Financial Analysis

(14) Commitments and Contingencies Litigation with Paragon Technologies, Inc. On October 10, 2023, Paragon Technologies, Inc. filed a complaint in the Court of Chancery of the State of Delaware against the Company, and the members of its Board of Directors, claiming certain breaches of their fiduciary duties. The complaint sought only injunctive relief against the Company, and not monetary damages, and therefore the financial exposure derived therein was limited to applicable legal fees and costs at that stage, which was material to FY 24. The hearing on the initial complaint was held and on November 30, 2023, the Court ruled in favor of the Company and denied Paragons motion for injunctive relief. On February 28, 2024, the Company successfully finalized its 2023 annual meeting of stockholders in spite of Paragons repeated attempts to contest the meeting. In an August 12, 2024 Press Release and its Form 10-Q report for the second quarter of 2024, Paragon announced that it was no longer pursuing litigation against the Company. Pursuant to a Court order dated January 9, 2025, Paragon was required to file a status report within 30 days. Otherwise, the case will be dismissed under Rule 41(e). Because Paragon did not file a status report by February 10, 2025, the Company anticipates that the Court will dismiss the case, with prejudice, due to Paragons failure to prosecute. Section 220 Demand In February 2025, the Company received a shareholder demand under Section 220 of the Gener …

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The table below represents the total revenue recognized under ASC 606 and ASC 842 for the three and six months ended October 31, 2025 and 2024. Schedule of Revenue Recognized Under ASC 606 and ASC 842 Three months ended October 31, 2025 Three months ended October 31, 2024 ASC 606 ASC 842 Total ASC 606 ASC 842 Total (in thousands) (in thousands) Product Line: WAM-V $ 101 $ 68 $ 169 $ 2,182 $ 65 $ 2,247 Buoy 255 255 171 171 Services Total $ 356 $ 68 $ 424 $ 2,353 $ 65 $ 2,418 Region: North and South America $ 137 $ $ 137 $ 1,491 $ $ 1,491 EMEA 43 68 111 860 65 925 Asia and Australia 176 176 2 2 Total $ 356 $ 68 $ 424 $ 2,353 $ 65 $ 2,418 Revenue $ 356 $ 68 $ 424 $ 2,353 $ 65 $ 2,418 Six months ended October 31, 2025 Six months ended October 31, 2024 ASC 606 ASC 842 Total ASC 606 ASC 842 Total (in thousands) (in thousands) Product Line: WAM-V $ 1,139 $ 135 $ 1,274 $ 3,416 $ 132 $ 3,548 Buoy 321 321 171 171 Services 11 11 Total $ 1,471 $ 135 $ 1,606 $ 3,587 $ 132 $ 3,719 Region: North and South America $ 272 $ $ 272 $ 2,720 $ $ 2,720 Europe 1,022 135 1,157 865 132 997 Asia and Australia 177 177 2 2 Total $ 1,471 $ 135 $ 1,606 $ 3,587 $ 132 $ 3,719 Revenue $ 1,471 $ 135 $ 1,606 $ 3,587 $ 132 $ 3,719 …

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(11) Share-Based Compensation In 2015, upon approval by the Companys shareholders, the Companys 2015 Omnibus Incentive Plan (the 2015 Plan) became effective. A total of 1,332,036 shares were authorized for issuance under the 2015 Omnibus Incentive Plan, including shares available for awards under the 2006 Stock Incentive Plan remaining at the time that plan terminated, or that were subject to awards under the 2006 Stock Incentive Plan that thereafter terminated by reason of expiration, forfeiture, cancellation or otherwise. If any award under the 2006 Stock Incentive Plan or 2015 Plan expires, is cancelled, terminates unexercised or is forfeited, those shares become again available for grant under the 2015 Plan. Most recently in January 2025, the shareholders approved an amendment and restatement of the 2015 Plan to, among other things, provide an aggregate increase to the 2015 Plan of 20,000,000 shares resulting in total shares authorized for issuance of 27,282,036 as of October 31, 2025, based on 7,282,036 available before the amendment. The 2015 Plan will now terminate in January 2035, but is subject to earlier termination as provided in the 2015 Plan. On January 18, 2018, the Companys Board of Directors adopted the Companys Employment Inducement Incentive Award Plan (the 2018 Inducement Plan) pursuant to which the Company reserved 25,000 shares of common stock for issuance under the Inducement Plan in accordance with Rule 711(a) of the NYSE American Company Guide. On Febr …

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(12) Fair Value Measurements ASC Topic 820, Fair Value Measurements states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable input and minimizes the use of unobservable inputs. The following is a description of the three hierarchy levels. Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly. Level 3 Inputs that are unobservable for the asset or liability. Disclosure of Fair Values The Companys financial instruments that are not re-measured at fair value include cash, cash equivalents, restricted cash, accounts receivable, other assets, contract assets and liabilities, deposits, accounts payable, and accrued expenses. The carrying value is equal to their fair value due to the short-term nature of these accounts. The following tables sets forth the Companys financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (amounts …

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(15) Income Taxes Uncertain Tax Positions The Company accounts for income taxes in accordance with ASC 740. The guidance requires the Company to recognize in its consolidated financial statements the impact of a tax position if that position is more likely than not to be sustained upon examination, based on the technical merits of the position. The Company has no current or deferred tax due to current and projected losses for the year. At October 31, 2025 the Company had no uncertain tax positions. The Company does not expect any material increases or decreases in its income tax expense or benefit in the next twelve months, related to examinations or uncertain tax positions. Net operating losses and credit carryforwards since inception remain open to examination by taxing authorities and will continue to remain open for a period of time after utilization. Tax Preservation Plan In June 2023, in order to protect the Companys valuable tax assets related to its net operating losses from being limited or lost under Section 382 of the Internal Revenue Code, the Company adopted a Tax Benefits Preservation Plan (the Plan). Pursuant to the Plan, the Board declared a dividend of one preferred share purchase right (each, a Right) for each outstanding share of common stock of the Company. The dividend was distributed to stockholders of record as of the close of business on July 11, 2023. The Plan substantially diminishes the risk that the Companys ability to utilize its net operating los …

