COMPANY PRESENTATION July 2010 Forward-Looking Statements
In addition to historical information, this presentation contains forward-looking statements that are based on assumptions made by management regarding future circumstances over which the company may have little or no control and involve risks, uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors include, among others, the following: future financial performance indicating expected cash flow, the ability to reduce costs and improve operational efficiencies, revenue growth and increased sales volume, or success in key markets, our ability to enter into relationships with partners and other third parties, delivery and deployment of PowerBuoys®, increasing the power output of our PowerBuoys and hiring new key employees and expected costs of our PowerBuoy product, and building strong long-lasting customer relationships. Many of these risks are discussed in our recent filings with the Securities and Exchange Commission.
2 Company Overview
Operating locations: Pennington, NJ, USA and Warwick, UK
Total number of employees: 55
Commenced active operations: 1994
Incorporation: Delaware, USA
Cash and investment balances: $66.8 million (as of 30 April 2010)
Nature of business: Sale of turnkey wave power stations and custom wave power applications, plus related maintenance contracts Public Listings: Nasdaq (symbol: OPTT); London Stock Exchange’s AIM (symbol: OPT)
3 OPT Wave Power Station
4 Individual PowerBuoy and Undersea Substation
Float
Cables from Spar other PowerBuoys
Under Sea Sub Heave Plate Station
Cable to Sea Floor Shore
5 Wave Energy Near Population Centers
Attractive Wave Energy Levels Current OPT Focus
2TW of energy, the equivalent of twice the world’s electricity production, could be harvested from the world’s oceans (World Energy Council)
6 Wave Energy and the Advantages of OPT’s Systems
Wave energy is the most concentrated form of renewable energy: Widespread throughout the US, U.K., Europe & other parts of the world Close to population centers Predictable & dependable, and can be fed into the power grid or stored Relatively small “footprint” – an OPT wave power station requires only one-tenth the area of comparable wind
Using OPT’s PowerBuoy® technology to convert wave energy to electrical energy has several advantages: Capacity factor of 30-45% versus solar and wind capacity factors of 10%-35% Environmentally benign & non-polluting No exhaust gases, no noise, minimal visibility from shore, safe for sealife Scalable to high capacity power stations (100MW+)
7 Competitive Advantages
PowerBuoy is based on ocean-going buoys, primarily below the ocean surface
Extensive in-ocean experience, including successfully withstanding hurricanes and
winter storms – insured by Lloyds since 1999
Electronic “tuning” capability to optimize power output in changing wave conditions
Flexibility of core technology, which is scaleable for different power applications
Certified grid connection system
Independent environmental assessment resulted in “Finding of No Significant Impact”
Strong partners: US Navy, Lockheed Martin, Iberdrola (Spain), PNGC Power (US),
Leighton Contractors (Australia), Mitsui (Japan), US DoE, Scottish Government
Strong capital base 8 Business Strategy
Sell turn-key power stations and O&M contracts *
Accelerate revenue streams from autonomous PowerBuoy systems and marine
energy infrastructure services
“Smart part” built at OPT’s facilities; outsource steel fabrication and balance of plant *
Maximize customer funding of technology development *
Increase utility PowerBuoy system reliability and output from 150kW to 500kW and
grow production volumes to improve economics
Concentrate on North America, Europe, Australia, Japan
Focus on customer relationships which expand commercial acceptance
Collaborate with other organizations to leverage combined expertise
* Serves to reduce on-going capital needs 9 Strong Leadership Team
Charles F. Dunleavy – Chief Executive Officer • Closely involved in expanding OPT’s operations in Europe, North America, Australia and Japan • Instrumental in raising over $150 million in equity capital in US and Europe
