Ocean Power Technologies, Inc.

Previous wording

We continue to monitor federal budget developments, appropriations activity, and agency guidance to assess downstream effects on pipeline conversion and resource allocation. We believe our active positioning in mission-critical domains, including persistent maritime surveillance, energy resilience, and multi-domain autonomy, will allow us to capitalize on pent-up demand as deferred contract opportunities move forward in the second half of calendar year 2025. However, additional political disruptions or appropriations delays could further affect our operating results and cash flow.

Current wording

We continue to monitor federal budget developments, appropriations activity, agency guidance, and broader geopolitical events to assess downstream effects on pipeline conversion and resource allocation. During fiscal 2026, the U.S. Government operated under two continuing resolutions, experienced two temporary government shutdowns, and faced delays in the enactment of a full-year defense appropriation. In addition, heightened geopolitical tensions, including the conflict involving Iran, contributed to shifting government priorities and procurement timing across portions of the defense market. These factors resulted in delays in certain customer procurement activities, contract awards, and program funding decisions. While the timing of these opportunities remains uncertain, we believe our active positioning in mission-critical domains, including persistent maritime surveillance, energy resilience, and multi-domain autonomy, positions us well to compete for these opportunities as procurement activity resumes. However, additional political disruptions, appropriations delays, geopolitical instability, or changes in government priorities could further delay customer decisions and adversely affect our operating results, cash flows, and the timing of future contract awards.

Previous wording

Inflationary pressures may impact the cost of key inputs used in products. Although pricing volatility began to moderate in the latter half of fiscal 2025, we may experience elevated vendor pricing compared to pre-pandemic levels. To partially offset these pressures, we have implemented cost optimization measures, adjusted pricing on new contracts, and re-evaluated supplier agreements.

Current wording

Inflationary pressures may impact the cost of key inputs used in products. To partially offset these pressures, we have implemented cost optimization measures, adjusted pricing on new contracts, and re-evaluated supplier agreements.

Previous wording

Despite these headwinds, our diversified contract base including U.S. federal government agencies, strategic defense contractors, and energy developers—continues to support revenue visibility. We remain focused on cost discipline, capital efficiency, and maintaining operational flexibility as macroeconomic uncertainty persists into fiscal 2026.

Current wording

Despite these headwinds, our diversified contract base, including U.S. federal government agencies, strategic defense contractors, and energy developers, provides a foundation for future revenue generation.

Previous wording

During fiscal year 2025 and subsequently, we undertook two significant capital raising activities to support our strategic initiatives and operational needs.

Current wording

During fiscal years 2025, 2026 and subsequently, we undertook various capital raising activities to support our strategic initiatives and operational needs.

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 April 30, 2025, the Company had received proceeds of approximately $17.7 million under this facility and an additional $0.3 million between April 30, 2025 and June 16, 2025.

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. The Company received proceeds of approximately $18.0 million under this facility prior to termination of the facility effective August 8, 2025.

Previous wording

Separate from the December 2024 transaction noted above, in May 2025 we issued $10 million in aggregate principal amount of convertible notes with a 24-month maturity to new institutional investors with net proceeds of $9.7 million. The notes are convertible into shares of our common stock under specific terms outlined in the Securities Purchase Agreement and Indenture. This financing was aimed at bolstering our balance sheet, supporting the commercialization of our systems, and advancing our autonomous maritime solutions. The convertible debt structure offers the potential for conversion into equity, which may result in dilution to existing shareholders upon conversion.

Current wording

In May 2025 we issued $10.0 million in aggregate principal amount of convertible notes with a 24-month maturity to new institutional investors with net proceeds of $9.7 million. The notes are convertible into shares of our common stock under specific terms outlined in the Securities Purchase Agreement and Indenture. This financing was aimed at providing us with additional liquidity, supporting the commercialization of our systems, and advancing our autonomous maritime solutions. On October 7, 2025, we issued and sold to the investors $6.5 million of additional notes. On April 1, 2026, the Company issued and sold a new class of senior convertible notes (the “Notes”) in an aggregate principal amount of $10.0 million. These notes replaced all outstanding balances then outstanding under the May 2025 and October 2025 convertible note issuances. The Notes bear interest at a rate of 4.5% per annum and mature eighteen months from issuance unless earlier converted or repaid. Upon an event of default, the interest rate increases to 13.0% per annum. At maturity, the Notes are payable at 113% of their principal amount. The Notes are convertible, in whole or in part, into shares of the Company’s common stock at a conversion price of $0.40 per share, subject to customary anti-dilution adjustments. A holder may not convert any portion of a Note to the extent such conversion would cause the holder to beneficially own more than 4.99% of the Company’s outstanding common stock. Beginning on the closing date, the Notes are subject to quarterly cash amortization payments through maturity. The Notes rank senior to the Company’s unsecured indebtedness, subject to certain exceptions, and contain customary affirmative and negative covenants, including restrictions on indebtedness, liens, restricted payments, asset transfers, changes in business, and affiliate transactions. The Notes also contain customary events of default. With exception to the ATM proceeds, at the discretion of the lender, the Company may be required to reserve up to 30% of the net proceeds related to future capital raises to repay this note.

