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What changed in Consolidated Water Co. Ltd.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Consolidated Water Co. Ltd.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+220 added−243 removedSource: 10-K (2026-03-16) vs 10-K (2025-03-17)

Top changes in Consolidated Water Co. Ltd.'s 2025 10-K

220 paragraphs added · 243 removed · 172 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

51 edited+4 added−10 removed69 unchanged
Biggest changeWe own 50% of the voting rights and 43.53% of the equity rights of Ocean Conversion (BVI) Ltd., which produces and supplies bulk water to the British Virgin Islands Water and Sewerage Department. ​ As of December 31, 2024, the number of water production and water treatment plants we and our affiliate operated in each country, and the production capacities of these plants, were as follows: ​ ​ ​ ​ ​ ​ Water Production Plant Location Plants Capacity (1) Cayman Islands 6 ​ 10.6 Bahamas 2 ​ 14.8 British Virgin Islands 2 ​ 0.8 Total 10 26.2 (1) In millions of gallons per day. ​ ​ ​ ​ ​ ​ Water Treatment Plant Location Plants Capacity (1) United States 29 ​ 58.0 ​ ​ ​ ​ ​ (1) In estimated millions of gallons per day. ​ In addition to the above plants, as of December 31, 2024, our wholly owned subsidiary, Ramey Environmental Compliance, Inc., performed operations, maintenance, and monitoring services for 64 wastewater and water treatment plants located in the Rocky Mountain and Eastern Plains Regions of Colorado. ​ 4 Table of Contents Strategy ​ We are a comprehensive water solutions company that serves a variety of customers through multiple product and service offerings.
Biggest changeWe own 50% of the voting rights and 43.53% of the equity rights of Ocean Conversion (BVI) Ltd., which produces and supplies bulk water to the British Virgin Islands Water and Sewerage Department. ​ As of December 31, 2025, the number of water production and water treatment plants we and our affiliate operated in each country, and the production capacities of these plants, were as follows: ​ ​ ​ ​ ​ ​ Water Production Plant Location ​ ​ ​ Plants ​ ​ ​ Capacity (1) Cayman Islands 6 ​ 11.6 Bahamas 2 ​ 14.8 British Virgin Islands 2 ​ 0.8 Total 10 27.2 (1) In millions of gallons per day. ​ ​ ​ ​ ​ ​ Water Treatment Plant Location ​ ​ ​ Plants (2) ​ ​ ​ Capacity (1) United States 97 ​ 78.5 ​ ​ ​ ​ ​ (1) In estimated millions of gallons per day.
As a result of our decades of experience in seawater desalination, we believe our expertise and experience with respect to the development and operation of desalination plants and similar facilities is easily transferable to locations outside of our historical operating areas as demonstrated by the recent award to us of a reverse osmosis desalination project in Honolulu, Hawaii, USA. ​ Wastewater Treatment Technology ​ Our approach to wastewater treatment integrates advanced technologies and processes to ensure high-quality water reuse while addressing environmental and operational concerns.
As a result of our decades of experience in seawater desalination, we believe our expertise and experience with respect to the development and operation of desalination plants and similar facilities is easily transferable to locations outside of our historical operating areas as demonstrated by the recent award to us of a reverse osmosis desalination project in Honolulu, Hawaii, USA. ​ Wastewater Treatment Technology ​ Our approach to wastewater treatment integrates advanced technologies and processes to ensure high-quality reuse water while addressing environmental and operational concerns.
We have competed with such companies as Veolia, IDE Technologies and small local contractors for bulk water supply contracts with the WAC and expect to compete with these and other companies for any new water supply contracts awarded by the WAC. ​ The Bahamas .
We have competed with companies such as Veolia, IDE Technologies and small local contractors for bulk water supply contracts with the WAC, and expect to compete with these and other companies for any new water supply contracts awarded by the WAC. ​ The Bahamas .
The Code of Business Conduct and Ethics, the charters of the Audit Committee, Compensation Committee, Nominations and Corporate Governance Committee, Environmental and Social Governance Committee and the Corporate Governance Guidelines of our Board of Directors are available at the Investors section of our website. ​ You may access, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, plus amendments to such reports as filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, on our website and on the website of the Securities and Exchange Commission (the “SEC”) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
The Code of Business Conduct and Ethics; the charters of the Audit Committee, Compensation Committee, Nominations and Corporate Governance Committee, and Environmental and Social Governance Committee; and the Corporate Governance Guidelines of our Board of Directors are available at the Investors section of our website. ​ You may access, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, plus amendments to such reports as filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, on our website and on the website of the Securities and Exchange Commission (the “SEC”) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
This concentrate is discharged without passing through the membrane, and the remaining hydraulic energy in the concentrate is transferred to the initial saline feed water with an energy recovery device thus reducing the total energy requirement for the reverse osmosis system.
This concentrate is discharged without passing through the membrane, and the remaining hydraulic energy in the concentrate is transferred to the initial saline feed water stream with an energy recovery device thus reducing the total energy requirement for the reverse osmosis system.
ITEM 1. BUSINESS ​ Overview ​ Through our subsidiaries and affiliate, we provide the following services to our customers in the Cayman Islands, The Bahamas, the United States and the British Virgin Islands: ​ ● Retail Water Operations.
ITEM 1. BUSINESS ​ Overview ​ Through our subsidiaries and affiliate, we provide the following products and services to our customers in the Cayman Islands, The Bahamas, the United States and the British Virgin Islands: ​ ● Retail Water Operations.
In the event of a tied vote of the Directors, the President of the Caribbean Water and Wastewater Association, a regional trade association comprised primarily of government representatives, is entitled to appoint a junior director to cast a deciding vote. ​ Through DesalCo, we provide certain engineering and administrative services to OC-BVI for a monthly fee and a bonus arrangement which provides for payment of 4% of the net operating income of OC-BVI. ​ We account for our investment in OC-BVI using the equity method of accounting. ​ OC-BVI sells bulk water to BVIW&S, which distributes the water through its own pipeline system to residential, commercial and tourist properties on the islands of Tortola and Jost Van Dyke in the British Virgin Islands. 10 Table of Contents ​ OC-BVI owns and operates a desalination plant located at Bar Bay, Tortola with a capacity of 720,000 gallons per day.
In the event of a tied vote of the Directors, the President of the Caribbean Water and Wastewater Association, a regional trade association comprised primarily of government representatives, is entitled to appoint a junior director to cast a deciding vote. ​ DesalCo provides certain engineering and administrative services to OC-BVI for a monthly fee and a bonus arrangement which provides for payment of 4% of the net operating income of OC-BVI. ​ We account for our investment in OC-BVI using the equity method of accounting. ​ OC-BVI sells bulk water to BVIW&S, which distributes the water through its own pipeline system to residential, commercial and tourist properties on the islands of Tortola and Jost Van Dyke in the British Virgin Islands. ​ OC-BVI owns and operates a desalination plant located at Bar Bay, Tortola with a capacity of 720,000 gallons per day.
This is particularly relevant for applications like Title 22 reuse and Indirect Potable Reuse, where safety and quality are paramount. ​ We utilize Membrane Bioreactor (“MBR”) technology, which is a wastewater treatment process that has been used for several decades to produce high quality recycled water for non-potable reuse.
This is particularly relevant for applications like reuse and indirect potable reuse, where safety and quality are paramount. ​ We utilize Membrane Bioreactor (“MBR”) technology, which is a wastewater treatment process that has been used for several decades to produce high quality recycled water for non-potable reuse.
We own the land for our ACWW and West Bay plants. The current aggregate production capacity of the two plants located at ACWW is 3.0 million gallons of water per day. The production capacity of the West Bay plant is 1.0 million gallons of water per day. ​ Electricity is supplied to our plants by Caribbean Utilities Co.
We own the land for our ACWW and West Bay plants. The current aggregate production capacity of the two plants located at ACWW is 3.0 million gallons of water per day. The production capacity of the West Bay plant is 2.0 million gallons of water per day. ​ Electricity is supplied to our plants by Caribbean Utilities Co.
This water supply agreement expires in March 2031. ​ OC-BVI purchases electrical power to operate this plant from the BVI Electricity Corporation and operates diesel engine-driven emergency power generators which can produce 100% of the plant’s production capacity when the BVI Electricity Corporation is unable to provide power to the plant. ​ OC-BVI’s plant on the island of Jost Van Dyke has a capacity of 60,000 gallons per day.
This water supply agreement expires in March 2031. ​ 10 Table of Contents OC-BVI purchases electrical power to operate this plant from the BVI Electricity Corporation and operates diesel engine-driven emergency power generators which can produce 100% of the plant’s production capacity when the BVI Electricity Corporation is unable to provide power to the plant. ​ OC-BVI’s plant on the island of Jost Van Dyke has a capacity of 60,000 gallons per day.
We maintain a standby generator with sufficient capacity to operate essential equipment at our Windsor and Blue Hills plants and are able to produce 100% of the production capacity with these plants during temporary interruptions in the electricity supply from BPL. ​ 9 Table of Contents Services Operations ​ For fiscal years 2024, 2023, and 2022, our services operations accounted for approximately 38%, 54% and 31%, respectively, of our consolidated revenue. ​ We provide design, engineering and construction services for desalination infrastructure projects through DesalCo, an original equipment manufacturer of seawater reverse osmosis desalination plants.
We maintain a standby generator with sufficient capacity to operate essential equipment at our Windsor and Blue Hills plants and are able to produce 100% of the production capacity with these plants during temporary interruptions in the electricity supply from BPL. ​ Services Operations ​ For fiscal years 2025, 2024, and 2023, our services operations accounted for approximately 35%, 38% and 54%, respectively, of our consolidated revenue. ​ 9 Table of Contents We provide design, engineering and construction services for desalination infrastructure projects through DesalCo, an original equipment manufacturer of seawater reverse osmosis desalination plants.
We continue to pursue acquisitions or joint ventures that (i) complement and enhance our existing businesses; (ii) expand our product and service offerings and markets; and (iii) support our objective to be a comprehensive water solutions provider. ​ Our Company ​ We conduct our operations in the Cayman Islands, The Bahamas, the United States, and the British Virgin Islands through our subsidiaries and our affiliate.
We continue to pursue acquisitions or joint ventures that (i) complement and enhance our existing businesses; (ii) expand our product and service offerings and markets; (iii) access new markets; and (iv) support our objective to be a comprehensive water solutions provider. ​ Our Company ​ We conduct our operations in the Cayman Islands, The Bahamas, the United States, and the British Virgin Islands through our subsidiaries and our affiliate.
We have been advised by the 12 Table of Contents Government of the Cayman Islands that we will not receive any duty concessions in any new retail water license signed with the government. ​ The Bahamas ​ Under the current laws of the Commonwealth of The Bahamas, no income, corporation, capital gains or similar taxes are payable by us.
We have been advised by the Government of the Cayman Islands that we will not receive any duty concessions in any new retail water license signed with the government. ​ The Bahamas ​ Under the current laws of the Commonwealth of The Bahamas, no income, corporation, capital gains or similar taxes are payable by us.
We conceal equipment and housing technologies in buildings that are both aesthetically pleasing and odor friendly, thereby addressing two of the common challenges in wastewater treatment facilities: odor and visual impact.
We conceal equipment and housing technologies in buildings that are both aesthetically pleasing and low odor, thereby addressing two of the common challenges in wastewater treatment facilities: odor and visual impact.
This not only enhances the quality of life for nearby residents but also demonstrates a commitment to environmental stewardship. ​ Furthermore, the vertical integration of technology within our operations constitutes a strategic approach to improving efficiency in construction and operational phases.
This not only enhances the quality of life for nearby residents but also demonstrates a commitment to environmental stewardship. ​ 11 Table of Contents Furthermore, the vertical integration of technology within our operations constitutes a strategic approach to improving efficiency in construction and operational phases.
The Cayman Islands government, through the WAC, supplies water to parts of Grand Cayman located outside of our licensed service area. Although we have no competition within our exclusive retail license service area for potable water, our ability to expand our service area is at 13 Table of Contents the discretion of the Cayman Islands government.
The Cayman Islands government, through the WAC, supplies water to parts of Grand Cayman located outside of our licensed service area. Although we have no competition within our exclusive retail license service area for potable water, our ability to expand our service area is at the discretion of the Cayman Islands government.
We have 23 management employees and 60 administrative and clerical employees. The remaining employees are engaged in engineering, purchasing, plant maintenance and operations, pipe laying and repair, leak detection, new customer connections, meter reading and laboratory analysis of water quality. We have no collective bargaining agreements with our employees, and none are represented by labor unions.
We have 20 management employees and 58 administrative and clerical employees. The remaining employees are engaged in engineering, purchasing, plant maintenance and operations, pipe laying and repair, leak detection, new customer connections, meter reading and laboratory analysis of water quality. We have no collective bargaining agreements with our employees, and none are represented by labor unions.
Additionally, MBR's capability to handle more challenging influent makes it a versatile solution for a variety of wastewater treatment needs. ​ 11 Table of Contents We employ various methods to improve the aesthetic and environmental integration of our clients’ facilities.
