Ocean Power Technologies Inc
For the period ended Oct 31, 2024. Filed Dec 16, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Oct 31, 2024 · Filed Dec 16, 2024
OPTT$0.43+14.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-07-31; filed 2024-09-16.
0001493152-24-036423
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-10-31; filed 2024-12-16.
0001493152-24-050220
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 129 previous paragraphs and 148 current paragraphs.
88 unchanged; 38 reworded; 14 added; 2 removed; 1 previous and 8 current paragraphs rearranged.
Tables are not compared: 12 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
In October 2024 we completed the second set of exercises of the previously announced follow-on contract as a subcontractor to EpiSci and successfully deployed several WAM-V autonomous surface vehicles during the Mission Autonomy Proving Grounds (MAPG) as part of Project Overmatch. Project Overmatch is a United States Navy initiative aimed at achieving a seamless and highly integrated warfighting capability by leveraging advanced data networks, artificial intelligence (AI), and machine learning. Under this contract, OPT continues to ruggedize and enhance the operational capability of its autonomous maritime technologies to support the U.S. military and its allies. The first set of exercises was concluded over the summer and the completion of these most recent exercises contributed to the revenue recognition noted above.
Current report
First Registered Direct Offering
Current report
On September 13, 2024, the Company entered into a common stock purchase agreement (the “First RDO Purchase Agreement”) with an institutional accredited investor for the sale (the “First Offering”) by the Company of shares (the “First RDO Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), for aggregate gross proceeds of $1.5 million, before deducting offering expenses payable by the Company. The First RDO Shares were issued upon issuance of a funding notice by the Company to the investor. The First RDO Shares were issued at a price per share equal to 80% of the lowest traded price of the Common Stock ten days prior to the closing date for the purchase of the shares. In addition, the Company has the right, but not the obligation, to sell to this investor up to an additional $3.5 million of shares of Common Stock on the same pricing terms.
Current report
The First RDO Purchase Agreement contained customary representations, warranties and agreements by the Company and customary conditions for closing. Pursuant to the First RDO Purchase Agreement, the Company also agreed to indemnify the purchaser against certain liabilities, including liabilities under the Securities Act and liabilities arising from breaches of representations and warranties contained therein. The First RDO Purchase Agreement also included a covenant on the investor to vote their shares of common stock in favor of all Company director nominees and other proxy proposals, but only for so long as the investor owns more than 5% of the outstanding stock.
Current report
The Company can use the net proceeds from this sale to build additional products and solutions to meet market demand, further advance the development of new products and solutions, engage in corporate development and merger and acquisition activities, for working capital needs, capital expenditures, repayment or refinancing of indebtedness, repurchases and redemptions of securities, and for other general corporate purposes.
Current report
Second Registered Direct Offering
Current report
On September 13, 2024, the Company also entered into a common stock purchase agreement (the “Second RDO Purchase Agreement”) with a separate institutional accredited investor for the sale (the “Second Offering”) by the Company of shares (the “Second RDO Shares”) of the Common Stock, for aggregate gross proceeds of $1.5 million, before deducting offering expenses payable by the Company. The Second RDO Shares were issued upon issuance of a funding notice by the Company to the investor. The Second RDO Shares were issued at a price per share equal to 80% of the lowest traded price of the Common Stock five days prior to the closing date for the purchase of the shares. In addition, the Company has the right, but not the obligation, to sell to this investor up to an additional $2.5 million of shares of Common Stock on the same pricing terms.
Current report
The Second RDO Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing. Pursuant to the Second RDO Purchase Agreement, the Company also agreed to indemnify the purchaser against certain liabilities, including liabilities under the Securities Act and liabilities arising from breaches of representations and warranties contained therein. The Second RDO Purchase Agreement also included a covenant on the investor to vote their shares of common stock in favor of all Company director nominees and other proxy proposals, but only for so long as the investor owns more than 5% of the outstanding stock.
Current report
The Company used the net proceeds from this sale to build additional products and solutions to meet market demand, further advance the development of new products and solutions, engage in corporate development and merger and acquisition activities, for working capital needs, capital expenditures, repayment or refinancing of indebtedness, repurchases and redemptions of securities, and for other general corporate purposes.
Current report
Revenues
Current report
Cost of revenues
Current report
Operating expenses
Current report
Interest income
Current report
Net cash provided by financing activities
Removed paragraphs (2)
Previous report
In November 2023 we announced that we have substantially completed our research and development phase and are primarily focused on commercial activities. This pivot to commercial activities has enabled reallocation of headcount going forward, resulting in approximately $4.5 million in annual run rate savings, and a material reduction in third-party expenditures.
Previous report
Net cash provided by/(used in) financing activities
Reworded paragraphs (38)
Previous wording
The following discussion and analysis should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. Some of the information contained in this management’s discussion and analysis is set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business, pending and threatened litigation and our liquidity, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of our Annual Report on Form 10-K for the year ended April 30, 2024 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. References to a fiscal year in this Form 10-Q refer to the year ended April 30 of that year (e.g., fiscal 2024 refers to the year ended April 30, 2024).
Current wording
The following discussion and analysis should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. Some of the information contained in this management’s discussion and analysis is set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business, pending and threatened litigation and our liquidity, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of our Annual Report on Form 10-K for the year ended April 30, 2024 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. References to a fiscal year in this Form 10-Q refer to the year ended April 30 of that year (e.g., fiscal 2024 refers to the year ended April 30, 2024). References to “we,” “us,” “our”, and “OPT” refer to Ocean Power Technologies, Inc. and its subsidiaries, as applicable.
