Pure Cycle Corporation (PCYO) Earnings Call Transcript & Summary

This meeting is being recorded.

It's about 35 miles northwest.

It's about 10 miles north of it Moorestown. So actually, where I am. It's kind of where it starts to become really like township. It's artificially both started out about 60 meters ago, they were a few families that is almost [indiscernible] track spread. Also it's a really difficult. It's only rules for past. So -- there is no not even one stop light in [indiscernible] township. Area is like a project that you guys do. People has like [indiscernible]. And there is nothing and people really there like in 40s or 50s a piece of land and people have been encroaching on it.

Why is there a strong procedure growth. Okay. So that steps the -- that's like, yes, 10 to 15 miles from maybe I'm just kind of northwest to see it.

Were technology and people to get it to work. We have just, in general, using being not being able to own type of things like that. The building up the brand or the prices as we -- in the land that was in New York ever since I was annual [indiscernible] skills, which was a casino and [indiscernible] useless and things like there was nothing there. I went there, we recently told me go, and it's unbelievable that they develop explosive level.

Yes.

And you kind of you see that the bigger cities get bigger, but then the metric of moving to an urbanized area in smaller areas that are adjacent to big cities are still growing, and they have their own uniqueness to offer, but they still get flowing the in-migration as well as the organic growth.

Well, you've been growing [indiscernible] right, because now you have a repeal its, it's amazing. These are the areas. Once again, they're trying to be the opportunity for people forget actually. So we will go ahead post it off. It will be hard to see the maps for the online stock right there.

You are saying for the weekend or you just...

Just for the weekend. I'm a little altoristic in the meeting since my dog moves up to sit.

I was just trying to see this.

My brother still live about that way Cathedral Parkway. It's at the top of the park and their condos. He brought on in the late '80s, early '90s, basically the top of the real estate market, then New York City real estate went totally dropped out in the early '90s for about 5 years. He brought it for like $100,000 and with Sony made financing 5% down, he ended up like wanting to move out to Jersey like all get married and move in New Jersey. He sold it for maybe a little more than that. These things now because a lot of like the residents from Colombia, it's a nice place for them close to the hospital and stuff. So I think they go for probably $ 1 million, $1.5 million now. But...

Are you going to be through the weekend? So if you want to have a central New York experience, you have to wait online [indiscernible] but if you take you to or for breakfast on the upper west side, I don't know the address anymore. But there's a place we that take care a it's called [indiscernible].

[indiscernible]

Yes, bond is like [indiscernible], the place is Korean [indiscernible] star place where the food is really over the price sensation, not more like a [indiscernible].

So he moved here in March.

She was in Delaware.

She was in Denver.

Graduated college or?

Yeah, she was working with -- so still working for KPMG. Consulting project.

Is she joining here.

She loves the city. She is kind of [indiscernible] from consulting. I don't think she likes the platform is like an Oracle base platform -- and...

It's a great background.

That's what I mean. She's been there 2 years.

Does she has masters in this -- I mean, this is like a masters in business like an consulting, auditing brand name that those are the best. So 2 of my 3, my oldest did the same thing. She's been consulting in Chicago in a health care practice -- and then my younger is a senior at [indiscernible]. My son is at University of Chicago [indiscernible]. He eventually was back here. But just different reasons, but she this a great city.

She lives kind of by the [ railing ] up in that area.

The brand line, which you hail that reliable.

Yeah. It's like New York, it's really sophisticated. It's much more affordable.

I don't know about that. I'd say she pays just about as much as the -- up in Upper West.

Really. I mean I just -- some of the -- when I look at like condos or real estate out there, it just seems so like the half the price.

Yes. I'm little tiny brother out there. We have 2 bedrooms with like [indiscernible] everything else like that. They each pad like $1,800 a month in New York. I mean it depends on the area.

Right.

Like I can sit in the village and things like that -- it's unfortunate. I mean this room would [ $35,000 ].

So that's it, they might pay the same amount, but she probably is twice the space.

Well, let's get going. I appreciate you all making the trek into the city. It's the first time I've been back in the city lot on, I certainly missed it didn't really have much of a format years ago. So what we really wanted to do is give you kind of a colorful view or what it is that we're doing, why we think it's working, what we're continuing to and maybe some of the nuances in the business center itself. What I'd like to do is maybe start with kind of a state of what or where we're at, we intend just [indiscernible].

I apologize for those of you that are kind of listening in on the virtual side, mapping will be a little bit tough. But we have most of the maps on our printing patients and on our website. This really illustrates kind of what we currently got going on. This was our first file and that's going down, right? Our wastewater plant. I mean, it's really one of the few -- there's just a handful of wastewater plants that are designed this way, where it's a zero discharge. And so the most unique thing about this whole community is really what we're doing on all scales on that we're vertically integrated as the water utility, the land developer and then also building houses. And when you take a look at how that synergies of that, and if I say what's our competitive advantage, that's the competitive advantage that we have, right? It's also very unique for builder experience, right? All our builder partners are extremely satisfied with being able to deliver the taps being able to connect the water service without going through a separate agency. It's all in the same agency. They have a very predictable format, which is all they want. If it's just give me something that's unknown, and I don't have any uncertainties to hit the marketplace.

So this is fully built out. Can you just back up one set zero discharge waste order. Help me understand what would that entails and the costs are relative to...

So the uniqueness of it is that not a drop of water is released from this plant -- it goes to a storage sites. So 100% of what we treat that site, that facility at right here, and we've got a pipeline that brings it back to this reservoir right here. And this reservoir is plunged into the entire irrigation system. And so what happens is all of the parts and the open space, everything green you see here is all plumbed for that system.

Great water. Yes.

It's much, much better than that. I mean Great waters are a very specific term for the industry. But it is fully reasonable we use water safer contact for human contact. And it's actually -- it's cleaner than the water that we take out of the surface water facility. So we take water out of this stream here. And the water that we have irrigating our parks is cleaner than the water that we have for this that we sometimes will blend depending on how the demand for the irrigation on.

I think now is that the standard at...

It's getting that way. More and more people are trying to do that. Colorado, what happened back in the -- as the Denver was start coming up in the 40s and 50s, what they thought was, okay, we understand the value of the water right. And everybody had their own water portfolio. And what they all thought was a good idea. Let's consolidate wastewater, right? So what they did was they brought all of -- everybody plumbed all their wastewater systems to one central facility, and it was far, far outside of town and it turned out to be -- well, that's not such a great idea because our most valuable source of supply is the supply that we already have. And now it's clear, it's how and gone from where their actual service areas are. So a couple of questions and not to show for you, but I will because -- just another thing is the wastewater is bioreactor takes up a much smaller footprint than the traditional wastewater and you don't have these giant flood [indiscernible] and it doesn't smell. Done nearly as much. So you can put school right next to it.