Additionally, MBR's capability to handle more challenging influent makes it a versatile solution for a variety of wastewater treatment needs. ​ We employ various methods to improve the aesthetic and environmental integration of our clients’ facilities.
Our corporate organizational structure as of December 31, 2024 is as follows: ​ ​ 5 Table of Contents Retail Segment ​ Cayman Water Company Limited (“Cayman Water”) .
Our corporate organizational structure as of December 31, 2025 is as follows: ​ ​ 5 Table of Contents Retail Segment ​ Cayman Water Company Limited (“Cayman Water”) .
For additional information about our business segments and geographical information about our operating revenue and long-lived assets, see Note 14 to our consolidated financial statements at ITEM 8 of this Annual Report. ​ Retail Water Operations ​ For fiscal years 2024, 2023, and 2022, our retail water operations accounted for approximately 24%, 17%, and 27%, respectively, of our consolidated revenue.
For additional information about our business segments and geographical information about our operating revenue and long-lived assets, see Note 14 to our consolidated financial statements at ITEM 8 of this Annual Report. ​ Retail Water Operations ​ For fiscal years 2025, 2024, and 2023, our retail water operations accounted for approximately 26%, 24%, and 17%, respectively, of our consolidated revenue.
REC operates and maintains water and wastewater treatment facilities and provides technical services to clients throughout the Rocky Mountain and Eastern Plains Regions of Colorado. ​ Manufacturing Operations ​ For fiscal years 2024, 2023, and 2022, our manufacturing operations accounted for approximately 13%, 10% and 7%, respectively, of our consolidated revenue.
REC operates and maintains water and wastewater treatment facilities and provides technical services to clients throughout the Rocky Mountain and Eastern Plains Regions of Colorado. ​ Manufacturing Operations ​ For fiscal years 2025, 2024, and 2023, our manufacturing operations accounted for approximately 14%, 13% and 10%, respectively, of our consolidated revenue.
We have competed with companies such as Veolia, IDE Technologies, and TSG for the contracts with The Bahamas government to build and operate seawater desalination plants in the past. We expect to compete with these companies and others for any future water supply contracts in The Bahamas. ​ British Virgin Islands .
We have competed with companies such as Veolia, IDE Technologies, and TSG for the contracts with The Bahamas government to build and operate seawater desalination plants in the past. We expect to compete with these companies and others for any future water supply contracts in The Bahamas. ​ 13 Table of Contents British Virgin Islands .
We are also required to pay a value added tax on materials and services we purchase and bill a value added tax for the water we sell. ​ Markets and Service Areas ​ We operate in the Cayman Islands, The Bahamas, the United States and the British Virgin Islands.
We are also required to pay a value added tax on materials and services we purchase and bill a value added tax for the water we sell. 12 Table of Contents ​ Markets and Service Areas ​ We operate in the Cayman Islands, The Bahamas, the United States and the British Virgin Islands.
We manufacture and service a wide range of specialized and custom water-related products and systems applicable to commercial, municipal and industrial water production, supply and treatment. In 2024, our manufacturing operations generated approximately 13% of our consolidated revenue. ​ ● Affiliate Operations.
We manufacture and service a wide range of specialized and custom water-related products and systems applicable to commercial, municipal and industrial water production, supply and treatment. In 2025, our manufacturing operations generated approximately 14% of our consolidated revenue. ​ ● Affiliate Operations.
CW-Bahamas owns and operates our largest desalination plant and one other desalination plant. ​ Ocean Conversion (Cayman) Limited (“OC-Cayman”). OC-Cayman provides bulk water under long-term contracts to the WAC, which distributes the water to properties located outside our exclusive retail license service area on Grand Cayman.
CW-Bahamas owns and operates our largest desalination plant and one other desalination plant. ​ Ocean Conversion (Cayman) Limited (“OC-Cayman”). OC-Cayman provides bulk water under long-term contracts to the WAC, which distributes the water to areas of Grand Cayman located outside of Cayman Water’s exclusive retail license service area.
We design, construct and sell water production and water treatment plants, and we manage and operate water production plants, and water treatment and reuse infrastructure, for third parties. We also provide water related consulting services. In 2024, our services operations generated approximately 38% of our consolidated revenue. ​ ● Manufacturing Operations.
We design, construct and sell water production and water treatment plants, and we manage and operate water production plants and water treatment and reuse infrastructure, for third parties. We also provide water related consulting services. In 2025, our services operations generated approximately 35% of our consolidated revenue. ​ ● Manufacturing Operations.
The plants we operate for the WAC are located on land owned by the WAC. ​ Our agreement with the WAC for the North Sound and NSWW plants expires in 2026.
The plants we operate for the WAC are located on land owned by the WAC. ​ Our agreement with the WAC for the North Sound and NSWW plants expires on July 1, 2026.
On February 18, 2025, Cayman Water received a new concession from the government that authorizes and maintains the terms of the 1990 license until a new license from OfReg is negotiated and enacted. ​ See also ITEM 1A. RISK FACTORS and ITEM 7.
On February 18, 2025, Cayman Water received a new concession from the government that authorizes and maintains the terms of the 1990 license until a new license from OfReg is negotiated and enacted. Negotiations between Cayman Water and OfReg for a new license remain on-going. ​ See also ITEM 1A. RISK FACTORS and ITEM 7.
Standby generation capacity is available at our ACWW plants and West Bay plant to operate a portion of the water production capacity as well. ​ Our distribution system is connected to the distribution system of the WAC.
Standby generation capacity is available at our ACWW plants and West Bay plant to operate a portion of the water production capacity as well.
According to the figures published by the Department of Tourism Statistics Information Center, in 2024 as compared to 2023, tourist air arrivals increased by 2% to approximately 438,000 and tourist cruise ship arrivals decreased by 15% to approximately 1,076,000. ​ We believe that our water sales in the Cayman Islands are more positively impacted by stay-over tourists that arrive by air than by those arriving by cruise ship, since cruise ship tourists generally only visit the island for less than one day and do not stay in hotels or condominiums.
According to the figures published by the Department of Tourism Statistics Information Center, in 2025 as compared to 2024, tourist air arrivals increased by 2.9% to approximately 450,000 and tourist cruise ship arrivals decreased by 1.4% to approximately 1,062,000. ​ Our water sales in the Cayman Islands are more positively impacted by stay-over tourists that arrive by air than by those arriving by cruise ship, since cruise ship tourists generally only visit the island for less than one day and do not stay in hotels or condominiums.
In 2024, our retail water operations generated approximately 24% of our consolidated revenue. ​ ● Bulk Water Operations. We produce potable water from seawater utilizing reverse osmosis technology and supply this water to government-owned distributors in the Cayman Islands and The Bahamas. In 2024, our bulk water operations generated approximately 25% of our consolidated revenue. ​ ● Services Operations .
In 2025, our retail water operations generated approximately 26% of our consolidated revenue. ​ ● Bulk Water Operations. We produce potable water from seawater utilizing reverse osmosis technology and supply this water to government-owned utilities in the Cayman Islands and The Bahamas. In 2025, our bulk water operations generated approximately 25% of our consolidated revenue. ​ ● Services Operations .
We consider our relationship with our employees to be very good. ​ Available Information ​ Our website address is http://www.cwco.com.
We consider our relationship with our employees to be very good. 14 Table of Contents ​ Available Information ​ Our website address is http://www.cwco.com.
When a development is completed, the developer then transfers operation and maintenance of the pipeline to us. ​ We bill our customers on a monthly basis based on metered consumption and bills are typically collected within 30 to 45 days after the billing date.
When a development is completed, the developer then transfers operation and maintenance of the pipeline to us. ​ We bill our customers 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.
We operate all but one of the reverse osmosis desalination plants owned by the WAC on Grand Cayman and supply water under three agreements held by OC-Cayman with the WAC. ​ According to the most recent information published by the Economics and Statistics Office of the Cayman Islands Government, the population of the Cayman Islands was estimated in 2023 to be 84,738 after the 2021 census count.
We operate all but one of the reverse osmosis desalination plants owned by the WAC on Grand Cayman and supply water under three agreements held by OC-Cayman with the WAC. ​ According to the most recent information published by the Economics and Statistics Office of the Cayman Islands Government, the population of the Cayman Islands was estimated in 2024 to be 88,833.
According to statistics published by the Bahamas Ministry of Tourism, in 2024 as compared to 2023, the number of air arrivals decreased by 1% to approximately 1,320,000 and cruise ship arrivals increased by 25% to approximately 3,901,000. ​ British Virgin Islands . The British Virgin Islands are a British Overseas Territory and are situated east of Puerto Rico.
According to statistics published by the Bahamas Ministry of Tourism, in 2025 as compared to 2024, the number of air arrivals decreased by 2% to approximately 1,290,000 and cruise ship arrivals increased by 6% to approximately 4,153,000. ​ British Virgin Islands . The British Virgin Islands are a British Overseas Territory situated east of Puerto Rico.
The Cayman Islands government, through the WAC, supplies water to the areas of Grand Cayman that are not within our licensed area, as well as to Cayman Brac.
The Cayman Islands are a British Overseas Territory situated in the central western Caribbean Sea. The Cayman Islands government, through the WAC, supplies water to the areas of Grand Cayman that are not within our licensed area, as well as to Cayman Brac.
Typical technology uses include that of micro and ultra filtration, reverse osmosis, and ultraviolet advanced oxidation systems, often with sodium hypochlorite or hydrogen peroxide as oxidizers, to meet the stringent water quality parameters set by California.
Typical technologies employed include micro and ultra filtration, reverse osmosis, and ultraviolet advanced oxidation systems, often with sodium hypochlorite or hydrogen peroxide as oxidizers, to meet the stringent water quality parameters in the areas we serve.
We have historically experienced low employee turnover. 14 Table of Contents ​ As of March 10, 2025, we employed a total of 307 persons, 62 in the Cayman Islands, 226 in the United States, 17 in The Bahamas and two in The Netherlands. We also managed the five employees of OC-BVI in the British Virgin Islands.
We have historically experienced low employee turnover. ​ As of March 9, 2026, we employed a total of 293 persons, 65 in the Cayman Islands, 206 in the United States, 20 in The Bahamas and two in The Netherlands. We also managed the five employees of OC-BVI in the British Virgin Islands.
Serving as a subcontractor to OC-Cayman, DesalCo designed and constructed the four reverse osmosis plants that OC-Cayman currently operates for (and previously sold to) the WAC. ​ Kalaeloa Desalco LLC (“Kalaeloa Desalco”). In September 2021, Kalaeloa Desalco was formed to pursue a project encompassing the design, construction, operations and maintenance of a seawater reverse osmosis desalination plant in Oahu, Hawaii.
In September 2021, Kalaeloa Desalco was formed to pursue a project encompassing the design, construction, operations and maintenance of a seawater reverse osmosis desalination plant in Oahu, Hawaii.
Presently, DesalCo is providing engineering, management and purchasing services to our affiliate OC-BVI in the British Virgin Islands.
DesalCo also provides management and procurement services for desalination plants and engineering services relating to municipal water production, distribution and treatment. Presently, DesalCo is providing engineering, management and purchasing services to CW-Bahamas and our affiliate OC-BVI in the British Virgin Islands.
We supply water to the WSC through the water supply agreements for our Blue Hills and Windsor plants, which are located in Nassau. New Providence is the most populous island in The Bahamas, with more than 70% of the country’s population. A 2022 census placed the population of New Providence at approximately 297,000.
New Providence is the most populous island in The Bahamas, with more than 70% of the country’s population. A 2022 census placed the population of New Providence at approximately 297,000.
Our water sales in the Cayman Islands are also greatly impacted by rainfall patterns and amounts on Grand Cayman. ​ The Bahamas. The Bahamas government, through the WSC, supplies all of the piped water on the island of New Providence, Bahamas, which includes Nassau, the largest city, political capital and commercial hub of The Bahamas.
The Bahamas government, through the WSC, supplies all of the piped water on the island of New Providence, Bahamas, which includes Nassau, the largest city, political capital and commercial hub of The Bahamas. We supply water to the WSC through the water supply agreements for our Blue Hills and Windsor plants, which are located in Nassau.
We continued to pay the royalty of 7.5% of the revenue we collected 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”).
We continued to pay a royalty of 7.5% of the revenue we collected 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”) and, in April 2017, passed supplemental legislation which transferred responsibility for the economic regulation of the water utility sector and the negotiations with us for a new retail license to OfReg. ​ Under the new regulatory legislation passed in October 2016, Cayman Water was required to first be granted a concession by the government before obtaining a new (or renewing the old) retail operations license.
A Cayman Islands company, DesalCo provides design, management, engineering and construction services for desalination projects as well as management and engineering services relating to municipal water distribution and treatment.
A Cayman Islands company, DesalCo provides design, management, engineering and construction services for desalination projects as well as management and engineering services relating to municipal water distribution and treatment. Serving as a subcontractor to OC-Cayman, DesalCo designed and constructed the four reverse osmosis plants that OC-Cayman sold to (and currently operates for) the WAC. ​ Kalaeloa Desalco LLC (“Kalaeloa Desalco”).
