Ocean Power Technologies, Inc.
For the period ended Jan 31, 2025. Filed Mar 17, 2025.
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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.
Jan 31, 2025 · Filed Mar 17, 2025
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 2024-10-31; filed 2024-12-16.
0001493152-24-050220
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-01-31; filed 2025-03-17.
0001493152-25-010607
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 148 previous paragraphs and 182 current paragraphs.
102 unchanged; 41 reworded; 39 added; 3 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 16 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 (39)
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Special Note Regarding Forward-Looking Statements
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We have made statements in this Quarterly Report on Form 10-Q that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. Forward-looking statements include statements regarding our future financial position, business strategy, pending, threatened, and current litigation, liquidity, budgets, projected revenue and 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.
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The forward-looking statements contained in or incorporated by reference are largely based on our expectations, which reflect estimates and assumptions made by management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve several risks and uncertainties that are beyond our control, including:
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Any or all of our forward-looking statements in this report may turn out to be inaccurate. We have based these forward-looking statements largely 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” of our Annual Report on Form 10-K for the year ended April 30, 2024, and in our subsequent reports under the Exchange Act. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur as contemplated and actual results could differ materially from those anticipated or implied by the forward-looking statements.
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Many of these factors are beyond our ability to control or predict. These factors are not intended to represent a complete list of the general or specific factors that may affect us. You should not unduly rely on these forward-looking statements, which speak only as of the date of this filing. Unless required by law, we undertake no obligation to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise.
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In January 2025 we completed a major set of exercises in California and successfully demonstrated the autonomous capability of the WAM-V to provide offshore survey capabilities for multiple days without needing to return to base. During the exercises, the WAM-V 22 operated for several days while hosting a complete seabed survey payload providing real time hydrographic and survey data collection. This multi-day operational capability is designed to offer greater persistence at sea while hosting an array of offshore instrumentation for longer and more power intensive requirements. This milestone for OPT demonstrated how WAM-Vs can now be deployed for multiple days in over the horizon operations. This opens up entirely new operating approaches for our customers, leading to enhanced efficiencies and new markets for OPT.
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Our regional partnership strategy is a cornerstone of our growth plan, aligning with our broader vision of delivering sustainable, innovative ocean technology solutions while driving long-term value for our shareholders. This strategy includes engaging with regional partners and resellers in order to expand our market reach, accelerate sales cycles, and strengthening our global presence in a cost-effective manner. By partnering with regional resellers, we leverage their deep understanding of local market dynamics, regulatory environments, and customer needs. This enables us to tailor our solutions and better address region-specific challenges and opportunities. Such regional partners and resellers also have established relationships and networks, allowing us to enter new markets more rapidly. This minimizes barriers to entry and reduces the time it takes to secure contracts.
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Recent global events have highlighted the growing risk of sabotage targeting critical infrastructure, including underwater pipelines and telecommunications cables. Such attacks have the potential to severely disrupt economic activities, compromise national security, and impede global communications. As these threats become more sophisticated, the need for proactive monitoring and deterrence strategies has never been more urgent. We recognize the critical role we play in supporting the security and resilience of maritime infrastructure. Our innovative solutions, such as the PowerBuoy® platform, provide real-time offshore intelligence, surveillance, and reconnaissance capabilities. These systems are equipped with advanced sensors, radar, and acoustic monitoring technologies, enabling the continuous collection and analysis of environmental and operational data. Through integrated communications systems, our platforms offer secure data transmission, allowing for timely detection of suspicious activities near critical assets. In light of the recent sabotage incidents, OPT has intensified its focus on collaborating with governmental agencies, defense organizations, and commercial operators to deploy maritime domain awareness solutions. Our autonomous, renewable energy-powered systems are designed to operate in remote and hard-to-reach areas, providing a sustainable and cost-effective approach to safeguarding vital infrastructure.
