Item 1A. Risk Factors 14
Item 1B. Unresolved Staff Comments 30
Item 2. Properties 31
Item 3. Legal Proceedings 31
Item 4. Mine Safety Disclosures 31
PART II
Item 6. [Reserved] 33
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 43
Item 8. Financial Statements and Supplementary Data 43
Item 9A. Controls and Procedures 44
Item 9B. Other Information 44
PART III
Item 10. Directors, Executive Officers and Corporate Governance 44
Item 11. Executive Compensation 47
Item 14. Principal Accountant Fees and Services 57
PART IV
Item 15. Exhibits, Financial Statement Schedules 57
PowerBuoy®,
PB-Vue ®, PowerTower ®, Making Waves in Power ®, Talk on Water ®, MerrowsTM,
WAM-V® and the Ocean Power Technologies logo are trademarks of Ocean Power Technologies, Inc. All other@ trademarks appearing
in this annual report are the property of their respective holders.
i
Special
Note Regarding Forward-Looking Statements
We
have made statements in this Annual Report on Form 10-K (the “Annual Report”) in, among other sections, Item 1 - “Business,”
Item 1A - “Risk Factors,” Item 3 - “Legal Proceedings,” and Item 7 - “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” that are forward-looking statements. Forward-looking statements convey
our current expectations or forecasts of future events. Forward-looking statements include statements regarding our future financial
position, business strategy, budgets, projected costs, plans and objectives of management for future operations. The words “may,”
“continue,” “estimate,” “intend,” “plan,” “will,” “believe,”
“project,” “expect,” “anticipate” and similar expressions may identify forward-looking statements,
but the absence of these words does not necessarily mean that a statement is not forward-looking.
Any
or all of our forward-looking statements in this Annual Report may turn out to be inaccurate. We have based these forward-looking statements
on our current expectations and projections about future events and financial trends that we believe may affect our financial condition,
results of operations, business strategy and financial needs. They may be affected by inaccurate assumptions we might make or unknown
risks and uncertainties, including the risks, uncertainties and assumptions described in Item 1A - “Risk Factors.” In light
of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Annual Report may not occur
as contemplated and actual results could differ materially from those anticipated or implied by the forward-looking statements.
You
should not unduly rely on these forward-looking statements, which speak only as of the date of this filing. We undertake no obligation
to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise.
Our
fiscal year begins on May 1 and ends on April 30. When we refer to a particular fiscal year, we are referring to the fiscal year ending
on April 30 of that year. References to fiscal 2026 are to the fiscal year ended April 30, 2026.
Unless
the context indicates otherwise, the terms “Company,” “Ocean Power Technologies,” “OPT,” “we,”
“our” or “us” as used herein refers to Ocean Power Technologies, Inc. and its subsidiaries.
ii
PART
I
ITEM
1. BUSINESS
Overview
Ocean
Power Technologies, Inc. (“OPT,” “we,” “our,” or “the Company”) is a Maritime Domain
Awareness (MDA) company specializing in innovative intelligent maritime solutions. These solutions include a variety of “as a service”
systems, including Data as a Service (DaaS), Robotics as a Service (RaaS), and Power as a Service (PaaS). These systems consist of a
variety of platforms including the PowerBuoy®, our persistent sensor and power solution, the WAM-V® (Wave Adaptive Modular Vessel),
our autonomous unmanned surface vehicle, and MerrowsTM, our user interface and command and control (C2) system that integrates multiple
sensor feeds using software and hardware and enables artificial intelligence and machine learning (AI/ML) integration. We design, manufacture,
deploy, and operate these systems for defense, security, subsea infrastructure, offshore oil and gas, offshore energy, marine research,
and communication markets. We operate primarily through a combination of direct sales and leases, strategic partnerships, and long-term
service agreements. Our business model emphasizes capital-light deployments, recurring revenue from service and maintenance contracts,
and high-margin technology sales and leases.
We
serve a global customer base, including the U.S. and allied defense agencies, offshore energy operators, and commercial interests. The
common thread across these markets is the growing need for a persistent, autonomous, and sustainable offshore presence, a need we are
uniquely positioned to fulfill.
The
Company holds numerous patents and leverages decades of research including control systems, energy storage, and marine integration. Our
headquarters and assembly operations are located in New Jersey, and we maintain an additional manufacturing and robotics development
facility in Richmond, CA. In addition, the Company maintains an office at the Association for Uncrewed Vehicle Systems International
(AUVSI) headquarters in Washington, D.C., which serves to strengthen our strategic position in the fast-growing uncrewed systems market.
