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​

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

​

FORM 10-Q

​

(Mark One)

​

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the quarterly period ended September 30, 2025

​

OR

​

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the transition period from ___________ to ___________

​

Commission File Number: 0-25248

​

CONSOLIDATED WATER CO. LTD.

(Exact name of registrant as specified in its charter)

​

CAYMAN ISLANDS |  | 98-0619652
(State or other jurisdiction of |  | (I.R.S. Employer Identification No.)
incorporation or organization) |  |
Regatta Office Park |  |
Windward Three, 4th Floor, West Bay Road |  |
P.O. Box 1114 |  |
Grand Cayman KY1-1102 |  |
Cayman Islands |  | N/A
(Address of principal executive offices) |  | (Zip Code)

​

(345) 945-4277

(Registrant’s telephone number, including area code)

​

Securities registered pursuant to Section 12(b) of the Act:

​

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Class A Common Stock, $0.60 par value |  | CWCO |  | The Nasdaq Global Select Market

​

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

​

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

​

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​

Large accelerated filer ☐ Accelerated filer ☒

​

Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

​

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

​

As of November 5, 2025, 15,931,336 shares of the registrant’s common stock, with US$0.60 par value, were outstanding.

​

​

​

​

Table of Contents

TABLE OF CONTENTS

​

​

​ | ​ | ​ | ​
​ | Description | ​ | Page
PART I | FINANCIAL INFORMATION |  | 4
Item 1 | Financial Statements | ​ | 4
​ | Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 | ​ | 4
​ | Condensed Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024 | ​ | 5
​ | Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024 | ​ | 6
​ | Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2025 and 2024 | ​ | 8
​ | Notes to Condensed Consolidated Financial Statements (Unaudited) | ​ | 9
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ​ | 25
Item 3 | Quantitative and Qualitative Disclosures about Market Risk | ​ | 37
Item 4 | Controls and Procedures | ​ | 37
​ | ​ | ​ | ​
PART II | OTHER INFORMATION | ​ | 38
Item 1A | Risk Factors | ​ | 38
Ite m 2 | Unregistered Sales of Equity Securities and Use of Proceeds | ​ | 40
Item 5 | Other Information | ​ | 40
Item 6 | Exhibits | ​ | 41
​ | ​ | ​ | ​
SIGNATURES | ​ | 42

​

​

​

​

​

2

Table of Contents

Note Regarding Currency and Exchange Rates

Unless otherwise indicated, all references to “$” or “US$” are to United States dollars.

​

The exchange rate for conversion of Cayman Island dollars (CI$) into US$, as determined by the Cayman Islands Monetary Authority, has been fixed since April 1974 at US$1.20 per CI$1.00.

​

The exchange rate for conversion of Bahamas dollars (B$) into US$, as determined by the Central Bank of The Bahamas, has been fixed since 1973 at US$1.00 per B$1.00.

​

The official currency of the British Virgin Islands is the US$.

​

​

​

3

Table of Contents

PART I - FINANCIAL INFORMATION

​

ITEM 1. FINANCIAL STATEMENTS

​

CONSOLIDATED WATER CO. LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | September 30, | ​ | ​ | December 31,
​ |  | ​ | 2025 | ​ | ​ | 2024
​ | ​ | (Unaudited) | ​ | ​ | ​
ASSETS |  | ​ |  |  | ​ |
Current assets |  | ​ |  |  | ​ |
Cash and cash equivalents | ​ | $ | 123,554,648 | ​ | $ | 99,350,121
Accounts receivable, net | ​ |  | 28,996,834 | ​ |  | 39,580,982
Inventory | ​ |  | 4,564,029 | ​ |  | 8,960,350
Prepaid expenses and other current assets | ​ |  | 5,965,382 | ​ |  | 5,112,183
Contract assets | ​ |  | 6,731,861 | ​ |  | 4,470,243
Current assets of discontinued operations | ​ |  | 136,928 | ​ |  | 272,485
Total current assets | ​ | ​ | 169,949,682 | ​ |  | 157,746,364
Property, plant and equipment, net | ​ |  | 55,553,056 | ​ |  | 52,432,282
Construction in progress | ​ |  | 5,210,534 | ​ |  | 5,143,717
Inventory, noncurrent | ​ |  | 5,597,052 | ​ |  | 5,338,961
Investment in affiliates | ​ |  | 1,122,030 | ​ |  | 1,504,363
Goodwill | ​ |  | 12,861,404 | ​ |  | 12,861,404
Intangible assets, net | ​ |  | 2,204,536 | ​ |  | 2,696,815
Operating lease right-of-use assets | ​ | ​ | 3,095,156 | ​ | ​ | 3,232,786
Other assets | ​ |  | 1,641,202 | ​ |  | 2,356,489
Total assets | ​ | $ | 257,234,652 | ​ | $ | 243,313,181
​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES AND EQUITY | ​ |  |  | ​ |  |
Current liabilities | ​ |  |  | ​ |  |
Accounts payable, accrued expenses and other current liabilities | ​ | $ | 9,530,167 | ​ | $ | 9,057,179
Accrued compensation | ​ |  | 3,569,948 | ​ |  | 3,336,946
Dividends payable | ​ |  | 2,272,907 | ​ |  | 1,780,841
Current maturities of operating leases | ​ | ​ | 667,074 | ​ | ​ | 634,947
Current portion of long-term debt | ​ | ​ | 62,458 | ​ | ​ | 126,318
Contract liabilities | ​ |  | 11,682,006 | ​ |  | 9,126,654
Deferred revenue | ​ | ​ | 149,675 | ​ | ​ | 365,879
Current liabilities of discontinued operations | ​ |  | 271,143 | ​ |  | 509,745
Total current liabilities | ​ |  | 28,205,378 | ​ |  | 24,938,509
Long-term debt, noncurrent | ​ | ​ | 34,753 | ​ | ​ | 70,320
Deferred tax liabilities | ​ |  | 183,536 | ​ |  | 210,893
Noncurrent operating leases | ​ | ​ | 2,457,151 | ​ | ​ | 2,630,812
Other liabilities | ​ |  | 153,000 | ​ |  | 153,000
Total liabilities | ​ |  | 31,033,818 | ​ |  | 28,003,534
Commitments and contingencies | ​ |  |  | ​ |  |
Equity | ​ |  |  | ​ |  |
Consolidated Water Co. Ltd. stockholders' equity | ​ |  |  | ​ |  |
Redeemable preferred stock, $0.60 par value. Authorized 200,000 shares; issued and outstanding 39,794 and 44,004 shares, respectively | ​ |  | 23,876 | ​ |  | 26,402
Class A common stock, $0.60 par value. Authorized 24,655,000 shares; issued and outstanding 15,931,336 and 15,846,345 shares, respectively | ​ |  | 9,558,802 | ​ |  | 9,507,807
Class B common stock, $0.60 par value. Authorized 145,000 shares; none issued | ​ |  | — | ​ |  | —
Additional paid-in capital | ​ |  | 94,729,766 | ​ |  | 93,550,905
Retained earnings | ​ |  | 116,068,697 | ​ |  | 106,875,581
Total Consolidated Water Co. Ltd. stockholders' equity | ​ |  | 220,381,141 | ​ |  | 209,960,695
Non-controlling interests | ​ |  | 5,819,693 | ​ |  | 5,348,952
Total equity | ​ |  | 226,200,834 | ​ |  | 215,309,647
Total liabilities and equity | ​ | $ | 257,234,652 | ​ | $ | 243,313,181

​

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

4

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​

CONSOLIDATED WATER CO. LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, |  | Nine Months Ended September 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Revenue | ​ | $ | 35,118,706 | ​ | $ | 33,390,557 | ​ | $ | 102,425,170 | ​ | $ | 105,559,105
Cost of revenue | ​ |  | 22,172,797 | ​ |  | 21,755,899 | ​ |  | 64,340,989 | ​ |  | 68,426,210
Gross profit | ​ |  | 12,945,909 | ​ |  | 11,634,658 | ​ |  | 38,084,181 | ​ |  | 37,132,895
General and administrative expenses | ​ |  | 7,218,722 | ​ |  | 6,955,969 | ​ |  | 22,522,919 | ​ |  | 20,126,292
Gain on asset dispositions, net | ​ |  | 34,095 | ​ |  | 201,582 | ​ |  | 94,547 | ​ |  | 198,452
Income from operations | ​ |  | 5,761,282 | ​ |  | 4,880,271 | ​ |  | 15,655,809 | ​ |  | 17,205,055
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other income (expense): | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Interest income | ​ |  | 637,532 | ​ |  | 626,801 | ​ |  | 2,011,114 | ​ |  | 1,341,797
Interest expense | ​ |  | (901) | ​ |  | (32,801) | ​ |  | (3,614) | ​ |  | (99,740)
Equity in the earnings of affiliates | ​ |  | 80,314 | ​ |  | 73,620 | ​ |  | 163,067 | ​ |  | 199,983
Other | ​ |  | 94,282 | ​ |  | 56,420 | ​ |  | 149,733 | ​ |  | 118,610
Other income, net | ​ |  | 811,227 | ​ |  | 724,040 | ​ |  | 2,320,300 | ​ |  | 1,560,650
Income before income taxes | ​ |  | 6,572,509 | ​ |  | 5,604,311 | ​ |  | 17,976,109 | ​ |  | 18,765,705
Provision for income taxes | ​ |  | 827,009 | ​ |  | 490,209 | ​ |  | 1,832,933 | ​ |  | 2,175,838
Net income from continuing operations | ​ |  | 5,745,500 | ​ |  | 5,114,102 | ​ |  | 16,143,176 | ​ |  | 16,589,867
Income from continuing operations attributable to non-controlling interests | ​ |  | 175,936 | ​ |  | 156,784 | ​ |  | 470,741 | ​ |  | 448,724
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | ​ |  | 5,569,564 | ​ |  | 4,957,318 | ​ |  | 15,672,435 | ​ |  | 16,141,143
Net income (loss) from discontinued operations | ​ | ​ | (37,220) | ​ | ​ | (502,854) | ​ | ​ | (252,857) | ​ | ​ | 10,637,926
Net income attributable to Consolidated Water Co. Ltd. stockholders | ​ | $ | 5,532,344 | ​ | $ | 4,454,464 | ​ | $ | 15,419,578 | ​ | $ | 26,779,069
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Continuing operations | ​ | $ | 0.35 | ​ | $ | 0.31 | ​ | $ | 0.98 | ​ | $ | 1.02
Discontinued operations | ​ | ​ | — | ​ | ​ | (0.03) | ​ | ​ | (0.01) | ​ | ​ | 0.67
Basic earnings per share | ​ | $ | 0.35 | ​ | $ | 0.28 | ​ | $ | 0.97 | ​ | $ | 1.69
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Diluted earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Continuing operations | ​ | $ | 0.34 | ​ | $ | 0.31 | ​ | $ | 0.97 | ​ | $ | 1.01
Discontinued operations | ​ | ​ | — | ​ | ​ | (0.03) | ​ | ​ | (0.01) | ​ | ​ | 0.67
Diluted earnings per share | ​ | $ | 0.34 | ​ | $ | 0.28 | ​ | $ | 0.96 | ​ | $ | 1.68
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Dividends declared per common and redeemable preferred shares | ​ | $ | 0.14 | ​ | $ | 0.11 | ​ | $ | 0.39 | ​ | $ | 0.30
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average number of common shares used in the determination of: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Basic earnings per share | ​ |  | 15,924,851 | ​ |  | 15,833,715 | ​ |  | 15,919,167 | ​ |  | 15,830,599
Diluted earnings per share | ​ |  | 16,054,557 | ​ |  | 15,989,601 | ​ |  | 16,047,312 | ​ |  | 15,986,019

​

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

​

5

Table of Contents

CONSOLIDATED WATER CO. LTD.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Redeemable | ​ | ​ | ​ | ​ | ​ | ​ | Additional | ​ | ​ | ​ | ​ | Non- | ​ | Total
​ |  | preferred stock |  | Common stock |  | paid-in |  | Retained |  | controlling |  | stockholders’
​ |  | Shares |  | Dollars |  | Shares |  | Dollars |  | capital |  | earnings |  | interests |  | equity
Balance as of December 31, 2024 | ​ | 44,004 | ​ | $ | 26,402 | ​ | 15,846,345 | ​ | $ | 9,507,807 | ​ | $ | 93,550,905 | ​ | $ | 106,875,581 | ​ | $ | 5,348,952 | ​ | $ | 215,309,647
Issue of share capital |  | — |  | ​ | — |  | 66,764 |  | ​ | 40,058 |  | ​ | (40,058) |  | ​ | — |  | ​ | — |  | ​ | —
Conversion of preferred stock |  | (2,486) | ​ |  | (1,492) |  | 2,486 | ​ |  | 1,492 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Buyback of preferred stock |  | (688) | ​ |  | (412) |  | — | ​ |  | — | ​ |  | (9,727) | ​ |  | — | ​ |  | — | ​ |  | (10,139)
Net income |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | 4,791,029 |  | ​ | 165,427 |  | ​ | 4,956,456
Exercise of options | ​ | — | ​ | ​ | — | ​ | 1,090 | ​ | ​ | 654 | ​ | ​ | 12,793 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 13,447
Dividends declared |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | (1,757,183) |  | ​ | — |  | ​ | (1,757,183)
Stock-based compensation |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | 299,371 |  | ​ | — |  | ​ | — |  | ​ | 299,371
Balance as of March 31, 2025 |  | 40,830 | ​ | ​ | 24,498 |  | 15,916,685 | ​ | ​ | 9,550,011 | ​ | ​ | 93,813,284 | ​ | ​ | 109,909,427 | ​ | ​ | 5,514,379 | ​ | ​ | 218,811,599
Issue of share capital |  | 8,534 |  | ​ | 5,120 |  | — |  | ​ | — |  | ​ | (5,120) |  | ​ | — |  | ​ | — |  | ​ | —
Buyback of preferred stock | ​ | (69) | ​ | ​ | (41) | ​ | — | ​ | ​ | — | ​ | ​ | (1,530) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1,571)
Net income |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | 5,096,205 |  | ​ | 129,378 |  | ​ | 5,225,583
Exercise of options | ​ | 549 | ​ | ​ | 329 | ​ | — | ​ | ​ | — | ​ | ​ | 9,894 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 10,223
Dividends declared |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | (2,234,434) |  | ​ | — |  | ​ | (2,234,434)
Stock-based compensation |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | 396,040 |  | ​ | — |  | ​ | — |  | ​ | 396,040
Balance as of June 30, 2025 |  | 49,844 | ​ | ​ | 29,906 |  | 15,916,685 | ​ | ​ | 9,550,011 | ​ | ​ | 94,212,568 | ​ | ​ | 112,771,198 | ​ | ​ | 5,643,757 | ​ | ​ | 222,207,440
Issue of share capital |  | — |  | ​ | — |  | 2,000 |  | ​ | 1,200 |  | ​ | (1,200) |  | ​ | — |  | ​ | — |  | ​ | —
Conversion of preferred stock | ​ | (10,801) | ​ | ​ | (6,481) | ​ | 10,801 | ​ | ​ | 6,481 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Buyback of preferred stock | ​ | (720) | ​ | ​ | (432) | ​ | — | ​ | ​ | — | ​ | ​ | (12,591) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (13,023)
Net income |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | 5,532,344 |  | ​ | 175,936 |  | ​ | 5,708,280
Exercise of options | ​ | 1,471 | ​ | ​ | 883 | ​ | 1,850 | ​ | ​ | 1,110 | ​ | ​ | 48,442 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 50,435
Dividends declared |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | (2,234,845) |  | ​ | — |  | ​ | (2,234,845)
Stock-based compensation |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | 482,547 |  | ​ | — |  | ​ | — |  | ​ | 482,547
Balance as of September 30, 2025 |  | 39,794 | ​ | $ | 23,876 |  | 15,931,336 | ​ | $ | 9,558,802 | ​ | $ | 94,729,766 | ​ | $ | 116,068,697 | ​ | $ | 5,819,693 | ​ | $ | 226,200,834

