Ocean Power Technologies Announces Results for the Year Ended April 30, 2007

Ocean Power Technologies, Inc. (Nasdaq: OPTT and London Stock Exchange AIM: OPT) ("OPT” or the "Company”) announced today its results for the year ended April 30, 2007. Revenues in fiscal 2007 were $2.5 million compared with $1.7 million in fiscal 2006. The Company incurred a net loss of $9.6 million in fiscal 2007 compared with a net loss of $7.1 million in the prior year. Contract backlog for the Company was $5.2 million as of April 30, 2007, as compared to $2.6 million as of April 30, 2006. Highlights Order backlog at April 30, 2007: $5.2 million (April 30, 2006: $2.6 million) $90 million net raised in US IPO and Nasdaq listing Signed a $3.2 million contract for the second phase of construction of a wave power station in Santona, Spain OPT awarded its first operations and maintenance contract for a wave power station Mark R. Draper appointed Chief Operating Officer Cash of $115.9 million at year end (2006: $32.4 million) Operational review The twelve months ended April 30, 2007 represented a landmark year in the development of the Company. OPT achieved significant operational progress and experience during the period towards its long-term goal of fully commercializing the PowerBuoy wave energy system. The completion of the US IPO means the Company has the capital base and the credibility of a listing on two of the world’s premier stock exchanges to build on those achievements in the future and benefit from the growth in demand for renewable energy in the global markets. That progress is evident in the projects OPT has ongoing in four countries, including: The Company’s largest contract ($3.2 million) of the year was won in Spain for the second phase of construction of the wave power station OPT is building in partnership with Iberdrola, the Spanish utility. OPT is continuing to work under contract from Total and Iberdrola in France to develop a wave power station on the Atlantic coast of France. In the US, the Company signed an agreement with the Oregon-based electric power group PNGC Power to work cooperatively on OPT’s development of an initial 2MW demonstration station in Reedsport on the coast of Oregon. OPT has been granted a preliminary permit for this project from the Federal Energy Regulatory Commission (FERC). OPT also has applied for FERC permits to build two other wave parks off the coast of Oregon. In total, the permit applications submitted to FERC for Oregon are to build three wave parks with a total capacity of up to 250MW. In February 2007, OPT was awarded $1.2 million by the Scottish Executive for the construction, installation and in-ocean demonstration in the Orkney Islands of our most advanced 150kW PowerBuoy system. Since the fiscal year end, OPT has expanded its relationship with the US Navy with the award of a $1.7 million contract to power a deep water acoustic detection system. The expansion of the Company’s activities has necessitated the growth and reorganization of staff. Six new employees have been added at the New Jersey headquarters and at the headquarters of OPT’s European subsidiary, Ocean Power Technologies Ltd. ("OPT Ltd.”), in Warwick, England. Subsequent to April 30, 2007, Mark Draper, the chief executive of OPT Ltd. and who has been instrumental in the Company’s success in Europe, has been appointed Chief Operating Officer of Ocean Power Technologies, Inc. OPT has continued to make significant investments in its technology over the period and has achieved substantial progress with the design of 150kW PowerBuoys, the largest system yet, and progress is being made towards the goal of developing a 500kW PowerBuoy by 2010. This progress includes completing the design and testing of the control system to be used in the 150kW, 250kW and 500kW PowerBuoy systems. Financial review Revenues increased by $0.8 million in fiscal 2007, or 45%, to $2.5 million as compared to $1.7 million in fiscal 2006. The increase in revenues was primarily attributable to the following factors: Revenues relating to the utility PowerBuoy system increased by approximately $1.1 million due to work that commenced on the first phase of construction of a 1.39MW wave power station off the coast of Spain, increased revenues relating to the US Navy project in Hawaii from a higher activity level; and work that commenced on the design, manufacture and installation of an OPT wave power station consisting of a single PB150 (150kW) PowerBuoy device in Orkney, Scotland. Revenues relating to the autonomous PowerBuoy system decreased by approximately $0.3 million primarily as a result of the completion of a development and construction contract with Lockheed Martin in the fiscal year ended April 30, 2006. The Company was awarded a $1.7 million contract in July 2007 from the US Navy for the use of the autonomous PowerBuoy system in connection with a deep water ocean sensing application. Net loss for the year ended April 30, 2007 was $9.6 million, compared to a net loss of $7.1 million in the prior year. This change was attributable in part to a 47% increase in product development costs, including efforts to increase the output of PowerBuoy systems, and a 53% increase in selling, general and administrative costs. These were partially offset by a $1.5 million foreign exchange gain in the year ended April 30, 2007, compared to a $1.0 million foreign exchange loss in the year ended April 30, 2006. The Company finished the year with very strong liquidity. At April 30, 2007, total cash, cash equivalents and certificates of deposit were $115.9 million. Non-US Dollar denominated certificates of deposit and cash accounts had a balance of $16.6 million as of April 30, 2007, or 14% of the total. Long-term