Consolidated Water Co. Ltd. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ Page CONSOLIDATED WATER CO. LTD. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID No. 688 ) 43 Consolidated Balance Sheets as of December 31, 2024 and 2023 47 Consolidated Statements of Income for the Years Ended December 31, 2024, 2023 and 2022 48 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024, 2023 and 2022 49 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 50 Notes to Consolidated Financial Statements 51 ​ Schedule II, Valuation and Qualifying Accounts, is omitted because the information is included in the financial statements and notes. ​ 42 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the Shareholders and Board of Directors of Consolidated Water Co. Ltd. ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheets of Consolidated Water Co. Ltd. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. ​ We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2024, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated March 17, 2025 , expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of the existence of a material weakness. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matters ​ The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. ​ Revenue Recognition - Estimated Costs to Complete ​ As described in Note 2 to the consolidated financial statements, the Company recognizes revenue for its construction and custom/specialized manufacturing contracts over time under the input method using costs incurred 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. The cost estimation process for these contracts is based on the knowledge and experience of the Company's project managers, engineers, and financial professionals. Changes in job performance, job conditions and management's assessment of expected variable 43 Table of Contents consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and the Company's revenue recognition. ​ We identified the estimated costs to complete on these revenue contracts as a critical audit matter. The determination of the total estimated cost and progress toward completion requires management to make significant estimates and assumptions. Total estimated costs to complete projects include various contracts costs that include labor, materials and subcontractor 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 is complicated and subject to many variables and, accordingly, are subject to changes. Changes in these estimates can have a significant impact on the revenue recognized each period. Auditing these estimates involved especially challenging auditor judgment in evaluating the reasonableness of management's assumptions and estimates over the duration of these contracts. ​ The primary procedures we performed to address this critical audit matter included: ​ ● We obtained an understanding and evaluated the design and implementation of the internal controls over management's process related to estimated costs to complete, including controls over management's review of: (i) the development of project budgets and key cost inputs, (ii) the ongoing assessment and revisions to project budgets, and (iii) the ongoing review of project status, including the nature of activities to complete open projects. ● Evaluating management’s ability to generate reasonable estimated costs to complete through performing a retrospective review of budget to actual variances. ● Assessing the reasonableness of the estimated costs to complete by evaluating the reasonableness of projects budgets and the nature of costs required to complete the project. Evaluation consists of investigating significant differences or unexpected results that take into consideration known changes in client operations, industry, and/or business conditions. ● Assessing the accuracy and the occurrence of the actual cost amount used in the percentage of completion by testing a sample of project costs incurred to date. ● Evaluating the reasonableness of project status by performing site visits and performing inquiries of project managers to assess the nature and costs of activities required to complete the project. ● Assessing the reasonableness of changes in estimated costs to complete by comparing project profitability estimates in the current period to historical estimates and actual performance including during the period under audit and subsequent to the period end and investigating reasons for changes in expected costs and project margins. ​ ​ ​ ​ ​ ​ /s/ Marcum LLP ​ ​ ​ We have served as the Company’s auditor since 2005. ​ ​ ​ West Palm Beach, Florida ​ March 17, 2025 ​ ​ ​ ​ 44 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING ​ To the Shareholders and Board of Directors of Consolidated Water Co. Ltd. ​ Adverse Opinion on Internal Control over Financial Reporting ​ We have audited Consolidated Water Co. Ltd.’s (the "Company") internal control over financial reporting as of December 31, 2024 , based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weakness described in the subsequent paragraphs on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. ​ A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in “Management’s Annual Report on Internal Control Over Financial Reporting”: ​ Business process controls (automated and manual) that are dependent on information technology general controls (ITGCs) from January 1, 2024 through October 31, 2024 could have been adversely affected due to the ineffective ITGCs during this time period. Due to the lack of a sufficient time period over which to demonstrate operating effectiveness, certain annual and quarterly business process controls are considered to be ineffective as of December 31, 2024. ​ This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the fiscal December 31, 2024 financial statements and this report does not affect our report dated March 17, 2025 on those financial statements. ​ We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the balance sheets as of December 31, 2024 and 2023 and the related statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024 and our report dated March 17, 2025 expressed an unqualified opinion on those financial statements. ​ Basis for Opinion ​ The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “ Management’s Annual Report on Internal Control Over Financial Reporting” . Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. ​ 45 Table of Contents Definition and Limitations of Internal Control over Financial Reporting ​ A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. ​ Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate. ​ ​ ​ ​ ​ /s/ Marcum LLP ​ We have served as the Company’s auditor since 2005. ​ West Palm Beach, Florida March 17, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ 46 Table of Contents CONSOLIDATED WATER CO. LTD. ​ CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 ASSETS ​ ​ ​ Current assets ​ ​ ​ Cash and cash equivalents ​ $ 99,350,121 ​ $ 42,621,898 Accounts receivable, net ​ 39,580,982 ​ 38,226,891 Inventory ​ 8,960,350 ​ 6,044,642 Prepaid expenses and other current assets ​ 5,153,984 ​ 4,056,370 Contract assets ​ 4,470,243 ​ 21,553,057 Current assets of discontinued operations ​ 272,485 ​ 211,517 Total current assets ​ ​ 157,788,165 ​ 112,714,375 Property, plant and equipment, net ​ 52,432,282 ​ 55,882,521 Construction in progress ​ 5,143,717 ​ 495,471 Inventory, noncurrent ​ 5,338,961 ​ 5,045,771 Investment in affiliates ​ 1,504,363 ​ 1,412,158 Goodwill ​ 12,861,404 ​ 12,861,404 Intangible assets, net ​ 2,696,815 ​ 3,353,185 Operating lease right-of-use assets ​ ​ 3,190,985 ​ ​ 2,135,446 Other assets ​ 2,356,489 ​ 3,407,973 Long-term assets of discontinued operations ​ — ​ 21,129,288 Total assets ​ $ 243,313,181 ​ $ 218,437,592 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND EQUITY ​ ​ Current liabilities ​ ​ Accounts payable, accrued expenses and other current liabilities ​ $ 9,057,179 ​ $ 11,604,369 Accrued compensation ​ 3,336,946 ​ 3,160,030 Dividends payable ​ 1,780,841 ​ 1,572,655 Current maturities of operating leases ​ ​ 634,947 ​ ​ 456,865 Current portion of long-term debt ​ ​ 126,318 ​ ​ 192,034 Contract liabilities ​ 9,126,654 ​ 6,237,011 Deferred revenue ​ ​ 365,879 ​ ​ 317,017 Current liabilities of discontinued operations ​ 509,745 ​ 364,665 Total current liabilities ​ 24,938,509 ​ 23,904,646 Long-term debt, noncurrent ​ ​ 70,320 ​ ​ 191,190 Deferred tax liabilities ​ 210,893 ​ 530,780 Noncurrent operating leases ​ ​ 2,630,812 ​ ​ 1,827,302 Other liabilities ​ 153,000 ​ 153,000 Total liabilities ​ 28,003,534 ​ 26,606,918 Commitments and contingencies ​ ​ Equity ​ ​ Consolidated Water Co. Ltd. stockholders' equity ​ ​ Redeemable preferred stock, $ 0.60 par value. Authorized 200,000 shares; issued and outstanding 44,004 and 44,297 shares, respectively ​ 26,402 ​ 26,578 Class A common stock, $ 0.60 par value. Authorized 24,655,000 shares; issued and outstanding 15,846,345 and 15,771,545 shares, respectively ​ 9,507,807 ​ 9,462,927 Class B common stock, $ 0.60 par value. Authorized 145,000 shares; none issued ​ — ​ — Additional paid-in capital ​ 93,550,905 ​ 92,188,887 Retained earnings ​ 106,875,581 ​ 85,148,820 Total Consolidated Water Co. Ltd. stockholders' equity ​ 209,960,695 ​ 186,827,212 Non-controlling interests ​ 5,348,952 ​ 5,003,462 Total equity ​ 215,309,647 ​ 191,830,674 Total liabilities and equity ​ $ 243,313,181 ​ $ 218,437,592 ​ The accompanying notes are an integral part of these consolidated financial statements. 47 Table of Contents CONSOLIDATED WATER CO. LTD. ​ CONSOLIDATED STATEMENTS OF INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Revenue ​ $ 133,966,633 ​ $ 180,211,233 ​ $ 94,104,972 Cost of revenue ​ 88,342,185 ​ 118,284,128 ​ 63,749,849 Gross profit ​ 45,624,448 ​ 61,927,105 ​ 30,355,123 General and administrative expenses ​ 27,537,436 ​ 24,752,366 ​ 21,070,234 Gain (loss) on asset dispositions and impairments, net ​ 197,786 ​ ( 7,112 ) ​ ( 12,704 ) Income from operations ​ 18,284,798 ​ 37,167,627 ​ 9,272,185 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ Interest income ​ 2,094,190 ​ 696,408 ​ 447,186 Interest expense ​ ( 101,847 ) ​ ( 145,284 ) ​ ( 46,545 ) Equity in the earnings of affiliates ​ 269,455 ​ 169,728 ​ 102,225 Loss on put/call options ​ — ​ — ​ ( 128,000 ) Other ​ 131,878 ​ 107,461 ​ 89,944 Other income, net ​ 2,393,676 ​ 828,313 ​ 464,810 Income before income taxes ​ 20,678,474 ​ 37,995,940 ​ 9,736,995 Provision for income taxes ​ 2,218,514 ​ 6,750,014 ​ 396,739 Net income from continuing operations ​ 18,459,960 ​ 31,245,926 ​ 9,340,256 Income from continuing operations attributable to non-controlling interests ​ 577,590 ​ 573,791 ​ 1,112,913 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders ​ 17,882,370 ​ 30,672,135 ​ 8,227,343 Net income (loss) from discontinued operations ​ ​ 10,355,184 ​ ​ ( 1,086,744 ) ​ ​ ( 2,371,049 ) Net income attributable to Consolidated Water Co. Ltd. stockholders ​ $ 28,237,554 ​ $ 29,585,391 ​ $ 5,856,294 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders ​ ​ ​ Continuing operations ​ $ 1.13 ​ $ 1.95 ​ $ 0.54 Discontinued operations ​ ​ 0.65 ​ ​ ( 0.07 ) ​ ​ ( 0.16 ) Basic earnings per share ​ $ 1.78 ​ $ 1.88 ​ $ 0.38 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders ​ ​ ​ Continuing operations ​ $ 1.12 ​ $ 1.93 ​ $ 0.54 Discontinued operations ​ ​ 0.65 ​ ​ ( 0.07 ) ​ ​ ( 0.16 ) Diluted earnings per share ​ $ 1.77 ​ $ 1.86 ​ $ 0.38 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends declared per common and redeemable preferred shares ​ $ 0.41 ​ $ 0.36 ​ $ 0.34 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares used in the determination of: ​ ​ ​ Basic earnings per share ​ 15,832,328 ​ 15,739,056 ​ 15,290,509 Diluted earnings per share ​ 15,935,962 ​ 15,865,897 ​ 15,401,653 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 48 Table of Contents CONSOLIDATED WATER CO. LTD. ​ CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ Total ​ ​ preferred stock ​ Common stock ​ paid-in ​ Retained ​ Non-controlling ​ stockholders’ ​ Shares Dollars Shares Dollars capital earnings interests equity Balance as of December 31, 2021 28,635 ​ $ 17,181 15,243,693 ​ $ 9,146,216 ​ $ 87,812,432 ​ $ 60,603,056 ​ $ 8,086,538 ​ $ 165,665,423 Issuance of share capital 9,295 ​ 5,577 72,597 ​ 43,558 ​ ( 49,135 ) ​ — ​ — ​ — Conversion of preferred stock ( 6,585 ) ​ ( 3,951 ) 6,585 ​ 3,951 ​ — ​ — ​ — ​ — Buyback of preferred stock ( 26 ) ​ ( 15 ) — ​ — ​ ( 211 ) ​ — ​ — ​ ( 226 ) Net income — ​ — — ​ — ​ — ​ 5,856,294 ​ 1,112,913 ​ 