on. We have phase II/B, which is we delivered those lots last summer. We have a bit of punch-out items on some landscaping issues and things like that that will round out the rest of this year as we roll into the spring. That's where most of the builders are currently going vertical. They've got a number of homes that are up available for sale or at various components of that. It seems like once they finish those homes, there's a ready and robust market for those. I think that's attributable mostly to price point that we find ourselves in that entry home segment. I think that's the most attractive segment in the market, not only in the Denver area, but nationally. This also highlights where we're at with the other phases of this II/C, II/D, really highlights both the lots for sale as well as our single-family rental lots. As you see those accumulating on each individual phase, we have 17 units that we've got under contract that are at various phases of permitting and starting of construction in phase II/B. We're rolling into phase II/C where we delivered the overlap grading. We finished the utility side and really now down to the curb and gutter and the paving side of that. That should deliver by fiscal year end. We're currently about 48% complete there. That'll round up to the mid-90s by fiscal year end. We finished the grading on phase II/D and have started our utility work on that. We're midway through our lot delivery contract structure where we get payments from our homebuilders on increments of phases of delivery. About 1,300 lots on the for-sale side and about 100 lots on the single-family rental side. It gives you kind of a very strong picture of how we're accelerating the development of these land assets and delivery of lots. The single-family rental highlighting that Qo Q performance, really not a lot of change there. We still have the same 14 homes that have been completed. Our rentals are still very strong. We continue to have a high occupancy rate there. Again, very great margins on how we do that. I think we've talked about this a lot in the past on why this is so attractive. It really is a formulation of being able to roll in the equity value that we have on the land side as well as the water utility side, being able to deliver these lots where our homebuilders who are our partners on buying the lots are also our partners on helping us build these homes. They have a great delivery device on building the homes. We have the advantage of keeping that equity within the lot themselves and renting them out at the full fair market value of those assets. The book value of those assets are about 80% of the fair market value of those assets. We very much continue to enjoy a great segment on the single-family rentals. Just want to quickly review, kind of take this up a few after the financial performance and really highlight kind of how the company is structured, how we look at each of these individual segments, and how they interrelate to each other. At a DNA level, most of you know we're a water utility company. We have a portfolio of water rights that we have acquired many, many years ago, some more than 30 years ago. We take those water, we bring that to properties, both properties that we own as well as properties that are in our service area and properties that others own that we can be delivering that as a water utility service, both water and wastewater service. In some cases where we have the land, we actually are developing that land. Right now, that's confined to the Sky Ranch community. It's about 5,000 single-family connections. We're about 20% built out there. That allows us to be able to vertically integrate ourselves and do the horizontal infrastructure. That's a very valuable component in the marketplace because there are very few people that are doing that. Homebuilders really prefer having a fixed fee where they have someone that will deliver that lot for them. We partner with them to deliver those lots. They build the home, sell those. That generates a water customer for us. In a portion of that portfolio, they also build that home for us. We rent that out as a single-family business. Each of these segments interrelate to each other. They're really building on each other and they're complementing each other. One does really feed into the next. I think it has a great business value-added proposition for both us and our shareholders. Let me drill down to each of these very specifically. I'll try and go through these quickly because I know many of you know this. Our water segment, if you just look at the balance sheet side of our water segment, that has about $65 million in total assets, kind of breaks itself out in terms of the water rights, the bricks and mortar of the pumps and the wells and the pipes and the water treatment facilities that deliver that potable water. Our portfolio allows us to provide service to about 60,000 connections. We are very early stage in monetizing this portfolio and getting our share value out of that. We continue to add connections each year. Take a look at the system capacity. We have more capacity. We are fortunate to be able to stay ahead of that capacity where we're developing wet water deliveries greater than the potable demand for those services are. What we use that excess capacity for is typically providing that service to industrial applications such as oil and gas. Taking a look at our portfolio capacity in terms of the capital fee, how many taps that 60,000 taps can generate. We're very, very early on in that. We have TAP fee capacities that can generate a little more than $2.3 billion worth of that. That's about a 50% margin business on the capital side as well as on the operating side. It gives you guys a pedal amount of what that water segment can do for us. Taking a look at our land segment, we have constructed about $77 million of lot sale revenue since we started the project. We're about 20% built on that. We still have a ton of pedal left in the land development segment. That's a very good gross margin segment. The reason I think that gross margin is as good as it is is probably because of the buy. We acquired Sky Ranch at a good price, at a fair price at the time when a lot of people weren't interested in buying it. We bought it in 2010 during the Great Recession. Really take a look at monetizing that asset, being opportunistic about our capital allocation and how we look for additional opportunities. With a very uncertain market out there, that sometimes presents great opportunities for those that are well-positioned. We think that we are well-positioned for that. We hope to see if we can continue to add to this portfolio and continue to expand in the land development segment. This is just a little bit of highlight of each of the phases that are subcomponents of that. We completed phase II/A. All those homes are fully occupied. Phase II/B, as you can see there, there's about 70 homes that are up and constructed. Phase II/C, you can see some of the alleyways being poured, many of the