Ocean Power Technologies Announces $1.1 Million Preliminary Award from the New Jersey Economic Development Authority (NJEDA) Technology Business Tax Certificate Transfer Program

Rhea-AI Summary

Ocean Power Technologies (NYSE American: OPTT) has received a $1.1 million preliminary award from the New Jersey Economic Development Authority (NJEDA) 2024 Technology Business Tax Certificate Transfer Program. This program, also known as the Net Operating Loss (NOL) Program, allows technology and life sciences businesses in New Jersey to sell a percentage of their New Jersey net operating losses and unused R&D tax credits to unrelated profitable corporations for cash.

OPT participates in this program annually, having received a $1.2 million award in 2023. The funding is considered a significant resource as the company progresses on its path to profitability. The award also highlights the potential value of OPT's net operating losses and unused R&D tax credits, emphasizing the importance of preserving these assets for future monetization opportunities.

Positive

• Received $1.1 million preliminary award from NJEDA NOL Program
• Non-dilutive funding to support strategic goals
• Demonstrates potential value of company's net operating losses and unused R&D tax credits

Negative

• None.

Insights

Financial Analyst

The $1.1 million preliminary award from the NJEDA's NOL Program represents a significant non-dilutive funding source for Ocean Power Technologies (OPT). This award, slightly lower than last year's $1.2 million, provides important financial support for the company's strategic goals and path to profitability.

The NOL Program allows OPT to monetize its net operating losses and unused R&D tax credits, demonstrating the value of these assets. This is particularly important for a company with a relatively small market cap of $13.7 million, as it provides additional liquidity without diluting existing shareholders.

While the funding is beneficial, it's important to note that reliance on such programs may indicate ongoing profitability challenges. Investors should monitor OPT's progress towards sustainable revenue growth and profitability, as well as its ability to continue qualifying for and benefiting from such programs in the future.

Tax Specialist

The NJEDA's NOL Program is a strategic tax incentive that benefits both the state and emerging technology companies like OPT. By allowing the sale of NOLs and R&D tax credits, it provides immediate cash flow to companies that may not yet be profitable enough to utilize these tax assets.

For OPT, this program offers several advantages:

• Immediate cash infusion without equity dilution
• Preservation of valuable tax assets for future use
• Potential to attract investors by demonstrating state support

However, investors should be aware that the availability and amount of these awards can vary annually. The slight decrease from $1.2 million in 2023 to $1.1 million in 2024 may reflect changes in the company's financial position or program funding. It's important to consider this funding as supplementary rather than a core part of the business model when evaluating OPT's long-term financial health.

Non-dilutive funding to further execute strategic goals

MONROE TOWNSHIP, N.J., Oct. 02, 2024 (GLOBE NEWSWIRE) -- Ocean Power Technologies, Inc. (NYSE American: OPTT) (“OPT” or the “Company”), a leader in innovative and cost-effective low-carbon marine power, data, and service solutions, today announced it has been notified of a $1.1 million preliminary award under the New Jersey Economic Development Authority (NJEDA) 2024 Technology Business Tax Certificate Transfer Program, commonly known as the Net Operating Loss (NOL) Program. This program enables technology and life sciences businesses in New Jersey to sell a percentage of their New Jersey net operating losses and unused research and development (R&D) tax credits to unrelated profitable corporations for cash.

OPT takes part in the NJEDA NOL program annually and received a $1.2 million award for the 2023 NOL program. This funding represents a significant resource as the Company continues to make progress on its previously announced path to profitability. In addition, the receipt of this award demonstrates the potential value of the Company’s net operating losses and unused R&D tax credits and the need to preserve these potentially valuable assets and thereby preserve OPT’s ability to participate in future value enhancing monetization opportunities.

For additional information about OPT and its services, please visit our website Ocean Power Technologies.

ABOUT OCEAN POWER TECHNOLOGIES

OPT provides intelligent maritime solutions and services that enable safer, cleaner, and more productive ocean operations for the defense and security, oil and gas, science and research, and offshore wind markets, including Merrows™, which provides AI capable seamless integration of Maritime Domain Awareness Systems across platforms. Our PowerBuoy^® platforms provide clean and reliable electric power and real-time data communications for remote maritime and subsea applications. We also provide WAM-V^® autonomous surface vessels (ASVs) and marine robotics services. The Company’s headquarters is in Monroe Township, New Jersey and has an additional office in Richmond, California. To learn more, visit www.OceanPowerTechnologies.com.

FORWARD-LOOKING STATEMENTS

This release may contain forward-looking statements that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by certain words or phrases such as "may", "will", "aim", "will likely result", "believe", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "contemplate", "seek to", "future", "objective", "goal", "project", "should", "will pursue" and similar expressions or variations of such expressions. These forward-looking statements reflect the Company's current expectations about its future plans and performance. These forward-looking statements rely on a number of assumptions and estimates that could be inaccurate and subject to risks and uncertainties, including thereceipt of the final 2024 NJEDA NOL program award, the continued success of its vehicles and PowerBuoys. the conversion of potential customers to contracts and the realization of the potential revenue thereunder. Actual results could vary materially from those anticipated or expressed in any forward-looking statement made by the Company. Please refer to the Company's most recent Forms 10-Q and 10-K and subsequent filings with the U.S. Securities and Exchange Commission for further discussion of these risks and uncertainties. The Company disclaims any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this release.

FAQ

What is the amount of the preliminary award Ocean Power Technologies (OPTT) received from NJEDA?

Ocean Power Technologies (OPTT) received a $1.1 million preliminary award from the New Jersey Economic Development Authority (NJEDA) 2024 Technology Business Tax Certificate Transfer Program.

How does the NJEDA NOL Program benefit Ocean Power Technologies (OPTT)?

The NJEDA NOL Program allows Ocean Power Technologies (OPTT) to sell a percentage of their New Jersey net operating losses and unused R&D tax credits to unrelated profitable corporations for cash, providing non-dilutive funding to support their strategic goals.

What was the amount of the NJEDA NOL Program award Ocean Power Technologies (OPTT) received in 2023?

Ocean Power Technologies (OPTT) received a $1.2 million award from the NJEDA NOL Program in 2023.

How does the NJEDA NOL Program award impact Ocean Power Technologies' (OPTT) financial strategy?

The NJEDA NOL Program award provides Ocean Power Technologies (OPTT) with significant non-dilutive funding to support their path to profitability and demonstrates the potential value of their net operating losses and unused R&D tax credits for future monetization opportunities.