What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-08-08 · 206 added, 120 removed, 706 unchanged (32% of the section changed)

3 unchanged sentences

(In thousands)

ASSETS June 30, 2025 December 31, 2024

ASSETS September 30, 2025 December 31, 2024

Utility plant, at original cost (less accumulated depreciation - 2025 - $ 199,048 ;

52 unchanged sentences

(In thousands, except per share amounts)

For the Three Months Ended For the Six Months Ended

June 30, June 30,

For the Three Months Ended For the Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

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(In thousands)

For the Six Months Ended

For the Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

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(In thousands)

For the Six Months Ended

For the Nine Months Ended

September 30,

NET (DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS $ ( 442 ) $ 8,198

2 unchanged sentences

Supplemental Disclosures of Cash Flow Information:

For the Six Months Ended

For the Nine Months Ended

September 30,

Non-cash Investing and Financing Activity:

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Balance as of June 30, 2024 9,415 881 9,415 881 143,663 80,457 234,416

Net income - - - - - 6,813 6,813

Cash dividends declared

Common stock - - - - - ( 3,043 ) ( 3,043 )

Issuance of common stock

Dividend reinvestment plan 2 - 2 - 78 - 80

Employee stock options and awards(4) - - - - 48 - 48

Employee Retirement Plan(3) - - - - - - -

Balance as of September 30, 2024 9,417 881 $ 9,417 $ 881 $ 143,789 $ 84,227 $ 238,314

Common Shares Outstanding Class A Non-Voting (1) (3) (4) Common Shares Outstanding Class B Voting (2) $1 Par Value Class A Non-Voting $1 Par Value Class B Voting Additional Paid-in Capital Retained Earnings Total

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Employee stock options and awards(4) -

- - - 45 - 45

Employee Retirement Plan(3) - - - - - - -

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Balance as of June 30, 2025 9,430 881 9,430 881 144,173 90,421 244,905

At June 30, 2025 and June 30, 2024, Class A Stock had 15,000,000 shares authorized.

Net income - - - - - 6,962 6,962

Cash dividends declared

Common stock - - - - - ( 3,169 ) ( 3,169 )

Issuance of common stock

Dividend reinvestment plan 2 - 2 - 83 - 85

Employee stock options and awards(4) -

Employee Retirement Plan(3) - - - - - - -

Balance as of September 30, 2025 9,432 881 $ 9,432 $ 881 $ 144,316 $ 94,214 $ 248,843

At September 30, 2025 and September 30, 2024, Class A Stock had 15,000,000 shares authorized.

For the same periods, shares issued, inclusive of treasury shares, were 9,460,651 and 9,445,316 , respectively.

At June 30, 2025 and June 30, 2024, Class B Stock had 1,040,000 shares authorized and 881,452 shares issued.

At September 30, 2025 and September 30, 2024, Class B Stock had 1,040,000 shares authorized and 881,452 shares issued.

Artesian Resources Corporation registered 200,000 shares of Class A Stock, subsequently adjusted for stock splits, available for purchase through the Company’s 401(k) retirement plan.

Under the Equity Compensation Plan, effective December 9, 2015, or the 2015 Plan, Artesian Resources Corporation authorized up to 331,500 shares of Class A Stock for issuance of grants in the form of stock options, stock units, dividend equivalents and other stock-based awards, subject to adjustment in certain circumstances as discussed in the 2015 Plan.

Includes stock compensation expense for June 30, 2025 and June 30, 2024.

Includes stock compensation expense for September 30, 2025 and September 30, 2024.

See Note 8 – Stock Compensation Plans.

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Artesian Development is a real estate holding company that owns properties, including land approved for office buildings, a water treatment plant and wastewater facility, as well as property for current operations, including an office facility in Sussex County, Delaware.

The office facility consists of approximately 10,000 square feet of office space along with nearly 7,000 square feet of warehouse space.