streets that are graded out. A lot of the utility package there has been complete and will really have that strong push to deliver those finished lots before fiscal year end together with the weather. We time that out such that we can be in that season where we can do the concrete and asphalt where we're not competing with Mother Nature on that. Phase II/D is fully graded. Equally, we're going to get the utilities in there and look to see if we can't get those lots finished by the end of the calendar year. Sometimes we have to race against Mother Nature. It depends on whether or not we get an early season winter in October versus a late season winter after November timeframe. We will continue to press on II/D. We will have another phase of this. We have a sub-phase of that, which is about another 150 ± units that are phase II/E, which we are planning right now. We will extend those opportunities to our existing portfolio builders. This kind of highlights the overall capacity of our land assets. As I mentioned, we're about 22% developed if you take a look at the residential side. We've delivered about 1,300 single-family residential lots through phase II. Our commercial lots, we have about 800 single-family equivalent commercials. We're just converting those to a commercial. Those are done a little bit differently. Those are usually priced per square foot as opposed to per lot. This allows us to do some forecasting to give you guys a comparison as to how the overall opportunity relates in the land development segment. Combined, we look at that being a very strong performance. The overall combined performance is about that 18% right there around close to 20% of the build-out of Sky Ranch when you combine both the residential and the commercial. Single-family rentals, we've highlighted some of the opportunities there and really the attractive nature of it. It's maximizing the land development as we continue to provide value to the community for what it is that we do on the parks, the open space, partnering with our National Heritage Academy for schools. It generates continued recurring revenue. Each unit provides close to a little more than $30,000 a year in recurring revenue on the rental side. It really does leverage the market demand and produces great returns for the company. We will continue to invest in this segment. You'll see a little bit more acceleration on that through the latter phases of this as we continue to build out the phase II. Some of the metrics on our existing portfolio. This really highlights the difference between fair market value and really the balance sheet impact. We have about $5.3 million of capital costs on that and a fair market value of about $2 million on that. We still have a lot of appreciated assets on there that are not able to discern through the balance sheet. This is kind of a highlight of where we're headed with that single-family portfolio. You're going to see phase II grow substantially here in 2C, B, C, and D. We're going to move from about 1,400 homes close to 100 homes on that. Really, this is some of the metrics that will drive to that. The fortunate thing for us on this one is because of the equity value that we have in the land and the water utility, this is a great one where we can leverage that portfolio. We have relationships with three different banks that are very excited to help with this portfolio and really give us a lot of that capital and a little bit of leverage to be able to capitalize on using that above our balance sheet capacity. We are very excited about that. One of the great things about the company is our balance sheet and our liquidity position. You take a look at where we are at between the cash that we have. We have more than $20 million of liquidity. We have cash and investments right at $17 million. The restricted cash that we have and how that is used is we secure lines of credit, letter of credits for the county on our performance of building out the infrastructure on delivery of the land segment. The reason that the county likes to do that is that they are allowing us to get building permits in some cases in advance of finishing some of the back-end side of the land development. Some of the most, all of the roads, curbs, and gutters and water, sewer, storm, all that stuff is completed. Some of the landscaping and things like that that usually come in seasonally, as long as we assure the county through a letter of credit that we'll complete all that stuff, they are releasing those building permits to us early. That is really advantageous to our homebuilders because we can concurrently build those homes while we are doing that landscaping. There is really very, very little risk on that restricted cash. Really, we do count that as a component of our balance sheet. We talk a lot about this note receivable from the reimbursables. Not only do we receive revenue from the sale of lots from our homebuilder partners, but a lot of the infrastructure that we complete, we do get reimbursed for that. We get reimbursed from that from the local municipality as they issue bonds. We had a bond offering in 2024 that gave us, it was about a $25 million bond offering, paid that down. That is a nice liquidity element for us. When you take a look at the overall liquidity of the company, we are in great position not only to navigate challenging markets. I am not sure if this was a challenging market, but it does give us not only a great asset base there, but also opportunities to continue to invest into land and water assets. Talk a little bit about outlook. This is kind of repeat of slides from our fiscal year end. We take a look at our short-term outlook, and that's kind of a three to five-year outlook. Customer growth, development of Sky Ranch up to about 2,500 units, consistent tap sales through the remaining phases of that. As those customers come online, it increases the overall recurring revenue. We've got annual tap fees that increase year- over- year. You've seen that as we continue to add new connections to the system. Longer term, with the build-out of Sky Ranch, we've really kind of tried to highlight what we have in the book, what we have in our portfolio for full build-out and monetization of these segments. They are very attractive returns for us on that. That build-out of Sky Ranch could be in that seven-year range. It depends on kind of how we build out that commercial segment and some of our participation in there. We like opportunities where we can joint venture some of that commercial opportunities. We are working on those commercial opportunities as well as developing a new interchange right there at the interstate where we've got some mill levies that are set aside for that so that can come off of an independent bond financing. That is a project that we're looking at in this short-term aspect that will increase the overall accessibility of the site as well as the commercial opportunities. Land development, steady lot sales through the next five years. We continue to increase our lot margins. I