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; ● 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 2025 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. 26 Table of Contents Goodwill and Intangible Assets ​ Goodwill represents the excess cost of an acquired business over the fair value of the assets and liabilities of the acquired business as of the date of acquisition. 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 2025, we elected to assess qualitative factors to determine whether it was necessary to perform quantitative goodwill impairment testing 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 information. Based upon this qualitative assessment, we determined that it is more likely than not that the fair values of our reporting units exceeded their carrying values as of December 31, 2025. In July 2021, a major customer communicated to Aerex that its purchases of a specialized product from Aerex in 2022 and subsequent years would be at substantially reduced annual amounts, as compared to the amounts it had purchased from Aerex in prior years. As a result, our updated sales estimate for this customer based on this new information was substantially below the sales we anticipated to this customer for 2022 and subsequent years that we used in the discounted cash flow projections we prepared for purposes of testing our manufacturing reporting unit’s goodwill for possible impairment as of December 31, 2020. 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 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. 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. 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 27 Table of Contents 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 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. 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. ​ Material Development and Entry into a Material Agreement 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. 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 1990 License expired on January 31, 2018, and from that date until February 18, 2025, Cayman Water continued to operate under the terms of the 1990 License, treating such terms as operative notwithstanding the expiration of the express extension. On February 18, 2025, Cayman Water received a concession from the Cayman Islands government that authorized and maintained the terms of the 1990 License until a new license was negotiated and enacted. In 2016, the Cayman Islands government passed legislation creating the Utility Regulation and Competition Office (“OfReg”), which is an independent and accountable regulatory body charged with protecting the rights of consumers, encouraging affordable utility services and promoting competition. Supplemental legislation passed in April 2017 transferred responsibility for the economic regulation of the water utility sector, including the negotiations with the Company for a new retail license, to OfReg. We began negotiations with OfReg in 2017, which negotiations continued until the issuance of the License (as defined below). 28 Table of Contents We have previously disclosed that OfReg and its predecessor informed us during the negotiations that the Cayman Islands government sought to restructure the terms of the license in a manner that could significantly reduce the operating income and cash flows we have historically generated from the 1990 License. On June 18, 2026, OfReg notified Cayman Water that, at a meeting held on June 11, 2026, the OfReg Board of Directors had approved the issuance to Cayman Water of a new license (the “License”) to produce and distribute potable water within its licensed service area (the “License Area”). The License has a stated commencement date of August 1, 2026 (the “License Date”) and, subject to its terms and conditions, continues for a period of 25 years from the License Date. The License establishes a long-term regulatory framework for our retail water operations in the License Area following an extended period of uncertainty and negotiations with OfReg. Subject to the terms and conditions of the License, Cayman Water has the exclusive right to produce, distribute and sell potable water within the License Area during the license term, and the License requires Cayman Water to carry on the business normally conducted by a water utility in the License Area throughout the term of the License, using its best efforts to maintain sufficient water production capacities and distribution capabilities, and to plan for, serve and extend service to applicants in the License Area, subject to the terms of the License. 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. 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. The License contains customary regulatory provisions for Cayman Water’s water utility operations, including provisions relating to renewal, modification, assignability, revocation or suspension, accounts and financial reporting, regulatory access to information, design and construction of new works, water quality, metering, consumer protection, business continuity planning, dispute resolution and notices. The License does not renew automatically upon expiration of its term, but Cayman Water may apply to OfReg for renewal not earlier than 36 months and not later than 24 months prior to the expiration of the term. Neither the License nor any obligations or benefits conferred by it may be assigned or transferred in whole or in part without OfReg’s prior written consent. The License may be modified by written consent of OfReg and Cayman Water, subject to any special conditions concerning modification set forth in the License. The License also provides that OfReg must, immediately upon the direction of the Cabinet of the Cayman Islands, modify the License for reasons of security, public interest or health of the general population of the Cayman Islands, with or without Cayman Water’s agreement, and establishes procedures for other modifications proposed by OfReg. 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 29 Table of Contents 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. 