Consolidated Water Co. Ltd.

Previous wording

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

Current wording

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.

Previous wording

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 comprise 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.

Current wording

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 comprise 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

Previous wording

Prior to the License Date (as defined below), we sold water 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. For the three months ended June 30, 2026 and 2025, the Company generated approximately 26% and 26%, respectively, of its consolidated revenue and 44% and 38%, respectively, of its consolidated gross profit from the retail water operations conducted under the 1990 License. For the six months ended June 30, 2026 and 2025, the Company generated approximately 27% and 27%, respectively, of its consolidated revenue and 45% and 42%, respectively, of its consolidated gross profit from the retail water operations conducted under the 1990 License.

Current wording

Prior to the License Date (as defined below), we sold water 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. For the three months ended September 30, 2026 and 2025, we generated approximately 27% and 22%, respectively, of our consolidated revenue and 43% and 33%, respectively, of our consolidated gross profit from our retail water operations. For the nine months ended September 30, 2026 and 2025, we generated approximately 27% and 25%, respectively, of our consolidated revenue and 44% and 39%, respectively, of our consolidated gross profit from our retail water operations.

Previous wording

The License provides that Cayman Water’s base rates, monthly meter rental fees and certain other rates and charges will be as set forth in the License. Effective on the License Date, the base rates for water sold to consumers by Cayman Water in the License Area will be CI$16.23 per 1,000 gallons for the first 3,000 gallons supplied in any month to residential consumers, CI$21.21 per 1,000 gallons for residential consumption above 3,000 gallons, CI$19.90 per 1,000 gallons for the first 3,000 gallons supplied in any month to commercial consumers, CI$21.21 per 1,000 gallons for commercial consumption above 3,000 gallons, CI$17.77 per 1,000 gallons for the first 3,000 gallons supplied in any month to public authority consumers, CI$19.01 per 1,000 gallons for public authority consumption above 3,000 gallons and CI$13.32 per 1,000 gallons for trucked water consumers. The License also provides for monthly meter rental fees based on meter size, as well as annual adjustments to base rates and certain fees, effective each July 1 following the License Date, in accordance with the rate cap adjustment mechanism described in the License, subject to OfReg verification and approval requirements. The exchange rate for conversion of Cayman Islands dollars (CI$) into United States dollars (US$), as determined by the Cayman Islands Monetary Authority, has been fixed since April 1974 at US$1.20 per CI$1.00.

Current wording

The License provides that Cayman Water’s base rates, monthly meter rental fees and certain other rates and charges will be as set forth in the License. Effective on the License Date, the base rates for water sold to consumers by Cayman Water in the License Area were established at CI$16.23 per 1,000 gallons for the first 3,000 gallons supplied in any month to residential consumers, CI$21.21 per 1,000 gallons for residential consumption above 3,000 gallons, CI$19.90 per 1,000 gallons for the first 3,000 gallons supplied in any month to commercial consumers, CI$21.21 per 1,000 gallons for commercial consumption above 3,000 gallons, CI$17.77 per 1,000 gallons for the first 3,000 gallons supplied in any month to public authority consumers, CI$19.01 per 1,000 gallons for public authority consumption above 3,000 gallons and CI$13.32 per 1,000 gallons for trucked water consumers. The License also provides for monthly meter rental fees based on meter size, as well as annual adjustments to base rates and certain fees, effective each July 1 following the License Date, in accordance with the rate cap adjustment mechanism described in the License, subject to OfReg verification and approval requirements. The exchange rate for conversion of Cayman Islands dollars (CI$) into United States dollars (US$), as determined by the Cayman Islands Monetary Authority, has been fixed since April 1974 at US$1.20 per CI$1.00.

Previous wording

In addition to base rates and monthly meter rental fees, the License permits Cayman Water to recover from consumers, through a separate energy cost charge, the reasonable cost of electricity used to produce and distribute water, subject to an efficiency-based mechanism that limits recovery when specific energy consumption exceeds the maximum acceptable amount set forth in the License and shares certain efficiency savings with consumers when specific energy consumption is below the target level set forth in the License. The License also contemplates statutory fee and regulatory fee charges as separate pass-through charges to consumers; however, those fees have not yet been prescribed by the Cayman Islands Parliament.