Previous wording

The sale of additional equity under new facilities could result in dilution to our shareholders. If additional funds are raised through the issuance of debt securities or preferred stock, these securities could have rights senior to those associated with our common stock and could contain covenants that would restrict our operations. The Company cannot be certain that additional equity and/or debt financing will be available to the Company as needed on acceptable terms, or at all. If we are unable to obtain required financing when needed, we may be required to reduce the scope of our operations, including our planned incremental product development and marketing efforts, which could materially and adversely affect our financial condition and operating results. If we are unable to secure additional financing, we may be forced to cease our operations.

Current wording

The sale of additional equity and convertible debt under new facilities could result in dilution to our shareholders. If additional funds are raised through the issuance of debt securities or preferred stock, these securities could have rights senior to those associated with our common stock and could contain covenants that would restrict our operations. The Company cannot be certain that additional equity and/or debt financing will be available to the Company as needed on acceptable terms, or at all. If we are unable to obtain required financing when needed, we may be required to reduce the scope of our operations, including our planned incremental product development and marketing efforts, which could materially and adversely affect our financial condition and operating results. If we are unable to secure additional financing, we may be forced to cease our operations.

Previous wording

As of April 30, 2025 and 2024, the Company’s backlog was $12.5 million and $4.9 million, respectively. The backlog represents the value of unfulfilled, purchase orders and agreements with commercial and governmental customers. If any of our contracts were to be terminated, our backlog would be reduced by the expected value of the remaining terms of such contract.

Current wording

As of April 30, 2026 and 2025, the Company’s backlog was $20.1 million and $12.5 million, respectively. The backlog represents the value of unfulfilled, purchase orders and agreements with commercial and governmental customers. If any of our contracts were to be terminated, our backlog would be reduced by the expected value of the remaining terms of such contract.

Previous wording

The Company accounts for revenue in accordance with Accounting Standards Codification 606 (ASC 606) for contracts with customers and Accounting Standards Codification 842 (ASC 842) for leasing arrangements. In relation to ASC 606, which states that a performance obligation is the unit of account for revenue recognition, the Company assesses the goods or services promised in a contract with a customer and identifies as a performance obligation as either: a) a good or service (or a bundle of goods or services) that is distinct; or b) a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. A contract may contain a single performance obligation or multiple performance obligations. For contracts with multiple performance obligations, the Company allocates the contracted transaction price to each performance obligation based upon the relative standalone selling price, which represents the price the Company would sell a promised good or service separately to a customer. The Company determines the standalone selling price based upon the facts and circumstances of each obligated good or service. When no observable standalone selling price is available, the standalone selling price is generally estimated based upon the Company’s forecast of the total cost to satisfy the performance obligation plus an appropriate profit margin.

Current wording

The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606 –Revenue from Contracts with Customers (“ASC 606”) for contracts with customers and ASC Topic 842 -Leases (“ASC 842”) for leasing arrangements. In relation to ASC 606, which states that a performance obligation is the unit of account for revenue recognition, the Company assesses the goods or services promised in a contract with a customer and identifies a performance obligation as either: a) a good or service (or a bundle of goods or services) that is distinct; or b) a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. A contract may contain a single performance obligation or multiple performance obligations. For contracts with multiple performance obligations, the Company allocates the contracted transaction price to each performance obligation based upon the relative standalone selling price, which represents the price the Company would sell a promised good or service separately to a customer. The Company determines the standalone selling price based upon the facts and circumstances of each obligated good or service. When no observable standalone selling price is available, the standalone selling price is generally estimated based upon the Company’s forecast of the total cost to satisfy the performance obligation plus an appropriate profit margin.