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. 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 included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2025 (“2025 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 2025 Form 10-K. Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 Consolidated Results 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. ​ The following discussion and analysis of our consolidated results of operations and results of operations by segment for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 relates only to our continuing operations. ​ 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. 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. General and administrative (“G&A”) expenses on a consolidated basis decreased to $7,243,022 for 2026 as compared to $7,580,238 for 2025. The decrease was primarily due to a decrease in employee costs of approximately $206,000 from 2025 to 2026, as well as slight decreases in various other expenses. 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. 30 Table of Contents Results by Segment Retail Segment: The retail segment generated $3,980,067 in income from operations for 2026 as compared to $3,877,491 for 2025. Revenue generated by retail water operations remained consistent at $8,660,947 for 2026 as compared to $8,638,026 for 2025 despite an overall decrease of approximately 2% in the volume of water sold from 2025 to 2026. The impact of this drop in the volume of water sold on 2026 revenue was mitigated by (i) an increase in the rate charged to a major non-potable water customer; and (ii) an increase in the volume of water sold to this major non-potable water customer from 2025 to 2026. Retail segment gross profit remained relatively consistent at $4,854,977 (56% of retail revenue) for 2026 as compared to $4,862,268 (56% of retail revenue) for 2025. Retail G&A expenses decreased to $899,499 for 2026 compared to $985,617 for 2025 primarily due to incremental information technology expenses incurred in 2025. Bulk Segment: The bulk segment contributed $2,871,669 and $2,141,159 to our income from operations for 2026 and 2025, respectively. 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. ​ Gross profit for our bulk segment increased to $3,211,816 (32% of bulk revenue) for 2026 as compared to $2,535,909 (31% of bulk revenue) for 2025. The improvement in bulk segment gross profit reflects maintenance expenses that were approximately $302,000 lower in 2026 than in 2025 and decreases in other operating expenses. Bulk segment G&A expenses also remained relatively consistent at $340,147 for 2026 as compared to $394,750 for 2025. 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. Services Segment: The services segment generated $424,436 and $1,429,454 in income from operations for 2026 and 2025. 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. ​ Gross profit for the services segment decreased to $1,899,027 (16% of services revenue) in 2026 from $3,391,319 (30% of services revenue) in 2025 due to the decreases in O&M and design and consulting revenue. ​ G&A expenses for the services segment decreased to $1,474,321 for 2026 as compared to $1,993,042 for 2025 primarily due to a decrease in headcount that lowered employee costs by approximately $322,000. 31 Table of Contents 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. We are required to obtain federal, state, regional and local permits, licenses and other government approvals as a condition to commencing and completing construction and initiating operations. The permitting process for a project of this scale and complexity is inherently iterative and subject to review by multiple regulatory authorities, public comment procedures and, in certain instances, interagency coordination. During the year ended December 31, 2025, and continuing through the time of the filing of this Quarterly Report on Form 10-Q, we and BWS have experienced delays in obtaining certain required permits and related governmental approvals. These delays have resulted in a corresponding deferral of certain project milestones and a delay in the commencement of plant construction. 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. The ultimate duration and economic burden of the permitting process remain subject to factors outside of our control, including the workload and resource constraints of applicable regulatory authorities, the timing and outcome of required public processes, the resolution of technical comments or requests for supplemental information and the potential for administrative or judicial challenges. To the extent that Kalaeloa Desalco does not receive the anticipated extensions of time, or if the extensions granted are insufficient to accommodate the full period of delay, Kalaeloa Desalco could be exposed to contractual remedies available to the BWS, which may include the assessment of liquidated damages, the withholding of milestone payments, or termination of the contract. 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. ​ Although we do not currently expect the permitting delays to result in a material adverse effect on our consolidated financial position, the deferral of construction activities has shifted anticipated revenue recognition and associated cash flows related to the Hawaii desalination plant project into future periods. We will continue to assess the impact of these developments on our estimates of total project costs, timing of performance obligations and variable consideration, and will update our disclosures as appropriate in future periodic or current reports. Manufacturing Segment: The manufacturing segment generated $478,497 and $1,511,937 in income from operations for 2026 and 2025. Manufacturing revenue decreased to $2,689,782 for 2026, as compared to $5,230,035 for 2025. The decrease in manufacturing revenue for 2026 resulted from a decrease in the total dollar amount of purchase orders. We believe, based 32 Table of Contents 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. 