gwrs-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_____________________________________________________________

FORM 10-Q

_____________________________________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 001-37756

______________________________________________________________

Global Water Resources, Inc.

(Exact Name of Registrant as Specified in its Charter)

______________________________________________________________

Delaware

90-0632193

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

21410 N. 19th Avenue #220

Phoenix,

Arizona

85027

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (480) 360-7775

Securities registered pursuant to Section 12(b) of the Act:

______________________________________________________________


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	GWRS	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

As of May 13, 2025, the registrant had 27,450,978 shares of common stock, $0.01 par value per share, outstanding.

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TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			5
ITEM 1. Financial Statements (Unaudited)			5
Condensed Consolidated Balance Sheets (unaudited)			5
Condensed Consolidated Statements of Operations (unaudited)			6
Condensed Consolidated Statements of Shareholders’ Equity (unaudited)			7
Condensed Consolidated Statements of Cash Flows (unaudited)			8
Notes to the Condensed Consolidated Financial Statements			9
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
ITEM 3. Qualitative and Quantitative Disclosures About Market Risk			30
ITEM 4. Controls and Procedures			30
PART II. OTHER INFORMATION			31
ITEM 1. Legal Proceedings			31
ITEM 1A. Risk Factors			31
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			31
ITEM 3. Defaults Upon Senior Securities			31
ITEM 4. Mine Safety Disclosures			31
ITEM 5. Other Information			31
ITEM 6. Exhibits			32
Signatures			33

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DEFINED TERMS

The following is a list of frequently used abbreviations or acronyms that are found in this report:


The Company’s Utilities
GW-Santa Cruz			Global Water - Santa Cruz Water Company, Inc.
GW-Palo Verde			Global Water - Palo Verde Utilities Company, Inc.
GW-Farmers			Global Water - Farmers Water Company, Inc.
GW-Hassayampa			Global Water - Hassayampa Utilities Company, Inc.
GW-Belmont			Global Water - Belmont Water Company, Inc.
GW-Turner			Global Water - Turner Ranches Irrigation, Inc.
GW-Saguaro			Global Water - Saguaro District Water Company, Inc. (formerly Global Water - Las Quintas Serenas Water Company, Inc.)
GW-Ocotillo			Global Water - Ocotillo Water Company, Inc. (formerly Global Water - 2024 Acquisition A, Inc.)
Abbreviations and Other
ACC			Arizona Corporation Commission
ADEQ			Arizona Department of Environmental Quality
ADWR			Arizona Department of Water Resources
AFUDC			Allowance for funds utilized during construction
AIAC			Advances in Aid of Construction
ALJ			Administrative Law Judge

ASU			Accounting Standards Update

CC&N			Certificate of Convenience & Necessity
CIAC			Contributions in Aid of Construction
CODM			Chief operating decision maker
Company (we, us, our, “GWRI”)			Global Water Resources, Inc.
CP Water			CP Water Company


EPA			United States Environmental Protection Agency
EPS			Earnings per share
FASB			Financial Accounting Standards Board
GAAP			Accounting principles generally accepted in the United States of America

HUF			Hook-up fee
ICFA			Infrastructure coordination and financing agreement

IT			Information technology
MCL			Maximum contaminant level

Northern Trust			The Northern Trust Company, an Illinois banking corporation
NPDWR			National Primary Drinking Water Regulations
PFAS			Per- and polyfluoroalkyl substances
Revolver			Revolving credit facility with Northern Trust
ROO			Recommended Opinion and Order
RSA			Restricted stock award
RSU			Restricted stock unit

RUCO			The Residential Utility Consumer Office, an office representing the interests of residential utility ratepayers
SEC			Securities and Exchange Commission



WIFA			Water Infrastructure Finance Authority of Arizona

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Index to Consolidated Financial Statements