6,969,207 Exercise of options 3,064 ​ 1,838 — ​ — ​ 24,901 ​ — ​ — ​ 26,739 Dividends declared — ​ — — ​ — ​ — ​ ( 5,211,651 ) ​ ( 1,102,475 ) ​ ( 6,314,126 ) Stock-based compensation — ​ — — ​ — ​ 1,417,172 ​ — ​ — ​ 1,417,172 Balance as of December 31, 2022 34,383 ​ ​ 20,630 15,322,875 ​ ​ 9,193,725 ​ ​ 89,205,159 ​ ​ 61,247,699 ​ ​ 8,096,976 ​ ​ 167,764,189 Issuance of share capital 13,309 ​ 7,985 68,864 ​ 41,319 ​ ( 49,304 ) ​ — ​ — ​ — Conversion of preferred stock ( 8,848 ) ​ ( 5,309 ) 8,848 ​ 5,309 ​ — ​ — ​ — ​ — Buyback of preferred stock ( 203 ) ​ ( 122 ) — ​ — ​ ( 1,708 ) ​ — ​ — ​ ( 1,830 ) Net income — ​ — — ​ — ​ — ​ 29,585,391 ​ 573,791 ​ 30,159,182 Purchase of remaining non-controlling interest in PERC ​ — ​ ​ — ​ 368,383 ​ ​ 221,030 ​ ​ 1,006,248 ​ ​ ​ ​ ​ ( 3,667,305 ) ​ ​ ( 2,440,027 ) Exercise of options 5,656 ​ 3,394 2,575 ​ 1,544 ​ 94,826 ​ — ​ — ​ 99,764 Dividends declared — ​ — — ​ — ​ — ​ ( 5,684,270 ) ​ — ​ ( 5,684,270 ) Stock-based compensation — ​ — — ​ — ​ 1,933,666 ​ — ​ — ​ 1,933,666 Balance as of December 31, 2023 44,297 ​ 26,578 15,771,545 ​ 9,462,927 ​ 92,188,887 ​ 85,148,820 ​ 5,003,462 ​ 191,830,674 Issuance of share capital 5,904 ​ 3,542 68,832 ​ 41,299 ​ ( 44,841 ) ​ — ​ — ​ — Conversion of preferred stock ( 5,968 ) ​ ( 3,581 ) 5,968 ​ 3,581 ​ — ​ — ​ — ​ — Buyback of preferred stock ( 1,272 ) ​ ( 763 ) — ​ — ​ ( 13,851 ) ​ — ​ — ​ ( 14,614 ) Net income — ​ — — ​ — ​ — ​ 28,237,554 ​ 577,590 ​ 28,815,144 Exercise of options 1,043 ​ 626 — ​ — ​ 23,127 ​ — ​ — ​ 23,753 Dividends declared — ​ — — ​ — ​ — ​ ( 6,510,793 ) ​ ( 232,100 ) ​ ( 6,742,893 ) Stock-based compensation — ​ — — ​ — ​ 1,397,583 ​ — ​ — ​ 1,397,583 Balance as of December 31, 2024 44,004 ​ $ 26,402 15,846,345 ​ $ 9,507,807 ​ $ 93,550,905 ​ $ 106,875,581 ​ $ 5,348,952 ​ $ 215,309,647 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 49 Table of Contents CONSOLIDATED WATER CO. LTD. ​ CONSOLIDATED STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Cash flows from operating activities ​ ​ ​ ​ ​ ​ Net income attributable to Consolidated Water Co. Ltd. stockholders ​ $ 28,237,554 ​ $ 29,585,391 ​ $ 5,856,294 Income from continuing operations attributable to non-controlling interests ​ ​ 577,590 ​ ​ 573,791 ​ ​ 1,112,913 Net income ​ ​ 28,815,144 ​ ​ 30,159,182 ​ ​ 6,969,207 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ Gain on sale of land and project documentation ​ ​ ( 12,134,766 ) ​ ​ — ​ ​ — Impairment loss for Mexico assets - discontinued operations ​ ​ — ​ ​ — ​ ​ 377,326 Foreign currency transaction adjustment - discontinued operations ​ ​ 64,960 ​ ​ ( 2,003 ) ​ ​ ( 102,507 ) Loss from discontinued operations ​ 1,714,622 ​ 1,088,747 ​ 2,096,230 Depreciation and amortization ​ 6,691,658 ​ 6,576,454 ​ 6,187,308 Deferred income tax benefit ​ ( 319,887 ) ​ ( 524,999 ) ​ ( 4,220 ) Provision for credit losses ​ ​ 442,828 ​ ​ 408,489 ​ ​ — Loss on net put/call option ​ — ​ — ​ 128,000 Compensation expense relating to stock and stock option grants ​ 1,397,583 ​ 1,933,666 ​ 1,417,172 (Gain) loss on asset dispositions and impairments, net ​ ( 197,786 ) ​ 7,112 ​ 12,704 Equity in earnings of affiliates ​ ( 269,455 ) ​ ( 169,728 ) ​ ( 102,225 ) Distribution of earnings from OC-BVI ​ 227,250 ​ 303,000 ​ 272,700 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in: ​ ​ ​ ​ ​ ​ Accounts receivable ​ ( 1,796,919 ) ​ ( 10,970,521 ) ​ 303,125 Contract assets ​ ​ 17,082,814 ​ ​ ( 18,639,335 ) ​ ​ ( 2,423,761 ) Inventory ​ ( 3,747,675 ) ​ ( 891,405 ) ​ ( 3,387,011 ) Prepaid expenses and other assets ​ ( 361,359 ) ​ ( 755,391 ) ​ ( 3,365,747 ) Accounts payable, accrued expenses and other current liabilities ​ ( 2,370,274 ) ​ 3,161,386 ​ 6,756,433 Contract liabilities ​ ​ 2,889,643 ​ ​ ( 2,566,910 ) ​ ​ 8,290,043 Operating lease liabilities ​ ​ ( 5,207 ) ​ ​ ( 5,205 ) ​ ​ ( 5,208 ) Deferred revenue ​ ​ 48,862 ​ ​ 1,192 ​ ​ ( 267,821 ) Net cash provided by operating activities - continuing operations ​ ​ 38,172,036 ​ ​ 9,113,731 ​ ​ 23,151,748 Net cash used in operating activities - discontinued operations ​ ( 1,656,504 ) ​ ( 1,142,969 ) ​ ( 1,819,943 ) Net cash provided by operating activities ​ ​ 36,515,532 ​ ​ 7,970,762 ​ ​ 21,331,805 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities ​ ​ ​ Purchase of certificate of deposit ​ ​ — ​ ​ — ​ ​ ( 2,518,493 ) Maturity of certificate of deposit ​ ​ — ​ ​ — ​ ​ 5,018,493 Additions to property, plant and equipment and construction in progress ​ ( 6,696,580 ) ​ ( 5,047,884 ) ​ ( 7,542,761 ) Proceeds from asset dispositions ​ 446,337 ​ 20,808 ​ 61,725 Investment in affiliate ​ ​ ( 50,000 ) ​ ​ — ​ ​ — Proceeds from Mexican settlement agreement ​ 33,261,664 ​ — ​ — Acquisition of REC, net of cash acquired ​ ​ — ​ ​ ( 3,419,916 ) ​ ​ — Purchase of remaining non-controlling interest in PERC ​ ​ — ​ ​ ( 2,440,027 ) ​ ​ — Net cash provided by (used in) investing activities ​ ​ 26,961,421 ​ ​ ( 10,887,019 ) ​ ​ ( 4,981,036 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities ​ ​ ​ Dividends paid to common shareholders ​ ( 6,284,645 ) ​ ( 5,472,790 ) ​ ( 5,145,742 ) Dividends paid to preferred shareholders ​ ( 17,962 ) ​ ( 14,228 ) ​ ( 11,078 ) Dividends paid to non-controlling interests ​ ​ ( 232,100 ) ​ ​ — ​ ​ ( 1,102,475 ) Buyback of redeemable preferred stock ​ ( 14,614 ) ​ ( 1,830 ) ​ ( 226 ) Proceeds received from exercise of stock options ​ ​ 23,753 ​ ​ 99,764 ​ ​ 26,739 Principal repayments on long-term debt ​ ​ ( 186,586 ) ​ ​ ( 135,481 ) ​ ​ ( 72,091 ) Net cash used in financing activities ​ ( 6,712,154 ) ​ ( 5,524,565 ) ​ ( 6,304,873 ) Net increase (decrease) in cash and cash equivalents ​ 56,764,799 ​ ( 8,440,822 ) ​ 10,045,896 Cash and cash equivalents at beginning of period ​ 42,621,898 ​ 50,711,751 ​ 40,358,059 Cash and cash equivalents at beginning of period - discontinued operations ​ ​ 91,283 ​ ​ 442,252 ​ ​ 750,048 Less: cash and cash equivalents at end of period - discontinued operations ​ ​ ( 127,859 ) ​ ​ ( 91,283 ) ​ ​ ( 442,252 ) Cash and cash equivalents at end of period ​ $ 99,350,121 ​ $ 42,621,898 ​ $ 50,711,751 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 50 Table of Contents CONSOLIDATED WATER CO. LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Principal activity Consolidated Water Co. Ltd. and its subsidiaries (collectively, the “Company”) supply potable water, treat wastewater and water for reuse, and provide water-related products and services to customers in the Cayman Islands, The Bahamas, the United States and the British Virgin Islands. The Company produces potable water from seawater using reverse osmosis technology and sells this water to a variety of customers, including public utilities, commercial and tourist properties, residential properties and government facilities. The Company designs, constructs and sells water production and water treatment infrastructure and manages water infrastructure for commercial and governmental customers. The Company also manufactures a wide range of specialized and custom water industry related products and provides design, engineering, operating and other services applicable to commercial, municipal and industrial water production, supply and treatment. ​ 2. Accounting policies Basis of preparation: The consolidated financial statements presented are prepared in accordance with the accounting principles generally accepted in the United States of America. Use of estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to estimates and assumptions include the carrying value of property, plant and equipment, intangible assets, goodwill and revenue recognition on construction and manufacturing contracts. Actual results could differ significantly from such estimates. Basis of consolidation: The accompanying consolidated financial statements include the accounts of the Company’s (i) wholly-owned subsidiaries, Aerex Industries, Inc. (“Aerex”), Aquilex, Inc. (“Aquilex”), Cayman Water Company Limited (“Cayman Water”), Consolidated Water Cooperatief, U.A. (“CW-Cooperatief”), Consolidated Water U.S. Holdings, Inc. (“CW-Holdings”), DesalCo Limited (“DesalCo”), Kalaeloa Desalco LLC (“Kalaeloa Desalco”), Ocean Conversion (Cayman) Limited (“OC-Cayman”), PERC Water Corporation ("PERC") and Ramey Environmental Compliance, Inc. (“REC”); and (ii) majority-owned subsidiaries Consolidated Water (Bahamas) Ltd. (“CW-Bahamas”), N.S.C. Agua, S.A. de C.V. (“NSC”), and Aguas de Rosarito S.A.P.I. de C.V. (“AdR”). The Company’s investment in its affiliate Ocean Conversion (BVI) Ltd. (“OC-BVI”) is accounted for using the equity method of accounting. All significant intercompany balances and transactions have been eliminated in consolidation. 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. On June 2, 2023, Kalaeloa Desalco signed a definitive agreement with the Honolulu Board of Water Supply to design, construct, operate and maintain a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii. Effective October 1, 2023, the Company purchased, through its wholly-owned subsidiary PERC, a 100 % ownership interest in REC, a Colorado company that operates and maintains water and wastewater treatment facilities and provides technical services to clients throughout the Rocky Mountain and Eastern Plains Regions of Colorado. PERC acquired REC for approximately $ 4.1 million and recorded goodwill and intangible assets from this acquisition of $ 2,436,391 and $ 1,108,390 respectively. 51 Table of Contents Foreign currency: The Company’s reporting currency is the United States dollar (“US$”). The functional currency of the Company and its foreign operating subsidiaries (other than NSC, AdR, and CW-Cooperatief) is the currency for each respective country. The functional currency for NSC, AdR, and CW-Cooperatief is the US$. NSC and AdR conduct business in US$ and Mexican pesos and CW-Cooperatief conducts business in US$ and euros. The exchange rates for the Cayman Islands dollar and the Bahamian dollar are fixed to the US$. The exchange rates for conversion of Mexican pesos and euros into US$ vary based upon market conditions. Net foreign currency gains arising from transactions and re-measurements were $ 74,993 , $ 84,678 and $ 41,750 for the years ended December 31, 2024, 2023, and 2022, respectively, and are included in “Other income - Other” in the accompanying 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 December 31, 2024 and 2023 include $ 5.2 million and $ 5.1 million, respectively, of certificates of deposit with an original maturity of three months or less. As of December 31, 2024, the Company had deposits in U.S. banks and brokerages in excess of federally mandated and insured limits of approximately $ 54.7 million. As of December 31, 2024, the Company held cash in foreign bank accounts of approximately $ 34.1 million . 