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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
−Removed: 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.
−Removed: 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 the 1990 license that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area.
−Removed: 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:
−Removed: Seven Mile Beach and West Bay.
−Removed: 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.
−Removed: 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.
−Removed: The most recent express extension of the license expired on January 31, 2018.
−Removed: From that date through February 18, 2025, we continued to operate under the terms of the 1990 license, treating such terms as operative notwithstanding the expiration of the express extension.
−Removed: 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 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.
−Removed: 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.
−Removed: On February 18, 2025, Cayman Water received a new concession from the government that authorizes and maintains the terms of the 1990 license until a new license from OfReg is negotiated and enacted.
−Removed: 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 the license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our retail license.
−Removed: 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.
−Removed: Such impairment losses could have a material adverse impact on our consolidated financial condition and results of operations.
+Added: 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, 2025 and our other filings with the Securities and Exchange Commission.
Periodically, our Bahamas subsidiary experiences substantial delays in the collection of its accounts receivable.
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 $23.9 million as of March 31, 2026.
−Removed: Approximately 75% of this March 31, 2026 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 $18.8 million as of June 30, 2026.
+Added: Approximately 64% of this June 30, 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 March 31, 2026, or prior periods.
+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 June 30, 2026, or prior periods.
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.
However, we are unable to determine when or if such reduction will occur.
−Removed: 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.
−Removed: Moody’s also lowered The Bahamas’ local currency ceiling to Baa3 from Baa2 and its foreign currency ceiling to Ba1 from Baa3.
−Removed: Moody’s has maintained these ratings through the date of its most current report issued in April 2025.
+Added: In a report dated April 30, 2026, Moody’s Investor Services (“Moody’s”) upgraded The Bahamas’ long-term issuer and senior unsecured ratings to Ba3 from B1.
+Added: Moody’s also raised The Bahamas’ local currency ceiling to Baa2 from Baa3 and its foreign currency ceiling to Baa3 from Ba1.
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.
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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: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
−Removed: 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.