CALIFORNIA WATER SERVICE GROUP

Except as disclosed below, there have been no material changes to the Company’s risk factors set forth in Part I, Item 1A of the 2025 Annual Report on Form 10-K.

Settlement provisions contained in our forward sale agreements subject us to certain risks.

We have entered into forward sale agreements with certain forward purchasers. Each forward purchaser has the right to accelerate the forward sale agreement to which it is a party with respect to all or a portion of the transaction underlying such forward sale agreement and require us to physically settle shares of common stock on a date specified by such forward purchaser under specified conditions. A forward purchaser’s decision to exercise its right to accelerate settlement will be made irrespective of our interests, including our need for capital, and the issuance of shares would result in dilution to our earnings per share.

The forward price we expect to receive upon physical settlement will be subject to adjustment on a daily basis based on a specified floating interest rate factor less a spread. If the specified floating interest rate factor is less than the applicable spread on any day, the interest rate factor will result in a daily reduction of the forward price. In addition, the forward price will be subject to decrease on certain dates by the amount per share of dividends we expect to declare on our common stock during the term of such forward sale agreement.

Except under certain circumstances and conditions, we will generally have the right, in lieu of physical settlement, to elect cash or net share settlement in respect of any or all of the shares subject to a forward sale agreement. If we elect to cash or net share settle, we expect the relevant forward purchaser or one of its affiliates to purchase shares of our common stock in secondary market transactions to unwind its hedge. If the price of our common stock at which these purchases are made exceeds the applicable forward price, we will either pay the forward purchaser an amount in cash equal to such difference or deliver to the forward purchaser a number of shares having a market value equal to such difference, and any such difference could be significant. In addition, these purchases could cause the price of our common stock to increase above the price that would have prevailed in the absence of those purchases (or prevent a decrease in such price), thereby increasing the amount of cash or the number of shares that we may owe such forward purchaser upon settlement.

If we file for or consent to bankruptcy or insolvency proceedings, or a petition is presented for our winding-up or liquidation, any forward sale agreement that is then in effect will automatically terminate and we would not receive the forward price per share in respect of any shares of our common stock not previously settled under such forward agreement.