4 August '10
2:50 PM UTC
1 Comment
  Tidal & Wave

Ocean Power Technologies Gets Closer to Utility-Scale Wave Power in America

Ocean Power Technologies PowerBuoy: Coming soon to Oregon

Ocean Power Technologies is a step closer today to building the country’s first utility-scale wave power project in Oregon.

The Pennington, N.J.,-based company announced that it had signed a settlement agreement with 11 federal and state agencies and three non-governmental stakeholders regarding the development of a 1.5-megawatt wave energy station at Reedsport, Oregon. The station will use ten Ocean Power Technologies’ PB150 PowerBuoys, which are currently under construction at Oregon Iron Works. The company’s stock (NASDAQ:OPTT) was up 3.2 percent to $5.48 at 3 p.m. EST. Read More »

29 September '09
5:00 AM UTC
No Comments
  Cleantech

Wave Power Company OPT Urges Stockholders to Approve Share Issuance

Ocean Power Technologies (London Stock Exchange AIM: OPT/NASDAQ:OPTT), a developer of wave powered technology, is urging its shareholders to vote “yes” on a $4.16 million share issuance it says it needs to replenish its stock option program. The Pennington, N.J. company says stock options are a crucial part of its pay package for current employees and are also an incentive to attract potential employees.

However, an unnamed shareholder advisory service is urging company stockholders to vote “no” on the share offering, arguing that it would dilute the company’s stock price, which closed Monday at $4.96 down from its 52 week high of $9.84.

OPT’s annual shareholder meeting is on October 2nd.

OPT management counters that the new shares would replace stock options that have expired or are close to expiring and which will not be added to the “pool of shares available for future awards.”

“We’re running out of shares to be offered to existing and potentially new employees,” OPT CFO Charles Dunleavy tells us. “[Shares] are a very important aspect of our incentive program,” he adds.

OPT’s SEC filing highlights a dilemma faced by a number of clean energy companies – they rely on highly skilled employees to develop their power technologies, but often don’t have the balance sheet to pay these employees what they could fetch at larger, more established companies. Like most cash-hungry startups, what these companies have are stock options and the possibility of a potential hundred-fold return.

In the SEC filing, OPT writes:

Share-based compensation is critical to the company’s ability to attract and retain talented people. Every time we talk with recruiters and prospective employees, the share-based component of the compensation package is a crucial way that we get candidates to appreciate the potential reward associated with the risks of coming to work at OPT. Nearly all of our mid- and upper-level employees have joined OPT from more secure and lower risk-profile career tracks, and the share-based compensation helps to “level” the playing field for OPT.

The current compensation pool has 47,602 shares left.

Including shares in the compensation package is also a way to cut a cash burn rate, adds CFO Dunleavy. Despite growing investor interest and strong government backing, the reality is that clean energy companies today are losing money. OPT reported an operating first quarter net loss of $3.2 million. A123 Systems, the Watertown, Mass. maker of electric automobile batteries, which caused a lot of buzz with its $378 million IPO, is also spilling red ink, reporting a $40 million net loss last quarter.

OPT has some $80 million in cash, some of that amount also includes company stocks. The company would like to use a bulk of that to support research and development rather than funnel into employee salaries.

OPT has developed the PowerBuoys generator, a water buoy that captures energy generated by waves to produce electricity. It has deployed 10 of these PowerBuoys off Spain’s Atlantic Coast as part of a 1.39-megawatt project it’s developing with Iberdrola. It’s also working on a utility-scale initiative with Lockheed Martin off the Oregon coast along with a joint project in Hawaii with the U.S. Navy. Back in Europe, OPT is developing Wave Hub, a 20-megawatt project, in Cornwall, England.

As a reliable energy source, wave power remains an early stage proposition. A report released last year byestimated that over the next five to six years Ocean-based power could grow to become a 1 gigawatt a year, $500 million market. Since 2001, about $500 million have been invested in ocean power, mostly in the form of government research and some venture capital funding.