What changed in this filing

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Item 1. Financial Statements

2024-08-14 compared with 2024-05-15 · 132 added, 94 removed, 489 unchanged (32% of the section changed)

31 unchanged sentences

Other liabilities

Deferred revenue

Total liabilities

19 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

General and administrative expenses

Gain on asset dispositions and impairments, net

Gain (loss) on asset dispositions and impairments, net

Income from operations

10 unchanged sentences

Net income from continuing operations attributable to Consolidated Water Co.

Loss from discontinued operations

Net income (loss) from discontinued operations

Net income attributable to Consolidated Water Co.

26 unchanged sentences

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

preferred stock

10 unchanged sentences

Balance as of March 31, 2023

Issue of share capital

Buyback of preferred stock

Exercise of options

Dividends declared

( 1,340,972 )

Stock-based compensation

Balance as of June 30, 2023

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

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

4 unchanged sentences

Compensation expense relating to stock and stock option grants

Gain on asset dispositions and impairments, net

Loss (gain) on asset dispositions and impairments, net

Profit-sharing and equity in earnings of OC-BVI

6 unchanged sentences

( 4,290,778 )

( 3,382,870 )

Prepaid expenses and other assets

( 2,890,187 )

Accounts payable, accrued expenses and other current liabilities

( 3,904,303 )

Contract liabilities

7 unchanged sentences

( 1,725,153 )

( 3,110,041 )

Proceeds from asset dispositions

Proceeds from Mexican settlement agreement

Purchase of remaining non-controlling interest in PERC

( 2,440,027 )

Net cash used in investing activities

Net cash provided by investing activities - continuing operations

( 5,528,658 )

Net cash provided by investing activities - discontinued operations

Net cash provided by investing activities

( 5,528,658 )

Cash flows from financing activities

4 unchanged sentences

Buyback of redeemable preferred stock

Proceeds received from exercise of stock options

Principal repayments on long-term debt

2 unchanged sentences

( 2,695,924 )

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

( 3,251,032 )

Cash and cash equivalents at beginning of period

1 unchanged sentence

cash and cash equivalents at end of period - discontinued operations

( 1,355,104 )

Cash and cash equivalents at end of period

Non-cash transactions:

Issuance of 5,904 and 13,309 , respectively, shares of redeemable preferred stock for services rendered

Issuance of 57,384 and 44,873 , respectively, shares of common stock for services rendered

Conversion (on a one-to-one basis) of 643 shares of redeemable preferred stock to common stock

Dividends declared but not paid

2 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

23 unchanged sentences

All significant intercompany balances and transactions have been eliminated in consolidation.

In January 2023, as a result of CW-Holdings' exercise of a call option in October 2022, CW-Holdings purchased the remaining 39 % ownership interest in PERC for $ 2.4 million in cash, and 368,383 shares of the Company’s common stock having a value of approximately $ 5.36 million based upon the opening trading price of the Company’s common stock on The Nasdaq Global Market on the date of the transaction.

After giving effect to this purchase, CW-Holdings owns 100 % of the outstanding capital stock of PERC.

In 2019 and 2020, CW-Holdings acquired 61 % of PERC.

In January 2023, CW-Holdings purchased the remaining 39 % ownership interest in PERC for $ 2.4 million in cash, and 368,383 shares of the Company’s common stock having a value of approximately $ 5.36 million based upon the opening trading price of the Company’s common stock on The Nasdaq Global Market on the date of the transaction.

In September 2021, Kalaeloa Desalco was formed to pursue a project in Oahu, Hawaii.

6 unchanged sentences

These condensed consolidated financial statements and notes are presented in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) relating to interim financial statements and in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

Certain information and note disclosures normally included in annual financial statements prepared in accordance with US GAAP have been

condensed or omitted in these condensed consolidated financial statements pursuant to SEC rules and regulations, although the Company believes that the disclosures made herein are adequate to make the information not misleading.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Certain information and note disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted in these condensed consolidated financial statements pursuant to SEC rules and regulations, although the Company believes that the disclosures made herein are adequate to make the information not misleading.

condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Foreign currency:

5 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 $ 24,197 and $ 25,779 for the three months ended March 31, 2024 and 2023, respectively, and 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 $ 16,602 and $ 24,397 for the three months ended June 30, 2024 and 2023, respectively, and $ 40,799 and $ 50,176 for the six months ended June 30, 2024 and 2023, 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 an original maturity of three months or less.