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(9) Leases Lessor Information As of October 31, 2025 and April 30, 2025, the Company had four WAM-Vs leased to customers which have been classified as operating leases per accounting guidance contained within ASC Topic 842, Leases, respectively. The remaining term on these operating leases is less than 2 years. Lessee Information Right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, the Company uses the incremental borrowing rate based on the information available at the effective date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The renewal options have not been included in the lease term as they are not reasonably certain of exercise. The Companys operating leases consist of leases for office facilities and warehouse space. Lease expense for minimum lease payments is recognized on a straight- line basis over the lease term and consists of interest on the lease liability and the amortization of the right of use asset. The Company has a lease for its facility located in Monroe Township, New Jersey that is used as warehouse/production space and the Companys principal offices and corporate headquarters. In August 2025, the Company extended the l …

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(s) Recently Issued Accounting Standards In recent periods, the FASB issued certain Accounting Standards Updates (ASUs) that may be relevant to the Companys operations and financial reporting. We are currently evaluating the potential impact of these ASUs and adopting them when applicable based on their effective dates. In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring companies to (1) disclose consistent categories and greater disaggregation of information in the effective rate reconciliation and (2) provide information on income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, although early adoption is permitted. The guidance should be applied on a prospective basis with the option to apply the standard retrospectively. We are currently evaluating the impact of adopting this ASU 2023-09 on our consolidated financial statements and disclosures for the annual period ending April 30, 2026. In November 2024, the FASB issued ASU No. 2024-3, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU improves the disclosures about a public business entitys expenses and addresses requests from in …

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(16) Operating Segments and Geographic Information The Company operates as one operating segment. The Companys chief operating decision maker (the CODM) is its Chief Executive Officer, who reviews financial information on a consolidated basis and utilizes net loss for purposes of making operating decisions, assessing financial performance of the consolidated Company, and making resource allocation decisions. The CODM also reviews total assets. While assets may move throughout the world to support our revenue projects, for reporting purposes they are included in North America total assets. Revenue and expenses are generally attributed to the operating unit that bills the customers. The following table presents selected financial information with respect to the Companys single operating segment and its significant segment expenses for the three and six months ended October 31, 2025 and 2024, respectively: Schedule of Operating Segment Expenses Three month ended October 31, 2025 2024 (in thousands) Revenue $ 424 $ 2,418 Less: Cost of sales 1,804 1,623 Product development costs 286 556 Employee-related costs 2,397 1,959 Professional, consulting and contractor fees 1,478 706 General and administrative costs 674 518 Facilities costs 419 394 Share-based compensation 2,792 292 Depreciation and amortization expense 237 285 Other expense (income) 138 1 Interest (income)/expense, net 564 (3 ) Credit loss expense 460 Net loss $ (10,825 ) $ (3,913 ) Six month ended October 31, 2025 2024 ( …

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(2) Summary of Significant Accounting Policies (a) Consolidation The accompanying consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries, Marine Advanced Robotics Inc. (CA), referred to herein as MAR,), Oregon Wave Energy Partners I LLC (DE), and ReedSport OPT WavePark, LLC (OR). Ocean Power Technologies Ltd. in the United Kingdom was dissolved on April 22, 2025. ReedSport OPT WavePark, LLC (OR) and Oregon Wave Energy Partners I, LLC (DE) were dissolved during the first quarter of fiscal 2024. All significant intercompany balances and transactions have been eliminated in consolidation. (b) Use of Estimates The preparation of the consolidated financial statements requires management of the Company to make several estimates and assumptions relating to the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the period. Significant items subject to such estimates and assumptions include, among other items, share-based compensation based on the likelihood of meeting performance obligations, over time revenue recognition, valuation consideration related to business combinations, including contingent consideration based on actual and projected revenues, in addition to discount rates and present values, and other assumptions and estimates used to evaluate the recoverability of long-lived assets, goodwill and other intangible assets. Ac …

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(13) Equity At-the-Market Offering Agreement On March 21, 2024, the Company entered into an At-the-Market Offering Agreement with an aggregate offering price of up to $ 7.0 million (the 2023 ATM Facility). On August 30, 2024 the aggregate offering price under the 2023 ATM Facility was increased to approximately $ 16.0 million. It was then reduced to approximately $ 2.9 million in September 2024 and increased again to approximately $ 60.0 million in December 2024. The Company received proceeds of approximately $ 18.0 million under this facility prior to termination of the facility effective August 8, 2025. On August 8, 2025, the Company entered into an At Market Issuance Sales Agreement with Ladenburg Thalmann &Co. Inc., under which the Company may, from time to time, offer and sell shares of its common stock having an aggregate gross sales price of up to $ 40.0 million. The shares will be offered pursuant to the Companys shelf registration statement on Form S-3, including the related prospectus supplement filed with the SEC on August 8, 2025. Sales, if any, will be made in transactions deemed to be at the market offerings as defined in Rule 415(a)(4) under the Securities Act, directly on or through the NYSE American or in negotiated transactions as otherwise permitted under the Sales Agreement. The Company is not obligated to sell any shares under the Ladenburg sales agreement and may suspend or terminate the offering at any time. A total of 4,929,253 shares were sold und …

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