Condensed Consolidated Balance Sheets (unaudited)			5
Condensed Consolidated Statements of Operations (unaudited)			6
Condensed Consolidated Statements of Shareholders’ Equity (unaudited)			7
Condensed Consolidated Statements of Cash Flows (unaudited)			8
Notes to the Condensed Consolidated Financial Statements			9
1. Description of Business, Basis of Presentation, Significant Accounting Policies, and Recent Accounting Pronouncements			9
2. Acquisitions			9
3. Regulatory Matters			10
4. Revenue Recognition			11
5. Earnings Per Share			12
6. Utility Plant			12
7. Taxes, prepaid expenses and other current assets			13
8. Goodwill			13
9. Equity			13
10. Debt			13
11. Accrued Expenses and Other Current Liabilities			14
12. Fair Value			14
13. Income Taxes			15
14. Share-based Compensation			15
15. Transactions With Related Parties			15
16. Commitments and Contingencies			15
17. Business Segment Information			16
18. Other, Net			18
19. Supplemental Cash Flow Information			18

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements (Unaudited)

GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Balance Sheets (unaudited)

(in thousands, except share and per share amounts)


	March 31, 2025		December 31, 2024
Assets

Utility Plant	$	535,355	$	512,993
Less accumulated depreciation	(157,110)		(153,614)
Net utility plant	378,245		359,379
Current Assets
Cash and cash equivalents	31,467		9,047
Accounts receivable, net of allowance for credit losses of $195 and $163, respectively	3,300		3,233
Unbilled revenue	3,206		3,109
Taxes, prepaid expenses and other current assets	1,919		4,080
Total current assets	39,892		19,469
Other Assets
Goodwill	6,527		9,486
Intangible assets, net	8,427		8,427
Regulatory assets	7,023		4,032
Restricted cash	1,708		2,109
Right-of-use assets	2,017		2,157
Other noncurrent assets	79		78

Total other assets	25,781		26,289
Total Assets	$	443,918	$	405,137
Capitalization and Liabilities
Capitalization
Common stock, $0.01 par value, 60,000,000 shares authorized; 27,796,899 and 24,570,994 shares issued, respectively	$	272	$	240
Treasury stock, 345,921 and 344,978 shares, respectively	(2)		(2)
Additional paid-in capital	76,946		47,366
Retained earnings	—		—
Total shareholders’ equity	77,216		47,604
Long-term debt, net	118,876		118,518
Total Capitalization	196,092		166,122
Current Liabilities
Accounts payable	3,823		2,051
Customer and meter deposits	1,633		1,609
Long-term debt, current portion	3,561		3,926
Leases, current portion	911		871
Accrued expenses and other current liabilities	15,796		13,801
Total current liabilities	25,724		22,258
Other Liabilities

Long-term lease liabilities	1,265		1,450
Deferred revenue - ICFA	21,559		21,517
Regulatory liabilities	5,372		5,386
Advances in aid of construction	131,790		126,467
Contributions in aid of construction, net	36,877		36,834
Deferred income tax liabilities, net	9,860		9,698
Other noncurrent liabilities	15,379		15,405
Total other liabilities	222,102		216,757
Commitments and contingencies (Refer to Note 16)
Total Capitalization and Liabilities	$	443,918	$	405,137

See accompanying notes to the condensed consolidated financial statements (unaudited)

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GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Statements of Operations (unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended March 31,
		2025		2024
Revenue
Water service		$	5,980	$	5,226
Wastewater and recycled water service		6,477		6,384

Total revenue		12,457		11,610
Operating Expenses
Operations and maintenance		3,687		3,284
General and administrative		4,187		4,125
Depreciation and amortization		3,328		2,934
Total operating expenses		11,202		10,343
Operating Income		1,255		1,267
Other Income (Expense)
Interest income		99		238
Interest expense		(1,478)		(1,566)
Other, net		898		1,002
Total other expense		(481)		(326)
Income Before Income Taxes		774		941
Income Tax Expense		(183)		(250)
Net Income		$	591	$	691

Basic earnings per common share		$	0.02	$	0.03
Diluted earnings per common share		$	0.02	$	0.03
Dividends declared per common share		$	0.08	$	0.08

Weighted average number of common shares used in the determination of:
Basic		24,370,052		24,175,699
Diluted		24,434,283		24,295,067

See accompanying notes to the condensed consolidated financial statements (unaudited)