NOTE 2 – BASIS OF PRESENTATION

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The condensed consolidated financial statements include the accounts of Artesian Resources Corporation and its wholly-owned subsidiaries, including its principal operating company, Artesian Water.

In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments (unless otherwise noted) necessary to present fairly the Company's balance sheet position as of June 30, 2025, the results of its operations for the three and six-month periods ended June 30, 2025 and June 30, 2024, its cash flows for the six-month periods ended June 30, 2025 and June 30, 2024 and the changes in stockholders’ equity for the three and six-month periods ended June 30, 2025 and June 30, 2024.

In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments (unless otherwise noted) necessary to present fairly the Company's balance sheet position as of September 30, 2025, the results of its operations for the three and nine-month periods ended September 30, 2025 and September 30, 2024, its cash flows for the nine-month periods ended September 30, 2025 and September 30, 2024 and the changes in stockholders’ equity for the three and nine-month periods ended September 30, 2025 and September 30, 2024.

The December 31, 2024 Condensed Consolidated Balance Sheet was derived from the Company’s December 31, 2024 audited consolidated financial statements but does not include all disclosures and notes normally provided in annual financial statements.

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For financial reporting purposes, depreciation is recorded using the straight-line method at rates based on estimated economic useful lives, which range from 5 to 85 years.

Composite depreciation rates for water utility plant were 1.93 %, and 1.93 % for June 30, 2025 and December 31, 2024, respectively.

Composite depreciation rates for water utility plant were 1.92 %, and 1.93 % for September 30, 2025 and December 31, 2024, respectively.

In a rate order issued by the DEPSC, the Company was directed, effective June 12, 2024, to begin using revised depreciation rates for utility plant in Artesian Water, which are based on the estimated useful life years.

1 unchanged sentence

This reduction in depreciation expense is also netted against outstanding CIAC and Advances on the Condensed Consolidated Balance Sheet.

Certain other deferred assets are amortized using the straight-line method over applicable lives, which range from 20 to 24 years.

Regulatory assets are amortized using the straight-line method over future periods, which range from 5 to 80 years.

NOTE 3 – REVENUE RECOGNITION

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the previous year’s volume in the same period, the previous billing period’s volume, or averaging.

While actual usage for individual customers may differ from the estimate based on management judgments described above, we believe the overall total estimate of volume and revenue for the fiscal period will not differ materially from actual billed consumption.

The majority of these wastewater customers are billed for the volume of water transferred on a quarterly basis.

While actual volume for individual customers may differ from the estimate based on management judgments described above, we believe the overall total estimate of volume and revenue for the fiscal period will not differ materially from actual billed consumption.

The majority of these wastewater customers are billed for the volume of wastewater transferred on a quarterly basis.

As a result, we record unbilled operating revenue (contract asset) for any estimated volume through the end of the accounting period that will be billed in the next quarterly cycle.

17 unchanged sentences

Until final rates are determined by the DEPSC, if it is probable that a refund of revenue associated with temporary rates will occur, a reserve would be recorded reducing revenue from temporary rates.

As of June 30, 2025 and June

30, 2024, no such reserve or reduction to revenue was recorded.

As of September 30, 2025 and September 30, 2024, no such reserve or reduction to revenue was recorded.

Temporary rates that were previously

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These services are invoiced at the end of every month based on incurred costs to date.

As of June 30, 2025, there is no associated contract asset or liability.

As of September 30, 2025, there is no associated contract asset or liability.

There is no provision for expected credit loss or bad debt expense associated with this revenue.

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all revenues are generated within a similar geographical location:

For the Three Months For the Six Months

Ended June 30, Ended June 30,

For the Three Months For the Nine Months

Ended September 30, Ended September 30,

(in thousands) 2025 2024 2025 2024

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Our contract assets and liabilities consist of the following:

(in thousands) June 30, 2025 December 31, 2024

(in thousands) September 30, 2025 December 31, 2024

Contract Assets – Tariff $ 3,717 $ 3,030

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Total Deferred Revenue $ 2,050 $ 2,099

For the six months ended June 30, 2025, the Company recognized revenue of $ 1.4 million from amounts that were included in Deferred Revenue – Tariff at the beginning of the year and revenue of $ 0.5 million from amounts that were included in Deferred Revenue – Non-Tariff at the beginning of the year.

