Ocean Power Technologies, Inc. 8-K

What Happened

• Ocean Power Technologies, Inc. announced on April 1, 2026 that it entered into a Securities Purchase Agreement to issue and sell $10,000,000 of convertible notes to institutional investors. The company filed the agreement on Form 8‑K.

Key Details

• Aggregate principal: $10,000,000 of convertible notes issued April 1, 2026.
• Conversion: Notes convertible into common stock at $0.40 per share (adjustable for splits/dividends). Conversion is limited so no holder may exceed 4.99% beneficial ownership after conversion (Beneficial Ownership Cap).
• Interest & default rate: 4.5% per year normally; interest increases to 13% per year if an event of default occurs.
• Maturity & payments: Notes mature 18 months after issuance and mature payable at a 13% premium to face value (i.e., ~113% of principal). Notes amortize with quarterly cash payments due on the first trading day of each three‑month anniversary from closing through maturity.
• Priority and offering: Notes rank senior to holders of the company’s unsecured debt (subject to exceptions). Securities are being offered under a prospectus supplement to the company’s shelf registration statement.

Why It Matters

• This transaction creates a new $10M debt obligation (Item 2.03) and provides near‑term capital for the company while giving investors conversion rights into equity at a fixed $0.40 price. The conversion cap limits any single investor’s stake to under 5%, which can limit immediate dilution. Interest, amortization and the 18‑month maturity mean investors will see scheduled cash outflows, and the notes are senior to existing unsecured debt, which affects creditor priority. Investors should consider the impact of potential dilution if notes are converted and the company’s upcoming cash flow requirements to meet quarterly payments and maturity.