​

6

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Redeemable |  | ​ | ​ | ​ | ​ |  | Additional |  | ​ | ​ |  | Non- |  | Total
​ | ​ | preferred stock | ​ | Common stock | ​ | paid-in | ​ | Retained | ​ | controlling | ​ | stockholders’
​ |  | Shares |  | Dollars |  | Shares |  | Dollars |  | capital |  | earnings |  | interests |  | equity
Balance as of December 31, 2023 | ​ | 44,297 | ​ | $ | 26,578 | ​ | 15,771,545 | ​ | $ | 9,462,927 | ​ | $ | 92,188,887 | ​ | $ | 85,148,820 | ​ | $ | 5,003,462 | ​ | $ | 191,830,674
Issue of share capital |  | — |  | ​ | — |  | 57,384 |  | ​ | 34,430 |  | ​ | (34,430) |  | ​ | — |  | ​ | — |  | ​ | —
Buyback of preferred stock |  | (272) | ​ |  | (163) |  | — | ​ |  | — | ​ |  | (2,727) | ​ |  | — | ​ |  | — | ​ |  | (2,890)
Net income |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | 6,474,348 |  | ​ | 169,068 |  | ​ | 6,643,416
Dividends declared |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | (1,510,082) |  | ​ | — |  | ​ | (1,510,082)
Stock-based compensation |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | 279,875 |  | ​ | — |  | ​ | — |  | ​ | 279,875
Balance as of March 31, 2024 |  | 44,025 | ​ | ​ | 26,415 |  | 15,828,929 | ​ | ​ | 9,497,357 | ​ | ​ | 92,431,605 | ​ | ​ | 90,113,086 | ​ | ​ | 5,172,530 | ​ | ​ | 197,240,993
Issue of share capital |  | 5,904 |  | ​ | 3,542 |  | — |  | ​ | — |  | ​ | (3,542) |  | ​ | — |  | ​ | — | ​ | ​ | —
Conversion of preferred stock | ​ | (643) | ​ | ​ | (386) | ​ | 643 | ​ | ​ | 386 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Buyback of preferred stock | ​ | (229) | ​ | ​ | (137) | ​ | — | ​ | ​ | — | ​ | ​ | (2,144) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (2,281)
Net income |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | 15,850,257 |  | ​ | 122,872 | ​ | ​ | 15,973,129
Dividends declared |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | (1,507,710) |  | ​ | — | ​ | ​ | (1,507,710)
Stock-based compensation |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | 297,368 |  | ​ | — |  | ​ | — | ​ | ​ | 297,368
Balance as of June 30, 2024 |  | 49,057 | ​ | ​ | 29,434 |  | 15,829,572 | ​ | ​ | 9,497,743 | ​ | ​ | 92,723,287 | ​ | ​ | 104,455,633 | ​ | ​ | 5,295,402 | ​ | ​ | 212,001,499
Conversion of preferred stock | ​ | (4,887) | ​ | ​ | (2,932) | ​ | 4,887 | ​ | ​ | 2,932 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Buyback of preferred stock | ​ | (563) | ​ | ​ | (338) | ​ | — | ​ | ​ | — | ​ | ​ | (5,306) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (5,644)
Net income |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | 4,454,464 |  | ​ | 156,784 | ​ | ​ | 4,611,248
Exercise of options | ​ | 1,043 | ​ | ​ | 626 | ​ | — | ​ | ​ | — | ​ | ​ | 23,127 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 23,753
Dividends declared |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | (1,745,942) |  | ​ | (232,100) | ​ | ​ | (1,978,042)
Stock-based compensation |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | 333,409 |  | ​ | — |  | ​ | — | ​ | ​ | 333,409
Balance as of September 30, 2024 |  | 44,650 | ​ | $ | 26,790 |  | 15,834,459 | ​ | $ | 9,500,675 | ​ | $ | 93,074,517 | ​ | $ | 107,164,155 | ​ | $ | 5,220,086 | ​ | $ | 214,986,223

​

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

​

​

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CONSOLIDATED WATER CO. LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Nine Months Ended September 30,
​ |  | 2025 |  | 2024
Cash flows from operating activities | ​ | ​ | ​ |  | ​ |
Net income attributable to Consolidated Water Co. Ltd. stockholders | ​ | $ | 15,419,578 | ​ | $ | 26,779,069
Income from continuing operations attributable to non-controlling interests | ​ | ​ | 470,741 | ​ | ​ | 448,724
Net income | ​ | ​ | 15,890,319 | ​ | ​ | 27,227,793
Adjustments to reconcile net income to net cash provided by operating activities: | ​ |  |  | ​ |  |
Gain on sale of land and project documentation | ​ | ​ | — | ​ | ​ | (12,134,766)
Foreign currency transaction adjustment - discontinued operations | ​ | ​ | 248 | ​ | ​ | 60,915
Loss from discontinued operations | ​ |  | 252,609 | ​ |  | 1,435,925
Depreciation and amortization | ​ |  | 5,163,826 | ​ |  | 5,020,410
Deferred income tax benefit | ​ |  | (27,357) | ​ |  | (303,527)
Provision for credit losses | ​ | ​ | 294,100 | ​ | ​ | 390,108
Amortization of operating lease right-of-use assets | ​ | ​ | 520,869 | ​ | ​ | 466,251
Compensation expense relating to stock and stock option grants | ​ |  | 1,177,958 | ​ |  | 910,652
Gain on asset dispositions, net | ​ |  | (94,547) | ​ |  | (198,452)
Equity in earnings of affiliates | ​ |  | (163,067) | ​ |  | (199,983)
Distribution of earnings from OC-BVI | ​ |  | 545,400 | ​ |  | 227,250
​ | ​ | ​ | ​ | ​ | ​ | ​
Change in: | ​ |  | ​ | ​ |  | ​
Accounts receivable | ​ |  | 10,290,048 | ​ |  | 637,162
Contract assets | ​ | ​ | (2,261,618) | ​ | ​ | 19,594,696
Inventory | ​ |  | 3,610,403 | ​ |  | 1,529,545
Prepaid expenses and other assets | ​ |  | (752,690) | ​ |  | (1,269,737)
Accounts payable, accrued expenses and other current liabilities | ​ |  | (74,330) | ​ |  | (4,495,643)
Accrued compensation | ​ | ​ | 233,002 | ​ | ​ | 587,486
Contract liabilities | ​ | ​ | 2,555,352 | ​ | ​ | (218,291)
Operating lease liabilities | ​ | ​ | (553,842) | ​ | ​ | (470,156)
Deferred revenue | ​ | ​ | (216,204) | ​ | ​ | (108,042)
Net cash provided by operating activities - continuing operations | ​ | ​ | 36,390,479 | ​ | ​ | 38,689,596
Net cash used in operating activities - discontinued operations | ​ |  | (457,646) | ​ |  | (1,432,041)
Net cash provided by operating activities | ​ | ​ | 35,932,833 | ​ | ​ | 37,257,555
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows from investing activities | ​ |  |  | ​ |  |
Additions to property, plant and equipment and construction in progress | ​ |  | (6,142,941) | ​ |  | (3,747,250)
Proceeds from asset dispositions | ​ |  | 97,342 | ​ |  | 446,337
Proceeds from Mexico settlement agreement | ​ |  | — | ​ |  | 33,261,664
Net cash provided by (used in) investing activities | ​ | ​ | (6,045,599) | ​ | ​ | 29,960,751
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows from financing activities | ​ |  |  | ​ |  |
Dividends paid to common shareholders | ​ |  | (5,718,080) | ​ |  | (4,519,412)
Dividends paid to preferred shareholders | ​ |  | (16,316) | ​ |  | (13,051)
Dividends paid to non-controlling interests | ​ | ​ | — | ​ | ​ | (232,100)
Buyback of redeemable preferred stock | ​ |  | (24,733) | ​ |  | (10,815)
Proceeds received from exercise of stock options | ​ | ​ | 74,105 | ​ | ​ | 23,753
Principal repayments on long-term debt | ​ | ​ | (99,427) | ​ | ​ | (140,387)
Net cash used in financing activities | ​ |  | (5,784,451) | ​ |  | (4,892,012)
Net increase in cash and cash equivalents | ​ |  | 24,102,783 | ​ |  | 62,326,294
Cash and cash equivalents at beginning of period | ​ |  | 99,350,121 | ​ |  | 42,621,898
Cash and cash equivalents at beginning of period - discontinued operations | ​ | ​ | 127,859 | ​ | ​ | 91,283
Less: cash and cash equivalents at end of period - discontinued operations | ​ | ​ | (26,115) | ​ | ​ | (169,848)
Cash and cash equivalents at end of period | ​ | $ | 123,554,648 | ​ | $ | 104,869,627
​ | ​ | ​ | ​ | ​ | ​ | ​
Non-cash transactions: | ​ | ​ | ​ | ​ | ​ | ​
Dividends declared but not paid | ​ | $ | 2,235,958 | ​ | $ | 1,746,702
Transfers from inventory to property, plant and equipment and construction in progress | ​ | $ | 527,827 | ​ | $ | 451,477
Transfers from construction in progress to property, plant and equipment | ​ | $ | 5,179,690 | ​ | $ | 875,580
Right-of-use assets obtained in exchange for new operating lease liabilities | ​ | $ | 412,308 | ​ | $ | 1,604,702
Transfers from prepaid expenses to property, plant and equipment | ​ | $ | 509,333 | ​ | $ | 67,136
Expenditures for property, plant and equipment and construction in progress not yet paid | ​ | $ | 547,318 | ​ | $ | —

​

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

​

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CONSOLIDATED WATER CO. LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Principal activity

Consolidated Water Co. Ltd. and its subsidiaries (collectively, the “Company”) supply potable water, treat wastewater and water for reuse, and provide water-related products and services to customers in the Cayman Islands, The Bahamas, the United States and the British Virgin Islands. The Company produces potable water from seawater using reverse osmosis technology and sells this water to a variety of customers, including public utilities, commercial and tourist properties, residential properties and government facilities. The Company designs, constructs and sells water production and water treatment infrastructure and manages water infrastructure for commercial and governmental customers. The Company also manufactures a wide range of specialized and custom water industry related products and provides design, engineering, operating and other services applicable to commercial, municipal and industrial water production, supply and treatment.

​

2. Accounting policies

Basis of consolidation: The accompanying condensed consolidated financial statements include the accounts of the Company’s (i) wholly-owned subsidiaries, Aerex Industries, Inc. (“Aerex”), Aquilex, Inc. (“Aquilex”), Cayman Water Company Limited (“Cayman Water”), Consolidated Water Cooperatief, U.A. (“CW-Cooperatief”), Consolidated Water U.S. Holdings, Inc. (“CW-Holdings”), DesalCo Limited (“DesalCo”), Kalaeloa Desalco LLC (“Kalaeloa Desalco”), Ocean Conversion (Cayman) Limited (“OC-Cayman”), PERC Water Corporation ("PERC") and Ramey Environmental Compliance, Inc. (“REC”); and (ii) majority-owned subsidiaries Consolidated Water (Bahamas) Ltd. (“CW-Bahamas”), N.S.C. Agua, S.A. de C.V. (“NSC”), and Aguas de Rosarito S.A.P.I. de C.V. (“AdR”). The Company’s investment in its affiliate Ocean Conversion (BVI) Ltd. (“OC-BVI”) is accounted for using the equity method of accounting. All significant intercompany balances and transactions have been eliminated in consolidation.

The accompanying interim condensed consolidated financial statements are unaudited. These condensed consolidated financial statements reflect all adjustments (which are of a normal recurring nature) that, in the opinion of management, are necessary to fairly present the Company’s consolidated financial position, results of operations and cash flows as of and for the periods presented. The consolidated results of operations for these interim periods are not necessarily indicative of the operating results for future periods, including the fiscal year ending December 31, 2025.

These condensed consolidated financial statements and notes are presented in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) relating to interim financial statements and in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted in these condensed consolidated financial statements pursuant to SEC rules and regulations, although the Company believes that the disclosures made herein are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Foreign currency: The Company’s reporting currency is the United States dollar (“US$”). The functional currency of the Company and its foreign operating subsidiaries (other than NSC, AdR, and CW-Cooperatief) is the currency for each respective country. The functional currency for NSC, AdR, and CW-Cooperatief is the US$. NSC and AdR conduct business in US$ and Mexican pesos and CW-Cooperatief conducts business in US$ and euros. The exchange rates for the Cayman Islands dollar and the Bahamian dollar are fixed to the US$. The exchange rates for conversion of Mexican pesos and euros into US$ vary based upon market conditions.

Net foreign currency gains arising from transactions and re-measurements were $19,093 and $24,807 for the three months ended September 30, 2025 and 2024, respectively, and $65,080 and $65,606 for the nine months ended September 30, 2025 and 2024 are included in “Other income (expense) - Other” in the accompanying condensed consolidated statements of income.

9

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Cash and cash equivalents: Cash and cash equivalents consist of demand deposits at banks and certificates of deposit at banks with original maturities of three months or less. Cash and cash equivalents as of September 30, 2025 and December 31, 2024 include approximately $16.9 million and $5.2 million, respectively, of certificates of deposits with original maturities of three months or less.

Certain transfers from the Company’s Bahamas bank accounts to Company bank accounts in other countries require the approval of the Central Bank of The Bahamas. The equivalent United States dollar cash balances held in The Bahamas as of September 30, 2025 and December 31, 2024 were approximately $26.4 million and $7.7 million, respectively.

Goodwill and intangible assets: Goodwill represents the excess cost of an acquired business over the fair value of the assets and liabilities of the acquired business as of the date of acquisition. Goodwill and intangible assets recorded as a result of a business combination and determined to have an indefinite useful life are not amortized but are tested for impairment annually or upon the identification of a triggering event. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed periodically for impairment. The Company evaluates the possible impairment of goodwill annually as part of its reporting process for the fourth quarter of each fiscal year. Management identifies the Company’s reporting units for goodwill impairment testing purposes, which consist of Cayman Water, the bulk segment (which is comprised of CW-Bahamas and OC-Cayman), PERC, REC, and the manufacturing segment (i.e., Aerex), and determines the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. The Company determines the fair value of each reporting unit and compares these fair values to the carrying amounts of the reporting units. To the extent the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment loss is recorded.