For the nine months ended September 30, 2025, the Company recognized revenue of $ 1.4 million from amounts that were included in Deferred Revenue – Tariff at the beginning of the year and revenue of $ 0.5 million from amounts that were included in Deferred Revenue – Non-Tariff at the beginning of the year.

The changes in Contract Assets and Deferred Revenue are primarily due to normal timing differences between our performance and customer payments.

Remaining Performance Obligations

As of June 30, 2025 and December 31, 2024, Deferred Revenue – Tariff is recorded net of contract assets within Unbilled operating revenues and represents our remaining performance obligations for our fixed fee water and wastewater services, all of which are expected to be satisfied and associated revenue recognized in the next three months .

As of June 30, 2025 and December 31, 2024, Deferred Revenue – Non-Tariff is recorded within Other current liabilities and represents our remaining performance obligations for our SLP Plan services, contract water operation services and wastewater inspections, which are expected to be satisfied and associated revenue recognized within the next three months , approximately four years and one year , respectively.

As of September 30, 2025 and December 31, 2024, Deferred Revenue – Tariff is recorded net of contract assets within Unbilled operating revenues and represents our remaining performance obligations for our fixed fee water and wastewater services, all of which are expected to be satisfied and associated revenue recognized in the next three months .

As of September 30, 2025 and December 31, 2024, Deferred Revenue – Non-Tariff is recorded within Other current liabilities and represents our remaining performance obligations for our SLP Plan services, contract water operation services and wastewater inspections, which are expected to be satisfied and associated revenue recognized within the next three months , approximately four years and one year , respectively.

NOTE 4 – ACCOUNTS RECEIVABLE

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The following table summarizes the changes in the Company’s accounts receivable balance:

(in thousands) June 30, 2025 December 31, 2024 December 31, 2023

(in thousands) September 30, 2025 December 31, 2024 December 31, 2023

Customer accounts receivable – water $ 6,706 $ 6,824 $ 6,573

21 unchanged sentences

Rent expense for all operating leases, except those with terms of 12 months or less, comprises:

For the Three Months Ended June 30, For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

4 unchanged sentences

(in thousands)

Six months ended Six months ended

June 30, 2025 June 30, 2024

Nine months ended Nine months ended

September 30, 2025 September 30, 2024

Cash paid for amounts included in the measurement of lease liabilities:

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(in thousands, except lease term and discount rate)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Operating Leases:

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Operating leases 5.0 % 5.0 %

Maturities of operating lease liabilities that have initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2025 are as follows:

Maturities of operating lease liabilities that have initial or remaining non-cancelable lease terms in excess of one year as of September 30, 2025 are as follows:

(in thousands)

4 unchanged sentences

Total lease liabilities recognized $ 407

As of June 30, 2025, we have not entered into operating or finance leases that will commence at a future date.

As of September 30, 2025, we have not entered into operating or finance leases that will commence at a future date.

NOTE 6 – FAIR VALUE OF FINANCIAL INSTRUMENTS

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Long-term Financial Liabilities

As of June 30, 2025 and December 31, 2024, all of the Company’s outstanding long-term debt interest rates were a fixed rate.

As of September 30, 2025 and December 31, 2024, all of the Company’s outstanding long-term debt interest rates were a fixed rate.

The fair value of the Company’s long-term debt is determined by discounting their future cash flows using current market interest rates on similar instruments with comparable maturities consistent with ASC 825, Financial Instruments.

4 unchanged sentences

(in thousands)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Carrying amount $ 176,885 $ 178,676

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For the full year 2024, the Company accrued approximately $ 17 thousand in penalties and interest related to positions taken on the 2022 corporate income tax return.