Cash and cash equivalents as of March 31, 2024 and December 31, 2023 include approximately $ 5.2 million and $ 5.1 million, respectively, of certificates of deposits with an original maturity of three months or less.

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 June 30, 2024 and December 31, 2023 include approximately $ 5.2 million and $ 5.1 million, respectively, of certificates of deposits with original maturities of three months or less.

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 March 31, 2024 and December 31, 2023 were approximately $ 6.9 million and $ 3.0 million, respectively.

The equivalent United States dollar cash balances held in The Bahamas as of June 30, 2024 and December 31, 2023 were approximately $ 9.4 million and $ 3.0 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, 2023, 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 the 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.

5 unchanged sentences

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized

in income in the period that includes the enactment date.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance is provided to the extent any deferred tax asset may not be realized.

3 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Retail revenue

3 unchanged sentences

Services revenue consists of the following:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Construction revenue

6 unchanged sentences

Receivables not collected within 45 days subject the customer to disconnection from water service.

The Company recognizes revenue from water sales at the time water is supplied to the customer’s premises.

The Company recognizes revenue from retail water sales at the time water is supplied to the customer’s premises.

The amount of water supplied is determined and invoiced based upon water meter readings performed at the end of each month.

27 unchanged sentences

The Company has elected the “right to invoice” practical expedient for revenue recognition on its operations and maintenance, design 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 at a point in time.

For the three months ended March 31, 2024 and 2023, the Company recognized $ 9,397,093 and $ 8,588,584 , respectively, of its services revenue from the transfer of goods or services to customers over time.

For the three months ended June 30, 2024 and 2023, the Company recognized $ 3,988,174 and $ 19,839,950 , respectively, of its services revenue from the transfer of goods or services to customers over time.

The remaining services revenue of $ 7,934,295 and $ 4,254,013 , respectively, was recognized from the transfer of goods or services to customers at a point in time.

For the three months ended March 31, 2024 and 2023, the Company recognized all of its manufacturing revenue from the transfer of goods or services to customers over time.

For the six months ended June 30, 2024 and 2023, the Company recognized $ 13,385,268 and $ 28,428,534 , respectively, of its services revenue from the transfer of goods or services to customers over time.

The remaining services revenue of $ 15,954,812 and $ 8,387,130 , respectively, was recognized from the transfer of goods or services to customers at a point in time.

For the three and six months ended June 30, 2024 and 2023, 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:

3 unchanged sentences

( 101,724,459 )

Net contract asset

Net contract asset /(liability)

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

3 unchanged sentences

( 6,237,011 )

Net contract asset

As of March 31, 2024, the Company had unsatisfied or partially unsatisfied performance obligations for contracts in progress representing approximately $ 152.3 million in aggregate transaction price for contracts with an original expected length of greater than one year .

Net contract asset /(liability)

As of June 30, 2024, the Company had unsatisfied or partially unsatisfied performance obligations for contracts in progress representing approximately $ 145.4 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 $ 11.3 million during the remainder of the year ending December 31, 2024 and approximately $ 134.1 million thereafter .

In addition, the Company recognized revenue of approximately $ 2.8 million in the three months ended March 31, 2024, that was included in the contract liability balance as of December 31, 2023.

In addition, the Company recognized revenue of approximately $ 5.0 million in the six months ended June 30, 2024, that was included in the contract liability balance as of December 31, 2023.

Practical Expedients and Exemptions

14 unchanged sentences

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.

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Manufacturing

1 unchanged sentence

General and administrative expenses

Gain (loss) on asset dispositions and impairments, net

Income from operations

5 unchanged sentences

Net income from continuing operations attributable to Consolidated Water Co.

Net income from discontinued operations

Net income attributable to Consolidated Water Co.

Depreciation and amortization expenses for the three months ended June 30, 2024 for the retail, bulk, services and manufacturing segments were $ 633,958 , $ 716,726 , $ 251,548 and $ 65,406 , respectively.

Three Months Ended June 30, 2023

Manufacturing

Cost of revenue

General and administrative expenses

Gain on asset dispositions and impairments, net

Income from operations

Other income, net

Income before income taxes

Provision for income taxes

Net income from continuing operations

Income attributable to non-controlling interests

Net income from continuing operations attributable to Consolidated Water Co.