Current wording

In addition to base rates and monthly meter rental fees, the License permits Cayman Water to recover from consumers, through a separate energy cost charge, the reasonable cost of electricity used to produce and distribute water, subject to an efficiency-based mechanism that limits recovery when specific energy consumption exceeds the maximum acceptable amount set forth in the License and shares certain efficiency savings with consumers when specific energy consumption is below the target level set forth in the License. The License also specifies statutory fee and regulatory fee charges as separate pass-through charges to consumers.

Previous wording

Regulation Act; obtaining the License by a fraudulent, false or misleading representation or in another illegal manner; or failure to meet demand in a reasonable manner and time, as determined by OfReg in its discretion, acting reasonably. The License also contains provisions addressing suspension, reinstatement, revocation and, in certain circumstances following revocation or non-renewal, potential compulsory divestiture of all mechanical, electrical and other equipment and all civil engineering works or plant, including appurtenances, owned by Cayman Water and used by Cayman Water in its licensed water production and distribution operations, including completed new works.

Current wording

The License may be revoked or suspended by OfReg upon the occurrence of specified events, including: fundamental breach of the License; persistent breaches of any condition attached to the License or failure to comply with applicable directives or water sector legislation; certain insolvency events; failure to pay specified fees or financial commitments for a continuous period in excess of three months after the relevant due date; certain offences under the Water Sector Regulation Act; obtaining the License by a fraudulent, false or misleading representation or in another illegal manner; or failure to meet demand in a reasonable manner and time, as determined by OfReg in its discretion, acting reasonably. The License also contains provisions addressing suspension, reinstatement, revocation and, in certain circumstances following revocation or non-renewal, potential compulsory divestiture of all mechanical, electrical and other equipment and all civil engineering works or plant, including appurtenances, owned by Cayman Water and used by Cayman Water in its licensed water production and distribution operations, including completed new works.

Previous wording

Based on our pro forma estimates, if the base rates, energy cost charges and monthly meter rental fees contemplated by the License had been applied to Cayman Water’s historical volumes, historical energy cost and meter base, we estimate that our revenue and operating income would have been approximately $2.1 million, $1.9 million and $1.1 million lower for 2024, 2025 and the first six months of 2026, respectively, than under the prior rate structure. These estimates are presented for illustrative purposes only; are based on historical volumes, historical energy cost, historical meter base and other assumptions; do not reflect statutory fee or regulatory fee charges that have not yet been prescribed; and are not necessarily indicative of the revenue or results of operations that Cayman Water will achieve under the License.

Current wording

Based on our pro forma estimates, if the base rates, energy cost charges and monthly meter rental fees contemplated by the License had been applied to Cayman Water’s historical volumes, historical energy cost and meter base, we estimate that our revenue and operating income would have been approximately $2.1 million, $1.9 million and $1.3 million lower for 2024, 2025 and the first seven months of 2026, respectively, than under the prior rate structure. These estimates are presented for illustrative purposes only, are based on historical volumes, historical energy cost, historical meter base and other assumptions, do not reflect statutory fee or regulatory fee charges, and are not necessarily indicative of the revenue or results of operations that Cayman Water will achieve under the License.

Previous wording

Including discontinued operations, net income attributable to Consolidated Water Co. Ltd. stockholders for 2026 was $3,931,746 ($0.24 per share on a fully diluted basis), as compared to net income of $5,096,205 ($0.32 per share on a fully diluted basis) for 2025. Our net losses from discontinued operations for 2026 and 2025 were ($105,574) and ($82,556), respectively. See Note 5 of the Notes to the Condensed Consolidated Financial Statements for a discussion of our discontinued operations.

Current wording

Including discontinued operations, net income attributable to Consolidated Water Co. Ltd. stockholders for 2026 was $2,322,270 ($0.14 per share on a fully diluted basis), as compared to net income of $5,532,344 ($0.34 per share on a fully diluted basis) for 2025. Our net losses from discontinued operations for 2026 and 2025 were ($61,627) and ($37,220), respectively. See Note 5 of the Notes to the Condensed Consolidated Financial Statements for a discussion of our discontinued operations.