Dr. George W. Taylor – Executive Chairman • Internationally recognized wave energy expert • Key to building OPT’s business, technology portfolio and strategy
Dr. Philip R. Hart – Chief Technology Officer • Significant experience in marine technology and subsea engineering projects • Has led multi-discipline engineering teams on various offshore programs
Michael G. Kelly – VP Operations • 28 years experience in marine industry • Management of international commercial and technical teams
Angus Norman – Chief Executive of OPT Ltd • Extensive experience in energy and renewable energy generation • Previously MD of Sustainable Solutions at EDF Energy
Brian M. Posner – Chief Financial Officer • 25 years experience in public and private companies • Served on audit staff of PriceWaterhouseCoopers LLP 10 Standard PowerBuoy Manufacturing Process
Buoy fabricated near coastal site
Power take-off and control system (“smart-part”) built in New Jersey PowerBuoy at Fabrication Site
Integration and test of completed PowerBuoys at dockside near coastal site
Power Take-Off & Control System 11 PowerBuoy Deployment Process
12 World-Class Supply Network
CONNECTOR CABLING & CONNECTORS SPAR & FLOAT
Sea Bed UNDERWATER POWER CABLE TO SHORE
ANCHORING
Aker Marine (Australia and Europe) POD EQUIPMENT and Vryhof (Netherlands). TRANSFORMER SWITCH GEAR
13 Multiple Market Opportunities
Large Primary Market for Utility PowerBuoys
Grid-Connected Power Stations for Utilities and IPPs - $150 Billion worldwide market Renewable portion is estimated at $50 Billion per annum
Applications for Autonomous PowerBuoys
$10 Billion estimated worldwide market Autonomous applications – Homeland Security – Off-Shore Platforms – Ocean-Based Communications
Other Opportunities
Off-Shore Aquaculture Hydrogen Production
Water Treatment and Desalination Oceanographic data collection and tsunami warning
14 OPT - Competitive with Other Energy Sources
Renewables Fossil Fuel OPT Wave Solar Solar Power (a) PV Thermal Biomass Wind (b) Natural Gas Coal
Capital Cost
$ million per MW $3.9 $7.2 – 10.4 $4.3 – 5.9 $2.9 – 3.9 $1.5 – 3.1 $0.6 – 1.0 $1.5 – 2.0
Energy Cost ¢ per kWh 15¢ 50 - 134¢ 24 - 34¢ 14 - 20¢ 8 – 16¢ 4 - 7¢ 4 - 7¢
Additional prospective benefits can be derived from: •Tax Credit monetization – e.g. US Production and Investment Tax Credits, Oregon Energy Tax Credit •Green tags, renewable obligation certificates, carbon credits •Grants, subsidies, tariffs – e.g. UK Marine Renewables Deployment Fund, Portugal feed-in tariffs
(a) Company projected costs based on production levels of 400 PowerBuoys per year (b) Includes offshore and onshore wind
Sources: Ernst & Young 2007 “Impact of banding the Renewables Obligation – Costs of electricity production”, Pöyry 2007 “Compliance costs for meeting the 20% Renewable Energy Target in 2020”, IEA 2005, “Project Costs of Generating Electricity” (note: Wind low-high range reflects on-shore and off-shore generation) (note: exchange rates used, £/$ =1.6 and €/$ = 1.4)
15 Global Contracts, Partners and Future Projects
Oregon PNGC and Dept. of Energy Scotland Reedsport, OR Ocean Trials of PB150 England Coos Bay, OR Wave Hub Phase: Manufacture Cornwall, UK Phase: Development Capacity: 0.15-2MW Capacity: 1.5-50MW (Reedsport) PB150 Phase: Development Capacity: 100MW (Coos Bay) Capacity: 5MW PB150 & PB500 PB150 & PB500
Japan Mitsui, Idemitsu, US Navy Japan Wind Dev. Co. Marine Corps Base Spain Oahu, Hawaii Iberdrola and Total Phase: Development Santoña, Spain Capacity: Utility Scale Phase: Demonstration PB150 Capacity: 0.1-1MW Phase: Deployment PB40 & PB150 Capacity: 1.4MW US Navy PB40 & PB150 Littoral Expeditionary Autonomous PowerBuoy Australia And Deep Water Active Leighton Contractors Detection System East and South Coasts
Phase: Development Phase: Development Capacity: 1-40kW Capacity: Utility Scale 16 PB150 & PB500 Ongoing Utility Marketing Initiatives
Europe North America 30-140 MW Japan 30-150 MW 1-5 MW
Australasia 15-20 MW
Target sales price in production volumes is $4 million/MW, will be higher initially 17 Appendix
Recent PowerBuoy Technology Advancements and Project Updates
18 Building Momentum With Deployments
