UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the Quarterly Period Ended July 31, 2024

☐	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: 001-33417

OCEAN POWER TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

22-2535818

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

28 ENGELHARD DRIVE, SUITE B, MONROE TOWNSHIP, NJ 08831

(Address of Principal Executive Offices, Including Zip Code)

(609) 730-0400

(Registrant’s Telephone Number, Including Area Code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $0.001 par value	OPTT	NYSE American
Series A Preferred Stock Purchase Rights	N/A	NYSE American

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. 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). 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. (Check one):

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 ☐ No ☒

As of September 13, 2024, the number of outstanding shares of common stock of the registrant was 97,935,748.

OCEAN POWER TECHNOLOGIES, INC.

INDEX TO FORM 10-Q

	Page Number
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of July 31, 2024 (unaudited) and April 30, 2024	4
Unaudited Consolidated Statements of Operations for the three months ended July 31, 2024 and 2023	5
Unaudited Consolidated Statements of Comprehensive Loss for the three months ended July 31, 2024 and 2023	6
Unaudited Consolidated Statement of Shareholders’ Equity for the three months ended July 31, 2024 and 2023	7
Unaudited Consolidated Statements of Cash Flows for the three months ended July 31, 2024 and 2023	8
Notes to Unaudited Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3. Quantitative and Qualitative Disclosures About Market Risk	43
Item 4. Controls and Procedures	43
PART II — OTHER INFORMATION	44
Item 1. Legal Proceedings	44
Item 1A. Risk Factors	44
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3. Defaults Upon Senior Securities	44
Item 4. Mine Safety Disclosures	44
Item 5. Other Information	45
Item 6. Exhibits	46

	●	Our ability to improve, market and commercialize our products, and achieve and sustain profitability;
	●	our continued improvement of our proprietary technologies, and expected continued use of cash from operating activities unless or until we achieve positive cash flow from the commercialization of our products and services;
	●	our ability to obtain additional funding, as and if needed, which will be subject to several factors, including market conditions, and our operating performance;
	●	the substantial doubt about our ability to continue as a going concern;
	●	our history of operating losses, which we expect to continue for at least the short term and possibly longer;
	●	our ability to manage challenges and expenses associated with communications and disputes with activist shareholders, including litigation;
	●	our ability to manage and mitigate risks associated with our internal cyber security protocols and protection of the data we collect and distribute;
	●	our ability to protect our intellectual property portfolio;
	●	the impact of inflation related to the U.S. dollar on our business, operations, customers, suppliers, manufacturers, and personnel;
	●	our ability to meet product enhancement, manufacturing and customer delivery deadlines and the potential impact due to disruptions to our supply chain or our ability to identify vendors that can assist with the prefabrication elements of our products, as a result of, among other things, staff shortages, order delays, and increased pricing from vendors and manufacturers;
	●	our estimates regarding future expenses, revenue, and capital requirements;
	●	our ability to identify and penetrate markets for our products, services, and solutions;
	●	our ability to effectively respond to competition in our targeted markets;
	●	our ability to establish relationships with our existing and future strategic partners which may not be successful;
	●	our ability to maintain the listing of our common stock on the NYSE American;
	●	the reliability of our technology, products and solutions;
	●	our ability to increase or more efficiently utilize the synergies available from our product lines:
	●	changes in current legislation, regulations and economic conditions that affect the demand for, or restrict the use of our products;
	●	our ability to expand markets across geographic boundaries;
	●	our ability to be successful with Federal government work which is complex due to various statutes and regulations applicable to doing business with the Federal government;
	●	our ability to be successful doing business internationally which requires strict compliance with applicable import, export, ITAR, anti-bribery and related statutes and regulations;
	●	the current geopolitical world uncertainty, including Russia’s invasion of Ukraine, the Israel/Palestine conflict and recent attacks on merchant ships in the Red Sea;
	●	our ability to hire and retain key personnel, including senior management, to achieve our business objectives; and
	●	our ability to establish and maintain commercial profit margin

	July 31, 2024			April 30, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,182		$	3,151
Accounts receivable		963			796
Contract assets		477			18
Inventory		5,681			4,831
Other current assets		785			1,747
Total current assets		11,088			10,543
Property and equipment, net		3,613			3,443
Intangibles, net		3,589			3,622
Right-of-use assets, net		2,198			2,405
Restricted cash, long-term		154			154
Goodwill		8,537			8,537
Total assets	$	29,179		$	28,704
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,741		$	3,366
Earnout payable		450			1,130
Accrued expenses		1,579			1,787
Right-of-use liabilities, current portion		926			774
Contract liabilities		445			302
Total current liabilities		5,141			7,359
Deferred tax liability		203			203
Right-of-use liabilities, less current portion		1,525			1,798
Total liabilities		6,869			9,360
Commitments and contingencies (Note 14)		-			-
Shareholders’ Equity:
Preferred stock, $0.001 par value; authorized 5,000,000 shares, none issued or outstanding; 100,000 designated as Series A		—			—
Common stock, $0.001 par value; authorized 100,000,000 shares, issued 95,661,806 shares and 61,352,731 shares, respectively; outstanding 95,573,789 shares and 61,264,714 shares, respectively		96			61
Treasury stock, at cost; 88,017 and 88,017 shares, respectively		(369	)		(369	)
Additional paid-in capital		334,659			327,276
Accumulated deficit		(312,031	)		(307,579	)
Accumulated other comprehensive loss		(45	)		(45	)
Total shareholders’ equity		22,310			19,344
Total liabilities and shareholders’ equity	$	29,179		$	28,704

	2024			2023
	Three months ended July 31,
	2024			2023

Revenues	$	1,301		$	1,272
Cost of revenues		854			609
Gross margin		447			663

Operating expenses		4,920			8,103
Gain from change in fair value of consideration		—			(62	)
Operating loss		(4,473	)		(7,378	)