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GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Statements of Shareholders’ Equity (unaudited)

(in thousands, except share and per share amounts)


	Common Stock Shares	Common Stock		Treasury Stock Shares	Treasury Stock		Additional Paid-in Capital		Retained Earnings		Total Equity
Balance as of December 31, 2024	24,570,994	$	240	(344,978)	$	(2)	$	47,366	$	—	$	47,604
Dividend declared $0.08 per share	—	—		—	—		(1,332)		(591)		(1,923)
Issuance of common stock, net	3,220,000	32		—	—		30,751		—		30,783

Share-based compensation	5,905	—		(943)	—		161		—		161
Net income	—	—		—	—		—		591		591
Balance as of March 31, 2025	27,796,899	$	272	(345,921)	$	(2)	$	76,946	$	—	$	77,216



















Balance as of December 31, 2023	24,492,918	$	240	(317,677)	$	(2)	$	47,585	$	797	$	48,620
Dividend declared $0.08 per share	—	—		—	—		(1,128)		(691)		(1,819)

Share option exercise	5,277	—		(4,405)	—		198		—		198

Net income	—	—		—	—		—		691		691
Balance as of March 31, 2024	24,498,195	$	240	(322,082)	$	(2)	$	46,655	$	797	$	47,690

See accompanying notes to the condensed consolidated financial statements (unaudited)

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GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Statements of Cash Flows (unaudited)

(in thousands)


	Three Months Ended March 31,
	2025		2024
Cash Flows from Operating Activities:
Net income	$	591	$	691
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,328		2,934
Share-based compensation	174		275
Deferred income tax expense	183		252


Operating lease expense	108		90
Other adjustments	(224)		36
Changes in assets and liabilities

Accounts receivable and other current assets	1,967		714
Accounts payable and other current liabilities	1,405		1,380
Other noncurrent assets	(67)		(17)
Other noncurrent liabilities	12		1,713
Net cash provided by operating activities	7,477		8,068
Cash Flows from Investing Activities:
Capital expenditures	(15,216)		(5,761)


Other cash flows used in investing activities	—		(4)
Net cash used in investing activities	(15,216)		(5,765)
Cash Flows from Financing Activities:
Dividends paid	(1,841)		(1,819)
Advances and contributions in aid of construction	725		372






Line of credit repayments	—		(2,315)
Loan borrowings	—		20,000

Issuance of common stock, net of issuance costs	31,041		—
Financing costs of debt and equity transactions	(34)		(370)






Other financing activities	(133)		(62)
Net cash provided by financing activities	29,758		15,806
Increase in cash, cash equivalents, and restricted cash	22,019		18,109
Cash, cash equivalents, and restricted cash — Beginning of period	11,156		4,763
Cash, cash equivalents, and restricted cash — End of period	$	33,175	$	22,872

See accompanying notes to the condensed consolidated financial statements (unaudited)

Supplemental disclosure of cash flow information:


	Three months ended March 31,
	2025		2024
Cash and cash equivalents	$	31,467	$	20,655
Restricted cash	1,708		2,217
Total cash, cash equivalents, and restricted cash	$	33,175	$	22,872

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GLOBAL WATER RESOURCES, INC.

Notes to the Condensed Consolidated Financial Statements (unaudited)

1. Description of Business, Basis of Presentation, Significant Accounting Policies, and Recent Accounting Pronouncements

Basis of Presentation and Principles of Consolidation

The Company’s condensed consolidated financial statements (unaudited) and related disclosures as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These financial statements follow the same accounting policies and methods of their application as the Company’s most recent annual consolidated financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. In the Company’s opinion, these financial statements include all normal and recurring adjustments necessary for the fair statement of the results for the interim period. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year, due to the seasonality of our business.