In general, the majority of tourists come from the United States during the winter which is also the dry season in the Cayman Islands. The COVID-19 pandemic and the resulting cessation of tourism to the Cayman Islands significantly reduced demand for our water.
In general, the majority of tourists come from the United States during the winter which is also the dry season in the Cayman Islands. ​ Bulk Water Operations ​ For fiscal years 2025, 2024, and 2023, our bulk water operations accounted for approximately 25%, 25%, and 19%, respectively, of our consolidated revenue.
We are presently in the process of liquidating CW-Cooperatief, NSC and AdR. ​ Our Operations ​ For fiscal year 2024, our retail water, bulk water, services and manufacturing segments generated approximately 24%, 25%, 38% and 13%, respectively, of our consolidated revenue.
We dissolved/terminated AdR in the first quarter of 2026 and expect to complete the dissolution and termination of CW-Cooperatief and NSC by mid-2026. ​ Our Operations ​ For fiscal year 2025, our retail water, bulk water, services and manufacturing segments generated approximately 26%, 25%, 35% and 14%, respectively, of our consolidated revenue.
Demand for our water in The Bahamas was not affected to the same degree by the drop in tourism resulting from the COVID-19 pandemic. ​ The business conducted by Aerex, REC, and PERC is generally not subject to seasonal variations. ​ Government Regulations, Custom Duties and Taxes ​ Our operations and activities are subject to the governmental regulations and taxes of the countries in which we operate.
In the Cayman Islands, we normally sell more water during the first and second quarters of the year, when the number of tourists is greater and local rainfall is less than in the third and fourth quarters. ​ The business conducted by Aerex, REC, and PERC is generally not subject to seasonal variations. ​ Government Regulations, Custom Duties and Taxes ​ Our operations and activities are subject to the governmental regulations and taxes of the countries in which we operate.
In addition to their past due invoice balance, customers that have had their service disconnected must pay re-connection charges. ​ Demand on our water production and pipeline distribution varies throughout the year. Demand depends upon various factors, most notably rainfall amounts and the number of tourists visiting Grand Cayman during any particular time of the year.
The provision for credit losses for our retail operations has historically represented less than 1% of our total annual retail sales. In addition to their past due invoice balance, customers that have had their service disconnected must pay re-connection charges. ​ 8 Table of Contents Demand on our water production and pipeline distribution varies throughout the year.
From that date until February 18, 2025, we 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 our understanding of its legal obligations, treating those obligations set forth in the 1990 license as operative notwithstanding the expiration of the express extension.
The most recent express extension of the license expired on January 31, 2018. From that date through February 18, 2025, we continued to operate under the terms of the 1990 license, treating such terms as operative notwithstanding the expiration of the express extension.
They consist of 16 inhabited and more than 20 uninhabited islands, of which Tortola is the largest and most populated. The British Virgin Islands serve as a hub for many large yacht-chartering businesses. ​ Competition ​ Cayman Islands.
They comprise 16 inhabited islands out of approximately 60 islands and cays, with Tortola being the largest and most populated. The British Virgin Islands serve as a hub for yacht-chartering businesses. According to government statements, tourism arrivals to the British Virgin Islands in 2025 increased by 10% compared to 2024. ​ Competition ​ Cayman Islands.
OC-Cayman operates three seawater reverse osmosis desalination plants owned by the WAC. ​ Services Segment ​ PERC Water Corporation (“PERC”). In October 2019, we purchased, through our wholly-owned U.S. subsidiary, Consolidated Water U.S. Holdings, Inc. (“CW-Holdings”), 51% of the equity in PERC, a U.S. company headquartered in Fountain Valley, California.
OC-Cayman operates three seawater reverse osmosis desalination plants owned by the WAC. ​ Services Segment ​ PERC Water Corporation (“PERC”). PERC designs, constructs, sells, operates and manages water, wastewater and water reuse infrastructure in the United States. ​ Ramey Environmental Compliance, Inc. (“REC”).
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In August 2020, we purchased an additional 10% ownership interest of PERC, increasing our ownership of this subsidiary to 61%. In January 2023, we acquired the remaining 39% ownership interest in PERC. PERC designs, constructs, sells, operates and manages water, wastewater and water reuse infrastructure in the United States. ​ Ramey Environmental Compliance, Inc. (“REC”).
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(2) Consists of water treatment plants for which we are the “Certified Operator in Responsible Charge” under operations and maintenance and other service agreements. ​ ​ 4 Table of Contents Strategy ​ We are a comprehensive water solutions company that serves a variety of customers through multiple product and service offerings.
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The most recent express extension of the license expired on January 31, 2018.
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We generate renewable energy to power our distribution pumps at ACWW using solar panels installed on the top of one of our water storage reservoirs. ​ Our distribution system is connected to the distribution system of the WAC.
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OfReg is an independent and accountable regulatory body with a view of protecting the 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.
Added
Demand depends upon various factors, most notably rainfall and the number of tourists staying on Grand Cayman during any particular time of the year.
Removed
Supplemental legislation was passed by the Government of the Cayman Islands in April 2017, which transferred responsibility for economic regulation of the water utility sector and the negotiations with us for a new retail license from the WAC to OfReg in May 2017. We began license negotiations with OfReg in July 2017 and such negotiations are ongoing.
Added
Our water sales in the Cayman Islands are also greatly impacted by rainfall patterns and amounts on Grand Cayman. ​ The Bahamas. The Bahamas are an independent nation situated in the western Atlantic Ocean just off the east coast of the State of Florida, USA.
Removed
We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of our license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our 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 operations license.
Removed
Receivables not collected within 45 days subject the customer to disconnection from water 8 Table of Contents service. The provision for credit losses has historically represented less than 1% of our total annual retail sales.
Removed
In August 2022, the Cayman Islands government lifted the COVID-19 pandemic related travel restrictions that had eliminated tourist travel to the Cayman Islands since March 2020. ​ Bulk Water Operations ​ For fiscal years 2024, 2023, and 2022, our bulk water operations accounted for approximately 25%, 19%, and 35%, respectively, of our consolidated revenue.
Removed
DesalCo also provides management and procurement services for desalination plants and engineering services relating to municipal water production, distribution and treatment. DesalCo sometimes tests new components and technology offered by suppliers in our business and, at times, collaborates with suppliers in the development of their products.
Removed
In the Cayman Islands, we normally sell more water during the first and second quarters of the year, when the number of tourists is greater and local rainfall is less than in the third and fourth quarters. The COVID-19 pandemic and the resulting cessation of tourism to the Cayman Islands significantly reduced demand for our water in 2021.
Removed
In August 2022, the Cayman Islands government lifted the COVID-19 pandemic related travel restrictions that had eliminated tourist travel to the Cayman Islands since March 2020.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

28 edited+7 added−8 removed44 unchanged
Biggest changeSupplemental legislation was passed by the Government of the Cayman Islands in April 2017, which transferred responsibility for economic regulation of the water utility sector and the negotiations with us for a new retail license from the WAC to OfReg in May 2017. We began license negotiations with OfReg in July 2017 and such negotiations are ongoing.
Biggest changeWe continued to pay a royalty of 7.5% of the revenue we collected as required under the 1990 license. ​ In October 2016, the Government of the Cayman Islands passed legislation which created OfReg and, in April 2017, passed supplemental legislation which transferred responsibility for the economic regulation of the water utility sector and the negotiations with us for a new retail license to OfReg. ​ Under the new regulatory legislation passed in October 2016, Cayman Water was required to first be granted a concession by the government before obtaining a new (or renewing the old) retail operations license.
For example, in January 2020, Grand Cayman experienced an earthquake which damaged three of our eight storage tanks. Any future disaster could cause us to lose use of our equipment and properties and incur additional repair costs. Damage to our customers’ properties and the adverse impact on tourism could result in a decrease in water demand.
For example, in January 2020, Grand Cayman experienced an earthquake which damaged three of our eight potable water storage tanks. Any future disaster could cause us to lose use of our equipment and properties and incur additional repair costs. Damage to our customers’ properties and the adverse impact on tourism could result in a decrease in water demand.
Any government that regulates our operations may issue legislation or adopt new regulations, including but not limited to: ​ ● restricting foreign ownership (by us); ● providing for the expropriation of our assets by the government; ● providing for nationalization of public utilities by the government; ● providing for different water quality standards; ● unilaterally changing or renegotiating our license and agreements; ● restricting the importation or use, and/or imposing tariffs on certain goods and materials from foreign countries; 18 Table of Contents ● restricting the transfer of U.S. currency; or ● causing currency exchange fluctuations/devaluations or enacting changes in tax laws. ​ As new laws and regulations are issued, we may be required to modify our operations and business strategy, which we may be unable to do in a cost-effective manner.
Any government that regulates our operations may issue legislation or adopt new regulations, including but not limited to: ​ ● restricting foreign ownership (by us); ● providing for the expropriation of our assets by the government; ● providing for nationalization of public utilities by the government; ● providing for different water quality standards; ● unilaterally changing or renegotiating our license and agreements; ● restricting the importation or use, and/or imposing tariffs on certain goods and materials from foreign countries; ● restricting the transfer of U.S. currency; or ● causing currency exchange fluctuations/devaluations or enacting changes in tax laws. ​ As new laws and regulations are issued, we may be required to modify our operations and business strategy, which we may be unable to do in a cost-effective manner.
In particular, the loss of the services of Frederick W. McTaggart, our President and Chief Executive Officer, could be detrimental to our operations and our continued success. Mr. McTaggart has an employment agreement expiring on December 31, 2027. Each year, the term of this agreement may be extended for an additional year. However, we cannot guarantee that Mr.
In particular, the loss of the services of Frederick W. McTaggart, our President and Chief Executive Officer, could be detrimental to our operations and our continued success. Mr. McTaggart has an employment agreement expiring on December 31, 2028. Each year, the term of this agreement may be extended for an additional year. However, we cannot guarantee that Mr.
A prevailing party could rely on the summary judgment procedures available in the Cayman Islands, subject to available defenses in the Cayman Islands courts, including, but not limited to, the lack of competent jurisdiction in the United States courts, lack of due service of process in the United States proceeding and the possibility that enforcement or recognition of the United States judgment would be contrary to the public policy of the Cayman Islands. ​ Depending on the nature of damages awarded, civil liabilities under the Securities Act of 1933, as amended (or the Securities Act), or the Securities Exchange Act of 1934, as amended (or the Exchange Act), for original actions instituted outside the Cayman Islands may or may not be enforceable.
A prevailing party could rely on the summary judgment procedures available in the Cayman Islands, subject to available defenses in the Cayman Islands courts, including, but not limited to, the lack 20 Table of Contents of competent jurisdiction in the United States courts, lack of due service of process in the United States proceeding and the possibility that enforcement or recognition of the United States judgment would be contrary to the public policy of the Cayman Islands. ​ Depending on the nature of damages awarded, civil liabilities under the Securities Act of 1933, as amended (or the Securities Act), or the Securities Exchange Act of 1934, as amended (or the Exchange Act), for original actions instituted outside the Cayman Islands may or may not be enforceable.
Any of these events could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows. ​ 16 Table of Contents The profitability of our contracts is dependent upon our ability to accurately estimate construction and operating costs. ​ The cost estimates we prepare in connection with the construction and operation of our water plants, the water infrastructure we construct and sell to third parties, and our manufacturing contracts, are subject to inherent uncertainties.
Any of these events could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows. ​ The profitability of our contracts is dependent upon our ability to accurately estimate construction and operating costs. ​ The cost estimates we prepare in connection with the construction and operation of our water plants, the water infrastructure we construct and sell to third parties, and our manufacturing contracts, are subject to inherent uncertainties.
In addition, it may be difficult for investors to enforce, in original actions 20 Table of Contents brought in courts or jurisdictions located outside of the United States, rights predicated upon the United States securities laws. ​ Based on the advice of our Cayman Islands legal counsel, we believe no reciprocal statutory enforcement of foreign judgments exists between the United States and the Cayman Islands, and that foreign judgments originating from the United States are not directly enforceable in the Cayman Islands.
In addition, it may be difficult for investors to enforce, in original actions brought in courts or jurisdictions located outside of the United States, rights predicated upon the United States securities laws. ​ Based on the advice of our Cayman Islands legal counsel, we believe no reciprocal statutory enforcement of foreign judgments exists between the United States and the Cayman Islands, and that foreign judgments originating from the United States are not directly enforceable in the Cayman Islands.
McTaggart will continue to work for us during the term of his agreement or will extend his employment agreement with us. ​ 19 Table of Contents Our business could be adversely affected by cyber threats or other interruptions in information technology, communications networks and operations. ​ As part of our operations, we rely on computer systems to process transactions and communicate with our customers, suppliers and other third parties.
McTaggart will continue to work for us during the term of his agreement or will extend his employment agreement with us. ​ Our business could be adversely affected by cyber threats or other interruptions in information technology, communications networks and operations. ​ As part of our operations, we rely on computer systems to process transactions and communicate with our customers, suppliers and other third parties.
For example, a United States judgment awarding remedies unobtainable in any legal action in the courts of the Cayman Islands, such as treble damages, would likely not be enforceable under any circumstances. ​ The relatively low trading volume of our stock may adversely impact the ability to sell our shares. ​ The average daily trading volume of our common stock in 2024 was approximately 118,000 shares, a much lower trading volume than that of many other companies listed on the NASDAQ Global Select Market.
