What changed in this filing

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Item 1. Financial Statements

2026-05-11 compared with 2025-11-10 · 66 added, 209 removed, 491 unchanged (36% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets

33 unchanged sentences

issued and outstanding 38,923 and 39,507 shares, respectively

Class A common stock, $ 0.60 par value.

Common stock, $ 0.60 par value.

Authorized 24,800,000 shares;

issued and outstanding 16,000,190 and 15,945,233 shares, respectively

Class B common stock, $ 0.60 par value.

Authorized 145,000 shares;

Additional paid-in capital

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of revenue

General and administrative expenses

Gain on asset dispositions, net

Gain (loss) on asset dispositions, net

Income from operations

9 unchanged sentences

Net income from continuing operations attributable to Consolidated Water Co.

Net income (loss) from discontinued operations

Net loss from discontinued operations

Net income attributable to Consolidated Water Co.

22 unchanged sentences

Buyback of preferred stock

Exercise of options

Dividends declared

3 unchanged sentences

Balance as of March 31, 2026

Issue of share capital

Buyback of preferred stock

Exercise of options

Dividends declared

( 2,234,434 )

Stock-based compensation

Balance as of June 30, 2025

Issue of share capital

Conversion of preferred stock

Buyback of preferred stock

Exercise of options

Dividends declared

( 2,234,845 )

Stock-based compensation

Balance as of September 30, 2025

preferred stock

2 unchanged sentences

Issue of share capital

Buyback of preferred stock

Dividends declared

( 1,510,082 )

Stock-based compensation

Balance as of March 31, 2024

Issue of share capital

Conversion of preferred stock

Buyback of preferred stock

Dividends declared

( 1,507,710 )

Stock-based compensation

Balance as of June 30, 2024

Conversion of preferred stock

Buyback of preferred stock

Exercise of options

3 unchanged sentences

Stock-based compensation

Balance as of September 30, 2024

Balance as of March 31, 2025

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities

2 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Gain on sale of land and project documentation

( 12,134,766 )

Foreign currency transaction adjustment - discontinued operations

5 unchanged sentences

Compensation expense relating to stock and stock option grants

Gain on asset dispositions, net

(Gain) loss on asset dispositions, net

Equity in earnings of affiliates

1 unchanged sentence

Accounts receivable

( 3,453,459 )

Contract assets

1 unchanged sentence

Prepaid expenses and other assets

( 1,269,737 )

Accounts payable, accrued expenses and other current liabilities

( 4,495,643 )

Accrued compensation

4 unchanged sentences

Net cash used in operating activities - discontinued operations

( 1,432,041 )

Net cash provided by operating activities

4 unchanged sentences

Proceeds from asset dispositions

Proceeds from Mexico settlement agreement

Net cash provided by (used in) investing activities

Net cash used in investing activities

( 1,682,253 )

( 1,568,281 )

Cash flows from financing activities

3 unchanged sentences

Dividends paid to preferred shareholders

Dividends paid to non-controlling interests

Buyback of redeemable preferred stock

13 unchanged sentences

Transfers from construction in progress to property, plant and equipment

Right-of-use assets obtained in exchange for new operating lease liabilities

Transfers from prepaid expenses to property, plant and equipment

36 unchanged sentences

The exchange rates for conversion of Mexican pesos and euros into US$ vary based upon market conditions.

Net foreign currency gains arising from transactions and re-measurements were $ 19,093 and $ 24,807 for the three months ended September 30, 2025 and 2024, respectively, and $ 65,080 and $ 65,606 for the nine months ended September 30, 2025 and 2024 are included in “Other income (expense) - Other” in the accompanying condensed consolidated statements of income.

Net foreign currency gains arising from transactions and re-measurements were $ 34,836 and $ 29,642 for the three months ended March 31, 2026 and 2025, respectively and are included in “Other income (expense) - Other” in the accompanying condensed consolidated statements of income.

Cash and cash equivalents:

Cash and cash equivalents consist of demand deposits at banks and certificates of deposit at banks with original maturities of three months or less.

Cash and cash equivalents as of September 30, 2025 and December 31, 2024 include approximately $ 16.9 million and $ 5.2 million, respectively, of certificates of deposits with original maturities of three months or less.

Cash and cash equivalents consist of demand deposits at banks, certificates of deposit at banks with original maturity of three months or less and a money market fund with a brokerage firm.