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. Estimates of variable consideration and determination of whether to include such amounts in the transaction price are based largely on the 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 April 30, 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 revenues 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. Estimates of variable consideration and determination of whether to include such amounts in the transaction price are based largely on the assessment of legal enforceability, performance, and any other information (historical, current, and forecasted) that is reasonably available to us. There was no variable consideration recognized in revenue for the years ended April 30, 2026 or 2025. 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.

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 (e.g., upon shipment, upon delivery, as services are rendered, or upon completion of service), including when performance obligations are satisfied in a bill-and-hold arrangement. 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 fiscal year ended April 30, 2025 the Company recognized approximately $4.9 million in revenue related to performance obligations satisfied at a point in time and approximately $1.0 million in revenue related to performance obligations satisfied over time as compared to $3.6 million in revenue related to performance obligations satisfied at a point in time and $1.9 million in revenue related to performance obligations satisfied over time revenue for the fiscal year ended April 30, 2024.

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 (e.g., upon shipment, upon delivery, as services are rendered, or upon completion of service), including when performance obligations are satisfied in a bill-and-hold arrangement. 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. For the quarter ended January 31, 2026 the Company recorded one-time losses associated with two contracts in strategically important markets. The expenses associated with these projects are now substantially complete, although they will continue to generate revenue over the next several months. Importantly, our core programs and commercial pipeline continue to demonstrate improving margin quality and operating leverage. 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 fiscal year ended April 30, 2026 the Company recognized approximately $2.4 million in revenue related to performance obligations satisfied at a point in time and approximately $0.7 million in revenue related to performance obligations satisfied over time as compared to $4.9 million in revenue related to performance obligations satisfied at a point in time and $1.0 million in revenue related to performance obligations satisfied over time revenue for the fiscal year ended April 30, 2025.

Previous wording

The Company’s contracts are either cost-plus contracts, fixed-price contracts, time and material agreements, lease or service agreements. Under cost plus contracts, customers are billed for actual expenses incurred plus an agreed-upon fee.

Current wording

The Company’s contracts are either cost-plus contracts, fixed-price contracts, time and material agreements, lease agreements or service agreements. Under cost-plus contracts, customers are billed for actual costs incurred plus an agreed-upon fee. Under fixed-price contracts, customers are billed based on contractually agreed pricing for specified deliverables or services. Under time-and-materials agreements, customers are billed based on negotiated labor rates for hours worked and the cost of materials, equipment, subcontractors, and other reimbursable expenses incurred in performing the work.

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 reports its disaggregation of revenue by contract type since this method best represents the Company’s business. For the fiscal years ended April 30, 2025 and 2024, the majority of the Company’s contracts were classified as firm fixed-price and the balance were cost-sharing.

Current wording

The Company has one type of fixed-price contract, firm fixed-price. 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. For the fiscal years ended April 30, 2026 and 2025, the majority of the Company’s fixed price contracts were classified as firm fixed-price.

Previous wording

The Company’s revenue also includes revenue from certain contracts which do not fall within the scope of ASC 606, but under the scope of ASC 842, “Leases”. At inception of a contract for those classified under ASC 842, the Company classifies leases as either operating or financing in accordance with the authoritative accounting guidance contained within ASC 842. If the direct financing or sales-type classification criteria are met, then the lease is accounted for as a finance lease. All others are treated as operating leases. The Company recognizes revenue from operating lease arrangements generally on a straight-line basis over the lease term, or as agreed upon in-use days are utilized, both of which are presented in Revenues in the Consolidated Statement of Operations. The Company also enters into operating lease arrangements for its PowerBuoys® and Wave Adaptive Modular Vessels (“WAM-V®”) with certain customers. Revenue related to multiple-element arrangements is allocated to lease and non-lease elements based on their relative standalone selling prices or expected cost plus a margin approach. Lease elements generally include a PowerBuoy®, WAM-V®, and components, while non-lease elements, which the Company expects to become more prevalent, generally include engineering, monitoring and support services. In the lease arrangement, the customer may be provided with an option to extend the lease term or purchase the leased PowerBuoy® or WAM-V® at some point during and/or at the end of the lease term.

