928340--3/16/2007--CONSOLIDATED_WATER_CO

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The British Virgin Islands government has asserted a purported right of ownership of OC-BVI s Baughers Bay plant. If this right is found to be enforceable and is exercised by the government, OC-BVI will lose ownership of the Baughers Bay plant. We do not have sole control over our affiliate, OC-BVI. A divergence of our interests and the interests of OC-BVI s other voting shareholder may adversely affect the operations of OC-BVI and in turn decrease the value of our investment in OC-BVI. The profitability of our plants is dependent upon our ability to accurately estimate the costs of their construction and operation. A significant portion of our consolidated revenues are derived from two customers. A loss of, or a less favorable relationship with either of these customers would adversely affect our results of operations. If OC-BVI does not obtain a customer to purchase water to be produced at its Bar Bay plant currently under construction, it may not be able to recover the cost of its investment in the plant, which could adversely affect its operations and in turn decrease the value of our investment in OC-BVI. Our operations are affected by tourism and are subject to seasonal fluctuations which could affect demand for our water and impact our revenues and results of operations. We may have difficulty accomplishing our growth strategy within and outside of our current operating areas Continued production shortfalls under our Windsor supply contract could result in further rate decreases or cancellation of the contract. Our operations could be harmed by hurricanes or tropical storms. Contamination of our processed water may cause disruption in our services and adversely affect our revenues Potential government decisions, actions and regulations could negatively affect our operations. The rates we charge our retail customers in the Cayman Islands are subject to regulation. If we are unable to obtain government approval of our requests for rate increases, or if approved rate increases are untimely or inadequate to cover our projected expenses, our results of operations may be adversely affected. We rely on the efforts of key employees. Our failure to retain these employees could adversely affect our results of operations. We are exposed to credit risk through our relationships with several customers and our affiliate. We are exposed to the risk of variations in currency exchange rates. We may enter new markets in the future in which we do not have a contractual commitment for our products or existing customers. Future sales of our ordinary shares may depress the market price of our ordinary shares We may not pay dividends in the future. If dividends are paid, they may be in lesser amounts than past dividends Service of process and enforcement of legal proceedings commenced against us in the United States may be difficult to obtain. Low trading volume of our stock may limit your ability to sell your shares at or above the price you pay for them. Competition may threaten the sustainability and growth of our current operations and impede the expansion of our operations into new areas. We are subject to anti-takeover measures that may discourage, delay or prevent changes of control of Consolidated Water Co. Ltd.

Full 10-K form ▸

928340--3/16/2007--CONSOLIDATED_WATER_CO_LTD