Cash and cash equivalents as of March 31, 2026 and December 31, 2025 include $ 17.1 million and $ 17.0 million, respectively, of certificates of deposits with original maturities of three months or less and $ 18.3 million and $ 18.1 million, respectively, in the money market fund.

Certain transfers from the Company’s Bahamas bank accounts to Company bank accounts in other countries require the approval of the Central Bank of The Bahamas.

The equivalent United States dollar cash balances held in The Bahamas as of September 30, 2025 and December 31, 2024 were approximately $ 26.4 million and $ 7.7 million, respectively.

The equivalent United States dollar cash balances held in The Bahamas as of March 31, 2026 and December 31, 2025 were approximately $ 11.9 million and $ 12.0 million, respectively.

Goodwill and intangible assets:

6 unchanged sentences

To the extent the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment loss is recorded.

For the year ended December 31, 2024, the Company elected to assess qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment testing that was conducted in prior years for its reporting units.

For the year ended December 31, 2025, the Company elected to assess qualitative factors to determine whether it was necessary to perform quantitative goodwill impairment testing for its reporting units.

The Company assessed the relevant events and circumstances to evaluate whether it is more likely than not that the fair values of such reporting units were less than their carrying values.

The events and circumstances assessed for each reporting unit included macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, and other relevant events.

Based upon this qualitative assessment, the Company determined that it is more likely than not that the fair values of its reporting units exceeded their carrying values as of December 31, 2025.

9 unchanged sentences

The following table presents the Company’s revenue disaggregated by revenue source.

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Retail revenue

3 unchanged sentences

Services revenue consists of the following:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Construction revenue

23 unchanged sentences

Substantially all of Aerex’s customers are U.S.

Kalaeloa Desalco has signed a contract with the Honolulu Board of Water Supply pursuant to which it is presently designing and expects to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii.

The Company generates construction, operations and maintenance, design and consulting revenue from PERC and DesalCo, generates construction revenue from Kalaeloa Desalco, and generates manufacturing revenue from Aerex.

The Company also generates operations and maintenance and consulting revenue from REC.

Kalaeloa Desalco has signed a contract with the Honolulu Board of Water Supply pursuant to which it presently expects to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii.

The Company generates construction, operations and maintenance, design and consulting revenue from PERC and DesalCo;

construction revenue from Kalaeloa Desalco;

manufacturing revenue from Aerex;

and operations and maintenance and consulting revenue from REC.

The Company recognizes revenue for its construction and custom/specialized manufacturing contracts (and some of its design contracts) over time under the input method, using costs incurred (which represents work performed) to date relative to the total estimated costs at completion to measure progress toward satisfying a contract’s performance obligations as such measure best reflects the transfer of control of the promised good to the customer.

3 unchanged sentences

The Company estimates total costs to be incurred and profit to be earned on each long-term, fixed price contract prior to the commencement of work on the contract and updates these estimates as work on the contract progresses.

The cumulative amount of revenue recorded on a contract at a specified point in time is that percentage of total estimated revenue that incurred costs to date comprised of estimated total contract costs.

The cumulative amount of revenue recorded on a contract at a specified point in time is that percentage of total estimated revenue that incurred costs to date comprise of estimated total contract costs.

Due to the extended time it may take to complete many of the Company’s contracts and the scope and nature of the work required to be performed on those contracts, the estimations of total revenue and costs at completion are complicated and subject to many variables and, accordingly, are subject to changes.

4 unchanged sentences

The Company has elected the “right to invoice” practical expedient for revenue recognition on its operations and maintenance and consulting contracts and recognizes revenue in the amount to which the Company has a right to invoice, recognizing this revenue from the transfer of goods or services to customers during the billing cycle.

For the three months ended September 30, 2025 and 2024, the Company recognized $ 6,462,508 and $ 4,246,506 , respectively, of its services revenue from the transfer of goods or services to customers over time.

The remaining services revenue of $ 7,826,807 and $ 8,431,331 , respectively, was recognized from the transfer of goods or services to customers when invoiced.

For the nine months ended September 30, 2025 and 2024, the Company recognized $ 11,752,695 and $ 17,631,774 , respectively, of its services revenue from the transfer of goods or services to customers over time.

For the three months ended March 31, 2026 and 2025, the Company recognized $ 2,210,163 and $ 2,180,261 , respectively, of its services revenue from the transfer of goods or services to customers over time.

The remaining services revenue of $ 9,041,181 and $ 7,898,007 , respectively, was recognized from the transfer of goods or services to customers when invoiced.

