Consolidated Water Co. Ltd.

On May 25, 2021, PERC and OHLA USA, Inc., aka OHL USA Inc. (“OHLA”) entered into a written agreement for professional services (“Subcontract”), pursuant to which PERC agreed to provide certain start-up and commissioning services on the work of improvement known as the Valencia Water Reclamation Plant Advanced Water Treatment Facility in the City of Valencia (“Project”) in exchange for the initial contract price of approximately $495,000. After commencing work on the Project pursuant to the Subcontract in May 2021, PERC performed additional work beyond the original Subcontract scope through 2024 pursuant to written direction and approval from OHLA. This direction was done via formal change orders as well as email directives from OHLA. In total, PERC performed $3,049,299 in directed OHLA work, but has been paid $2,426,537 from OHLA, leaving an unpaid balance of $622,762. Accordingly, on February 13, 2025, PERC filed a lawsuit in Los Angeles County Superior Court against OHLA, its sureties, and the project owner for: (1) Breach of Contract; (2) Reasonable Value; (3) Enforcement of Stop Payment Notice; and (4) Recovery on Payment Bond.

On October 13, 2026, OHLA filed a cross-complaint against PERC for (1) Breach of Contract; (2) Fraudulent Inducement; (3) Intentional Interference with Contractual Relations; (4) Negligence; and (5) Common Count-Money Had and Received. Each of OHLA’s causes of action in the cross-complaint arise from PERC’s separate purchase order with the Project owner to provide post-completion operation and training services. PERC denies the allegations of the cross-complaint and intends to vigorously defend itself in the lawsuit. The cross-complaint does not specify an amount of damages OHLA seeks, but rather a determination based on trial. We cannot presently determine the impact, if any, of the resolution of this litigation on our consolidated financial condition, results of operations or cash flows.