PURE CYCLE CORP

Except as set forth below, there have been no material changes to the risk factors disclosed in the 2025 Annual Report.

Legislation restricting institutional ownership of single-family homes, including the 21st Century ROAD to Housing Act, could reduce demand for single-family rental homes and the value we could realize on future sales of our rental portfolio. On June 23, 2026, Congress passed the 21st Century ROAD to Housing Act (the "Act"), which had not been signed into law as of the date of this report. As written, the Act would restrict large institutional investors, defined as those that own at least 350 single-family homes, from purchasing single-family homes, subject to an exception for "build-to-rent" properties, and would impose annual reporting requirements on those investors. Because this threshold is well above our current and planned single-family rental portfolio, and because we develop our rental homes on a build-to-rent basis, we do not currently expect the Act to restrict our development or rental operations.

Notwithstanding consideration relating to the Act, we have paused further additions to our rental home portfolio beyond what is currently under contract to build as federal policy on institutional ownership continues to evolve. The Act's final scope, thresholds and exceptions (including whether the build-to-rent exception extends to resales of previously constructed homes) remain uncertain, and we will evaluate the segment's returns as well as any disposition options as needed.