For the three and nine months ended September 30, 2025 and 2024, the Company recognized all of its manufacturing revenue from the transfer of goods or services to customers over time.

For the three months ended March 31, 2026 and 2025, the Company recognized all of its manufacturing revenue from the transfer of goods or services to customers over time.

Revenue recognized and amounts billed on contracts in progress are summarized as follows:

September 30,

Revenue recognized to date on contracts in progress

6 unchanged sentences

The above net balances are reflected in the accompanying condensed consolidated balance sheets as follows:

September 30,

Contract assets

5 unchanged sentences

( 8,237,819 )

As of September 30, 2025, the Company had unsatisfied or partially unsatisfied performance obligations for contracts in progress representing approximately $ 138.8 million in aggregate transaction price for contracts with an original expected length of greater than one year .

As of March 31, 2026, the Company had unsatisfied or partially unsatisfied performance obligations for contracts in progress representing approximately $ 148.7 million in aggregate transaction price for contracts with an original expected length of greater than one year .

The Company expects to earn revenue as it satisfies its performance obligations under those contracts in the amount of approximately $ 26.4 million during the remainder of the year ending December 31, 2026 and approximately $ 122.3 million thereafter .

In addition, the Company recognized revenue of approximately $ 5.1 million for the nine months ended September 30, 2025, that was included in the contract liability balance as of December 31, 2024.

In addition, the Company recognized revenue of approximately $ 653,000 for the three months ended March 31, 2026, that was included in the contract liability balance as of December 31, 2025.

Practical Expedients and Exemptions

1 unchanged sentence

Comparative amounts:

Revenue of $ 614,199 and $ 1,467,461 for the three and nine months ended September 30, 2024, respectively, presented in the services segment as design and consulting revenue in the financial statements previously issued for 2024 has been reclassified to construction revenue in the services segment information for 2024 provided herein to conform to the current period’s presentation.

Such reclassifications had no effect on consolidated or services segment revenue, gross profit, operating income or net income.

Certain amounts presented in the financial statements previously issued for 2025 have been reclassified to conform to the current period’s presentation .

Segment information

5 unchanged sentences

The manufacturing segment manufactures and services a wide range of custom and specialized water-related products applicable to commercial, municipal and industrial water production, supply and treatment.

The corporate segment consists of various expenses of a general and

administrative nature incurred at the parent company level, as well as the expenses incurred by Aquilex, a U.S.

The corporate segment consists of various expenses of a general and administrative nature incurred at the parent company level, as well as the expenses incurred by Aquilex, a U.S.

subsidiary that provides financial, engineering, information technology, administrative and supply chain management support services to all the Company’s subsidiaries and its affiliate.

6 unchanged sentences

Intersegment revenue transactions are insignificant to the Company and are eliminated.

Segment information previously disclosed in 2024 did not separately disclose those expenses currently reported in the corporate segment, as such expenses were previously included in the retail segment.

The 2024 segment information provided herein has been recast to conform to the current period presentation.

The Company’s segments are strategic business units that are managed separately because each segment sells different products and/or services, serves customers with distinctly different needs and generates different gross profit margins.

The following sets forth the Company’s income statements by segment.

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

Manufacturing

1 unchanged sentence

General and administrative expenses

Gain on asset dispositions, net

Gain (loss) on asset dispositions, net

Income (loss) from operations

14 unchanged sentences

Net income attributable to Consolidated Water Co.

Three Months Ended September 30, 2024

Three Months Ended March 31, 2025

Manufacturing

10 unchanged sentences

( 3,428,867 )

Provision for income taxes

Net income (loss) from continuing operations

( 3,072,669 )

Income from continuing operations attributable to non-controlling interests

Net income (loss) from continuing operations attributable to Consolidated Water Co.

( 3,072,669 )

Net loss from discontinued operations

Net income attributable to Consolidated Water Co.

The Company’s cost of revenue consists of:

Three Months Ended September 30, 2025

Manufacturing

Subcontractor and other project costs

Employee costs

Retail license royalties

Three Months Ended September 30, 2024

Manufacturing

Subcontractor and other project costs

Employee costs

Retail license royalties

Other cost of revenue segment expenses above primarily include chemicals and other supplies, government fees and licenses, and freight costs.

