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If any of the events or circumstances described in the referenced risks actually occurs, our business, financial condition or results of operations could be materially adversely affected and such events or circumstances could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this report.
−Removed: These risks should be read in conjunction with the other information set forth in this Quarterly Report as well as in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our other periodic reports on Form 10-Q and Form 8-K.
+Added: These risks should be
+Added: read in conjunction with the other information set forth in this Quarterly Report as well as in our Annual Report on Form 10-K for the year ended December 31, 2025 and in our other periodic reports on Form 10-Q and Form 8-K.
Our exclusive license to provide water to retail customers in the Cayman Islands is presently under renegotiation with OfReg, the Cayman Islands government utility regulatory authority, and we are presently unable to predict the outcome of these on-going negotiations.
−Removed: We sell water through our retail operations under a license issued in July 1990 by the Cayman Islands government (the “1990 license”) that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area.
+Added: We sell water through our retail operations under the 1990 license that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area.
Pursuant to the 1990 license, Cayman Water has the exclusive right to produce potable water and distribute it by pipeline to its licensed service area, which consists of two of the three most populated areas of Grand Cayman Island:
Seven Mile Beach and West Bay.
−Removed: For the three months ended September 30, 2025 and 2024, we generated approximately 22% and 23%, respectively, of our consolidated revenue and 33% and 34%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license.
−Removed: For the nine months ended September 30, 2025 and 2024, we generated approximately 25% and 23%, respectively, of our consolidated revenue and 39% and 36%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license.
+Added: For the three months ended March 31, 2026 and 2025, we generated approximately 29% and 28%, respectively, of our consolidated revenue and 45% and 46%, respectively, of our 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.
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We continued to pay a royalty of 7.5% of the revenue we collected as required under the 1990 license.
−Removed: In October 2016, the Government of the Cayman Islands passed legislation which created a new utilities regulation and competition office (“OfReg”) and in April 2017 passed supplemental legislation which transferred responsibility for the economic regulation of the water utility sector and the negotiations with us for a new retail license to OfReg.
+Added: In October 2016, the Government of the Cayman Islands passed legislation which created OfReg and, in April 2017, passed supplemental legislation which transferred responsibility for the economic regulation of the water utility sector and the negotiations with us for a new retail license to OfReg.
Under the new regulatory legislation passed in October 2016, Cayman Water was required to first be granted a concession by the government before obtaining a new (or renewing the old) retail operations license.
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Negotiations between Cayman Water and OfReg for the new license remain on-going.
−Removed: We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of its license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our retail license.
+Added: We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of the license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our retail license.
We are presently unable to determine what impact the resolution of our retail license negotiations will have on our consolidated financial condition, results of operations or cash flows but such resolution could result in a material reduction (or the loss) of the operating income and cash flows we have historically generated from our retail operations and could require us to record impairment losses to reduce the carrying values of our retail segment assets.
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As a result, our Bahamas subsidiary could have insufficient liquidity to continue operations, and our consolidated financial results could be materially adversely affected.
−Removed: CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $16.8 million as of September 30, 2025.
−Removed: Approximately 66% of this September 30, 2025 accounts receivable balance was delinquent as of that date.
+Added: CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $23.9 million as of March 31, 2026.
+Added: Approximately 75% of this March 31, 2026 accounts receivable balance was delinquent as of that date.
The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary.
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All previous delinquent accounts receivable from the WSC, including accrued interest thereon, were eventually paid in full.
−Removed: Based upon this payment history, we have not provided for a material allowance for credit losses for CW-Bahamas’ accounts receivable from the WSC as of September 30, 2025.
+Added: Based upon this payment history, we have not provided for a material allowance for credit losses for CW-Bahamas’ accounts receivable from the WSC as of March 31, 2026, or prior periods.
+Added: We continue to be in frequent contact with officials of The Bahamas government, who continue to express their intention to significantly reduce CW-Bahamas’ delinquent accounts receivable balances.
+Added: However, we are unable to determine when or if such reduction will occur.
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.
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Moody’s has maintained these ratings through the date of its most current report issued in April 2025.
+Added: Based upon our review of this Moody’s correspondence, we continue 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 significant portion of its delinquent accounts receivable, one or more of the following events may occur:
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(ii) we may be required to cease the recognition of revenue on CW-Bahamas’ water supply agreements with the WSC;
−Removed: and (iii) we may be required to provide a material allowance for credit losses for CW-Bahamas’ accounts receivable.
+Added: and (iii) we may be required to significantly increase our allowance for credit losses for CW-Bahamas’ accounts receivable.
Any of these events could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows.
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Any construction, manufacturing, and operating costs for our contracts that significantly exceed our initial estimates could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows.
−Removed: Substantial changes to fiscal, regulation and other federal policies could adversely affect our business, financial condition, operating results and cash flows.
−Removed: Significant changes in, and uncertainty with respect to, legislation, regulation, government policy and economic conditions could adversely affect our business.
−Removed: Specific legislative and regulatory proposals that could have a material impact on us include, but are not limited to, modifications to international trade policy (such as tariffs);
−Removed: public company reporting requirements;
−Removed: and environmental regulation.
−Removed: We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the U.S.
−Removed: and other countries, what products may be subject to such actions, or what actions may be taken by the other countries in retaliation.
−Removed: Accordingly, it is difficult to predict how such actions may impact our business, or the business or habits of our customers.
−Removed: Our business operations, as well as the businesses of our customers on which we are substantially dependent, are located in countries at risk for escalating trade disputes, including the U.S.
−Removed: Any resulting trade wars could have a significant adverse effect on world trade and could adversely impact our consolidated financial condition, results of operations and cash flows.
+Added: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
+Added: There were no unregistered sales of equity securities during the three months ended March 31, 2026.
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.