On September 25, 2026, Ocean Power Technologies, Inc. entered into exchange agreements with holders of its Series C-1 Convertible Notes issued on April 1, 2026. The company exchanged these existing notes for an equivalent principal amount of new Series D Convertible Notes. The exchange was conducted without registration under Section 3(a)(9) of the Securities Act of 1933. The Series D Notes are substantially similar to the Series C-1 Notes but feature a reduced conversion price of $2.45 per share, down from the previous $12.00. Additionally, the new notes include an alternative conversion price equal to 93% of the lowest volume-weighted average price (VWAP) of the company's common stock during the seven trading days prior to a conversion date.
The Series D Notes bear an interest rate of 4.5% per annum, increasing to 13% per annum in the event of a default. The notes mature on the eighteen-month anniversary of their issuance at a premium of 13% to face value. The holders are required to begin amortization payments on January 1, 2027. The agreement includes a beneficial ownership cap, limiting conversion to a maximum of 4.99% of outstanding shares, which can be adjusted to 9.99% with 61 days' notice. Furthermore, conversion is restricted until the company obtains stockholder approval for issuances exceeding 19.99% of outstanding shares, as required by NYSE American rules.
In a separate agreement on the same date, the company amended common warrants issued on June 8, 2026. The exercise price for these warrants was adjusted from $12.00 to $2.45 per share. The company also disclosed that its backlog stands at $20 million, with a qualified pipeline exceeding $150 million. Management highlighted recent operational successes, including participation in the REPMUS 2026 NATO exercise with the U.S. Navy and Marine Corps, as well as an official evaluation with the U.S. Army Corps of Engineers.