​

For the year ended December 31, 2024, the Company elected to assess qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment testing that was conducted in prior years for its reporting units. The Company assessed the relevant events and circumstances to evaluate whether it is more likely than not that the fair values of such reporting units were less than their carrying values. The events and circumstances assessed for each reporting unit included macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, and other relevant events. Based upon this qualitative assessment, the Company determined that it is more likely than not that the fair values of its reporting units exceeded their carrying values as of December 31, 2024.

​

Income taxes: The Company accounts for the income taxes arising from the operations of its United States subsidiaries under the asset and liability method. Deferred tax assets and liabilities, if any, are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to the extent any deferred tax asset may not be realized.

​

The Company is not presently subject to income taxes in the other countries in which it operates.

​

Revenue recognition: Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, |  | Nine Months Ended September 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Retail revenue | ​ | $ | 7,770,344 | ​ | $ | 7,585,992 | ​ | $ | 25,819,712 | ​ | $ | 24,392,814
Bulk revenue | ​ |  | 8,394,614 | ​ |  | 8,767,168 | ​ |  | 25,081,146 | ​ |  | 25,557,220
Services revenue | ​ |  | 14,289,315 | ​ |  | 12,677,837 | ​ |  | 35,815,785 | ​ |  | 42,017,917
Manufacturing revenue | ​ |  | 4,664,433 | ​ |  | 4,359,560 | ​ |  | 15,708,527 | ​ |  | 13,591,154
Total revenue | ​ | $ | 35,118,706 | ​ | $ | 33,390,557 | ​ | $ | 102,425,170 | ​ | $ | 105,559,105

​

Services revenue consists of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, |  | Nine Months Ended September 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Construction revenue | ​ | $ | 6,360,333 | ​ | $ | 4,251,237 | ​ | $ | 11,404,500 | ​ | $ | 17,632,772
Operations and maintenance revenue | ​ |  | 7,715,000 | ​ |  | 7,492,121 | ​ |  | 23,695,704 | ​ |  | 21,660,396
Design and consulting revenue | ​ |  | 213,982 | ​ |  | 934,479 | ​ |  | 715,581 | ​ |  | 2,724,749
Total services revenue | ​ | $ | 14,289,315 | ​ | $ | 12,677,837 | ​ | $ | 35,815,785 | ​ | $ | 42,017,917

​

Retail revenue

The Company produces and supplies water to end-users, including residential, commercial and governmental customers in the Cayman Islands under an exclusive retail license issued to Cayman Water by the Cayman Islands government to provide water in two of the three most populated areas on Grand Cayman. Customers are billed on a monthly basis based on metered consumption and bills are typically collected within 30 to 45 days after the billing date. Receivables not collected within 45 days subject the customer to disconnection from water service.

​

The Company recognizes revenue from retail water sales at the end of the billing cycle based on the water supplied to the customers’ premises. The amount of water supplied is determined and invoiced based upon water meter readings performed at the end of each month. All retail water contracts are month-to-month contracts. The Company has elected the “right to invoice” practical expedient for revenue recognition on its retail water sale contracts and recognizes revenue in the amount to which the Company has a right to invoice, recognizing this revenue from the transfer of goods or services to customers during the billing cycle.

Bulk revenue

The Company produces and supplies water to government-owned utilities in the Cayman Islands and The Bahamas.

OC-Cayman provides bulk water to the Water Authority-Cayman (“WAC”), a government-owned utility and regulatory agency, under three agreements. The WAC in turn distributes such water to properties in Grand Cayman outside of Cayman Water’s retail license area.

The Company sells bulk water in The Bahamas through its majority-owned subsidiary, CW-Bahamas, under two agreements with the Water and Sewerage Corporation of The Bahamas (“WSC”), which distributes such water through its own pipeline system to residential, commercial and tourist properties on the island of New Providence.

The Company has elected the “right to invoice” practical expedient for revenue recognition on its bulk water sale contracts and recognizes revenue in the amount to which the Company has a right to invoice, recognizing this revenue from the transfer of goods or services to customers during the billing cycle.

Services and Manufacturing revenue

The Company designs, constructs, sells, operates and maintains, and provides consulting services related to water, wastewater and water reuse infrastructure through PERC. All of PERC's customers are companies or governmental entities

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located in the United States. The Company provides operations and maintenance and consulting services to companies and governmental entities located in the state of Colorado through REC.

The Company provides design, engineering, management, procurement and construction services for desalination infrastructure through DesalCo, which serves customers in the Cayman Islands, The Bahamas and the British Virgin Islands.

The Company, through Aerex, is a custom and specialty manufacturer of systems and products applicable to commercial, municipal and industrial water production and treatment. Substantially all of Aerex’s customers are U.S. companies.

Kalaeloa Desalco has signed a contract with the Honolulu Board of Water Supply pursuant to which it is presently designing and expects to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii.

The Company generates construction, operations and maintenance, design and consulting revenue from PERC and DesalCo, generates construction revenue from Kalaeloa Desalco, and generates manufacturing revenue from Aerex. The Company also generates operations and maintenance and consulting revenue from REC.

The Company recognizes revenue for its construction and custom/specialized manufacturing contracts (and some of its 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. Contract costs include labor, materials, subcontractor costs and other expenses. The Company follows this method since it can make reasonably dependable estimates of the revenue and costs applicable to the various stages of a contract. Under this input method, the Company records revenue and recognizes profit or loss as work on the contract progresses. The Company estimates total costs to be incurred and profit to be earned on each long-term, fixed price contract prior to the commencement of work on the contract and updates these estimates as work on the contract progresses. The cumulative amount of revenue recorded on a contract at a specified point in time is that percentage of total estimated revenue that incurred costs to date comprised of estimated total contract costs. Due to the extended time it may take to complete many of the Company’s contracts and the scope and nature of the work required to be performed on those contracts, the estimations of total revenue and costs at completion are complicated and subject to many variables and, accordingly, are subject to changes. When adjustments in estimated total contract revenue or estimated total contract costs are required, any changes from prior estimates are recognized in the current period for the inception-to-date effect of such changes. The Company recognizes the full amount of any estimated loss on a contract at the time the estimates indicate such a loss. Any contract assets are classified as current assets. Contract liabilities on uncompleted contracts, if any, are classified as current liabilities.

The Company has elected the “right to invoice” practical expedient for revenue recognition on its operations and maintenance and consulting contracts and recognizes revenue in the amount to which the Company has a right to invoice, recognizing this revenue from the transfer of goods or services to customers during the billing cycle.

​

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For the three months ended September 30, 2025 and 2024, the Company recognized $6,462,508 and $4,246,506, respectively, of its services revenue from the transfer of goods or services to customers over time. The remaining services revenue of $7,826,807 and $8,431,331, respectively, was recognized from the transfer of goods or services to customers when invoiced. For the nine months ended September 30, 2025 and 2024, the Company recognized $11,752,695 and $17,631,774, respectively, of its services revenue from the transfer of goods or services to customers over time. The remaining services revenue of $24,063,090 and $24,386,143, respectively, was recognized from the transfer of goods or services to customers when invoiced. For the three and nine months ended September 30, 2025 and 2024, the Company recognized all of its manufacturing revenue from the transfer of goods or services to customers over time.

Revenue recognized and amounts billed on contracts in progress are summarized as follows:

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ | ​ | 2025 | ​ | 2024
Revenue recognized to date on contracts in progress |  | $ | 123,685,220 | ​ | $ | 114,590,991
Amounts billed to date on contracts in progress | ​ |  | (131,049,672) | ​ |  | (121,833,354)
Retainage | ​ | ​ | 2,414,307 | ​ | ​ | 2,585,952
Net contract liability | ​ | $ | (4,950,145) | ​ | $ | (4,656,411)

​

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

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ | ​ | 2025 | ​ | 2024
Contract assets |  | $ | 6,731,861 |  | $ | 4,470,243
Contract liabilities | ​ |  | (11,682,006) | ​ |  | (9,126,654)
Net contract liability | ​ | $ | (4,950,145) | ​ | $ | (4,656,411)

​

As of September 30, 2025, the Company had unsatisfied or partially unsatisfied performance obligations for contracts in progress representing approximately $138.8 million in aggregate transaction price for contracts with an original expected length of greater than one year. The Company expects to earn revenue as it satisfies its performance obligations under those contracts in the amount of approximately $4.6 million during the remainder of the year ending December 31, 2025 and approximately $134.2 million thereafter. In addition, the Company recognized revenue of approximately $5.1 million for the nine months ended September 30, 2025, that was included in the contract liability balance as of December 31, 2024.

Practical Expedients and Exemptions

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

​

Comparative amounts: Revenue of $614,199 and $1,467,461 for the three and nine months ended September 30, 2024, respectively, presented in the services segment as design and consulting revenue in the financial statements previously issued for 2024 has been reclassified to construction revenue in the services segment information for 2024 provided herein to conform to the current period’s presentation. Such reclassifications had no effect on consolidated or services segment revenue, gross profit, operating income or net income.

​

3. Segment information

The Company has five reportable segments: retail, bulk, services, manufacturing and corporate. The retail segment operates the water utility for the Seven Mile Beach and West Bay areas of Grand Cayman pursuant to an exclusive license granted by the Cayman Islands government. The bulk segment supplies potable water to government utilities in Grand Cayman and The Bahamas under long-term contracts. The services segment designs, constructs and sells water infrastructure and provides management and operating services to third parties. The manufacturing segment manufactures and services a wide range of custom and specialized water-related products applicable to commercial, municipal and industrial water production, supply and treatment. The corporate segment consists of various expenses of a general and

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administrative nature incurred at the parent company level, as well as the expenses incurred by Aquilex, a U.S. subsidiary that provides financial, engineering, information technology, administrative and supply chain management support services to all the Company’s subsidiaries and its affiliate.

Frederick W. McTaggart, Chief Executive Officer and President, is the Company’s chief operating decision maker (“CODM”).

​

For the retail, bulk, services, and manufacturing segments, the CODM uses revenue, gross profit, and income before income taxes to assess segment performance and in deciding the allocation of resources to each segment. The CODM considers actual versus budget and current period versus prior period variances on a monthly, quarterly, and annual basis for each of these financial measures. The CODM also considers variances from the budget and the prior period for major corporate expenses (such as employee costs, insurance and professional fees) when making decisions regarding capital and resource allocation.

​

The accounting policies of the segments are consistent with those described in Note 2. All intercompany transactions are eliminated for segment presentation purposes. Intersegment revenue transactions are insignificant to the Company and are eliminated. Segment information previously disclosed in 2024 did not separately disclose those expenses currently reported in the corporate segment, as such expenses were previously included in the retail segment. The 2024 segment information provided herein has been recast to conform to the current period presentation.

​

The Company’s segments are strategic business units that are managed separately because each segment sells different products and/or services, serves customers with distinctly different needs and generates different gross profit margins.

​

The following sets forth the Company’s income statements by segment.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, 2025
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing |  | Corporate |  | Total
Revenue | ​ | $ | 7,770,344 | ​ | $ | 8,394,614 | ​ | $ | 14,289,315 | ​ | $ | 4,664,433 | ​ | $ | — |  | $ | 35,118,706
Cost of revenue | ​ |  | 3,447,262 | ​ |  | 5,484,613 | ​ |  | 10,444,894 | ​ |  | 2,796,028 | ​ |  | — | ​ |  | 22,172,797
Gross profit | ​ |  | 4,323,082 | ​ |  | 2,910,001 | ​ |  | 3,844,421 | ​ |  | 1,868,405 | ​ |  | — | ​ |  | 12,945,909
General and administrative expenses | ​ |  | 952,102 | ​ |  | 267,292 | ​ |  | 1,955,186 | ​ |  | 459,038 | ​ |  | 3,585,104 | ​ |  | 7,218,722
Gain on asset dispositions, net | ​ |  | 6,600 | ​ |  | — | ​ |  | 22,495 | ​ |  | 5,000 | ​ |  | — | ​ |  | 34,095
Income (loss) from operations | ​ | ​ | 3,377,580 | ​ | ​ | 2,642,709 | ​ | ​ | 1,911,730 | ​ | ​ | 1,414,367 | ​ | ​ | (3,585,104) | ​ |  | 5,761,282
Interest income | ​ |  | 45,787 | ​ |  | 190,772 | ​ |  | 175,407 | ​ |  | 1 | ​ | ​ | 225,565 | ​ | ​ | 637,532
Interest expense | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (901) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (901)
Income (loss) from affiliates | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (935) | ​ | ​ | 81,249 | ​ | ​ | 80,314
Other | ​ | ​ | 19,797 | ​ | ​ | 3,651 | ​ | ​ | 70,998 | ​ | ​ | 90 | ​ | ​ | (254) | ​ | ​ | 94,282
Other income (loss), net | ​ | ​ | 65,584 | ​ | ​ | 194,423 | ​ | ​ | 245,504 | ​ | ​ | (844) | ​ | ​ | 306,560 | ​ | ​ | 811,227
Income (loss) before income taxes | ​ |  | 3,443,164 | ​ |  | 2,837,132 | ​ |  | 2,157,234 | ​ |  | 1,413,523 | ​ | ​ | (3,278,544) | ​ |  | 6,572,509
Provision for income taxes | ​ |  | — | ​ |  | — | ​ |  | 492,401 | ​ |  | 334,608 | ​ | ​ | — | ​ |  | 827,009
Net income (loss) from continuing operations | ​ |  | 3,443,164 | ​ |  | 2,837,132 | ​ |  | 1,664,833 | ​ |  | 1,078,915 | ​ | ​ | (3,278,544) | ​ |  | 5,745,500
Income from continuing operations attributable to non-controlling interests | ​ |  | — | ​ |  | 175,936 | ​ |  | — | ​ |  | — | ​ | ​ | — | ​ |  | 175,936
Net income (loss) from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | ​ | $ | 3,443,164 | ​ | $ | 2,661,196 | ​ | $ | 1,664,833 | ​ | $ | 1,078,915 | ​ | $ | (3,278,544) | ​ |  | 5,569,564
Net loss from discontinued operations | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ |  | (37,220)
Net income attributable to Consolidated Water Co. Ltd. stockholders | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ | $ | 5,532,344

