Ocean Power Technologies, Inc. (OPTT) · Nov 3, 2026 · New debt
$373.75M note — $325K cash proceeds; 12% interest; 25% conversion discount after default
Ocean Power Technologies secured a $325K financing, but the 12% note, default-triggered equity conversion and limited commitment expose funding pressure.
Ocean Power Technologies is trying to scale from a PowerBuoy manufacturer into an AI-enabled maritime-defense and robotics platform, with Coast Guard deployments, a record backlog and broader defense expansion—but it is still burning cash and faces substantial doubt about funding the business through its planned spending horizon.
This is a liquidity bridge, not growth financing. OPT receives $325,000 in cash for general working capital, while committing to repay $373,750 of principal plus a one-time 12% interest charge; the filing also says the potential additional $2.875 million is subject to further agreement, so it is not committed capital. 〔0〕
| Financing terms | November 2, 2026 | Comparison |
|---|---|---|
| Cash purchase price (Purchase Agreement) | $325,000 | |
| Principal (Purchase Agreement) | $373,750 | |
| One-time interest (Note §1.1) | 12% | |
| Conversion price after default (Note §4.2) | 75% of lowest trading price | 25% discount |
| Maturity date (Note) | October 30, 2027 |
The terms point to funding stress. The company is paying an effective premium for a relatively small amount of cash, and the note gives the lender a 25% discount to the lowest recent trading price if OPT defaults. 〔1〕 The lender can also accelerate repayment at 150% of the outstanding balance after an event of default.
Immediate dilution is limited, but the financing does not solve the capital problem. Conversion is available only after a default and is capped initially at 4.99% beneficial ownership and generally 19.99% of outstanding shares, so this is not an immediate equity issuance. But the financing adds another repayment obligation to a company whose latest quarterly filing reported $10.2 million of operating cash burn and only $7.5 million of cash and long-term restricted cash at July 31, 2026.
Bottom line: OPT buys short-term operating time, but the small cash infusion and expensive, default-sensitive structure reinforce the existing funding-risk story rather than advance the maritime-defense growth story. This is modestly negative because financing was expected; the surprise is how costly and limited the solution is.
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