So the question is. The question for you is because I'm just curious because you've been at this for a while and done very well with that. What is the standard in Colorado? Is reuse coming back that is I mean because it has to, right? I mean -- it's so [indiscernible] on the reactors in the Colorado.

Well, still the difficult part about it is you can't really do it in an existing community, right? There's not the footprint for it, the plumbing is not there. And then it's so costly for a big provider to do their own wastewater plant because it's not centralized. Everything is already going there. So what they trying to do is that all the ones that consolidate to the single wastewater plant that discharges to the plaque to the stream, right, and then they pick it up downstream and they pump it. Now the big problem with that is the cost, right? Because it's 50 miles. They've got to build a pipeline and lift it back, right? Because it's 8 pounds a gallon, and they've got a uphill. And so the local operators reclamation facilities like this, where you can take a master plan like this and do that. And you're exactly right. I mean this has no order whatsoever. I mean, we do have air handling just in case, but we don't need it. And it is right next to home just right next to [indiscernible].

The traditional process of chlorine and the being there [indiscernible] is in New York and there's a this plan [indiscernible] is it do they treat it the same way...

Same treatment process, right? -- you have sort of your biological so your [ rocks ] are the ones that are kind of consuming up organic material. You screen out the inorganics, the rock to the stick whatever else we had. Let me see if I can get. Can get I get everybody that's listening online to just mute. We're getting some background noise off that. Thank you. And so you go through those processes, but the time -- you can do it much faster, and you can control that pace and that speed, such that -- we have storage that will be at the plant, we have storage at will be off-site and then you have kind of the demand side and you can manage all 3 of those.

Do you have to, I'll say, aggregates stuff that comes out of that process when you [indiscernible] away to the [indiscernible] fees and conditions like that.

So ultimately get kind of a condensed organic material. And that's kind of a fixed sludge. So you -- as a third party that you have that will actually take that. And it's very inexpensive, and what they do is they take that to farms that they have and they use it as a soil enrichment. So 100% of is both the water side and the solid side are recycled. So you have uptake on your sludge there. So there is demand for condensed at [indiscernible]. Yes. Now, it goes out to -- the same provider that does the big wastewater for the region, they have about debt revenue to you? Or is it neutral that they're just taking it at for their cost filter.

[indiscernible] built on the land facility handle everything? Or that be either an upgrade or...

So the footprint that we have here is anticipated that we can serve all of Sky Range. But what we've got opportunities for other air. So without foreshadowing the rest of what we were talking about, there's other opportunities for joining land. And we've plumbed it in our way such that we can get that same line that would serve it, and then I can just flip and do this and double the capacity. So the footprint is the right footprint for Sky Ranch, on the building, the area footprint can be doubled so that I can actually serve other iterates. So yes, I mean that's one of the investments that we made upfront was to say, okay, great. We probably only need this much space will need this much to grow into. And then even within the plant, we're only using about 20% of the capacity to plant today and then we can continue to grow that asset the plant was designed so that they can have some parts that will expand without any more capital expense.

So this base is currently under construction, right?

We delivered these lots to this 2A, which is about 220 lots last July. And there's about 180 homes. So it kind of gives you an indication of the demand for [indiscernible] in this area. And I'd say it's a combination of things. One, we're putting out a good product. It's a great community. It's a great location. But at the end of the day, it's also the right price point in the marketplace. So this is an entry-level community, very unique in Colorado. There's not a lot of competition for homes that and you find any other home out there that starts with a floor in the Denver area. This is one of those. The things that we continue to do this first phase of the charter schools. So this is the [indiscernible] school, which we'll be opening up in August. So that's another amenity for it. And it's really central school facility, right? We put it in the middle of the neighborhood so that it would be really the community gathering spot for the whole neighborhood. Terrific charter school operator. We got out of Michigan, National Heritage, they have about 100 schools, about 60,000 students across the country, terrific facility. We've got all of the open space areas. And what we're doing is this whole area up in this area. This is a detention pond that we've got set out so that we can have open space around the detention pond, and then this spot will be the rec center that we have, and we're co-branding this so that the rec center can use some of the ball fields, the students can use some of the facilities at the Rex Center. We've got a spot here that we're looking at an independent facility that may be like either a hockey name or something like that, that we can partner with the school and the community as well. This phase is currently under construction. So we delivered this one, we've delivered -- we're doing -- we did most work on this one. So all soils are done, and now we're doing the utility contracts, all of the water and sewer in the storm are going in right now. And then what we'll do is we'll prioritize building the street curves and gutters, the Colorado seasonal issues because it does -- it's very difficult to do concrete and asphalt in the winter. So what we'll probably do is open up an area so that each of the builders can have some lots that they can continue to build on over the winter. The interesting thing is they were looking for this to be sequential. And one of the stories that happened on this. We delivered this in July. And then we were recording the flat on this in September, and that was when things were getting a little wonky with the interest rates and the builders weren't sure what was going to happen. And they said, "Hey, when you give us 90 days on this one before we do start distant because we're just not sure what's going to happen on this one. And it turned out that they just went runs out on this one. We waited the 90 days filed it. And then they said, "Okay, that's great. Can you start this one now? So we're actually going to be recording the plaque of this one in August and then getting going, and we'll have a parallel work. We have the utility were going on here. We'll have the dirt work going on here. Once we get to the pavement side of this, we'll be doing the utility work on this. So the absorption -- this is to be, what about to see how those issues were or not just to be like that. Yes, A, B, C, D.

Yes. Is there any change in environmental standards for testing standards or you crucial process, the development of tracks of land.

No. Still the same. When you go in and a lot of the focus in the Denver area, continues to be and you have what, what you cross -- they try and tie zoning and water together. And we went in for all 5,000 units on the front end, and we did that getting all upfront or, oh, yes, you've got some water. Not only we got the water, it be a way tensed. So that's another -- let's turn this make some lemonade out of what the builders asked was. So when they came back and said they asked us to pause this thing for a day. One of the things that I said was, okay, if you're uncertain about the market, I'm not. So why don't I claw back some of your lots and I'll be your first customer. You can go when I record this, you can go to your management team and say, "Hey, I already sold x number of houses. I said if you build my house. So I had this set up for me to have 10 single-family rentals in each quadrant. And so I ended up doubling that. So I clawed back. And I think in this one, we've got another 18 and then another 25 in this one. And so they're the green, the dark green lots here that you saw. And so on that front, we've got these 6 that are delivering. So I think these 4 are delivering this month, these 2 next month and then these 4.