OPT
is committed to enabling a smarter, safer ocean economy through innovation in ocean intelligence and power. As we look forward, our strategic
priorities include expanding our customer and geographic base, accelerating technology adoption, enhancing recurring revenue, and driving
margin growth through platform scalability and supply chain efficiencies.
We
were incorporated under the laws of the State of New Jersey in April 1984 and began commercial operations in 1994. On April 23, 2007,
we reincorporated in Delaware.
Our
Solutions
Maritime
Domain Awareness Solution (“MDAS”)
Maritime
Domain Awareness refers to the effective understanding of anything associated with the maritime domain that could impact safety, security,
economy, or the environment. The “maritime domain” includes all areas and things on, under, related to, adjacent to,
or bordering navigable waters, including the seafloor and airspace above.
Our
MDAS provides a customizable, integrated surveillance solution designed for persistent, roaming, and real-time ocean monitoring. The
system combines high-definition radar, optical and thermal imaging, and vessel Automatic Identification System (AIS) modules with edge
processing, secure communications, and cloud-based analytics.
Our
customers use and can apply our MDAS for:
MDAS
hardware can be deployed on OPT platforms, including PowerBuoy® systems and WAM-V® autonomous vessels, and networked via satellite,
Wi-Fi, and cellular links. Our architecture enables multi-platform surveillance, with command-and-control functionality enhanced through
proprietary software and third-party system integrations. These networks can incorporate external data sources such as satellite imagery,
drones, weather, and bathymetry to form a comprehensive operational picture.
Our
MDAS is also designed to provide persistent situational awareness beneath the ocean surface, an area inaccessible to conventional technologies
such as radar or the AIS. This capability plays a critical role in supporting national security objectives, enabling autonomous maritime
operations, and protecting marine resources and infrastructure. Key system components include:
Sensing
and Detection
Communications
and Networking
Data
Fusion and Analysis
Command,
Control, and Decision Support
Representative
Applications
● Defense and Security
○ Monitors strategic chokepoints and exclusive economic zones (EEZs).
○ Protects undersea cables and energy infrastructure from sabotage.
● Critical Infrastructure Protection
● Environmental and Regulatory Compliance
○ Monitors marine life and supports conservation
○ Detects illegal fishing, dredging, or resource extraction.
● Commercial Operations
○ Enhances situational awareness for offshore energy installations.
○ Supports navigation and missions for autonomous subsea vehicles.
Our
MDAS solution is a cornerstone of our broader DaaS strategy and reflects our leadership in scalable, autonomous maritime intelligence
infrastructure.
Data
as a Service (“DaaS”)
Our
Data as a Service offering enables persistent, near real-time collection and transmission of maritime domain awareness and environmental
intelligence data. Our DaaS platform leverages autonomous uncrewed surface vehicles (USVs), including the WAM-V® platform, and PowerBuoy®
systems, both of which integrate a range of environmental and security-focused sensors.
The
DaaS offering is used to support operational needs in several high-impact domains, including:
Our
WAM-V® USV platform supports modular payload integration and is engineered for operational stability in variable marine conditions.
It has been deployed in a range of commercial and governmental missions, including high-resolution sonar surveys, subsea infrastructure
assessments, berth clearance, dredging operations, and offshore renewable energy site characterization.
We
have completed multiple DaaS deployments with both government agencies and commercial customers. These engagements have provided validation
of our systems’ performance, interoperability, and mission relevance.
Robotics
as a Service (“RaaS”)
Our
Robotics as a Service offering provides customers with subscription-based access to our WAM-V® (Wave Adaptive Modular Vessel) autonomous
surface vehicles. Under this model, customers lease WAM-V® units pursuant to time-bound agreements or based on a defined number of
usage days. These agreements frequently include minimum usage thresholds and bundled operational support services. Oftentimes these agreements
also include OPT providing the training and operations for the vehicle. As an AUVSI Trusted Operator, (AUVSI is the world’s largest
nonprofit organization dedicated to advancing the use of autonomous systems and robotics across air, land, and sea domains). OPT’s
RaaS “pilots” are well suited to deliver value for our customers.
Through
the RaaS model, OPT retains ownership of the deployed assets and is responsible for all system maintenance, repairs, and upgrades. This
arrangement offers customers a lower upfront capital expenditure compared to outright equipment purchase, while enabling scalable access
to autonomous capabilities that can be aligned with peak mission windows or surge requirements.
Our
RaaS contracts have been utilized by both government and commercial customers for applications including port security, maritime surveying,
infrastructure inspection, and environmental monitoring. This model has allowed customers to accelerate access to autonomous maritime
solutions while preserving operational flexibility.