think that's largely because most of the heavy lift is complete. We've got most of the off-site infrastructure. I think the last remaining key element will be that interchange. We do have a bonding teed up and ready to go for that that will cover that cost. Excuse me, we really still have the most valuable land yet to come, which is going to be the commercial development. We want to continue to look at all of our opportunities on the commercial side. Single-family rentals, we talked significantly about that. Going from what we have today to maybe more than 200 homes and continuing to look at the strength of that, 200+ homes through the build-out of Sky Ranch. We would look to do each of these elements and a future acquisition. To the extent that we continue to expand our land portfolio, we look at all three of these segments being able to be contributors to what it is that we're looking for. This will be a little bit of the guidance on what we had for 2025. You take a look at the trailing three years and how we're continuing to accelerate and really grow our revenues year- over- year and really look at not only another good year in 2025, but then how we look at that short-term aspect where we're starting to bring in some of that commercial land development and the punch that that's going to have for the company revenue as well as earnings per share. Really continue to execute and highlight the value of these assets. Again, shareholder value, kind of a little bit both fiscal year guidance, short-term guidance, and then build-out guidance for Sky Ranch. Again, that build-out is sort of what we have in inventory. That's not something that we need to grow. It's really just to execute on continuing to build out Sky Ranch. We continue to be in the market. In our share repurchases, I'd say that in Q3, as we're rolling into that, this current market was a bit choppy. We continue to have a bid in there to buy those shares. We're also continuing to look at opportunities for reinvesting into land and other opportunities. Oftentimes, when you get turbulent times, it does create some of those opportunities. I will say that we've had an increase in the interest level on some of our target acquisitions. We want to make sure that we have both capital to invest in the three phases that we've got under construction right now. Then as these opportunities present themselves with an acquisition, really to be in a position to perform on that. Those are kind of how we look at our capital stack on that. With that, what I'd like to do is open it up to questions. I think what we'll do is we'll make everybody's mic live. If we get some feedback or something like that, we may change that format. If anybody's got a question, you can either raise your hand in the bar up there. Then we can identify you. You can call out or just kind of sing out, and we'll see if we can't have an orderly Q&A here. With that, we'll open up the mic. If anybody's got a question, go ahead and sing out. You have the ability to unmute yourself. It's not disabled. Yeah. I see everybody. Mark, Bill Miller. Good morning. Good morning, Bill. Getting back to the recurring themes, where do we stand on I-70? We keep talking about it. It's going to be great. When do you think that will come to any kind of fruition? Secondly, we've talked historically about acquisitions, and you say there's a little bit more appetite on the part of the seller. Is that going to result in some transaction sometime? Are we just still talking about people that are reluctant to sell their land because you've done so well? Let me take the sort of your first question was about I-70. Yeah. That interchange, there's a—I know this is going to surprise you all, but there's a pretty robust regulatory climate when you take a look at this. We've been together with Arapahoe County, who's kind of our partner on this. They're really the sponsor. We've been working on the 1601, which is the permit regulation for that, for the past three years. We're about ready to submit that 1601 to CDOT. It'll take them, call it four or five months to review that. I think we're forecasting that we'll be in a position to get clearance on a permit for construction of the interchange by the end of this year. I think what we would do is go to market for those bonds end of this year, first part of 2026, and really start construction of that. We have an existing interchange, so it really won't be a gap in that. It's one of those ideal scenarios where we can build an—excuse me. We can build an interchange without any disruption. We'll keep the existing interchange. It'll be about 600 ft apart, but we're moving the interchange along the alignment of the section lines, which is really what CDOT wanted. That's what we really look for. We'll look to see that happen. We think that that's going to be a very orderly transition of that infrastructure. As it relates to acquisitions, we keep very close to target acquisitions and the owners of that. The opportunities are there. The sellers just have different personal requirements as to when it makes sense for them to try and sell, whether that's estate planning or just lifestyle issues that they're looking for. One of the things that I can say is that I can highlight the fact that we are the beneficiary of an uncertain time with Sky Ranch. We were in a great position at the time to be able to buy Sky Ranch when nobody else wanted to buy land. Usually, opportunities are created by uncertainty or change of circumstances. This has been a very interesting time. We'll see if that yields any interest for sellers to move forward with a transaction at that time. I can't give you any guidance because I don't have it. If I had something under contract, I might be able to tell you that. It is the number one thing that we're—well, it's the number two thing that we're looking at. The number one thing that we're looking at is continuing to invest and accelerate the development of Sky Ranch. The number two thing that's important to us on the capital stack would be continued acquisitions in land, emphasis in land more than water. To the extent that water is strategically oriented to our existing portfolio, then we would be interested in that. Continuing to invest into the company through the share repurchase effect. Yes. Yeah. The land acquisition is very foremost on what we're looking for. Just before we go into the next question, we have allowed you guys to unmute yourself, but we don't have the ability to unmute you. If you are on the computer, you'll still have to click the microphone button to get unmute. If you're on the phone, you can dial star six as well as making sure your phone's not on mute. Looks like we have a question from Nigel. Hey, how are you doing, guys? Looks like a decent quarter for the seasonality issues. One piece of information I find very helpful is essentially what your builders are telling you about demand. If you could just give us a little bit of an update on demand in the Denver real estate market overall, is your price