The builder is building for you.

So we've got a custom, semi-custom builder building these, and then we're working on the builders themselves building the ones that were -- you're not saying the retail for plan [indiscernible]. Right. And the efficiencies that are out there. All I want is the product that you're building and when you're on that block, build that for me and you can keep going with efficiencies on. So that seems --

So it kind of keeps their crew going and they can kind of back into they -- and give you a idea. You're builders are still AV Homes and the Colorado Regional [indiscernible] Challenger.

Challenger, I think they're national, but they're small national. We have KB. We have DR Horton. We have [indiscernible] Yes.

And the same 4 builders [indiscernible]. I wanted to talk to you about the discounts on the prebuild basis so that they extract buyers even before they built the home?

I haven't seen that. What they're -- I'm shocked at how much spec building they're doing. I mean, they're building it because there's nowhere else they can offer this price point -- that within the last couple of months that they kind of fired up because they don't all fall back.

Since we delivered them in March, right? So the -- so then the whole market went wonky on them. And then they said, okay, here's our product here. And then whatever happened at the national office is that we have nowhere else in [indiscernible] we've got that price point, so just build it. So this selling pictures, not even a model home. Basically, this is what it's going to when it's done.

That's right. Well, there are some models in. Yes, there are models. Now they're just -- they started them all before they even had a home. So that's it. They still have models in the last phase. I mean and...

And in other markets, right?

So then this is the same as they're building in other areas, that are not far from it, and they're getting traffic in these other areas on the exact same home and the buyers may say, "Oh, well, I cannot like qualify for this and like great, I've got that exact same house rent.

What's the difference [indiscernible] different basis?

So the same price, we actually have accelerators in the pricing of there. So I would say the equivalent if you compare it to here, these lots were selling right around $75,000, these were selling at around $100,000, these were selling at around $115 and that we keep -- we just keep ratcheting it up.

So you get the lot fee, that's already there. They've already paid to start building. Do you get the tax fee on building? Or is that only on occupancy?

Well, no, we do get it at the time, they pull a building permit. So we get the lot fee before the building permit And you get the tap fees there. So that's -- okay. So there's a liability at that point to look at.

And could you -- if you were to like, let's say, the -- let's say, things slow down and you already in the past have done some offtake for -- do you have some flexibility with them and say, okay, well, is that a negotiation? Is that a set agreement? Or what are the dynamics of that? Can you offtake some if they are not selling it. And can they also -- can they give you sellers financing on that? Or do they want to carry it or they [indiscernible].

All these builders have their own mortgage companies that they can do that with -- and we haven't really been in a position to finished home from them when they owned a lot. That's what I really -- I don't want to kind of recycle the tax liability for me, right? I paid the taxes on selling them the lot, and now I'm going to buy that back and basis is 500 versus 300, but that said on the, when they keep looking at their -- the pace of absorption, and that's what I went back to them, we thought these -- why it was so quick for me to get back another 10, so doubling my portfolio, and there's still that opportunity in the [ food ] future phase. I still want to be in a position to say, okay, great, I still have an appetite for a few more homes. It worked well here, you building them without inventorying the lot, let's add to the portfolio. Because from their perspective, they make the same amount of money that they make on a house, they just don't have to inventory the lot. Now in truth, these builders don't make that much money on house. They make the money on locking up these lots for me for 3, 4 years and then have the whole community increase in value so that they're selling that lot, [ that hired ].

Is there a real question of whether or not you're competing with their natural customers, but being a buyer as well as the seller of the lot.

And we talked about that. That was the thing that came up. They said, "Hey, second to be competing with the buyer. And I said, at the end of the day, buyer renters in this space are your buyers in this space. And there's a possible reason that's [ phase for that ].

But it's legitimate sort of keeping in a project you're out there? I mean you're not getting the best, but you're not buying before it's available to the public. It's the simultaneous [ decision ].

Yes. I'm sorry, this is kind of wearing often. This is a bit arcane, but -- and I could go to law school and not understand half of the water [indiscernible] obviously. But like how long is prior [indiscernible]. You're rated for -- I could have it, so you have 30,000 acre fee and planning to use how many a year as much as you want. Okay. No evaluation. Is there any instance where if you're sitting on that water somebody nearby, like a roar is starting to build, and they can say, well, he's got all this water and there's no beneficial news. I think the water court can be used slowly a couple of years, now there is constant separate bars. So they have -- every day, they have portion [indiscernible].

Okay. So is -- are you -- is that a potential risk to your business not at all, but your water rights completely lost. No. Never. They could never come in and use their powers of an [indiscernible] say, "I'm going to condemn your water, they can't do it.

Okay. Great. and no instance look I just put up a building here and we got the also homes are going up, we've got 2,000 people moving in and we have beneficial use case and they're sitting on all this water, right? across the street from us, we want it. Can't do it. If you wanted to could you sell it to them?

Yes.

Water.

Yes.

I mean there are opportunities to sell it in more. It's a longer run. We've talked about that in the past. As the pricing [ native for Colorado ] -- that's a good question. I mean, at the end of the day, we continue to buy water, right? And so my basis and a lot of this water is a couple of thousand dollars [ neighborhood ] very, very low basis.

And what does it sell for, I mean, with variation different areas.

The most recent water I brought, and I still think I got a good deal on it was around $15,000 an acre foot.

When did you do that? Before the last call.

Before the last call. Yeah.

And as you buy it, is there fixed time in your own [indiscernible] opportunity.

[indiscernible].

And can you comment -- I'm just curious as any changes in dynamics since the federal government finally got in onto the table on Colorado -- recasting the Colorado River contract or what we want to call it? And I'm sure there is a lengthy approval process in the [indiscernible] did it's kind of historic. Any changes to Colorado you see from that?

Not really. Not really.

It's really more down river.

