CONSOLIDATED WATER CO. LTD. (NASDAQ:CWCO) Files An 8-K Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
Item 3.01
On December 20, 2019, Consolidated Water Co. Ltd. (the “Company”) notified The NASDAQ Stock Market LLC (“NASDAQ”) that the Company determined that one of the members of the Audit Committee (the “Committee”) of the Company’s Board of Directors, Linda Beidler-D’Aguilar, did not meet the independence criteria for audit committee members as set forth in Rule 10A-3(b)(1) promulgated under the Securities Exchange Act of 1934, as amended, as a result of the payment of fees unrelated to her responsibilities as a director or committee member. From May 22, 2019 through December 19, 2019, Consolidated Water (Bahamas) Ltd., a majority-owned subsidiary of the Company, paid Glinton Sweeting O’Brien, a law firm at which Ms. Beidler-D’Aguilar is a partner, a total of $16,852, consisting of $12,500 in fees, $2,776 in expense reimbursement and $1,576 in value-added tax.
In order to address this issue, Ms. Beidler-D’Aguilar resigned from the Committee effective December 19, 2019. Following Ms. Beidler-D’Aguilar’s resignation, the Committee is comprised of Richard L. Finlay, Wilmer F. Pergande, Leonard J. Sokolow and Raymond Whittaker. The Company examined the independence of each remaining Committee member and confirmed compliance with NASDAQ and SEC independence requirements. The Company also reviewed the minutes of the Committee meeting that Ms. Beidler-D’Aguilar attended between May 22, 2019 and December 19, 2019 and determined that the four members of the Committee other than Ms. Beidler-D’Aguilar approved all actions taken at such meetings.
Further, the Company reviewed its procedures with respect to the appointment of directors to the Committee and payments made to directors or entities in which directors are known to have an equity interest. In order to avoid future compliance issues with audit committee composition rules, the Company plans to revise the Committee’s charter to require that any appointment to the Committee be approved by both the Company’s Chief Executive Officer and Chief Financial Officer, after consultation with counsel.
On December 27, 2019, the Listing Qualifications department of NASDAQ notified the Company via letter that, due to the payments made to Glinton Sweeting O’Brien, the Company had failed to comply with NASDAQ’s audit committee composition requirements set forth in Listing Rule 5605(c)(2)(A)(ii). However, NASDAQ further noted that, because Ms. Beidler-D’Aguilar is no longer a member of the Committee, the Company is again in compliance with the Listing Rule and the matter is now closed.
About CONSOLIDATED WATER CO. LTD. (NASDAQ:CWCO)
Consolidated Water Co. Ltd. develops and operates seawater desalination plants (that utilize reverse osmosis technology) and water distribution systems in areas where naturally occurring supplies of potable water are scarce or non-existent. The Company operates in three segments: retail water operations, bulk water operations and services operations. The retail water operations segment produces and supplies water to end users, including residential, commercial and government customers. The bulk water operations segment produces potable water from seawater and sells this water to governments and private customers. The services operations segment provides engineering and management services, including designing and constructing desalination plants, and managing and operating plants owned by affiliated companies. Through its subsidiaries and affiliates, it provides various services to its customers in the Cayman Islands, The Bahamas, Belize, the British Virgin Islands and Indonesia.