For the six months ended June 30, 2025, the Company has accrued approximately $ 10 thousand in penalties and interest related to positions taken on the 2022 corporate income tax return.

For the nine months ended September 30, 2025, the Company has accrued approximately $ 16 thousand in penalties and interest related to positions taken on the 2022 and 2024 corporate income tax return.

The Company remains subject to examination by federal and state authorities for the tax years 2022 through 2024 .

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and permanent extension of expiring provisions of the Tax Cuts and Jobs Act of

The Company is currently

evaluating the impact that the OBBBA may have on its consolidated financial

condition and results of operations but anticipates minimal impact.

The Company has begun evaluating the impact that the OBBBA may have on its consolidated financial condition and

results of operations and determined that the majority of the provisions in the OBBBA does not apply to the Company and management anticipates minimal impact.

NOTE 8 – STOCK COMPENSATION PLANS

On December 9, 2015, the Company’s stockholders approved the 2015 Equity Compensation Plan, or the 2015 Plan, that replaced the 2005 Equity Compensation Plan, or the 2005 Plan, which expired on May 24, 2015.

The 2015 Plan provides that grants may be in any of the following forms:

incentive stock options, nonqualified stock options, stock units, stock awards, dividend equivalents and other stock-based awards.

The 2015 Plan is administered and interpreted by the Compensation Committee of the Board of Directors, or the Committee.

The Committee has the authority to determine the individuals to whom grants will be made under the 2015 Plan, determine the type, size and terms of the grants, determine the time when grants will be made and the duration of any applicable exercise or restriction period (subject to the limitations of the 2015 Plan) and deal with any other matters arising under the 2015 Plan.

All of the employees of the Company

and its subsidiaries are eligible for grants under the 2015

Non-employee directors of the Company are also eligible to receive

grants under the 2015 Plan.

On April 11, 2025, 1,000

shares of Class A Stock were granted as a restricted

The fair value per share

was $ 33.51 , the closing price of the Class A Stock as recorded on the Nasdaq

Global Select Market on April 11, 2025.

This restricted stock award will be fully

vested and released one year after the grant date and, prior to its vesting

date, is subject to forfeiture in the event of the recipient’s termination of

On October 30, 2025, the

Company’s stockholders approved the 2025 Equity Compensation Plan, or the 2025

Plan, that replaced the 2015 Equity Compensation Plan, or the 2015 Plan.

Outstanding grants under the 2015 Plan shall

continue in effect according to their terms, consistent with the 2015

No further grants will be made

under the 2015 Plan after the approval date of the 2025 Plan.

The 2025 Plan

provides that grants may be in any of the following forms:

incentive stock

options, nonqualified stock options, stock units, stock awards, dividend

equivalents and other stock-based awards.

The 2025 Plan is administered and

interpreted by the Compensation Committee of the Board of Directors, or the

The Committee has the

authority to determine the individuals to whom grants will be made under the 2025

Plan, determine the type, size and terms of the grants, determine the time when

grants will be made and the duration of any applicable exercise or restriction

period (subject to the limitations of the 2025 Plan) and deal with any other

matters arising under the 2025 Plan.

of the employees of the Company and its subsidiaries are eligible for grants

under the 2025 Plan.

Non-employee directors of the Company are also

eligible to receive grants under the 2025 Plan.

On September 16, 2025,

5,000 shares of Class A Stock were granted as restricted stock awards.

The fair value per share was $ 32.08 , the

closing price of the Class A Stock as recorded on the Nasdaq Global Select

Market on September 16, 2025.

These restricted stock awards will be fully

vested and released one year after the grant date and, prior to their vesting

date, are subject to forfeiture in the event of the recipient’s termination of

On July 1, 2025, 1,000 shares of Class A Stock were granted as a restricted stock award.

The fair value per share was $ 33.96 , the closing price of the Class A Stock as recorded on the Nasdaq Global Select Market on July 1, 2025.