For example, a United States judgment awarding remedies unobtainable in any legal action in the courts of the Cayman Islands, such as treble damages, would likely not be enforceable under any circumstances. ​ The relatively low trading volume of our stock may adversely impact the ability to sell our shares. ​ The average daily trading volume of our common stock in 2025 was approximately 113,000 shares, a much lower trading volume than that of many other companies listed on the NASDAQ Global Select Market.
Failure by us to comply with applicable regulations could result in the loss of our authorizations to operate, the assessment of penalties or fines, or otherwise may have a material adverse impact on our consolidated financial condition, results of operations and cash flows. Unforeseen environmental costs could adversely affect our business and results of operations.
Failure by us to comply with applicable regulations could result in the loss of our authorizations to operate, the assessment of penalties or fines, or otherwise may have a material adverse impact on our consolidated financial condition, results of operations and cash flows. 18 Table of Contents Unforeseen environmental costs could adversely affect our business and results of operations.
As a result, our Bahamas subsidiary could have insufficient liquidity to continue operations, and our consolidated financial results could be materially adversely affected. ​ CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $28.4 million as of December 31, 2024.
As a result, our Bahamas subsidiary could have insufficient liquidity to continue operations, and our consolidated financial results could be materially adversely affected. ​ CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $20.7 million and $28.4 million as of December 31, 2025 and 2024.
Each of these risks, as well as other risks and uncertainties not presently known to us or that we currently deem immaterial, could adversely affect our business, results of operations, cash flows and financial condition, and cause the value of our common stock to decline, which may result in the loss of part, or all, of your investment. ​ Our exclusive license to provide water to retail customers in the Cayman Islands is presently under renegotiation with OfReg, the Cayman Islands government utility regulatory authority, and we are presently unable to predict the outcome of these on-going negotiations. ​ We sell water through our retail operations under a license issued in July 1990 by the Cayman Islands government (the “1990 license”) that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area.
Each of these risks, as well as other risks and uncertainties not presently known to us or that we currently deem immaterial, could adversely affect our business, results of operations, cash flows and financial condition, and cause the value of our common stock to decline, which may result in the loss of part, or all, of your investment. ​ Our exclusive license to provide water to retail customers in the Cayman Islands is presently under renegotiation with OfReg, the Cayman Islands government utility regulatory authority, and we are presently unable to predict the outcome of these on-going negotiations. ​ We sell water through our retail operations under the 1990 license that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area.
Tourism in our service areas is affected by the economies of the tourists’ home countries, primarily the United States and Europe, terrorist activity and perceived threats thereof, global health concerns such as COVID-19, and increased costs of fuel and airfare.
Tourism in our service areas is affected by the economies of the tourists’ home countries, primarily the United States and Europe, terrorist activity and perceived threats thereof, global health concerns such as 17 Table of Contents COVID-19, and increased costs of fuel and airfare.
The cost of materials and services and the cost of the delivery of such services may increase significantly after we submit our bid for a contract, which could cause the gross profit for a contract to be less than we anticipated when the bid was made.
The cost of materials 16 Table of Contents and services and the cost of the delivery of such services may increase significantly after we submit our bid for a contract, which could cause the gross profit for a contract to be less than we anticipated when the bid was made.
In 2024, 2023, and 2022, we generated approximately 24%, 17% and 27%, respectively, of our consolidated revenue and 38%, 26% and 44%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license. ​ The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government in order to provide the parties with additional time to negotiate the terms of a new license agreement.
In 2025, 2024, and 2023, we generated approximately 26%, 24% and 17%, respectively, of our consolidated revenue and 39%, 38% and 26%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license. ​ The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government in order to provide the parties with additional time to negotiate the terms of a new license agreement.
The loss of the WSC as a customer would adversely affect us. ​ One bulk water customer, the WSC, accounted for approximately 22% of our consolidated revenue for 2024.
The loss of the WSC as a customer would adversely affect us. ​ One bulk water customer, the WSC, accounted for approximately 22% of our consolidated revenue for 2025.
Despite these safeguards and our other security processes and protections, we cannot be assured that all our systems and processes are free from vulnerability to evolving and increasingly sophisticated cyber-attacks, to other physical breaches or to inadvertent data disclosure by third parties or by us.
Despite these safeguards and our other security processes and protections, we cannot be assured that all our systems and processes are free from vulnerability to evolving 19 Table of Contents and increasingly sophisticated cyber-attacks, to other physical breaches or to inadvertent data disclosure by third parties or by us.
During the COVID-19 pandemic, the resulting cessation of tourism to the Cayman Islands through August 2022 significantly reduced the demand for our water. ​ 17 Table of Contents Performance shortfalls under any of our bulk supply contracts could result in penalties or cancellation of the contract. ​ Our bulk water supply agreements require us to meet specified minimum quality, quantity and energy consumption guarantees.
During the COVID-19 pandemic, the resulting cessation of tourism to the Cayman Islands through August 2022 significantly reduced the demand for our water and our retail segment’s profitability. ​ Performance shortfalls under any of our bulk supply contracts could result in penalties or cancellation of the contract. ​ Our bulk water supply agreements require us to meet specified minimum quality, quantity and energy consumption guarantees.
On February 18, 2025, Cayman Water received a new concession from government that authorizes and maintains the terms of the 1990 license until a new license from OfReg is negotiated and enacted. ​ We are presently unable to determine what impact the resolution of our retail license negotiations with OfReg will have on our cash flows, 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 we have historically generated from our retail operations and could require us to record impairment losses to reduce the carrying values of our retail segment assets.
We are presently unable to determine what impact the resolution of our retail license negotiations will have on our consolidated financial condition, results of operations or cash flows but such resolution could result in a material reduction (or the loss) of the operating income and cash flows we have historically generated from our retail operations and could require us to record impairment losses to reduce the carrying values of our retail segment assets.
Any construction, manufacturing, and operating costs for our contracts that significantly exceed our initial estimates could have a material adverse impact our consolidated financial condition, results of operations, and cash flows. ​ Certain of PERC’s contracts with its customers, including the contract with the Board of Water Supply of the City of Honolulu, Hawaii, may be terminated at any time at the customer’s convenience or with relatively short advance notice.
Any resulting trade wars could have a significant adverse effect on world trade and could adversely impact our consolidated financial condition, results of operations and cash flows. ​ Certain of PERC’s contracts with its customers, including the contract with the Board of Water Supply of the City of Honolulu, Hawaii, may be terminated at any time at the customer’s convenience or with relatively short advance notice.
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 significant 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) we may be required to cease the recognition of revenue on CW-Bahamas’ water supply agreements with the WSC; and (iii) we may be required to provide a material allowance for credit losses for CW-Bahamas’ accounts receivable.
Based upon our review of this Moody’s correspondence, we continue to believe that no material allowance for credit losses is required for CW-Bahamas’ accounts receivable from the WSC. ​ If CW-Bahamas is unable to collect a significant portion of its delinquent accounts receivable, one or more of the following events may occur: (i) CW-Bahamas may not have sufficient liquidity to meet its obligations; (ii) we may be required to cease the recognition of revenue on CW-Bahamas’ water supply agreements with the WSC; and (iii) we may be required to provide a material allowance for credit losses for CW-Bahamas’ accounts receivable.
In addition, six of our 13 Directors and Officers reside outside the United States.
In addition, as of March 9, 2026, six of our 15 Directors and Officers reside outside the United States.
We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of our license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our 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 operations license.
Negotiations between Cayman Water and OfReg for the new license remain on-going. ​ We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of the license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our retail license.
Approximately 81% of this December 31, 2024 accounts receivable balance was delinquent as of that date. The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary. ​ From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable from the WSC.
The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary. ​ From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable from the WSC. When these delays occur, we hold discussions and meetings with representatives of the WSC and the government of The Bahamas.
An inability by us to substitute feed water from an uncontaminated water source or to adequately treat the contaminated plant feed water or our processed water in a cost-effective manner may have a material adverse impact on our consolidated financial condition, results of operations, and cash flows. ​ Our internal controls over financial reporting were not considered to be effective as of December 31, 2024, and our independent auditors may not be able to certify as to their effectiveness in the future, which could adversely affect our business results and operations. ​ A material weakness was identified in our internal control over financial reporting as of December 31, 2024.
An inability by us to substitute feed water from an uncontaminated water source or to adequately treat the contaminated plant feed water or our processed water in a cost-effective manner may have a material adverse impact on our consolidated financial condition, results of operations, and cash flows. ​ Potential government decisions, actions and regulations could negatively affect our operations. ​ We are subject to the local regulations of the countries in which we operate, all of which are subject to change.
From that date through February 18, 2025, we 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 our understanding of its legal obligations, treating those obligations set forth in the 15 Table of Contents 1990 license as operative notwithstanding the expiration of the express extension.
The most recent express extension of the license expired on January 31, 2018. From that date through February 18, 2025, we continued to operate under the terms of the 1990 license, treating such terms as operative notwithstanding the expiration of the express extension.
When these delays occur, we hold 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.
All previous delinquent accounts receivable from the WSC, including accrued interest thereon, were eventually paid in full.
Based upon this payment history, we have not provided for a material allowance for credit losses for CW-Bahamas’ accounts receivable from the WSC as of 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.
Based upon this payment history, we have not provided for a material allowance for credit losses for CW-Bahamas’ accounts receivable from the WSC as of December 31, 2025, or prior periods. ​ We continue to be in frequent contact with officials of The Bahamas government, who continue to express their intention to significantly reduce CW-Bahamas’ delinquent accounts receivable balances.
Removed
The most recent express extension of the license expired on January 31, 2018.
Added
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 15 Table of Contents new license from OfReg is negotiated and enacted.
Removed
We continued to pay a royalty of 7.5% of the revenue we collected 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”).
Added
Approximately 71% and 81% of the accounts receivable balances were delinquent as of those dates, respectively. As of February 28, 2026, this receivable amounted to $22.6 million, of which 75% was delinquent.
Removed
OfReg is an independent and accountable regulatory body with a view of protecting the 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.
Added
However, we are unable to determine when or if such reduction will occur. ​ In a report dated October 6, 2022, Moody’s Investor Services (“Moody’s”) downgraded The Bahamas’ long-term issuer and senior unsecured ratings to B1 from Ba3. Moody’s also lowered The Bahamas’ local currency ceiling to Baa3 from Baa2 and its foreign currency ceiling to Ba1 from Baa3.
Removed
Moody’s also lowered The Bahamas’ local currency ceiling to Baa3 from Baa2 and its foreign currency ceiling to Ba1 from Baa3.
Added
Moody’s has maintained these ratings through the date of its most current report issued in April 2025.
Removed
The material weakness related to insufficient information technology general controls designed to monitor direct changes to databases within two accounting systems during the period January 1, 2024 through October 31, 2024.
Added
Any construction, manufacturing, and operating costs for our contracts that significantly exceed our initial estimates could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows. ​ Substantial changes to fiscal, regulation and other federal policies could adversely affect our business, financial condition, operating results and cash flows. ​ Significant changes in, and uncertainty with respect to, legislation, regulation, government policy and economic conditions could adversely affect our business.
Removed
Although we have taken actions to remediate this weakness, we cannot conclude that our remediation effort has been successful until such time as we have completed sufficient testing of the remediation process and the accompanying internal controls and procedures that rely on the information technology general controls.
Added
Specific legislative and regulatory proposals that could have a material impact on us include, but are not limited to, modifications to international trade policy (such as tariffs); public company reporting requirements; and environmental regulation. ​ We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the U.S. and other countries, what products may be subject to such actions, or what actions may be taken by the other countries in retaliation.
Removed
We cannot assure you that our remediation efforts will be successful or that other material weaknesses and control deficiencies will not be discovered in the future.
Added
Accordingly, it is difficult to predict how such actions may impact our business, or the business or habits of our customers. Our business operations, as well as the businesses of our customers on which we are substantially dependent, are located in countries at risk for escalating trade disputes, including the U.S.
Removed
If we identify any other material weaknesses in our internal control over financial reporting, it may cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock. ​ Potential government decisions, actions and regulations could negatively affect our operations. ​ We are subject to the local regulations of the countries in which we operate, all of which are subject to change.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed11 unchanged
Biggest changeWe use various tools, security measures and technologies to aid in seeking to protect our network perimeter and internal systems from unauthorized access, intrusion, or disruption. Assessments are conducted across our systems, networks, and data infrastructure to identify potential cybersecurity threats and vulnerabilities.
Biggest changeThese standards are guided, in part, by the relevant National Institute of Standards and Technology (NIST) and American Water 21 Table of Contents Works Association (AWWA) frameworks and guidance. We use various tools, security measures and technologies to aid in seeking to protect our network perimeter and internal systems from unauthorized access, intrusion, or disruption.