Net loss from discontinued operations

Net income attributable to Consolidated Water Co.

Depreciation and amortization expenses for the three months ended March 31, 2024 for the retail, bulk, services and manufacturing segments were $ 640,470 , $ 716,328 , $ 251,752 and $ 66,149 , respectively.

Three Months Ended March 31, 2023

Depreciation and amortization expenses for the three months ended June 30, 2023 for the retail, bulk, services and manufacturing segments were $ 593,337 , $ 840,200 , $ 174,084 and $ 68,160 , respectively.

Six Months Ended June 30, 2024

Manufacturing

7 unchanged sentences

Net income from continuing operations

Income attributable to non-controlling interests

Income from continuing operations attributable to non-controlling interests

Net income from continuing operations attributable to Consolidated Water Co.

Net income from discontinued operations

Net income attributable to Consolidated Water Co.

Depreciation and amortization expenses for the six months ended June 30, 2024 for the retail, bulk, services and manufacturing segments were $ 1,274,428 , $ 1,433,054 , $ 503,300 and $ 131,555 , respectively.

Six Months Ended June 30, 2023

Manufacturing

Cost of revenue

General and administrative expenses

Gain (loss) on asset dispositions and impairments, net

Income (loss) from operations

Other income, net

Income before income taxes

Provision for income taxes

Net income from continuing operations

Income from continuing operations attributable to non-controlling interests

Net income from continuing operations attributable to Consolidated Water Co.

Net loss from discontinued operations

Net income attributable to Consolidated Water Co.

Depreciation and amortization expenses for the three months ended March 31, 2023 for the retail, bulk, services and manufacturing segments were $ 626,637 , $ 728,129 , $ 171,349 and $ 67,963 , respectively.

As of March 31, 2024

Depreciation and amortization expenses for the six months ended June 30, 2023 for the retail, bulk, services and manufacturing segments were $ 1,219,974 , $ 1,568,329 , $ 345,433 and $ 136,123 , respectively.

As of June 30, 2024

Manufacturing

22 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

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

Loss from discontinued operations

Income (loss) from discontinued operations

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

12 unchanged sentences

(“NuWater”) submitted its tender for the Project in April 2016 and in June 2016, the State designated the Consortium as the winner of the tender process for the Project.

In August 2016, NSC and NuWater incorporated a new company under the name AdR to pursue completion of the Project and executed a shareholders agreement for AdR agreeing among other things that (i) AdR would purchase the land and other Project assets from NSC on the date that the Project begins commercial operation and (ii) AdR would enter into a Management and Technical Services Agreement with NSC effective on the first day that the Project begins commercial operation.

other Project assets from NSC on the date that the Project begins commercial operation and (ii) AdR would enter into a Management and Technical Services Agreement with NSC effective on the first day that the Project begins commercial operation.

NSC initially owned 99.6 % of the equity of AdR.

16 unchanged sentences

To date, AdR has not received a formal response from CEA or CESPT to its submission of non-recoverable expenses.

The Company believes CW-Cooperatief, as a Netherlands company, has 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”).

The Company believed 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”).

On April 16, 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.

2 unchanged sentences

Two such meetings were held on July 9, 2021 and August 2, 2021 on a confidential basis, without a resolution of the Company’s investment dispute.

On February 9, 2022, CW-Cooperatief, filed a Request for Arbitration with the International Centre for Settlement of International Disputes 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.

CW-Cooperatief intends to pursue vigorously the relief sought in the arbitration, in addition to pursuing all other legal remedies and courses of action available under the operative contracts and applicable law with respect to their rights, damages, fees and expenses.

The Company cannot provide any assurances that CW-Cooperatief will be able to obtain the relief sought in the arbitration, and the Company has incurred and will continue to incur legal and other arbitration-related expenses that are material to its consolidated results of operations and cash flows.

During July 2022, the State initiated discussions with the Company to potentially resolve the issues related to the cancellation by the government of the Rosarito desalination plant contract as well as potentially addressing the State’s acute water shortage issues.

The Company cannot presently determine the outcome of the discussions and the Company has not terminated its efforts to obtain relief through the international arbitration process as a result of these discussions.

The Company cannot provide any assurances that it will be able to obtain reimbursement for any expenses or investments made with respect to the Project.

As a result of the cancellation of the APP Contract, in 2020 the Company discontinued all development activities associated with the Project and commenced active marketing efforts to sell the land NSC purchased for the Project.