Previous wording
Our mission is to provide intelligent maritime solutions and services that enable more secure and more productive utilization of our oceans and waterways, provide clean energy power services, and offer sophisticated surface and subsea maritime domain awareness solutions. The Company achieves this through our proprietary, state-of-the-art technologies that are at the core of our clean and renewable energy platforms, autonomous systems, solutions and services. The Company is involved in the entire life cycle of product development, from product design through assembly, testing, deployment, maintenance and upgrades, while working closely with partners across our supply chain. The Company also works closely with our third-party partners that provide us with, among other things, software, controls, sensors, integration services, and marine installation services. Our solutions are based on proprietary technologies that enable autonomous, zero or low carbon emitting, and cost-effective data collection, analysis, transportation and communication. Our solutions are primarily suited to ocean and other offshore environments, and support generation of actionable intelligence on a standalone basis or working with other data sources. We channel the information we collect, and other communications, through control equipment linked to edge computing and cloud hosting environments. The data collected by OPT’s technologies underscores the Company’s unique position as a system of systems provider. What sets OPT apart is its ability to enhance these data collection capabilities by integrating the WAM-V and PB systems. This integration enables the use of artificial intelligence and machine learning not only to improve data accuracy and operational efficiency but also delivery of actionable intelligence.
Current wording
Our mission is to provide intelligent maritime solutions and services that enable more secure and more productive utilization of our oceans and waterways, provide clean energy power services, and offer sophisticated surface and subsea maritime domain awareness solutions. The Company achieves this through our proprietary, state-of-the-art technologies that are at the core of our clean and renewable energy platforms, autonomous systems, solutions and services. The Company is involved in the entire life cycle of product development, from product design through assembly, testing, deployment, maintenance and upgrades, while working closely with partners across our supply chain. The Company also works closely with our third-party partners that provide us with, among other things, software, controls, sensors, integration services, and marine installation services. Our solutions are based on proprietary technologies that enable autonomous, zero or low carbon emitting, and cost-effective data collection, analysis, transportation and communication. Our solutions are primarily suited to ocean and other offshore environments, and support generation of actionable intelligence on a standalone basis or working with other data sources. We channel the information we collect, and other communications, through control equipment linked to edge computing and cloud hosting environments. The data collected by OPT’s technologies underscores the Company’s unique position as a system of systems provider. What sets OPT apart is its ability to enhance these data collection capabilities by integrating the WAM-V and PB systems. This integration enables the use of artificial intelligence and machine learning not only to improve data accuracy and operational efficiency but also delivery of persistent actionable intelligence over greater distances
Previous wording
Our MDAS processes data onboard our platforms (i.e., edge computing) and transmits the results to our cloud-based analytics platform via secure Wi-Fi and cellular and satellite communications. We anticipate integrating our MDAS solution into our WAM-V’s® to add mobile assets for patrols or interdiction and utilizing satellite communication to expand the availability of our data service. Surveillance data can be integrated with third party marine monitoring software or with our own MDAS software solution to provide command and control features of a multi-platform surveillance network. As an example, one or more WAM-Vs® can be networked to our self-powered buoy, which acts as a central data and communication hub. These WAM-Vs® can significantly increase the range of our MDAS network solutions. The data can also be integrated with satellite, weather, bathymetric, and other third-party data feeds to form a detailed surface and subsea picture of a monitored area. All vessel video, radar, and track data can be securely stored in our cloud, or the customer’s cloud environment and is accessible for as long as required by the customer for further analysis and reference. We refer to these integrated Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance systems as Merrows.
Current wording
Our MDAS processes data onboard our platforms (i.e., edge computing) and transmits the results to our cloud-based analytics platform via secure Wi-Fi and cellular and satellite communications. We anticipate integrating our MDAS solution into our WAM-V’s® to add mobile assets for patrols or interdiction and utilizing satellite communication to expand the availability of our data service. Surveillance data can be integrated with third party marine monitoring software or with our own MDAS software solution to provide command and control features of a multi-platform surveillance network. As an example, one or more WAM-Vs® can be networked to our self-powered buoy, which acts as a central data and communication hub. These WAM-Vs® can significantly increase the range of our MDAS network solutions. The data can also be integrated with satellite, weather, bathymetric, and other third-party data feeds to form a detailed surface and subsea picture of a monitored area. All vessel video, radar, and track data can be securely stored in our cloud, or the customer’s cloud environment and is accessible for as long as required by the customer for further analysis and reference. We refer to the integrated Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance systems as Merrows.
Previous wording
The Company launched the first commercially ready MDAS on a test buoy off the coast of New Jersey in September 2021. The system includes our proprietary integration of sensors, hardware and software, supported by cloud infrastructure as well as having a web-based user interface that displays camera, radar, AIS and live chart data. During the first half of calendar 2024 we successfully demonstrated the system multiple times for potential customers, including a showcase in San Diego Bay at the U.S. Navy’s Advanced Naval Technology Exercise, and remote demonstrations using assets deployed off New Jersey for potential customers active in the Mediterranean, South America and Middle East.
Current wording
The Company launched the first commercially ready MDAS on a test buoy off the coast of New Jersey in September 2021. The system includes our proprietary integration of sensors, hardware and software, supported by cloud infrastructure as well as having a web-based user interface that displays camera, radar, AIS and live chart data. During the first half of calendar 2024 we successfully demonstrated the system multiple times for potential customers, including a remote demonstrations using assets deployed off New Jersey for potential customers active in the Mediterranean, South America and Middle East.