​

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2024
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing |  | Corporate |  | Total
Revenue | ​ | $ | 7,585,992 | ​ | $ | 8,767,168 | ​ | $ | 12,677,837 | ​ | $ | 4,359,560 | ​ | $ | — | ​ | $ | 33,390,557
Cost of revenue | ​ |  | 3,606,944 | ​ |  | 5,969,292 | ​ |  | 9,409,325 | ​ |  | 2,770,338 | ​ |  | — | ​ |  | 21,755,899
Gross profit | ​ |  | 3,979,048 | ​ |  | 2,797,876 | ​ |  | 3,268,512 | ​ |  | 1,589,222 | ​ |  | — | ​ |  | 11,634,658
General and administrative expenses | ​ |  | 787,403 | ​ |  | 381,230 | ​ |  | 1,469,845 | ​ |  | 745,418 | ​ |  | 3,572,073 | ​ |  | 6,955,969
Gain on asset dispositions, net | ​ |  | 8,796 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 192,786 | ​ |  | 201,582
Income (loss) from operations | ​ | ​ | 3,200,441 | ​ | ​ | 2,416,646 | ​ | ​ | 1,798,667 | ​ | ​ | 843,804 | ​ | ​ | (3,379,287) | ​ |  | 4,880,271
Interest income | ​ |  | 48,945 | ​ |  | 204,807 | ​ |  | 139,822 | ​ |  | 1 | ​ | ​ | 233,226 | ​ | ​ | 626,801
Interest expense | ​ | ​ | (31,123) | ​ | ​ | — | ​ | ​ | (1,634) | ​ | ​ | — | ​ | ​ | (44) | ​ | ​ | (32,801)
Income from affiliate | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 73,620 | ​ | ​ | 73,620
Other | ​ | ​ | 20,046 | ​ | ​ | 36,379 | ​ | ​ | 89 | ​ | ​ | 90 | ​ | ​ | (184) | ​ | ​ | 56,420
Other income, net | ​ | ​ | 37,868 | ​ | ​ | 241,186 | ​ | ​ | 138,277 | ​ | ​ | 91 | ​ | ​ | 306,618 | ​ | ​ | 724,040
Income (loss) before income taxes | ​ |  | 3,238,309 | ​ |  | 2,657,832 | ​ |  | 1,936,944 | ​ |  | 843,895 | ​ | ​ | (3,072,669) | ​ |  | 5,604,311
Provision for income taxes | ​ |  | — | ​ |  | — | ​ |  | 255,534 | ​ |  | 234,675 | ​ | ​ | — | ​ |  | 490,209
Net income (loss) from continuing operations | ​ |  | 3,238,309 | ​ |  | 2,657,832 | ​ |  | 1,681,410 | ​ |  | 609,220 | ​ | ​ | (3,072,669) | ​ |  | 5,114,102
Income from continuing operations attributable to non-controlling interests | ​ |  | — | ​ |  | 156,784 | ​ |  | — | ​ |  | — | ​ | ​ | — | ​ |  | 156,784
Net income (loss) from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | ​ | $ | 3,238,309 | ​ | $ | 2,501,048 | ​ | $ | 1,681,410 | ​ | $ | 609,220 | ​ | $ | (3,072,669) | ​ |  | 4,957,318
Net loss from discontinued operations | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ |  | (502,854)
Net income attributable to Consolidated Water Co. Ltd. stockholders | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ | $ | 4,454,464

​

The Company’s cost of revenue consists of:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2025
​ | ​ | Retail | ​ | Bulk | ​ | Services | ​ | Manufacturing | ​ | Corporate | ​ | Total
Subcontractor and other project costs |  | $ | — |  | $ | — |  | $ | 5,973,677 |  | $ | 1,958,385 |  | $ | — |  | $ | 7,932,062
Employee costs | ​ | ​ | 752,990 | ​ | ​ | 510,286 | ​ | ​ | 4,103,148 | ​ | ​ | 656,068 | ​ | ​ | — | ​ | ​ | 6,022,492
Electricity | ​ | ​ | 1,068,659 | ​ | ​ | 1,021,140 | ​ | ​ | 33,870 | ​ | ​ | 10,749 | ​ | ​ | — | ​ | ​ | 2,134,418
Fuel oil | ​ | ​ | — | ​ | ​ | 1,921,144 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,921,144
Depreciation | ​ | ​ | 626,525 | ​ | ​ | 709,512 | ​ | ​ | 120,627 | ​ | ​ | 45,805 | ​ | ​ | — | ​ | ​ | 1,502,469
Maintenance | ​ | ​ | 144,331 | ​ | ​ | 407,705 | ​ | ​ | 80,289 | ​ | ​ | 100,329 | ​ | ​ | — | ​ | ​ | 732,654
Insurance | ​ | ​ | 188,443 | ​ | ​ | 311,651 | ​ | ​ | 40,604 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 540,698
Retail license royalties | ​ | ​ | 488,962 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 488,962
Other | ​ | ​ | 177,352 | ​ | ​ | 603,175 | ​ | ​ | 92,679 | ​ | ​ | 24,692 | ​ | ​ | — | ​ | ​ | 897,898
​ | ​ | $ | 3,447,262 | ​ | $ | 5,484,613 | ​ | $ | 10,444,894 | ​ | $ | 2,796,028 | ​ | $ | — | ​ | $ | 22,172,797

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2024
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing |  | Corporate |  | Total
Subcontractor and other project costs | ​ | $ | — | ​ | $ | — | ​ | $ | 4,875,016 | ​ | $ | 2,103,943 | ​ | $ | — | ​ | $ | 6,978,959
Employee costs | ​ | ​ | 744,844 | ​ | ​ | 495,717 | ​ | ​ | 4,232,268 | ​ | ​ | 509,387 | ​ | ​ | — | ​ | ​ | 5,982,216
Electricity | ​ | ​ | 1,191,856 | ​ | ​ | 1,051,352 | ​ | ​ | 30,552 | ​ | ​ | 6,656 | ​ | ​ | — | ​ | ​ | 2,280,416
Fuel oil | ​ | ​ | — | ​ | ​ | 2,125,905 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,125,905
Depreciation | ​ | ​ | 611,573 | ​ | ​ | 675,404 | ​ | ​ | 90,015 | ​ | ​ | 39,869 | ​ | ​ | — | ​ | ​ | 1,416,861
Maintenance | ​ | ​ | 287,891 | ​ | ​ | 463,373 | ​ | ​ | 105,387 | ​ | ​ | 87,734 | ​ | ​ | — | ​ | ​ | 944,385
Insurance | ​ | ​ | 173,551 | ​ | ​ | 453,106 | ​ | ​ | 11,238 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 637,895
Retail license royalties | ​ | ​ | 461,770 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 461,770
Other | ​ | ​ | 135,459 | ​ | ​ | 704,435 | ​ | ​ | 64,849 | ​ | ​ | 22,749 | ​ | ​ | — | ​ | ​ | 927,492
​ | ​ | $ | 3,606,944 | ​ | $ | 5,969,292 | ​ | $ | 9,409,325 | ​ | $ | 2,770,338 | ​ | $ | — | ​ | $ | 21,755,899

​

Other cost of revenue segment expenses above primarily include chemicals and other supplies, government fees and licenses, and freight costs.

​

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The Company’s general and administrative expenses consist of:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2025
​ | ​ | Retail | ​ | Bulk | ​ | Services | ​ | Manufacturing | ​ | Corporate | ​ | Total
Employee costs |  | $ | 417,321 |  | $ | 90,065 |  | $ | 1,171,174 |  | $ | 311,471 |  | $ | 1,840,811 |  | $ | 3,830,842
Professional fees | ​ | ​ | 20,491 | ​ | ​ | 44,018 | ​ | ​ | 175,517 | ​ | ​ | 17,940 | ​ | ​ | 746,094 | ​ | ​ | 1,004,060
Insurance | ​ | ​ | 104,394 | ​ | ​ | 97,796 | ​ | ​ | 53,031 | ​ | ​ | 43,304 | ​ | ​ | 216,036 | ​ | ​ | 514,561
Depreciation and amortization | ​ | ​ | 10,460 | ​ | ​ | 4,761 | ​ | ​ | 157,607 | ​ | ​ | 27,048 | ​ | ​ | 16,604 | ​ | ​ | 216,480
Other | ​ | ​ | 399,436 | ​ | ​ | 30,652 | ​ | ​ | 397,857 | ​ | ​ | 59,275 | ​ | ​ | 765,559 | ​ | ​ | 1,652,779
​ | ​ | $ | 952,102 | ​ | $ | 267,292 | ​ | $ | 1,955,186 | ​ | $ | 459,038 | ​ | $ | 3,585,104 | ​ | $ | 7,218,722

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2024
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing |  | Corporate |  | Total
Employee costs | ​ | $ | 364,182 | ​ | $ | 87,966 | ​ | $ | 852,656 | ​ | $ | 347,001 | ​ | $ | 1,986,384 | ​ | $ | 3,638,189
Professional fees | ​ | ​ | 29,880 | ​ | ​ | 38,109 | ​ | ​ | 141,749 | ​ | ​ | 63,887 | ​ | ​ | 625,193 | ​ | ​ | 898,818
Insurance | ​ | ​ | 124,299 | ​ | ​ | 97,179 | ​ | ​ | 63,652 | ​ | ​ | 52,459 | ​ | ​ | 221,009 | ​ | ​ | 558,598
Depreciation and amortization | ​ | ​ | 9,595 | ​ | ​ | 6,260 | ​ | ​ | 157,315 | ​ | ​ | 25,906 | ​ | ​ | 17,297 | ​ | ​ | 216,373
Other | ​ | ​ | 259,447 | ​ | ​ | 151,716 | ​ | ​ | 254,473 | ​ | ​ | 256,165 | ​ | ​ | 722,190 | ​ | ​ | 1,643,991
​ | ​ | $ | 787,403 | ​ | $ | 381,230 | ​ | $ | 1,469,845 | ​ | $ | 745,418 | ​ | $ | 3,572,073 | ​ | $ | 6,955,969

​

General and administrative segment expenses set forth in the “Other” category above include Board of Directors fees and expenses, maintenance, office rent, information technology costs, amortization of intangible assets, provisions for credit losses and investor relations costs.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, 2025
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing |  | Corporate |  | Total
Revenue | ​ | $ | 25,819,712 | ​ | $ | 25,081,146 | ​ | $ | 35,815,785 | ​ | $ | 15,708,527 | ​ | $ | — |  | $ | 102,425,170
Cost of revenue | ​ |  | 10,929,083 | ​ |  | 16,807,609 | ​ |  | 26,563,654 | ​ |  | 10,040,643 | ​ |  | — | ​ |  | 64,340,989
Gross profit | ​ |  | 14,890,629 | ​ |  | 8,273,537 | ​ |  | 9,252,131 | ​ |  | 5,667,884 | ​ |  | — | ​ |  | 38,084,181
General and administrative expenses | ​ |  | 2,726,531 | ​ |  | 1,008,123 | ​ |  | 6,143,566 | ​ |  | 1,653,668 | ​ |  | 10,991,031 | ​ |  | 22,522,919
Gain on asset dispositions, net | ​ |  | 37,416 | ​ |  | — | ​ |  | 52,131 | ​ |  | 5,000 | ​ |  | — | ​ |  | 94,547
Income (loss) from operations | ​ | ​ | 12,201,514 | ​ | ​ | 7,265,414 | ​ | ​ | 3,160,696 | ​ | ​ | 4,019,216 | ​ | ​ | (10,991,031) | ​ |  | 15,655,809
Interest income | ​ |  | 123,702 | ​ |  | 622,345 | ​ |  | 580,061 | ​ |  | 3 | ​ | ​ | 685,003 | ​ | ​ | 2,011,114
Interest expense | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (3,614) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (3,614)
Income (loss) from affiliates | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (35,198) | ​ | ​ | 198,265 | ​ | ​ | 163,067
Other | ​ | ​ | 55,500 | ​ | ​ | 25,526 | ​ | ​ | 69,038 | ​ | ​ | 254 | ​ | ​ | (585) | ​ | ​ | 149,733
Other income (loss), net | ​ | ​ | 179,202 | ​ | ​ | 647,871 | ​ | ​ | 645,485 | ​ | ​ | (34,941) | ​ | ​ | 882,683 | ​ | ​ | 2,320,300
Income (loss) before income taxes | ​ |  | 12,380,716 | ​ |  | 7,913,285 | ​ |  | 3,806,181 | ​ |  | 3,984,275 | ​ | ​ | (10,108,348) | ​ |  | 17,976,109
Provision for income taxes | ​ |  | — | ​ |  | — | ​ |  | 870,688 | ​ |  | 962,245 | ​ | ​ | — | ​ |  | 1,832,933
Net income (loss) from continuing operations | ​ |  | 12,380,716 | ​ |  | 7,913,285 | ​ |  | 2,935,493 | ​ |  | 3,022,030 | ​ | ​ | (10,108,348) | ​ |  | 16,143,176
Income from continuing operations attributable to non-controlling interests | ​ |  | — | ​ |  | 470,741 | ​ |  | — | ​ |  | — | ​ | ​ | — | ​ |  | 470,741
Net income (loss) from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | ​ | $ | 12,380,716 | ​ | $ | 7,442,544 | ​ | $ | 2,935,493 | ​ | $ | 3,022,030 | ​ | $ | (10,108,348) | ​ |  | 15,672,435
Net loss from discontinued operations | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ |  | (252,857)
Net income attributable to Consolidated Water Co. Ltd. stockholders | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ | $ | 15,419,578

​

​

16

Table of Contents

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Nine Months Ended September 30, 2024
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing | ​ | Corporate |  | Total
Revenue | ​ | $ | 24,392,814 | ​ | $ | 25,557,220 | ​ | $ | 42,017,917 | ​ | $ | 13,591,154 |  | $ | — | ​ | $ | 105,559,105
Cost of revenue | ​ |  | 10,828,421 | ​ |  | 17,632,010 | ​ |  | 30,536,801 | ​ |  | 9,428,978 | ​ |  | — | ​ |  | 68,426,210
Gross profit | ​ |  | 13,564,393 | ​ |  | 7,925,210 | ​ |  | 11,481,116 | ​ |  | 4,162,176 | ​ |  | — | ​ |  | 37,132,895
General and administrative expenses | ​ |  | 2,335,807 | ​ |  | 1,088,639 | ​ |  | 4,264,323 | ​ |  | 1,930,706 | ​ |  | 10,506,817 | ​ |  | 20,126,292
Gain on asset dispositions, net | ​ |  | 2,666 | ​ |  | — | ​ |  | 3,000 | ​ |  | — | ​ |  | 192,786 | ​ |  | 198,452
Income (loss) from operations | ​ | ​ | 11,231,252 | ​ | ​ | 6,836,571 | ​ | ​ | 7,219,793 | ​ | ​ | 2,231,470 | ​ | ​ | (10,314,031) | ​ |  | 17,205,055
Interest income | ​ |  | 156,362 | ​ |  | 622,520 | ​ |  | 329,649 | ​ |  | 3 | ​ | ​ | 233,263 | ​ | ​ | 1,341,797
Interest expense | ​ | ​ | (93,369) | ​ | ​ | — | ​ | ​ | (6,327) | ​ | ​ | — | ​ | ​ | (44) | ​ | ​ | (99,740)
Income from affiliate | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 199,983 | ​ | ​ | 199,983
Other | ​ | ​ | 56,324 | ​ | ​ | 48,807 | ​ | ​ | 700 | ​ | ​ | 11,866 | ​ | ​ | 913 | ​ | ​ | 118,610
Other income, net | ​ | ​ | 119,317 | ​ | ​ | 671,327 | ​ | ​ | 324,022 | ​ | ​ | 11,869 | ​ | ​ | 434,115 | ​ | ​ | 1,560,650
Income (loss) before income taxes | ​ |  | 11,350,569 | ​ |  | 7,507,898 | ​ |  | 7,543,815 | ​ |  | 2,243,339 | ​ | ​ | (9,879,916) | ​ |  | 18,765,705
Provision for income taxes | ​ |  | — | ​ |  | — | ​ |  | 1,627,258 | ​ |  | 548,580 | ​ | ​ | — | ​ |  | 2,175,838
Net income (loss) from continuing operations | ​ |  | 11,350,569 | ​ |  | 7,507,898 | ​ |  | 5,916,557 | ​ |  | 1,694,759 | ​ | ​ | (9,879,916) | ​ |  | 16,589,867
Income from continuing operations attributable to non-controlling interests | ​ |  | — | ​ |  | 448,724 | ​ |  | — | ​ |  | — | ​ | ​ | — | ​ |  | 448,724
Net income (loss) from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | ​ | $ | 11,350,569 | ​ | $ | 7,059,174 | ​ | $ | 5,916,557 | ​ | $ | 1,694,759 | ​ | $ | (9,879,916) | ​ |  | 16,141,143
Net income from discontinued operations | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ |  | 10,637,926
Net income attributable to Consolidated Water Co. Ltd. stockholders | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ | $ | 26,779,069

