Ocean Power Technologies, Inc.

RISK FACTORS*

The discussion of our business and operations should be read together with the risk factors contained in Item 1A of our Annual Report on Form 10-K for the year ended April 30, 2024 and set forth below in this Quarterly Report on Form 10-Q. These risk factors describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies or prospects in a material and adverse manner. Except as noted below, there have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K filed with the SEC on July 25, 2024.

We have a history of operating losses and may not achieve or maintain profitability and positive cash flow.

We have incurred net losses since we began operations in 1994, including net losses of $15.1 million during the first nine months of fiscal year 2025 and $20.8 million during the same nine-month period in fiscal year 2024. As of January 31, 2025, we had an accumulated deficit of $322.5 million.

We do not know whether we will be able to successfully commercialize our products and solutions, or whether we can achieve profitability. There is significant uncertainty about our ability to successfully commercialize our products and solutions in our targeted markets. Even if we do achieve commercialization of our products and solutions and become profitable, we may not be able to achieve or, if achieved, sustain profitability on a quarterly or annual basis.

We encounter seasonality and revenue variability due to the markets and customers we serve which may impact our ability to attain forecasted revenue, earnings and cash flow targets consistently on a quarterly basis

As we continue to grow and scale, we anticipate some quarterly variability in both bookings and revenue recognition going forward. This is a natural outcome of our business model, which involves securing large, complex contracts that may span multiple quarters before revenue is fully recognized. We believe this variability will continue to be offset by our existing “as a Service” solutions that provide recurring revenue, but there may be quarters in our business where this cannot be the case. Our focus remains on long-term execution, delivering on our commitments, and driving sustained value creation. By maintaining this disciplined approach, we believe we will successfully navigate these natural variances as we scale, but there can be no assurance that this will be the case consistently on a quarterly basis. In turn, our ability to attain forecasted revenue, earnings and cash flow targetscould be negatively impacted from time to time.

Changes in government trade policies, including the imposition of tariffs, may have a material impact on our results of operations.

We evaluate all trade policies that impact us, and we adjust our operational strategies to mitigate the impact of these policies. However, trade policies, including quotas, duties, tariffs, taxes, or other restrictions on the import or export of our products, are subject to change, and we cannot ensure that any mitigation strategies employed will remain available in the future or that we will be able to offset tariff-related costs or maintain competitive pricing of our products. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, our suppliers, and the global economy, which in turn could have a material adverse effect on our business, operating results, and financial condition.

Further tariffs may be imposed on other imports of our products. For example, effective February 4, 2025, the U.S. announced additional tariffs for goods imported into the U.S. from Mexico, Canada, and China beginning in January through April of 2025. We cannot predict what additional actions may ultimately be taken by the U.S. or other governments with respect to tariffs or trade relations and our business may be further impacted by retaliatory trade measures taken by other countries in response to existing or future U.S. tariffs or other measures (e.g., subsidies). We may raise our prices on products subject to such tariffs to share the cost with our customers, which could harm our operating performance or cause our customers to seek alternative suppliers. In addition, we may seek to shift some of our manufacturing to other countries, which could result in additional costs and disruption to our operations. We also sell our products globally and, therefore, our export sales could be impacted by the tariffs. Any material reduction in sales may have a material adverse effect on our results of operations.

*Item 2.