Previous wording
In September 2024, we announced that we completed more than four months of offshore testing of our Next Generation PowerBuoy® (“PB”) in the Atlantic Ocean off New Jersey. The solar and wind power equipped Next Generation PB was equipped with OPT’s proprietary Artificial Intelligence capable Merrows™ suite of solutions. The system maintained 100% data uptime and the state of charge of the batteries remained over 90% throughout the deployment. During the deployment, several Intelligence, Surveillance, and Reconnaissance demonstrations for potential customers were completed.
Current wording
In September 2024, we announced that we completed more than four months of offshore testing of our Next Generation PowerBuoy® (“PB”) in the Atlantic Ocean off New Jersey. The solar and wind power equipped Next Generation PB was equipped with OPT’s AI capable Merrows™ suite of solutions. The system maintained 100% data uptime and the state of charge of the batteries remained over 90% throughout the deployment. During the deployment, several intelligence, surveillance, and reconnaissance demonstrations for potential customers were completed.
Previous wording
In April 2024, the Company announced Merrows, a projected significant step forward to enhance maritime domain awareness and underline the critical importance of ocean security’s role in national security. Merrows is OPT’s consolidated solution offering comprehensive ocean surveillance and involves the deployment of sophisticated Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance systems. These systems are integrated within OPT’s roaming technologies, such as the WAM-V, and resident technologies, like the PB, to offer an unparalleled level of surveillance and data analysis capability. This initiative, which builds on OPT’s recently completed R&D efforts, demonstrates OPT’s commitment to safeguarding the world’s oceans through advanced technology and innovation.
Current wording
In April 2024, the Company announced Merrows, a projected significant step forward to enhance maritime domain awareness and underline the critical importance of ocean security’s role in national security. Merrows is OPT’s consolidated solution offering comprehensive ocean surveillance and involves the deployment of sophisticated Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance systems. These systems are integrated within OPT’s roaming technologies, such as the WAM-V, and geostationary technologies, like the PB, to offer an unparalleled level of surveillance and data analysis capability. This initiative, which builds on OPT’s recently completed R&D efforts, demonstrates OPT’s commitment to safeguarding the world’s oceans through advanced technology and innovation.
Previous wording
In May 2024, the Company announced it was approaching 15MWh of renewable energy production from its family of PB. The recent launch of its Next Generation PB off the coast of New Jersey has materially accelerated average energy production by combining solar, wind, and wave energy production capabilities. The energy generation numbers are based on deployments in the Atlantic, Pacific, Mediterranean, and North Sea. OPT has demonstrated and delivered use cases as a proven solution for Anti-Submarine Warfare, Intelligence, Surveillance, and Reconnaissance, USV Charging, and Environmental Sensing. These numbers show that non-grid connected marine energy production is not just for the R&D community but is a commercially available solution.
Current wording
In May 2024, the Company announced it was approaching 15MWh of renewable energy production from its family of PBs. The recent launch of its Next Generation PB off the coast of New Jersey has materially accelerated average energy production by combining solar, wind, and wave energy production capabilities. The energy generation numbers are based on deployments in the Atlantic, Pacific, Mediterranean, and North Sea. OPT has demonstrated and delivered use cases as a proven solution for Anti-Submarine Warfare, Intelligence, Surveillance, and Reconnaissance, USV Charging, and Environmental Sensing. These numbers show that non-grid connected marine energy production is not just for the R&D community but is a commercially available solution.
Previous wording
PaaS solutions deliver value to customers by utilizing our managed power platforms. We continue to commercialize our proprietary power platforms that generate electricity primarily by harnessing the renewable energy of ocean waves. In addition to offering our commercial legacy PB3, we have added solar power options to our next generation PowerBuoy® (the “NextGen PB”) and have the option of adding small wind turbines to supplement power generation. The NextGen PB includes versions with and without a wave energy converter (WEC), with the non-WEC version replacing our previous hybrid PB. Our focus for these solutions is on bringing autonomous clean power to our customers wherever it is required. Moreover, offshore data and communications networks require power to function, and our solution solves this need without requiring ongoing battery replacement or older technologies such as shore station power cables. Many of the lessons learned from the deployments of both our legacy PB3 and demonstrator systems have been used to develop the next generation of PowerBuoy® systems that are based on modularity for WEC and non-WEC applications. The legacy PB3 will continue to be available and supported in addition to the support provided to the NextGen PB, which was fully commercialized during fiscal 2024.
Current wording
PaaS solutions deliver value to customers by utilizing our managed power platforms. We continue to commercialize our proprietary power platforms that generate electricity primarily by harnessing the renewable energy of ocean waves. In addition to offering our commercial legacy PB3, we have added solar power options to our next generation PowerBuoy® (the “NextGen PB”) and have the option of adding small wind turbines to supplement power generation. The NextGen PB includes versions with and without a wave energy converter (WEC), with the non-WEC version replacing our previous hybrid PB. Our focus for these solutions is on bringing autonomous clean power to our customers wherever it is required. Moreover, offshore data and communications networks require power to function, and our solution provides this power continuously without requiring ongoing battery replacement or older technologies such as shore station power cables. Many of the lessons learned from the deployments of both our legacy PB3 and demonstrator systems have been used to develop the next generation of PowerBuoy®. The NextGen PBs are designed to be modular for both WEC and non-WEC applications. The legacy PB3 will continue to be available and supported in addition to the NextGen PB, which was fully commercialized during fiscal 2024.