Previous wording

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders for 2026 was $4,037,320 ($0.25 per share on a fully diluted basis), as compared to net income from continuing operations of $5,178,761 ($0.32 per share on a fully diluted basis) for 2025.

Current wording

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders for 2026 was $2,383,897 ($0.15 per share on a fully diluted basis), as compared to net income from continuing operations of $5,569,564 ($0.34 per share on a fully diluted basis) for 2025.

Previous wording

Revenue for 2026 decreased to $32,870,362 from $33,591,079 in 2025 as a result of a revenue decrease in the manufacturing segment, which was partially offset by revenue increases in the retail, bulk and services segments. Gross profit for 2026 was $10,963,389 (33% of total revenue) as compared to $12,831,985 (38% of total revenue) for 2025. For further discussion of revenue and gross profit see the “Results by Segment” discussion and analysis that follows.

Current wording

Revenue for 2026 decreased to $30,922,537 from $35,118,706 in 2025 as a result of revenue decreases in the services and manufacturing segments, which were partially offset by revenue increases in the retail and bulk segments. Gross profit for 2026 was $9,818,063 (32% of total revenue) as compared to $12,945,909 (37% of total revenue) for 2025. For further discussion of revenue and gross profit, see the “Results by Segment” discussion and analysis that follows.

Previous wording

General and administrative (“G&A”) expenses on a consolidated basis decreased to $14,662,090 for 2026 as compared to $15,304,197 for 2025 due to decreases in professional fees, amortization expense and the provision for credit losses.

Current wording

General and administrative (“G&A”) expenses on a consolidated basis increased to $7,629,656 for 2026 as compared to $7,218,722 for 2025. The principal factor in this increase was incremental professional fees of approximately $263,000.

Previous wording

Other income, net, decreased to $1,470,205 for 2026 as compared to $1,509,073 for 2025, primarily due to a decrease in interest earned on balances of interest-earning assets, offset by an increase in equity in earnings of affiliates.

Current wording

Other income, net, decreased to $576,468 for 2026 as compared to $811,227 for 2025, primarily due to a decrease in interest income attributable to lower average balances of interest-earning assets.

Previous wording

The bulk segment contributed $2,871,669 and $2,141,159 to our income from operations for 2026 and 2025, respectively.

Current wording

The bulk segment contributed $2,918,160 and $2,642,709 to our income from operations for 2026 and 2025, respectively.

Previous wording

Bulk segment revenue was $9,934,060 and $8,274,816 for 2026 and 2025, respectively. The increase in revenue for 2026 results principally from an increase in the pass-through energy rate charged by CW-Bahamas which is attributable to an increase in energy costs from 2025 to 2026. To a lesser extent, bulk revenue increased in 2026 due to revenue earned from CW-Bahamas’ new plants on Cat Island, The Bahamas.

Current wording

Bulk segment revenue was $10,138,396 and $8,394,614 for 2026 and 2025, respectively. The increase in revenue for 2026 results principally from an increase in the pass-through energy rate charged by CW-Bahamas which is attributable to an increase in energy costs from 2025 to 2026. To a lesser extent, bulk revenue increased in 2026 due to revenue earned from CW-Bahamas’ new plants on Cat Island, The Bahamas.

Previous wording

OC-Cayman’s agreements with the WAC to operate and maintain the North Sound and North Side Water Works plants were originally scheduled to expire on July 1, 2026. The agreements have been extended through March 31, 2027. Revenue recognized under the North Sound and North Side Water Works agreements for the three months ended June 30, 2026 was $325,659 and $406,617, respectively.

Current wording

OC-Cayman’s agreements with the WAC to operate and maintain the North Sound and North Side Water Works plants were originally scheduled to expire on July 1, 2026. The agreements have been extended through March 31, 2027. Revenue recognized under the North Sound and North Side Water Works agreements for the three months ended September 30, 2026 was $315,322 and $425,778, respectively. WAC is presently conducting a formal bid process for the granting of a new contract for the upgrade and operations and maintenance of these plants for ten years.