point advantage holding up against that market? I'm a little puzzled because I've always perceived that it'd be a very heavy rental demand. I'm a little puzzled even in a winter quarter as to why there isn't demand happening on the family rental side. Just wanted a quick update from you on the demand situation the re as well. Yep. Good question. You are right. I think our biggest opportunity is our price point. One of the things that we have seen is a push for affordability from the administration. A component of that is going to be the interest rate environment. I think interest rates have been all over the map, but they have been trending a little bit softer, allowing that price point in there. A lot of the builders, when interest rates went from 3% to 7%, found themselves in a position of really competing by buying down that interest rate and offering the incentives as an interest rate environment. I think that has kind of burned off. I think that buyers out there are more acclimated to this being the current interest rate environment or the normal interest rate environment rather than to have an expectation to try and time that out. As a component of consumer sentiment, I think that's a favorable outcome both for the builders as well as for people that are delivering these lots. We can take a look at a number of investments that are being made, and there's a number of projects that continue to focus in the I-70 corridor. The majority of all of the development activity, whether that's going to be master plan communities, whether that's going to be infill projects, or any of that stuff, is really concentrated in that I-70 corridor. We find ourselves in the right segment of the market, not only in terms of the price of the delivery, but also where most of that development is occurring. Traffic, throughput, and I will tell you, our builders, we've got of the 70 homes out there, they're building like crazy, and they're building on spec. They have a lot of confidence to put that investment in there and an understanding of, "Okay, this is the right price point for us to be able to take that inventory." Those are all those things that are, and having three phases under construction at the same time, all of that activity is really giving a lot of incentives for Sky Ranch to be among the high performers out there. We will see how that continues to absorb over the next 18 months. That is really what we are trying to do, hit that market. Your second question relative to the single-family rentals, we had a bit of a gap between phase II/A and phase II/B. That was when interest rates went up, and our builders asked us for a 90-day pause on delivering some of those lots. That gapped us out on that. We are seeing very strong demand for each of these units that we are bringing online. The problem is that we have been trying to get these permits and phases online. Delivering the phase II/B last summer, we went straight into contracting for another 17 units. The county updated their building code. I think our builders—some of our builders got grandfathered in. That is where they have that 75 units out there. Some of the builders were in the process of making those applications. A lot of those things are getting released right now. A lot of the inventory of the 17 homes that we have in that phase are going to come online now. There is a little bit of a gap there. It wasn't certainly from a market standpoint or from a desire standpoint. It's just a little bit of timing variance on that. We're teed up for the rest of the phases to be able to continue to accelerate that. You're expecting a stronger environment in terms of sales and rentals through this calendar year versus last year? Very much so. Yes. We've got a 917. Okay. Looks like that. Ending in 2446. Elliott had a question. Okay. The 2446, you're on mute. You'll have to hit your mute button. If anybody else has got a question, did I hear Elliott? Mark? Breaking in. Yes. Yes. This is Elliott. Can you hear me? I can. I'd like to go back to your answer to question number one when you said that your second most important priority is to acquire new land. Just for those who may not have heard your February call, which was recorded—hang on just a minute. Okay. Which was recorded and is available on the website. You had a luncheon meeting, and it was available on Zoom, and it is now available on the website. It was long. It lasted an hour and a half, but it was filled with information. For those who did not hear it, the thesis, if I can call it a thesis, was what happens, how valuable is Pure Cycle if they are unable to make another land acquisition? I am not going to try to summarize what the answer to that was, but it was a very impressive number. Anyone who is seriously interested might want to take the time to watch that call because there was a wealth of information available. I do not have a question, but I just want people to know that that asset is available if they're interested. Yeah. No, I appreciate that. One of the challenges that we have is I think we're a partial victim of our own success because we have acquired these assets, and I think we've done a very good job of acquiring assets that are favorably valued for us. I have also been able to be good stewards of that over time. The market of those assets has appreciated significantly. Not only is that call a little bit helpful for some of that, but when we try to articulate some of these numbers, if we take a look at the back half of these slides, that really also tries to monetize this. It's tough for us to be able to give you full guidance on that. What we can do is say, "Hey, here is what we make per lot. Here is what we do on the water side. Here is what we're doing on the single-family rental side. Here's how that generates the monetization of those legacy assets, as well as here's what it does on the recurring revenue side." I would say the company has had a strong disconnect between what certainly we believe the value of those assets are and what the market capitalization is for that. We try and allocate some of that money to bridge some of that gap in now. What I was going to say, Mark, is just as a tease, if you like it, to those who are listening who did not hear it, you came up with, with actually the analysts on the call came up with impressive numbers for what the pile of cash the company would have with Sky Ranch fully developed, with roughly 85% of its undedicated water reserves not still undedicated and available for sale. You also came up with a number for ongoing revenues per share at the end of the development of Sky Ranch. It was very specific, and it was very helpful. I appreciate that. Jeff, I see Jeff Scott's got his hand up, and I see his smiling mug. Good morning. How are you? By the way, I am good morning. E lliott, I think I will take some credit for the luncheon analysis, but I want to ask you. Jeff, you were brilliant. You were brilliant. You just made my whole day, Elliott. That's on the back. Keep you going. Mark, I want to ask a