And the most of the water that is in Colorado and the Colorado River is pretty far away and so you'd say that Headwater would like to use the Headwater at. And we have all of the -- all of the -- where the Colorado and all this tribute area start, we've developed projects on that side of the Continental Divide, and we've got as many as 20 different tunnels that go underneath the Continental Divide. It take it from the West low and bring it to these slope but they've developed as much as they can from where they're at. They have to go further downstream. And that's very expensive, right? That's a lot of rock. That's a lot of elevation, a lot of complications to bring that water on the other side.

How much water -- maybe you don't know, it flows to the Pacific versus the Atlantic in Colorado. Do you have any idea like -- is that...

Yeah. I would say 80% goes to the Pacific.

Oh, really.

So it's awesome. So from Colorado, here's an interesting [indiscernible]. 80% of the state's population goes to East of Continental Divide. 80% of the water supply goes west to the Continental Divide. And so we -- and you can imagine it, right? How it happened that way is sellers moving West coming to the Rocky Mountains. If that's it. As far as we got, and that's where they stopped. And there really wasn't a material amount of water. There's just one stream, the plant that goes through [indiscernible]. Yes, right. But that's -- the bulk of the water supply and another interesting statistics are, there's 2 states that are net exporters of what other than Colorado, can you imagine what the other state is. No water flows into Colorado, that's all headwater or so.

Interesting. This is something of the snowfall and the [indiscernible]. You said 180 lots of area completed and atleast under construction.

[ Dean Holtons ]. That must have a lot of written structure. They are the weak [ cisternes ]. And they're the strongest, right? They're the biggest and the most aggressive spec builder in the country, and they were late to the game. Then we started selling a few weeks ago, right? So they -- this was the -- this is the only project in a Bubble County. They didn't have any of their building plans approved in and out of the county. And everybody else did, right? They were building in other areas of our county, and they just weren't. And so it took them probably 5 months longer before they could get out there and start breaking ground. Now they're going after it. I mean when they get in there, they go after it.

Is just a miscalculation?

It's just somebody, they're like. What do you mean they don't have any plans to approve in there. They plans approve everywhere.

So this is -- so I don't want to getting up to [indiscernible] shift gears. Just maybe more of a kind of Kevin question. But you guys are like -- you're building up a recurring revenue Continental cap fees, which have been forecast, but your water, wastewater service charges. And I don't know what your actual contribution margin for that. But do you have any -- you may not want to disclose it, but do you have any sense of what that is in terms of...

Can I get -- for those of you that are online, can I get you to mute your mics, your speakers on that. That would be great. We're still getting quite a bit of feedback from the online. So to your point, and this is one that we've been thinking about a lot. So what you're going to see in future presentations are we do the consolidation of the revenue, earnings per share, margins and all the performance metrics. We're going to break it down by each segment. So we're going to build balance sheet income statement for the water utility. We're going to build that for the construction land development. We're going to build that actually for oil and gas, and then we're going to build that for single-family rentals. And then you're going to see each asset allocation and the depreciation schedules and then the earnings that each of those contribute to so you can get those exact metrics.

Rental income is a couple of hundred thousand dollars a quarter, and I don't know -- and at that -- and I suspect, I mean, you have to hire people, you have superintendents, people working there. It's doesn't drop off the bottom line, but a fair amount, it does it. You also have a fair amount of interest income now as well right? So in the balance sheet you'll be disclosing that in a little bit more detail.

And the interesting thing to your point though. And one of the things that's so unique about it is, when you see the tap fee revenue and the usage revenue. And you can see it both on an annualized basis and a recurring basis. One of the things that we want to illustrate is we're only using like 5% of our asset. So here's the margins that this is generating relative to 5% of our assets so that it's easier for the market to understand what the top line potential is on this day.

No, that is great. But can you see we're on kind going with this a little bit on this recurring revenue idea?

No.

It's just the stock repurchase. You guys were out over your [ sleep ] up here, but then...

Yes. Nothing.

You need to -- as a shareholder, you need to put a lot of capital time and some of them a career into this. You need to -- if that happens again, you've got to be there.

Yes. No. And I would say...

I don't have the repurchase amount.

Right. Yes, yes. And we want to do that. And I think that, that -- we have been looking at that on the recurring revenue side, not only stock repurchases, but also getting into the dividend up, so that we qualify for holdings on typical people own utilities for the dividend, and we want to have a portion of that recurring revenue be allocated to that. So you're going to see that. You definitely are going to see that.

[indiscernible] when it comes to along with this thought I really think you need almost like an in-game strategy. But all these things make sense. But between the size of the company and the opportunity, to me, I think a bit more of a mature business is developing one. So you have to think about is the best use of capital of value creation, buying additional tracks of money. We're doing something experiencing because in my mind, when you come to share repurchases and dividend is certain dividend inefficiencies of capital for companies, inefficient for the people get it to shareholders. And the idea of inflows finally starting to trade somewhat a little better whatever, that doesn't get me to where I want to be anyway. I have to view it as you've really done a great job. We've really been very smart about the business. And it's really that value creation to get sufficient scale so that it makes sense and you make notice in the context of the marketplace. And I would just so as you basically say, "I don't really care. And I want -- I don't get this one share of same day on the guy who owns it and it's $100 or $200 a share, and I'm working towards that. But that's sort of sub short the growth potential of what we're developing. And I don't disagree with this point.

I'm just saying that in the year of 2022, when a lot of things got slammed, right, it just was not very signaling to see thing. Yes, we down to like 750 something like that...

It's really a question when it's sufficient. -- there's nothing else going on, only thing on the opportunity. It's just -- the hard part is we didn't have to regain potentially of having an open-ended share sale -- they go from perpetuity, we don't. So if we start at $6 a share, now it's selling something whatever that -- that...

We -- we can't see that either. But I don't think and you guys are not. We can't. I have an [indiscernible] of the company. There's no positive ROI fee yet. Is there a it's too accepted. There will be at some point.

But right now, I don't think and you're not like an EVA process company writing sale, okay, [indiscernible] you guys are making 1.2x. Great job building something from nothing.

And so getting to the -- what's working and why it's working is One, I think we do have a pretty decent job in terms of the land playing stock. I think what we're pretty disciplined about is capital. We have -- we had only went to the market when we needed to go to the market, never really had a big balance sheet. And now we have a very strong balance sheet, right? So owning these legacy assets. So why it's working is that our cost basis in all these assets is almost nothing. We've held them for 30 years. And now they're really starting to monetize, and we're monetizing them on optimized basis as we can by vertically integrating ourselves on each individual walk and seeing that lot. When we now have a portfolio, we get through this phase, we'll have 80 single-family rental units. So then it becomes material in terms of the recurring revenue. And then that 80 -- that could be close to $45 million. It's growing at 6%, 7% per year because of everything we're adding to the community. And so that's going to be a great accumulator of wealth, the shareholder wealth for -- we see the value of water increasing, right? We know that, that's increasing just because of the scarcity value the security that we have and the ownership structure, right? It doesn't -- we've been running taxes that we have to pay against that. So that owning that asset is a very attractive asset to own in perpetuity.