Previous wording

Services segment revenue was $11,585,573 for 2026 as compared to $11,448,202 for 2025. Construction revenue increased to $5,338,043 for 2026 as compared to $2,825,935 for 2025 due to incremental revenue generated by a project in Colorado and a project in California. Revenue generated under operations and maintenance (“O&M”) contracts decreased to $6,044,002 in 2026 as compared to $8,255,408 in 2025 due primarily to the expiration of PERC’s contracts with two customers in the first quarter of 2026. These contracts in the aggregate generated approximately $1.9 million in revenue in 2025. Design and consulting revenue decreased to $203,528 for 2026 from $366,859 for 2025.

Current wording

Services segment revenue was $9,760,608 for 2026 as compared to $14,289,315 for 2025. Construction revenue decreased to $3,483,375 for 2026 as compared to $6,360,333 for 2025 due to a decline in the number and total value of construction projects. Revenue generated under operations and maintenance (“O&M”) contracts decreased to $6,100,605 in 2026 as compared to $7,715,000 in 2025 due primarily to the expiration of PERC’s contracts with three significant customers in the first quarter of 2026. Design and consulting revenue was $176,628 for 2026 and $213,982 for 2025.

Previous wording

In June 2023, we (through our subsidiary Kalaeloa Desalco) executed a contract with the Honolulu Board of Water Supply (“BWS”) to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii, and since that time we have been engaged in the design and development phase for construction of the plant. We have achieved major project milestones under this phase of the project, including (i) successful pilot plant testing, (ii) receipt of confirmation from BWS that we are able to produce water that is a “reasonable match” to the quality of BWS’s current water supply and that we are able to produce water that causes “no detrimental impact” to the BWS water system or their customers’ assets, and (iii) completion of the plant design.

Current wording

In June 2023, we (through our subsidiary Kalaeloa Desalco) executed a contract with the Honolulu Board of Water Supply (“BWS”) to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii (the “project”). Since that time we have been engaged in the design and development phase for construction of the plant. We have achieved major project milestones under this phase of the project, including (i) successful pilot plant testing, (ii) receipt of confirmation from BWS that we are able to produce water that is a “reasonable match” to the quality of BWS’s current water supply and that we are able to produce water that causes “no detrimental impact” to the BWS water system or their customers’ assets, and (iii) completion of the plant design.

Previous wording

At the time of the filing of this Quarterly Report on Form 10-Q, Kalaeloa Desalco is continuing to advance the permitting process, respond to regulatory inquiries and coordinate with the BWS to mitigate project schedule impacts. Kalaeloa Desalco also is evaluating potential adjustments to sequencing and procurement activities designed to reduce the effect of the delays on the overall project economics. In July 2026, Kalaeloa Desalco received a Limited Notice to Proceed from BWS, authorizing the procurement of various long-lead equipment for the Kalaeloa seawater reverse osmosis desalination facility. The Limited Notice to Proceed releases approximately $6 million in project funds, enabling Kalaeloa Desalco to procure critical long-lead equipment.

Current wording

Kalaeloa Desalco is continuing to advance the permitting process, respond to regulatory inquiries and coordinate with the BWS to mitigate project schedule impacts. Kalaeloa Desalco also is evaluating potential adjustments to sequencing and procurement activities designed to reduce the effect of the delays on the overall project economics.

Previous wording

Manufacturing revenue decreased to $4,090,311 for 2026, as compared to $11,044,094 for 2025. The decrease in manufacturing revenue for 2026 resulted from a decrease in the total dollar amount of new purchase orders. We believe, based on current projections, that manufacturing revenue for the full 2026 fiscal year will be less than the manufacturing revenue generated for the 2025 fiscal year.

Current wording

Manufacturing revenue decreased to $2,811,843 for 2026, as compared to $4,664,433 for 2025. The decrease in manufacturing revenue for 2026 resulted from a decrease in the total dollar amount of contracts completed and in progress. We believe, based on current projections, that manufacturing revenue for the full 2026 fiscal year will be less than the manufacturing revenue generated for the 2025 fiscal year.