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. G&A expenses for the manufacturing segment remained relatively consistent at $519,072 for 2026 as compared to $530,552 for 2025. ​ Corporate Segment: ​ 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. ​ Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Consolidated Results 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. ​ 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. ​ 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. 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. 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. 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. Results by Segment Retail Segment: The retail segment generated $7,935,607 in income from operations for 2026 as compared to $8,823,934 for 2025. 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. 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. 33 Table of Contents Retail G&A expenses remained consistent at $1,802,106 for 2026 as compared to $1,774,429 for 2025. Bulk Segment: The bulk segment contributed $5,476,229 and $4,622,705 to our income from operations for 2026 and 2025, respectively. 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. ​ 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. Bulk segment G&A expenses also remained consistent at $744,370 for 2026 as compared to $740,831 for 2025. 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. Services Segment: The services segment generated $1,482,177 and $1,248,966 in income from operations for 2026 and 2025. 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. ​ 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. ​ 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. 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. We are required to obtain federal, state, regional and local permits, licenses and other government approvals as a condition to commencing and completing construction and initiating operations. The permitting process for a project of this scale and complexity is inherently iterative and subject to review by multiple regulatory authorities, public comment procedures and, in certain instances, interagency coordination. During the year ended December 31, 2025, and continuing through the time of the filing of this Quarterly Report on Form 10-Q, we and BWS have experienced delays in obtaining certain required permits and related governmental approvals. These delays have resulted in a corresponding deferral of certain project milestones and a delay in the commencement of plant construction. 34 Table of Contents 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. The ultimate duration and economic burden of the permitting process remain subject to factors outside of our control, including the workload and resource constraints of applicable regulatory authorities, the timing and outcome of required public processes, the resolution of technical comments or requests for supplemental information and the potential for administrative or judicial challenges. To the extent that Kalaeloa Desalco does not receive the anticipated extensions of time, or if the extensions granted are insufficient to accommodate the full period of delay, Kalaeloa Desalco could be exposed to contractual remedies available to the BWS, which may include the assessment of liquidated damages, the withholding of milestone payments, or termination of the contract. 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. ​ Although we do not currently expect the permitting delays to result in a material adverse effect on our consolidated financial position, the deferral of construction activities has shifted anticipated revenue recognition and associated cash flows related to the Hawaii desalination plant project into future periods. We will continue to assess the impact of these developments on our estimates of total project costs, timing of performance obligations and variable consideration, and will update our disclosures as appropriate in future periodic or current reports. Manufacturing Segment: The manufacturing segment generated $140,730 and $2,604,849 in income from operations for 2026 and 2025. 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. Manufacturing gross profit decreased to $1,145,710 (28% of manufacturing revenue) for 2026 as compared to $3,799,479 (34% of manufacturing revenue) for 2025 due to the decrease in revenue. G&A expenses for the manufacturing segment decreased to $1,004,980 for 2026 as compared to $1,194,630 for 2025 due primarily to a decrease in the provision for credit losses. ​ Corporate Segment: ​ Corporate G&A expenses increased to $7,850,317 for 2026 as compared to $7,405,927 for 2025 due to an increase in directors’ fees and expenses and smaller increases in various other expenses. ​ 35 Table of Contents FINANCIAL CONDITION The significant changes in the components of our condensed consolidated balance sheet as of June 30, 2026 as compared to December 31, 2025 (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 $4.1 million primarily due to the $1.9 million decrease in CW-Bahamas’ accounts receivable and a $1.7 million decrease in PERC accounts receivable. Property, plant and equipment, net, increased by approximately $4.3 million primarily due to a transfer from construction in progress upon the completion of the CW-Bahamas’ Cat Island plants. Construction in progress decreased by approximately $2.6 million, primarily due to a $5.3 million transfer of the Cat Island plants to property, plant and equipment, offset by a $2.3 million increase for work underway on a Cayman Islands project. LIQUIDITY AND CAPITAL RESOURCES Certain transfers from our bank accounts in The Bahamas to our bank accounts in other countries require the approval of the Central Bank of The Bahamas. ​ The Cayman Islands does not have a tax treaty with the United States. 