couple of chicken and egg questions. I'm assuming that the development of the interchange is the egg and that the commercial development is kind of the chicken. The value of the commercial development goes up after there's an interchange in there. Is that basically correct? Yeah. I think that is true. I mean, I will say that I think the value of the commercial, we have an existing interchange. The new interchange gives you more capacity. It's a freer flow of traffic. The proximity and the location along I-70 give you both of those elements. The interchange is kind of a component that we do need as we continue to build out. What we've tried to do on that, Jeff, because commercial needs a certain amount of demand from the residential side. We have been bringing that up at the same time as we're paralleling the permitting for that interchange so that we don't have a gap out in that issue where we have the demand from the residents, but not the infrastructure or the traffic capacities. Right. I'm assuming that the demand for the commercial will go up when they see a bigger and better interchange. Absolutely. I would not argue with that thesis. Okay. That was the first chicken and egg. The second one was kind of interesting because I think for the first time, you said that the land acquisition is a higher priority than additional water right acquisition. I don't think I've ever heard you actually say that before. Is that because what you'll be able to do with land is going to be faster than what you're going to be able to do with additional water? I mean, you have water for 60,000 units. You don't have land for 60,000 units. So presumably, you have water and inventory, and in order to utilize that water, you need additional land. Is that the correct interpretation of the chicken and egg? Yep. Exactly right. I think we're longer on the water side than we are on the land side and really want to be more aggressive on the land side. Okay. Thank you. That's all I had. Okay. Thanks for chiming in. Elliot, thanks for your comments and kind of the filter that you as a shareholder and really a long-term shareholder have in terms of the company and really aligning with kind of how we think about the world and how we steward some of these assets was very helpful in that February call. Keep up the good work. Thank you. Boss was trying to ask a question. Who is? Boss. Yes. I'm tuning late, so this question has been answered. Let me know. I'm interested in how the school is doing. I think it's a key component of the entity. Tell us about the school. I'll go back on mute. Okay. Great. It is a great question. You're right. Having a local school, having a K-12 campus right in the middle of what it is that we're doing, tremendous value. I will say our partner on that, National Heritage Academy, great partner in that. We are their first K-12 campus, and they have other campuses that are K-8. They have high school campuses, but we're the full K-12 model. We are looking at breaking ground on the high school of that later this year for the delivery of high school in the 2026, 2027 year. What we've got is the existing K-8 system. They'll go K-9 next year because they want to make sure that they can continue to keep the kids there as they start there and then have that high school for full build-out on that. The capacity of the full K-12 model will be something like, I think, 1,700 kids. It'll accommodate all of the kids in Sky Ranch, full build-out of Sky Ranch, plus a little bit more so that we can service some of the surrounding areas. Wonderful group. I think the overall feedback, I'm part of, I chair the school board on that. I attend a lot of the parent conferences that they have there. The feedback that I get is the school's just a terrific asset for the community, a terrific model. They love kind of the NHA model, how they deliver the education, the moral focus that they have. Everything that they do, I think, is a terrific opportunity. I'm learning a ton about schools as well. It's great. I thank you for your continued support on that school. I know you continue to reach out with me on that and continue to touch on that. Thank you for that support. There's one caller that ends in 6841. You're off mute. I don't know if you had a question. Thank you. you. Yeah. Thank you. This is Greg Bennett, one of your shareholders. Washington, DC, or the new administration has talked about affordable housing and the need for it. They've also talked about the possibility of using federal land or giving federal land for affordable housing. My question is, do you have water near, or is there land near our properties that could be federal land that you could basically obtain for a dollar and then with the agreement that you would create affordable housing? Thank you. That's a good question. We are not adjacent to any federal land, but I will say that our service area is owned by the state, the state of Colorado. The state of Colorado recognizes, as much as the federal government, the importance of affordable land and affordable housing. While we do not control the land, our water and our service area are all on that state land. It is a massive inventory of land. It is 24,000 acres of property. It is located in that I-70 corridor. It is probably the single most valuable asset that the state of Colorado owns in the state land board. Clearly, they are attenuated to not only the affordability aspect, but what they do with that land generates revenue for the public education system, the K-12 public education system. Those are great opportunities for us to partner with them. We will provide the utilities regardless of whether or not we develop the land in conjunction with them or somebody else develops that land. They're currently evaluating what opportunities they might want to consider for that. They've taken a look at that land at various segments over the last 30 years as to what the inventory and the carrying capacity of that are. We'll see. That's an opportunity. We look at other land areas for us to be able to acquire or partner with and be able to monetize and develop that land by bringing our water to it. Also carrying that forward within our model where we're developing the horizontal infrastructure. We've looked at inventory a portion of that for single-family rentals. You're right. Land is a critical component to the overall development. Just interest rates. I think as much as the federal government has the opportunities to take a look at its lands, the current administration really does have a focus on trying to do something about affordability. Interest rates are a key element of that. Much to maybe their frustration, they do not have as much control over interest rates as they would like. Certainly, policy does influence interest rates. Has the state of Colorado ever granted or sold land for a purpose like public housing? You bet. You bet. They have sold land. They have all their interests. They sell land. They buy land. They trade it out. They have commercial properties where they have office