Do you -- is there a risk when it comes to water. A lot more -- I mean, look, the risk is that it's really understand of management as opposed to state control. In the [indiscernible] not particularly bright and very political. So when you get increased demands from Arizona and Nevada, California and things like that, whether things could structurally be done to benefit larger population centers with lower political cloud and limit that as controlled, but limit the opportunity of what you see as an open-ended asset. It might be more at risk at times than you presently affected.

I don't see it in terms of the [ happiness in stock ] and then having any legislation invade that puts ownership of the rock at risk -- if I had the magic wand and could tell us better go what they shouldn't do in this area. It's the regulatory plan, right? That they come in and they wave a magic wand, and they say, okay, this species is now endangered and you got to do something about that or this graph that blade of grass is special and you can't do anything with that. So you can't build a reserve, something like that. Those things they have control over to make harder or to make easier, and they may choose to do that further the political implications of a big project. And from our perspective, the nice thing that we have is we secured a lot of that upfront where -- we have 2 reservoirs out here that are non-jurisdictional. We've already got a termination from the federal government that said there's no federal nexus on these 2 reservoirs. Well, that's of course as valuable as you can get.

I didn't realize that.

Yes.

And your water rights all come from the [indiscernible] thing or like 95%, which is state-owned, right, right? So that's another reason why we couldn't expect the federal government to directly get involved in that.

Yes. Yes.

Mark, can I jump in with something?

Sure. Sure.

I guess it's more of a statement than a question, but I'm always a big fan of dividends. And -- but I would just say that even though utilities often have dividends, I don't know that the utility investors will understand your company as well as equity investors. So personally, I'm a much bigger fan of 2 things. Number one, accelerating the last, so you could get the tax fees, accelerating the rental program and buying back stock. So for me, I think those are all great options and buying additional land would be another great use of capital. I just don't see at this point in time, dividends really being something that I would -- I don't think it would help, it's my comment.

Fair enough. And it's kind of an all-of-the-above approach where you want to take a little bit of each, and to Andy's point, we do -- this is probably my preference is, I have spent 34 years at the company, not sure if my paycheck would cash. And so I'm pretty conservative with that balance sheet. It's strong, and I like it to be strong. And I like to be able to buy other things with it, whether that's going to be opportunistic thoughts. The success that we've had is because we've had the courage to go out and do something when everybody was running out of the building. And whether that was buying [ styrene ], whether that was buying a water here and nobody thought about it, whether it's buying farms and water when those weren't in both all that stuff has been very helpful. And so patients on that capital allocation and having a little powder to do those transactions where people don't. So if you're not having to raise money at the same time, you're trying to buy something when the world's on fire. That's a good place to be because you can make those bets. And then to the extent that -- and I agree. I mean, I've heard all of them on the stock buyback. And you've heard my argument, in terms of the timing of the stock buyback and we did authorize that this year. And I will tell you what's happened with that. We authorized that, and we said, okay, if the stock goes below 8, it never did. Okay, if it goes below 9, Okay. It did. If it goes below 10. Okay. It's not. So it wasn't to set the price of the stock. It was to be opportunistic and there are times. And to your point is, there are times when somebody has to get out. And because of the timing of that exit, I do think we trade better, but sometimes there's more stock than there are demand. I'm going to be that demand when that happens. So that's how I look at it.

Yes. I'm personally trying to buy the stock today, and I can't get any fills. There really are no sellers most of the time. So -- and you'll find that also. It's a very small, thinly traded company. So you being the buyer would have a major, major impact. Anyway, it starts doing well. We're very, very happy with the performance and keep doing what you're doing.

Don't hesitate to tell me when you think I'm wrong. My wife does that every day.

What about -- [indiscernible] just because it might put, even if it's insignificant in terms of cash, it might put you in a different category of having a stockholder base. I think you do. I mean if you declare even a $0.01 given or even a fraction of a cent, you do -- it's a binary issue for some fun who set...

Hey, I like to walk, but I have this mandate. And so something like that's not out of the realm of opportunity. And so again, it will be something that we do build on

You, in a few years back in your annual letter, you had estimated the value of the water rights and land that was like $2 billion. I don't know if you have an update on that first? And second is how do I estimate a range of IRRs based on like $250 million or so [ $2 billion ] sort of huge IRR. But how do I estimate the range of IRRs for my investment.

Right. And at the end of the day, when do you see [indiscernible].

Yes.

So it's -- the timing and the present value to get that there. And so our cap fees when we got into this business, we're like around $12,000 combined water sewer cap fee in $12,000. Now their combined water sewer cap fee is $38,000. So they keep inching up every year, those [indiscernible] $38,000 to $60,000 connections, that's closer to about $2.7 billion. And it's about 50% to build that system out. So that's the next. When you look at me building water and sewer system to serve 60,000. And then our water usage deals keep creeping up common metrics about $1,500 is considered about $1,800 per customer per year. So it's about $100 million year-over-year revenue on that side. And that's just the water utility set aside the land side, the water utility side. And you say, okay, it took -- and this -- I told the story a lot. When I first went out here and said, okay, I think this is valuable and everybody said -- it will be 30 years before that's. Well, that's true. It was 30 years. But the next 30 years aren't going to look like the last, but I'll tell you that. We're writing. I mean we are literally at the precipice. And this central land max, 24,000 acres unique in all the countries. If you whittle it all down, the thing that I thought was so unusual about it was that, you don't have that land as anywhere...

Largest undeveloped land in any metropolitan area in the country.

It's so unique.

Is that.

You cannot find contiguous parcels like that. And so I don't own it, but boy, I'm sure we're going to talk to somebody about it now that I have to stick to do that.

Well, is there a reexamination process in the State of Colorado has to go through before development can start there.

They do. I mean, they also know that, that's their prized jewel and they're not sure what, how or when to take a look at that particular asset. They've taken a look at it 100x in the past. They know the value of it. And they also know that us providing water utility there, generates revenue for them on a perpetual basis as well. So to your question, I think it's 30, it's not -- if you asked me 30 years ago, I had said it was 30 years, and I was wrong. But now it really is going to be much more to...