This restricted stock award will be fully vested and released May 6, 2026 and, prior to its vesting date, is subject to forfeiture in the event of the recipient’s termination of service.

On May 5, 2025, 4,000 shares

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date, are subject to forfeiture in the event of the recipient’s termination of

On July 1, 2025, 1,000

shares of Class A Stock were granted as a restricted

The fair value per share

was $ 33.96 , the closing price of the Class A Stock as recorded on the Nasdaq

Global Select Market on July 1, 2025.

This restricted stock award will be fully

vested and released May 6, 2026 and, prior to its vesting date, is subject to

forfeiture in the event of the recipient’s termination of service.

On April 11, 2025, 1,000 shares of Class A Stock were granted as a restricted stock award.

The fair value per share was $ 33.51 , the closing price of the Class A Stock as recorded on the Nasdaq Global Select Market on April 11, 2025.

This restricted stock award will be fully vested and released one year after the grant date and, prior to its vesting date, is subject to forfeiture in the event of the recipient’s termination of service.

On May 6, 2024, 5,000 shares

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vested and released one year after the grant.

Compensation expense of approximately $ 47 thousand and $ 92 thousand was recorded for the three and six months ended June 30, 2025, respectively, for restricted stock awards

issued in May 2024, April 2025, and May 2025.

Compensation expense of approximately $ 57 thousand and $ 125 thousand was recorded for the three and six months ended June 30, 2024, respectively, for restricted stock awards issued in May 2023.

Compensation expense of approximately $ 60 thousand and $ 152 thousand was recorded for the three and nine months ended September 30, 2025, respectively, for restricted stock awards

issued in May 2024, April 2025, May 2025, July 2025 and September 2025.

Compensation expense of approximately $ 47 thousand and $ 172 thousand was recorded for the three and nine months ended September 30, 2024, respectively, for restricted stock awards issued in May 2023.

Costs were determined based on the fair value on the dates of the awards and those costs were charged to income over the service periods associated with the awards.

There was no stock compensation cost capitalized as part of an asset.

The following summary reflects changes in the shares of Class A Stock underlying options and restricted stock awards for the six months ended June 30, 2025:

The following summary reflects changes in the shares of Class A Stock underlying options and restricted stock awards for the nine months ended September 30, 2025:

Options Restricted Awards

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Expired/cancelled - - - - - -

Outstanding at June 30, 2025 - $ - - $ - 5,000 $ 34.12

Exercisable/vested at June 30, 2025 - $ - - $ - - $ -

There were no options exercised during the six months ended June 30, 2025.

There were no unvested option shares outstanding under the 2015 Plan during the six months ended June 30, 2025.

As of June 30, 2025, there were no unrecognized expenses related to non-vested option shares granted under the 2015 Plan.

As of June 30, 2025, there was approximately $ 142 thousand total unrecognized expenses related to non-vested awards of restricted shares awarded under the 2015 Plan.

Outstanding at September 30, 2025 - $ - - $ - 11,000 $ 33.18

Exercisable/vested at September 30, 2025 - $ - - $ - - $ -

There were no options exercised during the nine months ended September 30, 2025.

There were no unvested option shares outstanding under the 2015 Plan during the nine months ended September 30, 2025.

As of September 30, 2025, there were no unrecognized expenses related to non-vested option shares granted under the 2015 Plan.

As of September 30, 2025, there was approximately $ 276 thousand total unrecognized expenses related to non-vested awards of restricted shares awarded under the 2015 Plan.

The cost will be recognized over 0.76 years, the remaining vesting period for the restricted stock awards.

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Artesian Water, Artesian Water Maryland and Artesian Water Pennsylvania provide regulated water utility service to customers within their established service territory in all three counties of Delaware and in portions of Maryland and Pennsylvania, pursuant to rates filed with and approved by the DEPSC, the MDPSC and the PAPUC.