​

The Company’s cost of revenue consists of:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, 2025
​ | ​ | Retail | ​ | Bulk | ​ | Services | ​ | Manufacturing | ​ | Corporate | ​ | Total
Subcontractor and other project costs |  | $ | — |  | $ | — |  | $ | 13,064,351 |  | $ | 7,678,086 |  | $ | — |  | $ | 20,742,437
Employee costs | ​ | ​ | 2,272,261 | ​ | ​ | 1,571,674 | ​ | ​ | 12,533,716 | ​ | ​ | 1,854,210 | ​ | ​ | — | ​ | ​ | 18,231,861
Electricity | ​ | ​ | 3,398,245 | ​ | ​ | 3,128,782 | ​ | ​ | 102,226 | ​ | ​ | 33,113 | ​ | ​ | — | ​ | ​ | 6,662,366
Fuel oil | ​ | ​ | — | ​ | ​ | 5,583,464 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5,583,464
Depreciation | ​ | ​ | 1,861,706 | ​ | ​ | 2,091,347 | ​ | ​ | 304,320 | ​ | ​ | 121,122 | ​ | ​ | — | ​ | ​ | 4,378,495
Maintenance | ​ | ​ | 685,176 | ​ | ​ | 1,446,647 | ​ | ​ | 286,483 | ​ | ​ | 267,687 | ​ | ​ | — | ​ | ​ | 2,685,993
Insurance | ​ | ​ | 534,633 | ​ | ​ | 1,168,427 | ​ | ​ | 88,166 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,791,226
Retail license royalties | ​ | ​ | 1,640,448 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,640,448
Other | ​ | ​ | 536,614 | ​ | ​ | 1,817,268 | ​ | ​ | 184,392 | ​ | ​ | 86,425 | ​ | ​ | — | ​ | ​ | 2,624,699
​ | ​ | $ | 10,929,083 | ​ | $ | 16,807,609 | ​ | $ | 26,563,654 | ​ | $ | 10,040,643 | ​ | $ | — | ​ | $ | 64,340,989

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, 2024
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing |  | Corporate |  | Total
Subcontractor and other project costs | ​ | $ | — | ​ | $ | — | ​ | $ | 16,889,209 | ​ | $ | 7,412,469 | ​ | $ | — | ​ | $ | 24,301,678
Employee costs | ​ | ​ | 2,199,019 | ​ | ​ | 1,538,671 | ​ | ​ | 12,716,853 | ​ | ​ | 1,533,683 | ​ | ​ | — | ​ | ​ | 17,988,226
Electricity | ​ | ​ | 3,652,656 | ​ | ​ | 2,890,194 | ​ | ​ | 175,353 | ​ | ​ | 22,819 | ​ | ​ | — | ​ | ​ | 6,741,022
Fuel oil | ​ | ​ | — | ​ | ​ | 6,446,878 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 6,446,878
Depreciation | ​ | ​ | 1,828,300 | ​ | ​ | 2,005,305 | ​ | ​ | 275,793 | ​ | ​ | 119,562 | ​ | ​ | — | ​ | ​ | 4,228,960
Maintenance | ​ | ​ | 672,865 | ​ | ​ | 1,528,524 | ​ | ​ | 316,481 | ​ | ​ | 256,076 | ​ | ​ | — | ​ | ​ | 2,773,946
Insurance | ​ | ​ | 514,191 | ​ | ​ | 1,271,807 | ​ | ​ | 25,022 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,811,020
Retail license royalties | ​ | ​ | 1,498,859 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,498,859
Other | ​ | ​ | 462,531 | ​ | ​ | 1,950,631 | ​ | ​ | 138,090 | ​ | ​ | 84,369 | ​ | ​ | — | ​ | ​ | 2,635,621
​ | ​ | $ | 10,828,421 | ​ | $ | 17,632,010 | ​ | $ | 30,536,801 | ​ | $ | 9,428,978 | ​ | $ | — | ​ | $ | 68,426,210

​

Other cost of revenue segment expenses above primarily include chemicals and other supplies, government fees and licenses, and freight costs.

​

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Table of Contents

The Company’s general and administrative expenses consist of:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, 2025
​ | ​ | Retail | ​ | Bulk | ​ | Services | ​ | Manufacturing | ​ | Corporate | ​ | Total
Employee costs |  | $ | 1,188,916 |  | $ | 268,946 |  | $ | 3,463,647 |  | $ | 950,038 |  | $ | 6,103,836 |  | $ | 11,975,383
Professional fees | ​ | ​ | 47,940 | ​ | ​ | 84,870 | ​ | ​ | 691,610 | ​ | ​ | 109,654 | ​ | ​ | 1,991,918 | ​ | ​ | 2,925,992
Insurance | ​ | ​ | 313,242 | ​ | ​ | 291,623 | ​ | ​ | 124,356 | ​ | ​ | 202,864 | ​ | ​ | 652,036 | ​ | ​ | 1,584,121
Depreciation and amortization | ​ | ​ | 31,308 | ​ | ​ | 15,179 | ​ | ​ | 474,402 | ​ | ​ | 79,286 | ​ | ​ | 50,642 | ​ | ​ | 650,817
Other | ​ | ​ | 1,145,125 | ​ | ​ | 347,505 | ​ | ​ | 1,389,551 | ​ | ​ | 311,826 | ​ | ​ | 2,192,599 | ​ | ​ | 5,386,606
​ | ​ | $ | 2,726,531 | ​ | $ | 1,008,123 | ​ | $ | 6,143,566 | ​ | $ | 1,653,668 | ​ | $ | 10,991,031 | ​ | $ | 22,522,919

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, 2024
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing |  | Corporate |  | Total
Employee costs | ​ | $ | 1,100,764 | ​ | $ | 263,038 | ​ | $ | 2,426,917 | ​ | $ | 959,747 | ​ | $ | 6,009,959 | ​ | $ | 10,760,425
Professional fees | ​ | ​ | 75,362 | ​ | ​ | 79,408 | ​ | ​ | 390,744 | ​ | ​ | 99,249 | ​ | ​ | 1,638,772 | ​ | ​ | 2,283,535
Insurance | ​ | ​ | 310,836 | ​ | ​ | 282,481 | ​ | ​ | 179,354 | ​ | ​ | 166,878 | ​ | ​ | 639,326 | ​ | ​ | 1,578,875
Depreciation and amortization | ​ | ​ | 27,437 | ​ | ​ | 19,737 | ​ | ​ | 474,837 | ​ | ​ | 77,768 | ​ | ​ | 57,156 | ​ | ​ | 656,935
Other | ​ | ​ | 821,408 | ​ | ​ | 443,975 | ​ | ​ | 792,471 | ​ | ​ | 627,064 | ​ | ​ | 2,161,604 | ​ | ​ | 4,846,522
​ | ​ | $ | 2,335,807 | ​ | $ | 1,088,639 | ​ | $ | 4,264,323 | ​ | $ | 1,930,706 | ​ | $ | 10,506,817 | ​ | $ | 20,126,292

​

General and administrative segment expenses set forth in the “Other” category above include Board of Directors fees and expenses, maintenance, office rent, information technology costs, amortization of intangible assets, provisions for credit losses and investor relations costs.

​

The Company’s segment assets are presented below.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of September 30, 2025
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing |  | Corporate |  | Total
Cash and cash equivalents | ​ | $ | 13,811,367 | ​ | $ | 34,434,833 | ​ | $ | 42,225,132 | ​ | $ | 6,327,391 | ​ | $ | 26,755,925 | ​ | $ | 123,554,648
Accounts receivable, net | ​ | $ | 2,803,608 | ​ | $ | 17,011,930 | ​ | $ | 7,154,835 | ​ | $ | 2,015,722 | ​ | $ | 10,739 | ​ | $ | 28,996,834
Inventory, current and non-current | ​ | $ | 3,509,239 | ​ | $ | 5,104,409 | ​ | $ | — | ​ | $ | 1,547,433 | ​ | $ | — | ​ | $ | 10,161,081
Contract assets | ​ | $ | — | ​ | $ | — | ​ | $ | 2,458,141 | ​ | $ | 4,273,720 | ​ | $ | — | ​ | $ | 6,731,861
Property, plant and equipment, net | ​ | $ | 32,242,134 | ​ | $ | 16,992,299 | ​ | $ | 1,739,687 | ​ | $ | 4,375,782 | ​ | $ | 203,154 | ​ | $ | 55,553,056
Construction in progress | ​ | $ | 937,927 | ​ | $ | 4,268,056 | ​ | $ | — | ​ | $ | 4,551 | ​ | $ | — | ​ | $ | 5,210,534
Intangibles, net | ​ | $ | — | ​ | $ | — | ​ | $ | 1,706,757 | ​ | $ | 497,779 | ​ | $ | — | ​ | $ | 2,204,536
Goodwill | ​ | $ | 1,170,511 | ​ | $ | 1,948,875 | ​ | $ | 7,756,807 | ​ | $ | 1,985,211 | ​ | $ | — | ​ | $ | 12,861,404
Total segment assets | ​ | $ | 56,837,257 | ​ | $ | 81,343,368 | ​ | $ | 66,447,339 | ​ | $ | 21,528,556 | ​ | $ | 30,941,204 | ​ | $ | 257,097,724
Assets of discontinued operations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 136,928
Total assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 257,234,652

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of December 31, 2024
​ |  | Retail |  | Bulk |  | Services |  | Manufacturing |  | Corporate |  | Total
Cash and cash equivalents | ​ | $ | 19,167,484 | ​ | $ | 13,339,206 | ​ | $ | 34,181,902 | ​ | $ | 4,768,376 | ​ | $ | 27,893,153 | ​ | $ | 99,350,121
Accounts receivable, net | ​ | $ | 3,223,190 | ​ | $ | 28,807,257 | ​ | $ | 6,593,276 | ​ | $ | 946,846 | ​ | $ | 10,413 | ​ | $ | 39,580,982
Inventory, current and non-current | ​ | $ | 3,437,771 | ​ | $ | 4,865,117 | ​ | $ | 167,856 | ​ | $ | 5,828,567 | ​ | $ | — | ​ | $ | 14,299,311
Contract assets | ​ | $ | — | ​ | $ | — | ​ | $ | 1,204,522 | ​ | $ | 3,265,721 | ​ | $ | — | ​ | $ | 4,470,243
Property, plant and equipment, net | ​ | $ | 31,689,586 | ​ | $ | 18,093,155 | ​ | $ | 858,352 | ​ | $ | 1,601,501 | ​ | $ | 189,688 | ​ | $ | 52,432,282
Construction in progress | ​ | $ | 1,951,559 | ​ | $ | 2,480,999 | ​ | $ | — | ​ | $ | 711,159 | ​ | $ | — | ​ | $ | 5,143,717
Intangibles, net | ​ | $ | — | ​ | $ | — | ​ | $ | 2,129,037 | ​ | $ | 567,778 | ​ | $ | — | ​ | $ | 2,696,815
Goodwill | ​ | $ | 1,170,511 | ​ | $ | 1,948,875 | ​ | $ | 7,756,807 | ​ | $ | 1,985,211 | ​ | $ | — | ​ | $ | 12,861,404
Total segment assets | ​ | $ | 62,994,011 | ​ | $ | 71,743,161 | ​ | $ | 56,792,772 | ​ | $ | 20,095,648 | ​ | $ | 31,415,104 | ​ | $ | 243,040,696
Assets of discontinued operations | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | $ | 272,485
Total assets | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | $ | 243,313,181

​

​

4. Earnings per share

​

Earnings per share (“EPS”) is computed on a basic and diluted basis. Basic EPS is computed by dividing net income (less preferred stock dividends) available to common stockholders by the weighted average number of common shares outstanding during the period. The computation of diluted EPS assumes the issuance of common shares for all potential common shares outstanding during the reporting period and, if dilutive, the effect of stock options as computed under the treasury stock method.

18

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​

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, |  | Nine Months Ended September 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | ​ | $ | 5,569,564 | ​ | $ | 4,957,318 | ​ | $ | 15,672,435 | ​ | $ | 16,141,143
Less: preferred stock dividends | ​ |  | (5,571) | ​ |  | (4,912) | ​ |  | (17,041) | ​ |  | (13,754)
Net income from continuing operations available to common shares in the determination of basic earnings per common share | ​ |  | 5,563,993 | ​ |  | 4,952,406 | ​ |  | 15,655,394 | ​ |  | 16,127,389
Income (loss) from discontinued operations | ​ |  | (37,220) | ​ |  | (502,854) | ​ |  | (252,857) | ​ |  | 10,637,926
Net income available to common shares in the determination of basic earnings per common share | ​ | $ | 5,526,773 | ​ | $ | 4,449,552 | ​ | $ | 15,402,537 | ​ | $ | 26,765,315
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average number of common shares in the determination of basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders | ​ |  | 15,924,851 | ​ |  | 15,833,715 | ​ |  | 15,919,167 | ​ |  | 15,830,599
Plus: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Weighted average number of preferred shares outstanding during the period | ​ |  | 43,687 | ​ |  | 45,118 | ​ |  | 42,644 | ​ |  | 44,494
Potential dilutive effect of unexercised options and unvested stock grants | ​ |  | 86,019 | ​ |  | 110,768 | ​ |  | 85,501 | ​ |  | 110,926
Weighted average number of shares used for determining diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders | ​ |  | 16,054,557 | ​ |  | 15,989,601 | ​ |  | 16,047,312 | ​ |  | 15,986,019

​

​

5. Discontinued operations - Mexico project development

​

In 2010, the Company began the pursuit, through its Netherlands subsidiary, CW-Cooperatief, and its Mexico subsidiary, NSC, of a project (the “Project”) that encompassed the construction, operation and minority ownership of a 100 million gallons per day seawater reverse osmosis desalination plant to be located in northern Baja California, Mexico and accompanying pipelines to deliver water to the Mexican potable water system.

​

Through a series of transactions that began in 2012, NSC purchased 20.1 hectares of land for approximately $21.1 million on which the proposed Project’s plant was to be constructed.

​

In November 2015, the State of Baja California (the “State”) officially commenced 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. 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”). The APP Contract required AdR to design, construct, finance and operate a seawater reverse osmosis desalination plant (and accompanying aqueduct) with a capacity of up to 100 million gallons per day in two phases: the first with a capacity of 50 million gallons per day and an aqueduct to the Mexican public water system in Tijuana, Baja California and the second phase with a capacity of 50 million gallons per day. The first phase was to be operational within 36 months of commencing construction and the second phase was to be operational by January 2025. The APP Contract further required AdR to operate and maintain the plant and aqueduct for a period of 37 years starting from the commencement of operation of the first phase. At the end of the operating period, the plant and aqueduct would have been transferred to CEA.