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Convertible Debt Offering
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On December 20, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an institutional investor (the “Investor”) under which the Company agreed to issue and sell, in one or more registered public offerings by the Company directly to the Investor (the “Offering”), senior convertible notes for up to an aggregate principal amount of $54.0 million (the “Notes”) that will be convertible into shares of the Company’s common stock. On December 20, 2024 (the “Initial Closing Date”), the Company issued and sold to the Investor a Note in the original principal amount of $4.0 million (the “Initial Note”). Upon our filing of one or more additional prospectus supplements, and our satisfaction of certain other conditions, the Securities Purchase Agreement contemplates additional closings of up to $50 million in aggregate principal amount of additional Notes, upon mutual agreement of the Company and the Investor. The Securities Purchase Agreement contains customary representations, warranties and covenants. It also grants the Investor the right to participate in certain future equity and equity-linked transactions of the Company from the Initial Closing Date through the 3-year anniversary thereof, as well as certain anti-dilution rights applicable to the Notes. No Note may be converted to the extent that such conversion would cause the then holder of such Note to become the beneficial owner of more than 4.99%, or, at the option of such holder, 9.99% of the then outstanding common stock, after giving effect to such conversion (the “Beneficial Ownership Cap”).
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The Initial Note was issued with an original issue discount of 9.5%, resulting in $3.6 million of proceeds to the Company, before fees and expenses of approximately $0.4 million. Each Note will bear interest at a rate of 12.5% per annum, which shall compound on the first calendar day of each calendar quarter and increase the principal amount of the Notes on a dollar-for-dollar basis. Upon the occurrence and during the continuance of an event of default, the interest rate on the Notes will increase to 17.5% per annum. Unless earlier converted, the Notes will mature on the eighteen-month anniversary of their respective issuance dates. All amounts due under the Notes are convertible at any time, in whole or in part, and subject to the Beneficial Ownership Cap, at the option of the holders into shares of common stock at a conversion price equal to the lower of the closing price of the common stock on the trading day prior to each closing plus a 15% premium (the “Reference Price”) or 90% of the volume weighted average price of the common stock during the seven trading days ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice. Upon the satisfaction of certain conditions, we may prepay outstanding Notes upon not less than 20 business days nor more than 30 business days’ written notice by paying an amount equal to the face value of the Notes at premium of 15%.
Current report
The Initial Note contains certain terms and conditions which management evaluated as potential embedded derivatives. Management determined that the optional conversion feature is not clearly and closely related to the debt host instrument, and therefore requires bifurcation and separate accounting. We determined the fair value of the embedded derivative as approximately $0.4 million and recorded it as a discount to the debt and a derivative liability on the date of issue.
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The Investor converted all of the outstanding principal and accrued interest under the Initial Note to common stock during December 2024, resulting in the issuance of 15,442,429 common shares at an average conversion price of $0.26 per share. Interest expense during the time the Initial Note was outstanding was immaterial. The Company recognized a loss on extinguishment resulting from the conversion, which is presented as a separate line item in the Company’s Consolidated Statements of Operations.
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In November 2024, the FASB issued ASU No. 2024-3, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU improves the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The new guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating what the potential impact of adopting this ASU 2024-03 could have on our consolidated financial statements and disclosures
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Revenues for the three months ended January 31, 2025 and 2024 were approximately $0.8 million and $1.8 million, respectively. The year-over-year decrease primarily related to the timing of deliveries on current year projects versus the prior year contracts of WAM-Vs.
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Loss on extinguishment of debt
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The loss on extinguishment of debt of $0.8 million as of January 31, 2025 relates to convertible notes issued in December 2024 that were converted to common stock in December 2024.
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Loss on disposition of assets
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The loss on disposition of assets of $0.2 million as of January 31, 2024 relates to the disposal of intangible and fixed assets related to the disposition of 3Dent Technology, LLC in November of 2023.
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Loss on extinguishment of debt
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The loss on extinguishment of debt of $0.8 million as of January 31, 2025 relates to convertible notes that were issued in December 2024 and were converted to common stock in December 2024.
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Loss on disposition of assets*
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The loss on disposition of assets of $0.2 million as of January 31, 2024 relates to the disposal of intangible and fixed assets related to the disposition of 3Dent Technology, LLC in November of 2023.
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Strategic Consulting Services
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In November 2023 OPT divested its non-core strategic consulting team so that it can more fully focus its efforts and resources on the commercialization of its cutting-edge pipeline of products – particularly for the national security and defense markets. Going forward, the focus of our Strategic Consulting Services will be on delivering value to our customers through services which can be integrated in support of our broader PaaS, DaaS and/or RaaS solutions.
