Item 1.01Entry into a Material Definitive Agreement.
As previously reported, in October 2022, Consolidated Water Co. Ltd. (the
"Company"), through its wholly-owned subsidiary, Consolidated Water U.S.
Holdings, Inc. ("CW-Holdings"), exercised its option to purchase shares
constituting the remaining 39% interest (the "Remaining Interest") in PERC Water
Corporation ("PERC") not owned by CW-Holdings at a price to be determined by an
independent valuation.
On January 4, 2023, CW-Holdings entered into a stock purchase agreement (the
"Purchase Agreement") with Johan Perslow, Nathan Owen, Steven Owen and Colton
Schmidt (collectively, the "Sellers"), pursuant to which CW-Holdings acquired
the Remaining Interest in exchange for approximately $2.44 million in cash and
368,383 shares of the Company's common stock, having a value of approximately
$5.36 million based upon the opening trading price of the Company's common stock
on The Nasdaq Global Market on the date of the transaction. After giving effect
to the transactions contemplated by the Purchase Agreement, CW-Holdings owns
100% of the outstanding capital stock of PERC.
PERC designs, builds, sells, operates and manages water, wastewater and water
reuse infrastructure. PERC generated approximately $17.8 million and $13.4
million in revenues over the nine months ended September 30, 2022 and the twelve
months ended December 31, 2021, respectively.
The Purchase Agreement is provided to give investors information regarding the
agreement terms. It is not provided to give investors factual information about
the Company, CW-Holdings or any other parties thereto. In addition, the
representations, warranties and covenants contained in the Purchase Agreement
were made only for purposes of those agreements and as of specific dates, were
solely for the benefit of the parties to the Purchase Agreement, and may be
subject to limitations agreed by the contracting parties, including being
qualified by disclosures exchanged between the parties in connection with the
execution of the Purchase Agreement. The representations and warranties may have
been made for the purposes of allocating contractual risk between the parties to
the agreement instead of establishing these matters as facts, and may be subject
to standards of materiality applicable to the contracting parties that differ
from those applicable to investors. Investors are not third-party beneficiaries
under the Purchase Agreement and should not view the representations, warranties
and covenants or any descriptions thereof as characterizations of the actual
state of facts or conditions of the Company.
Item 2.01Completion of Acquisition or Disposition of Assets.
To the extent required by Item 2.01 of Form 8-K, the information relating to the
consummation of the transaction contained or incorporated elsewhere in this
Current Report on Form 8-K is incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities.
To the extent required by Item 3.02 of Form 8-K, the information relating to the
consummation of the transaction contained or incorporated elsewhere in this
Current Report on Form 8-K is incorporated by reference herein. The issuance of
the common stock was exempt from registration under Section 4(a)(2) of the
Securities Act of 1933, as amended. The Sellers are knowledgeable,
sophisticated and experienced in making investment decisions of this kind and
received adequate information about the Company or had adequate access,
including through the their business relationship with the Company, to
information about the Company.
Item 7.01Regulation FD Disclosure.
On January 9, 2023, the Company issued a press release announcing the
consummation of the transaction described in Item 1.01, a copy of which is
attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated
herein by reference.
The information in this Item 7.01, including Exhibit 99.1, is furnished and
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to liabilities under that
section, and shall not be deemed to be incorporated by reference into the
filings of the Company under the Securities Act of 1933, as amended, regardless
of any general incorporation language in those filings.
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Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No. Description
10.1 Stock Purchase Agreement dated January 4, 2023 among
Consolidated Water U.S. Holdings, Inc. and the Sellers.
99.1 Press Release dated January 9, 2023.
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