Previous wording
The NextGen PB is our future platform that integrates the lessons learned from the legacy PB3 and our demonstrator systems. It consists of two versions, one utilizing solar and wind power and one utilizing solar and wind power plus wave energy conversion capability, to provide reliable power in remote offshore locations, regardless of ocean wave conditions. Both versions utilize the same spar shape, thus increasing modularity and decreasing part count and costs. The WEC technology in the NextGen PB is based on our ongoing Mass on Spring Wave Energy Converter (MOSWEC) development which has the advantages of smaller size, lower cost, environmentally sealed design, and increased energy generation capability. The solar and wind PowerBuoy® is now commercially available and the prototype of the MOSWEC PowerBuoys®has been tested off the coast of New Jersey and the solar and wind system was used during the MDAS demonstration for ANTX during fiscal 2023.
Current wording
The NextGen PB is our future platform that integrates the lessons learned from the legacy PB3 and our demonstrator systems. It consists of two versions, one utilizing solar and wind power and one utilizing solar and wind power plus wave energy conversion capability, to provide reliable power in remote offshore locations, regardless of ocean wave conditions. Both versions utilize the same spar shape, thus increasing modularity and decreasing part count and costs. The WEC technology in the NextGen PB is based on our Mass on Spring Wave Energy Converter (MOSWEC) development which has the advantages of smaller size, lower cost, sealed to the environment design, and increased energy generation capability. The solar and wind PowerBuoy® is now commercially available and the prototype of the MOSWEC PowerBuoys®has been tested off the coast of New Jersey and the solar and wind system was used during the MDAS demonstration for ANTX during fiscal 2023.
Previous wording
We believe this product addresses a broader spectrum of customer deployment needs, including low-wave and nearshore environments, with the potential for greater product integration within each customer project. The NextGen PB is intended to provide a stable energy platform for our MDAS solution, and for agile deployment of other intelligence gathering surface and subsea sensors, subsea power applications, such as a surface communications hub for electric remotely operated vehicles (“eROV”) and autonomous underwater vehicles used for mine counter measures, unexploded ordinance disposal, subsea acoustic monitoring, underwater inspections and short-term maintenance, and subsea equipment monitoring and control. The design has a high payload capacity for surveillance and communications equipment, including subsea acoustics, with the capability of being tethered to subsea payloads such as batteries, or with a conventional anchor mooring system. Energy is stored in onboard lithium-ion batteries which can power subsea and topside payloads. The control system uses sensors and an onboard computer to continuously monitor the subsystems. The NextGen PB is designed to be able to operate over a broad range of temperature and ocean wave conditions. It has a 50kW-hour battery system which can be expanded up to 100 kW-hour energy.
Current wording
We believe this product addresses a broader spectrum of customer deployment needs, including low-wave and nearshore environments, with the potential for greater product integration within each customer project. The NextGen PB is intended to provide a stable energy platform for our MDAS solution, and for agile deployment of other intelligence gathering surface and subsea sensors, subsea power and surface communications applications, for electric remotely operated vehicles (“eROV”) and autonomous underwater vehicles used for mine counter measures, unexploded ordinance disposal, subsea acoustic monitoring, underwater inspections and short-term maintenance, and subsea equipment monitoring and control. The design has a high payload capacity for surveillance and communications equipment, including subsea acoustics, with the capability of being tethered to subsea payloads such as batteries, or with a conventional anchor mooring system. Energy is stored in onboard lithium-ion batteries which can power subsea and topside payloads. The control system uses sensors and an onboard computer to continuously monitor the subsystems. The NextGen PB is designed to be able to operate over a broad range of temperature and ocean wave conditions. It has a 50kW-hour battery system which can be expanded up to 100 kW-hour energy.
Previous wording
Unmanned systems are increasingly in demand by defense and security and commercial companies to reduce costs and improve safety in offshore operations. Also, geopolitical developments such as conflict in the Middle East and Eastern Europe demonstrate the need for countries to protect their borders. In addition, the need to protect exclusive economic zones from illegal fishing activities and protect natural resources on the seabed are accelerating the adoption of solutions or technologies that collect, transmit, and synthesize data to provide actionable intelligence and decision-advantage to clients. Our recent operations in Bahrain and in the Asia Pacific region show the broadening geographic opportunity for our services, especially in the defense and security markets. This includes support for other unmanned assets, such as aerial drones, deployment of underwater vehicles, that can then communicate via PowerBuoy® deployed communication links, and as a deployment platform for secure communication networks.
Current wording
Unmanned systems are increasingly in demand by defense and security and commercial companies to reduce costs and improve safety in offshore operations. Also, geopolitical developments such as conflict in the Middle East and Eastern Europe demonstrate the need for countries to protect their borders. In addition, the need to protect exclusive economic zones from illegal fishing activities and protect natural resources on the seabed are accelerating the adoption of solutions or technologies that collect, transmit, and synthesize data to provide actionable intelligence and decision-advantage to clients. Our recent operations in Bahrain and in the Asia Pacific region show the broadening geographic opportunity for our services, especially in the defense and security markets. This includes support for other unmanned technologies, such as aerial drones, deployment of underwater vehicles, that can then communicate via PowerBuoy® deployed secure communication links.
Previous wording
We are focused on serving defense and security organizations, while also targeting offshore wind, science and research, and ports and harbors. Our pipeline continues to grow and comprises primarily participants in defense and security markets. In addition, we continue to see a growing number of commercial opportunities as we witness growing interest from offshore wind companies for autonomous monitoring, surveillance and survey-related services during various stages of the project development cycle, including initial permitting that can reduce risk in permit obtainment and legal challenge. Further, we are attracting interest targeted toward subsea applications, using proprietary sensor payloads for environmental monitoring and subsea intelligence. We believe that our buoys and WAM-Vs® are uniquely able to deliver these services either as a standalone solution or in combination with other systems. Furthermore, we are becoming a trusted provider of solutions for the hydrography survey market, especially for shallow water operations.