We
believe that our RaaS model supports our strategic goals of increasing recurring revenue, improving asset utilization, broadening our
customer base and expanding customer lifetime value. As RaaS involves OPT-owned systems deployed in customer-controlled environments,
we evaluate associated risks related to asset recoverability, service delivery logistics, and liability exposure. Based on these assessments,
we implement appropriate contractual protections, insurance coverage, and operational safeguards to mitigate such risks and ensure continuity
of service and asset security
Power
as a Service (“PaaS”)
Our
Power as a Service offering provides customers with subscription-based access to our PowerBuoy® systems. Under this model, customers
lease PowerBuoy® platforms pursuant to time-bound agreements, enabling flexible deployment without the need for upfront capital investment.
These leases are structured to accommodate both steady-state operations and surge requirements, offering a scalable energy solution for
offshore missions.
The
PowerBuoy® delivers autonomous, renewable energy via OPT-managed infrastructure. This reduces the need for traditional power delivery
methods such as subsea cabling, fuel-based generators, or periodic manual battery replacement. Our modular PowerBuoy® configurations
can include solar-only systems, wave energy converters, and optional wind turbine integrations to support varying power loads across
different marine environments.
The
PaaS offering is available for defense, offshore energy, and environmental monitoring applications. The PaaS model aligns with our broader
strategy to offer end-to-end maritime infrastructure services, complementing our DaaS and RaaS offerings. This integrated approach is
designed to support recurring revenue growth, enhance customer retention, and differentiate OPT from competitors that focus exclusively
on hardware or one-time equipment sales.
While
we believe this model strengthens our customer relationships and operational resilience, there can be no assurance of continued customer
uptake or contract renewals. We also evaluate ongoing risks associated with offshore service delivery, environmental exposure, and asset
maintenance and implement mitigation strategies including enhanced monitoring protocols, environmental hardening of equipment, and service-level
agreements with local partners
Autonomous
Vehicles (“WAM-V®”)
Our
Autonomous Vehicles business centers around our patented WAM-V® (Wave Adaptive Modular Vessel) platform, a class of modular USVs
engineered to support autonomous maritime operations in inshore, nearshore, and offshore environments. The WAM-V® platform is designed
to enable scalable, real-time data acquisition and payload customization based on mission requirements.
WAM-V®
vessels are manufactured in three standard sizes, 8, 16, and 22 feet, and are built on a modular framework. This design allows
interoperability across propulsion types (electric and/or liquid-fuel) and supports rapid integration of third-party sensors and
mission systems. These features make the platform suitable for a wide range of operational use cases, including underwater, survey,
scientific research, port security, subsea infrastructure inspection, and defense surveillance.
WAM-V®
platforms have been deployed across the Middle East, Europe, Asia, Oceania, and the Americas. These deployments are conducted through
both direct sales and our RaaS offering, which provides subscription-based access to WAM-V® units and associated operational support
as described above.
Our
Autonomous Vehicles segment complements our strategic focus on persistent maritime awareness and autonomy. In particular, WAM-V®
systems are increasingly integrated with our MerrowsTM MDA suite, enabling mobile MDA operations to consolidate surface, subsea,
and environmental data in real time. This integration expands our service capabilities and supports recurring revenue growth from both
government and commercial customers.
We
expect continued demand for WAM-V® platforms driven by factors including increased investment in autonomous marine systems, cost
advantages over crewed vessels, global regulatory mandates for maritime monitoring, and defense modernization initiatives. However, actual
adoption rates may be affected by procurement cycles, governmental budgetary constraints, and competitive offerings.
PowerBuoy®
Our
PowerBuoy® is a renewable energy-powered autonomous offshore platform designed to deliver continuous electrical power and real-time
data connectivity in remote maritime environments. The PowerBuoy® converts any combination of wave motion, solar, and wind into energy
and includes onboard energy storage to maintain system availability during low-sea-state, cloudy, or still conditions. The platform enables
persistent operations without reliance on liquid fuel-based power systems or crewed support vessels.
PowerBuoy®
deployments reduce operational costs and carbon emissions by replacing diesel generators and minimizing vessel-based maintenance. The
system is designed for compact deployment, rapid installation, and long-duration missions, with remote diagnostics and limited on-site
service requirements. Depending on the mission profile, a single PowerBuoy® unit can operate autonomously for several months or longer.
