StreetSweeper Reports Ocean Power Technologies "Dead in Water", Shares Sink 12%

Shares of

fall more than 12% following StreetSweeper's report on the company's misleading announcements, a lack of funding, and "dead" projects.

In a press release on Tuesday, Ocean Power Technologies announced that it's entity Victorian Wave Partners Pty. Ltd. (VWP) received a $5 million initial grant funding from the Australian Renewable Energy Agency (ARENA). Ocean Power reported, "The funding received represents the first payment under the A$66.5 million grant that was awarded by ARENA to VWP toward the cost of building and deploying its planned wave power station project off the coast of Australia. VWP and ARENA signed a Deed of Variation in January, which amended the grant agreement to accelerate the reimbursement of eligible expenses for stages one and two of the planned three-stage project and increases the number of project milestones." Following the press release, shares began to climb hitting $4.29 on Wednesday, a gain of approximately 20% over two days. Amid stock excitement, Streetsweeper's investigative reporter Sonya Colberg told investors not to be fooled.

In an article published Thursday, Colberg told investors to "Wave Goodbye To This Wave Power Company". The reporter noted that the company recently announced this same deal on January with the headline, "Ocean Power Technologies Announces Funding Agreement with Australian Government For A $66.5 Million Grant." The stock jumped 52.9% in pre-market trading following the January 14 announcement.

As surprising as it is to see a press release repeated, Colberg remarked that the company announced a $66.5 million grant to Ocean Power Technologies (Australasia) Pty. Ltd., a partner of Victorian Wave Partners Pty. Ltd. The news of the $66.5 million (AUD), or $4.6 million (US), is not "new" news. The reporter emphasized that the grant was already assumed and the "misleading headline ignores the real news that OPTT is legally required to disclose in its 8-K, US Securities and Exchange Commission filing. That real news is that the Oregon project is officially Dead Sea debris. The US Department of Energy has terminated the remaining teeny, single-buoy contract with OPTT because the company couldn't come up with enough money. Key wording in the new SEC filing is: 'The Company and the DOE are discussing the steps necessary to close out the project.'"

If the "regurgitated" news wasn't enough for investors and the general public to question Ocean Power Technologies, Sonya Colberg remarked on additional issues and concerns with the company. The reporter noted the contingency that the company must match the money, for a total of $210 million (US), or lose the grant. The project contains three phases, with Phase 1 holding a $19 million price- all of which is Ocean Power Technologies. The price for Phase 1 is almost laughable, as the company only has $17 million. In addition to the price tag, the second condition connected with the Australia grant says that Ocean Power Technologies must get licensing and a purchase power agreement first. Colberg noted that five years have passed without any license or purchase power agreement.

The reporter continued her attack on the questionable technology company, remarking on "uninteresting" completed projects and dead projects. Colberg wrote, "The most interesting “completed project” in Hawaii has earned US Navy funding and the Marine Corps' blessing. But even it is simply a test site, connected to the power grid only 'to evaluate technical and economic feasibility of commercial scale wave energy systems from multiple suppliers.' The Navy's press releases says the goal is to eventually make the Marine Corps Base Hawaii energy self-sustaining. Here's the kicker. The buoy generated about 3 to 4 kilowatts. That would power the grand total of three light bulbsleft on all day." Ocean Power Technologies has numerous "dead" deals including it's inability to get past phase 1 in the Oregon project due to project implementation delays, associated studies delays, and increased project costs. The 2006 Spain project also failed with concerns and problems related with the power-take-off and control systems for the 40 kilowatt buoy.

Shares of Ocean Power Technologies closed at $4.05 on Wednesday. The stock was down over 12% on Thursday, at $3.61. The stock is currently trading at $3.79.