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 for deposits held in The Bahamas as of December 31, 2024 and 2023 were approximately $ 7.7 million and $ 3.0 million, respectively. Accounts receivable: Accounts receivable are recorded at invoiced amounts based on meter readings, contractual amounts, fixed fees plus reimbursables or time and materials per contractual agreements. Trade accounts receivable also represent our unconditional right, subject only to the passage of time, to receive consideration arising from our performance under contracts with customers. Trade accounts receivable include amounts billed and billable on construction contracts, service and maintenance contracts and contracts for the sale of goods. Billed contract receivables have been invoiced to customers based on contracted amounts. Allowance for credit losses: The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable and contract assets balances. The Company determines the current expected credit losses based on historical loss experience, current conditions, and reasonable and supportable forecasts. The Company also considers the nature of the financial asset, the credit quality of the counterparty, and other relevant factors. Past due balances are reviewed individually for collectability. Account balances are charged off against the allowance for credit losses after all means of collection have been exhausted and the potential for recovery is considered by management to be remote. Inventory: Inventory primarily consists of consumables stock and spare parts stock that are valued at cost, less an allowance for obsolescence, with cost determined on the first-in, first-out basis. Inventory also includes (i) raw materials purchased for specific manufacturing contracts that are valued at cost on the first-in, first-out basis; and (ii) potable water held in the Company’s reservoirs that is valued at the lower of the average cost of producing water during the year or its net realizable value. Contract assets and liabilities: Billing practices for the Company’s contracts are governed by the contract terms of each project based upon costs incurred, achievement of milestones or predetermined schedules. Billings do not necessarily correlate with revenue, which is recognized over time using the input method based on cost incurred. The Company records contract assets and contract liabilities to account for these differences in timing. Contract assets, which include costs and estimated earnings in excess of billings on uncompleted contracts, arise when the Company recognizes revenue for services performed under its construction and manufacturing contracts, but the Company 52 Table of Contents is not yet entitled to bill the customer under the terms of the contract. Contract liabilities, which include billings in excess of costs and estimated earnings on uncompleted contracts, represent the Company's obligation to transfer goods or services to a customer for which the Company has been paid by the customer or for which the Company has billed the customer under the terms of the contract. Revenue for future services reflected in this account is recognized, and the liability is reduced, as the Company subsequently satisfies the performance obligation under the contract. ​ Costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts are typically resolved within one year and are not considered significant financing components. The Company considers retention that is withheld on progress billings as not creating an unconditional right to payment until contractual milestones are reached (typically substantial completion). Accordingly, withheld retention is considered a component of contracts assets and liabilities until finally billed to the customer, when obligations have been satisfied and the right to receipt is subject only to the passage of time. The Company’s contract assets and liabilities are reported in a net asset or liability position on a contract-by-contract basis at the end of each reporting period. The Company classifies contract assets and liabilities related to construction and manufacturing contracts in current assets and current liabilities as they will be liquidated in the normal course of contract completion, although this may require more than one year. Property, plant and equipment, net: Property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is calculated using a straight-line method with an allowance for estimated residual values. Rates are determined based on the estimated useful lives of the assets as follows: ​ ​ ​ ​ Buildings 5 to 40 years Plant and equipment 4 to 40 years Distribution system 3 to 40 years Office furniture, fixtures and equipment 3 to 10 years Vehicles 3 to 10 years Leasehold improvements Shorter of 5 years or lease term Lab equipment 5 to 10 years ​ Assets under construction are recorded as additions to property, plant and equipment upon completion of the projects. Depreciation commences in the month the asset is placed in service. Additions to construction in progress are comprised of the cost of the contracted services, direct labor and materials. Interest costs directly attributable to the acquisition and construction of qualifying assets, which are assets that necessarily take a substantial amount of time to be ready for their intended use, are added to the cost of those assets until such time as the assets are substantially ready for use. No interest was capitalized during the years ended December 31, 2024 or 2023. Long-lived assets: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if their carrying amounts are not recoverable through their undiscounted cash flows and measures the impairment loss based on the difference between the carrying amounts and estimated fair values. 53 Table of Contents Goodwill and intangible assets: Goodwill represents the excess cost of an acquired business over the fair value of the assets and liabilities of the acquired business as of the date of acquisition. Goodwill and intangible assets recorded as a result of a business combination and determined to have an indefinite useful life are not amortized but are tested for impairment annually or upon the identification of a triggering event. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed periodically for impairment. The Company evaluates the possible impairment of goodwill annually as part of its reporting process for the fourth quarter of each fiscal year. Management identifies the Company’s reporting units for goodwill impairment testing purposes, which consist of Cayman Water, the bulk segment (which is comprised of CW-Bahamas and OC-Cayman), PERC, REC, and the manufacturing segment (i.e., Aerex), and determines the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. The Company determines the fair value of each reporting unit and compares these fair values to the carrying amounts of the reporting units. 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 years ended December 31, 2024 and 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 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, 2024 and 2023 . ​ For the year ended December 31, 2022, the Company elected to assess qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment testing conducted in prior years for all reporting units other than the manufacturing reporting unit. The Company assessed relevant events and circumstances to evaluate whether it is more likely than not that the fair values of such reporting units are 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 was more likely than not that the fair values of its Cayman Water and bulk segment reporting units exceeded their carrying values as of December 31, 2022. Based upon the Company’s negotiated, arms-length purchase of the remaining 39 % equity interest in PERC from its minority shareholders for $ 7.8 million in January 2023, the fair value of the Company’s PERC reporting unit exceeded its carrying value by 79 % as of December 31, 2022. ​ Due to the factors discussed in the following paragraphs, the Company elected to test the goodwill associated with its manufacturing reporting unit for possible impairment for 2022 using the quantitative tests applied in prior years. ​ Approximately 80 % of Aerex’s revenue, and 89 % of Aerex’s gross profit, for the year ended December 31, 2020 were generated from sales to one customer. While Aerex sells various products to this customer, Aerex’s revenue from this customer had historically been derived primarily from one specialized product. In October 2020, this customer informed Aerex that, for inventory management purposes, it was suspending its purchases of the specialized product from Aerex following 2020 for a period of approximately one year. This customer informed Aerex at that time that it expected to recommence its purchases of the specialized product from Aerex beginning with the first quarter of 2022. As a result of this anticipated loss of revenue for Aerex, the Company updated its projections for its Manufacturing reporting unit’s future cash flows. Such projections assumed, in part, that Aerex’s major customer would recommence its purchases from Aerex in 2022 but at a reduced aggregate amount, as compared to 2020. Based upon these updated projections, the Company tested its manufacturing reporting unit’s goodwill for possible impairment as of December 31, 2020 using the discounted cash flow and guideline public company methods, with a weighting of 80 % and 20 % applied to these two methods, respectively. As a result of these impairment tests, the Company determined that the estimated fair value of its manufacturing reporting unit exceeded its carrying value by approximately 31 % as of December 31, 2020. ​ In late July 2021, this former major customer communicated to Aerex that it expected to recommence its purchases of the specialized product from Aerex in 2022 and subsequent years, but informed Aerex that such purchases would be at substantially reduced annual amounts, as compared to the amounts it had purchased from Aerex in 2020 and prior years. The Company’s updated sales estimate for this customer based on this new information was substantially below the 54 Table of Contents anticipated sales to this customer for 2022 and subsequent years that the Company used in the discounted cash flow projections it prepared for purposes of testing its Manufacturing reporting unit’s goodwill for possible impairment as of December 31, 2020. Furthermore, Aerex’s efforts to replace the revenue previously generated from this customer with revenue from existing and new customers were adversely impacted by the negative economic conditions (caused in part by the COVID-19 pandemic). These negative economic conditions also increased Aerex’s raw material costs, resulted in raw material shortages and extended delivery times for such materials, and adversely affected the overall financial condition of Aerex’s current and prospective customers. Accordingly, in light of this new information from Aerex’s former major customer, and the on-going weak economic conditions that the Company believed would continue through 2022, the Company updated its projections of future cash flows for the manufacturing reporting unit and tested its goodwill for possible impairment as of June 30, 2021 using the discounted cash flow and guideline public company methods, with a weighting of 80 % and 20 % applied to these two methods, respectively. Based upon this testing, the Company determined that the carrying value of its manufacturing reporting unit exceeded its fair value by $ 2.9 million, and the Company recorded an impairment loss to reduce its manufacturing segment’s goodwill by this amount for the three months ended June 30, 2021. For the year ended December 31, 2022, the Company estimated the fair value of its manufacturing reporting unit by applying the discounted cash flow method, which relied upon seven-year discrete projections of operating results, working capital and capital expenditures, along with a terminal value subsequent to the discrete period. These seven-year projections were based upon historical and anticipated future results, general economic and market conditions, and considered the impact of planned business and operational strategies. The discount rates for the calculations represented the estimated cost of capital for market participants at the time of each analysis. The Company also estimated the fair value of its manufacturing reporting unit for the year ended December 31, 2022 by applying the guideline public company method. The Company weighted the fair values estimated for its manufacturing reporting unit under each method and summed such weighted fair values to estimate the overall fair value for the reporting unit. The respective weightings the Company applied to each method for the year ended December 31, 2022 were 80 % to the discounted cash flow method and 20 % to the guideline public company method. ​ The fair value the Company estimated for its manufacturing reporting unit exceeded its carrying amount by 63 % as of December 31, 2022. ​ Investments: Investments where the Company does not exercise significant influence over the operating and financial policies of the investee and holds less than 20% of the voting stock are recorded at cost. The Company uses the equity method of accounting for investments in common stock where the Company holds 20% to 50% of the voting stock of the investee and has significant influence over its operating and financial policies but does not meet the criteria for consolidation. The Company recognizes impairment losses on declines in the fair value of the stock of investees that are other than temporary. ​ Income taxes: The Company accounts for the income taxes arising from the operations of its United States subsidiaries under the asset and liability method. Deferred tax assets and liabilities, if any, are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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. A valuation allowance is provided to the extent any deferred tax asset may not be realized. ​ The Company is not presently subject to income taxes in the other countries in which it operates. ​ Revenue recognition: Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. ​ 55 Table of Contents The following table presents the Company’s revenue disaggregated by revenue source. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Retail revenue ​ $ 31,741,343 ​ $ 30,158,051 ​ $ 25,954,013 Bulk revenue ​ 33,673,387 ​ 34,595,058 ​ 32,991,066 Services revenue ​ 50,956,489 ​ 97,966,650 ​ 28,835,428 Manufacturing revenue ​ 17,595,414 ​ 17,491,474 ​ 6,324,465 Total revenue ​ $ 133,966,633 ​ $ 180,211,233 ​ $ 94,104,972 ​ Services revenue consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Construction revenue ​ $ 17,637,432 ​ $ 77,306,704 ​ $ 11,616,274 Operations and maintenance revenue ​ 29,307,405 ​ 19,368,365 ​ 14,152,158 Design and consulting revenue ​ 4,011,652 ​ 1,291,581 ​ 3,066,996 Total services revenue ​ $ 50,956,489 ​ $ 97,966,650 ​ $ 28,835,428 ​ Retail revenue ​ The Company produces and supplies water to end-users, including residential, commercial and governmental customers in the Cayman Islands under an exclusive retail license issued to Cayman Water by the Cayman Islands government to provide water in two of the three most populated areas on Grand Cayman. Customers are billed on a monthly basis based on metered consumption and bills are typically collected within 30 to 45 days after the billing date. Receivables not collected within 45 days subject the customer to disconnection from water service. ​ The Company recognizes revenue from retail water sales at the end of the billing cycle based on the water supplied to the customers’ premises. The amount of water supplied is determined and invoiced based upon water meter readings performed at the end of each month. All retail water contracts are month-to-month contracts. The Company has elected the “right to invoice” practical expedient for revenue recognition on its retail water sale 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. Bulk revenue The Company produces and supplies water to government-owned utilities in the Cayman Islands and The Bahamas. OC-Cayman provides bulk water to the Water Authority-Cayman (“WAC”), a government-owned utility and regulatory agency, under three agreements. The WAC in turn distributes such water to properties in Grand Cayman outside of Cayman Water’s retail license area. The Company sells bulk water in The Bahamas through its majority-owned subsidiary, CW-Bahamas, under two agreements with the Water and Sewerage Corporation of The Bahamas (“WSC”), which distributes such water through its own pipeline system to residential, commercial and tourist properties on the island of New Providence. The Company has elected the “right to invoice” practical expedient for revenue recognition on its bulk water sale 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. Services and Manufacturing revenue The Company designs, constructs, sells, operates and maintains, and provides consulting services related to water, wastewater and water reuse infrastructure through PERC. All of PERC's customers are companies or governmental entities 56 Table of Contents located in the United States. Effective October 2023, PERC acquired REC, a company that provides operations and maintenance and consulting services to companies and governmental entities located in the state of Colorado. The Company also provides design, engineering, management, procurement and construction services for desalination infrastructure through DesalCo, which serves customers in the Cayman Islands, The Bahamas and the British Virgin Islands. The Company, through Aerex, is a custom and specialty manufacturer of systems and products applicable to commercial, municipal and industrial water production and treatment. Substantially all of Aerex’s customers are U.S. companies. The Company generates construction, operations and maintenance, design and consulting revenue from PERC and DesalCo and generates manufacturing revenue from Aerex. The Company also generates operations and maintenance and consulting revenue from REC. The Company recognizes revenue for its construction and custom/specialized manufacturing 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. Contract costs include labor, materials, subcontractor costs and other expenses. The Company follows this method since it can make reasonably dependable estimates of the revenue and costs applicable to the various stages of a contract. Under this input method, the Company records revenue and recognizes profit or loss as work on the contract progresses. The Company estimates total costs to be incurred and profit to be earned on each long-term, fixed price contract prior to 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. 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. When adjustments in estimated total contract revenue or estimated total contract costs are required, any changes from prior estimates are recognized in the current period for the inception-to-date effect of such changes. The Company recognizes the full amount of any estimated loss on a contract at the time the estimates indicate such a loss. Any contract assets are classified as current assets. Contract liabilities on uncompleted contracts, if any, are classified as current liabilities. During the year ended December 31, 2023, the Company adjusted its prior year estimates of the total contract costs for two of its construction contracts. These changes in accounting estimates resulted in an increase in the services segment’s income from operations and the Company’s consolidated net income by $ 2,356,439 and $ 1,750,750 , respectively, for the year ended December 31, 2023. This adjustment increased basic and diluted earnings per share by $ 0.11 for the year ended December 31, 2023. 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 during the billing cycle. ​ 57 Table of Contents During the years ended December 31, 2024, 2023, and 2022, the Company recognized $ 18,211,554 , $ 77,411,792 and $ 14,146,271 , respectively, of its services revenue from the transfer of goods or services to customers over time. The remaining services revenue of $ 32,744,935 , $ 20,554,858 and $ 14,689,157 , respectively, was recognized from the transfer of goods or services to customers when invoiced. During the years ended December 31, 2024, 2023, and 2022, the Company recognized all of its manufacturing revenue from the transfer of goods or services to customers over time. Practical Expedients and Exemptions The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed. ​ Comparative amounts: Certain amounts presented in the financial statements previously issued for 2023 and 2022 have been reclassified to conform to the current year’s presentation . ​ 3. Cash and cash equivalents Cash and cash equivalents are not restricted by the terms of the Company’s bank accounts as to withdrawal or use. As of December 31, 2024 and 2023, the equivalent United States dollars of the Company’s cash and cash equivalents, including those accounts denominated in currencies other than the U.S. dollar, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Bank accounts: ​ ​ United States dollar ​ $ 39,094,067 ​ $ 15,857,612 Cayman Islands dollar ​ 17,499,492 ​ 11,826,102 Bahamian dollar ​ 7,717,705 ​ 3,025,898 ​ ​ 64,311,264 ​ 30,709,612 ​ ​ ​ ​ ​ ​ ​ Short-term deposits: ​ ​ United States dollar ​ 31,908,220 ​ 8,861,606 Cayman Islands dollar ​ 3,130,637 ​ 3,050,680 ​ ​ 35,038,857 ​ 11,912,286 Total cash and cash equivalents ​ $ 99,350,121 ​ $ 42,621,898 ​ 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. ​ 4. Accounts receivable, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Trade accounts receivable ​ $ 39,986,234 ​ $ 38,446,554 Receivable from OC-BVI ​ 42,515 ​ 41,129 Other accounts receivable ​ 373,655 ​ 322,609 ​ ​ 40,402,404 ​ 38,810,292 Allowance for credit losses ​ ( 821,422 ) ​ ( 583,401 ) Accounts receivable, net ​ $ 39,580,982 ​ $ 38,226,891 ​ 58 Table of Contents The activity for the allowance for credit losses consisted of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Opening allowance for credit losses ​ $ 583,401 ​ $ 183,214 Provision for credit losses ​ 442,828 ​ 408,489 Accounts written off during the year ​ ( 205,467 ) ​ ( 9,215 ) Recovery of accounts written off ​ ​ 660 ​ ​ 913 Ending allowance for credit losses ​ $ 821,422 ​ $ 583,401 ​ Significant concentrations of credit risk are disclosed in Note 17. ​ 5. Inventory ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Spare parts stock ​ $ 8,341,395 ​ $ 7,747,455 Raw materials ​ ​ 5,828,568 ​ ​ 3,135,357 Consumables stock ​ 89,689 ​ 166,935 Water stock ​ ​ 39,659 ​ ​ 40,666 Total inventory ​ 14,299,311 ​ 11,090,413 Less current portion ​ 8,960,350 ​ 6,044,642 Inventory (non-current) ​ $ 5,338,961 ​ $ 5,045,771 ​ ​ 6. Contracts in progress Revenue recognized and amounts billed on contracts in progress are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Revenue recognized to date on contracts in progress ​ $ 114,590,991 $ 108,952,682 Amounts billed to date on contracts in progress ​ ( 121,833,354 ) ​ ( 101,724,459 ) Retainage ​ ​ 2,585,952 ​ ​ 8,087,823 Net contract asset /(liability) ​ $ ( 4,656,411 ) ​ $ 15,316,046 ​ The above net balances are reflected in the accompanying consolidated balance sheet as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 ​ 2023 Contract assets ​ $ 4,470,243 $ 21,553,057 Contract liabilities ​ ( 9,126,654 ) ​ ( 6,237,011 ) Net contract asset /(liability) ​ $ ( 4,656,411 ) ​ $ 15,316,046 ​ ​ ​ The significant decrease in contract assets from December 31, 2023 to December 31, 2024 is attributable to the completion of the construction contract with the WAC for the Red Gate plant in Grand Cayman and the completion of the construction contract with Liberty Utilities for a water treatment facility in Arizona. ​ During the year ended December 31, 2023, the Company adjusted its prior year estimates of the total contract costs for two of its construction contracts. These changes in accounting estimates resulted in an increase in the services segment’s income from operations and the Company’s consolidated net income by $ 2,356,439 and $ 1,750,750 , respectively, for the year ended December 31, 2023. This adjustment increased basic and diluted earnings per share by $ 0.11 for the year ended December 31, 2023. ​ 59 Table of Contents As of December 31, 2024, the Company had unsatisfied or partially unsatisfied performance obligations for contracts in progress representing approximately $ 151.3 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 $ 44.2 million during the year ending December 31, 2025 and $ 107.1 million thereafter. In addition, the Company recognized revenue of approximately $ 6.2 million in the year ended December 31, 2024, that was included in the contract liability balance as of December 31, 2023. ​ ​ ​ ​ ​ ​ 7. Property, plant and equipment and construction in progress ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Land ​ $ 6,307,089 ​ $ 6,488,400 Buildings ​ 26,033,866 ​ 26,044,551 Plant and equipment ​ 61,089,877 ​ 66,000,977 Distribution system ​ 40,402,691 ​ 39,546,175 Office furniture, fixtures and equipment ​ 3,277,313 ​ 3,338,760 Vehicles ​ 3,830,539 ​ 3,433,561 Leasehold improvements ​ 306,545 ​ 306,545 Lab equipment ​ 12,456 ​ 12,456 ​ ​ 141,260,376 ​ 145,171,425 Less accumulated depreciation ​ 88,828,094 ​ 89,288,904 Property, plant and equipment, net ​ $ 52,432,282 ​ $ 55,882,521 Construction in progress ​ $ 5,143,717 ​ $ 495,471 ​ The Company maintains insurance for loss or damage to all fixed assets that it deems susceptible to loss. During the years ended December 31, 2024, and 2023, $ 1,395,485 and $ 7,093,158 , respectively, of construction in progress was placed in service. Depreciation expense was $ 5,855,935 , $ 5,823,008 and $ 5,425,177 for the years ended December 31, 2024, 2023 and 2022, respectively . ​ 8. 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 the public tender for the Project. A consortium (the “Consortium”) comprised of NSC and two other parties 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 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. ​ ​ 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”). 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 60 Table of Contents 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 the Director General of CEA and the Director General of 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 was comprised of 51,144,525 United States dollars and an additional 137,333,114 Mexican pesos. ​ 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. 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. On June 29, 2021, the Mexican Ministry of Economy responded to CW-Cooperatief’s letter and proposed to hold a consultation meeting. 