Accordingly, the assets and liabilities of CW-Cooperatief, NSC and AdR, as well as the costs for legal and administrative activities to pursue reimbursement from the State of Baja California following the cancellation of the APP Contract, are classified as discontinued operations in the accompanying condensed consolidated financial statements.

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.

On May 29, 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”).

Under the Settlement Agreement, CW-Cooperatief requested that ICSID discontinue the arbitration and on May 31, 2024, ICSID issued an order discontinuing the arbitration.

Pursuant to the Settlement Agreement, the Trust purchased the 20.1 hectares of land on which the Project’s plant was to be constructed, including related rights of way (the “Land”), on an “as-is” basis, from NSC for MXN$ 596,144,000 .

The sale of the Land to the Trust was closed on June 14, 2024 at which time the MXN$ 596,144,000 was paid to the Company and converted at the prevailing exchange rate on that date into US$ 31,959,685 .

In connection with the Settlement Agreement on June 14, 2024, the State also paid NSC MXN$ 20,000,000 to purchase certain documentation owned by NSC relating to the Project.

As a result of the Settlement Agreement:

(i) the parties have been released from all obligations owed to each other in connection with the APP Contract and the arbitration;

and (ii) no party to the Settlement Agreement may institute any legal proceedings against another party thereto with respect to the matters which have been addressed by the Settlement Agreement.

The Settlement Agreement and any matter arising out of or in connection with it are governed by the federal laws of Mexico.

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

2 unchanged sentences

Total liabilities of discontinued operations

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Loss from discontinued operations

Gain on sale of land and project documentation

Depreciation expense

Mexico Project litigation

a) EWG request of precautionary measures

In January 2018, EWG Water LLC (“EWG”) initiated an ordinary mercantile claim against, among others, N.S.C.

(“NSC”) and Consolidated Water Cooperatief, U.A.

(“CW-Cooperatief”) (with Aguas de Rosarito S.A.P.I.

(“AdR”) being named as a third party to be called to trial) before the Tenth Civil Judge in Tijuana, Baja California for Mercantile Matters (the “Tenth Civil Judge”).

In such claim, EWG challenged, among other things, the transactions contemplated under a certain option agreement (entered into in 2012), and therefore, the capital investment transactions occurring in May 2013 that increased the ownership interest of CW-Cooperatief in NSC to 99.99 %.

On October 1, 2020, and following an order from a Federal Judge obtained by NSC, the Tenth Civil Judge resolved to (i) move the claim of EWG to arbitration, and (ii) suspend the corresponding ordinary mercantile procedure.

Within the above-mentioned claim, the Tenth Civil Judge granted EWG certain preliminary measures against NSC, which were later overturned by an Upper Court.

In July 2023, EWG filed a motion before a local court in Playas de Rosarito, Baja California (the “Rosarito Court”) to obtain precautionary measures consisting of the securing of assets owned by NSC (particularly real estate), as a procedure prior to the commencement of an arbitration that allegedly would be initiated by EWG against NSC to claim the payment of an indemnification for damages derived from a so-called simulation of legal acts.

In the opinion of the Rosarito Court, such motion did not require notification to NSC or the presentation of counterarguments by NSC to the motion prior to securing the assets of NSC.

On July 28, 2023, the Rosarito Court issued a resolution in which it:

(i) granted the precautionary measures requested by EWG, subject to the posting of a bond in the amount of MXN$ 1,500,000 (One Million Five Hundred Thousand Mexican Pesos), and (ii) ordered that once the precautionary measures were executed, EWG would have three business days, counted from the posting of the bond, to initiate and prove to the Rosarito Court that it initiated the arbitration.

To the Company’s knowledge EWG has not posted the bond.

Consequently, NSC has not been summoned to an arbitration procedure.

As EWG has apparently not posted the bond set by the Rosarito Court (i) the precautionary measures have not been enforced;

(ii) no securing or attachment has been registered against the real estate of NSC;

and (iii) NSC has not been formally summoned to this procedure.

As stated previously, NSC is unaware of any arbitration commenced by EWG regarding this matter.

b) NSC amparo lawsuit

On August 16, 2023, NSC filed an amparo suit (i.e.

application for constitutional relief) before the Eleventh Federal District Court in Tijuana (“Federal District Court in Tijuana”) against the precautionary measures granted to EWG by the Rosarito Court.