PowerBuoy® platforms support a variety of payloads, including surveillance cameras, acoustic and environmental sensors, weather stations,
radar, AIS, and communication nodes. These features enable use cases in maritime security and intelligence, surveillance, and reconnaissance
(“ISR”); offshore wind and oil infrastructure monitoring; and oceanographic data collection.
PowerBuoy®
units have been integrated into operational deployments for both government and commercial customers.
The
PowerBuoy® represents a core technology component across multiple OPT offerings, including DaaS and PaaS. These integrated offerings
are intended to support long-term growth in recurring revenue and platform utilization. We believe the PowerBuoy® is well suited
to serve emerging demand for autonomous, low-emission offshore infrastructure.
Merrows
MerrowsTM
is our integrated user interface and C2 platform that consolidates and enhances the capabilities of our PowerBuoy®, WAM-V®, and
sensor payload systems into a unified maritime surveillance and data processing solution. It is designed to address the operational complexity
of MDA, which involves monitoring, detecting, and analyzing activity on, under, adjacent to, or bordering navigable waters.
The
MerrowsTM architecture incorporates elements of Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance,
and Reconnaissance (C5ISR) into a flexible and modular system. It leverages both mobile (WAM-V®) and stationary (PowerBuoy®)
platforms to enable persistent situational awareness across mission-critical maritime zones. As a result, MerrowsTM is well-positioned
to meet the operational needs of defense, intelligence, and homeland security customers seeking scalable, multi-mission capability. By
embedding C5ISR, OPT moves beyond being a “vehicle provider” to offering full-spectrum mission solutions.
MerrowsTM
facilitates the collection, processing, and secure transmission of multi-modal sensor data including radar, acoustic, visual, weather,
and geospatial inputs. The platform supports real-time and historical data analysis and integrates artificial intelligence and machine
learning to support operational decision-making, anomaly detection, and system automation.
MerrowsTM
has been deployed in multiple instances and is integrated within several OPT service offerings, including DaaS and RaaS. MerrowsTM
is offered as part of comprehensive system deployments and is not currently marketed as a standalone product.
We
believe the MerrowsTM system enhances the value proposition of our broader portfolio by enabling cross-platform interoperability
and improving the operational efficiency and data fidelity of autonomous maritime missions.
Recent
Technological Advancements
During
fiscal year 2026 and through the date of this filing, we achieved several notable milestones related to the continued development and
operational deployment of our autonomous maritime systems. These developments reflect our investment in platform capability enhancement,
strategic partnerships, and customer-oriented service infrastructure:
These
developments are consistent with our strategic priorities of expanding platform capability, increasing global market reach, and enhancing
customer value through integrated offerings. While we believe these achievements strengthen our market position, future revenue impact
remains dependent on follow-on orders, contract conversions, and customer retention. See Item 1A, “Risk Factors,” for a discussion
of operational and adoption risks
Strategy
and Marketing
We
are focused on delivering integrated, autonomous ocean infrastructure solutions. Our strategy centers on unifying renewable energy powered
systems (PowerBuoy®), autonomous vehicles (WAM-V®), and data-driven command and control platforms (MerrowsTM) into a cohesive,
interoperable ecosystem. This multi-domain architecture is designed to support operations across surface, subsea, and airborne environments,
offering utility in both government and commercial missions.
ISR
is a critical function in military and security operations that involves the collection, processing, and dissemination of information
to support decision-making, targeting, and situational awareness. and is central to OPT’s strategic positioning as a provider of
autonomous, intelligent, and scalable maritime mission systems, enabling it to serve both national security and commercial maritime
markets through recurring services and full-stack platform offerings. ISR is a core enabler of our strategy, driving value across defense,
homeland security, and international maritime markets. ISR capability is not only a product feature, but a strategic differentiator woven
into OPT’s platform design, autonomy stack, and service delivery models.
We
believe our platform-centric approach for ISR aligns OPT with three primary global trends:
Market
Trends and Tailwinds
Defense
and Environmental Monitoring Demand
The
defense sector continues to prioritize autonomous and AI-enabled systems to enhance maritime domain awareness, situational awareness,
decision-making, and operational cost-efficiency. Customers increasingly seek solutions capable of collecting, integrating, and analyzing
data from distributed sensors to support real-time operational decisions with reduced human intervention. Regulatory initiatives and
funding priorities within the U.S. Department of War, the Intelligence Community, the Department of Homeland Security, allied governments,
and other international defense organizations continue to support investments in autonomous maritime capabilities and advanced sensing
technologies. OPT believes these trends align well with its integrated portfolio of autonomous surface vehicles, PowerBuoy® platforms,
maritime communications, and the MerrowsTM AI-enabled maritime domain awareness platform. The Company continues to align its product
development and commercial strategy with evolving customer requirements while pursuing opportunities with defense prime contractors,
government agencies, and allied foreign ministries.