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. ​ 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. ​ The Company’s net income (losses) from discontinued operations for the years ended December 31, 2024, 2023 and 2022 were $ 10,355,184 , ($ 1,086,744 ) and ($ 2,371,049 ), respectively. ​ Summarized financial information for the discontinued Mexico project development operation is as follows: 61 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2024 ​ ​ 2023 Cash $ 127,859 $ 91,283 Prepaid expenses and other current assets ​ ​ 144,626 ​ ​ 120,234 Land ​ — ​ 21,126,898 Other assets ​ — ​ 2,390 Total assets of discontinued operations ​ $ 272,485 ​ $ 21,340,805 ​ ​ ​ Total liabilities of discontinued operations ​ $ 509,745 ​ $ 364,665 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Revenue $ — $ — ​ $ — Loss from discontinued operations ​ $ ( 1,779,582 ) ​ $ ( 1,086,744 ) ​ $ ( 2,371,049 ) Gain on sale of land and project documentation ​ $ 12,134,766 ​ $ — ​ $ — Depreciation expense ​ $ — ​ $ — ​ $ — ​ ​ ​ 9. Intangible assets The Company’s purchase transactions for Aerex and PERC identified certain intangible assets. The remaining intangible assets and their respective useful lives are as follows: trade names ( 15 years ) and facility management contracts ( 6 years ). Effective October 2023, the Company purchased a 100 % ownership interest in REC. The purchase transaction identified certain intangible assets with a fair value of $ 1,108,390 and useful lives as follows: non-compete ( 5 years ), trade name ( 15 years ) and customer relationships ( 15 years ). The costs and accumulated amortization for these assets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Cost ​ ​ Non-compete agreements ​ $ 268,590 ​ $ 268,590 Trade names ​ 3,096,900 ​ 3,096,900 Customer relationships ​ ​ 442,900 ​ ​ 442,900 Facility management contracts ​ 2,200,000 ​ 2,200,000 ​ ​ 6,008,390 ​ 6,008,390 Accumulated amortization ​ ​ ​ Non-compete agreements ​ ( 67,147 ) ​ ( 13,430 ) Trade names ​ ( 1,313,075 ) ​ ( 1,106,615 ) Customer relationships ​ ​ ( 36,908 ) ​ ​ ( 7,382 ) Facility management contracts ​ ( 1,894,445 ) ​ ( 1,527,778 ) ​ ​ ( 3,311,575 ) ​ ( 2,655,205 ) Intangible assets, net ​ $ 2,696,815 ​ $ 3,353,185 ​ 62 Table of Contents Amortization of intangible assets for each of the next five years and thereafter is expected to be as follows: ​ ​ ​ ​ ​ 2025 $ 595,260 2026 ​ 289,705 2027 ​ 289,705 2028 ​ 276,275 2029 ​ 235,987 Thereafter ​ 1,009,883 ​ ​ $ 2,696,815 ​ Amortization expense was $ 656,370 , $ 574,093 and $ 582,778 for the years ended December 31, 2024, 2023 and 2022, respectively. ​ 10. Leases The Company’s leases consist primarily of leases for office and warehouse space. For leases with terms greater than twelve months, the related asset and obligation are recorded at the present value of the lease payments over the term. Many of these leases contain rental escalation clauses which are factored into the determination of the lease payments when appropriate. When available, the lease payments are discounted using the rate implicit in the lease; however, the Company’s current leases do not provide a readily determinable implicit rate. Therefore, the Company’s incremental borrowing rate is estimated to discount the lease payments based on information available at the lease commencement. These leases contain both lease and non-lease components, which the Company has elected to treat as a single lease component. The Company elected not to recognize leases that have an original lease term, including reasonably certain renewal or purchase obligations, of twelve months or less in its consolidated balance sheets for all classes of underlying assets. 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. All lease liabilities denominated in a foreign currency are remeasured using the exchange rate as of the consolidated balance sheet date. 63 Table of Contents Lease assets and liabilities The following table presents the lease-related assets and liabilities and their respective classification on the consolidated balance sheets: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 ​ 2023 ASSETS ​ ​ ​ Current ​ ​ ​ Prepaid expenses and other current assets ​ $ 41,801 ​ $ 110,541 Noncurrent ​ ​ ​ ​ Operating lease right-of-use assets ​ 3,190,985 ​ 2,135,446 Total lease right-of-use assets ​ $ 3,232,786 ​ $ 2,245,987 ​ ​ ​ ​ ​ ​ ​ LIABILITIES ​ ​ Current ​ ​ ​ Current maturities of operating leases ​ $ 634,947 ​ $ 456,865 Noncurrent ​ ​ ​ ​ Noncurrent operating leases ​ ​ 2,630,812 ​ ​ 1,827,302 Total lease liabilities ​ $ 3,265,759 ​ $ 2,284,167 ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term: ​ ​ Operating leases ​ 5.0 years ​ 6.1 years ​ ​ ​ ​ ​ Weighted average discount rate: ​ ​ ​ ​ Operating leases ​ 6.56 % ​ 5.67 % ​ The components of lease costs were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 Operating lease costs ​ $ 847,540 ​ $ 751,261 ​ $ 692,404 Short-term lease costs ​ 361,176 ​ 217,640 ​ ​ 100,975 Lease costs - discontinued operations ​ ​ 31,946 ​ ​ 45,979 ​ ​ 40,021 Total lease costs ​ $ 1,240,662 ​ $ 1,014,880 ​ $ 833,400 ​ Supplemental cash flow information related to leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 Cash paid for amounts included in measurement of liabilities: ​ ​ ​ ​ ​ ​ ​ Operating cash outflows for operating leases ​ $ 924,461 ​ $ 760,847 ​ $ 742,696 Operating cash outflows for operating leases - discontinued operations ​ ​ — ​ ​ 11,337 ​ ​ 9,590 ​ 64 Table of Contents Future lease payments relating to the Company's operating lease liabilities from continuing operations as of December 31, 2024 are as follows: ​ ​ ​ ​ ​ Years ending December 31, Total 2025 ​ $ 836,548 2026 ​ 763,783 2027 ​ 732,904 2028 ​ 749,143 2029 ​ ​ 455,209 Thereafter ​ 314,007 Total future lease payments ​ 3,851,594 Less: imputed interest ​ ( 585,835 ) Total lease obligations ​ 3,265,759 Less: current obligations ​ ( 634,947 ) Noncurrent lease obligations ​ $ 2,630,812 ​ ​ ​ ​ ​ ​ ​ ​ 11. Income taxes The components of income before income taxes for the years ended December 31, 2024, 2023, and 2022 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Foreign (not subject to income taxes) ​ $ 10,699,269 ​ $ 10,002,233 ​ $ 6,958,583 Mexico ​ 10,922,374 ​ ( 742,367 ) ​ ( 987,279 ) United States ​ 9,412,015 ​ 27,649,330 ​ 1,394,642 ​ ​ 31,033,658 ​ 36,909,196 ​ 7,365,946 Discontinued operations ​ ( 10,355,184 ) ​ 1,086,744 ​ 2,371,049 ​ ​ $ 20,678,474 ​ $ 37,995,940 ​ $ 9,736,995 ​ The Company’s provision for (benefit from) income taxes for the years ended December 31, 2024, 2023, and 2022, which related to U.S. operations, consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Current: ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 2,282,566 ​ $ 5,611,360 ​ $ 430,116 State ​ ​ 255,835 ​ ​ 1,663,653 ​ ​ ( 29,157 ) Foreign ​ ​ — ​ ​ — ​ ​ — Total current income tax expense (benefit) ​ ​ 2,538,401 ​ ​ 7,275,013 ​ ​ 400,959 Deferred: ​ ​ ​ ​ ​ ​ Federal ​ ​ ( 267,100 ) ​ ​ ( 276,070 ) ​ ​ ( 184,469 ) State ​ ​ ( 52,787 ) ​ ​ ( 248,929 ) ​ ​ 180,249 Foreign ​ ​ — ​ ​ — ​ ​ — Total deferred income tax expense (benefit) ​ ​ ( 319,887 ) ​ ​ ( 524,999 ) ​ ​ ( 4,220 ) Total provision for (benefit from) income taxes ​ $ 2,218,514 ​ $ 6,750,014 ​ $ 396,739 ​ 65 Table of Contents A reconciliation of the U.S. statutory federal tax rate to the effective rate for the years ended December 31, 2024, 2023, and 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2023 U.S. statutory federal rate ​ 21.00 % 21.00 % 21.00 % State taxes, net of federal effect 0.72 % 2.88 % 8.88 % Foreign rate differential ( 11.45 ) % ( 5.71 ) % ( 25.57 ) % Research and development tax credit — % — % ( 1.92 ) % Permanent items 0.46 % ( 0.32 ) % ( 0.70 ) % Change in valuation allowance — % ( 0.08 ) % 2.38 % ​ 10.73 % 17.77 % 4.07 % ​ The tax effects of significant items comprising the Company’s net long-term deferred tax liability as of December 31, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Continuing Operations ​ ​ ​ ​ ​ ​ Deferred tax assets: ​ ​ Net operating loss carryforwards ​ $ 80,285 ​ $ 130,911 Accruals and reserves ​ ​ 209,549 ​ ​ 146,057 Operating lease liabilities ​ ​ 425,797 ​ ​ 501,397 Capitalized research expenditures ​ ​ 316,937 ​ ​ 326,178 Others ​ ​ 88,750 ​ ​ 29,094 Valuation allowances ​ — ​ — ​ ​ 1,121,318 ​ 1,133,637 Deferred tax liabilities: ​ ​ Property and equipment ​ 239,830 ​ 325,473 Intangible assets ​ 672,973 ​ 847,450 Operating lease right-of-use assets ​ 419,408 ​ 491,494 ​ ​ 1,332,211 ​ 1,664,417 ​ ​ ​ ​ ​ ​ ​ Net deferred tax liabilities ​ $ ( 210,893 ) ​ $ ( 530,780 ) ​ ​ ​ ​ ​ ​ ​ Discontinued Operations ​ ​ ​ ​ ​ ​ Deferred tax assets: ​ ​ ​ ​ ​ ​ Operating loss carryforwards - Mexico ​ $ — ​ $ 5,844,847 Land basis difference - Mexico ​ ​ — ​ ​ 2,818,663 Start-up costs - Mexico ​ ​ — ​ ​ 7,015,484 Valuation allowances ​ ​ — ​ ​ ( 15,678,994 ) ​ ​ $ — ​ $ — ​ As of December 31, 2024, the Company’s continuing operations have a federal net loss carryforward of approximately $ 400,000 and a state net loss carryforward of approximately $ 38,000 . The net operating losses (“NOLs”) generated in taxable years beginning before January 1, 2018, may be carried forward up to 20 taxable years. The unused federal NOLs will expire on various dates starting from 2030. For NOLs generated in taxable years beginning after December 31, 2017, they are carried forward indefinitely until used and never expire . 12. Earnings per share Earnings per share (“EPS”) is computed on a basic and diluted basis. 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 66 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders ​ $ 17,882,370 ​ $ 30,672,135 ​ $ 8,227,343 Less: preferred stock dividends ​ ( 18,595 ) ​ ( 15,513 ) ​ ( 11,532 ) Net income from continuing operations available to common shares in the determination of basic earnings per common share ​ 17,863,775 ​ 30,656,622 ​ 8,215,811 Income (loss) from discontinued operations ​ 10,355,184 ​ ( 1,086,744 ) ​ ( 2,371,049 ) Net income available to common shares in the determination of basic earnings per common share ​ $ 28,218,959 ​ $ 29,569,878 ​ $ 5,844,762 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares in the determination of basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders ​ 15,832,328 ​ 15,739,056 ​ 15,290,509 Plus: ​ ​ ​ ​ ​ ​ Weighted average number of preferred shares outstanding during the period ​ 44,257 ​ 39,885 ​ 31,885 Potential dilutive effect of unexercised options and unvested stock grants ​ 59,377 ​ 86,956 ​ 79,259 Weighted average number of shares used for determining diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders ​ 15,935,962 ​ 15,865,897 ​ 15,401,653 ​ ​ ​ 13. Dividends Interim dividends declared on Class A common stock and redeemable preferred stock for each quarter of the respective years ended December 31, 2024, 2023, and 2022, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 2022 First Quarter ​ $ 0.095 ​ $ 0.085 ​ $ 0.085 Second Quarter ​ 0.095 ​ 0.085 ​ 0.085 Third Quarter ​ 0.11 ​ 0.095 ​ 0.085 Fourth Quarter ​ 0.11 ​ 0.095 ​ 0.085 ​ ​ $ 0.41 ​ $ 0.36 ​ $ 0.34 ​ ​ ​ 14. Segment information The Company has five reportable segments: retail, bulk, services, manufacturing and corporate. The retail segment operates the water utility for the Seven Mile Beach and West Bay areas of Grand Cayman pursuant to an exclusive license granted by the Cayman Islands government. The bulk segment supplies potable water to government utilities in Grand Cayman and The Bahamas under long-term contracts. The services segment designs, constructs and sells water infrastructure and provides management and operating services to third parties. 