Ocean Power Technologies (OPTT) risk factors, FY2025 10-K

Risks Related to Our Financial Condition

1. 01We have a history of operating losses and may not achieve or maintain profitability and positive cash flow
2. 02Loss of U.S. Government Security Clearances Could Harm Our Business
3. 03We may not be able to raise sufficient capital to continue to operate our business
4. 04Our business could be affected by macroeconomic risks
5. 05Changes to U.S. tariff and import/export regulations may have a negative effect on us
6. 06Any current or future indebtedness may limit our operations and our use of our cash flow, and any failure to comply with the covenants that apply to any indebtedness could adversely affect our liquidity and financial condition
7. 07Any failure to meet our debt obligations could damage our business
8. 08Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions, could adversely affect our business, financial condition, or results of operations
9. 09Currency translation and transaction risk may adversely affect our business, financial condition and results of operations

Risks Related to Growth of Our Business

1. 10If sufficient demand for our solutions and services or new products does not develop or takes longer to develop than we anticipate, our revenue generation will be limited, and it is unlikely that we will be able to achieve and, if achieved, then sustain profitability
2. 11If demand for our solutions and products fails to develop sufficiently, it is unlikely that we will be able to grow our business or generate sufficient revenue
3. 12If we are unable to attract and retain management and other qualified personnel, we may not be able to achieve our business objectives
4. 13If we are unable to effectively manage our growth, this could adversely affect our business and operations
5. 14If we are unable to successfully negotiate and enter into service contracts with our customers on terms that are acceptable to us, our ability to diversify our revenue stream will be impacted
6. 15Actions of activist shareholders could be disruptive and costly and the possibility that activist shareholders may gain representation on or control of our board of directors could adversely affect our results of operations, financial condition, or share price
7. 16Failure by third parties to supply or manufacture components of our products or to deploy our systems timely or properly could adversely affect our business, financial condition, and results of operation
8. 17We market and plan to market our services and products in multiple international regions. If we are unable to manage our international operations effectively, our business, financial condition and results of operations could be adversely affected
9. 18Failure of our information systems or those of third parties or breaches of data security could cause significant harm to our business
10. 19Cyber-security breaches of our systems and information technology could adversely impact our ability to operate or meet contractual obligations
11. 20Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal income tax purposes may be limited

Risks Related to Product Development and Commercialization

1. 21We have only manufactured a limited number of PowerBuoys®, and to date, we have not produced these products in any significant quantity for commercial production. These products do not have a sufficient operating history to accurately predict how they will perform over their estimated useful life
2. 22We face the possibility of a range of potential accident and safety risks and hazards, including hazards associated with extreme weather, wind and other environmental conditions, which are inherent in offshore operations
3. 23Our relationships with our strategic partners may not be successful, and we may not be successful in establishing additional relationships, either of which could adversely affect our ability to commercialize our products and services
4. 24We have limited manufacturing, deployment and internal software development experience. If we are unable to increase our software development and manufacturing capacity in a cost-effective manner, our business may be materially harmed
5. 25Problems with the quality or performance of our products would adversely affect our business, financial condition and results of operations
6. 26We must continually improve existing services and products, design and sell new products and improve reliability in order to compete effectively

Risks Related to Intellectual Property

1. 27If we are unable to obtain or maintain intellectual property rights relating to our technology and products, the commercial value of our technology and products may be adversely affected, which could in turn adversely affect our business, financial condition and results of operations
2. 28If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected, which could in turn adversely affect our business, financial condition and results of operations
3. 29Foreign laws may not afford us sufficient protections for our intellectual property, and we may not be able to obtain patent protection outside of the U.S
4. 30If we infringe or are alleged to have infringed upon intellectual property rights of third parties, our business, financial condition and results of operations could be adversely affected
5. 31Our contracts with governmental entities could negatively affect our intellectual property rights, and our ability to commercialize our products could be impaired

Risks Related to Regulatory and Compliance Matters

1. 32If we are unable to obtain all necessary regulatory permits and approvals, it is possible that we will not be able to implement our planned projects or business plan
2. 33In the event we are unable to satisfy regulatory requirements relating to internal control over financial reporting, or if our internal controls are not effective, our business, reputation and financial results may suffer
3. 34Environmental and other regulation of our business, including potential climate change regulation, could adversely impact us by increasing our production cost or restricting our ability to deliver products to our customers
4. 35A portion of products we acquire from our suppliers are manufactured in foreign countries, making the price and availability of these products subject to international trade risks and other international conditions
5. 36Our business involves the use of hazardous materials, which require compliance with environmental and occupational safety laws regulating the use of such materials. If we violate these laws, we could be subject to significant fines, liabilities or other adverse consequences

Risks Related to Litigation

1. 37Litigation is costly and time-consuming to defend, and if decided against us, could require us to pay substantial judgments or settlements. We may be the subject of future securities or other litigation, which could adversely affect our company, our business and our liquidity
2. 38We may become the target of securities litigation, which is costly and time-consuming to defend

Risks Related to Our Common Stock

1. 39If we issue additional shares of our equity securities in the future, our shareholders may experience substantial dilution in the value of their investment or their ownership interest
2. 40Historically, our stock price has been volatile, and this is likely to continue; purchasers of our common stock could incur substantial losses as a result
3. 41Provisions in our corporate charter documents and under Delaware law may delay or prevent attempts by our shareholders to change our management or our Board of Directors and hinder efforts to acquire a controlling interest in us
4. 42If securities or industry analysts fail to cover us, or do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline
5. 43We have never paid cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future