Current wording

The Company’s revenue also includes revenue from certain contracts which do not fall within the scope of ASC 606, but under the scope of ASC 842, “Leases.” At inception of a contract for those classified under ASC 842, the Company classifies leases as either operating or financing in accordance with the authoritative accounting guidance contained within ASC 842. If the direct financing or sales-type classification criteria are met, then the lease is accounted for as a financing lease. All others are treated as operating leases. The Company recognizes revenue from operating lease arrangements generally on a straight-line basis over the lease term, or as agreed upon in-use days are utilized, which is presented in Revenues in the Consolidated Statement of Operations. The Company also enters into lease arrangements for its PowerBuoys® and Wave Adaptive Modular Vessels (“WAM-V®”) with certain customers. Revenue related to multiple-element arrangements is allocated to lease and non-lease elements based on their relative standalone selling prices or expected cost plus a margin approach. Lease elements generally include a PowerBuoy®, WAM-V®, and components, while non-lease elements, which the Company expects to become more prevalent, generally include engineering, monitoring and support services. In the lease arrangement, the customer may be provided with an option to extend the lease term or purchase the leased buoy or WAM-V® at some point during and/or at the end of the lease term.

Previous wording

As of the years ended April 30, 2025 and 2024, the Company had three and four customers, respectively, whose revenue accounted for at least 10% of the Company’s consolidated revenue. These customers accounted for approximately 53% and 52% of the Company’s total revenue for the respective periods.

Current wording

In each of the years ended April 30, 2026 and 2025, the Company had four customers whose revenue accounted for at least 10% of the Company’s consolidated revenue. These customers accounted for approximately 62% and 53% of the Company’s total revenue for 2026 and 2025, respectively.

Previous wording

The following table shows the percentage of our revenue by geographical location of our customers for fiscal 2025 and 2024:

Current wording

The following table shows the percentage of our revenue by geographical location of our customers headquarters for fiscal 2026 and 2025:

Previous wording

Our cost of revenue consists primarily of subcontracts, incurred material, labor and manufacturing overhead expenses, such as engineering expense, equipment depreciation, maintenance, and facility related expenses, and includes the cost of equipment to customize the PowerBuoy®, WAM-V® and our other products supplied by third-party suppliers. Cost of revenue also includes PowerBuoy® and other product system delivery and deployment expenses and may include losses recorded at the time a loss is forecasted to be incurred on a contract.

Current wording

Our cost of revenue consists primarily of subcontracts, materials incurred, labor and manufacturing overhead expenses, such as engineering expenses, equipment depreciation, maintenance, and facility related expenses, and includes the cost of equipment to customize the PowerBuoy®, WAM-V® and our other products supplied by third-party suppliers. Cost of revenue also includes PowerBuoy® and other product system delivery and deployment expenses and may include losses recorded at the time a loss is forecasted to be incurred on a contract.

Previous wording

Our selling, general and administrative costs consist primarily of professional fees, salaries 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

The simplification of OPT’s legal entity structure reduces fixed costs and compliance complexity, enabling a more agile and scalable approach to international market entry and project execution. The unrealized gains or losses resulting from foreign currency translation associated with these entities are included in Accumulated Other Comprehensive Loss within Shareholders’ Equity. Foreign currency transaction gains and losses are recognized within the Company’s Consolidated Statements of Operations.

Current wording

The Company completed the process of winding down its Australian subsidiary during fiscal 2024 and its UK subsidiary during fiscal 2025. The unrealized gains or losses resulting from foreign currency balances translation are included in Accumulated Other Comprehensive Loss within Shareholders’ Equity. Foreign currency transaction gains and losses are recognized within our Consolidated Statements of Operations.

Previous wording

Change in fair value of contingent consideration

Current wording

Change in fair value of financial instruments

Previous wording

The loss on extinguishment of debt of $0.8 million as of April 30, 2025 relates to convertible notes that were issued in December 2024 and were converted to common stock in December 2024 loss on disposition of assets.

Current wording

The loss on extinguishment of debt of $1.2 million as of April 30, 2026 relates to convertible notes that were issued in May and October 2025 and were repaid in full in April 2026. The loss on extinguishment of debt of $0.8 million as of April 30, 2025 relates to convertible notes that were issued in December 2024 and were converted to common stock in December 2024 loss on disposition of assets.

Previous wording

Income tax benefit reflects the sale by the Company of New Jersey State net operating losses and research development credits under the New Jersey Economic Development Authority Tax Transfer programs, resulting in $1.0 million and $1.3 million of tax benefit related to the fiscal year ended April 30, 2025 and 2024, respectively.

Current wording

Income tax benefit reflects the sale by the Company of New Jersey State net operating losses and research development credits under the New Jersey Economic Development Authority Tax Transfer programs, resulting in $1.3 million of tax benefit related to the fiscal year ended April 30, 2025. The Company did not sell any net operating losses in the fiscal year ended April 30, 2026.