As of June 30, 2025, Artesian Water was serving approximately 98,200 customers, Artesian Water Maryland was serving approximately 2,700 customers and Artesian Water Pennsylvania was serving approximately 40 customers.

As of September 30, 2025, Artesian Water was serving approximately 98,800 customers, Artesian Water Maryland was serving approximately 2,700 customers and Artesian Water Pennsylvania was serving approximately 40 customers.

Artesian Wastewater and TESI provide regulated wastewater utility service to customers within their established service territory in Sussex County, Delaware pursuant to rates filed with and approved by the DEPSC.

As of June 30, 2025, Artesian Wastewater and TESI were serving approximately 8,800 customers combined, including one large industrial customer.

As of September 30, 2025, Artesian Wastewater and TESI were serving approximately 9,000 customers combined, including one large industrial customer.

NOTE 10 – OTHER DEFERRED ASSETS

The investment in CoBank, ACB, or CoBank, which is a cooperative bank, is related to certain outstanding First Mortgage Bonds and is a required investment in the bank based on the underlying long-term debt agreements .

(in thousands) June 30, 2025 December 31, 2024

(in thousands) September 30, 2025 December 31, 2024

Investment in CoBank $ 6,889 $ 6,425

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(in thousands)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Deferred contract costs and other $ 165 $ 271

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The annual amortization currently authorized by the DEPSC could be adjusted in future rate applications.

Deferred settlement refunds consist of reimbursements from the Trust for Artesian Water’s past capital and operating costs, totaling approximately $ 10.0 million, related to the treatment costs associated with the release of contaminants from the Site in groundwater that Artesian Water uses for public potable water supply, pursuant to the Settlement Agreement.

The full amount of $ 10.0

million has been paid to us, in four installments of approximately $ 2.5 million each,

in August 2022, July 2023, July 2024 and July 2025.

Artesian Water received approval from the

DEPSC in October 2022 to refund to its customers these reimbursements for past

capital and operating costs.

for the reimbursements was applied to customer bills in annual

installments.

The first three refunds

occurred in October 2022, August 2023 and August 2024.

The final customer refund will occur no later than August 2025.

The amount of the credit will be calculated by dividing the amount of the reimbursement by the number of eligible customers.

Beginning in 2022, Artesian Water began recording recovery of capital expenditures as Contributions in Aid of Construction and began recording expense recovery as an offset to operations and maintenance expense, with the intention that those recoveries will be available for inclusion and consideration in any future rate applications.

settlement refunds consist of reimbursements from the Trust for Artesian

Water’s past capital and operating costs, totaling approximately $ 10.0 million,

related to the treatment costs associated with the release of contaminants from

the Site in groundwater that Artesian Water uses for public potable water

supply, pursuant to the Settlement Agreement.

The full amount of $ 10.0 million has been paid to us, in four

installments of approximately $ 2.5 million each, in August 2022, July 2023,

July 2024 and July 2025.

Artesian Water

received approval from the DEPSC in October 2022 to refund to its customers

these reimbursements for past capital and operating costs.

The refund for the reimbursements was applied

to customer bills in annual installments.

The refunds occurred in October 2022, August 2023, August 2024 and

The amount of the credit was

calculated by dividing the amount of the reimbursement by the number of

eligible customers.

Beginning in 2022, Artesian

Water began recording recovery of capital expenditures related to treatment of

contaminants from the Site as Contributions in Aid of Construction and began recording expense recovery as an

offset to operations and maintenance expense, with the intention that those

recoveries will be available for inclusion and consideration in any future rate

applications.

Pursuant to the enactment of the Tax Cuts and Jobs Act, or TCJA, on December 22, 2017, the Company adjusted its existing deferred income tax balances to reflect the decrease in the corporate income tax rate from 34 % to 21 % (see Note 7 – Income Taxes) resulting in a decrease in the net deferred income tax liability of $ 24.3 million, of which $ 22.8 million was reclassified to a regulatory liability related to Artesian Water and Artesian Water Maryland.

