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DENVER, Sept. 18, 2012 (GLOBE NEWSWIRE) -- Pure Cycle Corporation (Nasdaq:PCYO) announces date for sale of HP Collateral Interests and Revenues from Farm Operations and Frack Water Sales.
High Plains Default
High Plains A&M, LLC ("HP A&M") has failed to make balloon payments due on certain promissory notes secured by deeds of trust on properties we acquired pursuant to the Arkansas River Agreement. HP A&M pledged 1,500,000 unregistered shares of Pure Cycle common stock owned by HP A&M as security for the payment and performance of HP A&M's obligations on those notes and deeds of trust. On September 27, 2012, the Company intends to sell the pledged shares to the highest qualified bidder in a foreclosure sale conducted by Wm Smith & Co. in accordance with Article 9 of the Colorado Uniform Commercial Code This notice does not constitute an offer of any securities for sale. Any bidder will be required to meet certain qualifications in order to participate, including pre-qualifying as an accredited investor. Interested parties may contact Bill Smith at (303) 831-9696 for more information.
Pursuant to HP A&M's default, Pure Cycle has entered into contracts to sell a portion of its farm holdings in southeast Colorado and is working with HP A&M note holders to enter into agreements to purchase HP A&M's defaulted notes. The Company intends to foreclose on HP A&M's notes and seek remedies from HP A&M under the Asset Purchase Agreement.
"While it is unfortunate that HP A&M defaulted on their obligations, we had provided for such a contingency under our Asset Purchase Agreement and will pursue our default remedies and seek damages against HP A&M," said Pure Cycle CEO Mark Harding.
Farm Operations and Frack Water Sales
Additionally, Mr. Harding noted that the Company has terminated its Farm Management Agreement with HP A&M and has begun collecting farm income from leasing its farms to tenant farmers. Farm income is projected to generate approximately $1,000,000 annually of which approximately 50% remains outstanding for 2012.