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. subsidiary that provides financial, engineering, information technology, administrative and supply chain management support services to all the Company’s subsidiaries and its affiliate. ​ 67 Table of Contents Frederick W. McTaggart, Chief Executive Officer and President, is the Company’s chief operating decision maker (“CODM”). ​ For the retail, bulk, services, and manufacturing segments, the CODM uses revenue, gross profit, and income before income taxes to assess segment performance and in deciding the allocation of resources to each segment. The CODM considers actual versus budget and current period versus prior period variances on a monthly, quarterly, and annual basis for each of these financial measures. The CODM also considers variances from budget and prior period for major corporate expenses (such as employee costs, insurance and professional fee) when making decisions regarding capital and resource allocation. ​ The accounting policies of the segments are consistent with those described in Note 2. All intercompany transactions are eliminated for segment presentation purposes. Intersegment revenue transactions are insignificant to the Company and are eliminated. Segment information previously disclosed in 2023 and 2022 did not separately disclose those expenses currently reported in the corporate segment, as such expenses were previously included in the retail segment. The 2023 and 2022 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 Company’s income statements by segment, significant segment expenses, and segment assets are presented below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 ​ Retail Bulk Services Manufacturing Corporate Total Revenue ​ $ 31,741,343 ​ $ 33,673,387 ​ $ 50,956,489 ​ $ 17,595,414 ​ $ — $ 133,966,633 Cost of revenue ​ 14,199,088 ​ 23,360,360 ​ 38,511,535 ​ 12,271,202 ​ — ​ 88,342,185 Gross profit ​ 17,542,255 ​ 10,313,027 ​ 12,444,954 ​ 5,324,212 ​ — ​ 45,624,448 General and administrative expenses ​ 3,263,593 ​ 1,564,975 ​ 6,055,409 ​ 2,456,807 ​ 14,196,652 ​ 27,537,436 Gain on asset dispositions and impairments, net ​ 2,286 ​ — ​ 2,714 ​ — ​ 192,786 ​ 197,786 Income (loss) from operations ​ ​ 14,280,948 ​ ​ 8,748,052 ​ ​ 6,392,259 ​ ​ 2,867,405 ​ ​ ( 14,003,866 ) ​ 18,284,798 Interest income ​ 198,180 ​ 865,584 ​ 458,732 ​ 4 ​ ​ 571,690 ​ ​ 2,094,190 Interest expense ​ ​ ( 93,368 ) ​ ​ — ​ ​ ( 8,409 ) ​ ​ — ​ ​ ( 70 ) ​ ​ ( 101,847 ) Income from affiliates ​ ​ — ​ ​ — ​ ​ — ​ ​ 16,701 ​ ​ 252,754 ​ ​ 269,455 Other ​ ​ 78,647 ​ ​ 39,625 ​ ​ ( 5,634 ) ​ ​ 11,993 ​ ​ 7,247 ​ ​ 131,878 Other income, net ​ ​ 183,459 ​ ​ 905,209 ​ ​ 444,689 ​ ​ 28,698 ​ ​ 831,621 ​ ​ 2,393,676 Income (loss) before income taxes ​ 14,464,407 ​ 9,653,261 ​ 6,836,948 ​ 2,896,103 ​ ​ ( 13,172,245 ) ​ 20,678,474 Provision for income taxes ​ — ​ — ​ 1,528,398 ​ 672,040 ​ ​ 18,076 ​ 2,218,514 Net income (loss) from continuing operations ​ 14,464,407 ​ 9,653,261 ​ 5,308,550 ​ 2,224,063 ​ ​ ( 13,190,321 ) ​ 18,459,960 Income from continuing operations attributable to non-controlling interests ​ — ​ 577,590 ​ — ​ — ​ ​ — ​ 577,590 Net income (loss) from continuing operations attributable to Consolidated Water Co. Ltd. stockholders ​ $ 14,464,407 ​ $ 9,075,671 ​ $ 5,308,550 ​ $ 2,224,063 ​ $ ( 13,190,321 ) ​ 17,882,370 Net income from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ 10,355,184 Net income attributable to Consolidated Water Co. Ltd. stockholders ​ ​ ​ ​ ​ ​ ​ ​ $ 28,237,554 ​ ​ 68 Table of Contents The Company’s cost of revenue consists of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 ​ Retail Bulk Services Manufacturing Corporate Total Subcontractor and other project costs ​ $ — ​ $ 3,787 ​ $ 20,366,236 ​ $ 9,535,078 ​ $ — ​ $ 29,905,101 Employee costs ​ ​ 2,895,606 ​ ​ 2,069,920 ​ ​ 17,062,858 ​ ​ 2,042,518 ​ ​ — ​ ​ 24,070,902 Electricity ​ ​ 4,755,308 ​ ​ 3,864,863 ​ ​ 212,337 ​ ​ 33,551 ​ ​ — ​ ​ 8,866,059 Fuel oil ​ ​ — ​ ​ 8,330,914 ​ ​ — ​ ​ — ​ ​ — ​ ​ 8,330,914 Depreciation ​ ​ 2,427,254 ​ ​ 2,689,432 ​ ​ 364,473 ​ ​ 160,211 ​ ​ — ​ ​ 5,641,370 Maintenance ​ ​ 877,882 ​ ​ 2,138,584 ​ ​ 439,883 ​ ​ 344,042 ​ ​ — ​ ​ 3,800,391 Insurance ​ ​ 686,073 ​ ​ 1,721,846 ​ ​ 38,408 ​ ​ — ​ ​ — ​ ​ 2,446,327 Retail license royalties ​ ​ 1,945,470 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,945,470 Other ​ ​ 611,495 ​ ​ 2,541,014 ​ ​ 27,340 ​ ​ 155,802 ​ ​ — ​ ​ 3,335,651 ​ ​ $ 14,199,088 ​ $ 23,360,360 ​ $ 38,511,535 ​ $ 12,271,202 ​ $ — ​ $ 88,342,185 ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 ​ Retail Bulk Services Manufacturing Corporate Total Employee costs ​ $ 1,555,619 ​ $ 375,479 ​ $ 3,443,005 ​ $ 1,286,141 ​ $ 8,031,817 ​ $ 14,692,061 Professional fees ​ ​ 85,739 ​ ​ 82,452 ​ ​ 646,610 ​ ​ 133,229 ​ ​ 2,448,386 ​ ​ 3,396,416 Insurance ​ ​ 417,604 ​ ​ 384,932 ​ ​ 214,983 ​ ​ 215,241 ​ ​ 834,612 ​ ​ 2,067,372 Depreciation and amortization ​ ​ 37,691 ​ ​ 25,086 ​ ​ 630,544 ​ ​ 103,674 ​ ​ 73,940 ​ ​ 870,935 Other ​ ​ 1,166,940 ​ ​ 697,026 ​ ​ 1,120,267 ​ ​ 718,522 ​ ​ 2,807,897 ​ ​ 6,510,652 ​ ​ $ 3,263,593 ​ $ 1,564,975 ​ $ 6,055,409 ​ $ 2,456,807 ​ $ 14,196,652 ​ $ 27,537,436 ​ Other general and administrative segment expenses primarily include Board of Directors fees and expenses, maintenance, office rent, amortization of intangible assets, and investor relations costs. ​ 69 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ Retail Bulk Services Manufacturing Corporate Total Cash and cash equivalents ​ $ 19,167,484 ​ $ 13,339,206 ​ $ 34,181,902 ​ $ 4,768,376 ​ $ 27,893,153 ​ $ 99,350,121 Accounts receivable, net ​ $ 3,223,190 ​ $ 28,807,257 ​ $ 6,593,276 ​ $ 946,846 ​ $ 10,413 ​ $ 39,580,982 Inventory, current and non-current ​ $ 3,437,771 ​ $ 4,865,117 ​ $ 167,856 ​ $ 5,828,567 ​ $ — ​ $ 14,299,311 Contract assets ​ $ — ​ $ — ​ $ 1,204,522 ​ $ 3,265,721 ​ $ — ​ $ 4,470,243 Property, plant and equipment, net ​ $ 31,689,586 ​ $ 18,093,155 ​ $ 858,352 ​ $ 1,601,501 ​ $ 189,688 ​ $ 52,432,282 Construction in progress ​ $ 1,951,559 ​ $ 2,480,999 ​ $ — ​ $ 711,159 ​ $ — ​ $ 5,143,717 Intangibles, net ​ $ — ​ $ — ​ $ 2,129,037 ​ $ 567,778 ​ $ — ​ $ 2,696,815 Goodwill ​ $ 1,170,511 ​ $ 1,948,875 ​ $ 7,756,807 ​ $ 1,985,211 ​ $ — ​ $ 12,861,404 Total segment assets ​ $ 62,994,011 ​ $ 71,743,161 ​ $ 56,792,772 ​ $ 20,095,648 ​ $ 31,415,104 ​ $ 243,040,696 Assets of discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 272,485 Total assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 243,313,181 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ Retail Bulk Services Manufacturing ​ Corporate Total Revenue ​ $ 30,158,051 ​ $ 34,595,058 ​ $ 97,966,650 ​ $ 17,491,474 $ — ​ $ 180,211,233 Cost of revenue ​ 13,891,229 ​ 24,128,132 ​ 66,797,762 ​ 13,467,005 ​ — ​ 118,284,128 Gross profit ​ 16,266,822 ​ 10,466,926 ​ 31,168,888 ​ 4,024,469 ​ — ​ 61,927,105 General and administrative expenses ​ 2,978,164 ​ 1,737,264 ​ 4,271,808 ​ 1,838,284 ​ 13,926,846 ​ 24,752,366 Gain (loss) on asset dispositions and impairments, net ​ ( 21,716 ) ​ 12,720 ​ — ​ 2,233 ​ ( 349 ) ​ ( 7,112 ) Income (loss) from operations ​ ​ 13,266,942 ​ ​ 8,742,382 ​ ​ 26,897,080 ​ ​ 2,188,418 ​ ​ ( 13,927,195 ) ​ 37,167,627 Interest income ​ 181,468 ​ 362,422 ​ 151,706 ​ 4 ​ ​ 808 ​ ​ 696,408 Interest expense ​ ​ ( 123,867 ) ​ ​ — ​ ​ ( 21,417 ) ​ ​ — ​ ​ — ​ ​ ( 145,284 ) Income from affiliate ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 169,728 ​ ​ 169,728 Other ​ ​ 93,795 ​ ​ 10,793 ​ ​ 1,024 ​ ​ 2,020 ​ ​ ( 171 ) ​ ​ 107,461 Other income, net ​ ​ 151,396 ​ ​ 373,215 ​ ​ 131,313 ​ ​ 2,024 ​ ​ 170,365 ​ ​ 828,313 Income (loss) before income taxes ​ 13,418,338 ​ 9,115,597 ​ 27,028,393 ​ 2,190,442 ​ ​ ( 13,756,830 ) ​ 37,995,940 Provision (benefit) for income taxes ​ — ​ — ​ 6,388,457 ​ 440,111 ​ ​ ( 78,554 ) ​ 6,750,014 Net income (loss) from continuing operations ​ 13,418,338 ​ 9,115,597 ​ 20,639,936 ​ 1,750,331 ​ ​ ( 13,678,276 ) ​ 31,245,926 Income from continuing operations attributable to non-controlling interests ​ — ​ 573,791 ​ — ​ — ​ ​ — ​ 573,791 Net income (loss) from continuing operations attributable to Consolidated Water Co. Ltd. stockholders ​ $ 13,418,338 ​ $ 8,541,806 ​ $ 20,639,936 ​ $ 1,750,331 ​ $ ( 13,678,276 ) ​ 30,672,135 Net loss from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ( 1,086,744 ) Net income attributable to Consolidated Water Co. Ltd. stockholders ​ ​ ​ ​ ​ ​ ​ ​ $ 29,585,391 ​ ​ ​ ​ ​ ​ ​ 70 Table of Contents The Company’s cost of revenue consists of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ Retail Bulk Services Manufacturing Corporate Total Subcontractor and other project costs ​ $ — ​ $ — ​ $ 53,830,817 ​ $ 10,869,688 ​ $ — ​ $ 64,700,505 Employee costs ​ ​ 2,797,130 ​ ​ 1,927,313 ​ ​ 12,311,403 ​ ​ 1,899,167 ​ ​ — ​ ​ 18,935,013 Electricity ​ ​ 4,846,974 ​ ​ 4,306,439 ​ ​ 301,247 ​ ​ 48,006 ​ ​ — ​ ​ 9,502,666 Fuel oil ​ ​ — ​ ​ 9,024,836 ​ ​ — ​ ​ — ​ ​ — ​ ​ 9,024,836 Depreciation ​ ​ 2,376,747 ​ ​ 2,831,368 ​ ​ 256,537 ​ ​ 168,347 ​ ​ — ​ ​ 5,632,999 Maintenance ​ ​ 845,596 ​ ​ 1,705,585 ​ ​ 83,998 ​ ​ 357,693 ​ ​ — ​ ​ 2,992,872 Insurance ​ ​ 587,238 ​ ​ 1,468,508 ​ ​ 5,751 ​ ​ — ​ ​ — ​ ​ 2,061,497 Retail license royalties ​ ​ 1,842,924 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,842,924 Other ​ ​ 594,620 ​ ​ 2,864,083 ​ ​ 8,009 ​ ​ 124,104 ​ ​ — ​ ​ 3,590,816 ​ ​ $ 13,891,229 ​ $ 24,128,132 ​ $ 66,797,762 ​ $ 13,467,005 ​ $ — ​ $ 118,284,128 ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ Retail Bulk Services Manufacturing Corporate Total Employee costs ​ $ 1,485,647 ​ $ 359,923 ​ $ 2,529,548 ​ $ 1,071,012 ​ $ 8,244,023 ​ $ 13,690,153 Professional fees ​ ​ 122,067 ​ ​ 93,754 ​ ​ 422,196 ​ ​ 88,882 ​ ​ 1,285,193 ​ ​ 2,012,092 Insurance ​ ​ 351,259 ​ ​ 341,391 ​ ​ 127,993 ​ ​ 196,539 ​ ​ 886,674 ​ ​ 1,903,856 Depreciation and amortization ​ ​ 38,883 ​ ​ 22,180 ​ ​ 528,810 ​ ​ 105,013 ​ ​ 69,216 ​ ​ 764,102 Other ​ ​ 980,308 ​ ​ 920,016 ​ ​ 663,261 ​ ​ 376,838 ​ ​ 3,441,740 ​ ​ 6,382,163 ​ ​ $ 2,978,164 ​ $ 1,737,264 ​ $ 4,271,808 ​ $ 1,838,284 ​ $ 13,926,846 ​ $ 24,752,366 ​ Other general and administrative segment expenses primarily include Board of Directors fees and expenses, maintenance, office rent, amortization of intangible assets, and investor relations costs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ Retail Bulk Services Manufacturing Corporate Total Cash and cash equivalents ​ $ 10,982,982 ​ $ 7,932,485 ​ $ 18,080,724 ​ $ 2,879,665 ​ $ 2,746,042 ​ $ 42,621,898 Accounts receivable, net ​ $ 3,409,973 ​ $ 26,965,126 ​ $ 6,802,780 ​ $ 1,033,037 ​ $ 15,975 ​ $ 38,226,891 Inventory, current and non-current ​ $ 3,041,460 ​ $ 4,858,324 ​ $ 55,272 ​ $ 3,135,357 ​ $ — ​ $ 11,090,413 Contract assets ​ $ — ​ $ — ​ $ 17,715,872 ​ $ 3,837,185 ​ $ — ​ $ 21,553,057 Property, plant and equipment, net ​ $ 32,318,148 ​ $ 20,370,056 ​ $ 1,143,884 ​ $ 1,559,094 ​ $ 491,339 ​ $ 55,882,521 Construction in progress ​ $ 380,436 ​ $ — ​ $ — ​ $ 115,035 ​ $ — ​ $ 495,471 Intangibles, net ​ $ — ​ $ — ​ $ 2,692,074 ​ $ 661,111 ​ $ — ​ $ 3,353,185 Goodwill ​ $ 1,170,511 ​ $ 1,948,875 ​ $ 7,756,807 ​ $ 1,985,211 ​ $ — ​ $ 12,861,404 Total segment assets ​ $ 52,120,112 ​ $ 63,956,725 ​ $ 58,476,773 ​ $ 15,888,642 ​ $ 6,654,535 ​ $ 197,096,787 Assets of discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 21,340,805 Total assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 218,437,592 ​ ​ 71 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ Retail Bulk Services Manufacturing ​ Corporate Total Revenue ​ $ 25,954,013 ​ $ 32,991,066 ​ $ 28,835,428 ​ $ 6,324,465 $ — ​ $ 94,104,972 Cost of revenue ​ 12,548,763 ​ 23,032,212 ​ 22,973,634 ​ 5,195,240 ​ — ​ 63,749,849 Gross profit ​ 13,405,250 ​ 9,958,854 ​ 5,861,794 ​ 1,129,225 ​ — ​ 30,355,123 General and administrative expenses ​ 2,609,571 ​ 1,570,732 ​ 3,461,294 ​ 1,485,342 ​ 11,943,295 ​ 21,070,234 Gain (loss) on asset dispositions and impairments, net ​ ( 39,397 ) ​ 5,607 ​ 23,717 ​ ( 2,631 ) ​ — ​ ( 12,704 ) Income (loss) from operations ​ ​ 10,756,282 ​ ​ 8,393,729 ​ ​ 2,424,217 ​ ​ ( 358,748 ) ​ ​ ( 11,943,295 ) ​ 9,272,185 Interest income ​ 131,403 ​ 313,232 ​ 2,441 ​ 1 ​ ​ 109 ​ ​ 447,186 Interest expense ​ ​ ( 31,748 ) ​ ​ — ​ ​ ( 14,797 ) ​ ​ — ​ ​ — ​ ​ ( 46,545 ) Income from affiliate ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 102,225 ​ ​ 102,225 Net loss on put/call options ​ ​ — ​ ​ — ​ ​ ( 128,000 ) ​ ​ — ​ ​ — ​ ​ ( 128,000 ) Other ​ ​ 83,682 ​ ​ 1,865 ​ ​ 1,803 ​ ​ 782 ​ ​ 1,812 ​ ​ 89,944 Other income (loss), net ​ ​ 183,337 ​ ​ 315,097 ​ ​ ( 138,553 ) ​ ​ 783 ​ ​ 104,146 ​ ​ 464,810 Income (loss) before income taxes ​ 10,939,619 ​ 8,708,826 ​ 2,285,664 ​ ( 357,965 ) ​ ​ ( 11,839,149 ) ​ 9,736,995 Provision (benefit) for income taxes ​ — ​ — ​ 458,659 ​ ( 61,920 ) ​ ​ — ​ 396,739 Net income (loss) from continuing operations ​ 10,939,619 ​ 8,708,826 ​ 1,827,005 ​ ( 296,045 ) ​ ​ ( 11,839,149 ) ​ 9,340,256 Income from continuing operations attributable to non-controlling interests ​ — ​ 558,353 ​ 554,560 ​ — ​ ​ — ​ 1,112,913 Net income (loss) from continuing operations attributable to Consolidated Water Co. Ltd. stockholders ​ $ 10,939,619 ​ $ 8,150,473 ​ $ 1,272,445 ​ $ ( 296,045 ) ​ $ ( 11,839,149 ) ​ 8,227,343 Net loss from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ( 2,371,049 ) Net income attributable to Consolidated Water Co. Ltd. stockholders ​ ​ ​ ​ ​ ​ ​ ​ $ 5,856,294 ​ The Company’s cost of revenue consists of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ Retail Bulk Services Manufacturing Corporate Total Subcontractor and other project costs ​ $ — ​ $ — ​ $ 14,380,940 ​ $ 3,436,343 ​ $ — ​ $ 17,817,283 Employee costs ​ ​ 2,759,588 ​ ​ 1,831,305 ​ ​ 8,156,016 ​ ​ 1,289,208 ​ ​ — ​ ​ 14,036,117 Electricity ​ ​ 4,063,303 ​ ​ 2,594,723 ​ ​ 278,629 ​ ​ 38,474 ​ ​ — ​ ​ 6,975,129 Fuel oil ​ ​ — ​ ​ 10,203,690 ​ ​ — ​ ​ — ​ ​ — ​ ​ 10,203,690 Depreciation ​ ​ 2,281,584 ​ ​ 2,645,691 ​ ​ 155,237 ​ ​ 178,951 ​ ​ — ​ ​ 5,261,463 Maintenance ​ ​ 878,880 ​ ​ 1,717,319 ​ ​ — ​ ​ 190,059 ​ ​ — ​ ​ 2,786,258 Insurance ​ ​ 501,508 ​ ​ 1,280,825 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,782,333 Retail license royalties ​ ​ 1,590,250 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,590,250 Other ​ ​ 473,650 ​ ​ 2,758,659 ​ ​ 2,812 ​ ​ 62,205 ​ ​ — ​ ​ 3,297,326 ​ ​ $ 12,548,763 ​ $ 23,032,212 ​ $ 22,973,634 ​ $ 5,195,240 ​ $ — ​ $ 63,749,849 ​ ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ Retail Bulk Services Manufacturing Corporate Total Employee costs ​ $ 1,321,660 ​ $ 332,023 ​ $ 1,966,493 ​ $ 941,680 ​ $ 6,647,780 ​ $ 11,209,636 Professional fees ​ ​ 55,756 ​ ​ 127,400 ​ ​ 286,802 ​ ​ 14,736 ​ ​ 1,275,585 ​ ​ 1,760,279 Insurance ​ ​ 301,306 ​ ​ 291,430 ​ ​ 336,832 ​ ​ 168,486 ​ ​ 969,571 ​ ​ 2,067,625 Depreciation and amortization ​ ​ 36,544 ​ ​ 11,750 ​ ​ 519,271 ​ ​ 105,452 ​ ​ 73,475 ​ ​ 746,492 Other ​ ​ 894,305 ​ ​ 808,129 ​ ​ 351,896 ​ ​ 254,988 ​ ​ 2,976,884 ​ ​ 5,286,202 ​ ​ $ 2,609,571 ​ $ 1,570,732 ​ $ 3,461,294 ​ $ 1,485,342 ​ $ 11,943,295 ​ $ 21,070,234 ​ Other general and administrative segment expenses primarily include Board of Directors fees and expenses, maintenance, office rent, amortization of intangible assets, and investor relations costs. ​ 72 Table of Contents Revenue earned by major geographic region was: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2024 2023 2022 Cayman Islands ​ $ 37,137,424 ​ $ 41,728,340 ​ $ 30,375,985 The Bahamas ​ 29,675,947 ​ 31,221,633 ​ 29,943,615 United States ​ 66,662,406 ​ 106,768,621 ​ 33,338,466 Revenue earned from management services agreement with OC-BVI ​ 490,856 ​ 492,639 ​ 446,906 ​ ​ $ 133,966,633 ​ $ 180,211,233 ​ $ 94,104,972 ​ Revenue earned from major customers was: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2024 2023 2022 Revenue earned from the WSC ​ $ 29,675,947 ​ $ 31,221,633 ​ $ 29,943,615 Percentage of consolidated revenue earned from the WSC ​ 22 % ​ 17 % ​ 32 % Revenue earned from one service segment customer ​ $ — ​ $ 64,149,170 ​ $ 11,805,752 Percentage of consolidated revenue earned from the one service segment customer ​ 0 % ​ 36 % ​ 13 % ​ Property, plant and equipment, net by major geographic region was: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Cayman Islands ​ $ 31,882,111 ​ $ 32,902,949 The Bahamas ​ 17,903,191 ​ 20,039,049 United States ​ 2,646,980 ​ 2,940,523 ​ ​ $ 52,432,282 ​ $ 55,882,521 ​ ​ ​ 15. Stock-based compensation The Company has the following stock compensation plans that form part of its employees’ and Directors’ remuneration: Employee Share Incentive Plan (Preferred Stock) Employees (i.e., other than Directors and Officers), after four consecutive years of employment, become eligible to receive shares of the Company’s preferred stock for $nil consideration under the Company’s Employee Share Incentive Plan. Once an individual becomes eligible for this plan, they are awarded shares of preferred stock in the month of June following their date of eligibility for the plan (the “grant date”) and in June of each subsequent year of the individual's employment for as long as the individual remains employed with the Company. If the employee remains with the Company through the fourth anniversary of a grant date, the preferred stock can be converted into shares of the Company’s common stock on a one for one basis. In addition, at the time the preferred stock is granted, the employee receives options to purchase an equal number of shares of preferred stock at a discount to the average trading price of the Company’s common stock for the first seven days of the October immediately preceding the date of the preferred stock grant. If these options are exercised, the shares of preferred stock obtained may also be converted to shares of common stock if the employee remains with the Company through the fourth anniversary of a grant date. Each employee’s option to purchase shares of preferred stock must be exercised within 30 days of the grant date, which is the 90 th day after the date of the independent registered public accountants’ audit opinion on the Company’s consolidated financial statements. Shares of preferred stock not subsequently converted to shares of common stock are redeemable only at the discretion of the Company. Shares of preferred stock granted under this plan during the years ended December 31, 2024, 2023 and 2022 totaled 5,904 , 13,309 and 9,295 , respectively, and an equal number of preferred stock options were granted in each of these years. Employee Share Option Plan (Common Stock Options) The Company has an employee stock option plan for four long-serving employees of the Company. Under the plan, these employees are granted in each calendar year, as long as the employee is a participant in the Employee Share Incentive 73 Table of Contents Plan, options to purchase common shares. The price at which the option may be exercised is the closing market price on the grant date, which is the 40 th day after the date of the Company’s Annual Shareholder Meeting. The number of options each employee is granted is equal to five times the sum of (i) the number of shares of preferred stock that employee receives for $nil consideration and (ii) the number of preferred stock options that employee exercises in that given year. Options may be exercised during the period commencing on the fourth anniversary of the grant date and ending on the 30 th day after the fourth anniversary of the grant date. Options granted under this plan during the years ended December 31, 2024, 2023 and 2022 totaled 1,300 , 3,010 and 3,665 , respectively. The fair value of each option award is estimated on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding. The Company uses historical data to estimate stock option exercises and forfeitures within its valuation model. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. 2008 Equity Incentive Plan On May 14, 2008, the Company’s stockholders approved the 2008 Equity Incentive Plan (the “2008 Plan”) and reserved 1,500,000 shares of the Company’s Class A common shares for issuance under this plan. All Directors, executives and key employees of the Company or its affiliates are eligible for participation in the 2008 Plan which provides for the issuance of options, restricted stock and stock equivalents at the discretion of the Board. The Company measures and recognizes compensation expense at fair value for all share-based payments, including stock options. Stock-based compensation for the Employee Share Incentive Plan, Employee Share Option Plan and the 2008 Equity Incentive Plan totaled $ 142,566 , $ 703,289 and $ 386,260 for the years ended December 31, 2024, 2023 and 2022, respectively, and is included in general and administrative expenses in the accompanying consolidated statements of income. The significant weighted average assumptions for the years ended December 31, 2024, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 Risk free interest rate 5.23 % 5.06 % 1.64 Expected option life (years) 0.8 1.0 ​ 1.2 Expected volatility 32.93 % 42.42 % 47.15 Expected dividend yield 1.48 % 1.60 % 2.35 ​ A summary of the Company’s stock option activity for the year ended December 31, 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ ​ ​ Exercise ​ Contractual ​ Intrinsic ​ Options Price Life (Years) Value (1) Outstanding at beginning of period 12,175 ​ $ 16.08 ​ Granted 7,204 ​ 23.24 ​ Exercised ( 1,043 ) ​ 22.77 ​ Forfeited/expired ( 4,861 ) ​ 22.77 ​ Outstanding as of December 31, 2024 13,475 ​ $ 16.97 1.51 years $ 120,136 Exercisable as of December 31, 2024 — ​ $ — — years $ — (1) The intrinsic value of a stock option represents the amount by which the fair value of the underlying stock, measured by reference to the closing price of the common shares of $ 25.89 on the Nasdaq Global Select Market on December 31, 2024, exceeds the exercise price of the option. 74 Table of Contents As of December 31, 2024, 13,475 non-vested options were outstanding, with weighted average exercise price of $ 16.97 , and average remaining contractual life of 1.51 years . The total remaining unrecognized compensation costs related to unvested stock-based arrangements were $ 32,423 as of December 31, 2024, and are expected to be recognized over a weighted average period of 1.51 years . The following table summarizes the weighted average fair value of options at the date of grant and the intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 Options granted with an exercise price below market price on the date of grant: ​ ​ ​ ​ Employees — preferred stock ​ $ 2.58 ​ $ 12.21 ​ $ 5.58 Overall weighted average ​ 2.58 ​ 12.21 ​ 5.58 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options granted with an exercise price at market price on the date of grant: ​ ​ ​ Management employees ​ $ — ​ $ — ​ $ — Employees — common stock ​ 8.50 ​ 8.29 ​ 4.32 Overall weighted average ​ 8.50 ​ 8.29 ​ 4.32 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options granted with an exercise price above market price on the date of grant: ​ ​ ​ Management employees ​ $ — ​ $ — ​ $ — Employees — preferred stock ​ — ​ — ​ — Overall weighted average ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intrinsic value of options exercised ​ $ 2,482 ​ $ 104,559 ​ $ 17,158 ​ Senior Management Long-Term Incentive Compensation ​ The Board of Directors has established the long-term incentive compensation for the Company’s senior management to better align the interests of its senior management with those of its shareholders. The long-term compensation plan includes a combination of performance and non-performance-based grants of common stock from the shares of Company stock provided for issuance under the 2008 Equity Incentive Plan. ​ The non-performance-based stock grant rights, which are issued on January 1 of each year, vest in one-third increments at the end of each year over a three-year period. The number of non-performance-based stock grant rights issued on the first stock trading day of January 2024, 2023, and 2022, were 12,837 , 29,508 and 32,265 , respectively. These stock grant rights vest in one-third increments over the three-year periods ending December 31, 2026, 2025 and 2024, respectively. The total number of vested shares issued under prior years’ non-performance stock grant rights totaled 29,392 , 25,986 and 23,411 in the years ended December 31, 2024, 2023 and 2022, respectively. For the years ended December 31, 2024, 2023 and 2022, the Company recognized $ 412,520 , $ 366,058 and $ 325,270 in stock-based compensation expense, respectively, related to the incremental vesting of the non-performance stock grant rights. The performance-based grants may be earned at the end of each year based upon the Company's three-year cumulative financial performance relative to three-year cumulative financial performance targets. The Company recognized $ 509,357 , $ 522,925 and $ 335,964 in stock-based compensation for the year ended December 31, 2024, 2023 and 2022, respectively, related to these grants. A total of 41,889 stock grant rights were earned as of December 31, 2024, based upon the Company’s actual financial performance relative to the cumulative financial performance targets for the three-year period ended December 31, 2024. The shares associated with these grants will be issued in 2025. A total of 26,742 stock grant rights were earned as of December 31, 2023, based upon the Company’s actual financial performance relative to the cumulative financial performance targets for the three -year period ended December 31, 2023. The shares associated with these grants were issued in 2024. ​ 75 Table of Contents A total of 13,797 stock grant rights were earned as of December 31, 2022, based upon the Company’s actual financial performance relative to the cumulative financial performance targets for the three-year period ended December 31, 2022. The shares associated with these grants were issued in 2023. ​ Non-Executive Directors’ Share