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 will be required to pay a withholding tax of 30% on the amount of any such funds transferred. ​ Liquidity Position Our projected liquidity requirements for the balance of 2026 include capital expenditures for our existing operations of approximately $4.8 million. We paid approximately $2.3 million for dividends in July 2026. Our liquidity requirements may also include future quarterly dividends, if such dividends are declared by our Board. ​ As of June 30, 2026, we had cash and cash equivalents of $132.6 million and working capital of $144.6 million. With the exception of the liquidity matter relating to CW-Bahamas that is discussed in the paragraphs that follow, we are not presently aware of anything that would lead us to believe that we will not have sufficient liquidity to meet our needs. ​ CW-Bahamas Liquidity CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $18.8 million and $20.7 million as of June 30, 2026 and December 31, 2025, respectively. Approximately 64% and 71% 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. ​ 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 June 30, 2026, or prior periods. ​ We continue to be in frequent contact with officials of The Bahamas government, who continue to express their intention to significantly reduce CW-Bahamas’ delinquent accounts receivable balances. However, we are unable to determine when or if such reduction will occur. ​ In a report dated April 30, 2026, Moody’s Investor Services (“Moody’s”) upgraded The Bahamas’ long-term issuer and senior unsecured ratings to Ba3 from B1. Moody’s also raised The Bahamas’ local currency ceiling to Baa2 from Baa3 36 Table of Contents and its foreign currency ceiling to Baa3 from Ba1. Based upon our review of this Moody’s correspondence, we continue to believe that no material allowance for credit losses is required for CW-Bahamas’ accounts receivable from the WSC. ​ If CW-Bahamas is unable to collect a sufficient portion of its delinquent accounts receivable, one or more of the following events may occur: (i) CW-Bahamas may not have sufficient liquidity to meet its obligations; (ii) we may be required to cease the recognition of revenue on CW-Bahamas’ water supply agreements with the WSC; and (iii) we may be required to significantly increase our 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. ​ Discussion of Cash Flows for the Six Months Ended June 30, 2026 Our cash and cash equivalents increased to $132,629,006 as of June 30, 2026 from $123,788,390 as of December 31, 2025. Cash Flows from Operating Activities Net cash provided by our operating activities was $18,571,275. This net cash reflects the net income generated for the six months ended June 30, 2026 of $8,035,569 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 $3,532,983, a decrease in accounts receivable of $4,173,373, a decrease in prepaid expenses and other assets of $890,957, and an increase in accounts payable, accrued expenses and other current liabilities of $1,409,231. Cash Flows from Investing Activities Net cash used in our investing activities was $5,133,145 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 $4,565,343, almost all of which related to the payment of dividends. Material Commitments, Expenditures and Contingencies CW-Bahamas Supply Guarantees Our contracts to supply water to the WSC from our Blue Hills, Windsor and Cat Island 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 contracts. 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. The Cat Island contract expires in 2041 and requires the two plants located in Bennett’s Harbour and New Bight to deliver 504,000 gallons of water each week per plant. ​ Adoption of New Accounting Standards None. 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 on our financial statements. 37 Table of Contents ​ Dividends ● On January 30, 2026, we paid a dividend of $0.14 to shareholders of record on January 2, 2026. ● On April 30, 2026, we paid a dividend of $0.14 to shareholders of record on April 1, 2026. ● On June 2, 2026, our Board declared a dividend of $0.14 payable on July 31, 2026 to shareholders of record on July 1, 2026. ​ 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 flows, capital requirements and other factors our Board of Directors deems relevant in determining the amount and timing of such dividends. ​ Dividend Reinvestment and Common Stock Purchase Plan This plan is available to our shareholders, who may reinvest all or a portion of their common stock dividends into shares of common stock at prevailing market prices and may also invest optional cash payments to purchase additional shares at prevailing market prices as part of this plan. ​ Impact of Inflation Under the terms of our bulk water sales agreements in the Cayman Islands, The Bahamas and the British Virgin Islands, our water rates are automatically adjusted for inflation on an annual basis. Therefore, the impact of inflation on our gross profit from these revenue sources, measured in consistent dollars, historically has not been material. We had not increased the water rates for Cayman Water since January 2018 (despite the inflation that has occurred since that date) due to the pendency of our negotiations with OfReg for a new retail license. Under the License issued by OfReg in June 2026 and effective as of the License Date of August 1, 2026, Cayman Water’s base rates are subject to annual adjustment beginning 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. Denial by OfReg of any requested rate adjustment, or approval of an adjustment 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. ​ While our operations and maintenance contracts are generally adjusted for inflation on an annual basis, such adjustment for many of these contracts is capped at 3% annually. ​ Kalaeloa Desalco has signed a contract with the Honolulu Board of Water Supply pursuant to which it presently expects to construct and operate a 1.7 million gallons per day seawater reverse osmosis desalination plant in Oahu, Hawaii. Approximately 80% of the approximate $148 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. ​ In periods of high inflation, our consolidated results of operations and cash flows could be materially adversely affected. ​