Previous wording

During the fiscal year ended April 30, 2025, net cash flows used in operating activities was $18.6 million, a decrease of $11.1 million compared to net cash used in operating activities during the fiscal year ended April 30, 2024. This primarily reflects a decrease in the net loss of $5.4 million and increases in the current year on non-cash expenses, such as depreciation and stock-based compensation.

Current wording

During the fiscal year ended April 30, 2026, net cash flows used in operating activities was $20.8 million, an increase of $2.1 million compared to net cash used in operating activities during the fiscal year ended April 30, 2025 of 18.6 million. This primarily reflects an increase in net loss of $24.4 million, prepaid expenses, and inventory on hand, partially offset an increase in accounts payable, contract liabilities, and equity compensation and decreases in accounts receivable in the current year versus the prior year.

Previous wording

Net cash provided by financing activities during the fiscal year ended April 30, 2025 was approximately $22.7 million compared to net cash used in financing activities during the fiscal year ended April 30, 2024 of $0.5 million. The increase in net cash provided by financing activities during the fiscal year ended April 30, 2025 was driven by the issuance of common stock under the Company’s At the Market Facility and proceeds from the issuance of stock and convertible debt, discussed under “Capital Raises” above.

Current wording

Net cash provided by financing activities during the fiscal year ended April 30, 2026 was approximately $26.8 million compared to net cash used in financing activities during the fiscal year ended April 30, 2025 of $22.7 million. The current year activity was driven by proceeds from the issuance of the May 2025, October 2025, and April 2026 convertible notes of $26.5 million and ATM proceeds of $7.6 million, and the prior year activity was related primarily to ATM proceeds of $17.7 million, $3.2 million in proceeds from convertible debt issued in December 2024, and proceeds from other capital raises of $2.5 million discussed above under “Liquidity”.

Previous wording

Since our inception, our operating cash flows have not been sufficient to fund our operations and provide the capital resources for our business. For the two-year period ended April 30, 2025 our aggregate revenue was $11.4 million, our aggregate net losses were $49.6 million and our aggregate net cash used in operating activities was $48.4 million.

Current wording

Since our inception, our operating cash flows have not been sufficient to fund our operations and provide the capital resources for our business. For the two-year period ended April 30, 2026 our aggregate revenue was $9.6 million, our aggregate net losses were $73.4 million and our aggregate net cash used in operating activities was $39.4 million.

Previous wording

Our business is capital intensive, and through April 30, 2025, we have been funding our business principally through sales of our securities. As of April 30, 2025, our cash and cash equivalents and long-term restricted cash balance was $6.9 million and we expect to fund our business with this amount, future financings such as the May 2025 convertible debt issuance and, to a lesser extent, with our cash flow generated from operations. Management believes the Company’s current cash and cash equivalents, inclusive of the May 2025 convertible debt, and long-term restricted cash, and future financing will be sufficient to fund its planned expenditures through July 2026.

Current wording

Our business is capital intensive, and through April 30, 2026, we have been funding our business principally through sales of our securities. As of April 30, 2026, our cash and cash equivalents and long-term restricted cash balance was $8.9 million and we expect to fund our business with this amount, future financings such as the June 2026 registered direct offering of common stock and warrants and, to a lesser extent, with our cash flow generated from operations. Management believes the Company’s current cash and cash equivalents may not be sufficient to fund its planned expenditures through twelve months from the filing date of the Form 10-K. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company’s operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The accompanying consolidated financial statements have been prepared on a basis which assumes the Company is a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from any uncertainty related to the Company’s ability to continue as a going concern.

Previous wording

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which improves the transparency of income tax disclosures by requiring companies to (1) disclose consistent categories and greater disaggregation of information in the effective rate reconciliation and (2) provide information on income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, although early adoption is permitted. The guidance should be applied on a prospective basis with the option to apply the standard retrospectively. We are currently evaluating the impact of adopting this ASU 2023-09 on our consolidated financial statements and disclosures.

Current wording

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ASU 2023-09, which improves the transparency of income tax disclosures by requiring companies to (1) disclose consistent categories and greater disaggregation of information in the effective rate reconciliation and (2) provide information on income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, although early adoption is permitted. The guidance should be applied on a prospective basis with the option to apply the standard retrospectively. The Company has adopted this ASU 2023-09 on our consolidated financial statements and disclosures for the annual period ending April 30, 2026 on a prospective basis.