The Company’s general and administrative expenses consist of:

Three Months Ended September 30, 2025

Manufacturing

Employee costs

Professional fees

Depreciation and amortization

Three Months Ended September 30, 2024

Manufacturing

Employee costs

Professional fees

Depreciation and amortization

General and administrative segment expenses set forth in the “Other” category above include Board of Directors fees and expenses, maintenance, office rent, information technology costs, amortization of intangible assets, provisions for credit losses and investor relations costs.

Nine Months Ended September 30, 2025

Manufacturing

Cost of revenue

General and administrative expenses

Gain on asset dispositions, net

Income (loss) from operations

( 10,991,031 )

Interest income

Interest expense

Income (loss) from affiliates

Other income (loss), net

Income (loss) before income taxes

( 10,108,348 )

Provision for income taxes

Provision (benefit) for income taxes

Net income (loss) from continuing operations

5 unchanged sentences

Net income attributable to Consolidated Water Co.

Nine Months Ended September 30, 2024

Manufacturing

Cost of revenue

General and administrative expenses

Gain on asset dispositions, net

Income (loss) from operations

( 10,314,031 )

Interest income

Interest expense

Income from affiliate

Other income, net

Income (loss) before income taxes

( 9,879,916 )

Provision for income taxes

Net income (loss) from continuing operations

( 9,879,916 )

Income from continuing operations attributable to non-controlling interests

Net income (loss) from continuing operations attributable to Consolidated Water Co.

( 9,879,916 )

Net income from discontinued operations

Net income attributable to Consolidated Water Co.

The Company’s cost of revenue consists of:

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Manufacturing

2 unchanged sentences

Retail license royalties

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Manufacturing

2 unchanged sentences

Retail license royalties

Other cost of revenue segment expenses above primarily include chemicals and other supplies, government fees and licenses, and freight costs.

Cost of revenue segment expenses set forth in the “Other” category above primarily include chemicals and other supplies, government fees and licenses, and freight costs.

The Company’s general and administrative expenses consist of:

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Manufacturing

2 unchanged sentences

Depreciation and amortization

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Manufacturing

2 unchanged sentences

Depreciation and amortization

General and administrative segment expenses set forth in the “Other” category above primarily include Board of Directors fees and expenses, maintenance, office rent, information technology costs, provisions for credit losses and investor relations costs.

The Company’s segment assets are presented below.

As of September 30, 2025

As of March 31, 2026

Manufacturing

22 unchanged sentences

Basic EPS is computed by dividing net income (less preferred stock dividends) available to common stockholders by the weighted average number of common shares outstanding during the period.

The computation of diluted EPS assumes the issuance of common shares for all potential common shares outstanding during the reporting period and, if dilutive, the effect of stock options as computed under the treasury stock method.

The computation of diluted EPS assumes the issuance of common shares for all potential

common shares outstanding during the reporting period and, if dilutive, the effect of stock options as computed under the treasury stock method.

The following summarizes information related to the computation of basic and diluted EPS:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Net income from continuing operations attributable to Consolidated Water Co.

1 unchanged sentence

Net income from continuing operations available to common shares in the determination of basic earnings per common share

Income (loss) from discontinued operations

Loss from discontinued operations

Net income available to common shares in the determination of basic earnings per common share

6 unchanged sentences

Discontinued operations - Mexico project development

In 2010, the Company began the pursuit, through its Netherlands subsidiary, CW-Cooperatief, and its Mexico subsidiary, NSC, of a project (the “Project”) that encompassed the construction, operation and minority ownership of a 100 million gallons per day seawater reverse osmosis desalination plant to be located in northern Baja California, Mexico and accompanying pipelines to deliver water to the Mexican potable water system.

Through a series of transactions that began in 2012, NSC purchased 20.1 hectares of land for approximately $ 21.1 million on which the proposed Project’s plant was to be constructed.

In November 2015, the State of Baja California (the “State”) officially commenced a public tender for the Project, and in June 2016 a consortium comprised of NSC and two other parties was selected by the State as the winner of the tender process for the Project.

NSC subsequently formed AdR to pursue the completion of the Project.

On August 22, 2016, the Public Private Partnership Agreement for the Project (the “APP Contract”) was executed between AdR, the State Water Commission of Baja, California (“CEA”), and the Government of Baja California, as represented by the Secretary of Planning and Finance and the Public Utilities Commission of Tijuana (“CESPT”).

Shortly thereafter, NSC formed its wholly owned subsidiary, AdR, to pursue the completion of the Project.