In its amparo suit, NSC also requested the Federal District Court in Tijuana to grant an order to put on hold said precautionary measures.

A preliminary order to stay was granted by the Federal District Court in Tijuana, followed by a definitive injunction, subject to the posting of a guarantee.

NSC has submitted the guarantee to the court.

NSC subsequently filed an extension of the amparo suit introducing new arguments aiming to strengthen NSC´s position.

The amparo extension was admitted through a resolution published on November 7, 2023.

The Federal District Court in Tijuana has not been able to summon EWG on this amparo suit, as it has not been able to determine or obtain an address for such summons.

As such, the Federal District Court in Tijuana has requested various authorities to provide information on any domicile where EWG can be summoned.

The responses of some authorities are in process of being received by the Federal District Court in Tijuana.

NSC is waiting until all the authorities provide their official response to determine if there is a viable alternative for summoning EWG.

NSC offered certain evidence consisting of the docket of amparo file number 74/2020, which was processed by the Twelfth Civil District Court in Tijuana.

The Amparo Law provides that any documentary evidence offered by the parties shall be issued without any cost.

Therefore, NSC requested the Court to grant the expedition of said copies for free.

However, this request was denied by the Federal District Court in Tijuana.

Therefore, NSC filed an appeal for review against said decision, which was admitted by the Federal District Court in Tijuana and sent to the Second Collegiate Circuit Court in Tijuana, acting as Court of Appeals, which confirmed the admission of the appeal remedy through a resolution published on January 26, 2024.

The judgment is still pending resolution.

The Company cannot presently determine what impact the resolution of this matter may have on its consolidated financial statements.

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

7 unchanged sentences

Lease costs for such short-term leases are expensed on a straight-line basis over the lease term.

Effective May 1, 2024, the Company entered into a new office lease for the existing office located in Grand Cayman, Cayman Islands under similar terms compared to the prior lease.

This new lease has a term of five years from the commencement date with an option for an additional five-year term.

All lease assets denominated in a foreign currency are measured using the exchange rate at the commencement of the lease.

15 unchanged sentences

The components of lease costs were as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease costs

3 unchanged sentences

Supplemental cash flow information related to leases is as follows:

Three Months Ended March 31,

Six Months Ended June 30,

Cash paid for amounts included in measurement of liabilities:

1 unchanged sentence

Operating cash outflows for operating leases - discontinued operations

Future lease payments relating to the Company’s operating lease liabilities from continuing operations as of March 31, 2024 were as follows:

Future lease payments relating to the Company’s operating lease liabilities from continuing operations as of June 30, 2024 were as follows:

Years ending December 31,

4 unchanged sentences

Noncurrent lease obligations

As of March 31, 2024 and December 31, 2023, 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 June 30, 2024 and December 31, 2023, 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.

Under US GAAP, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date.

11 unchanged sentences

Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

As of March 31, 2024 and December 31, 2023, the Company does not have assets and liabilities measured at fair value to present in the fair value hierarchy.

As of June 30, 2024 and December 31, 2023, the Company does not have assets and liabilities measured at fair value to present in the fair value hierarchy.

Contingencies

3 unchanged sentences

Seven Mile Beach and West Bay.

For the three months ended March 31, 2024 and 2023, the Company generated approximately 22 % and 24 %, respectively, of its consolidated revenue and 37 % and 40 %, respectively, of its consolidated gross profit from the retail water operations conducted under the 1990 license.

For the three months ended June 30, 2024 and 2023, the Company generated approximately 25 % and 17 %, respectively, of its consolidated revenue and 39 % and 27 %, respectively, of its consolidated gross profit from the retail water operations conducted under the 1990 license.

For the six months ended June 30, 2024 and 2023, the Company generated approximately 23 % and 20 %, respectively, of its consolidated revenue and 38 % and 32 %, 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 $ 25.6 million and $ 26.9 million as of March 31, 2024 and December 31, 2023, respectively.

CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $ 25.4 million and $ 26.9 million as of June 30, 2024 and December 31, 2023, respectively.

Approximately 79 % and 80 % 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 March 31, 2024.

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 June 30, 2024.

CW-Bahamas held discussions with the WSC in March 2024 and with representatives of The Bahamas Government in April 2024 during which CW-Bahamas was informed that the Government intends to substantially reduce CW-Bahamas’ accounts receivable from the WSC over the course of 2024.

27 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