buildings that they are for lease. They have multifamily opportunities where they have participated in either land or vertical side. Then just selling land. The predominant drivers for their land interest have been oil and gas and grazing. They own about 3 million acres throughout the state of Colorado. This is one of those pieces of their portfolio. How close is their land to your Sky Ranch or your interchange? Is there anything that's nearby, or is it miles away? Oh, yeah. yeah. It's very close. It's 4 mi directly south. When you take a look at—and we have a lot of these images on our website—you'll see where we show our service area and the proximity of our service area. In fact, some of our presentations will have sort of some drone imaging where you see on one side of the road, you have a bunch of developed houses. On the other side of the road is kind of vacant land. That is where the state—that is where the Lowry Ranch starts. The metro area has grown out to the Lowry Ranch. It is ideally positioned for opportunities. Okay. Final question. Sky Ranch, the build-out, you do not need to acquire any land in order to continue growing for the next, what, five years? Is the absorption of Sky Ranch going to take five years? Yeah. I would say most of the residential should be wrapped up in that cycle. Some of the commercial may still tail on depending on how we participate in that. You are right. That is baked in. You take a look at that guidance set where we think we can monetize both the land and the water, and the single-family rentals on that, that $600 million really is just what we own at Sky Ranch. Okay. I guess one of the concerns investors may have is that you're tying up capital in the rental units. If you do make another land acquisition, provided on the deal you get, that's capital that won't get a return for five years, possibly. I don't know if you want to comment on that. Yeah. The cycle of land development, certainly, you're not wrong. When you buy raw land, the time to entitle it and start developing it could be a little bit longer. The issue for us is to make sure that we allocate that capital so we're not over our skis and we can actually continue to invest in the land development at Sky Ranch. I think we're ideally positioned to do that. To the extent that we get a large enough land acquisition that would be beyond what our liquidity position might want to support, that's something that we can take a look at monetizing our single-family rental portfolio. We can bundle that up and sell that out and be able to use that rather than our equity to be able to acquire some land interest and replace it. It is a very attractive investment, not only because of the tax advantages to it, but the equity carry forward and then the ability to monetize it in the event that there's an opportunity to do that. You're suggesting like a 1031 exchange where you exchange your rentals? Something like that. Something like that. Yep. Yeah. Okay. Yep. I don't want to know. Thank you for everything. Thank you for the call. You bet. Any other caller I can layer in? Yeah. Mark. Please. This is Dan Kozlowski calling in, board member. I'm not familiar with that. Yeah. I love to do Yeah. I love to do Yeah. I love to do this. Due to a scheduling conflict, but good call. I think this is one of the better calls. Good quarter in a seasonally slow time. Again, I think it speaks to the robustness of the model where these slower quarters are less slow and still stacking on some earnings growth, which is great. Just a couple of observations. I kind of listened today, and the caller questions, I think, are at a higher level. Everyone's kind of really understanding the business model better and better each quarter. That is great. Just to pivot off a few things. I mean, the interchange process, I'm glad you brought that up today and spoke about it because it is a big opportunity. I mean, if you just drive out there, you see there's a fine off-ramp, and I guess you call it an interchange today. Obviously, the ability to control and work with Arapahoe County and have the outcome of that interchange be favorable towards our sections that we're going to develop, a lot of it commercially, is really a huge opportunity. I know you've put a lot of time and work on that. More disclosure today, I think, is good. It's slowed us down a little bit to do some regulatory caps and how all that works in the past. Once that is in process and moving, I think it'll free us up to make us more flexible in terms of pacing of absorption. Maybe you can comment on that a touch if you want. Also, a second part of that is, how do you think about commercial in terms of your classic retail, commercial build-out, the grocery stores, the drug stores, the software that goes around a community versus going either earlier or at the same time and doing it in an aesthetic way, but adding industrial warehousing, that type of thing that could also be sellable at really good prices really at any time. Maybe just a little more color on how you're thinking about the classic retail software versus the industrial warehousing that there's always huge demand on I-70 for. Yep. Yep. All good questions and really good things to kind of throw a little color into this. The interchange, I think, is a great asset, great opportunity, and one that we've been planning for since we started construction of the project. We're well-positioned on that. It is a long lead cycle. We have really been early to try and get that through the system and through that process, both with the county as well as CDOT. I do think, as Jeff sort of highlighted in his chicken and egg sort of analogy, that it does open up. While it is not constraining some of the commercial activity, I think commercial activity really is a lag of some of the residential activity. We did want to time those two out such that when the residential was good, we did not have any constraints on the transportation and then the attractiveness of having a bigger, fuller scale interchange on that. That is an important component on it. As it relates to some of the commercial, and one of the things that Dan's been super engaged in helping us really kind of color into some of the communication style of how we can translate the value of the company to investors. One of the other opportunities, and I talk about this all the time in terms of the strength of the board, one of our board members is very dialed in on the commercial. He works with a local family office that does commercial all over the Denver area. They have developed tons of grocery models with Kroger and King Soopers as their brand here in Colorado, as well as bolting into that the commercial that goes around that, whether that's going to be your fast casual, whether it's going to be other types of office, medical office, and then building into box store where you can get the retail side, whether that's going to be big box like Home Depot or Walmart or Sam's or Costco-type models, and also in the industrial side. While that's