Previous wording

Manufacturing gross profit decreased to $997,569 (37% of manufacturing revenue) for 2026 as compared to $2,042,489 (39% of manufacturing revenue) for 2025 due to the decrease in revenue.

Current wording

Manufacturing gross profit decreased to $933,354 (33% of manufacturing revenue) for 2026 as compared to $1,868,405 (40% of manufacturing revenue) for 2025 due to the decrease in revenue.

Previous wording

G&A expenses for the manufacturing segment remained relatively consistent at $519,072 for 2026 as compared to $530,552 for 2025.

Current wording

G&A expenses for the manufacturing segment remained relatively consistent at $524,577 for 2026 as compared to $459,038 for 2025.

Previous wording

Corporate G&A expenses increased to $4,009,983 for 2026 as compared to $3,676,277 for 2025 due to slight increases in various expense categories.

Current wording

Corporate G&A expenses increased to $4,068,376 for 2026 as compared to $3,585,104 for 2025 due to slight increases in various expense categories.

Previous wording

Including discontinued operations, net income attributable to Consolidated Water Co. Ltd. stockholders for 2026 was $7,709,175 ($0.48 per share on a fully diluted basis), as compared to net income of $9,887,234 ($0.62 per share on a fully diluted basis) for 2025. Our net losses from discontinued operations for 2026 and 2025 were ($148,616) and ($215,637), respectively. See Note 5 of the Notes to the Condensed Consolidated Financial Statements for a discussion of our discontinued operations.

Current wording

Including discontinued operations, net income attributable to Consolidated Water Co. Ltd. stockholders for 2026 was $10,031,445 ($0.62 per share on a fully diluted basis), as compared to net income of $15,419,578 ($0.96 per share on a fully diluted basis) for 2025. Our net losses from discontinued operations for 2026 and 2025 were ($210,243) and ($252,857), respectively. See Note 5 of the Notes to the Condensed Consolidated Financial Statements for a discussion of our discontinued operations.

Previous wording

The following discussion and analysis of our consolidated results of operations and results of operations by segment for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 relates only to our continuing operations.

Current wording

The following discussion and analysis of our consolidated results of operations and results of operations by segment for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 relates only to our continuing operations.

Previous wording

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders for 2026 was $7,857,791 ($0.49 per share on a fully diluted basis), as compared to net income from continuing operations of $10,102,871 ($0.63 per share on a fully diluted basis) for 2025.

Current wording

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders for 2026 was $10,241,688 ($0.64 per share on a fully diluted basis), as compared to net income from continuing operations of $15,672,435 ($0.97 per share on a fully diluted basis) for 2025.

Previous wording

Revenue for 2026 decreased to $62,844,062 from $67,306,464 in 2025 due to revenue decreases in the manufacturing segment and, to a lesser extent, the retail segment. Gross profit for 2026 was $21,879,402 (35% of total revenue) as compared to $25,138,272 (37% of total revenue) for 2025. For further discussion of revenue and gross profit see the “Results by Segment” discussion and analysis that follows.

Current wording

Revenue for 2026 decreased to $93,766,599 from $102,425,170 in 2025 primarily due to revenue decreases in the manufacturing and services segments. Gross profit for 2026 was $31,697,465 (34% of total revenue) as compared to $38,084,181 (37% of total revenue) for 2025. For further discussion of revenue and gross profit see the “Results by Segment” discussion and analysis that follows.

Previous wording

Other income, net, decreased to $730,639 for 2026 as compared to $820,182 for 2025, primarily due to a decrease in interest earned on balances of interest-earning assets.

Current wording

Other income, net, decreased to $2,046,673 for 2026 as compared to $2,320,300 for 2025, primarily due to a decrease in interest earned on the average balances of interest-earning assets.

Previous wording

Revenue generated by retail water operations decreased to $17,238,005 in 2026 from $18,049,368 in 2025 due to a 6.3% decrease in the volume of water sold. The decrease in the volume of water sold in 2026 as compared to 2025 is attributable to significantly greater rainfall on Grand Cayman in 2026, as 2025 rainfall was well below historical norms.

