Ocean Power Technologies, Inc.

On February 1, 2021, the Company entered into a unit purchase agreement (the “3dent Agreement”), pursuant to which the Company acquired all of the outstanding equity interest of 3dent Technology, LLC (“3dent”), a Houston, Texas based company that offers offshore energy engineering and design services that are complementary to OPT’s technology and products. In consideration for the purchase, the Company issued 361,991 shares of its common stock to the sellers with an agreed value of $800,000 based on the closing price of the Company’s common stock on the date that the Company agreed to terms with 3dent. In addition, the former owners of 3dent will be eligible for awards of performance stock with a potential value of $360,000 if certain revenue targets are achieved over the next 12 months. The 3dent Agreement includes a number of other standard representations, warranties, covenants and indemnifications.

The Company is accounting for the transaction as a business combination under ASC 805, “Business Combinations.” Accordingly, the assets acquired and the liabilities assumed will be recorded at their estimated fair value on the date of acquisition. Goodwill from the acquisition principally relates to excess value of the purchase price over the fair value of identified net assets and liabilities. Under ASC 805, acquisition-related transaction costs (such as advisory, legal, valuation, other professional fees) have been expensed in the statement of operations in the period incurred.

On February 1, 2021, the Company acquired all of the outstanding equity interest of 3dent Technology, a limited liability company based in Houston, Texas that offers offshore energy engineering and design services that are complementary to OPT’s technology and products. Our achievements during the first nine months of fiscal 2021 included the Company’s continued work on EGP and Eni projects. In November 2020, the Company entered into an agreement with the Offshore Operators Committee (“OOC”) under which the Company will provide engineering and technical services for a new project under the DeepStar Global Technology Consortium Program. In October 2020, the Company entered into an agreement with Adams Communication & Engineering Technology, Inc. (“ACET”) to conduct a feasibility study for the evaluation of a PB3 PowerBuoy® power and 5G communications solution in support of the U.S. Navy’s Naval Postgraduate School’s Sea, Land, Air, Military Research Initiative (“SLAMR”).

Through its 3dent Technology subsidiary, the Company offers a full range of high-level offshore engineering, providing consulting engineering and design services to offshore wind developers, offshore construction companies, drilling contractors, major oil companies, service companies, and engineering firms. 3dent’s team of dedicated consultants/designers has expertise in structural engineering, hydrodynamics and naval architecture. Among its services is a focus on addressing the issues current or would-be owners of offshore floaters, jackups, and liftboats have with their fleet. 3dent Technology services include: simulation engineering, software engineering, concept design and motion monitoring.

A key goal for the Company this year was to bolster its financial position, improve its liquidity and reduce its capital risk.  During the fiscal year, the Company has generated $76.1 million in net proceeds through utilization of the 2019 ATM Facility (as defined below), the 2020 ATM Facility (as defined below) and the purchase agreement with Aspire Capital, including $66.7 in net proceeds raised during the third quarter.  Additionally, the Company’s liquidity position has improved due to cost cutting measures that were put in place at the beginning of the year.  The Company believes that its unrestricted cash balance of approximately $79.8 million as of January 31, 2021, in addition to continued prudent cost management, will provide it with the capital necessary to fund ongoing operations as well as the financial flexibility to execute on its growth strategy, consisting of market expansion, sales cycle acceleration, development of new products and solutions, and strategic acquisitions.