Simultaneously,
the environmental monitoring market is expanding due to regulatory compliance pressures and increased investment in ocean science. Our
solutions are engineered to address use cases such as coastal zone management, hydrographic surveying, and habitat monitoring.
Competitive
Positioning and Global Demand
The
rising global focus on unmanned maritime systems is expanding OPT’s addressable market across multiple sectors and geographies.
Our platforms are being evaluated or deployed for use in:
Our
modular platforms, specifically the PowerBuoy® and WAM-V®, are designed to support autonomous missions with minimal human intervention,
and offer value in shallow-water, nearshore, and offshore environments.
Growth
Priorities and Target Markets
OPT’s
commercial and public-sector focus is directed toward high-value, mission-critical domains where autonomous maritime infrastructure delivers
operational or strategic benefit. Our key markets include:
● U.S. Defense and Intelligence agencies
● Strategic partners and commercial customers
Product
Development Focus
Autonomy
Advancement (Level 3 and Beyond)
We
have expanded our internal autonomy engineering team with the addition of full-time specialists in control systems and software integration.
This investment supports the development of autonomous capabilities across OPT’s vehicle platforms, with a focus on reliable, adaptive,
and scalable mission execution. Our autonomous systems are designed to execute missions with minimal operator involvement while continuously
adapting to changing environmental conditions such as waves, wind, vessel traffic, and other dynamic operating factors. At the same time,
a human operator remains able to monitor operations and intervene whenever necessary, providing an additional layer of safety and operational
oversight. These investments strengthen OPT’s ability to deliver increasingly capable autonomous maritime solutions for defense,
security, and commercial customers while supporting safe, reliable, and persistent operations in complex maritime environments.
Docking
and Charging Systems
OPT
continues to refine and improve its at-sea docking and charging system that integrates a PowerBuoy® with a WAM-V® platform. This
system is designed to extend the duration of autonomous missions by enabling unmanned surface vehicles to recharge autonomously in the
field. Test data and user feedback informs subsequent design iterations and validation protocols.
These
initiatives support our objective of offering persistent, autonomous systems that reduce lifecycle cost and increase mission resilience
in both government and commercial deployments.
Competition
and Competitive Positioning
We
operate in the converging sectors of USVs, ocean sensing and surveillance platforms, and offshore renewable energy systems. Our competitors
include companies that offer:
● Standalone USV systems for inshore, nearshore, or offshore environments;
● MDA software and data platforms;
● Legacy power infrastructure (e.g., subsea cabling, diesel generators); and
The
unmanned surface vessel (“USV”) sector remains dynamic. In June 2024, the U.S. Navy awarded multiple indefinite-delivery/indefinite-quantity
contracts to 49 vendors to support its current and future USV Family of Systems and subsystems. The contracts have an aggregate ceiling
value of approximately $982.1 million and cover platforms, payloads, sensors, autonomy and vehicle-control systems, communications, integration
and sustainment services. During fiscal 2026, the Navy continued to fund unmanned maritime programs and activities. In June 2025, the
Navy awarded HII Unmanned Systems, Inc. an indefinite-delivery/indefinite-quantity contract with a ceiling value of approximately $85.7
million for engineering support services for the MK 18 Unmanned Underwater Vehicle Family of Systems. The Navy’s fiscal 2026 budget
request also included approximately $49 million for the Large Unmanned Surface Vessel program. In August 2025, the Navy exercised a $7.7
million option for continued operations and sustainment of the Sea Hunter and Seahawk Medium Unmanned Surface Vessels, with $2.5 million
obligated at the time of award. In addition, the Navy advanced its Modular Attack Surface Craft acquisition initiative for modular, commercially
derived unmanned surface vessels. These developments reflect continued U.S. government investment in unmanned maritime systems and increasing
competition among established defense contractors and emerging maritime-technology companies.
The
autonomous buoy segment remains comparatively early-stage and fragmented. It is generally divided between grid-connected solutions and
smaller-scale autonomous systems. OPT remains focused on the non-grid segment. To our knowledge, few competitors currently offer fully
commercialized, continuously deployed platforms with persistent, renewable power generation. This reflects the nascency of the market,
which continues to evolve through research and development programs, demonstration projects, and limited initial deployments.