Current wording

Revenue generated by retail water operations decreased slightly to $25,449,695 in 2026 from $25,819,712 in 2025 due to a 4.1% decrease in the volume of water sold. The decrease in the volume of water sold in 2026 as compared to 2025 is attributable to significantly greater rainfall on Grand Cayman in 2026, as 2025 rainfall was well below historical norms.

Previous wording

As a result of the decrease in revenue, retail segment gross profit decreased in total dollars and as a percentage of revenue to $9,789,878 (57% of retail revenue) for 2026 as compared to $10,567,547 (59% of retail revenue) for 2025.

Current wording

As a result of the decrease in revenue and increased energy and operating costs, retail segment gross profit decreased in total dollars and as a percentage of revenue to $13,974,024 (55% of retail revenue) for 2026 as compared to $14,890,629 (58% of retail revenue) for 2025.

Previous wording

Retail G&A expenses remained consistent at $1,802,106 for 2026 as compared to $1,774,429 for 2025.

Current wording

Retail G&A expenses remained consistent at $2,798,587 for 2026 as compared to $2,726,531 for 2025.

Previous wording

The bulk segment contributed $5,476,229 and $4,622,705 to our income from operations for 2026 and 2025, respectively.

Current wording

The bulk segment contributed $8,394,389 and $7,265,414 to our income from operations for 2026 and 2025, respectively.

Previous wording

Bulk segment revenue was $18,678,829 and $16,686,532 for 2026 and 2025, respectively. The increase in revenue for 2026 results principally from an increase in the pass-through energy rate charged by CW-Bahamas which is attributable to an increase in energy costs from 2025 to 2026. To a lesser extent, bulk revenue increased for 2026 due to revenue earned by CW-Bahamas from its new plants on Cat Island, The Bahamas.

Current wording

Bulk segment revenue was $28,817,225 and $25,081,146 for 2026 and 2025, respectively. The increase in revenue for 2026 results principally from an increase in the pass-through energy rate charged by CW-Bahamas which is attributable to an increase in energy costs from 2025 to 2026. To a lesser extent, bulk revenue increased for 2026 due to revenue earned by CW-Bahamas from its new plants on Cat Island, The Bahamas.

Previous wording

Gross profit for our bulk segment increased to $6,220,599 (33% of bulk revenue) for 2026 from $5,363,536 (32% of bulk revenue) for 2025. The improvement in bulk segment gross profit reflects insurance expense for CW-Bahamas that was approximately $226,000 lower in 2026 than in 2025.

Current wording

Gross profit for our bulk segment increased to $9,599,579 (33% of bulk revenue) for 2026 as compared to $8,273,537 (33% of bulk revenue) for 2025 due to the increased revenue.

Previous wording

Bulk segment G&A expenses also remained relatively consistent at $340,147 for 2026 as compared to $394,750 for 2025.

Current wording

Bulk segment G&A expenses remained relatively consistent at $1,205,190 for 2026 as compared to $1,008,123 for 2025.

Previous wording

OC-Cayman’s agreements with the WAC to operate and maintain the North Sound and North Side Water Works plants were originally scheduled to expire on July 1, 2026. The agreements have been extended through March 31, 2027. Revenue recognized under the North Sound and North Side Water Works agreements for the six months ended June 30, 2026 was $609,601 and $801,023, respectively.

Current wording

OC-Cayman’s agreements with the WAC to operate and maintain the North Sound and North Side Water Works plants were originally scheduled to expire on July 1, 2026. The agreements have been extended through March 31, 2027. Revenue recognized under the North Sound and North Side Water Works agreements for the nine months ended September 30, 2026 was $924,923 and $1,226,801, respectively. WAC is presently conducting a formal bid process for the granting of a new contract for the upgrade and operations and maintenance of these plants for ten years.

Previous wording

Services segment revenue increased to $22,836,917 for 2026 from $21,526,470 for 2025. Construction revenue increased to $7,439,180 for 2026 as compared to $5,044,167 for 2025 due to incremental revenue generated by a project in Colorado and a project in California. Revenue generated under O&M contracts decreased to $14,932,460 in 2026 as compared to $15,980,704 in 2025 due to the expiration of contracts with two significant customers of PERC. Design and consulting revenue decreased to $465,277 for 2026 from $501,599 for 2025.