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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.
Reworded paragraphs (41)
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 persistent actionable intelligence over greater distances
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, including Merrows™, which provides AI capable seamless integration of Maritime Domain Awareness Systems across platforms. 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
In February 2024, the Company received additional funding from the Naval Postgraduate School for the year-long deployment of a PowerBuoy® in Monterey Bay. The PowerBuoy®, integrating our MDAS along with cutting-edge Satellite communication and AT&T 5G technology, will demonstrate its persistent surveillance and communications capacities in a maritime environment. This deployment marks a significant milestone in maritime technology, showcasing the potential of standalone at-sea infrastructure nodes to support diverse operational needs. We have further expanded our DaaS offering through field demonstration such as ANTX Coastal Trident, as well as the Naval Task Force 59 for the Digital Horizon field exercise and the International Maritime Exercise (IMX) in Bahrain. Additional DaaS contracts include Sulmara for survey services with our WAM-V® platform and Phase I funding through National Oceanic and Atmospheric Administration’s (NOAA) Small Business Innovation Research (SBIR) program.
Current wording
The Company received funding from the Naval Postgraduate School for the deployment of a PowerBuoy® in Monterey Bay. The PowerBuoy®, integrating our MDAS along with cutting-edge Satellite communication and AT&T 5G technology, will demonstrate its persistent surveillance and communications capacities in a maritime environment. This deployment marks a significant milestone in maritime technology, showcasing the potential of standalone at-sea infrastructure nodes to support diverse operational needs. We have further expanded our DaaS offering through field demonstration such as ANTX Coastal Trident, as well as the Naval Task Force 59 for the Digital Horizon field exercise and the International Maritime Exercise (IMX) in Bahrain. Additional DaaS contracts include Sulmara for survey services with our WAM-V® platform and Phase I funding through National Oceanic and Atmospheric Administration’s (NOAA) Small Business Innovation Research (SBIR) program.
Previous wording
In September 2023, the Company received an award of three separate Indefinite Delivery Indefinite Quantity (IDIQ) Multiple-Award Contracts (MAC) from the NOAA. NOAA has selected OPT as one of several Multiple Award IDIQ contract holders to provide Uncrewed Maritime Systems (UMS) Services to NOAA’s Office of Marine and Aviation Operations (OMAO), Uncrewed Systems Operation Center (UxSOC). Under these contracts, OPT will bring its expertise to utilize cutting-edge UMS to support NOAA in conducting vital marine resource surveys and research while also playing a pivotal role in enhancing NOAA’s meteorological and oceanographic observations, further advancing our understanding of the natural world. Finally, OPT will collaborate with NOAA to explore and characterize the depths of our oceans, contributing to the discovery and preservation of invaluable marine ecosystems.
Current wording
The Company also received an award of three separate Indefinite Delivery Indefinite Quantity (IDIQ) Multiple-Award Contracts (MAC) from the NOAA. NOAA has selected OPT as one of several Multiple Award IDIQ contract holders to provide Uncrewed Maritime Systems (UMS) Services to NOAA’s Office of Marine and Aviation Operations (OMAO), Uncrewed Systems Operation Center (UxSOC). Under these contracts, OPT will bring its expertise to utilize cutting-edge UMS to support NOAA in conducting vital marine resource surveys and research while also playing a pivotal role in enhancing NOAA’s meteorological and oceanographic observations, further advancing our understanding of the natural world. Finally, OPT will collaborate with NOAA to explore and characterize the depths of our oceans, contributing to the discovery and preservation of invaluable marine ecosystems.
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 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. In addition, during the third quarter of fiscal 20025 the Company shipped an AI capable Merrows™ PowerBuoy®to a customer in the middle east and a system,to the Navy Postgraduate School which include AT&T® 5G technology and integrated advanced subsea sensors into a PowerBuoy® equipped with OPT’s latest Merrows™ suite for AI capable seamless integration of Maritime Domain Awareness (MDA) across platforms.