For a discussion regarding risks from cybersecurity threats that have or are reasonably likely to affect the company, see the risk factor titled “Our business could be adversely affected by cyber threats or other interruptions to information technology, communications networks and operations.” in Item 1A of this Annual Report on Form 10-K. ​ 22 Table of Contents
For a discussion regarding risks from cybersecurity threats that have or are reasonably likely to affect the company, see the risk factor titled “Our business could be adversely affected by cyber threats or other interruptions to information technology, communications networks and operations.” in Item 1A of this Annual Report on Form 10-K. ​
Cybersecurity training and employee phishing simulations; c. Ongoing vulnerability assessment, identification, and remediation; 21 Table of Contents d. Cyber incident response, IT disaster recovery, and business continuity plans; e. Identity and access management controls; f. Automated patch management and security updates; g. Network isolation of key operations environments; and h. Email filtering with attachment inspection and targeted threat protection.
Cybersecurity training and employee phishing simulations; c. Ongoing vulnerability assessment, identification, and remediation; d. Cyber incident response, IT disaster recovery, and business continuity plans; e. Identity and access management controls; f. Automated patch management and security updates; g. Network isolation of key operations environments; and h. Email filtering with attachment inspection and targeted threat protection.
We have policies and procedures in place for selecting and managing our relationships with third-party service providers and other business partners, including monitoring compliance with our agreements and regulatory and legal requirements.
Assessments are conducted across our systems, networks, and data infrastructure to identify potential cybersecurity threats and vulnerabilities. We have policies and procedures in place for selecting and managing our relationships with third-party service providers and other business partners, including monitoring compliance with our agreements and regulatory and legal requirements.
The standards set in our cybersecurity program include the implementation of controls that are aligned with industry guidelines and applicable regulations to identify threats, deter attacks, and protect our information security assets. These standards are guided, in part, by the relevant National Institute of Standards and Technology (NIST) and American Water Works Association (AWWA) frameworks and guidance.
The standards set in our cybersecurity program include the implementation of controls that are aligned with industry guidelines and applicable regulations to identify threats, deter attacks, and protect our information security assets.

Item 2. Properties

Properties — owned and leased real estate

10 edited+0 added−0 removed13 unchanged
Biggest changeProperties ​ Aerex owns a 30,000 square foot manufacturing facility located on 6.4 acres of land in Fort Pierce, Florida and has approximately 6,000 square feet of office space in downtown Fort Pierce under a lease that expires on June 30, 2026. We are in the process of expanding Aerex’s manufacturing facility to 47,500 square feet.
Biggest changeProperties ​ Aerex owns a manufacturing facility situated on 6.4 acres of land in Fort Pierce, Florida. In August 2025, we completed an expansion of this facility that increased its total manufacturing space to 47,500 square feet. Aerex also leases approximately 6,000 square feet of office space in downtown Fort Pierce under a lease that expires on June 30, 2026.
We have leased the site (comprised of 0.73 acres) and steel frame building which houses the plant for a term that ends in 2027 at an annual rent of $1.00. ​ Distribution System ​ We own our Seven Mile Beach and West Bay potable water distribution systems in Grand Cayman which consist of potable water pipes, valves, curb stops, meter boxes, and water meters.
We have leased the site (comprised of 0.73 acres) and steel frame building which houses the plant for a term that ends in January 2027 at an annual rent of $1.00. ​ Distribution System ​ We own our Seven Mile Beach and West Bay potable water distribution systems in Grand Cayman which consist of potable water pipes, valves, curb stops, meter boxes, and water meters.
We are presently evaluating a renewal of this lease as well as possible new locations for PERC’s corporate headquarters. ​ REC leases approximately 7,500 square feet of office space in Frederick, Colorado that serves as its corporate headquarters under a lease that expires on October 1, 2029. ​ ITEM 3. LEGAL PROCEEDINGS ​ Not applicable. ​ ​ ITEM 4.
We are presently evaluating a renewal of this lease as well as possible new locations for PERC’s corporate headquarters. ​ REC leases approximately 7,500 square feet of office space in Frederick, Colorado that serves as its corporate headquarters under a lease that expires in October 2029. ​ ITEM 3. LEGAL PROCEEDINGS ​ Not applicable. ​ ​ ITEM 4.
The plant is powered by a combination of diesel engine-driven high-pressure pumps and electrical power purchased from Bahamas Power and Light to power all other loads in the plant. The plant is contained within a 12,000 sq. 23 Table of Contents ft. steel building, and a warehouse, workshop and offices are contained within a 2,600 sq. ft. concrete building.
The plant is powered by a combination of diesel engine-driven high-pressure pumps and electrical power purchased from Bahamas Power and Light to power all other loads in the plant. The plant is contained within a 12,000 sq. ft. steel building, and a warehouse, workshop and offices are contained within a 2,600 sq. ft. concrete building.
The site is located on 4.2 acres, including 485 feet of waterfront. ​ West Bay Plant ​ In 2023, we commissioned a new seawater reverse osmosis desalination plant in the West Bay area and decommissioned the previous plant located on the same property.
The site is located on 4.2 acres, including 485 feet of waterfront. ​ 22 Table of Contents West Bay Plant ​ In 2023, we commissioned a new seawater reverse osmosis desalination plant in the West Bay area and decommissioned the previous plant located on the same property.
We also plan to relocate our current warehouse facility from the ACWW site to this proposed new location at some point in the future. ​ Bahamas Properties ​ Windsor Plant ​ Our Windsor water production facility, located in Nassau, New Providence, has a production capacity of 2.8 million gallons per day.
We also plan to relocate our current warehouse facility from the ACWW site to this proposed new location. ​ Bahamas Properties ​ Windsor Plant ​ Our Windsor water production facility, located in Nassau, New Providence, has a production capacity of 2.8 million gallons per day.
The plant is contained within a concrete and steel building with a footprint of 16,000 square feet that also contains a warehouse, workshop and offices.
The plant is contained within a concrete and steel building with a footprint of 16,000 square feet that also contains 23 Table of Contents a warehouse, workshop and offices.
The new plant began operating in November 2023, with a capacity of 1,000,000 gallons per day and is expandable to 2,000,000 gallons per day.
The new plant began operating in November 2023, with a water production capacity of 1,000,000 gallons per day and was expanded to a water production capacity of 2,000,000 gallons per day in 2025.
We are presently evaluating lease renewals as well as possible new locations for both our Aquilex headquarters and its warehouse. ​ PERC subleases approximately 4,100 square feet of office space in Fountain Valley, California that serves as its corporate headquarters. This lease expires in August 2025.
Our Aquilex office consists of 6,500 square feet located in Coral Springs, Florida that has been leased through June 2031. ​ PERC subleases approximately 4,100 square feet of office space in Fountain Valley, California that serves as its corporate headquarters. This lease expires in August 2026.
The anticipated completion date for this expansion is June 2025. ​ Our Aquilex warehouse consists of 4,100 square feet located in Sunrise, Florida that has been leased through September 2025. Our Aquilex office consists of 6,500 square feet located in Coral Springs, Florida that has been leased through March 2026.
We expect to renew this lease on a short-term basis while new office space is constructed on the manufacturing site, with construction scheduled to begin at the end of 2026. ​ Our Aquilex warehouse consists of 4,100 square feet located in Sunrise, Florida that has been leased through September 2030.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEXECUTIVE COMPENSATION”. ​ Currently 2,023,850 Bahamian Depository Receipts (“BDRs”) that constitute ownership of 404,770 shares of our common stock are listed and traded on the Bahamian International Stock Exchange. Our common shares that underlie these BDRs are held in a custodial account in The Bahamas.
Biggest changeThe third-party vendor is knowledgeable , sophisticated and experienced in making investment decisions of this kind and received adequate information about us or had adequate access, including through its business relationship with us, to information about us. ​ Currently 2,023,850 Bahamian Depository Receipts (“BDRs”) that constitute ownership of 404,770 shares of our common stock are listed and traded on the Bahamian International Stock Exchange.
The Cayman Islands does not impose any limitations on the right of non-resident owners to hold or vote our common stock. There are no exchange control restrictions in the Cayman Islands. ​ 25 Table of Contents The information required by Item 201(d) of Regulation S-K is provided under ITEM 12.
The Cayman Islands does not impose any limitations on the right of non-resident owners to hold or vote our common stock. There are no exchange control restrictions in the Cayman Islands. ​ The information required by Item 201(d) of Regulation S-K is provided under ITEM 12.
However, the payment of any future cash dividends will depend upon our earnings, financial condition, cash flows, capital requirements and other factors our Board of Directors deems relevant in determining the amount and timing of such dividends. ​ Listed below, for each quarter of the last three fiscal years, are the per share dividends declared on our issued and outstanding shares of common shares and redeemable preferred stock. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ Exchange Controls and Other Limitations Affecting Security Holders ​ Our Company is not subject to any governmental laws, decrees or regulations in the Cayman Islands which restrict the export or import of capital, or that affect the remittance of dividends, interest or other payments to non-resident holders of our securities.
However, the payment of any future cash dividends will depend upon our earnings, financial condition, cash flows, capital requirements and other factors our Board of Directors deems relevant in determining the amount and timing of such dividends. ​ Listed below, for each quarter of the last three fiscal years, are the per share dividends declared on our issued and outstanding shares of common shares and redeemable preferred stock. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ 2023 First Quarter ​ $ 0.11 ​ $ 0.095 ​ $ 0.085 Second Quarter ​ 0.14 ​ 0.095 ​ 0.085 Third Quarter ​ 0.14 ​ 0.11 ​ 0.095 Fourth Quarter ​ 0.14 ​ 0.11 ​ 0.095 ​ ​ $ 0.53 ​ $ 0.41 ​ $ 0.36 ​ 25 Table of Contents Exchange Controls and Other Limitations Affecting Security Holders ​ Our Company is not subject to any governmental laws, decrees or regulations in the Cayman Islands which restrict the export or import of capital, or that affect the remittance of dividends, interest or other payments to non-resident holders of our securities.
The BDRs are entitled to dividend payments, when declared, on our common stock in proportion to the BDRs’ relative value to our common stock. ​ Holders ​ As of March 10, 2025, we had 695 holders of record of our common stock. ​ Dividends ​ Our Board of Directors declares and approves any and all dividends. ​ We have paid dividends to owners of our common stock and redeemable preferred stock since we began declaring dividends in 1985.
The BDRs are entitled to dividend payments, when declared, on our common stock in proportion to the BDRs’ relative value to our common stock. ​ Holders ​ As of March 9, 2026, we had 686 holders of record of our common stock. ​ Dividends ​ Our Board of Directors declares and approves any and all dividends. ​ We have paid dividends to owners of our common stock and redeemable preferred stock since we began declaring dividends in 1985.
On December 17, 2024, we issued a total of 11,448 shares of our common stock to our Directors under our Non-Executive Directors’ Share Plan in consideration for their service on our Board of Directors and the committees thereof. See “ITEM 11.
On December 15, 2025, we issued a total of 13,897 shares of our common stock to our Directors under our Non-Executive Directors’ Share Plan in consideration for their service on our Board of Directors and the committees thereof. See “ITEM 11.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ Market Information ​ Our Class A common stock is listed on the NASDAQ Global Select Market and trades under the symbol “CWCO”. ​ No trading market exists for our redeemable preferred stock, which is only issued to, or purchased by, our long-term employees. ​ On January 2, 2024, March 27, 2024 and January 2, 2025, we issued a total of 29,392 shares, 26,742 shares and 24,875 shares of our common stock, respectively, to Executive Officers under our 2008 Equity Incentive Plan.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ Market Information ​ Our common stock is listed on the NASDAQ Global Select Market and trades under the symbol “CWCO”. ​ No trading market exists for our redeemable preferred stock, which is only issued to, or purchased by, our long-term employees. ​ On January 2, 2025, March 25, 2025 and January 2, 2026, we issued a total of 24,875 shares, 41,889 shares and 18,780 shares of our common stock, respectively, to Executive Officers under our 2008 Equity Incentive Plan.
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EXECUTIVE COMPENSATION”. ​ On September 25, 2025, we issued 2,000 shares of common stock to a third-party vendor, which shares had a value on the date of issuance of $69,440 (based upon a per share value of $34.72, which was the closing price of our common stock on the date of issuance).
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The issuance of the shares was exempt under Section 4(a)(2) of the Securities Act.
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Our common shares that underlie these BDRs are held in a custodial account in The Bahamas.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table sets forth the comparative combined estimated production capacity of our subsidiary PERC as of December 31 of each year. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comparative Operations Water Treatment Plants ​ 2024 ​ 2023 ​ 2022 Location Plants Capacity (1) Plants Capacity (1) Plants ​ Capacity (1) United States 29 ​ 58.0 31 ​ 59.7 ​ 27 ​ 52.5 (1) In estimated millions of gallons per day. ​ As of December 31, 2024 and 2023, REC performed operations, maintenance, and monitoring services for 64 and 72, respectively, wastewater and water treatment plants located in the Rocky Mountain and Eastern Plains Regions of Colorado. ​ Cayman Islands ​ We have been operating our business on Grand Cayman since 1973 and have been using reverse osmosis technology to convert seawater to potable water since 1989.