Current wording
We are focused on serving defense and security organizations, while also targeting offshore wind, science and research, and ports and harbors. Our pipeline continues to grow and comprises primarily participants in defense and security markets. In addition, we continue to see a growing number of commercial opportunities from offshore wind companies for autonomous monitoring, surveillance and survey-related services during various stages of the project development cycle, including initial permitting that can reduce risk in permit obtainment and legal challenge. Further, we are attracting interest targeted toward subsea applications, using proprietary sensor payloads for environmental monitoring and subsea intelligence. We believe that our buoys and WAM-Vs® are uniquely able to deliver these services either as a standalone solutions, together or in combination with other systems. Furthermore, we are becoming a trusted provider of solutions for the hydrography survey market, especially for shallow water operations.
Previous wording
Our third-party software company is contributing to the Company’s MDAS by providing integration software, control software, autonomy and systems integration for the buoy sensor payload. In addition, they are assisting the Company with designing and building a customized data platform that supports the Company’s MDAS with sensor data feed management, secure communications management, a cloud-based infrastructure, and web-based user interface. The platform was designed with a flexible architecture that allows the Company to integrate new sensor technologies and third-party analytics capabilities and share MDAS data with customers and partners. We also keep in contact with several offshore specialists and marine operations partners globally to support our deployment, maintenance, and recovery operations and projects.
Current wording
We are currently transitioning our focus from our third-party software company to our internal software team, allowing us to have faster response to customer needs and more significant control over our MDAS solution. In addition, our internal software team will be supporting a more integrated solution between the PB and WAM-V products, moving the Merrows initiative forward. The platform will continue to have a flexible architecture that allows the Company to integrate new sensor technologies and third-party analytics capabilities and share MDAS data with customers and partners. We also keep in contact with several offshore specialists and marine operations partners globally to support our deployment, maintenance, and recovery operations and projects.
Previous wording
During the first three months of fiscal 2024, we have continued to advance our marketing programs, products, and solutions (including Merrows noted above). We have substantially completed our research and development efforts, thus positioning the Company to increase its focus on delivering intelligent maritime solutions and services, particularly in the national security and defense markets. We intend to build on these efforts by introducing additional processes and making investments in appropriate human capital, operations, and manufacturing capabilities. In support of our focus on the national security and defense markets, we have developed a defense specific sales team, including veterans from the U.S. Navy and Swedish Navy.
Current wording
During the first six months of fiscal 2024, we have continued to advance our marketing programs, products, and solutions (including Merrows noted above). We intend to build on these efforts by introducing additional processes and making investments in appropriate human capital, operations, and manufacturing capabilities. In support of our focus on the national security and defense markets, we have developed a defense specific sales team, including veterans from the U.S. Navy and Swedish Navy.
Previous wording
Historically, demonstration projects have been a requisite step towards broad solution deployment and revenue associated with specific applications such as our New Jersey MDAS test array as part of our DaaS solution and to highlight these capabilities. Customers may want their own dedicated demonstration depending on customer needs. During a typical demonstration project’s specification, negotiation and evaluation period, we are often subject to the prospective customer’s vendor qualification process, which entails substantial due diligence of the Company and its capabilities. Such demonstrations are often a required step prior to leasing and may include negotiation of standard terms and conditions. Many proposals contain provisions which would provide the option to purchase or lease our PowerBuoy® or WAM-V® product upon successful conclusion of the demonstration project. The Company maintains a fleet of WAM-Vs® dedicated to demonstrations and has successfully demonstrated the capabilities of many of its solutions on its own or in customer-sponsored evaluation projects and remains focused on further demonstrations to build customer awareness and confidence and to drive revenue.
Current wording
Historically, demonstration projects have been a requisite step towards broad solution deployment and revenue associated with specific applications such as our New Jersey MDAS test array as part of our DaaS solution and to highlight these capabilities. Customers may want their own dedicated demonstration depending on customer needs. During a typical demonstration project’s specification, negotiation and evaluation period, we are often subject to the prospective customer’s vendor qualification process, which entails substantial due diligence of the Company and its capabilities. Such demonstrations are often a required step prior to leasing and may include negotiation of standard terms and conditions. Many proposals contain provisions which would provide the option to purchase or lease our PowerBuoy® or WAM-V® product upon successful conclusion of the demonstration project. The Company maintains access to WAM-Vs® assets for demonstrations and has successfully demonstrated the capabilities of many of its solutions on its own or in customer-sponsored evaluation projects and remains focused on further demonstrations to build customer awareness and confidence in our products and services and ultimately to drive revenue.
Previous wording
During the three months ended July 31, 2024, the Company incurred a net loss of approximately $4.5 million and used cash in operations of approximately $6.1 million. In addition, the Company has continued to make investments to build inventory, support order backlog and future growth.
Current wording
During the six months ended October 31, 2024, the Company incurred a net loss of approximately $8.4 million and used cash in operations of approximately $10.9 million. In addition, the Company has continued to make investments to build inventory, support order backlog and future growth.
Previous wording
On March 21, 2024, the Company entered into an At-the-Market Offering Agreement with AGP with an aggregate offering price of up to $7,000,000 (the “2023 ATM Facility”). On August 30, 2024 the aggregate offering price under the 2023 ATM Facility was increased to approximately $16 million. As of July 31, 2024, the Company had received proceeds of approximately $7 million under this facility and an additional $0.7 million between July 31, 2024 and September 13, 2024. The Company’s ability to raise capital under its shelf offering is limited by the provisions of Rule 415 of the Securities Act of 1933 (Baby Shelf). This limit is currently approximately $16 million.