The Company prepares its financial statements in accordance with the rules and regulations of the SEC. The preparation of the financial statements in conformity with GAAP requires management 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 financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impacts this amendment will have on its income tax disclosures and intends to adopt the pronouncement for its Annual Report on Form 10-K for the year ending December 31, 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). This pronouncement requires disaggregated disclosure of income statement expenses for public business entities. In January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of this standard. This standard requires disclosure in tabular format of disaggregation of relevant expense captions presented on the income statement by certain natural expense categories with certain related qualitative disclosures within the notes to the financial statements. The ASU does not change the expense captions an entity presents on the income statement. The standard is effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impacts this amendment will have on its required disclosures.

2. Acquisitions

Asset Purchase Agreement with City of Tucson

Effective April 25, 2024, GW-Ocotillo, a wholly owned subsidiary of the Company, entered into an asset purchase agreement with the City of Tucson, pursuant to which GW-Ocotillo agreed to acquire seven isolated public water systems from the City of Tucson in an all-cash transaction for a purchase price of $8.4 million. The subject public water systems are located in and around unincorporated Pima County and serve approximately 2,200 water service connections. GW-Ocotillo’s application for a CC&N to provide water service to these water systems was approved by the ACC on January 22, 2025. The Company expects to complete the acquisition in mid-2025, subject to customary closing conditions. The estimated rate base of the seven water systems is approximately $7.8 million.

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3. Regulatory Matters

Recent ACC Rulings and Activity

2024 GW-Farmers Rate Case

On June 27, 2024, GW-Farmers filed a rate case application with the ACC for increased water rates based on a 2023 test year, with updates for changes in post-test year plant through December 31, 2024. On January 10, 2025, GW-Farmers filed with the ACC a unanimous settlement agreement between GW-Farmers, RUCO and the Utilities Division Staff of the ACC, and on March 26, 2025, the ALJ issued a ROO, which recommended approval of the settlement agreement. On April 29, 2025, the ACC approved GW-Farmers’ rate case application in Decision No. 80695. Among other approvals, Decision No. 80695 approved an increase in GW-Farmers’ annual revenue requirement of $1.1 million and a return on equity of 9.6%, with increased rates to be phased-in over three periods, starting with 50% of the increase effective on May 1, 2025, and subsequent 25% portions of the increase effective November 1, 2025 and May 1, 2026. In addition to the rate increase, Decision No. 80695 also approved a deferral of the recovery of an acquisition premium of approximately $3 million related to the Company’s acquisition of GW-Farmers, which we recorded as of March 31, 2025. The Decision calls for the acquisition premium to be recovered in a future rate case, subject to the GW-Farmers utility being found viable by the ACC. Refer to Note 8 – “Goodwill” for additional information.

2025 GW-Santa Cruz and GW-Palo Verde Rate Case

On March 5, 2025, GW-Santa Cruz and GW-Palo Verde each filed a general rate case application with the ACC for water and wastewater rates, respectively. The GW-Santa Cruz and GW-Palo Verde rate case is based on a test year ending December 31, 2024, with updates for changes in post-test year plant. A procedural schedule has been set, with testimony and a hearing expected to commence in the fourth quarter of 2025.

Decision No. 79383 - Issued June 20, 2024 - GW-Saguaro Rate Case

On June 20, 2024, the ACC issued Decision No. 79383, which related to each of the rate case applications filed by seven of the Company’s regulated water utilities for increased water rates based on a 2022 test year. Decision No. 79383 approved, among other things, a collective annual revenue increase of approximately $351,000. The approved rates will be phased-in over five periods with the first increase effective July 1, 2024. The subsequent four increases will be effective on January 1 of each subsequent year. The majority of the revenue increase was phased in on January 1, 2025.

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4. Revenue Recognition

Disaggregated Revenue

For the three months ended March 31, 2025 and 2024, disaggregated revenue from contracts with customers by major source and customer class are as follows (in thousands):


	Three Months Ended March 31,
		2025		2024
Regulated revenue
Water Service
Residential		$	4,388	$	4,162
Irrigation		620		367
Commercial		383		328
Multi-family		81		57
Construction		327		153
Other water revenue		181		159
Total water revenue		5,980		5,226
Wastewater and recycled water service
Residential		5,868		5,834
Commercial		287		305
Multi-family		49		39
Recycled water revenue		193		121
Other wastewater revenue		80		85
Total wastewater and recycled water revenue		6,477		6,384
Total regulated revenue		12,457		11,610