debt of $232,000 represents amounts due to the State of New Jersey under a non-interest bearing loan which must be repaid no later than January 2012. Stockholders’ equity and common shares outstanding reflect the closing in late April 2007 of the US IPO and listing on the Nasdaq Global Market. The Company raised a net amount of approximately $90 million through the sale of 5 million common shares. Outlook OPT has made progress on all fronts in fiscal year 2007, improving the technology of the PowerBuoys, strengthening our team and signing significant contracts with world-class partners. The completion of the US IPO and listing on Nasdaq, and the approximately $90 million net raised in that transaction has given OPT the resources to build on those achievements in fiscal 2008, and the Company expects to make continued progress in commercializing the technology in the target markets of North America, Europe, Japan and Australia. Additional information may be found in the Company’s Annual Report on Form 10-K filed with the US Securities and Exchange Commission. The Form 10-K may be accessed at www.sec.gov or at the Company’s website in the Investor Relations tab. About Ocean Power Technologies Ocean Power Technologies, Inc. develops and is commercializing proprietary systems that generate electricity by harnessing the renewable energy of ocean waves. The Company’s PowerBuoy® system is based on modular, ocean-going buoys, which have been ocean tested for nearly a decade. The waves move the buoy-like structure creating mechanical energy that the Company’s proprietary technologies convert into electricity. Consolidated Balance Sheets as of April 30, 2006 and April 30, 2007 Apr 30, 2006 Apr 30, 2007 $ $ ASSETS Cash and cash equivalents 31,957,209 107,505,473 Certificates of deposit 482,156 8,390,146 Accounts receivable — 865,081 Unbilled receivables 211,000 313,080 Other current assets 331,139 441,342   Total current assets 32,981,504 117,515,122   Property and equipment, net 544,285 387,923 Patents, net of accumulated amortization of $157,451 and $176,840, respectively 372,448 597,280 Restricted cash — 983,376 Other noncurrent assets 97,901 227,845   TOTAL ASSETS 33,996,138 119,711,546   LIABILITIES AND STOCKHOLDERS' EQUITY   CURRENT LIABILITIES: Accounts payable 242,624 1,708,408 Accrued expenses 1,726,870 4,593,413 Unearned revenues 14,405 — Other current liabilities 111,576 26,106   Total current liabilities 2,095,475 6,327,927   LONG-TERM DEBT 233,959 231,585   DEFERRED RENT — 10,825   DEFERRED CREDITS 600,000 600,000 Total liabilities 2,929,434 7,170,337   COMMITMENTS AND CONTINGENCIES   STOCKHOLDERS' EQUITY: Preferred stock, $0.001 par value; authorized 5,000,000 shares; none issued or outstanding — — Common stock, $0.001 par value; authorized 105,000,000 shares; issued and outstanding 5,171,119 and 10,186,254 shares, respectively   5,171 10,186 Additional paid-in capital 59,725,777 150,842,671 Accumulated deficit (28,632,153) (38,270,918) Accumulated other comprehensive loss (32,091) (40,730)   Total stockholders’ equity 31,066,704 112,541,209   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 33,996,138 119,711,546 Consolidated Statements of Operations For the years ended April 30, 2006 and 2007   Apr 30, 2006 Apr 30, 2007 $ $ REVENUES 1,747,715 2,531,315 COST OF REVENUES 2,059,318 3,983,742 Gross loss (311,603) (1,452,427) PRODUCT DEVELOPMENT COSTS 4,224,997 6,219,893 SELLING, GENERAL AND ADMINISTRATIVE COSTS 3,190,687 4,893,580 Operating loss (7,727,287) (12,565,900)   INTEREST INCOME, NET 1,408,361 1,389,702 OTHER INCOME, NET 218,257 13,906 FOREIGN EXCHANGE (LOSS) GAIN (978,242) 1,523,527 Loss before income taxes (7,222,874) (9,638,765) INCOME TAX BENEFIT 143,963 - NET LOSS (7,078,911) (9,638,765) Basic and diluted net loss per share (1.37) (1.83) Weighted average shares used to compute basic and diluted net loss per share 5,162,340 5,260,794 Consolidated Statements of Cash Flows For the years ended April 30, 2006 and 2007 Apr 30, 2006 Apr 30, 2007 CASH FLOWS FROM OPERATING ACTIVITIES: $ $ Net loss (7,078,911) (9,638,765) Adjustments to reconcile net loss to net cash used in operating activities: Foreign exchange loss (gain) 978,242 (1,523,527) Depreciation and amortization 233,132 269,075 Loss on disposal of equipment — 24,572 Compensation expense related to stock option grants 129,139 1,152,416 Realization of deferred credits (75,000) — Deferred rent — 10,825 Changes in operating assets and liabilities: Accounts receivable 668,424 (827,287) Unbilled receivables 611,037 (95,896) Other current assets 161,505 (99,436) Accounts payable (632,778) 1,233,484 Accrued expenses (121,840) 2,126,616 Unearned revenues (2,383) (14,405) Other current liabilities 57,803 (85,470)   Net cash used in operating activities (5,071,630) (7,467,798)   CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of certificates of deposit (62,677,400) (55,187,304) Maturities of certificates of deposit 87,397,606 47,279,314 Restricted cash — (983,376) Purchases of equipment (330,047) (107,271) Payments of patent costs (57,396) (217,763) Investments in joint ventures and other noncurrent assets (30,747) (122,001)   Net cash provided by (used in) investing activities 24,302,016 (9,338,401)   CASH FLOWS FROM FINANCING ACTIVITIES: Sale of common stock, net of issuance costs — 90,773,935 Proceeds from exercise of stock options 122,703 65,674   Net cash provided by financing activities 122,703 90,839,609   EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (980,694) 1,514,854   NET INCREASE IN CASH AND CASH EQUIVALENTS 18,372,395 75,548,264   CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 13,584,814 31,957,209   CASH AND CASH EQUIVALENTS, END OF PERIOD 31,957,209 107,505,473