Plan This stock grant plan provides part of the Directors’ remuneration. Under this plan, non-Executive Directors receive a combination of cash and common stock for their participation in Board meetings. The number of shares of common stock granted is calculated based upon the market price of the Company’s common stock on October 1 of the year preceding the grant. Common stock granted under this plan during the years ended December 31, 2024, 2023 and 2022, totaled 11,448 , 22,831 and 30,767 shares, respectively. The Company recognized stock-based compensation for these share grants of $ 333,140 , $ 341,394 and $ 369,678 for the years ended December 31, 2024, 2023 and 2022, respectively. ​ 16. Retirement benefits Retirement plans are offered to all employees in California, Florida, Colorado, the Cayman Islands and The Bahamas. The plans are administered by third parties and are defined contribution plans pursuant to which the Company matches participating employees’ contributions up to certain amounts. The Company’s expense for these plans was $ 898,457 , $ 771,616 and $ 624,798 for the years ended December 31, 2024, 2023, and 2022, respectively. ​ 17. Financial instruments Credit risk: The Company is not exposed to significant credit risk on its retail customer accounts as its policy is to cease supply of water to customers’ accounts that are more than 45 days overdue. The Company’s exposure to credit risk is concentrated on receivables from its bulk water, services, and manufacturing customers. The Company considers these receivables fully collectible and therefore has not recorded a material allowance for these receivables. Interest rate risk: The Company is not subject to significant interest rate risk arising from fluctuations in interest rates. Foreign exchange risk: All relevant foreign currencies other than the Mexican peso and the euro have been fixed to the dollar for more than 50 years and as a result, the Company does not employ a hedging strategy against exchange rate risk associated with the reporting in dollars. If any of these fixed exchange rates become a floating exchange rate or if any of the foreign currencies in which the Company conducts business depreciate significantly against the dollar, the Company’s consolidated results of operations could be adversely affected. Fair values: As of December 31, 2024 and 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. US GAAP guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s 76 Table of Contents assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Company reviews its fair value hierarchy classifications on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. As of December 31, 2024 and 2023, the Company does not have assets and liabilities measured at fair value to present in the fair value hierarchy. ​ ​ ​ 18. Commitments and contingencies Commitments The Company has entered into employment agreements with certain executives, which expire through December 31, 2027 and provide for, among other things, base annual salaries in an aggregate amount of approximately $5.2 million, performance bonuses and various employee benefits. The Company has purchase obligations totaling approximately $ 15.6 million through December 31, 2025. Contingencies Cayman Water The Company sells water through its Cayman Water 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. Although the 1990 license has not been expressly extended after January 2018, the Company continues to supply water under the terms of the 1990 license, as further discussed in the following paragraph. 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. In 2024, 2023, and 2022, the Company generated approximately 24 %, 17 % and 27 %, respectively, of its consolidated revenue and 38 %, 26 % and 44 %, 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. The most recent express extension of the 1990 license expired on January 31, 2018. From that date until February 18, 2025, the Company continued to operate under the terms of the 1990 license, providing water services to the level and quality specified in the 1990 license and in accordance with its understanding of its legal obligations, treating those obligations set forth in the 1990 license as operative notwithstanding the expiration of the express extension. The Company continued to pay the royalty of 7.5 % of the revenue that Cayman Water collects as required under the 1990 license. In October 2016, the Government of the Cayman Islands passed legislation which created a new utilities regulation and competition office (“OfReg”). OfReg is an independent and accountable regulatory body with a view of protecting the 77 Table of Contents rights of consumers, encouraging affordable utility services and promoting competition. OfReg, which began operations in January 2017, has the ability to supervise, monitor and regulate multiple utility undertakings and markets. Supplemental legislation was passed by the Government of the Cayman Islands in April 2017, which transferred responsibility for the economic regulation of the water utility sector and the negotiations with the Company for a new retail license from the WAC to OfReg in May 2017. The Company began license negotiations with OfReg in July 2017 and such negotiations are ongoing. The Company has been informed during its 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 the Company has historically generated from its retail license. Under the new regulatory legislation passed in October 2016, Cayman Water must first be granted a concession by the government before obtaining a new (or renewing the old) retail operating license. 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 is negotiated and enacted. The Company is presently unable to determine what impact the resolution of its retail license negotiations will have on its consolidated financial condition or results of operations but such resolution could result in a material reduction (or the loss) of the operating income and cash flows the Company has historically generated from Cayman Water’s retail operations and could require the Company to record impairment losses to reduce the carrying values of its retail segment assets. Such impairment losses could have a material adverse impact on the Company’s consolidated financial condition and results of operations. CW-Bahamas CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $ 28.4 million and $ 26.9 million as of December 31, 2024 and 2023. Approximately 81 % and 80 % of the accounts receivable balances were delinquent as of those dates, respectively. From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable from the WSC. When these delays occur, the Company holds discussions and meetings with representatives of the WSC and The Bahamas government, and as a result, payment schedules are developed for WSC’s delinquent accounts receivable. 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 December 31, 2024. ​ 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. Moody’s also lowered The Bahamas’ local currency ceiling to Baa3 from Baa2 and its foreign currency ceiling to Ba1 from Baa3. Moody’s has maintained these ratings through the date of its most current report issued in October 2024. ​ If CW-Bahamas is unable to collect a sufficient portion of its delinquent accounts receivable, one or more of the following events may occur: (i) CW-Bahamas may not have sufficient liquidity to meet its obligations; (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. Any of these events could have a material adverse impact on the Company’s consolidated financial condition, results of operations, and cash flows. ​ CW-Bahamas Performance Guarantees The contracts to supply water to the WSC from the Blue Hills and Windsor plants require CW-Bahamas to guarantee delivery of a minimum quantity of water per week. If the WSC requires the water and CW-Bahamas does not meet this minimum, CW-Bahamas is required to pay the WSC for the difference between the minimum and actual gallons delivered at a per gallon rate equal to the price per gallon that the WSC is currently paying CW-Bahamas under the contract. The Blue Hills contract expires in 2032 and requires CW-Bahamas to deliver 63.0 million gallons of water each week. The Windsor contract expires in 2033 and requires CW-Bahamas to deliver 16.8 million gallons of water each week. CW- 78 Table of Contents Bahamas has been in compliance with the performance guarantees under these contracts for all periods since the inception of the contracts. ​ ​ ​ 19. Related party transactions ​ The Company, through PERC, purchases engineering and technology support services from various companies formerly affiliated with PERC, as a former minority shareholder in these companies was also a minority shareholder of PERC. On January 4, 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. After giving effect to this purchase, CW-Holdings owns 100 % of the outstanding capital stock of PERC and, consequently, transactions with the formerly affiliated companies no longer constitute related party transactions. During the year ended December 31, 2022, the Company made total purchases of services from these companies of approximately $ 2,695,000 . These total purchases are included in the Company’s cost of revenue in the accompanying consolidated statements of income. ​ PERC entered into a sublease agreement with one of these formerly affiliated companies that commenced on March 14, 2021 and ended August 31, 2021. This lease was subsequently extended on an annual basis until August 31, 2025. During the year ended December 31, 2022, the Company recognized approximately $ 97,000 of expense related to this lease. This lease expense is included in the Company's general and administrative expenses in the accompanying consolidated statements of income. ​ ​ ​ ​ 20. Supplemental disclosure of cash flow information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Interest paid in cash ​ $ 8,479 ​ $ 21,417 ​ $ 14,797 Income taxes paid in cash ​ $ 3,147,300 ​ $ 4,920,912 ​ $ 211,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of 5,904 , 13,309 and 9,295 , respectively, shares of redeemable preferred stock for services rendered ​ $ 148,485 ​ $ 323,275 ​ $ 133,197 Issuance of 68,832 , 68,864 and 72,597 , respectively, shares of common stock for services rendered ​ $ 1,064,119 ​ $ 1,015,177 ​ $ 877,298 Conversion (on a one-to- one basis) of 5,968 , 8,848 and 6,585 , respectively, shares of redeemable preferred stock to common stock ​ $ 3,581 ​ $ 5,309 ​ $ 3,951 Dividends declared but not paid ​ $ 1,747,938 ​ $ 1,502,506 ​ $ 1,305,367 Issuance of 0 , 368,383 and 0 , respectively, shares of common stock for the purchase of non-controlling interest in PERC ​ $ — ​ $ 5,359,973 ​ $ — Transfers from inventory to property, plant and equipment and construction in progress ​ $ 538,777 ​ $ 317,853 ​ $ 346,024 Transfers from construction in progress to property, plant and equipment ​ $ 1,395,485 ​ $ 7,093,158 ​ $ 297,723 Right-of-use assets obtained in exchange for new operating lease liabilities ​ $ 1,604,702 ​ $ 745,078 ​ $ — Purchase of equipment through issuance of long-term debt ​ $ — ​ $ — ​ $ 188,645 Transfers from prepaid expenses to property, plant and equipment ​ $ 67,136 ​ $ 271,922 ​ $ — Transfers from prepaid expenses to inventory ​ $ — ​ $ 238,032 ​ $ — ​ ​ ​ 21. Impact of recent accounting standards Adoption of new accounting standards: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an 79 Table of Contents explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The adoption of ASU 2023-07 did not have a material impact on the Company’s financial position, results of operations or cash flows. Effect of newly issued but not yet effective accounting standards: ​ In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. 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. ​ 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 evaluation the impact of this guidance. ​ 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 is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is permitted. The adoption of ASU 2023-09 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. ​ 22. Subsequent events The Company evaluated subsequent events through the time of the filing of its Annual Report on Form 10-K. Other than as disclosed in these consolidated financial statements, the Company is not aware of any significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on its consolidated financial statements. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ​ None. ​