Biggest changeThe following table sets forth the comparative combined estimated production capacity of our subsidiaries PERC and REC as of December 31 of each year. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comparative Operations Water Treatment Plants ​ 2025 ​ 2024 ​ 2023 Location ​ ​ ​ Plants (2) ​ ​ ​ Capacity (1) ​ ​ ​ Plants (2) ​ ​ ​ Capacity (1) ​ ​ ​ Plants (2) ​ Capacity (1) United States 97 ​ 78.5 ​ ​ ​ 93 ​ 80.8 ​ ​ ​ 103 ​ 89.8 (1) In estimated millions of gallons per day.
Design and consulting revenue increased to approximately $4.0 million in 2024 from approximately $1.3 million in 2023. ​ The gross profit for the services segment decreased to $12,444,954 (24% of services revenue) in 2024 as compared to $31,168,888 (32% of services revenue) for 2023 due to the decrease in construction revenue. ​ G&A expenses for the services segment increased to $6,055,409 for 2024 as compared to $4,271,808 for 2023 primarily due to incremental G&A expenses of REC (which was acquired in the fourth quarter of 2023) of approximately $1,321,000.
Design and consulting revenue increased to approximately $3.0 million in 2024 from approximately $1.3 million in 2023. ​ The gross profit for the services segment decreased to $12,444,954 (24% of services revenue) in 2024 as compared to $31,168,888 (32% of services revenue) for 2023 due to the decrease in construction revenue. ​ G&A expenses for the services segment increased to $6,055,409 for 2024 as compared to $4,271,808 for 2023 primarily due to incremental G&A expenses of REC (which was acquired in the fourth quarter of 2023) of approximately $1,321,000.
Our payment of any future cash dividends will depend upon our earnings, financial condition, cash flows, capital requirements and other factors our Board of Directors deems relevant in determining the amount and timing of such dividends. ​ Dividend Reinvestment and Common Stock Purchase Plan ​ This plan is available to our shareholders, who may reinvest all or a portion of their common stock dividends into shares of common stock at prevailing market prices and may also invest optional cash payments to purchase additional shares at prevailing market prices as part of this plan. ​ Impact of Inflation ​ Under the terms of our Cayman Islands license and our bulk water sales agreements in The Cayman Islands, The Bahamas and the British Virgin Islands, our water rates are automatically adjusted for inflation on an annual basis.
Our payment of any future cash dividends will depend upon our earnings, financial condition, cash flows, capital requirements and other factors our Board of Directors deems relevant in determining the amount and timing of such dividends. ​ Dividend Reinvestment and Common Stock Purchase Plan ​ This plan is available to our shareholders, who may reinvest all or a portion of their common stock dividends into shares of common stock at prevailing market prices and may also invest optional cash payments to purchase additional shares at prevailing market prices as part of this plan. ​ Impact of Inflation ​ Under the terms of our bulk water sales agreements in The Cayman Islands, The Bahamas and the British Virgin Islands, our water rates are automatically adjusted for inflation on an annual basis.
Such impairment losses could have a material adverse impact on our consolidated financial condition and results of operations . ​ CW-Bahamas Performance Guarantees ​ Our contracts to supply water to the WSC from our Blue Hills and Windsor plants require us to guarantee delivery of a minimum quantity of water per week.
Such impairment losses could have a material adverse impact on our consolidated financial condition and results of operations . ​ CW-Bahamas Supply Guarantees ​ Our contracts to supply water to the WSC from our Blue Hills and Windsor plants require us to guarantee delivery of a minimum quantity of water per week.
We recognize revenue for our construction and our specialized/custom 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.
We recognize revenue for our construction and our specialized/custom manufacturing contracts (and some of our design contracts) over time under the input method using costs incurred (which represents work performed) to date relative to the total estimated costs at completion to measure progress toward satisfying a contract’s performance obligations, as such measure best reflects the transfer of control of the promised good to the customer.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA, of this Annual Report. ​ Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 ​ Discontinued Operations – Mexico Project Development In 2010, we began the pursuit, through our Netherlands subsidiary, Consolidated Water Cooperatief, U.A. (“CW-Cooperatief”), and our Mexico subsidiary, N.S.C. Agua, S.A. de C.V.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA, of this Annual Report. ​ Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 ​ Discontinued Operations – Mexico Project Development In 2010, we began the pursuit, through our Netherlands subsidiary, Consolidated Water Cooperatief, U.A. (“CW-Cooperatief”), and our Mexico subsidiary, N.S.C. Agua, S.A. de C.V.
Based upon our review of this Moody’s correspondence, we continue to believe that no material allowance for credit losses is required for CW-Bahamas’ accounts receivable from the WSC. ​ If CW-Bahamas is unable to collect a 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) we may be required to 37 Table of Contents cease the recognition of revenue on CW-Bahamas’ water supply agreements with the WSC; and (iii) we may be required to provide a material allowance for credit losses for CW-Bahamas’ accounts receivable.
Based upon our review of this Moody’s correspondence, we continue to believe that no material allowance for credit losses is required for CW-Bahamas’ accounts receivable from the WSC. ​ If CW-Bahamas is unable to collect a 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) we may be required to cease the recognition of revenue on CW-Bahamas’ water supply agreements with the WSC; and (iii) we may be required to provide a material allowance for credit losses for CW-Bahamas’ accounts receivable.
During 2024, we supplied approximately 4.8 billion gallons of water to the WSC from these plants, which is consistent with the 4.8 billion gallons supplied during 2023. ​ From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable.
During 2025, we supplied approximately 4.8 billion gallons of water to the WSC from these plants, which is consistent with the 4.8 billion gallons supplied during 2024. ​ From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable.
The increase in manufacturing gross profit in dollars and as a percentage of revenue results from a higher margin product mix. ​ G&A expenses for the manufacturing segment increased to $2,456,807 for 2024 as compared to $1,838,284 for 2023 principally due to an increase in the provision for credit losses of approximately $336,000 in 2024. ​ Corporate: ​ Corporate G&A expenses increased slightly to $14,196,652 for 2024 as compared to $13,926,846 for 2023.
The increase in manufacturing gross profit in dollars and as a percentage of revenue results from a higher margin product mix. ​ 35 Table of Contents G&A expenses for the manufacturing segment increased to $2,456,807 for 2024 as compared to $1,838,284 for 2023 principally due to an increase in the provision for credit losses for the manufacturing segment of approximately $336,000 in 2024. ​ Corporate: ​ Corporate G&A expenses increased slightly to $14,196,652 for 2024 as compared to $13,926,846 for 2023.
At the end of the operating period, ownership of 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.
At the end of the operating period, ownership of the plant and aqueduct would have been transferred to CEA. ​ On June 29, 2020, AdR received a letter (the “Letter”) from CEA and CESPT terminating the APP Contract.
Based upon this qualitative assessment, we determined that it is more likely than not that the fair values of our reporting units exceeded their carrying values as of December 31, 2024 and 2023.
Based upon this qualitative assessment, we determined that it is more likely than not that the fair values of our reporting units exceeded their carrying values as of December 31, 2025 and 2024.
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 30 Table of Contents and an aqueduct to the Mexican potable water system in Tijuana, Baja California and the second phase with a capacity of 50 million gallons per day.
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 potable water system in Tijuana, Baja California and the second phase with a capacity of 50 million gallons per day.
The following table sets forth the comparative combined production capacity of our retail and bulk segments and our affiliate as of December 31 of each year. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comparative Operations Water Production Plants ​ 2024 ​ 2023 ​ 2022 Location Plants Capacity (1) Plants Capacity (1) Plants Capacity (1) Cayman Islands 6 ​ 10.6 6 ​ 9.3 ​ 7 ​ 9.9 Bahamas 2 ​ 14.8 ​ 2 ​ 14.8 ​ 2 ​ 14.8 British Virgin Islands 2 ​ 0.8 ​ 2 ​ 0.8 ​ 2 ​ 0.8 ​ 10 ​ 26.2 ​ 10 ​ 24.9 ​ 11 ​ 25.5 (1) In millions of gallons per day. ​ Effective October 1, 2023, the Company purchased, through its wholly-owned subsidiary PERC, a 100% ownership interest in Ramey Environmental Compliance, Inc., 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.
The following table sets forth the comparative combined production capacity of our retail and bulk segments and our affiliate as of December 31 of each year. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comparative Operations Water Production Plants ​ 2025 ​ 2024 ​ 2023 Location ​ ​ ​ Plants ​ ​ ​ Capacity (1) ​ ​ ​ Plants ​ ​ ​ Capacity (1) Plants ​ ​ ​ Capacity (1) Cayman Islands 6 ​ 11.6 ​ ​ ​ 6 ​ 10.6 ​ ​ ​ 6 ​ 9.3 Bahamas 2 ​ 14.8 ​ 2 ​ 14.8 ​ 2 ​ 14.8 British Virgin Islands 2 ​ 0.8 ​ 2 ​ 0.8 ​ 2 ​ 0.8 ​ 10 ​ 27.2 ​ 10 ​ 26.2 ​ 10 ​ 24.9 (1) In millions of gallons per day. ​ Effective October 1, 2023, the Company purchased, through its wholly-owned subsidiary PERC, a 100% ownership interest in Ramey Environmental Compliance, Inc., 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.
For 2024 and 2023, we elected to assess qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment testing we have conducted in prior years for our reporting units.
For 2025 and 2024, we elected to assess qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment testing we have conducted in prior years for our reporting units.
Contract costs include labor, materials, subcontractor costs and other 29 Table of Contents expenses. We follow this method since we can make reasonably dependable estimates of the revenue and costs applicable to the various stages of a contract. Under this input method, we record revenue and recognize profit or loss as work on the contract progresses.
Contract costs include labor, materials, subcontractor costs and other expenses. We follow this method since we can make reasonably dependable estimates of the revenue and costs applicable to the various stages of a contract. Under this input method, we record revenue and recognize profit or loss as work on the contract progresses.
The decrease in bulk revenue from 2023 to 2024 reflects a decrease in the price of energy for CW-Bahamas, which decreased the energy pass-through component of CW-Bahamas’ rates. 32 Table of Contents ​ Gross profit for our bulk segment was $10,313,027 (31% of bulk revenue) and $10,466,926 (30% of bulk revenue) for 2024 and 2023, respectively.
The decrease in bulk revenue from 2023 to 2024 reflects a decrease in the price of energy for CW-Bahamas, which decreased the energy pass-through component of CW-Bahamas’ rates. ​ Gross profit for our bulk segment was $10,313,027 (31% of bulk revenue) and $10,466,926 (30% of bulk revenue) for 2024 and 2023, respectively.
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. ​ We 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 August 28, 2020, AdR submitted their list of non-recoverable expenses, including those of NSC, to CEA and CESPT which amounted to 51,144,525 United States dollars and an additional 137,333,114 Mexican pesos. ​ 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”).
As a result of the cancellation of the Project we discontinued all development activities associated with the Project, commenced marketing efforts to sell the land NSC purchased for the Project, and initiated international arbitration against 33 Table of Contents the Government of Mexico to recover the costs we had incurred for the Project.
As a result of the cancellation of the Project, we discontinued all development activities associated with the Project, commenced marketing efforts to sell the land NSC purchased for the Project, and initiated international arbitration against the Government of Mexico to recover the costs we had incurred for the Project.
In 2024, 2023, and 2022 we generated approximately 24%, 17% and 27%, respectively, of our consolidated revenue and 38%, 26% and 44%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license. ​ The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government to provide the parties with additional time to negotiate the terms of a new license agreement.
In 2025, 2024, and 2023 we generated approximately 26%, 24% and 17%, respectively, of our consolidated revenue and 39%, 38% and 26%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license. ​ The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government to provide the parties with additional time to negotiate the terms of a new license agreement.
We believe the increase in the volume of water sold in 2024 resulted in part from a 4.3% increase in the number of customer accounts in our license area from December 31, 2023 to December 31, 2024.
We believe the increase in the volume of water sold in 2024 resulted in part 34 Table of Contents from a 4.3% increase in the number of customer accounts in our license area from December 31, 2023 to December 31, 2024.
Our updated sales estimate for this customer based on this new information was substantially below the sales we anticipated 28 Table of Contents to this customer for 2022 and subsequent years that we used in the discounted cash flow projections we prepared for purposes of testing our manufacturing reporting unit’s goodwill for possible impairment as of December 31, 2020.
As a result, our updated sales estimate for this customer based on this new information was substantially below the sales we anticipated to this customer for 2022 and subsequent years that we used in the discounted cash flow projections we prepared for purposes of testing our manufacturing reporting unit’s goodwill for possible impairment as of December 31, 2020.
For long-lived assets to be held and used, we recognize an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measure the impairment loss based on the difference between the carrying amount and fair value.
For long-lived assets to be held and used, we recognize an impairment loss only if 28 Table of Contents its carrying amount is not recoverable through its undiscounted cash flows and measure the impairment loss based on the difference between the carrying amount and fair value.
The first phase was to be operational within 36 months of commencing construction and the second phase was to be operational by July 2024. 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.
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.
However, while we have received annual inflation adjustments for the rates we charge under our bulk water agreements, we have not increased the retail water rates for Cayman Water since January 2018 (despite the inflation that has occurred since that date) due to the lack of a resolution of our negotiations with OfReg for a new retail license.