Do you have a sense of I guess, their timeliness to make a decision because you've been -- you have the continuity of management, politicians don't, but couple of years they gone some new [indiscernible] what's going on. So is there a sense of urgency or a time frame for them to make a decision?

That's the one thing that's [ flat ]. I mean they don't behave like a private company to say, present dollar today is worth more than a future dollar tomorrow. They don't view it that way. They just view it as what they do, they're more worried about being wrong, to be part of the generating rent.

Getting [indiscernible] sort of uniting of it, the mentality of its another decision for the totality of a parcel or maybe you can start smaller.

I think they looked at it in 2007 or 2005, they looked at it and said, "Okay, we'll send it out to the market. Even if we were like because it's over a year. It might be a little early, don't worry, we're right in -- and so they said, okay, if anybody want to do anything with 24,000 acres, everybody was interested. And then they dialed it back to say, well, if anybody wanted to maybe we don't do at all. Maybe we just a little bit in the [indiscernible]. So in my mind, I think it is better to be as the entirety and then shut it off a little bit of time. But to do something exciting with as a whole as opposed to mission crews, right? You just creep in, peel off another 1,000 acres every sort of thing.

You also came to something total its peeling off the [indiscernible] you can't do something strategic if you don't know what the time frame is for .

And I think they appreciate that. They're looking at it from the standpoint of we want some consolidation value out there. We want some recreation value. We want some -- we want to preserve the natural features, we want to enhance it and we want to do the best for our fiduciary, which is a K through 12 education system.

Margin on the under -- before we pronounce turn the [indiscernible].

Say that again.

You said $100 million fully built out 60,000 in terms of metered water solution -- what was the margin...

It's about a 55%, 60% launch. Yes. And then I keep getting -- it's not just one right. We get multiple uses. So sometimes I'm talking about water 3 times before it expires.

Have's you gotten any indication that anybody in the state is starting to look at this more closely or just silent.

Okay. So no. No. I mean it was a great opportunity. The staff that they listen, we've got Boards have turned over 4 or 5 times since we last visited with you, can we get you to tell them what you got out there so that they appreciate what they're getting money from and that asset on the water side and then how that asset can layer into it. And there's folks on there that are attuned to, okay, I see where the houses are I see what our front is.

What's the positivity and I guess it's kind of 2.0, like parcel is not in a low [indiscernible], how are those negotiations going then like that, standstill for the last couple of years in terms of sellers come to the table.

No, I continue to meet with them. It's tough because 2 types of owners out in this area. There's owner's that have all the money in the world. And they're not -- they're sort of saying, I don't need it, don't want it and I wouldn't know what to do with it if I have, right? And so they're perfectly content to keep holding that asset and then it's hard to know what changes that settlement, but we're the logical, right? We can probably pay more for it than anybody else because if somebody else bought it, they still have to cut a deal with us on the water side. And so I can be very competitive, and I can be in front of them on a continuous basis and say, it's not this year, Okay. It's a time value money for me. My money continues to go up. Your property value may go up, may not. It depends on timing on that because land does have its cycles and there are cycles where it's out to end out. And there's other buyers out there that still drive their 1972, Ford F-150 and living in a 1,000 square foot house and they don't want anything else. They don't have it. They don't want. It's for the next generation. And so they look at the decision that I'm going to adopt. If I sell this, I've committed them to sell, then I'm going to not...

So the interest rate, the current past the last 6 months didn't really shape our [indiscernible]

Yes. No, it did. I mean I would say if one particular seller, I'm getting a little more action with, but will see.

I don't want to see what's going on at like Texas at all, but watching what's going on like in Dallas and the families that control the market, I mean, there could be projects there where that these entire miles of land are going to be just flat. We [indiscernible] families are operating together, to your point, no one really needs the money back to change and invest lifestyle, but these are going to be trillion-dollar projects where it's going to be a 10- to 20-year developments and they'd be positioned everything. And unfortunately, I haven't found the public way of paying it. Then actually it turned out [indiscernible] that in, but massive opportunity and people -- this trend of people moving around the country, the demand for people to live there and move from those states to other states is growing. And company is moving there, so the job creation is enormous, which wasn't the case before.

So -- in a lot of these -- some of the people are more sophisticated that I'd -- some of them just don't know the lift that it takes to do master plan, right? When you look at doing [indiscernible] and something like that, I come in and say, "I'm willing to pay $100 on this. And it's going to get -- it's going to take $1,000. You'll sell it for $1,000, but I've got to invest $700 to get $1,000. And then it just -- and so they're looking at it saying, well, but you have everything. And I'm like, well, I'm flattered. But no, it's not that easy.

Is there anyone out there that could assemble water markets like yours and compete run [indiscernible]

No. Even if I had to go do it today. If I had to go buy water at $15,000 an acre foot where I'm buying it and bringing to, so to a local service area [indiscernible] This is 1 of a comp. And it was only because we were so early buying and then being able to build to it, like I can bolt on because I have a core system. And now my system gets built, and I got these tentacles up for more water. But if I had to buy it now and grow it, it wouldn't work. Indeed it would work, putting me on work a lot harder.

Yes. Basically, your potential service priority, if I understand it, is probably south of the interstate and to the east of Aurora. Is that so, that's kind of that quadrant. You've got, I guess, Denver, kind of Denver International Airport is part of excellent city of Denver. Right? So kind of swings up.

Yes. It still is rightful that gets it out there.

And then you've got the small water rights that you bought, I guess, further the north, I forget the name of it, Lost Creek , Lost Creek. I mean, that's a different area. I'm kind of curious as to what your thoughts might be and what the plan?

So it's a pretty unique water right. It's in a designated base, and so I like that element of it. I mean, there's not a water right out there that everybody has known everything of that. So I can't say that I'm more brilliant than anybody else. You just -- you're planting a flag and that's where you stop, right? And so we had a seller wanted to sell it. I thought that was a fair price. I don't predatory kind of stuff. I look for fair prices. Sometimes sellers are more motivated in certain areas than others. And so I like Joe's, but -- and then some of the surrounding wells around it and then coming up for sale. And now that I'm there, people say, okay, I don't know when I'm going to sell, but I know this guy, he's been up here, has been a good neighbor and all and so on. So that's kind of why we did that area.