Current wording
On March 21, 2024, the Company entered into an At-the-Market Offering Agreement with an aggregate offering price of up to $7.0 million (the “2023 ATM Facility”). On August 30, 2024 the aggregate offering price under the 2023 ATM Facility was increased to approximately $16.0 million. It was then reduced to approximately $2.9 million in September 2024 and increased again to approximately $60.0 million in December 2024. As of October 31, 2024, the Company had received proceeds of approximately $8.0 million under this facility and an additional $2.0 million between October 31, 2024 and December 13, 2024.
Previous wording
As of July 31, 2024, the Company’s backlog was $5.3 million. Our backlog includes unfilled firm orders for our products and services from commercial or 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.
Current wording
As of October 31, 2024, the Company’s backlog was $3.8 million. Our backlog includes unfilled firm orders for our products and services from commercial or 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.
Previous wording
The amount of contract backlog is not necessarily indicative of future revenue because modifications to or terminations of present contracts and production delays can provide additional revenue or reduce anticipated revenue. A portion of our revenue is recognized using the input method used to measure progress towards completion of our customer contracts over time, and changes in estimates from time to time may have a significant effect on revenue and backlog. Our backlog is also typically subject to large variations from time to time due to the timing of new awards.
Current wording
The amount of contract backlog is not necessarily indicative of future revenue because modifications to or terminations of present contracts and production delays can provide additional revenue or reduce anticipated revenue. A portion of our revenue is recognized using the input method used to measure progress towards completion of our customer contracts over time, and changes in estimates from time to time may have a significant effect on revenue and backlog. Our backlog is subject to large variations from time to time due to the timing of new awards.
Previous wording
For a discussion of our critical accounting estimates, see the section entitled Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended April 30, 2024. There were no material changes to our critical accounting estimates or accounting policies during the three months ended July 31, 2024.
Current wording
For a discussion of our critical accounting estimates, see the section entitled Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended April 30, 2024. There were no material changes to our critical accounting estimates or accounting policies during the three and six months ended October 31, 2024.
Previous wording
The Company recognizes revenue when or as it satisfies a performance obligation by transferring a good or service to a customer, either (1) at a point in time or (2) over time. A good or service is transferred when or as the customer obtains control. The evaluation of whether control of each performance obligation is transferred at a point in time or over time is made at contract inception. Input measures such as costs incurred are utilized to assess progress against specific contractual performance obligations for the Company’s services. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. For the Company, the input method using costs or labor hours incurred best represents the measure of progress against the performance obligations incorporated within the contractual agreements. If estimated total costs on any contract project a loss, the Company charges the entire estimated loss to operations in the period the loss becomes known. The cumulative effect of revisions to revenue, estimated costs to complete contracts, including penalties, change orders, claims, anticipated losses, and others are recorded in the accounting period in which the events indicating a loss are known and the loss can be reasonably estimated. These loss projections are re-assessed for each subsequent reporting period until the project is complete. Such revisions could occur at any time and the effects may be material. During the three month period ended July 31, 2024, the Company recognized approximately $1.2 million in revenue related to performance obligations satisfied at a point in time and approximately $0.1 million in revenue related to performance obligations satisfied over time.
Current wording
The Company recognizes revenue when or as it satisfies a performance obligation by transferring a good or service to a customer, either (1) at a point in time or (2) over time. A good or service is transferred when or as the customer obtains control. The evaluation of whether control of each performance obligation is transferred at a point in time or over time is made at contract inception. Input measures such as costs incurred are utilized to assess progress against specific contractual performance obligations for the Company’s services. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. For the Company, the input method using costs or labor hours incurred best represents the measure of progress against the performance obligations incorporated within the contractual agreements. If estimated total costs on any contract project a loss, the Company charges the entire estimated loss to operations in the period the loss becomes known. The cumulative effect of revisions to revenue, estimated costs to complete contracts, including penalties, change orders, claims, anticipated losses, and others are recorded in the accounting period in which the events indicating a loss are known and the loss can be reasonably estimated. These loss projections are re-assessed for each subsequent reporting period until the project is complete. Such revisions could occur at any time and the effects may be material. During the six-month period ended October 31, 2024, the Company recognized approximately $3.6 million in revenue related to performance obligations satisfied at a point in time and approximately $0.1 million in revenue related to performance obligations satisfied over time. During the three month period ended October 31, 2024, the Company recognized approximately $2.3 million in revenue related to performance obligations satisfied at a point in time and approximately $0.1 million in revenue related to performance obligations satisfied over time.
Previous wording
The Company has two types of fixed-price contracts, firm fixed-price and cost-sharing. Under firm fixed-price contracts, the Company receives an agreed-upon amount for providing products and services specified in the contract, and a profit or loss is recognized depending on whether actual costs are more or less than the agreed-upon amount. Under cost-sharing contracts, the fixed amount agreed upon with the customer is only intended to fund a portion of the costs on a specific project. Under cost sharing contracts, an amount corresponding to the revenue is recorded in cost of revenue, resulting in gross profit on these contracts of zero. The Company’s share of the costs is recorded as product development expense. The Company reports its disaggregation of revenue by contract type since this method best represents the Company’s business. For the three month period ended July 31, 2024 and 2023, the majority of the Company’s contracts were classified as firm fixed-price and the balance were cost-sharing.