​

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Table of Contents

On June 29, 2020, AdR received a letter (the “Letter”) from CEA and CESPT terminating the APP Contract. The Letter requested that AdR provide an inventory of the assets that comprised the “Project Works” (as defined in the APP Contract) for the purpose of acknowledging and paying the non-recoverable expenses made by AdR in connection with the Project, with such reimbursement to be calculated in accordance with the terms of the APP Contract. On August 28, 2020, AdR submitted their list of non-recoverable expenses, including those of NSC, to CEA and CESPT which 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”). In April 2021, CW-Cooperatief submitted a letter to the President of Mexico and other Mexican federal government officials alleging that the State’s termination of the APP Contract constituted a breach by Mexico of its international obligations under the Treaty, entitling CW-Cooperatief to full reparation, including monetary damages. This letter invited Mexico to seek a resolution of this investment dispute through consultation and negotiation but stated that if the dispute cannot be resolved in this manner, CW-Cooperatief would refer the dispute to the International Centre for the Settlement of International Disputes for arbitration, as provided for in the Treaty.

​

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, the Company, through CW-Cooperatief, NSC, and AdR, entered into a settlement agreement (the “Settlement Agreement”) with the State and Banco Nacional de Obras y Servicios Públicos, S.N.C., as trustee under the trust agreement for the trust named Fondo Nacional de Infraestructura (the “Trust”). Under the Settlement Agreement, CW-Cooperatief requested that ICSID discontinue the arbitration and on May 31, 2024, ICSID issued an order discontinuing the arbitration. Pursuant to the Settlement Agreement, the Trust purchased the 20.1 hectares of land on which the Project’s plant was to be constructed, including related rights of way (the “Land”), on an “as-is” basis, from NSC for MXN$596,144,000. The sale of the Land to the Trust was closed on June 14, 2024 at which time the MXN$596,144,000 was paid to the Company and converted at the prevailing exchange rate on that date into US$31,959,685.

​

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

​

As a result of the Settlement Agreement: (i) the parties have been released from all obligations owed to each other in connection with the APP Contract and the arbitration; and (ii) no party to the Settlement Agreement may institute any legal proceedings against another party thereto with respect to the matters which have been addressed by the Settlement Agreement.

​

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

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ | ​ | 2025 | ​ | 2024
Cash |  | $ | 26,115 |  | $ | 127,859
Prepaid expenses and other current assets | ​ | ​ | 110,813 | ​ | ​ | 144,626
Total assets of discontinued operations | ​ | $ | 136,928 | ​ | $ | 272,485
​ | ​ |  |  | ​ |  |
Total liabilities of discontinued operations | ​ | $ | 271,143 | ​ | $ | 509,745

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Nine Months Ended September 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Loss from discontinued operations | ​ | $ | (37,220) | ​ | $ | (502,854) | ​ | $ | (252,857) | ​ | $ | (1,496,840)
Gain on sale of land and project documentation | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 12,134,766

​

20

Table of Contents

​

6. Leases

The Company’s leases consist principally of leases for office and warehouse space. For leases with terms greater than twelve months, the related asset and obligation are recorded at the present value of the lease payments over the term. Many of these leases contain rental escalation clauses which are factored into the determination of the lease payments when appropriate. When available, the lease payments are discounted using the rate implicit in the lease; however, the Company’s current leases do not provide a readily determinable implicit rate. Therefore, the Company’s incremental borrowing rate is estimated to discount the lease payments based on information available at the lease commencement.

These leases contain both lease and non-lease components, which the Company has elected to treat as a single lease component. The Company elected not to recognize leases that have an original lease term, including reasonably certain renewal or purchase obligations, of twelve months or less in its condensed consolidated balance sheets for all classes of underlying assets. Lease costs for such short-term leases are expensed on a straight-line basis over the lease term.

All lease assets denominated in a foreign currency are measured using the exchange rate at the commencement of the lease. All lease liabilities denominated in a foreign currency are remeasured using the exchange rate as of the condensed consolidated balance sheet date.

Lease assets and liabilities

The following table presents the lease-related assets and liabilities and their respective classification on the condensed consolidated balance sheets:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, | ​ | December 31,
​ | ​ | 2025 | ​ | 2024
ASSETS |  | ​ | ​ | ​ |
Noncurrent | ​ |  | ​ | ​ |  | ​
Total operating lease right-of-use assets | ​ | $ | 3,095,156 | ​ | $ | 3,232,786
​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES |  |  | ​ |  |  | ​
Current |  | ​ |  | ​ | ​ |
Current maturities of operating leases | ​ | $ | 667,074 | ​ | $ | 634,947
Noncurrent | ​ |  | ​ | ​ |  | ​
Noncurrent operating leases | ​ | ​ | 2,457,151 | ​ | ​ | 2,630,812
Total lease liabilities | ​ | $ | 3,124,225 | ​ | $ | 3,265,759
​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average remaining lease term: | ​ |  |  | ​ |  |
Operating leases | ​ |  | 4.4 years | ​ |  | 5.0 years
​ | ​ |  | ​ | ​ |  | ​
Weighted average discount rate: | ​ |  | ​ | ​ |  | ​
Operating leases | ​ |  | 6.55% | ​ |  | 6.56%

​

The components of lease costs were as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
​ | ​ | 2025 | ​ | 2024 | ​ | 2025 | ​ | 2024
Operating lease costs | ​ | $ | 210,025 | ​ | $ | 213,090 | ​ | $ | 637,158 | ​ | $ | 633,692
Short-term lease costs | ​ |  | 100,338 | ​ | ​ | 153,227 | ​ |  | 299,666 | ​ |  | 270,351
Lease costs - discontinued operations | ​ | ​ | 1,160 | ​ | ​ | 5,222 | ​ | ​ | 5,778 | ​ | ​ | 29,364
Total lease costs | ​ | $ | 311,523 | ​ | $ | 371,539 | ​ | $ | 942,602 | ​ | $ | 933,407

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Supplemental cash flow information related to leases is as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Nine Months Ended September 30,
​ | ​ | 2025 | ​ | 2024
Cash paid for amounts included in measurement of liabilities: |  | ​ |  | ​ | ​ | ​
Operating cash outflows for operating leases | ​ | $ | 674,349 | ​ | $ | 699,497

​

Future lease payments relating to the Company’s operating lease liabilities from continuing operations as of September 30, 2025 were as follows:

​

​ | ​ | ​ | ​
Years ending December 31, |  | Total
2025 | ​ | $ | 218,039
2026 | ​ |  | 839,279
2027 | ​ |  | 813,513
2028 | ​ |  | 833,216
2029 | ​ | ​ | 541,352
Thereafter | ​ |  | 427,399
Total future lease payments | ​ |  | 3,672,798
Less: imputed interest | ​ |  | (548,573)
Total lease obligations | ​ |  | 3,124,225
Less: current obligations | ​ |  | (667,074)
Noncurrent lease obligations | ​ | $ | 2,457,151

​

​

7. Fair value

As of September 30, 2025 and December 31, 2024, the carrying amounts of cash equivalents, accounts receivable, accounts payable, accrued expenses, accrued compensation, dividends payable and other current liabilities approximate their fair values due to the short-term maturities of these instruments. As of September 30, 2025 and December 31, 2024, the Company does not have assets and liabilities measured at fair value to present in the fair value hierarchy.

8. Commitments and contingencies

Cayman Water

​

The Company sells water through its Cayman Water retail operations under a license issued in July 1990 by the Cayman Islands government (the “1990 license”) that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area. Pursuant to the 1990 license, Cayman Water has the exclusive right to produce potable water and distribute it by pipeline to its licensed service area, which consists of two of the three most populated areas of Grand Cayman Island: Seven Mile Beach and West Bay. For the three months ended September 30, 2025 and 2024, the Company generated approximately 22% and 23%, respectively, of its consolidated revenue and 33% and 34%, respectively, of its consolidated gross profit from the retail water operations conducted under the 1990 license. For the nine months ended September 30, 2025 and 2024, the Company generated approximately 25% and 23%, respectively, of its consolidated revenue and 39% and 36%, respectively, of its consolidated gross profit from the retail water operations conducted under the 1990 license.

The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government in order to provide the parties with additional time to negotiate the terms of a new license agreement. The most recent express extension of the 1990 license expired on January 31, 2018. From that date until February 18, 2025, the Company continued to operate under the terms of the 1990 license, treating such terms as operative notwithstanding the expiration of the express extension. The Company continues to pay the royalty of 7.5% of the revenue that Cayman Water collects as required under the 1990 license.

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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 the Company 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 operating license. On February 18, 2025, Cayman Water received a new concession from the government that authorizes and maintains the terms of the 1990 license until a new license from OfReg is negotiated and enacted. Negotiations between Cayman Water and OfReg for the new license remain on-going.

The Company has been informed during its retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of its license in a manner that could significantly reduce the operating income and cash flows the Company has historically generated from its retail license. The Company is presently unable to determine what impact the resolution of its retail license negotiations will have on its 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 the Company has historically generated from Cayman Water’s retail operations and could require the Company to record impairment losses to reduce the carrying values of its retail segment assets. Such impairment losses could have a material adverse impact on the Company’s consolidated financial condition and results of operations.

CW-Bahamas

​

CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $16.8 million and $28.4 million as of September 30, 2025 and December 31, 2024, respectively. Approximately 66% and 81% of the accounts receivable balances were delinquent as of those dates, respectively.

​

From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable from the WSC. When these delays occur, the Company holds discussions and meetings with representatives of the WSC and the government of The Bahamas. All previous delinquent accounts receivable from the WSC, including accrued interest thereon, were eventually paid in full. Based upon this payment history, CW-Bahamas has not provided a material allowance for credit losses for its accounts receivable from the WSC as of September 30, 2025 or prior periods.

​

In a report dated October 6, 2022, Moody’s Investor Services (“Moody’s”) downgraded The Bahamas’ long-term issuer and senior unsecured ratings to B1 from Ba3. Moody’s also lowered The Bahamas’ local currency ceiling to Baa3 from Baa2 and its foreign currency ceiling to Ba1 from Baa3. Moody’s has maintained these ratings through the date of its most current report issued in April 2025.

​

If CW-Bahamas is unable to collect a sufficient portion of its delinquent accounts receivable, one or more of the following events may occur: (i) CW-Bahamas may not have sufficient liquidity to meet its obligations; (ii) the Company may be required to cease the recognition of revenue on CW-Bahamas’ water supply agreements with the WSC; and (iii) the Company may be required to provide an additional allowance for credit losses for CW-Bahamas’ accounts receivable. Any of these events could have a material adverse impact on the Company’s consolidated financial condition, results of operations, and cash flows.

​

CW-Bahamas Supply Guarantees

The contracts to supply water to the WSC from its Blue Hills and Windsor plants require CW-Bahamas to guarantee delivery of a minimum quantity of water per week. If the WSC requires the water and CW-Bahamas does not meet this minimum, CW-Bahamas is required to pay the WSC for the difference between the minimum and actual gallons delivered at a per gallon rate equal to the price per gallon that the WSC is currently paying CW-Bahamas under the contract. The Blue Hills contract expires in 2032 and requires CW-Bahamas to deliver 63.0 million gallons of water each week. The Windsor contract expires in 2033 and requires CW-Bahamas to deliver 16.8 million gallons of water each week. CW-Bahamas has been in compliance with the supply guarantees under these contracts for all periods since the inception of the contracts.

​

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Fiscal, Regulation and Other Federal Policies

​

Significant changes in, and uncertainty with respect to, legislation, regulation, government policy and economic conditions could adversely affect the Company’s business. Specific legislative and regulatory proposals that could have a material impact on the Company include, but are not limited to, modifications to international trade policy (such as tariffs); public company reporting requirements; and environmental regulation.

​

The Company 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. Accordingly, it is difficult to predict how such actions may impact the Company’s business, or the business or habits of its customers. The Company’s business operations, as well as the businesses of its customers on which it is substantially dependent, are located in countries at risk for escalating trade disputes, including the U.S. Any resulting trade wars could have a significant adverse effect on world trade and could adversely impact the Company’s consolidated financial condition, results of operations and cash flows.

​

9. Impact of recent accounting standards

Adoption of new accounting standards:

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 became effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is permitted. The adoption of ASU 2023-09 did not have a material impact on the Company’s 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. The ASU requires public companies to disclose, in the notes to financial statements, specific information about certain costs and expenses at each interim and annual reporting period. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this guidance.

​

In January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The ASU amends the effective date of ASU 2024-03 to clarify that all business entities are required to adopt the guidance in annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this guidance.

​

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The ASU is effective for annual periods beginning after December 15, 2027. Early adoption is permitted and the guidance can be applied on a prospective basis, a modified basis for in-process projects, or on a retrospective basis. The Company is currently evaluating the impact of this guidance.

​

10. Subsequent events

The Company evaluated subsequent events through the time of the filing of this report on Form 10-Q. The Company is not aware of any significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on its condensed consolidated financial statements.

​

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our future revenue, future plans, objectives, expectations and events, assumptions and estimates. Forward-looking statements can be identified by use of the words or phrases “will,” “will likely result,” “are expected to,” “will continue,” “estimate,” “project,” “potential,” “believe,” “plan,” “anticipate,” “expect,” “intend,” or similar expressions and variations of such words. Statements that are not historical facts are based on our current expectations, beliefs, assumptions, estimates, forecasts and projections for our business and the industry and markets related to our business.

​

The forward-looking statements contained in this report are not guarantees of future performance and involve assumptions and certain risks and uncertainties which are difficult to predict. Actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Important factors which may affect these actual outcomes and results include, without limitation:

​

● | tourism and weather conditions in the areas we serve;

● | the economic, political and social conditions of each country in which we conduct or plan to conduct business;

● | our relationships with the government entities and other customers we serve;

● | regulatory matters, including resolution of the negotiations for the renewal of our retail license on Grand Cayman;

● | our ability to successfully enter new markets; and

● | other factors, including those “Risk Factors” set forth under Part II, Item 1A. “Risk Factors” in this Quarterly Report and in our 2024 Annual Report on Form 10-K.

The forward-looking statements in this Quarterly Report speak as of its date. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained in this Quarterly Report to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based, except as may be required by law.

References herein to “we,” “our,” “ours” and “us” refer to Consolidated Water Co. Ltd. and its subsidiaries.

Critical Accounting Policies and Estimates

Our critical accounting policies relate to (i) the valuations of our goodwill, intangible assets and long-lived assets; and (ii) revenue recognition on our construction and manufacturing contracts.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Our actual results could differ significantly from such estimates and assumptions.

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.

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Goodwill and Intangible Assets

​

Goodwill represents the excess cost of an acquired business over the fair value of the assets and liabilities of the acquired business as of the date of acquisition. Goodwill and intangible assets recorded as a result of a business combination and determined to have an indefinite useful life are not amortized but are tested for impairment annually or upon the identification of a triggering event. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed periodically for impairment. We evaluate the possible impairment of goodwill annually as part of our reporting process for the fourth quarter of each fiscal year. Management identifies our reporting units for goodwill impairment testing purposes, which consist of Cayman Water, the bulk segment (which is comprised of CW-Bahamas and OC-Cayman), PERC, REC, and the manufacturing segment (i.e., Aerex), and determines the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. We determine the fair value of each reporting unit and compare these fair values to the carrying amounts of the reporting units. To the extent the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment loss is recorded.