Competitive
Differentiators
Despite
the presence of larger industry participants, OPT seeks to differentiate through a combination of vertically integrated products, operational
deployment history, and business model flexibility. Our competitive positioning is based on the following characteristics:
● Integrated, Autonomous Maritime Infrastructure
OPT
offers a suite of interoperable platforms—PowerBuoy®, WAM-V® USVs, and the MerrowsTM data system, designed to function
as a cohesive ocean intelligence network. This integration may reduce logistical complexity and improve system interoperability for customers
compared to point-solution providers.
● Renewable, Persistent Power Delivery
The
PowerBuoy® platform generates renewable energy from any combination of wave motion, solar, and wind and includes battery storage
to enable continuous power for sensors, communications systems, and mission payloads in remote ocean areas. This reduces or eliminates
reliance on fossil fuel-based power systems or vessel-based servicing, materially reducing customer costs.
● Modular and Scalable Design
Our
WAM-V® and PowerBuoy® product lines are designed for payload modularity and field customization. This architecture supports multiple
mission types and promotes asset reuse across use cases and customers.
● Field-Proven Performance
As
of April 30, 2026, OPT has deployed over 100 WAM-V® platforms globally and completed multiple operational deployments of PowerBuoy®
systems in varying marine conditions. These deployments contribute to our operational validation record, though additional deployments
and independent assessments are ongoing.
● Lifecycle Cost Efficiency
OPT’s
systems are intended to reduce lifecycle operating costs by minimizing the need for crewed vessels, fuel logistics, and routine on-site
maintenance. Our service-based business models RaaS, Daas, and PaaS may further lower customer acquisition barriers and enhance revenue
predictability.
● Alignment with National and Allied Security Priorities
Our
solutions are designed to align with stated U.S. government objectives, including the Department of Homeland Security’s National
MDA Plan and the U.S. Coast Guard’s Unmanned Systems Strategy. Areas of application include persistent surveillance, Exclusive
Economic Zone (EEZ) enforcement, and offshore infrastructure monitoring.
Agility and Customer Responsiveness
OPT’s
organizational structure and scale may provide an advantage in prototyping, iteration, and customer collaboration. Because OPT has an
agile, lean organizational structure and smaller scale, it can more rapidly develop, test, and modify prototypes and incorporate customer
feedback into new iterations. This speed is crucial when customers need a solution tailored to a specific mission, threat, or environment.
In addition, this customer intimacy fosters trust and can lead to long-term relationships, especially in environments like NATO, UN,
or U.S.-led coalitions where interoperability and mission alignment are key.
Recent
Contracts and Commercial Developments
During
fiscal 2026 and fiscal 2027 to date, OPT executed several commercial transactions that expanded our international presence and supported
strategic positioning in defense and commercial maritime sectors:
Backlog
As
of April 30, 2026, our contract backlog was approximately $20.1 million, compared to $12.5 million as of April 30, 2025. The backlog
represents the value of unfulfilled, purchase orders and agreements with commercial and governmental customers. If any of our contracts
were to be terminated, our backlog would be reduced by the expected value of the remaining terms of such contract.
Backlog
figures do not necessarily reflect future revenue, as orders may be adjusted, delayed, or canceled, and our recognition of associated
revenue is subject to the terms of the underlying agreements. The size of our backlog may also fluctuate materially based on the timing
of new awards, contract renewals, or the conclusion of long-term engagements. Consequently, while we view backlog as a useful performance
indicator, it should not be relied upon as a predictor of future results.
Product
and Solution Development
OPT
continues to prioritize the development and commercialization of modular, autonomous solutions for offshore energy, data acquisition,
and maritime domain awareness. Our development strategy is informed by customer use cases, operational field data, and regulatory trends,
and is focused on delivering scalable capabilities that support persistent and intelligent ocean infrastructure.
Our
approach emphasizes disciplined capital allocation, with a focus on near-term commercial viability and alignment with long-term Company
strategy and platform goals. As of April 30, 2026, our product development activities primarily support enhancements to existing systems.
However, we expect to expand these efforts to include new platform capabilities, advanced autonomy features, and mission-specific configurations
in response to evolving customer requirements and emerging market opportunities
Product
Roadmap and Innovation Focus
Our
product development roadmap is driven by three primary inputs:
1. Customer Feedback and Operational Data
2. Strategic Technology Integration
3. Long-Term AI/ML and Data Strategy
Intellectual
Property
We
maintain an intellectual property (IP) portfolio that supports our operations across autonomous maritime systems, wave energy conversion,
and integrated ocean intelligence solutions. Our IP strategy is designed to protect proprietary technology, promote long-term product
differentiation, and support commercial growth in both U.S. and international markets.