Previous wording
The WAM-V® product line highly complements the Company’s business strategy and can be used inshore, nearshore, and offshore. This business continues to grow and is further expanding into core marine survey and maritime security markets in the Middle East, Europe, Asia, Oceania and the Americas. We continue to find ways to integrate Autonomous Vehicles with the Company’s existing platforms and service offerings and expect to take advantage of new synergistic opportunities as they arise. In addition, in connection with our Merrows offering noted below, we are already integrating data streams relating to all aspects of, on, under, adjacent to, or bordering on a sea, ocean, or other navigable waterway onto the WAM-V® to expand our offering to provide a roaming MDA solution to our customers.
Current wording
The WAM-V® product line highly complements the Company’s business strategy and can be used inshore, nearshore, and offshore. This business continues to grow and is further into core marine survey and maritime security markets in the Middle East, Europe, Asia, Oceania and the expanding Americas. We continue to find ways to integrate Autonomous Vehicles with the Company’s existing platforms and service offerings and expect to take advantage of new synergistic opportunities as they arise. In addition, in connection with our Merrows offering noted below, we are already integrating data streams relating to all aspects of, on, under, adjacent to, or bordering on a sea, ocean, or other navigable waterway onto the WAM-V® to expand our offering to provide a roaming MDA solution to our customers.
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 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.
Current wording
In April 2024, the Company announced Merrows TM, a projected significant step forward to enhance maritime domain awareness and underline the critical importance of ocean security’s role in national security. Merrows TM 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
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.
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 and is capable of being deployed in hot climates such as the Middle East, Sub-Saharan Africa, and North Africa. It has a 50kW-hour battery system which can be expanded up to 100 kW-hour energy.
Previous wording
The legacy PB3 uses proprietary technologies that convert the hydrokinetic energy of ocean waves into electricity. The legacy PB3 generates a nominal nameplate capacity rating of up to three kilowatts (“kW”) of peak power. Our Energy Storage System (“ESS”) has a capacity of up to a nominal 150 kW-hours to meet specific application requirements.
Current wording
The legacy PB3 has been discontinued. The proprietary technologies that convert the hydrokinetic energy of ocean waves into electricity and lessons learned from the legacy PB# have been incorporated into the NextGen PB as noted above. The legacy PB3 generates a nominal nameplate capacity rating of up to three kilowatts (“kW”) of peak power. Our Energy Storage System (“ESS”) has a capacity of up to a nominal 150 kW-hours to meet specific application requirements.
Previous wording
Our strategy includes developing integrated solutions and services, including autonomous and cloud-based delivery systems for ocean intelligence, ocean data and predictive analytics to provide actionable intelligence including our product offering Merrows. We also have a number of resellers and strategic alliances, including partnerships recently entered into in the Middle East and U.S., to advance our product and services and gain further adoption from our target markets. Our marketing efforts are focused on offshore locations that require a cost-efficient solution for renewable, reliable, and persistent power, data collection, and communications, either by supplying electric power to payloads that are integrated directly with our products or located in its vicinity, such as on the surface, the seabed, or in the water column. Our recent projects have been primarily focused on military and government applications.
Current wording
Our strategy includes developing integrated solutions and services, including autonomous and cloud-based delivery systems for ocean intelligence, ocean data and predictive analytics to provide actionable intelligence including our product offering Merrows TM. We also have a number of resellers and strategic alliances, including partnerships recently entered into in the Middle East and U.S., to advance our product and services and gain further adoption from our target markets. Our marketing efforts are focused on offshore locations that require a cost-efficient solution for renewable, reliable, and persistent power, data collection, and communications, either by supplying electric power to payloads that are integrated directly with our products or located in its vicinity, such as on the surface, the seabed, or in the water column. Our recent projects have been primarily focused on military and government applications.
Previous wording
As noted above, we are now primarily focused on commercial activities. We have built a suite of products that we believe will be the basis for our current and future commercial success resulting in meaningful progress in orders, pipeline, and backlog. We continue to seek new strategic relationships and further develop our existing partnerships. We collaborate with companies that have developed or are developing in-ocean applications requiring a persistent source of power that is also capable of real time data collection, processing and communication, to address potential customer needs. For the three-month periods ended October 31, 2024 and 2023, the Company had two and four customers, respectively, whose revenue accounted for at least 10% of the Company’s consolidated revenue, respectively. These revenues accounted for approximately 84% and 73% of the Company’s total revenue for the respective periods.