Deployment of PowerBuoy at the Marine Corps Base in Oahu, Hawaii • Performing as intended, producing power in-line with expectations and testing protocols • Continuous operation since deployment in December 2009 • Survived severe storm wave conditions
Successful completion of ocean trials of USP
Achievements demonstrate: • Survivability and longevity of OPT products • Strength of technical base • Meeting design specifications
19 Hawaii Deployment
20 Undersea Substation Pod
Unique features – open platform An enabler for field development of marine energy devices Lowers cost per MW installed
21 Operational Progress – United States
Hawaii • Deployed and continue to operate enhanced 40kW-rated PowerBuoy at Marine Corps Base in Oahu • Awarded an additional $380,000 funding for the project
US Navy “DWADS” project • Progress continued under $3 million contract to provide OPT’s autonomous PowerBuoy technology for deep ocean data gathering program • Deployment of enhanced buoy scheduled for second half of CY2010
US Navy “LEAP” project • Project to provide wave energy system for coastal surveillance • Current one-year, $2.4 million contract is the initial award under a proposed four-year, $10-$15 million program
Oregon • Construction begun by Oregon Iron Works on Reedsport project’s first PB150 • Proceeding with permitting and licensing process • Signed MOU with State of Oregon for future projects, including phased development of up to 100 MW wave power station at Coos Bay
22 Manufacturing of PB150 – Oregon
23 Operational Progress – Europe
Scotland • Construction complete – energy conversion and power take-off subassemblies soon to be integrated into the buoy structure • Ocean trials scheduled for second half CY 2010
Spain • Completed in-ocean trials of proprietary Undersea Substation Pod • Awarded €2.2 million (US $3 million) European Commission grant to develop enhanced wave power device for Spain
England • Signed agreement with SWRDA to develop one of four berths at the Cornwall Wave Hub project • Site and infrastructure work by SWRDA began June 2010 • SWRDA expect final cabling and subsea infrastructure to be installed by end of CY 2010
24 Manufacturing of PB150 – Scotland
25 Operational Progress – International
Japan • Breakthrough agreement for development of Japan’s first utility-scale wave power station • Consortium includes Mitsui Engineering & Shipbuilding Co. • Initial demonstration plant with up to three PowerBuoys to provide the basis for commercial-scale OPT wave power station of 10MW or more
Australia • Awarded A$66.5 million (US $60 million) in partnership with Leighton Contractors Pty Ltd from the Federal Government of Australia to build a 19MW wave power project • Only wave power company to receive an award under this program • Leighton working towards completion of funding milestones
26 Financial Summary – Operating Results
Twelve Months Ended April 30
US$ 2010 2009
Revenues $5,101,311 $4,049,445 Cost of revenues 4,298,955 4,840,403
Gross profit (loss) 802,356 (790,958)
Product development costs 13,001,550 8,372,244 Selling, general and administrative costs 9,063,482 9,529,071
Operating loss (21,262,676) (18,692,273)
Interest income 1,032,484 1,672,350 Other income 557,540 ─ Foreign exchange gain (loss) 540,644 (1,295,227)
Net loss (19,132,008) (18,315,150) Less: Net income attributable to the noncontrolling interest in Ocean Power Technologies (Australasia) Pty, Ltd (38,299) ─ Net loss attributable to OPT ($19,170,307) ($18,315,150)
Basic and diluted net loss per share ($1.88) ($1.79)
Weighted average shares 10,217,003 10,210,354
27 Financial Summary – Financial Condition & Cash Burn
US ($ millions) April 30, 2010 April 30, 2009
Cash, cash equivalents, restricted cash and marketable securities $66.8 $82.7
Cash burn $15.9 $19.5
Current and long-term debt $0.3 $0.3
Stockholders' equity $64.8 $82.8
Common shares outstanding at period end 10,391,000 10,210,000
Unexercised stock options at period end 1,375,000 1,632,000
28 Near-Term Goals
Ocean trials of first PB150 off the coast of Scotland
Progress on PB150 for Reedsport
Grid connection for Hawaii buoy at marine base
Deploy enhanced autonomous PowerBuoy for US Navy’s ocean data gathering programme
Complete first stage of LEAP contract
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