PURE CYCLE CORP 10-Q

Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures as defined in Rule 13a-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. The President and the Chief Financial Officer evaluated the effectiveness of disclosure controls and procedures as of May 31, 2021, pursuant to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, the President and the Chief Financial Officer each concluded that, during the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to a material weakness in internal controls over financial reporting resulting from ineffective controls related to the management preparation and review of spreadsheets which compromised the integrity of the spreadsheets used to support and record transactions related to the public improvement reimbursable amounts and related interest income. To address this material weakness, management has devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of its internal control over financial reporting by implementing additional steps in the review process of various complex schedules that support accounting entries on a monthly and quarterly basis or moving these manual tracking and reconciliation processes to a purchase software system. 34 Table of Contents Changes in Internal Control Over Financial Reporting No significant changes were made to our internal control over financial reporting during our most recently completed fiscal quarter. However, subsequent to the quarter ended May 31, 2021, based on the discovery of the control weakness noted above, we added additional review procedures and additional check balances to all complicated and infrequently updated schedules to ensure all calculations and formulas are prepared and reviewed appropriately. The Company is continuing to assess additional modifications to its internal controls required to remediate the material weakness noted above and ensure other spreadsheet controls are properly utilized. ​ 35 Table of Contents PART II – OTHER INFORMATION Item 6. Exhibits Exhibit Number Description ​ ​ 3.1 Articles of Incorporation of the Company. Incorporated by reference to Appendix B to the Proxy Statement on Schedule 14A filed on December 14, 2007 . ​ ​ 3.2 Bylaws of the Company. Incorporated by reference to Appendix C to the Proxy Statement on Schedule 14A filed on December 14, 2007. ​ ​ ​ 31.1 Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * ​ ​ 31.2 Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. * ​ ​ ​ 32.1 Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** ​ ​ 32.2 Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** ​ ​ ​ 101.INS Inline XBRL Instance Document. * ​ ​ 101.SCH Inline XBRL Taxonomy Extension Schema Document. * ​ ​ 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. * ​ ​ 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. * ​ ​ 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. * ​ ​ 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. * ​ ​ ​ 104 ​ Cover page formatted as inline XBRL and contained in Exhibit 101 ​ * Filed herewith. ** Furnished herewith. ​ 36 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PURE CYCLE CORPORATION ​ ​ ​ /s/ Kevin B. McNeill ​ Kevin B. McNeill ​ ​ Vice President and Chief Financial Officer ​ ​ ​ ​ ​ July 9, 2021 ​ ​ ​ ​ ​ ​ 37