7 unchanged sentences

(in thousands)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Utility plant retirement cost obligation $ 207 $ 279

50 unchanged sentences

Eligible Plant Improvements – Installed Ending Date 04/30/2024 10/31/2024

On December 18, 2024, the DEPSC approved Artesian Water’s application to implement a DSIC rate of 1.66 %, effective January 1, 2025.

Effective July 1, 2024, Artesian Water was permitted to recover specific investments made in infrastructure through the assessment of a 0.34 % DSIC.

The January 1, 2025 and

July 1, 2024 DSIC rates are subject to periodic audit by the DEPSC.

The January 1, 2025 DSIC

rate was reset to zero when the temporary base rate increase was placed into effect

on June 3, 2025.

For the three and six

months ended June 30, 2025, we earned approximately $ 0.2 million and $ 0.5

million, respectively in DSIC revenue.

the three and six months ended June 30, 2024, we did not report any earnings in

DSIC revenue.

On December 18, 2024, the DEPSC approved Artesian

Water’s application to implement a DSIC rate of 1.66 %, effective January 1,

Effective July 1, 2024, Artesian

Water was permitted to recover specific investments made in infrastructure

through the assessment of a 0.34 % DSIC.

The January 1, 2025 DSIC rate is subject to periodic

audit by the DEPSC.

The January 1, 2025

DSIC rate was reset to zero when the temporary base rate increase was placed

into effect on June 3, 2025.

For the three

months ended September 30, 2025, we did no t report any earnings in DSIC

For the nine months ended September

30, 2025, we earned approximately $ 0.5 million, in DSIC revenue.

In each of the three and nine months ended September

30, 2024, we earned approximately $ 0.1 million in DSIC revenue.

NOTE 14 - NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE

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The following table summarizes the shares used in computing basic and diluted net income per share:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

3 unchanged sentences

Weighted average common shares outstanding during the period for diluted computation 10,314 10,298 10,309 10,294

For the three months and six months ended June 30, 2025 and 2024, no shares of restricted stock awards were excluded from the calculations of diluted net income per share.

For the three and six months ended June 30, 2025 and 2024, no stock options were excluded from the calculations of diluted net income per share.

For the three months and nine months ended September 30, 2025 and 2024, no shares of restricted stock awards were excluded from the calculations of diluted net income per share.

For the three and nine months ended September 30, 2025 and 2024, no stock options were excluded from the calculations of diluted net income per share.

The Company has 15,000,000 authorized shares of Class A Stock and 1,040,000 authorized shares of Class B Stock.

As of June 30, 2025, 9,429,077 shares of Class A Stock and 881,452 shares of Class B Stock were issued and outstanding.

As of June 30, 2024, 9,414,094 shares of Class A Stock and 881,452 shares of Class B Stock were issued and outstanding.

As of September 30, 2025, 9,431,674 shares of Class A Stock and 881,452 shares of Class B Stock were issued and outstanding.

As of September 30, 2024, 9,416,339 shares of Class A Stock and 881,452 shares of Class B Stock were issued and outstanding.

The par value for both classes is $ 1.00 per share.

Equity per common share was $ 23.77 and $ 23.24 at June 30, 2025 and December 31, 2024, respectively.

These amounts were computed by dividing common stockholders' equity by the number of weighted average shares of common stock outstanding on June 30, 2025 and December 31, 2024, respectively.

Equity per common share was $ 24.14 and $ 23.24 at September 30, 2025 and December 31, 2024, respectively.

These amounts were computed by dividing common stockholders' equity by the number of weighted average shares of common stock outstanding on September 30, 2025 and December 31, 2024, respectively.

NOTE 15 - LEGAL PROCEEDINGS

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However, we cannot ensure that we will prevail in any litigation and, regardless of the outcome, may incur significant litigation expense and may have significant diversion of management attention.