Current wording

Services segment revenue decreased to $32,597,525 for 2026 from $35,815,785 for 2025. Construction revenue was relatively consistent at $10,922,555 for 2026 as compared to $11,404,500 for 2025. Revenue generated under O&M contracts decreased to $21,033,065 in 2026 as compared to $23,695,704 in 2025 due to the expiration of contracts with three significant customers of PERC. Design and consulting revenue remained relatively consistent at $641,905 for 2026 as compared to $715,581 for 2025.

Previous wording

Gross profit for the services segment decreased to $4,723,215 (21% of services revenue) in 2026 from $5,407,710 (25% of services revenue) in 2025 due to the decrease in O&M revenue.

Current wording

Gross profit for the services segment decreased to $6,044,798 (19% of services revenue) in 2026 from $9,252,131 (26% of services revenue) in 2025 due to the decrease in O&M revenue and lower margins earned on construction projects.

Previous wording

G&A expenses for the services segment decreased to $3,260,317 for 2026 as compared to $4,188,380 for 2025 primarily due to a decreases in (i) the provision for credit losses; (ii) professional fees; and (iii) the completion of the amortization of certain intangible assets associated with the acquisition of REC.

Current wording

G&A expenses for the services segment decreased to $4,839,719 for 2026 as compared to $6,143,566 for 2025 primarily due to decreases in employee costs and professional fees; and the completion of the amortization of certain intangible assets associated with the acquisition of REC.

Previous wording

In June 2023, we (through our subsidiary Kalaeloa Desalco) executed a contract with the Honolulu Board of Water Supply (“BWS”) to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii, and since that time we have been engaged in the design and development phase for construction of the plant. We have achieved major project milestones under this phase of the project, including (i) successful pilot plant testing, (ii) receipt of confirmation from BWS that we are able to produce water that is a “reasonable match” to the quality of BWS’s current water supply and that we are able to produce water that causes “no detrimental impact” to the BWS water system or their customers’ assets, and (iii) completion of the plant design.

Current wording

In June 2023, we (through our subsidiary Kalaeloa Desalco) executed a contract with the Honolulu Board of Water Supply to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii. Since that time we have been engaged in the design and development phase for construction of the plant. We have achieved major project milestones under this phase of the project, including (i) successful pilot plant testing, (ii) receipt of confirmation from BWS that we are able to produce water that is a “reasonable match” to the quality of BWS’s current water supply and that we are able to produce water that causes “no detrimental impact” to the BWS water system or their customers’ assets, and (iii) completion of the plant design.

Previous wording

Pursuant to the terms of the contract, we are entitled to extensions of time for performance should delays arise from the failure to obtain required permits or other governmental approvals, provided that we have satisfied certain contractually specified conditions, including the exercise of all reasonable efforts to obtain such permits or other governmental approvals. We believe that we have complied in all material respects with the contractual prerequisites necessary to obtain relief in respect of such delays. BWS has granted change orders to Kalaeloa Desalco to reflect the impact of delays in the project schedule. However, Kalaeloa Desalco may require additional change orders from BWS for pending governmental approvals to further extend the completion date of the plant construction and until such formal change orders, amendments or written confirmations are executed, there can be no assurance as to the timing, scope or terms of any such extensions, or if such extensions will be granted at all.

Current wording

specified conditions, including the exercise of all reasonable efforts to obtain such permits or other governmental approvals. We believe that we have complied in all material respects with the contractual prerequisites necessary to obtain relief in respect of such delays. BWS has granted change orders to Kalaeloa Desalco to reflect the impact of delays in the project schedule. However, Kalaeloa Desalco may require additional change orders from BWS for pending governmental approvals to further extend the completion date of the plant construction and until such formal change orders, amendments or written confirmations are executed, there can be no assurance as to the timing, scope or terms of any such extensions, or if such extensions will be granted at all.