As
of April 30, 2026, OPT held approximately 82 issued U.S. patents covering innovations in the following categories:
● Wave energy control systems and thermal/wave hybrid power conversion;
● Mooring and anchoring systems, including subsea cabling and marine connectors;
● Multi-unit wave energy farm network configurations;
● Autonomous charging interfaces for USVs;
Our
patents have staggered expiration dates, extending through fiscal year 2041. No individual patent is considered material to our business.
However, the collective breadth and interconnectivity of the portfolio provide meaningful protection for our core systems and solutions.
In
addition to patents, we rely on trade secrets, proprietary engineering processes, and non-public technical documentation. Certain technologies
were developed under government-funded programs and may be subject to U.S. federal government use rights under the Bayh-Dole Act and
related provisions.
OPT
also holds and maintains registered U.S. trademarks critical to brand identity and market differentiation, including PowerBuoy®,
WAM-V®, and MerrowsTM.
Our
intellectual property portfolio is reviewed periodically to assess enforceability, alignment with strategic product roadmaps, and licensing
opportunities. We may pursue additional filings or commercial partnerships to expand our IP base and enter new applications or jurisdictions.
Regulatory
Environment
OPT’s
operations are subject to a range of domestic and international laws, regulations, and technical standards that affect product design,
deployment, data handling, and defense-related contracting. Our ability to operate effectively in key markets depends in part on maintaining
compliance across multiple regulatory regimes.
Facility
Security Clearance
OPT
currently holds an FCL from the U.S. Department of War, which allows our company to access and perform work on contracts involving classified
information at the “Secret” level. This clearance supports our eligibility to participate in certain U.S. government programs,
particularly in the defense and intelligence sectors.
To
maintain this clearance, OPT is required to comply with a range of ongoing security and operational requirements under the National Industrial
Security Program. These requirements include:
Failure
to comply with these requirements could result in the suspension or revocation of our security clearance, which may impact our ability
to perform on classified contracts or bid on certain U.S. government opportunities.
Export
Control and Trade Compliance
We
are subject to U.S. export control laws, including the International Traffic in Arms Regulations (ITAR) and the Export Administration
Regulations (“EAR”). Certain technologies, components, and technical data integrated into OPT systems may require U.S. government
authorization for export, re-export, or third-party access. OPT maintains internal compliance protocols to support adherence to applicable
export control requirements and customer-specific licensing obligations.
Maritime
and Offshore Operations
Our
PowerBuoy® and WAM-V® platforms operate in offshore and nearshore environments and may be subject to regulation by the U.S. Coast
Guard, Bureau of Ocean Energy Management, and other federal or local agencies. For international deployments, we work with country-specific
maritime authorities to obtain operational approvals and ensure environmental and navigational compliance.
Telecommunications
and Data Transmission
Several
OPT platforms transmit real-time operational data via satellite, LTE/5G, or other secure communications channels. These activities are
subject to domestic and international telecommunications regulation, including oversight by the FCC and analogous bodies abroad. OPT
maintains policies to ensure frequency band licensing, data privacy compliance, and secure communications protocols are met.
Government
Contracting and Compliance
As
a contractor and supplier to U.S. government agencies—including the Department of War (DoW), Department of Energy (DOE), and National
Oceanic and Atmospheric Administration (NOAA)—we are subject to the FAR, Defense Federal Acquisition Regulation Supplement, and
other federal procurement standards. These frameworks govern cybersecurity, ethics, cost allowability, and reporting obligations. We
are also subject to the terms of government funding agreements that may impose IP licensing restrictions or data rights limitations.
Environmental
and Safety Regulation
OPT
systems are engineered to operate with low emissions and minimal environmental impact. However, we are subject to regulations governing
offshore noise, emissions, marine habitat protection, and operational safety. Our compliance posture is evaluated on a jurisdiction-by-jurisdiction
basis, and we continuously monitor evolving sustainability mandates across key markets.
Assembly
Facilities and Operations
OPT
conducts in-house assembly and integration activities at two primary U.S.-based locations:
Together,
these facilities support OPT’s ability to meet current production requirements, provide geographic flexibility for field operations,
and maintain lead-time responsiveness for government and commercial projects.
We
believe our existing facilities are adequate for our near production needs. We continuously monitor demand forecasts and contract volume
to assess whether further investment or expansion will be required. If customer demand materially increases, we may consider expanding
our footprint, increasing shifts, or utilizing contract manufacturing partnerships.