Current wording
The Company has two types of fixed-price contracts, firm fixed-price and cost-sharing. Under firm fixed-price contracts, the Company receives an agreed-upon amount for providing products and services specified in the contract, and a profit or loss is recognized depending on whether actual costs are more or less than the agreed-upon amount. Under cost-sharing contracts, the fixed amount agreed upon with the customer is only intended to fund a portion of the costs on a specific project. Under cost sharing contracts, an amount corresponding to the revenue is recorded in cost of revenue, resulting in gross profit on these contracts of zero. The Company’s share of the costs is recorded as product development expense. The Company reports its disaggregation of revenue by contract type since this method best represents the Company’s business. For the three- and six-month period ended October 31, 2024 and 2023, the majority of the Company’s contracts were classified as firm fixed-price and the balance were cost-sharing.
Previous wording
We currently focus our sales efforts in key global markets in North America, South America, Europe and Asia. The following table shows the percentage of our revenues by geographical location of our customers for the three months ended July 31, 2024 and 2023.
Current wording
We currently focus our sales efforts in key global markets in North America, South America, Europe and Asia. The following table shows the percentage of our revenues by geographical location of our customers for the three and six months ended October 31, 2024 and 2023.
Previous wording
Our selling, general and administrative costs consist primarily of professional fees, salaries, stock based compensation and other personnel-related costs for employees and consultants engaged in sales and marketing of our products, and costs for executive, accounting and administrative personnel, professional fees and other general corporate expenses.
Current wording
Our selling, general and administrative costs consist primarily of professional fees, salaries, share-based compensation and other personnel-related costs for employees and consultants engaged in sales and marketing of our products, and costs for executive, accounting and administrative personnel, professional fees and other general corporate expenses.
Previous wording
Revenues for the three months ended July 31, 2024 and 2023 were approximately $1.3 million and $1.3 million, respectively. The slight year-over-year increase primarily reflects higher levels of revenue stemming from the sales and leases of WAM-Vs.
Current wording
Revenues for the three months ended October 31, 2024 and 2023 were approximately $2.4 million and $0.9 million, respectively. The year-over-year increase primarily reflects higher levels of revenue stemming from the sales and leases of WAM-Vs.
Previous wording
Operating expenses for the three months ended July 31, 2024 and 2023 were $4.9 million and $8.1 million, respectively. The decrease of approximately $3.2 million was primarily the result of the initial benefits of the significant cost reduction activities we implemented at the end of fiscal 2024 including headcount optimization, material reductions in third party spend, and efforts to tightly control and contain costs.
Current wording
Operating expenses for the three months ended October 31, 2024 and 2023 were $4.7 million and $8.0 million, respectively. The decrease of approximately $3.3 million was primarily the result of the significant cost reduction activities we implemented at the end of fiscal 2024 including headcount optimization, material reductions in third party spend, and efforts to tightly control and contain costs.
Previous wording
Interest income for the three months ended July 31, 2024 and 2023 was $0.0 million and $0.3 million, respectively, with the decrease primarily related to lower investment balances in the current year.
Current wording
Interest income for the three months ended October 31, 2024 and 2023 was less than $0.1 million and $0.3 million, respectively, with the decrease primarily related to lower investment balances in the current year.
Previous wording
Cost of revenues for the three months ended July 31, 2024 and 2023 increased slightly to $0.9 million from $0.6 million, respectively. The year-over-year increase is related to a change in product mix, with current year quarterly revenue containing a larger amount of third-party equipment, and associated lower margins.
Current wording
Cost of revenues for the six months ended October 31, 2024 and 2023 increased to $2.5 million from $1.0 million, respectively. The year-over-year increase is related to an increase in revenue and a change in product mix, with the current year’s quarterly revenue containing a larger amount of third-party equipment, and associated lower margins.
Previous wording
The change in fair value of contingent consideration for the three months ended July 31, 2024 and 2023 was zero and a $0.1 million decrease in the liabilities value, respectively. The prior year adjustment was due to changes in actual and forecasted bookings relating to the MAR acquisition.
Current wording
The change in fair value of contingent consideration for the six months ended October 31, 2024 and 2023 was zero and a $0.1 million decrease in the liabilities value, respectively. The prior year amount was due to changes in actual and forecasted bookings relating to the MAR acquisition.
Previous wording
Other income for the three months ended July 31, 2024 and 2023 was $17 thousand and zero, respectively. The 2024 balance is related to proceeds received from the sale of fixed assets.
Current wording
Other income for the six months ended October 31, 2024 and 2023 was $17 thousand and zero, respectively. The 2024 balance is related to proceeds received from the sale of fixed assets.
Previous wording
Our cash requirements relate primarily to working capital needed to operate and grow our business including funding operating expenses. We have experienced and continue to experience negative cash flows from operations and net losses. The Company incurred net losses of $4.5 million and $7.0 million for the three months ended July 31, 2024 and 2023, respectively. Refer to “Liquidity Outlook” below for additional information.
Current wording
Our cash requirements relate primarily to working capital needed to operate and grow our business including funding operating expenses. We have experienced and continue to experience negative cash flows from operations and net losses. The Company incurred net losses of $8.4 million and $14.3 million for the six months ended October 31, 2024 and 2023, respectively. Refer to “Liquidity Outlook” below for additional information.
Previous wording
During the three months ended July 31, 2024, net cash flows used in operating activities was $6.1 million, a decrease of $1.9 million compared to net cash used in operating activities during the three months ended July 31, 2023 of $8.0 million. This primarily reflects a decrease in the net loss, of $2.5 million, partially offset by increases in inventory and timing of payments of trade payables.