Following a public tender process for the Project in which NSC and its consortium were declared the winners, in August, 2016, the Public Private Partnership Agreement for the Project (the “APP Contract”) was executed between AdR, the State Water Commission of Baja, California (“CEA”), and the Government of Baja California, as represented by the Secretary of Planning and Finance and the Public Utilities Commission of Tijuana (“CESPT”).

The APP Contract required AdR to design, construct, finance and operate a seawater reverse osmosis desalination plant (and accompanying aqueduct) with a capacity of up to 100 million gallons per day in two phases:

the first with a capacity of 50 million gallons per day and an aqueduct to the Mexican public water system in Tijuana, Baja California and the second phase with a capacity of 50 million gallons per day.

The first phase was to be operational within 36 months of commencing construction and the second phase was to be operational by January 2025.

The APP Contract further required AdR to operate and maintain the plant and aqueduct for a period of 37 years starting from the commencement of operation of the first phase.

At the end of the operating period, the plant and aqueduct would have been transferred to CEA.

On June 29, 2020, AdR received a letter (the “Letter”) from CEA and CESPT terminating the APP Contract.

The Letter requested that AdR provide an inventory of the assets that comprised the “Project Works” (as defined in the APP Contract) for the purpose of acknowledging and paying the non-recoverable expenses made by AdR in connection with the Project, with such reimbursement to be calculated in accordance with the terms of the APP Contract.

On August 28, 2020, AdR submitted their list of non-recoverable expenses, including those of NSC, to CEA and CESPT which amounted to 51,144,525 United States dollars and an additional 137,333,114 Mexican pesos.

The APP Contract further provided that AdR would operate and maintain the plant and aqueduct for a period of 37 years starting from the commencement of operation of the first phase.

In June 2020, AdR received a letter from CEA and CESPT terminating the APP Contract.

CW-Cooperatief, as a Netherlands company, had certain rights relating to its investments in NSC and AdR under the Agreement on Promotion, Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the United Mexican States entered into force as of October 1, 1999 (the “Treaty”).

In April 2021, CW-Cooperatief submitted a letter to the President of Mexico and other Mexican federal government officials alleging that the State’s termination of the APP Contract constituted a breach by Mexico of its international obligations under the Treaty, entitling CW-Cooperatief to full reparation, including monetary damages.

This letter invited Mexico to seek a resolution of this investment dispute through consultation and negotiation but stated that if the dispute cannot be resolved in this manner, CW-Cooperatief would refer the dispute to the International Centre for the Settlement of International Disputes for arbitration, as provided for in the Treaty.

In February 2022, CW-Cooperatief, filed a Request for Arbitration with the International Centre for Settlement of International Disputes (“ICSID”) requesting that the United Mexican States pay CW-Cooperatief damages in excess of US$ 51 million plus MXN$ 137 million (with the exact amount to be quantified in the proceedings), plus fees, costs and pre- and post-award interest.

In February 2022,

CW-Cooperatief filed a Request for Arbitration with the International Centre for Settlement of International Disputes (“ICSID”) requesting that the United Mexican States pay CW-Cooperatief damages in excess of US$ 51 million plus MXN$ 137 million (with the exact amount to be quantified in the proceedings), plus fees, costs and pre- and post-award interest.

In May 2024, the Company, through CW-Cooperatief, NSC, and AdR, entered into a settlement agreement (the “Settlement Agreement”) with the State and Banco Nacional de Obras y Servicios Públicos, S.N.C., as trustee under the trust agreement for the trust named Fondo Nacional de Infraestructura (the “Trust”).

7 unchanged sentences

Summarized financial information for the discontinued Mexico project development operation is as follows:

September 30,

Prepaid expenses and other current assets

1 unchanged sentence

Total liabilities of discontinued operations

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Loss from discontinued operations

( 1,496,840 )

Gain on sale of land and project documentation

The Company’s leases consist principally of leases for office and warehouse space.

11 unchanged sentences

The following table presents the lease-related assets and liabilities and their respective classification on the condensed consolidated balance sheets:

September 30,

Operating lease right-of-use assets

Total operating lease right-of-use assets

7 unchanged sentences

The components of lease costs were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating lease costs

3 unchanged sentences

Supplemental cash flow information related to leases is as follows:

Nine Months Ended September 30,

Three Months Ended March 31,

Cash paid for amounts included in measurement of liabilities:

Operating cash outflows for operating leases

Future lease payments relating to the Company’s operating lease liabilities from continuing operations as of September 30, 2025 were as follows:

Future lease payments relating to the Company’s operating lease liabilities from continuing operations as of March 31, 2026 were as follows:

Years ending December 31,

4 unchanged sentences

Noncurrent lease obligations

As of September 30, 2025 and December 31, 2024, the carrying amounts of cash equivalents, accounts receivable, accounts payable, accrued expenses, accrued compensation, dividends payable and other current liabilities approximate their fair values due to the short-term maturities of these instruments.