And one of the properties actually has wells in it, right? It's not just the water right. So I don't -- does that add a lot of value to what you have there, that they're probably insignificant in terms of putting anything else?

I was a big farmer, right? I own 17,000 acres of farmland for 10 years and farming stocks. I have highest degree of spec for farmers. It is such a hard business. To figure out the commodity pricing and then your inputs and trying to hedge them before you actually put the stuff in the ground. And then you -- and when I was a farmer, I got it. And I looked at the weather every single day. Now like, okay, what's the way they're going to dig.

So is this land that's actually being falling down?

Yes.

How far down do they have to dig to go and get water in the well?

Yes. So where I'm simulating it's about 40 miles north. It's a long. And it's a little bit unique because -- so I can't say that I didn't have a reason for planning my pool there. So what we're doing is this is an inside baseball on water, but I'm leveraging my ability to use my water here and then augment that up better. So I don't have to physically build the plant, right? I have that water supply and on the prior appropriations, when I'm not in priority when I'm out called out, it means, assume, if somebody which has a senior water right to mine gets the water and I don't. If I augment that, then I can get this water even in a senior amount. That's why I bought that one.

Okay. That's interesting. And seems with my limited knowledge about that's got kind of unique to Colorado. How does that work? I think you have...

It's -- so there's a number of unique things about it, right? So this is a dry stream, right? So when you're pulling water out of here, when I'll have water here and there won't be water anywhere else, right? So there's this thing called a lag depletion requirement. So when I'm pulling the water out here, even though there's not a live stream, it takes you years for that impact to be felt by a senior water right holder that I mean to. And so what I do is I take my supply and I put it right above where their supply is to augment that for that future lag. But it's -- that's a very inside transaction that allowed this water to be much more functional than without that water.

You have the 2 reservoir sites around there. And I think at this point, you -- at some point, you'll need to develop 1 of those for your own use, I believe. How many caps can you sell before you need to develop that reservoir?

I'd say probably 10,000 [indiscernible] There may be reasons to do it sooner, depending on the continued development of oil and gas. And we're looking at phasing this so that maybe we phase it in a way where we're building a portion of the dam that store is 1,000 acre feet, but then we can expand it to store 30,000 acre feet. So we're looking at some of those options. And you're right, we'll likely keep this one to ourselves and we'll likely have this one need more of a regional reservoir. You've read in our filings about this one rise in the regional participation of South Metro and those sorts of things. So we're a strong partner in that, and we're working on projects with bigger projects, $1 billion projects that are taking water far from the plate through a pipeline and then being able to store it here and being able to integrate it within all water [indiscernible] water providers. So 14 different water providers.

With your sort of specialized understanding of water as well and sort of unique state characteristics, are you -- I mean to say, so you suggest possibly that could be going a field of what we do of being establishing more relationships near reservoirs or land use, whatever. So it's almost like a speculative match of aggregating different water rights in different county areas. Because that seems to be more and more precious, more and more unique to access to it and a great way to hold cash, that's always tradable.

Yes, that's a storage of so many things. Correct.

You're right. Change gears commercial other opportunities for increasing the NOI [indiscernible] when the earliest you might start to see some of that come online?

So this is kind of a view of a lot of more when people are on the commercial side. And so two things are happening. So we spent a year, 18 months, taking a look at this is the existing interchange out there. And so Sudan the County we're looking at, okay, what's the capacity of this interchange, do we want it at that location. This is the section line, so it's offset from the section lines. So this is the data, it's under determination that they want a new interchange here, which is fine. We have the -- I have a funding mechanism within my mills here, that I can commit to fund this and I get reimbursed first. So it's not actually coming off of mine balance sheet. It's a lot like $30 million.

$30 million?

Yes. Yes. But -- so we're actually going into the design of that map. So we went -- we were on that for bid, for the design of this. And so we'll probably look at starting that in [indiscernible]

[indiscernible]

So I've reserved some mills within my overall community to be able to float that bond. And then what's going to happen is the county puts in an impact fee. And so the impact fee reimburses my bond for that. So I'm not actually out of the money.

Is that idea of the balance sheet capacity -- right now, you have about -- that would be also turn balance sheet as you fund that. So how do you do that and do a buyback and potentially do you think about it if there is unofficial [indiscernible] balance sheet?

Yes.

So you don't fund it first.

No. So all the other infrastructure, Iceland first and I get reimbursed. This one, I've got that fund by itself.

And how many square feet is this total?

This is about 2.5 million square feet.

And how should we think about how much NOI that could generate, that could stabilize? How do you think about like building it JVs like...

So typically, it's 4x what you get on the residential side. Commercial is about 4x in terms of land value. So if I'm selling -- if I'm making $100,000 per lot, and we look at this as maybe a couple of thousand lots. That's what that's...

So you're planning to sell it not necessary to retain that...

Yes. No, I think I'll sell some and I'll replace it. Like, for example, this one, I've got a lot of people that want this. It's like distribution center, right? It's right along the interstate, good distribution center. And I said, okay, great. I'm going to joint venture a land, you put the building on it. Let's figure out what that value is. And then when you sell it, I get my proportional value of the contribution into it. So that the building increases the value of the lot.

I would think why sell, I mean, [indiscernible] long-term plan [indiscernible] to retain all of it and bringing JV partners to help you out. Did you -- I mean, necessarily demonstrate the projects, but then or [indiscernible] disappointed about like what really gets people excited is that is having an annuity stream in addition to the water and the BTR. So -- but it doesn't -- it sounds like that's still off of negotiation in terms of when [indiscernible].

No. I mean -- and so that is the nice thing about it is, I get good minds on the board and big developers, both residential and commercial developers and they're both of the mindset. I've never not regretted selling. I've always regretted selling my commercial. Every time they sell commercial, they regret it. And so we have that opportunity to do something unique out here.

How much density do you have to get on the years away is this like we can interchange, like when should we thinking about when this could [indiscernible]

So it needs a little bit more density is the issue. I mean like we've been talking to Kroger about the growth we still have to grow. And I said, I'll give you the length and just build a store, right? Because I wanted everything around. I give that to them and then I keep all of this. And then they say, everybody offers the same, we don't. And at the end of the day, the guy said, he said, when we come in there, we'll pay you a fortune for the land. It's just that trade-off. They want $1 million a day, when they see the people, they [indiscernible]. And I said, how many rooftops. And he said, more than you've got, but he won't tell you, right, he doesn't tell us. More than you got, but at the end of the day, all of this around it. And then like, well, I don't want this guy to develop before I develop.