Total revenue		$	12,457	$	11,610

Contract Balances

The Company’s contract assets and liabilities consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Contract assets
Accounts receivable, net	$	3,300	$	3,233
Total contract assets	$	3,300	$	3,233
Contract liabilities
Deferred revenue - ICFA	$	21,559	$	21,517


Total contract liabilities	$	21,559	$	21,517

Accounts Receivable and Allowance for Credit Losses

Accounts receivable as of March 31, 2025 and December 31, 2024 consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Billed receivables	$	3,495	$	3,396
Less provision for credit losses	(195)		(163)
Accounts receivable, net	$	3,300	$	3,233

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The following table summarizes the allowance for credit loss activity as of March 31, 2025 and December 31, 2024 (in thousands):


	March 31, 2025		December 31, 2024
Beginning of Period	$	(163)	$	(122)
Credit Loss Expense	(30)		(103)
Write Offs	1		90
Recoveries	(3)		(28)
End of Period	$	(195)	$	(163)

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Deferred revenue - ICFA is recognized as revenue once the obligations specified within the applicable ICFA are met, including construction of sufficient operating capacity to serve the customers for which revenue was deferred. Due to the uncertainty of future events, the Company is unable to estimate when to expect recognition of deferred revenue - ICFA.


	December 31, 2024 Balance		Payments Allocated to Deferred Revenue		Revenue Recognized		March 31, 2025 Balance
Deferred Revenue - ICFA	$	21,517	$	42	$	—	$	21,559

5. Earnings Per Share

Basic EPS in each period of this report were calculated by dividing net income by the weighted-average number of shares during those periods. Diluted EPS includes additional weighted-average common stock equivalents (options and restricted stock awards), if dilutive. A reconciliation of the denominator used in basic and diluted EPS calculations is shown in the following table:


	Three Months Ended March 31,
(In thousands)		2025	2024
Basic weighted average common shares outstanding		24,370	24,176
Effect of dilutive securities:
Option grants		48	80
Restricted stock awards		16	39
Total dilutive securities		64	119
Diluted weighted average common shares outstanding		24,434	24,295
Anti-dilutive shares excluded from earnings per diluted shares		—	—

6. Utility Plant

Utility plant as of March 31, 2025 and December 31, 2024 consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Transmission and distribution plant	$	326,067	$	321,075
Equipment	70,081		67,917
Office buildings and other structures	68,339		67,313
Construction work-in-progress	68,557		54,388
Land	2,311		2,300
Total utility plant	$	535,355	$	512,993

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Depreciation expense related to depreciable property was $3.2 million and $2.9 million for the three months ended March 31, 2025 and 2024, respectively.

7. Taxes, prepaid expenses and other current assets

Taxes, prepaid expenses and other current assets as of March 31, 2025 and December 31, 2024 consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Prepaid expense	$	736	$	648
Buckeye growth premiums receivable	609		738
Prepaid insurance	323		533
Income tax receivable	149		149
ICFA receivable	—		1,871







Other current assets	102		141
Taxes, prepaid expenses and other current assets	$	1,919	$	4,080

8. Goodwill

The Company’s goodwill is related to historical acquisitions. As of March 31, 2025, there were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill subsequent to the acquisitions.

In March 2025, in connection with the 2024 GW-Farmers rate case, the Company reclassified approximately $3.0 million of goodwill to regulatory assets to establish an acquisition premium. Refer to Note 3 – “Regulatory Matters” for additional information.

9. Equity

Public Offering of Common Stock

On March 27, 2025, the Company completed a public offering of 3,220,000 shares of its common stock at a public offering price of $10.00 per share, which included 420,000 shares issued and sold to the underwriters following the exercise in full of their option to purchase additional shares of common stock. Certain existing stockholders, including certain directors and/or their affiliates, purchased an aggregate of 1,439,200 shares of common stock at the public offering price. The public offering resulted in approximately $32.2 million of gross proceeds or $30.8 million of net proceeds, after deducting underwriting discounts, commissions and offering expenses.