However, while we have received annual inflation adjustments for the rates we charge under our bulk water agreements, we have not applied to increase the water rates for Cayman Water since January 2018 (despite the inflation that has occurred since that date) due to the delayed resolution of our negotiations with OfReg for a new retail license.
Increases in fuel and energy costs and other items could create additional credit risks for us, as our customers’ ability to pay our invoices could be adversely affected by such increases. ​ In periods of high inflation, our consolidated results of operations and cash flows could be materially adversely affected. ​ 40 Table of Contents
Increases in fuel and energy costs and other items could create additional credit risks for us, as our customers’ ability to pay our invoices could be adversely affected by such increases. ​ In periods of high inflation, our consolidated results of operations and cash flows could be materially adversely affected. ​ ITEM 7A.
Construction revenue was $17,637,432 in 2024 as compared to $77,306,704 in 2023. We recognized approximately $8.5 million and $64 million in construction revenue for the Liberty Utilities contract for the construction of a water treatment plant in Goodyear, Arizona in 2024 and 2023, respectively. This contract was completed in mid-2024.
Construction revenue was $18,602,919 in 2024 as compared to $77,306,704 in 2023. We recognized approximately $8.5 million and $64 million in construction revenue for the Liberty Utilities contract for the construction of a water treatment plant in Goodyear, Arizona in 2024 and 2023, respectively. This contract was completed in mid-2024.
Our liquidity requirements may also include future quarterly dividends, if such dividends are declared by our Board. ​ As of December 31, 2024, we had cash and cash equivalents of $99.4 million and working capital of $132.8 million. ​ With the exception of the liquidity matter relating to CW-Bahamas that is discussed in the paragraphs that follow, we are not presently aware of anything that would lead us to believe that we will not have sufficient liquidity to meet our needs . ​ CW-Bahamas Liquidity ​ CW-Bahamas’ accounts receivable balance (which include accrued interest) due from the WSC amounted to $28.4 million as of December 31, 2024.
Our liquidity requirements may also include future quarterly dividends, if such dividends are declared by our Board. ​ As of December 31, 2025, we had cash and cash equivalents of $123.8 million and working capital of $141.9 million. ​ 36 Table of Contents With the exception of the liquidity matter relating to CW-Bahamas that is discussed in the paragraphs that follow, we are not presently aware of anything that would lead us to believe that we will not have sufficient liquidity to meet our needs. ​ CW-Bahamas Liquidity ​ CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $20.7 million and $28.4 million as of December 31, 2025 and 2024.
Our Grand Cayman operations consist of three company-owned seawater reverse osmosis desalination plants which (as of December 31, 2024) provide water to 8,174 retail residential and commercial connections within a government licensed area and three 26 Table of Contents government-owned seawater reverse osmosis plants which supply bulk water to the WAC.
Our Grand Cayman operations consist of three company-owned seawater reverse osmosis desalination plants which (as of December 31, 2025) provide water to 8,717 retail residential and commercial connections within a government licensed area and three government-owned seawater reverse osmosis plants which supply bulk water to the WAC.
Such accounts receivable balances due from The Bahamas government amounted to $28.4 million as of December 31, 2024. See further discussion of this matter at ITEM 7.
Such accounts receivable balances due from The Bahamas government amounted to $20.7 million as of December 31, 2025. See further discussion of this matter at ITEM 7.
This net cash provided reflects net income generated for the year ended December 31, 2024 of $28,815,144 as adjusted for (i) various items included in the determination of net income that do not affect cash flows during the year; and (ii) changes in the other components of working capital.
This net cash provided reflects net income generated for the year ended December 31, 2025 of $18,929,852 as adjusted for (i) various items included in the determination of net income that do not affect cash flows during the year; and (ii) changes in the other components of working capital.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Material Commitments, Expenditures and Contingencies – Cayman Water Retail License . ​ The Bahamas ​ CW-Bahamas produces potable water from two seawater reverse osmosis desalination plants.
See further discussion of this matter at ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Material Commitments, Expenditures and Contingencies – Cayman Water Retail License . ​ The Bahamas ​ CW-Bahamas produces potable water from two seawater reverse osmosis desalination plants.
We continued to pay the royalty of 7.5% required under the 1990 license. On February 18, 2025, we received a new concession from the Cayman Islands government that authorizes and maintains the terms of our previous license until a new license is negotiated and enacted.
We continued to pay a royalty of 7.5% of the revenue we collect as required under the 1990 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 from OfReg is negotiated and enacted.
Furthermore, our manufacturing segment has in the past been adversely impacted by significant increases in raw material costs and our manufacturing and services segments could suffer similar adverse impacts in the future. ​ While our operations and maintenance contracts are generally adjusted for inflation on an annual basis, such adjustment for some of these contracts is limited to 3% annually. ​ Kalaeloa Desalco has 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.
Furthermore, our manufacturing segment has in the past been adversely impacted by significant increases in raw material costs and our manufacturing and services segments could suffer similar adverse impacts in the future. ​ 39 Table of Contents While our operations and maintenance contracts are generally adjusted for inflation on an annual basis, such adjustment for many of these contracts is capped at 3% annually. ​ Kalaeloa Desalco has signed a contract with the Honolulu Board of Water Supply pursuant to which it presently expects to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii.
The adoption of ASU 2023-07 did not have a material impact on our consolidated 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.
There was no impact on our consolidated 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.
Any of these events could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows. ​ Discussion of Cash Flows for the Year Ended December 31, 2024 ​ Our cash and cash equivalents increased to $99,350,121 as of December 31, 2024 from $42,621,898 as of December 31, 2023. ​ Cash Flows from Operating Activities ​ Net cash provided by our operating activities was $36,515,532.
Any of these events could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows. ​ Discussion of Cash Flows for the Year Ended December 31, 2025 ​ Our cash and cash equivalents increased to $123,788,390 as of December 31, 2025 from $99,350,121 as of December 31, 2024. ​ Cash Flows from Operating Activities ​ Net cash provided by our operating activities was $41,713,571.
Dividends ● On January 31, 2024, we paid a dividend of $0.095 to shareholders of record on January 2, 2024. ● On April 30, 2024, we paid a dividend of $0.095 to shareholders of record on April 1, 2024. ● On July 31, 2024, we paid a dividend of $0.095 to shareholders of record on July 1, 2024. ● On October 31, 2024, we paid a dividend of $0.11 to shareholders of record on October 1, 2024 . ● On January 31, 2025, we paid a dividend of $0.11 to shareholders of record on January 2, 2025. ● On February 18, 2025, our Board declared a dividend of $0.11 payable on April 30, 2025 to shareholders of record on April 1, 2025. ​ We have paid dividends to owners of our common stock and redeemable preferred stock since we began declaring dividends in 1985.
We are currently evaluating the impact of this guidance. ​ Dividends ● On January 31, 2025, we paid a dividend of $0.11 to shareholders of record on January 2, 2025. ● On April 30, 2025, we paid a dividend of $0.11 to shareholders of record on April 1, 2025. ● On July 31, 2025, we paid a dividend of $0.14 to shareholders of record on July 1, 2025. ● On October 31, 2025, we paid a dividend of $0.14 to shareholders of record on October 1, 2025 . ● On January 30, 2026, we paid a dividend of $0.14 to shareholders of record on January 2, 2026. ● On February 17, 2026, our Board declared a dividend of $0.14 payable on April 30, 2026 to shareholders of record on April 1, 2026. ​ We have paid dividends to owners of our common stock and redeemable preferred stock since we began declaring dividends in 1985.
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.
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. ​ 29 Table of Contents In November 2015, the State of Baja California (the “State”) officially commenced a public tender for the Project, and in June 2016 a consortium comprised of NSC and two other parties was selected by the State as the winner of the tender process for the Project.
The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary. ​ From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable from the WSC.
The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary. ​ From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable from the WSC. When these delays occur, we hold discussions and meetings with representatives of the WSC and the government of The Bahamas.
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. ​ We are presently unable to determine what impact the resolution of our retail license negotiations will have on our cash flows, 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 we have historically generated from our retail operations and could require us to record impairment losses to reduce the carrying value of our retail segment assets.
We are presently unable to determine what impact the resolution of our retail license negotiations will have on our consolidated financial condition, results of operations, or cash flows but such resolution could result in a material reduction (or the loss) of the operating income and cash flows we have historically generated from our retail operations and could require us to record impairment losses to reduce the carrying values of our retail segment assets.
We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of our license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our retail license. See further discussion of this matter at ITEM 7.
Negotiations between Cayman Water and OfReg for the new license remain on-going. ​ We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of the license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our retail license.
Two such meetings were held on July 9, 2021 and August 2, 2021 on a confidential basis, without a resolution of our investment dispute. ​ In February 2022, CW-Cooperatief, filed a Request for Arbitration with the International Centre for Settlement of International Disputes requesting that the United Mexican States pay CW-Cooperatief damages in excess of US$51 million plus MXN$137 million (with the exact amount to be quantified in the proceedings), plus fees, costs and pre- and post-award interest. ​ On May 29, 2024, we, 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”).
This letter invited Mexico to seek a resolution of this investment dispute through consultation and negotiation but stated that if the dispute cannot be resolved in this manner, CW-Cooperatief would refer the dispute to the International Centre for the Settlement of International Disputes for arbitration, as provided for in the Treaty. ​ In February 2022, CW-Cooperatief, filed a Request for Arbitration with the International Centre for Settlement of International Disputes (“ICSID”) requesting that the United Mexican States pay CW-Cooperatief damages in excess of US$51 million plus MXN$137 million (with the exact amount to be quantified in the proceedings), plus fees, costs and pre- and post-award interest. ​ In May 2024, we, 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”).
LIQUIDITY AND CAPITAL RESOURCES ​ Certain transfers from our bank accounts in The Bahamas to our bank accounts in other countries require the approval of the Central Bank of The Bahamas. ​ The Cayman Islands does not have a tax treaty with the United States.
Contract liabilities increased by approximately $2.4 million, primarily due to the Kalaeloa Desalco construction project. LIQUIDITY AND CAPITAL RESOURCES ​ Certain transfers from our bank accounts in The Bahamas to our bank accounts in other countries require the approval of the Central Bank of The Bahamas. ​ The Cayman Islands does not have a tax treaty with the United States.
The application of our critical accounting policies involves estimates or assumptions that constitute “critical accounting estimates” for us because: ● the nature of these estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and ● the impact of the estimates and assumptions on financial condition and results of operations is material. 27 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.
Our actual results could differ significantly from such estimates and assumptions. 27 Table of Contents The application of our critical accounting policies involves estimates or assumptions that constitute “critical accounting estimates” for us because: ● the nature of these estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and ● the impact of the estimates and assumptions on financial condition and results of operations is material.
We design, construct, and sell wastewater and water reuse infrastructure in the United States through PERC and Kalaeloa Desalco. Aerex is a custom and specialty manufacturer in the United States of water treatment-related systems and products applicable to commercial, municipal and industrial water production.
Aerex is a custom and specialty manufacturer in the United States of water-related systems and products applicable to commercial, municipal and industrial water production and treatment.
Consequently, should we be required (or elect) to transfer any profits generated by our U.S. subsidiaries from U.S. operations to our company in the Cayman Islands, we would be required to pay a withholding tax of 30% on the amount of any such funds transferred. ​ Liquidity Position ​ Our projected liquidity requirements for 2025 include capital expenditures for our existing operations of approximately $10.3 million, which includes $926,000 to be incurred in 2025 for our new West Bay plant and $1.8 million for the expansion of Aerex’s manufacturing facility.
Consequently, should we be required (or elect) to transfer any profits generated by our U.S. subsidiaries to our parent company in the Cayman Islands, we would be required to pay a withholding tax of 30% on the amount of any such funds transferred. ​ Liquidity Position ​ Our projected liquidity requirements for 2026 include capital expenditures for our existing operations of approximately $11.1 million, which includes approximately $1.0 million to be incurred during the first half of 2026 for a project in the Bahamas.
Ltd. stockholders for 2023 was $29,585,391 ($1.86 per share on a fully diluted basis), as compared to $5,856,294 ($0.38 per share on a fully diluted basis) for 2022. ​ The following discussion and analysis of our consolidated results of operations and results of operations by segment for the year ended December 31, 2023 as compared to the year ended December 31, 2022 relates only to our continuing operations. ​ Net income from continuing operations attributable to Consolidated Water Co.
Ltd. stockholders for 2025 was $18,336,673 ($1.14 per share on a fully diluted basis), as compared to $28,237,554 ($1.77 per share on a fully diluted basis) for 2024. ​ The following discussion and analysis of our consolidated results of operations and results of operations by segment for the year ended December 31, 2025 as compared to the year ended December 31, 2024 relates only to our continuing operations. ​ Net income from continuing operations attributable to Consolidated Water Co.
We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of our license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our 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 operations license.
Negotiations between Cayman Water and OfReg for the new license remain on-going. ​ We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of the license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our retail license.