For 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. 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 reporting unit included macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, and other relevant events. 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.

In 2020, approximately 80% of Aerex’s revenue, and 89% of Aerex’s gross profit were generated from sales to one customer. While Aerex sells various products to this customer, Aerex’s revenue from this customer had historically been derived primarily from one specialized product. In October 2020, this customer informed Aerex that, for inventory management purposes, it was suspending its purchases of the specialized product from Aerex following 2020 for a period of approximately one year. This customer informed Aerex at that time that it expected to recommence its purchases of the specialized product from Aerex beginning with the first quarter of 2022. As a result of this anticipated loss of revenue for Aerex, we updated our projections for our manufacturing reporting unit’s future cash flows. Such projections assumed, in part, that Aerex’s major customer would recommence its purchases from Aerex in 2022 but at a reduced aggregate amount, as compared to 2020. Based upon these updated projections, we tested our manufacturing reporting unit’s goodwill for possible impairment as of December 31, 2020 using the discounted cash flow and guideline public company methods, with a weighting of 80% and 20% applied to these two methods, respectively. As a result of these impairment tests, 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. 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. Furthermore, Aerex’s efforts to replace the revenue previously generated from this customer with revenue from existing and new customers were adversely impacted by negative economic conditions (caused in part by the COVID-19 pandemic). These negative economic conditions also increased Aerex’s raw material costs, resulted in raw material shortages and extended delivery times for such materials, and adversely affected the overall financial condition of Aerex’s current and prospective customers. Accordingly, in light of this new information from Aerex’s former major customer, and the on-going weak economic conditions that we believed would continue through 2022, we updated our projections of future cash flows for the manufacturing reporting unit and tested its goodwill for possible impairment as of June 30, 2021 using the discounted cash flow and guideline public company methods, with a weighting of 80% and 20% applied to these two methods, respectively. Based upon this testing, we determined that the carrying value of our manufacturing reporting unit exceeded its fair value by $2.9 million, and we recorded an impairment loss to reduce our manufacturing segment’s goodwill by this amount for the three months ended June 30, 2021.

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​

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. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, 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.

On June 29, 2020, our Mexico subsidiary, AdR, received a letter from the State of Baja California (the “State”) terminating AdR’s contract with the State involving the construction and operation of a desalination plant in Rosarito California and accompanying aqueduct to deliver the water produced by this plant to the Mexican public water system. 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. We design, construct, and sell wastewater, water reuse, and water production infrastructure in the United States through PERC and Kalaeloa Desalco. 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.

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. 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. We estimate total costs to be incurred and profit to be earned on each long-term, fixed price contract prior to commencement of work on the contract and update these estimates as work on the contract progresses. The cumulative amount of revenue recorded on a contract at a specified point in time is that percentage of total estimated revenue that incurred costs to date comprised of estimated total contract costs. Due to the extended time it may take to complete many of our contracts and the scope and nature of the work required to be performed on those contracts, the estimations of total revenue and costs at completion are complicated and subject to many variables and, accordingly, are subject to changes. When adjustments in estimated total contract revenue or estimated total contract costs are required, any changes from prior estimates are recognized in the current period for the inception-to-date effect of such changes. We recognize the full amount of any estimated loss on a contract at the time the estimates indicate such a loss.

The cost estimates we prepare in connection with our construction and manufacturing contracts are subject to inherent uncertainties. Because we base our contract prices on our estimation of future construction and manufacturing costs, the profitability of our construction and manufacturing contracts is highly dependent on our ability to estimate these costs accurately, as almost all of our construction and manufacturing contracts are fixed-price contracts. The cost of materials, labor and subcontractors could increase significantly after we sign a construction or manufacturing contract, which could cause the gross profit for a contract to decline from our previous estimates, adversely affecting our recognition of revenue and gross profit for the contract. Construction or manufacturing contract costs that significantly exceed our initial estimates could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows.

​

RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included under Part I, Item 1. “Financial Statements” of this Quarterly Report and our consolidated financial statements and accompanying notes

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included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2024 (“2024 Form 10-K”) and the information set forth under Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Form 10-K.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 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. (“NSC”), of a project (the “Project”) that encompassed the construction, operation and minority ownership of a 100 million gallons per day seawater reverse osmosis desalination plant to be located in northern Baja California, Mexico and accompanying pipeline to deliver water to the Mexican potable water system.

Through a series of transactions that began in 2012, NSC purchased 20.1 hectares of land for approximately $21.1 million on which the proposed Project’s plant was to be constructed.

​

In November 2015, the State of Baja California (the “State”) officially commenced 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. 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”), the Government of Baja California as represented by the Secretary of Planning and Finance and the Public Utilities Commission of Tijuana (“CESPT”). The APP Contract required AdR to design, construct, finance and operate a seawater reverse osmosis desalination plant (and accompanying aqueduct) with a capacity of up to 100 million gallons per day in two phases: the first with a capacity of 50 million gallons per day and an aqueduct to the Mexican potable water system in Tijuana, Baja California and the second phase with a capacity of 50 million gallons per day. The first phase was to be operational within 36 months of commencing construction and the second phase was to be operational by 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. 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. The Letter requested that AdR provide an inventory of the assets that comprised the “Project Works” (as defined in the APP Contract) for the purpose of acknowledging and paying the non-recoverable expenses made by AdR in connection with the Project, with such reimbursement to be calculated in accordance with the terms of the APP Contract. On August 28, 2020, AdR submitted their list of non-recoverable expenses, including those of NSC, to CEA and CESPT which was comprised of 51,144,525 United States dollars and an additional 137,333,114 Mexican pesos.

​

CW-Cooperatief, as a Netherlands company, had certain rights relating to its investments in NSC and AdR under the Agreement on Promotion, Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the United Mexican States entered into force as of October 1, 1999 (the “Treaty”). On April 16, 2021, CW-Cooperatief submitted a letter to the President of Mexico and other Mexican federal government officials alleging that the State’s termination of the APP Contract constituted a breach by Mexico of its international obligations under the Treaty, entitling CW-Cooperatief to full reparation, including monetary damages. This letter invited Mexico to seek a resolution of this investment dispute through consultation and negotiation but stated that if the dispute could not 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 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.

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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”). Under the Settlement Agreement, CW-Cooperatief requested that ICSID discontinue the arbitration and on May 31, 2024, ICSID issued an order discontinuing the arbitration. Pursuant to the Settlement Agreement, the Trust purchased the 20.1 hectares of land on which the Project’s plant was to be constructed, including related rights of way (the “Land”), on an “as-is” basis, from NSC for MXN$596,144,000. The sale of the Land to the Trust was closed on June 14, 2024 at which time the MXN$596,144,000 was paid to 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 until such processes are completed.

​

Our net losses from discontinued operations for the three months ended September 30, 2025 and 2024 were $($37,220) and ($502,854), respectively.

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Consolidated Results

Including discontinued operations, net income attributable to Consolidated Water Co. Ltd. stockholders for 2025 was $5,532,344 ($0.34 per share on a fully diluted basis), as compared to net income of $4,454,464 ($0.28 per share on a fully diluted basis) for 2024.

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The following discussion and analysis of our consolidated results of operations and results of operations by segment for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 relates only to our continuing operations.

​

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders for 2025 was $5,569,564 ($0.34 per share on a fully diluted basis), as compared to net income from continuing operations of $4,957,318 ($0.31 per share on a fully diluted basis) for 2024.

Revenue for 2025 increased to $35,118,706 from $33,390,557 in 2024, as a result of revenue increases in the retail, services and manufacturing segments. These increases were partially offset by a slight decline in revenue for the bulk segment. Gross profit for 2025 was $12,945,909 (37% of total revenue) as compared to $11,634,658 (35% 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 (“G&A”) expenses on a consolidated basis increased to $7,218,722 for 2025 as compared to $6,955,969 for 2024. The increase in G&A expenses for 2025 arises principally from incremental employee costs of approximately $193,000 attributable to new hires and salary increases.

Other income, net, remained relatively consistent at $811,227 for 2025 as compared to $724,040 for 2024.

Results by Segment

Retail Segment:

The retail segment generated $3,377,580 in income from operations for 2025 as compared to $3,200,441 for 2024.

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Revenue generated by retail water operations increased to $7,770,344 in 2025 from $7,585,992 in 2024 due to a 6% increase in the volume of water sold. We believe significantly lower rainfall in 2025 on Grand Cayman as compared to 2024 and an increase in total number of customer service connections were the principal reasons for the increase in the volume of water sold in 2025. The impact of greater volume sales on retail revenue for 2025 was partially offset by a decrease in energy costs in 2025 from 2024 that decreased the energy pass-through component of Cayman Water’s rates.

As a result of the revenue increase, retail segment gross profit increased in both total dollars and as a percentage of revenue to $4,323,082 (56% of retail revenue) for 2025 from $3,979,048 (52% of retail revenue) for 2024.

Retail G&A expenses increased to $952,102 for 2025 compared to $787,403 for 2024 principally due to incremental information technology expenses resulting from the ongoing implementation of a new utility billing system and an increase in employee costs attributable to salary increases.

Bulk Segment:

The bulk segment generated $2,642,709 and $2,416,646 in income from operations for 2025 and 2024, respectively.

Bulk segment revenue was $8,394,614 and $8,767,168 for 2025 and 2024, respectively. The decrease in bulk revenue from 2024 to 2025 resulted from lower diesel fuel prices, which decreased the pass-through energy component of CW-Bahamas’ rates.

Gross profit for our bulk segment increased to $2,910,001 (35% of bulk revenue) for 2025 as compared to $2,797,876 (32% of bulk revenue) for 2024 due to improved plant efficiency and reductions in various operating expenses.

Bulk segment G&A expenses decreased to $267,292 for 2025 as compared to $381,230 for 2024 due to a decrease in the provision for credit losses of approximately $122,000.

Services Segment:

The services segment generated $1,911,730 and $1,798,667 in income from operations for 2025 and 2024, respectively.

Services segment revenue increased to $14,289,315 for 2025 from $12,677,837 for 2024. Construction revenue increased to $6,360,333 as compared to $4,251,237. Revenue generated under operations and maintenance contracts increased to $7,715,000 for 2025 as compared to $7,492,121 for 2024 primarily due to the amendment, effective June 2025, of an operating and maintenance contract for a US federal client which increased the scope of services we provide (and thus increased the fees we charge) under that contract. Design and consulting revenue decreased to $213,982 in 2025 from $934,479 in 2024 due to the completion in the fourth quarter of 2024 of a contract for a major plant commissioning and startup project.

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Gross profit for the services segment increased to $3,844,421 (27% of services revenue) in 2025 from $3,268,512 (26% of services revenue) in 2024 due to the overall increase in revenue.

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We have been informed by one of our significant operations and maintenance customers that it is unlikely such customer will extend its existing contract with PERC beyond the current expiration date of this contract in March 2026. We recognized approximately $1.4 million and $474,000 in revenue and gross profit, respectively, under this contract for 2025.

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G&A expenses for the services segment increased to $1,955,186 for 2025 as compared to $1,469,845 for 2024 primarily due to incremental employee costs of $318,518 attributable to new hires and salary increases.

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Manufacturing Segment:

The manufacturing segment contributed $1,414,367 and $843,804 to our income from operations in 2025 and 2024, respectively.

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Manufacturing revenue increased to $4,664,433 from $4,359,560 for 2025 and 2024, respectively, due to increased production activity.

Manufacturing gross profit was $1,868,405 (40% of manufacturing revenue) for 2025 as compared to a gross profit of $1,589,222 (36% of manufacturing revenue) for 2024. The increase in manufacturing gross profit in dollars and as a percentage of revenue results from production efficiencies and a higher margin product mix.

G&A expenses for the manufacturing segment decreased to $459,038 for 2025 as compared to $745,418 for 2024 due to a decrease in the provision for credit losses of $184,000.

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Corporate

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Corporate G&A expenses remained relatively consistent at $3,585,104 for 2025 as compared to $3,572,073 for 2024.

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Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Discontinued Operations – Mexico Project Development

As discussed previously, on June 30, 2020 the State of Baja California cancelled its APP Contract with AdR 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 May 2024, we executed a Settlement Agreement with the State pursuant to which we discontinued the arbitration in exchange for the purchase by the State (i) of the land for the Project for MXN$596,144,000; and (ii) certain documentation for the Project for MXN$20,000,000. 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.

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Our net loss from discontinued operations for the nine months ended September 30, 2025 was ($252,857). We generated net income from discontinued operations of $10,637,926 for the nine months ended September 30, 2024 as a result of the gain generated from the sale of the Project land and documentation under the Settlement Agreement.

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Consolidated Results

Including discontinued operations, net income attributable to Consolidated Water Co. Ltd. stockholders for 2025 was $15,419,578 ($0.96 per share on a fully diluted basis), as compared to net income of $26,779,069 ($1.68 per share on a fully diluted basis) for 2024.

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The following discussion and analysis of our consolidated results of operations and results of operations by segment for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 relates only to our continuing operations.

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Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders for 2025 was $15,672,435 ($0.97 per share on a fully diluted basis), as compared to net income from continuing operations of $16,141,143 ($1.01 per share on a fully diluted basis) for 2024.

Revenue for 2025 decreased to $102,425,170 from $105,559,105 in 2024. Increases in revenue for the retail and manufacturing segments were more than offset by a significant decrease in the services segment revenue. Gross profit for 2025 was $38,084,181 (37% of total revenue) as compared to $37,132,895 (35% of total revenue) for 2024. For further discussion of revenue and gross profit see the “Results by Segment” discussion and analysis that follows.

G&A expenses on a consolidated basis increased to $22,522,919 for 2025 as compared to $20,126,292 for 2024. The increase in G&A expenses for 2025 arises principally from (i) incremental legal, consulting and other professional fees of approximately $642,000; (ii) added employee costs of approximately $1.2 million attributable to new hires, salary

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increases and (iii) incremental information technology expenses of almost $240,000 resulting from the ongoing implementation of a new utility billing system for the retail segment.

Other income, net, increased to $2,320,300 for 2025 as compared to $1,560,650 for 2024 primarily due to approximately $669,000 of additional interest income earned on higher balances of interest earning assets.

Results by Segment

Retail Segment:

The retail segment generated $12,201,514 in income from operations for 2025 compared to $11,231,252 for 2024.

Revenue generated by our retail water operations increased to $25,819,712 in 2025 from $24,392,814 in 2024 due to a 9% increase in the volume of water sold. We believe significantly lower rainfall in 2025 on Grand Cayman as compared to 2024 and an increase in total number of customer service connections were the principal reasons for the increase in the volume of water sold in 2025. The impact of greater volume sales on retail revenue for 2025 was partially offset by a decrease in energy costs in 2025 from 2024 that decreased the energy pass-through component of Cayman Water’s rates.

As a result of the revenue increase, retail segment gross profit increased in both total dollars and as a percentage of revenue to $14,890,629 (58% of retail revenue) for 2025 from $13,564,393 (56% of retail revenue) for 2024.

Retail G&A expenses increased to $2,726,531 for 2025 compared to $2,335,807 for 2024 primarily as a result of incremental information technology expenses to approximately $240,000 for the ongoing implementation of a new utility billing system.