Interest income, net		3			339
Other income		17			—
Loss before income taxes		(4,453	)		(7,039	)
Income tax benefit		—			—
Net loss		(4,453	)		(7,039	)
Basic and diluted net loss per share	$	(0.05	)	$	(0.12	)
Weighted average shares used to compute basic and diluted net loss per common share		81,951,002			58,723,076

	Shares		Amount		Shares			Amount			Capital		Deficit			Loss			Equity
	Three Months Ended July 31, 2024
	Common Shares				Treasury Shares						Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Shares			Amount			Capital		Deficit			Loss			Equity

Balance at May 1, 2024		61,352,731	$	61		(88,017	)	$	(369	)	$	327,276	$	(307,579	)	$	(45	)		19,344
Net loss		—		—		—			—			—		(4,453	)		—			(4,453	)
Share-based compensation		—		—		—			—			259		—			—			259
Common stock issued related to bonus and earnout payments		2,864,808		3		—			—			627		—			—			630
Issuance of common stock – AGP At The Market Offering, net of issuance costs		31,444,267		32		—			—			6,497		—			—			6,529
Balances at July 31, 2024		95,661,806	$	96		(88,017	)	$	(369	)	$	334,659	$	(312,031	)	$	(45	)	$	22,310

	Three Months Ended July 31, 2023
	Common Shares				Treasury Shares						Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Shares			Amount			Capital		Deficit			Loss			Equity

Balance at May 1, 2023		56,304,642	$	56		(40,914	)	$	(355	)	$	324,393	$	(280,096	)	$	(45	)		43,953
Balance		56,304,642	$	56		(40,914	)	$	(355	)	$	324,393	$	(280,096	)	$	(45	)		43,953
Net loss		—		—		—			—			—		(7,039	)		—			(7,039	)
Share-based compensation		—		—		—			—			401		—			—			401
Common stock issued related to bonus and earn out payments		2,403,846		3		—			—			1,247		—			—			1,250
Common stock issued upon vesting of restricted stock		68,166		—		—			—			—		—			—			—
Shares withheld for tax withholdings		—		—		(3,766	)		(2	)		—		—			—			(2	)
Balances at Balance, July 31, 2023		58,776,654	$	59		(44,680	)	$	(357	)	$	326,041	$	(287,135	)	$	(45	)	$	38,563
Balance		58,776,654	$	59		(44,680	)	$	(357	)	$	326,041	$	(287,135	)	$	(45	)	$	38,563

	July 31, 2024		April 30, 2024
	(in thousands)
Cash and cash equivalents	$	3,182	$	3,151
Restricted cash- long term		154		154
	$	3,336	$	3,305

Description		Estimated depreciable life

Equipment		5-7 years
Computer equipment & software		3 years
Office furniture & fixtures		3-7 years
Leasehold improvements		Shorter of the estimated useful life or lease term
Leased Power Buoy assets		10 years
Leased WAM-V assets		10 years

	ASC 606		ASC 842		Total		ASC 606		ASC 842		Total
	Three months ended July 31, 2024						Three months ended July 31, 2023
	ASC 606		ASC 842		Total		ASC 606		ASC 842		Total
	(in thousands)						(in thousands)
Product Line:
WAM-V	$	1,234	$	67	$	1,301	$	460	$	243	$	703
Buoy		—		—		—		250		—		250
Services		—		—		—		319		—		319
Total	$	1,234	$	67	$	1,301	$	1,029	$	243	$	1,272

Region:
North and South America	$	1,230	$	—	$	1,230	$	1,029	$	225	$	1,254
Europe		4		67		71		—		18		18
Total	$	1,234	$	67	$	1,301	$	1,029	$	243	$	1,272
Revenue	$	1,234	$	67	$	1,301	$	1,029	$	243	$	1,272

	July 31, 2024		April 30, 2024		April 30, 2023
	(in thousands)
Accounts receivable	$	963	$	796	$	745
Contract assets	$	477	$	18	$	152
Contract liabilities	$	445	$	302	$	1,378

	Three months ended July 31, 2024			Three months ended July 31, 2023
	(in thousands)
Transferred to receivables from contract assets recognized	$	(104	)	$	(377	)
Revenue recognized and not billed		563			518
Net change in contract assets	$	459		$	141

	July 31, 2024
	(in thousands)
Operating lease:
Operating right-of-use assets, net	$	2,198

Right-of-use liabilities- current	$	926
Right-of-use liabilities- long term		1,525
Total lease liabilities	$	2,451

Weighted average remaining lease term- operating leases		2.72 years
Weighted average discount rate- operating leases		8.4	%

	July 31, 2024
	(in thousands)
Remainder of fiscal year 2025	$	788
2026		1,847
2027		329
2028		333
2029		28
thereafter		—
Total future minimum lease payments	$	3,325
Less imputed interest		(874	)
Total	$	2,451

	Shares Underlying Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)
Outstanding as of April 30, 2024		734,543		$	2.12		7.6
Granted		—		$	—
Exercised		—		$	—
Cancelled/forfeited		(70,269	)	$	0.89
Outstanding as of July 31, 2024		664,274		$	2.25		7.3
Exercisable as of July 31, 2024		454,056		$	2.88		6.8

	Number of Shares			Weighted Average Price per Share
Unvested at April 30, 2024		5,124,529		$	0.38
Granted/Adjusted		693,038		$	0.09
Vested and issued		—		$
Cancelled/forfeited		(572,584	)	$	0.30
Unvested at July 31, 2024		5,244,983		$	0.35

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2	Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly.

Level 3	Inputs that are unobservable for the asset or liability.

SEC Form 10-Q filed by Ocean Power Technologies Inc.