Current wording
During the six months ended October 31, 2024, net cash flows used in operating activities was $10.9 million, a decrease of $4.6 million compared to net cash used in operating activities during the six months ended October 31, 2023 of $15.5 million. This primarily reflects a decrease in the net loss, of $5.7 million, partially offset timing of payments of trade payables.
Previous wording
Net cash used in investing activities during the three months ended July 31, 2024 was ($374,000), compared to $5.0 million cash provided by investing activities during the three months ended July 31, 2023. The net cash of ($374,000) million used in investing activities during the three months ended July 31, 2024 was due to the purchase of property, plan and equipment.
Current wording
Net cash used in investing activities during the six months ended October 31, 2024 was ($128,000), compared to $11.9 million cash provided by investing activities during the six months ended October 31, 2023, a change of 12.0 million. The net cash of ($128,000) million used in investing activities during the six months ended October 31, 2024 was due to the purchase of property, plant and equipment.
Previous wording
Net cash provided by/(used in) financing activities during the three months ended July 31, 2024 and July 31, 2023 was $6.5 million and ($2,000), respectively. The current quarter activity was driven by the issuance of common stock under the Company’s At the Market Facility.
Current wording
Net cash provided by financing activities during the six months ended October 31, 2024 and October 31, 2023 was $10.0 million and $27,000, respectively. The current quarter activity was driven by the issuance of common stock under the Company’s At the Market Facility discussed above under “-Liquidity”.
Previous wording
There was no material effect of exchange rates on cash and cash equivalents during the three months ended July 31, 2024 and July 31, 2023.
Current wording
There was no material effect of exchange rates on cash and cash equivalents during the six months ended October 31, 2024 and October 31, 2023.
Previous wording
Since our inception, the cash flows from customer revenues have not been sufficient to fund our operations and provide the capital resources for our business. As of July 31, 2024, our year-to-date revenues were $1.3 million, our year-to-date net losses were $4.5 million, and our year-to-date net cash used in operating activities was $6.1 million.
Current wording
Since our inception, the cash flows from customer revenues have not been sufficient to fund our operations and provide the capital resources for our business. As of October 31, 2024, our year-to-date revenues were $3.7 million, our year-to-date net losses were $8.4 million, and our year-to-date net cash used in operating activities was $10.9 million.
Previous wording
We expect to devote substantial resources to expand our sales, marketing and manufacturing programs associated with the continued commercialization of our products. Our future capital requirements will depend on several factors, including but not limited to:
Current wording
We expect to continue to devote substantial resources to expand our sales, marketing and manufacturing programs associated with the continued commercialization of our products. Our future capital requirements will depend on several factors, including but not limited to:
Previous wording
Our business is capital intensive, and through July 31, 2024, we have been funding our business principally through sales of our securities. As of July 31, 2024, our cash and cash equivalents and long-term restricted cash balance was $3.3 million and we expect to fund our business with this amount and, to a lesser extent, with our cash flow generated from operations. Management believes the Company’s current cash and cash equivalents, and long-term restricted cash, may not be sufficient to fund its planned expenditures through September 2025.
Current wording
Our business is capital intensive, and through October 31, 2024, we have been funding our business principally through sales of our securities. As of October 31, 2024, our cash and cash equivalents and long-term restricted cash balance was $2.2 million and we expect to fund our business with this amount and, to a lesser extent, with our cash flow generated from operations. Management believes the Company’s current cash and cash equivalents, and long-term restricted cash, may not be sufficient to fund its planned expenditures through December 2025.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Cost of revenues for the three months ended October 31, 2024 and 2023 increased to $1.6 million from $0.4 million, respectively. The year-over-year increase is related primarily to a revenue increase, partially offset by changes in product mix, with the current year’s quarterly revenue containing a larger amount of third-party equipment, and associated lower margins.
Current report — wording carried from elsewhere
The gain from change in fair value of contingent consideration for the three months ended October 31, 2024 and 2023 was zero and a $23,000 decrease in the liabilities value, respectively. The prior year amount was due to changes in actual and forecasted bookings relating to the MAR acquisition.
Current report — wording carried from elsewhere
Six months ended October 31, 2024 compared to the six months ended October 31, 2023
Current report — wording carried from elsewhere
The following table contains selected statement of operations information, which serves as the basis of the discussion of our results of operations for the six months ended October 31, 2024 and 2023.
Current report — wording carried from elsewhere
Revenues for the six months ended October 31, 2024 and 2023 were approximately $3.7 million and $2.2 million, respectively. The year-over-year increase primarily reflects higher levels of revenue stemming from the sales and leases of WAM-Vs.
Current report — wording carried from elsewhere
Gain from change in fair value of contingent consideration
Current report — wording carried from elsewhere
Operating expenses for the six months ended October 31, 2024 and 2023 were $9.6 million and $16.1 million, respectively. The decrease of approximately $6.5 million was primarily the result of the significant cost reduction activities we implemented at the end of fiscal 2024 including headcount optimization, material reductions in third party spend, and efforts to tightly control and contain costs.
Current report — wording carried from elsewhere
Interest income for the six months ended October 31, 2024 and 2023 was $0.0 million and $0.6 million, respectively, with the decrease primarily related to lower investment balances in the current year.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In November 2023 we announced that we have substantially completed our research and development phase and are primarily focused on commercial activities. We have built a suite of products (more fully described below) that we believe will be the basis for our current and future commercial success resulting in meaningful progress in orders, pipeline, and backlog.