Several of the water systems of Artesian Resources’ subsidiaries are claimants in four multi-district litigation, or MDL, class action settlements designed to resolve claims for per- and polyfluoroalkyl substances, or PFAS, contamination in Public Water Systems’ Drinking Water, as those terms are defined in the respective Agreements (the “Settlements”), which are with four groups of settling defendants on behalf of:

Several of the water

systems of Artesian Resources’ subsidiaries are claimants in four

multi-district litigation, or MDL, class action settlements designed to resolve

claims for per- and polyfluoroalkyl substances, or PFAS, contamination in

Public Water Systems’ Drinking Water, as those terms are defined in the

respective Agreements (the “Settlements”), which are with four groups of

settling defendants on behalf of:

(1) the 3M Company (“3M”);

Du Pont de Nemours and Company (n/k/a Eidp, Inc.), DuPont de Nemours Inc., The Chemours Company, The Chemours Company FC, LLC, and Corteva, Inc.

(collectively, “DuPont”);

de Nemours and Company (n/k/a Eidp, Inc.), DuPont de Nemours Inc., The Chemours

Company, The Chemours Company FC, LLC, and Corteva, Inc.

(collectively,

(3) Tyco Fire Products LP and Chemguard, Inc.

and (4) BASF Corporation.

Claims Forms have been submitted on behalf of Artesian Resources’ eligible systems in each of the Settlements.

The amount of recovery by Artesian Resources’ subsidiaries is uncertain.

( collectively, “the Tyco Defendants”);

and (4) BASF Corporation (“BASF”).

Claims Forms have been submitted on behalf of

Artesian Resources’ eligible

systems in each of the Settlements.

2025, the Company received its first payment from 3M in the amount of $ 2.3

million with an anticipated total net settlement of approximately $ 12.6 million

to be paid over 8 years.

DuPont settlement payments

to claimants began on or about October 15, 2025.

Although the Company has not yet received its

first payment, it expects to soon receive approximately $ 1.3 million, equal to approximately 95 % of its total

DuPont settlement award.

The Company anticipates receiving the balance

of the 3M settlement award, the Dupont settlement award and additional

settlement payments from the other MDL lawsuit defendants.

The current projected payment timeline for

the Tyco Defendants and BASF settlements is December 2025;

however, that

timeline is heavily dependent on timely resolution of claim deficiencies by

claimants and the outcome of the quality control review process.

The settlement proceeds are intended to

reimburse the Company for past and future capital investments or operations and

maintenance expenses related to PFAS water contamination to its water systems .

The DEPSC will review

and approve the regulatory treatment for the settlement funds received to date as

well as future settlement funds.

expected that the funds will be returned to customers through regulatory mechanisms as determined by the DEPSC.

On September 15, 2025, Artesian Water was served as a

third-party defendant in a third-party complaint filed by Metra Industries,

Inc., in the Superior Court of the State of Delaware.

The litigation arises

from a contractual dispute related to a water main renewal project and asserts a claim against us in the total amount of

$ 3.4 million comprised mainly of $ 2.7 million in unabsorbed office overhead as

well as $ 0.1 million in end-of-job direct costs and $ 0.6 million in change

While we plan to defend the

claim vigorously, it is possible that we could

incur a loss;

however, any loss is not estimable at this time.

NOTE 16 - BUSINESS SEGMENT INFORMATION

10 unchanged sentences

The measurement of depreciation, interest, and capital expenditures are predominately related to our Regulated Utility segment.

These amounts in our non-utility business are negligible and account for approximately less than 1% of condensed consolidated amounts as of June 30, 2025 and June 30, 2024.

Three Months Ended June 30,

These amounts in our non-utility business are negligible and account for approximately less than 1% of condensed consolidated amounts as of September 30, 2025 and September 30, 2024.

Three Months Ended September 30,

Regulated Utility Total Regulated Utility Total

14 unchanged sentences

Consolidated operating income $ 8,619 $ 8,590

Six Months Ended June 30,

Nine Months Ended September 30,

Regulated Utility Total Regulated Utility Total

51 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements