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Paragon Technologies, Inc. ("Paragon"), a diversified holding company, owning approximately 4.9% of the outstanding shares of Ocean Power Technologies, Inc. (NYSE:OPTT), ("Company") ("OPT"), calls out OPT's recent contract award press releases in response to Paragon's criticism of the financial mismanagement of OPT as yet another attempt to divert shareholder attention from the degrading financial condition of the Company.
When Paragon expressed its grave concerns to the OPT Board regarding the Company's alarming financial losses and rapid decline in shareholder value, Paragon requested that its three directors be part of OPT's six-member Board, thus contributing an equal voice on the Board. As the largest shareholder, owning 4.9% of OPT, and with a proven track record of creating long-term shareholder value, we believe our inclusion was in the absolute best interest of all OPT shareholders, and would provide them a more balanced shareholder aligned Board.
Ever since we voiced those concerns, the financial degradation of OPTT has gotten drastically worse:
| FY Ended April 30, 2021 2022 2023 Q1 - 2024 |
| Sales $1.2M $1.8M $2.7M $1.3M |
| Expenses $12.5M $21.5M $28.3M $8.1M |
| Net Loss ($14.8M) ($18.9M) ($26.3M) ($7.0M) |
| Cash & ST Inv. $83.0M $57.3M $34.7M $26.6M |
On April 30th, 2021, OPT's share price closed at $2.51. Today the share price is $0.30, a decline of 88%.
Perhaps more self-serving at the expense of shareholders is that over the past three years Board and Executive Officer Compensation more than doubled and exceeded OPTT's revenues!
| Fiscal Year Ended 2021 2022 2023 Total |
| Revenues $1.2M $1.8M $2.7M $5.7M |
| Board and Exec. Comp $2.1M $3.0M $2.6M $7.7M |
| % Total Compensation to Sales 175% 168% ~100% |
Yet rather than work constructively with Paragon's director nominees - who have delivered an 800% return to shareholders over the last five years - OPT's directors instead have spent millions to protect their Board seats.
Over the past few months OPT has issued announcements promoting potential sales opportunities or contract awards that we believe do not guarantee any definitive revenues at the stated time but appear to require continued capital expenditure by OPT.
We believe OPT continues to mislead shareholders with the Company's latest December 11, 2023 press release announcing the "Letter Contract with a $6.5M Ceiling." CEO Phillip Stratmann again takes a victory lap without clearly telling shareholders that a letter contract is effectively a commitment by OPT to manufacture products without ANY definitive commitment of a purchase order contract. Not surprisingly, the press release fails to provide any details as to when revenue might be earned, the expected potential profitability or any other information that can give shareholders confidence in the Company's board and management.
After 30 years of OPT failing to profitably commercialize a product, OPT's Board and CEO can only manage to sign agreements that require OPT to take significant risk without any definitive commitment of business.
Interestingly OPT's share price declined by approximately 10% on the same day that OPT announced the Letter Contract.
OPT shareholders can put a stop to this downward stock price spiral and ongoing mismanagement of shareholder assets. Vote Paragon's BLUE proxy card that will arrive in the mail and discard ANY white proxy card from OPT.
Please email us at ir@pgntgroup.com with any questions about how to vote your BLUE proxy card.
We appreciate the support from shareholders thus far. If shareholders have any questions, please contact our Proxy Solicitor, Alliance Advisors at:
Alliance Advisors
200 Broadacres Drive, 3rd Floor
Bloomfield, NJ 07003
Toll-Free Phone: 855-200-8651
Email: OPTT@allianceadvisors.com
We would like to hear from you. Please email us at ir@pgntgroup.com if you would like to learn more.