Bulk Segment:

The bulk segment generated $7,265,414 and $6,836,571 in income from operations for 2025 and 2024, respectively.

Bulk segment revenue was $25,081,146 and $25,557,220 for 2025 and 2024, respectively. The decrease in bulk revenue from 2024 to 2025 resulted from lower diesel fuel prices, which decreased the pass-through energy component of CW-Bahamas’ rates.

Gross profit for our bulk segment improved slightly to $8,273,537 (33% of bulk revenue) for 2025 as compared to $7,925,210 (31% of bulk revenue) for 2024, primarily as a result of improved plant efficiency and lower operating costs.

Bulk segment G&A expenses remained relatively consistent at $1,008,123 for 2025 as compared to $1,088,639 for 2024.

Services Segment:

The services segment generated $3,160,696 and $7,219,793 in income from operations for 2025 and 2024, respectively.

Construction revenue declined to $11,404,500 for 2025 as compared to $17,632,772 for 2024 primarily as a result of approximately $8.0 million of additional revenue generated from PERC’s contract with Liberty Utilities and $1.3 million in revenue generated from the Red Gate contract in Grand Cayman in 2024. Such contracts were substantially completed by the end of the second quarter of 2024. Construction revenue recognized on the Hawaii contract also declined by $3.1 million in 2025 due to the completion of the pilot plant testing phase of the project, which has resulted in a decrease in project expenditures pending commencement of the construction phase of the project. These decreases in construction revenue were partially offset by construction revenue generated under new contracts. Revenue generated under operations and maintenance contracts increased to $23,695,704 for 2025 as compared to $21,660,396 for 2024 as a result of incremental revenue generated by both PERC and REC. Design and consulting revenue decreased to $715,581 in 2025 from $2,724,749 in 2024 due to the completion in the fourth quarter of 2024 of a contract for a major plant commissioning and startup project.

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Gross profit for the services segment decreased to $9,252,131 (26% of services revenue) in 2025 from $11,481,116 (27% of services revenue) in 2024 due to the substantial decline in construction and design and consulting revenue.

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We have been informed by one of our significant operations and maintenance customers that it is unlikely such customer will extend its existing contract with PERC beyond the current expiration date of this contract in March 2026. We recognized approximately $3.7 million and $1.2 million in revenue and gross profit, respectively, under this contract for 2025.

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G&A expenses for the services segment increased to $6,143,566 for 2025 as compared to $4,264,323 for 2024 primarily due to increases of (i) $1,036,730 in employee costs attributable to new hires and salary increases; (ii) incremental legal costs and other professional fees of $300,866; and (iii) approximately $329,000 for the provision for credit losses.

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Manufacturing Segment:

The manufacturing segment contributed $4,019,216 and $2,231,470 to our income from operations in 2025 and 2024, respectively.

Manufacturing revenue increased to $15,708,527 in 2025 from $13,591,154 for 2024 due to increased production activity.

Manufacturing gross profit was $5,667,884 (36% of manufacturing revenue) for 2025 as compared to $4,162,176 (31% of manufacturing revenue) for 2024. The increase in manufacturing gross profit in dollars and as a percentage of revenue results from increased production activity, production efficiencies and a higher margin product mix.

G&A expenses for the manufacturing segment decreased to $1,653,668 for 2025 as compared to $1,930,706 for 2024 due to a reduction of $327,000 in the provision for credit losses.

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Corporate

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Corporate G&A expenses increased to $10,991,031 for 2025 as compared to $10,506,817 for 2024 due to incremental legal, and other professional fees of approximately $353,000.

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FINANCIAL CONDITION

The significant changes in the components of our condensed consolidated balance sheet as of September 30, 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 $10.6 million primarily due to a $11.5 million decrease in CW-Bahamas’ accounts receivable.

Current inventory decreased by approximately $4.4 million primarily due to a decrease of $4.3 million in Aerex’s inventory resulting from the consumption of materials used in product production.

Contract assets increased by approximately $2.3 million primarily due to a $1.0 million increase in the manufacturing segment contract assets attributable to work started in the third quarter for one client and an increase in PERC’s contract assets of approximately $2.3 million. These increases were partially offset by a decrease of approximately $1.1 million in DesalCo’s contract assets due to the collection of the final payment for the design and construction of the WAC’s Red Gate plant.

Property, plant and equipment, net, increased by approximately $3.1 million primarily due to the completion of the expansion of Aerex’s manufacturing facility this quarter as well as specialized equipment purchased for the services segment.

Contract liabilities increased by $2.6 million due to a $3.2 million increase for the Kalaeloa Desalco construction project.

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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. 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.

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Liquidity Position

Our projected liquidity requirements for the balance of 2025 include capital expenditures for our existing operations of approximately $4.5 million, which includes approximately $1.3 million to be incurred during 2025 for a project in The Bahamas and $266,000 for new equipment for Aerex’s manufacturing facility. We paid approximately $2.3 million for dividends in October 2025. Our liquidity requirements may also include future quarterly dividends, if such dividends are declared by our Board.

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As of September 30, 2025, we had cash and cash equivalents of $123.6 million and working capital of $141.7 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.

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CW-Bahamas Liquidity

CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $16.8 million and $28.4 million as of September 30, 2025 and December 31, 2024, respectively. Approximately 66% and 81% of the accounts receivable balances were delinquent as of those dates, respectively. The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary.

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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. 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 September 30, 2025.

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We continue to be in frequent contact with officials of The Bahamas government, who continue to express their intention to eliminate CW-Bahamas delinquent accounts receivable balances in the near future. However, we are unable to determine when such reduction will occur.

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In a report dated October 6, 2022, Moody’s Investor Services (“Moody’s”) downgraded The Bahamas’ long-term issuer and senior unsecured ratings to B1 from Ba3. Moody’s also lowered The Bahamas’ local currency ceiling to Baa3 from Baa2 and its foreign currency ceiling to Ba1 from Baa3. Moody’s has maintained these ratings through the date of its most current report issued in April 2025. Based upon our review of this Moody’s correspondence, we continue to believe that no material allowance for credit losses is required for CW-Bahamas’ accounts receivable from the WSC.

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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. Any of these events could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows.

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Discussion of Cash Flows for the Nine Months Ended September 30, 2025

Our cash and cash equivalents increased to $123,554,648 as of September 30, 2025 from $99,350,121 as of December 31, 2024.

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Cash Flows from Operating Activities

Net cash provided by our operating activities was $35,932,833. This net cash reflects the net income generated for the nine months ended September 30, 2025 of $15,890,319 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. Significant adjustments included depreciation and amortization of $5,163,826, a decrease in accounts receivable of $10,290,048, a decrease in inventory of $3,610,403, an increase in contract assets of $2,261,618, and an increase in contract liabilities of $2,555,352.

Cash Flows from Investing Activities

Net cash used in our investing activities was $6,045,599 primarily for additions to property, plant and equipment and construction in progress.

Cash Flows from Financing Activities

Net cash used by our financing activities was $5,784,451, 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. Pursuant to the 1990 license, Cayman Water has the exclusive right to produce potable water and distribute it by pipeline to its licensed service area, which consists of two of the three most populated areas of Grand Cayman Island: Seven Mile Beach and West Bay. For the three months ended September 30, 2025 and 2024, we generated approximately 22% and 23%, respectively, of our consolidated revenue and 33% and 34%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license. For the nine months ended September 30, 2025 and 2024, we generated approximately 25% and 23%, respectively, of our consolidated revenue and 39% and 36%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license.

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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. 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. We continued to pay a royalty of 7.5% of the revenue we collect as required under the 1990 license.

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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.

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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. 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 the new license remain on-going.

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We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of its license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our retail license. 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

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values of our retail segment assets. Such impairment losses could have a material adverse impact on our consolidated financial condition and results of operations.

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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. If the WSC requires the water and we do not meet this minimum, we are required to pay the WSC for the difference between the minimum and actual gallons delivered at a per gallon rate equal to the price per gallon that the WSC is currently paying us under the contract. The Blue Hills contract expires in 2032 and requires us to deliver 63.0 million gallons of water each week. The Windsor contract expires in 2033 and requires us to deliver 16.8 million gallons of water each week. We have been in compliance with the performance guarantees under these contracts for all periods since the inception of the contracts.

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Adoption of New Accounting Standards

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 became effective on a prospective basis for annual periods beginning after December 15, 2024. The adoption of ASU 2023-09 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. The ASU requires public companies to disclose, in the notes to financial statements, specific information about certain costs and expenses at each interim and annual reporting period. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. We are currently evaluating the impact of this guidance.

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In January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The ASU amends the effective date of ASU 2024-03 to clarify that all business entities are required to adopt the guidance in annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating the impact of this guidance.

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In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The ASU is effective for annual periods beginning after December 15, 2027. Early adoption is permitted and the guidance can be applied on a prospective basis, a modified basis for in-process projects, or on a retrospective basis. The Company is currently evaluating the impact of this guidance.

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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 August 19, 2025, our Board declared a dividend of $0.14 payable on October 31, 2025 to shareholders of record on October 1, 2025.

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We have paid dividends to owners of our common stock and redeemable preferred stock since we began declaring dividends in 1985. Our payment of any future cash dividends will depend upon our earnings, financial condition, cash

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flows, capital requirements and other factors our Board of Directors deems relevant in determining the amount and timing of such dividends.

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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.

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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. Therefore, the impact of inflation on our gross profit from these revenue sources, measured in consistent dollars, historically has not been material. However, while we have received annual inflation adjustments for the rates we charge under our bulk water agreements, we were unable 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. While we believe that we are entitled to apply to OfReg for future rate adjustments under the terms of the February 18, 2025 concession agreement with the Cayman Islands government, the denial by OfReg of such application or approval of an increase that is less than the increase in our costs could adversely affect the profitability of our retail segment. 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.

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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.

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Kalaeloa Desalco has signed a contract with the Honolulu Board of Water Supply pursuant to which it is presently designing and expects to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii. 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.

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.

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In periods of high inflation, our consolidated results of operations and cash flows could be materially adversely affected.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risk from December 31, 2024 to the end of the period covered by this report.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission (the “SEC”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can only provide

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reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the possible controls and procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial and accounting officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.

Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

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ITEM 1A. RISK FACTORS

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Our business faces significant risks. These risks include those disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as supplemented by the additional risk factors included below. If any of the events or circumstances described in the referenced risks actually occurs, our business, financial condition or results of operations could be materially adversely affected and such events or circumstances could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this report. These risks should be read in conjunction with the other information set forth in this Quarterly Report as well as in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our other periodic reports on Form 10-Q and Form 8-K.

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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.

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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. Pursuant to the 1990 license, Cayman Water has the exclusive right to produce potable water and distribute it by pipeline to its licensed service area, which consists of two of the three most populated areas of Grand Cayman Island: Seven Mile Beach and West Bay. For the three months ended September 30, 2025 and 2024, we generated approximately 22% and 23%, respectively, of our consolidated revenue and 33% and 34%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license. For the nine months ended September 30, 2025 and 2024, we generated approximately 25% and 23%, respectively, of our consolidated revenue and 39% and 36%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license.

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The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government in order to provide the parties with additional time to negotiate the terms of a new license agreement. The most recent express extension of the 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. We continued to pay a royalty of 7.5% of the revenue we collected as required under the 1990 license.

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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.

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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. 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 the new license remain on-going.

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We have been informed during our retail license negotiations, both by OfReg and its predecessor in these negotiations, that they seek to restructure the terms of its license in a manner that could significantly reduce the operating income and cash flows we have historically generated from our retail license. 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. Such impairment losses could have a material adverse impact on our consolidated financial condition and results of operations.

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Periodically, our Bahamas subsidiary experiences substantial delays in the collection of its accounts receivable. As a result, our Bahamas subsidiary could have insufficient liquidity to continue operations, and our consolidated financial results could be materially adversely affected.

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CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $16.8 million as of September 30, 2025. Approximately 66% of this September 30, 2025 accounts receivable balance was delinquent as of that date. The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary.

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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. 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 September 30, 2025.

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In a report dated October 6, 2022, Moody’s Investor Services (“Moody’s”) downgraded The Bahamas’ long-term issuer and senior unsecured ratings to B1 from Ba3. Moody’s also lowered The Bahamas’ local currency ceiling to Baa3 from Baa2 and its foreign currency ceiling to Ba1 from Baa3. Moody’s has maintained these ratings through the date of its most current report issued in April 2025.

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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. Any of these events could have a material adverse impact on our consolidated financial condition, results of operations, and cash flows.

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The profitability of our contracts is dependent upon our ability to accurately estimate construction and operating costs.

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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. Additionally, the terms of our water supply contracts may require us to guarantee the price of water on a per unit basis, subject to certain annual inflation and monthly energy cost adjustments, and to assume the risk that the costs associated with producing this water may be greater than anticipated. Because we base our contract prices in part on our estimation of future construction, manufacturing and operating costs, the profitability of our plants and our manufacturing and operations and maintenance contracts is dependent on our ability to estimate these costs accurately. 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 profit margins we initially expect to generate from an operations and maintenance contract could be further reduced if future operating costs for that contract exceed our estimates of such costs. 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.

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Substantial changes to fiscal, regulation and other federal policies could adversely affect our business, financial condition, operating results and cash flows.

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Significant changes in, and uncertainty with respect to, legislation, regulation, government policy and economic conditions could adversely affect our business. 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.

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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. 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. 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.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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During the quarter, we issued 1,471 shares of preferred stock to 20 employees for a total consideration of $27,391. The issuance of the preferred stock to nine of the employees was exempt from registration under Regulation S promulgated under the Securities Act of 1933 as amended (the “Securities Act”), because the shares were issued outside of the United States to non-U.S. persons (as defined in Regulation S). The issuance to 11 employees who are U.S. persons was exempt under Section 4(a)(2) of the Securities Act. The U.S. persons are knowledgeable, sophisticated and experienced in making investment decisions of this kind and received adequate information about us or had adequate access, including through their business relationship with us, to information about us.

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ITEM 5. OTHER INFORMATION

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During the quarter ended September 30, 2025, no directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) of the Company adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS

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​ | ​ | ​
Exhibit Number | ​ | Exhibit Description
31.1 | ​ | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2 | ​ | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1 | ​ | Section 1350 Certification of Chief Executive Officer
32.2 | ​ | Section 1350 Certification of Chief Financial Officer
101.INS | ​ | XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH | ​ | XBRL Taxonomy Extension Schema
101.CAL | ​ | XBRL Taxonomy Extension Calculation Linkbase
101.DEF | ​ | XBRL Taxonomy Extension Definition Document
101.LAB | ​ | XBRL Taxonomy Extension Label Linkbase
101.PRE | ​ | XBRL Taxonomy Extension Presentation Linkbase
104 | ​ | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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CONSOLIDATED WATER CO. LTD.
By: | /s/ Frederick W. McTaggart |
| Frederick W. McTaggart |
| Chief Executive Officer |
| (Principal Executive Officer) |
By: | /s/ David W. Sasnett |
| David W. Sasnett |
| Executive Vice President & Chief Financial Officer |
| (Principal Financial and Accounting Officer) |
Date: November 10, 2025

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