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 us 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. ​ We are presently in the process of legally terminating/dissolving CW-Cooperatief, NSC and AdR and will continue to incur expenses for these subsidiaries while such process is completed, but such expenses are not expected to be material to our consolidated results of operations. ​ 31 Table of Contents Our net income (loss) from discontinued operations for 2024 and 2023 was $10,355,184 and ($1,086,744), respectively.
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 us 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. ​ 30 Table of Contents AdR was officially terminated/dissolved in the first quarter of 2026.
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 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 amended ASU is effective on a prospective basis for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.
Cash used for additions to property, plant and equipment and construction in progress was $6,696,580. ​ Cash Flows from Financing Activities ​ Net cash used by our financing activities was $6,712,154, almost all of which related to the payment of dividends. ​ Material Commitments, Expenditures and Contingencies Cayman Water Retail License ​ We sell water through our retail operations under a license issued in July 1990 by the Cayman Islands government (the “1990 license”) that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area.
The more significant of such items and changes in working capital components includes depreciation and amortization of $6,903,438, a decrease in accounts receivable of $6,519,621 attributable principally to CW-Bahamas, a decrease in inventory of $4,240,636 and an increase in contract liabilities of $2,401,980. ​ Cash Flows from Investing Activities ​ Net cash used in our investing activities was $8,439,222 primarily for additions to property, plant and equipment and construction in progress. ​ 37 Table of Contents Cash Flows from Financing Activities ​ Net cash used in our financing activities was $8,950,163, almost all of which related to the payment of dividends. ​ Material Commitments, Expenditures and Contingencies Cayman Water Retail License ​ We sell water through our retail operations under a license issued in July 1990 by the Cayman Islands government (the “1990 license”) that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area.
(“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”), the Government of Baja California as represented by the Secretary of Planning and Finance and the Public Utilities Commission of Tijuana (“CESPT”).
NSC subsequently formed AdR to pursue the completion of the Project. ​ On August 22, 2016, the Public Private Partnership Agreement for the Project (the “APP Contract”) was executed between AdR, the State Water Commission of Baja California (“CEA”), and the Government of Baja California as represented by the Secretary of Planning and Finance and the Public Utilities Commission of Tijuana (“CESPT”).
As a result of these impairment tests, we determined that the estimated fair value of our 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.
In late July 2021, a major customer communicated to Aerex that its purchases of a specialized product from Aerex in 2022 and subsequent years would be at substantially reduced annual amounts, as compared to the amounts it had purchased from Aerex in prior years.
This increase in employee costs is attributable to pay raises as well as increased stock compensation and bonus accruals arising from the Company’s improved financial results from 2022 to 2023. ​ FINANCIAL CONDITION ​ The significant changes in the components of our consolidated balance sheet as of December 31, 2024 as compared to December 31, 2023 (other than the change in our cash and cash equivalents, which is discussed later in “LIQUIDITY AND CAPITAL RESOURCES”) and the reasons for these changes are discussed in the following paragraphs. ​ Accounts receivable increased by approximately $1.4 million primarily due to an increase in CW-Bahamas’ accounts receivable.
This increase reflects almost $1.2 million incremental audit, consulting and legal fees arising primarily from the Company’s change in S.E.C. filing status from a small reporting company to an accelerated filer. ​ FINANCIAL CONDITION ​ The significant changes in the components of our consolidated balance sheet as of December 31, 2025 as compared to December 31, 2024 (other than the change in our cash and cash equivalents, which is discussed later in “LIQUIDITY AND CAPITAL RESOURCES”) and the reasons for these changes are discussed in the following paragraphs. ​ Accounts receivable decreased by approximately $6.8 million, primarily due to a $7.6 million decrease in CW-Bahamas’ accounts receivable.
We have been in compliance with the performance guarantees under these contracts for all periods since the inception of the contracts. ​ 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 .
We have been in compliance with the performance guarantees under these contracts for all periods since the inception of the contracts. ​ 38 Table of Contents Adoption of New Accounting Standards ​ In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures .
We continued to pay a royalty of 7.5% of the revenue we collect 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”).
We continued to pay a royalty of 7.5% of the revenue we collect 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”) and, in April 2017, passed supplemental legislation which transferred responsibility for economic regulation of the water utility sector and the negotiations with us for a new retail license to OfReg. ​ Under the new regulatory legislation passed in October 2016, Cayman Water was required to first be granted a concession by the government before obtaining a new (or renewing the old) retail operations license.
Approximately 80% of the $147 million price for the construction of this plant is subject to adjustment based upon changes in inflation indices from the date the contract was executed to the date construction begins.
Approximately 80% of the $147 million price for the construction of this plant is subject to adjustment based upon changes in inflation indices from September 29, 2022 (the date that was 120 days after the original proposal was submitted) until the date that the notice to proceed with construction is issued by the client.
Gross profit for 2023 was $61,927,105 (34% of total revenue) as compared to $30,355,123 (32% of total revenue) for 2022. For further discussion of revenue and gross profit see the “Results by Segment” discussion and analysis that follows. ​ General and administrative expenses (“G&A expenses”) on a consolidated basis increased to $24,752,366 for 2023 as compared to $21,070,234 for 2022.
Gross profit for 2025 was $48,378,810 (37% of total revenue) as compared to $45,624,448 (34% of total revenue) for 2024. For further discussion of revenue and gross profit see the “Results by Segment” discussion and analysis that follows. ​ General and administrative expenses (“G&A expenses”) on a consolidated basis increased to $30,116,328 for 2025 as compared to $27,537,436 for 2024.
Property, plant and equipment, net, decreased by approximately $3.5 million due to the scheduled depreciation of fixed assets. Construction in progress increased by approximately $4.6 million primarily due to $2.1 million spent on the CW-Bahamas Cat Island plant construction and $1.7 million spent on the new West Bay plant in Cayman Islands.
Construction in progress increased by approximately $1.6 million, primarily due to $3.2 million spent on the CW-Bahamas Cat Island plant construction, partially offset by a decrease of $1.7 million resulting from the additional capitalization of completed and in-use components of the West Bay plant expansion in Grand Cayman.
We paid approximately $1.8 million for dividends in January 2025.
We paid approximately $2.3 million in dividends in January 2026.
Based upon this payment history, we have not provided for a material allowance for credit losses for CW-Bahamas’ accounts receivable from the WSC as of December 31, 2024. ​ CW-Bahamas held discussions with the WSC in March 2024 and with representatives of The Bahamas Government in April 2024 during which CW-Bahamas was informed that the Government intended to substantially reduce CW-Bahamas’ accounts receivable from the WSC before the end of 2024.
Based upon this payment history, we have not provided for a material allowance for credit losses for CW-Bahamas’ accounts receivable from the WSC as of December 31, 2025, or prior periods. ​ We continue to be in frequent contact with officials of The Bahamas government, who continue to express their intention to significantly reduce CW-Bahamas’ delinquent accounts receivable balances.
From that date until February 18, 2025, we 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 our understanding of its legal obligations, treating those obligations set forth in the 1990 license as operative notwithstanding the expiration of the express extension.
The most recent express extension of the license expired on January 31, 2018. From that date until February 18, 2025, we continued to operate under the terms of the 1990 license, treating such terms as operative notwithstanding the expiration of the express extension.
Current inventory increased by $2.9 million primarily due to an increase in Aerex’s inventory arising from production activity. Contract assets decreased by approximately $17.1 million primarily due to a $16.5 million decrease in the services segment contract assets attributable to the completion of the Liberty Utilities and the Red Gate II projects.
Current inventory decreased by $5.2 million, primarily due to a decrease of $5.1 million in Aerex’s inventory resulting from the consumption of materials used in product production. Contract assets decreased by approximately $1.2 million, primarily due to a $1.1 million decrease in Aerex’s contract assets.
Approximately 81% of the December 31, 2024 accounts receivable balance was delinquent as of that date. As of February 28, 2025, this receivable amounted to $22.5 million, of which 77% was delinquent.
Approximately 71% and 81% of the accounts receivable balances were delinquent as of those dates, respectively. As of February 28, 2026, this receivable amounted to $22.6 million, of which 75% was delinquent.
From that date to February 18, 2025, we 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 our understanding of its legal obligations, treating those obligations set forth in the 1990 license as operative notwithstanding the expiration of the express extension.
The most recent express extension of the license expired on January 31, 2018. From that date to February 18, 2025, we continued to operate under the terms of the 1990 license, treating such terms as operative notwithstanding the expiration of the express extension.
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.
Moody’s has maintained these ratings through the date of its most current report issued in April 2025.
The increase in bulk segment revenue from 2022 to 2023 was attributable to a 6% increase in water volume and an increase in energy costs for CW-Bahamas, which increased the energy pass-through component of CW-Bahamas’ rates. ​ Gross profit for the bulk segment was $10,466,926 (30% of bulk revenue) and $9,958,854 (30% of bulk revenue) for 2023 and 2022, respectively.
The decrease in bulk revenue from 2024 to 2025 reflects a decrease in the price of energy for CW-Bahamas, which decreased the energy pass-through component of CW-Bahamas’ rates. ​ Gross profit for our bulk segment was $11,011,110 (33% of bulk revenue) and $10,313,027 (31% of bulk revenue) for 2025 and 2024, respectively.
As a result of the cancellation of this contract, we recorded an impairment loss for rights of way acquired for the contract’s proposed aqueduct of approximately ($3.0 million) in 2020. Construction and Manufacturing Contract Revenue Recognition We design, construct, and sell desalination infrastructure through DesalCo, which serves customers in the Cayman Islands, The Bahamas, and the British Virgin Islands.
Construction and Manufacturing Contract Revenue Recognition We design, construct, and sell desalination infrastructure through DesalCo, which serves customers in the Cayman Islands, The Bahamas, and the British Virgin Islands. We design, construct, and sell wastewater, water reuse, and water production infrastructure in the United States through PERC and Kalaeloa Desalco.
The respective weightings we 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 we estimated for our manufacturing reporting unit exceeded its carrying amount by 63% as of December 31, 2022. ​ Long-lived Assets ​ We review the carrying amounts of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable.
Long-lived Assets ​ We review the carrying amounts of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable.
We continue to be in frequent contact with officials of the Bahamas government, who continue to express their intention to significantly reduce CW-Bahamas accounts receivable balances in the near future, however we cannot provide any assurance as to when such reduction will occur. ​ In a report dated October 6, 2022, Moody’s Investor Services (“Moody’s”) downgraded The Bahamas’ long-term issuer and senior unsecured ratings to B1 from Ba3.
However, we are unable to determine when or if such reduction will occur. ​ In a report dated October 6, 2022, Moody’s Investor Services (“Moody’s”) downgraded The Bahamas’ long-term issuer and senior unsecured ratings to B1 from Ba3. Moody’s also lowered The Bahamas’ local currency ceiling to Baa3 from Baa2 and its foreign currency ceiling to Ba1 from Baa3.
When these delays occur, we hold 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.
All previous delinquent accounts receivable from the WSC, including accrued interest thereon, were eventually paid in full.
We received the proceeds from the sale of the land and documentation in June 2024. ​ Our net losses from discontinued operations for 2023 and 2022 were ($1,086,744) and ($2,371,049), respectively. ​ Consolidated Results ​ Including discontinued operations, net income attributable to Consolidated Water Co.
We received the proceeds from the sale of the land and documentation in June 2024. ​ We are presently in the process of legally terminating/dissolving CW-Cooperatief, NSC and AdR and will continue to incur expenses for these subsidiaries until such processes are completed. ​ Our net income (loss) from discontinued operations for 2024 and 2023 was $10,355,184 and ($1,086,744), respectively.
We are currently evaluating the impact of this guidance. ​ 39 Table of Contents 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 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The Company adopted the standard as of December 31, 2025, including a recast of 2024 and 2023 information, by including additional required disclosures within the Notes to the Consolidated Financial Statements. See Note 11—Income Taxes for further details.
Removed
The most recent express extension of the license expired on January 31, 2018.
Added
(2) Consists of water treatment plants for which we are the “Certified Operator in Responsible Charge” under operations and maintenance and other service agreements. ​ 26 Table of Contents Cayman Islands ​ We have been operating our business on Grand Cayman since 1973 and have been using reverse osmosis technology to convert seawater to potable water since 1989.
Removed
Our actual results could differ significantly from such estimates and assumptions.
Added
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.
Removed
For 2022, we elected to assess qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment testing we have conducted in prior years for all reporting units other than the manufacturing unit.
Added
We are presently in the process of legally terminating/dissolving CW-Cooperatief and NSC and expect to complete this process by mid-2026. ​ Our net income (loss) from discontinued operations for 2025 and 2024 was ($290,635) and $10,355,184, respectively. ​ Consolidated Results ​ Including discontinued operations, net income attributable to Consolidated Water Co.
Removed
We assessed the 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 unit included macroeconomic conditions, industry and market conditions, cost factors, expected future results, overall financial performance, and other relevant events.
Added
Ltd. stockholders for 2025 was $18,627,308 ($1.16 per share on a fully diluted basis), as compared to $17,882,370 ($1.12 per share on a fully diluted basis) for 2024. ​ Revenue for 2025 decreased to $132,073,368 from $133,966,633 in 2024, due to decreases in the revenue from our services and bulk segments.

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Other CWCO 10-K year-over-year comparisons