Ocean Power Technologies Completes Note Exchange, Lowers Conversion Prices

What Happened

• On September 25, 2026, Ocean Power Technologies, Inc. (OPTT) entered exchange agreements with holders of its Series C-1 Convertible Notes, cancelling the Existing Notes and issuing equivalent principal amounts of Series D Convertible Notes in a securities-for-securities exchange under Section 3(a)(9) of the Securities Act.
• The Series D Notes reduce the conversion price from $12.00 to $2.45 and add an alternative conversion price equal to 93% of the lowest VWAP of OPTT common stock during the seven trading days before a conversion date. The Company also entered amendment agreements on the same date lowering the exercise price of warrants issued June 8, 2026 from $12.00 to $2.45.
• Amortization payments under the Series D Notes will begin January 1, 2027. The Series D Notes bear interest at 4.5% per annum (rising to 13% per annum during an Event of Default) and mature 18 months after issuance, payable with a stated premium (described in the notes).

Key Details

• Date of action: September 25, 2026 (management interview transcript filed September 24, 2026 as Exhibit 99.1).
• Conversion price change: from $12.00 → $2.45; alternative conversion = 93% of lowest 7-day VWAP before conversion.
• Interest and maturity: 4.5% annual interest (13% on default); maturity at 18 months with a premium to face value.
• Conversion limits: default Beneficial Ownership Cap 4.99% (holder may raise up to 9.99% with 61-day notice); no conversion that would give a holder more than 19.99% of outstanding shares as of the exchange date unless shareholder approval is obtained per NYSE American rules.

Why It Matters

• The reduced conversion and warrant exercise prices (from $12.00 to $2.45) significantly lower the price at which debt and warrants can convert into common stock, increasing the potential for equity issuance and shareholder dilution if conversions occur.
• The notes still carry interest and amortization obligations (payments start Jan 1, 2027), so they affect near-term cash flow planning and creditor claims; higher default interest (13%) raises the cost if OPTT misses obligations.
• Conversion caps limit any one holder’s immediate ownership but do not prevent aggregate dilution; the 19.99% blocker requires shareholder approval for very large single conversions under NYSE American rules.
• The Company also furnished a management interview transcript (Regulation FD disclosure) on Sept 24, 2026, which may provide additional context on strategy and financial outlook.