Because right now, there's no grocery stores anywhere in [indiscernible]

That's probably the one thing that's lacking out there is that no retail grocery.

Can you -- Yes. I mean, you don't want to get in that business. Can you offer to anyone else for a smaller one or that maybe block out Kroger or put them, it's like...

And then you end up chunking up that land use. So we are going to look at -- we're going to look at small commercial fee. Right? So there'll be something here. So there's 2 B -- 2 A, B, C. This is about a 3.5 acre.

How long it drives it for the residents to go to, I guess, Aurora, would be the closest? Clear, to be?

The answer is about 15 minutes. It's not sure. So then the other side of it is -- we're also working on Phase III, right? So this is a design for the next 1,400, which will be this past section. So 1,400 -- 1,400 to 1,500 units depending on product mix on that. And then at that, so including when you take a look at the rest of the project, they got of 1,400 units over here down in this side. I've got another 200 units that we're looking at for kind of an active adult sort of area, and then I've got another 180 units here. And this one will likely go into our portfolio. This is -- it's right next to everything that we've done. So when we look at a big BTR, this might be another big build into the BTR. I want to put that online after I got maybe 100 units that are cash flowing so that I can then use that as my mortgage leverage for the big push into a BTR here.

Would the single family is going?

It will be the same product mix. You're going to see some single-family, some town home, but it won't be multi-family. We do have multi-family.

I was going to ask about that.

So we've got these 2. So this is the school side. That's what -- that's what I was just referring to is our big push into the BTR. But these are multi-family, and that's another JV opportunity, right? I can get the land to them. And there's not a ton of people that are very good and very efficient about building and leasing the multi-family.

Family units.

I think each pass like 350, so maybe 700.

So the charter school will open in August, will that be full? Or I can't...

No. So it will open up with grades 1 through 7. And then in 2 more years, we'll open up the high school. And it still grows into it. So they'll open up probably with around 500 or a house and they had a high school kid and then I end at great school, send to great school kid, so there's a Charter school. Where is this high school -- so the high school.

All these kids, these kids are in the Aurora [indiscernible] the streets they walk over here, catch the bus and come along here. And so as you also have the choice to either go to the Charter at great school or in Charter [indiscernible] private school?

Yes.

So how long was that process of negotiating with the Charter school and [indiscernible] grounding for them?

Yes. I mean, that was some of the first meetings I ever had was with the schools that [indiscernible] that in 2019.

Yes. And you gave them the land and they build the school themselves?

Yes. So I've got the Charter school from the local public school district. And then I said they get a fee. So in Colorado, funding for schools is by the kid. So wherever that kid goes, sooner they fund. So, I said, I'm not taking away any funding for you. And in fact, this Charter school, every kid that goes to school here, you don't have to build the school, my Charter operator will, and they'll share a portion of that revenue with you. So they get a fee for every student and not the obligation of educating.

Okay. So the public school in the East are funded by tax property tax in Colorado, little different is funding.

It's still funded by the property tax. But it's actually, if that student lives in your district and goes to school out of your district to another choice school then you lose that month. That's why a lot of the public schools oppose Charter schools in Colorado is that they take away that funding. If the Charter school is providing the facilities for that funding, and then do a revenue share, then that support them. That's what we did.

If you want to keep the [indiscernible]. Okay. You are putting in an ice rink in that Rec Center next to school or about that?

Yes. Well, I think that's what we're going to do. We'll see.

That's to what you're playing with now, it's probably insignificant, but that's some capital now [indiscernible] get.

Yes, I mean, I'll give something. I'll try to give something that will [indiscernible] I don't want [indiscernible] Rec Center.

Yes. So that wasn't in your original plans to put a Rec Center in there. Was it [indiscernible] Was?

Yes. Yeah, yeah.

I know it's on that plan, but I thought -- I mean, with harmony, I guess that I visited there. The development is right basically a next store to Sky Ranch. And they kind of made the distinction that they were a place with full Rec Center and things as opposed to some of the other developments in the area that didn't have it. So I guess my question is, with a Rec Center, does that basically put you on the same level as Harmony in terms of facilities spread.

Yes. I mean I wanted to use a little bit more of the reimbursables to pay feedback before that, because we're out so much on the infrastructure. Once I get caught up on that, then that the Rec Center can come in as another component of it.

What master planning communities around the country do you kind of use your -- really studied from or learn from...

It was kind of an all of the above approach. And then what I did was went to who I thought was doing it better than others. So we have a consultant that actually does do the light up. And they do the housing, some things like that. And sort of say, okay, here's the drainage areas, and this is what we're going to do in the drainage areas and you go through a bunch of iterations, right? They put something up and they show it to you and you say, okay, like this, more of that, less of that and sort of thing. So it's been an iterative process in the mix of it on [indiscernible]

Yes. So other than our cycle, if you had to invest your network into any of the other -- even whether water wise or land or [indiscernible] which one would that be?

Boy, that's a good question. I don't think anybody does have thought. And then I would say, I've got a lot at the end of the day. It's only water. You can't own the water and make it work from an [indiscernible] standpoint, right? So -- is there a way -- you have to find a way that water can have value in the future, but pay for itself in the interim. And those are very difficult things to do. I went after 17,000 acres of irrigated farmland and that was made in 1%. And it was just off -- every year it was a struggle on it to say, can you roll up a bunch of farms, it would be successful at it. The biggest owner of farms in the country are the insurance companies, right? They own thousands and thousands of acres of farmers and they can own it and have that basis in their portfolio, they generate a 3% return, and then that's also appreciating in value, but they don't actually need to get anything more than that 3%. When you look at companies like [indiscernible] everybody saw [indiscernible] sell this year.

I hope they sold themselves very cheaply.

Yes. Disappointed performer. Sure, both they really sold out low to KB. Important. And I have -- we have looked at -- I mean, Catesis like -- it's a novel. Yes. I mean, it's they've been doing that for 30 years. Right. And from my advice to these is you got to do your own stuff. You're trying to sell to somebody who hate you. They have like -- they have some industrial company out of Europe that now almost 35% of them, we can't figure out who they are reality. [indiscernible] this company called [indiscernible] say, if I'm pronouncing it correctly, close 35% of another publicly traded order rights company called [indiscernible] CDCI in December. [indiscernible] got into in [indiscernible] 25 years ago.