Current wording
As noted above, we are now primarily focused on commercial activities. We have built a suite of products that we believe will be the basis for our current and future commercial success resulting in meaningful progress in orders, pipeline, and backlog. We continue to seek new strategic relationships and further develop our existing partnerships. We collaborate with companies that have developed or are developing in-ocean applications requiring a persistent source of power that is also capable of real time data collection, processing and communication, to address potential customer needs. For the three-month periods ended January 31, 2025 and 2024, the Company had three and two customers, respectively, whose revenue accounted for at least 10% of the Company’s consolidated revenue, respectively. These revenues accounted for approximately 95% and 85% of the Company’s total revenue for the respective periods.
Previous wording
The following commercially notable activities occurred during the first and second quarter of fiscal 2025:
Current wording
The following commercially notable activities occurred during year to date fiscal. 2025:
Previous 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.
Current wording
We are finalizing the transition 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 TM 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 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.
Current wording
During the first nine months of fiscal 2025, we have continued to advance our marketing programs, products, and solutions (including Merrows TM 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
The Company’s future results of operations involve significant risks and uncertainties. Factors that could affect the Company’s future operating results and could cause actual results to vary materially from expectations include, but are not limited to, performance of its products, its ability to market and commercialize its products and new products that it may develop, access to capital, technology development, scalability of technology and production, ability to attract and retain key personnel, concentration of customers and suppliers, pending or threatened litigation (including recent litigation noted above), and deployment risks and integration of acquisitions.
Current wording
During the nine months ended January 31, 2025, the Company incurred a net loss of approximately $15.1 million and used cash in operations of approximately $14.6 million. The Company’s future results of operations involve significant risks and uncertainties. Factors that could affect the Company’s future operating results and could cause actual results to vary materially from expectations include, but are not limited to, performance of its products, its ability to market and commercialize its products and new products that it may develop, access to capital, technology development, scalability of technology and production, ability to attract and retain key personnel, concentration of customers and suppliers, pending or threatened litigation (including recent litigation noted above), and deployment risks and integration of acquisitions.
Previous 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.
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 January 31, 2025, the Company had received proceeds of approximately $16.8 million under this facility and an additional $0.9 million between January 31, 2025 and March 16, 2025.
Previous wording
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 wording
The Company used the net proceeds from the First RDO Purchase Agreement and the Second RDO Purchase Agreement 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.
Previous 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.
Current wording
As of January 31, 2025, the Company’s backlog was $7.5 million as compared to $3.3 million as of January 31, 2024. 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
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.
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 nine months ended January 31, 2025.
Previous wording
The nature of the Company’s contracts may give rise to several types of variable consideration, including unpriced change orders, liquidated damages and penalties. Variable consideration can also arise from modifications to the scope of services. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur once the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include such amounts in the transaction price are based largely on our assessment of legal enforceability, performance, and any other information (historical, current, and forecasted) that is reasonably available to us. There was no variable consideration as of October 31, 2024 or 2023. The Company presents shipping and handling costs, that occur after control of the promised goods or services transfer to the customer, as fulfillment costs in costs of goods sold and regular shipping and handling activities charged to operating expenses.
Current wording
The nature of the Company’s contracts may give rise to several types of variable consideration, including unpriced change orders, liquidated damages and penalties. Variable consideration can also arise from modifications to the scope of services. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur once the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include such amounts in the transaction price are based largely on our assessment of legal enforceability, performance, and any other information (historical, current, and forecasted) that is reasonably available to us. There was no variable consideration as of January 31, 2025 or 2024. The Company presents shipping and handling costs, that occur after control of the promised goods or services transfer to the customer, as fulfilment costs in costs of goods sold and regular shipping and handling activities charged to operating expenses.
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 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.
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 nine-month period ended January 31, 2025, the Company recognized approximately $4.0 million in revenue related to performance obligations satisfied at a point in time and approximately $0.5 million in revenue related to performance obligations satisfied over time. During the three month period ended January 31, 2025, the Company recognized approximately $0.4 million in revenue related to performance obligations satisfied at a point in time and approximately $0.4 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- 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.