something that is key for the company to keep their pulse on, we also have veteran experience on that that help guides us. Jeff Sheets is the board member on that who brings that value to the company. We sought that expertise as we continued to build that board portfolio out such that they could assist us on that. Through his help and participation, we have developed a commercial model for that that really accommodates all of those things that Dan was talking about, whether you have space because we have about 160 acres. We have space for the light industrial, for this big distribution center that does provide tremendous assessed value that brings a lot of that revenue into the reimbursable side. We have components of that for multifamily where we have apartment complexes. We have talked with a number of different apartment developers and various models where we can help participate with that. That model looks something like where we bring our water, we bring our land to the equation. Somebody goes vertical with that. We get it fully leased out and to sell it as a package. Our exit becomes fully developed when you've got a fully improved lot for a particular use like a multifamily. That could be anywhere between 500 and 1,000 units of multifamily, depending on how that configuration goes. The grocery, the fast casuals, the services, the fuel, all that stuff gets built right around that. Those are all extremely high-value land interests where we can keep some of those units available, working with, partnering with commercial developers, and then getting those facilities leased out and then selling those to maybe REITs and other types of entities that really participate in that cash flow. As much as we look at all those options, we look at those options with some degree of expertise, somebody who's done it, who's spent their career. He's got 30 years doing specific commercial development in the Denver area. We are very excited about that. We are very excited about that guidance. We are very excited about that opportunity. Good question, Dan, and a nice way to kind of highlight how we are transitioning from a core of strictly residential to moving into that commercial side. Just a few other observations generally. I think this finished lot approach that you chose to take starting back in phase I or phase A, I think, is understood somewhat by the market, by the long-term shareholders. The attractiveness, even in times we talk about times like these, I mean, there's always stuff going on, right? Whether it's interest rates moving up or down or COVID or the change of administrations with different viewpoints on how to attack opportunities and challenges of the country. It seems always more volatile when you watch social media or CNBC. The reality is home builders, they have pretty good businesses, and they're pretty good at managing their risk. They earn a lot of money. They've been good stocks for a decade or longer. I think the bottom line is they're pretty good at managing their risk. What they really desire is the ability to put down their cash on lots and go vertical quickly. Our model, which was slightly more capital-intensive for us to finish all the lots out, is just highly attractive to if they're looking at their entire nationwide portfolio, obviously, they like Colorado. Look at their Colorado portfolio. You continually, as you develop these phases and sub-phases, you're showing up with buildable lots, right, right away. Those are the ones where even when the home builders will go through 90-day pauses or whatnot, they want because they can buy from us and go vertical and have lower carrying costs. It is the way we chose to approach the business. It really protects the business back to times like these, meaning people are cautious. If they can buy and go vertical, it is just a huge leg up on the sustainability and consistency that we are delivering. I think that is understood by half the people that look at Pure Cycle, but there is another half that is newer to it. I have to think in the market, when our stock price is bouncing around along with the home builders and other people, it is not completely appreciated how much. When we talk about demand, yeah, there's general demand in the Colorado market, but there's a lot it just strikes me, and I've watched it for five years. There's always demand for these finished lots. That's key here for people to understand on the call and otherwise. Maybe you can comment on that in a minute. The second thing that I'd say is partially understood, but not fully. It's the nature of Sky Ranch and any development: the cash flow is just very much back-end loaded. If all we did on Sky Ranch was develop 1,000 lots, we're going to do many thousands, but if it was just 1,000 lots, I think what we had seen was the first 500 were pretty good, and then the last 500 would be massively cash flow generative, right, as you're winding down a smaller project. All that cash comes over the transom. I've just done some rough math on it. It just seems very disproportionately cash flow generative in the second half of the project and as you're closing it out. A lot of developmental projects are like that. The last 30% just goes straight into your pocket. Sky Ranch is big. It is 3,500-4,000 homes, and then the commercial. It is really back-end loaded when all that cash comes over the transom. Now that we're inching up on 1,500 lots, we're inching up on that halfway mark. As we come over the halfway development of Sky Ranch, the cash flow dynamics, the margin structure, all of it really blossoms. I think that's going to hopefully surprise people as we get another 12, 18, 24 months down the path. So much of the cash flow payoff from this will, again, I'll use the word blossom in the back half. We're pretty close to the back half now. That's, I think, exciting. I'll stop there on those two comments if you have anything to add. Yeah. Good comments. You're right. In terms of our home builder partners, the thing that they like is they want to be able to sell their home before they buy their lot. Really, we're delivering this stuff just in time for them so that their capital allocation is as good as it can be. There's very few people that do that, right? There's very few people that are in a position to do that. Most developers sell platted lots, particularly in the Denver market. They sell platted lots, a paper lot, and then they force the developer to put that infrastructure in. The developer has to put that capital in upfront, and they're IRR-driven, right? Their whole model is IRR-driven. They want velocity. If they have projects where they can choose to build spec homes, they're going to build them in an area where they do not have to do the horizontals. That allows them a much more favorable rating. Really, that's why I think we've had such good success with all of our builders and the renewed aspect of it. The portfolio builders who want to be in Sky Ranch. As we open up phase III and we go into the next 1,500 lots, you're right. You're going to see an acceleration of that, right? We're not seeing most master plan communities grow on a bell curve. You start out slow. You get up to a certain point where you're delivering a lot, kind of the max number of lots. I'd say you come down and tail off and are milking the residual value of each of the remaining lots. While we haven't peaked in that bell curve, we're on the upper side of that. You've seen that by accelerating the lot deliveries from 250 lots a year to something like 500 lots a year. That's going to go directly into monetizing that asset. You're right. If you took a look at any master plan community, we continue to build that value. When you look at our balance sheet, you see more than twice our liquidity is in the note receivable. If we were on the back end of that, that would all be moved over into the cash side. And so that note receivable really is, as the assessed value of the community grows, that's where you get those reimbursables. You get that high value of monetizing the final lots in there. It is cyclical in terms of how you stagger out the overall development. You can see from the balance sheet that continued growth. I think the disconnect there might be that people just are like, "I want to see more of the lot deliveries. I want to see more of execution on the commercial side. I want to see" and all that stuff is right within our business plan and how we're going to execute. You're right. Our enthusiasm's high. We continue to try and communicate that to the marketplace. The market has its own cyclical natures of it. We want to be as transparent as we can. Looks like Jeff wanted to weigh in on one of those observations. No, I was just going to take Dan's thought process one step further. He said that the builders need something that they can go vertical on quickly. The other thing they need is demand. That article that I sent you yesterday on Link 56 had to do really with the growth of Denver going eastward and out by the airport. The article came from, I think, the Denver Business Journal. It talked about the Link 56 development out there. You said it was, I think, 10 mi away. Nevertheless, there is going to be a population shift eastward. Anything that brings people closer to Sky Ranch is going to ultimately increase the value. There were things like a large land purchase by Microsoft for a campus that I had, that's the first time I had heard of that. It is that kind of development over the next fill-in-the-blank decades that is just going to enhance the value of Sky Ranch going forward. As part of that, it said that Target had acquired land for, I want to say, a four-acre retail outlet for $7 million. I do not know the details of that and how much was, how much for the, it was a 140,000 sq ft store. They may have had to buy some parking and stuff like that. $7 million for 4+ acres is a pretty substantial investment for somebody like Target. I wish that would translate into value at $2+ million an acre for Sky Ranch. Anyway, damn it, if Mark can forward you that article, I do not know if you have seen it or not, but I thought it was very interesting. That is all I had. Yeah. No, it was great. It keeps coming. I mean, I have made this point, I think, maybe a couple of calls ago. If you look at Denver historically, I-25 and I-70 kind of bisect Denver. Where they hit was kind of the old, 20, 30 years ago, the old industrial kind of epicenter of Denver. That has all moved eastward now. That was triggered by the beginning of that, which was triggered back around 2000 when the airport opened up. Then the Anschutz Medical Center. The whole, I think, the epicenter of Denver now for the future is really E-470 and I-70. It has moved eastward, what is that, probably 12 mi or so. That is because DIA is right there, 3 mi or 4 mi. That is why all the industrial or light industrial warehousing Amazon Center that is there is off to the east. Sky Ranch is sitting right in the middle of that development to the east. Our water is sitting right there too. Water, we always talk about, is an interesting business. Water is very valuable, but it really is, is your water in the right place? Our water is in the right place. It is coming right over the top of us. That just leads me to my last observation or point I will make, and then I will cut off. The state landlord owns this unbelievable piece of property. It's 40 sq mi, but it's Lowry Ranch. I would just note that we've been impressed with the way the state landlord is evolving their views and some of the human capital the state landlord has added over the last year or 18 months with real high-level real estate development expertise on the board. You have to think if they're adding that sort of talent and expertise, they certainly are aware of the opportunity they have with the Lowry Ranch over time. I know, Mark, you've gotten closer with them and built a great relationship. It's all there for the taking whenever the state wants to begin to monetize that in a thoughtful, progressive way for the community and help with this would be low-income or entry-level housing. It's pretty exciting. I think, Mark, you've done a great job building those relationships. The state landlord is doing a great job bringing in high-level talent to evaluate all the opportunities. I think that's been a long process. We've got a long history, but it's really on the up and up. I think it's tipping the cap to Mark for his patience as well as his relationship building there. Good work on that. I'll sign off. Good quarter. It should be a good rest of the year. Nice work. Great. Thanks. Pats on the back like that keep me going. If there's no other comments, certainly if anybody's got something that they didn't get a chance to ask or want to just drill down privately, go ahead and give me a call. I'm always available. We do like doing these kind of road investor meetings. We'll try and see if we can't set something up, maybe in the Midwest or maybe on the West Coast. I've got some good friends and shareholders on the West Coast that have been itching for us to come out and organize a sit-in. I will tell you, I mean, this format is very helpful where we can engage in a dialogue, an interactive dialogue like this. I think the reaction with some of the folks that attended the meeting in New York, they were just overwhelmed when you see it, when you roll out maps and you kind of get that tangible evidence as to how the Denver market's positioned and where I-70 is and how the growth of the metropolitan area goes. It really does provide a very compelling argument as to what it is that we're doing, not only what we have in inventory, but what our opportunities are with the portfolio. We will continue to reach out and continue to really expand that knowledge base and that outreach to not only our existing portfolio, but folks that may be new to the story. With that, I will go ahead and sign off. Thank you all for your continued sponsorship and confidence in your invested capital. Take care, and we'll be in touch. Thanks, Mark. Thanks all.