10. Debt

Revolver

The Company maintains a revolving credit facility with Northern Trust pursuant to a loan agreement entered into between the parties (as amended, the “Northern Trust Loan Agreement”). On April 14, 2025, the Company and Northern Trust entered into a sixth amendment to the Northern Trust Loan Agreement to, among other things, (i) extend the scheduled maturity date from July 1, 2026 to May 18, 2027 and (ii) increase the maximum principal amount available for borrowing under the Revolver from $15.0 million to $20.0 million. As of March 31, 2025 and December 31, 2024, the Company had no outstanding borrowings under the Revolver.

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11. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities as of March 31, 2025 and December 31, 2024 consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Accrued project liabilities	$	6,960	$	5,858
Interest	1,986		1,180
AIAC refunds, current portion	1,431		1,431
Other taxes	1,059		1,648
Accrued payroll	903		991
Dividend payable	695		614
Customer prepayments	553		556
Accrued professional fees	369		66
Accrued license fees	333		353
Accrued equity issuance costs	225		—


Other accrued liabilities	1,282		1,104
Total accrued expenses and other current liabilities	$	15,796	$	13,801

12. Fair Value

Financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 were as follows (in thousands):


	March 31, 2025								December 31, 2024
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
HUF Funds - restricted cash	$	650	$	—	$	—	$	650	$	870	$	—	$	—	$	870

Certificate of Deposit - Restricted	1,058		—		—		1,058		1,239		—		—		1,239
Total	$	1,708	$	—	$	—	$	1,708	$	2,109	$	—	$	—	$	2,109
Liabilities:
Contingent Consideration	—		—		1,864		1,864		—		—		1,942		1,942
Total	$	—	$	—	$	1,864	$	1,864	$	—	$	—	$	1,942	$	1,942

HUF Funds - restricted cash and Certificates of Deposit - Restricted are presented on the Restricted cash line item of the Company’s consolidated balance sheets (unaudited) and are valued at amortized cost, which approximates fair value.

Within the service area of its GW-Saguaro utility, the Company is required to pay a growth premium equal to $750 (not in thousands) for each new account established within specified growth premium areas, commencing in each area on the date of the first meter installation and ending on the earlier of ten years after such first installation date, or twenty years from the acquisition date. The fair value of the contingent consideration was calculated using a discounted cash flow technique which utilized unobservable inputs developed using the Company’s estimates and assumptions. Significant inputs used in the fair value calculation are as follows: year of the first meter installation, total new accounts per year, years to complete full build out, and discount rate. The estimated fair value of the remaining liability was $0.7 million as of both March 31, 2025 and December 31, 2024.

In addition, as part of the GW-Farmers acquisition, the Company is required to pay the seller a growth premium equal to $1,000 (not in thousands) for each new account established in the service area, up to a maximum total aggregate growth premium of $3.5 million. The obligation period of the growth premium commences on the closing date of the acquisition and ends (i) ten years after the first new account for residential purposes is established on land that is, at the time of the closing date of the acquisition, undeveloped or unplatted and owned by the seller within the service area; or, (ii) ten years after the date of closing if a new account (as previously described) has not been established. The fair value of the contingent consideration was calculated using a discounted cash flow technique which utilized unobservable inputs developed using the Company’s estimates and assumptions. Significant inputs used in the fair value calculation are as follows: year of the first meter installation, total

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new accounts per year, years to complete full build out, and discount rate. The estimated fair value of the remaining liability was $1.2 million as of both March 31, 2025 and December 31, 2024.

Contingent consideration is included within Other noncurrent liabilities on the consolidated balance sheets (unaudited). Refer to Note 16 — “Commitments and Contingencies” for additional information about contingent consideration.

The fair value of outstanding long-term debt is estimated based on interest rates considered available for instruments of similar terms and remaining maturities. Certain premium costs associated with the early settlement of long-term debt are not taken into consideration in determining fair value. These fair value measurements are classified within Level 2 of the fair value hierarchy. The carrying amount and estimated fair values of these financial instruments were as follows (in thousands):