Human
Capital Management
We
recognize that our workforce is central to our innovation, operational performance, and long-term business success. As of April 30, 2026,
OPT employed 65 full-time employees, all located in the United States. We believe our ability to attract, develop, and retain a skilled
workforce is critical to the execution of our strategic and technical objectives.
Workplace
Culture and Inclusion
OPT
is an equal opportunity employer. Employment decisions are made without regard to race, gender, age, disability, veteran status, or other
characteristics protected by applicable law. We are committed to fostering an inclusive, respectful, and diverse work environment and
continue to evaluate ways to improve equity across our workforce and talent pipeline.
Quality,
Health, Safety, and Environmental
Quality,
Health, Safety, and Environmental (QHSE) performance is a core value of OPT and is integrated into our operational and business processes.
We maintain an integrated QHSE Management System designed to support product quality, employee health and safety, environmental stewardship,
risk management, regulatory compliance, and continuous improvement across our operations.
Our
primary manufacturing and research & development facilities in Monroe Township, New Jersey and Richmond, California are certified
to ISO 45001, the international standard for occupational health and safety management systems. Both sites are also certified to ISO
9001, the international standard for quality management systems. These certifications reflect our commitment to maintaining structured
management processes that support consistent product quality, safe operations, and continuous improvement.
Key
elements of our integrated QHSE Management System include:
● Employee stop-work authority and proactive hazard identification practices;
● Monitoring and evaluation of leading and lagging performance indicators;
● Structured incident investigation and root cause analysis processes;
● Ongoing employee training, competency development, and engagement, and
● Management system reviews and continuous improvement initiatives.
Through
our integrated ISO 9001 and ISO 45001-certified management systems, we seek to maintain high standards of quality, health, safety, and
environmental performance while supporting operational effectiveness and regulatory compliance.
Operational
Sustainability and Product Risk Review
Based
on external review and regulatory agency feedback (including from NOAA and the U.S. Army Corps of Engineers), PowerBuoy® platforms
have been determined to pose no material harm to marine ecosystems. Key safety features include:
● Absence of rare earth or toxic metals in batteries;
● Minimal fire or explosion risk; and
● Remote energy discharge capability for emergency shutdown.
We
are currently assessing the WAM-V® platform for materials safety and its impact on sensitive marine habitats.
Available
Information
Our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are made
available free of charge through the Investor Relations section of the Company’s website (www.oceanpowertechnologies.com) as soon
as practicable after such material is electronically filed with, or furnished to, the SEC. Material contained on our website is not incorporated
by reference in this report. Our executive offices are located at 28 Engelhard Drive, Suite B, Monroe Township, New Jersey, 08831, and
our telephone number is (609) 730-0400. Since June 2021, our common stock has traded on the NYSE American exchange under the symbol “OPTT”,
and previously, it traded on Nasdaq under the same symbol. The public may also read and copy any materials that we file with the Securities
and Exchange Commission (“SEC”) at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains
an Internet website that contains reports and other information regarding issuers that file electronically with the SEC located at http://www.sec.gov.
ITEM
1A. RISK FACTORS
You
should carefully consider the following risk factors together with the other information contained in this Annual Report, and in prior
periodic and current reports. If any of the following risks occur, they may materially harm our business and our financial condition
and results of operations. In this event, the market price of our common stock could decline, and your investment could be lost.
Risks
Related to Our Financial Condition
We
have a history of operating losses and may not achieve or maintain profitability and positive cash flow.
We
have incurred net losses since we began operations in 1994, including net losses of $48.9 million and $24.5 million in fiscal 2026
and 2025, respectively. As of April 30, 2026, we had an accumulated deficit of $381.0 million. Our losses to date have resulted
primarily from costs incurred in our research and development programs and from our selling, general and administrative costs. As we
continue to develop our proprietary technologies, we expect to continue to have a net loss and use of cash from operating activities
unless or until we achieve positive cash flow from the commercialization of our products and services.
We
do not know whether we will be able to successfully commercialize our products and services or whether we can achieve profitability.
There is significant uncertainty about our ability to successfully commercialize our products in our target markets. Even if we do
achieve commercialization of our products and services and become profitable, we may not be able to achieve or, if achieved, sustain
profitability on a quarterly or annual basis.
Loss
of U.S. Government security clearances could harm our business
We
maintain a FCL at the Secret level, which enables us to perform on U.S. government contracts that involve access to classified information.
Our eligibility to maintain this clearance is subject to the requirements of the National Industrial Security Program, administered by
the Defense Counterintelligence and Security Agency (DCSA). If we fail to comply with these requirements, such as through deficiencies
in our security protocols, loss of cleared personnel and inability to replace these people in key roles, or failure to report material