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 nine-month periods ended January 31, 2025 and 2024, 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 and six months ended October 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 nine months ended January 31, 2025 and 2023.
Previous wording
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 wording
Cost of revenues for the three months ended January 31, 2025 and 2024 decreased to $0.6 million from $1.0 million, respectively. The year-over-year decrease is related primarily to revenue decreases and changes in product mix, with the current year’s quarterly revenue containing a larger amount of third-party equipment, which carry lower margins.
Previous wording
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 wording
The gain from change in fair value of contingent consideration for the three months ended January 31, 2025 and 2024 was zero and a $33,000 decrease in the liabilities value, respectively. The prior year amount was due to changes in actual and forecasted bookings relating to the MAR acquisition.
Previous 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.
Current wording
Operating expenses for the three months ended January 31, 2025 and 2024 were $6.0 million and $8.6 million, respectively. The decrease of approximately $2.6 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 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.
Current wording
Interest income for the three months ended January 31, 2025 and 2024 was less than $6,000 and $151,000, respectively, with the decrease primarily related to lower investment balances in the current year.
Previous wording
Six months ended October 31, 2024 compared to the six months ended October 31, 2023
Current wording
Nine months ended January 31, 2025 compared to the nine months ended January 31, 2024
Previous wording
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 wording
The following table contains selected statement of operations information, which serves as the basis of the discussion of our results of operations for the nine months ended January 31, 2025 and 2024.
Previous 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.
Current wording
Revenues for the nine months ended January 31, 2025 and 2024 were approximately $4.5 million and $4.0 million, respectively. The year-over-year increase primarily reflects higher levels of revenue stemming from the sales and leases of WAM-Vs.
Previous 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.
Current wording
Cost of revenues for the nine months ended January 31, 2025 and 2024 increased to $3.1 million from $2.0 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 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.
Current wording
The change in fair value of contingent consideration for the nine months ended January 31, 2025 and 2024 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
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 wording
Operating expenses for the nine months ended January 31, 2025 and 2024 were $15.7 million and $24.6 million, respectively. The decrease of approximately $8.9 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 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.
Current wording
Interest income for the nine months ended January 31, 2025 and 2024 was $13,000 and $760,000, respectively, with the decrease primarily related to lower investment balances in the current year.
Previous 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.
Current wording
Other income for the nine months ended January 31, 2025 and 2024 was $4,000 and zero, respectively. The 2025 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 $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.
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 $15.1 million and $20.8 million for the nine months ended January 31, 2025 and 2024, respectively. Refer to “Liquidity Outlook” below for additional information.
Previous 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.
Current wording
During the nine months ended January 31, 2025, net cash flows used in operating activities was $14.6 million, a reduction of cash used in operating activities of $10.1 million compared to net cash used in operating activities during the nine months ended January 31, 2024 of $24.7 million. This primarily reflects a decrease in the net loss, of $5.9 million and increases in the current year on non-cash expenses, such as depreciation and stock-based compensation.
Previous 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.
Current wording
Net cash used in investing activities during the nine months ended January 31, 2025 was ($350,000), compared to $22.5 million cash provided by investing activities during the nine months ended January 31, 2024, a change of $22.1 million. The net cash of $(350,000) million used in investing activities during the nine months ended January 31, 2025 was due to the purchase of property, plant and equipment.
Previous 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”.
Current wording
Net cash provided by financing activities during the nine months ended January 31, 2025 and January 31, 2024 was $21.9 million and $16,000, respectively. The current quarter activity was driven by the issuance of common stock under the Company’s At the Market Facility and proceeds from the issuance of stock for convertible debt, discussed above under “Liquidity”.
Previous 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.
Current wording
There was no material effect of exchange rates on cash and cash equivalents during the nine months ended January 31, 2025 and January 31, 2024.
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 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.
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 January 31, 2025, our year-to-date revenues were $4.5 million, our year-to-date net losses were $15.1 million, and our year-to-date net cash used in operating activities was $14.6 million.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
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.
Previous report — wording carried 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.