As of September 30, 2025 and December 31, 2024, the Company does not have assets and liabilities measured at fair value to present in the fair value hierarchy.

As of March 31, 2026 and December 31, 2025, the carrying amounts of cash equivalents, accounts receivable, accounts payable, accrued expenses, accrued compensation, dividends payable and other current liabilities approximate their fair values due to the short-term maturities of these instruments.

As of March 31, 2026 and December 31, 2025, the Company does not have assets and liabilities measured at fair value to present in the fair value hierarchy.

Commitments and contingencies

2 unchanged sentences

Seven Mile Beach and West Bay.

For the three months ended September 30, 2025 and 2024, the Company generated approximately 22 % and 23 %, respectively, of its consolidated revenue and 33 % and 34 %, respectively, of its consolidated gross profit from the retail water operations conducted under the 1990 license.

For the nine months ended September 30, 2025 and 2024, the Company generated approximately 25 % and 23 %, respectively, of its consolidated revenue and 39 % and 36 %, respectively, of its consolidated gross profit from the retail water operations conducted under the 1990 license.

For the three months ended March 31, 2026 and 2025, the Company generated approximately 29 % and 28 %, respectively, of its consolidated revenue and 45 % and 46 %, respectively, of its consolidated gross profit from the retail water operations conducted under the 1990 license.

The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government in order to provide the parties with additional time to negotiate the terms of a new license agreement.

9 unchanged sentences

Such impairment losses could have a material adverse impact on the Company’s consolidated financial condition and results of operations.

CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $ 16.8 million and $ 28.4 million as of September 30, 2025 and December 31, 2024, respectively.

CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $ 23.9 million and $ 20.7 million as of March 31, 2026 and December 31, 2025, respectively.

Approximately 75 % and 71 % of the accounts receivable balances were delinquent as of those dates, respectively.

2 unchanged sentences

All previous delinquent accounts receivable from the WSC, including accrued interest thereon, were eventually paid in full.

Based upon this payment history, CW-Bahamas has not provided a material allowance for credit losses for its accounts receivable from the WSC as of September 30, 2025 or prior periods.

Based upon this payment history, CW-Bahamas has not provided a material allowance for credit losses for its accounts receivable from the WSC as of March 31, 2026 or prior periods.

In a report dated October 6, 2022, Moody’s Investor Services (“Moody’s”) downgraded The Bahamas’ long-term issuer and senior unsecured ratings to B1 from Ba3.

1 unchanged sentence

Moody’s has maintained these ratings through the date of its most current report issued in April 2025.

Based upon the Company’s review of this Moody’s correspondence, CW-Bahamas continues to believe that no material allowance for credit losses is required for CW-Bahamas’ accounts receivable from the WSC.

If CW-Bahamas is unable to collect a sufficient portion of its delinquent accounts receivable, one or more of the following events may occur:

1 unchanged sentence

(ii) the Company may be required to cease the recognition of revenue on CW-Bahamas’ water supply agreements with the WSC;

and (iii) the Company may be required to provide an additional allowance for credit losses for CW-Bahamas’ accounts receivable.

and (iii) the Company may be required to significantly increase its allowance for credit losses for CW-Bahamas’ accounts receivable.

Any of these events could have a material adverse impact on the Company’s consolidated financial condition, results of operations, and cash flows.

17 unchanged sentences

Adoption of new accounting standards:

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU became effective on a prospective basis for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Effect of newly issued but not yet effective accounting standards:

2 unchanged sentences

The ASU requires public companies to disclose, in the notes to financial statements, specific information about certain costs and expenses at each interim and annual reporting period.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of this guidance.

In January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date.

The ASU amends the effective date of ASU 2024-03 to clarify that all business entities are required to adopt the guidance in annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of this guidance.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose.

The ASU is effective for annual periods beginning after December 15, 2027.

Early adoption is permitted and the guidance can be applied on a prospective basis, a modified basis for in-process projects, or on a retrospective basis.

The Company is currently evaluating the impact of this guidance.

The amended ASU is effective on a prospective basis for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of this guidance on its financial statements.

Subsequent events

2 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