Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-221867
Prospectus
Supplement
(To
prospectus dated December 12, 2017)
Up to $3,645,000
Shares
of Common Stock
This
prospectus supplement and the accompanying prospectus, which together we sometimes refer to as the prospectus, relate to the offer
and sale, from time to time, of
shares of our common stock having an aggregate gross sales
price of up to $3,645,000
, to or
through A.G.P./Alliance Global Partners,
or A.G.P., acting as our sales agent
, in accordance with the terms of a
sales agreement
we have entered into with A.G.P.
Sales
of our common stock, if any, under this prospectus will be made by any method that is deemed to be an “at the market offering”
as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, or the Securities Act. A.G.P.
is
not required to sell any specific amount of securities, but will act as our sales agent using commercially reasonable efforts
consistent with its normal trading and sales practices, on mutually agreed terms between A.G.P. and us. There is no arrangement
for funds to be received in any escrow, trust or similar arrangement.
A.G.P.
will be entitled to compensation at a fixed commission rate of 3.25% of the gross proceeds from the sale of our common stock on
our behalf as sales agent pursuant to the sales agreement. In connection with the sale of the common stock on our behalf, A.G.P.
will be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation of A.G.P. will
be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to A.G.P.
against certain civil liabilities, including liabilities under the Securities Act. See “Plan of Distribution.”
Our
common stock is listed on The Nasdaq Capital Market under the symbol “OPTT.” The last reported sale price of our common
stock on The Nasdaq Capital Market on January 4, 2019 was $0.38 per share.
As
of January 7, 2019, the aggregate market value of our outstanding common stock held by non-affiliates, or our public float,
was approximately $10,947,052, which amount is based on 19,205,355 outstanding shares of common stock held by non-affiliates
and a per share price of $0.57, which was the last reported sale price of our common stock on The Nasdaq Capital Market on November
9, 2018. Pursuant to General Instruction I.B.6. of Form S-3, so long as our public float remains below $75.0 million, in no event
will we sell securities with a value of more than one-third of our public float in any 12-month period under the registration
statement of which this prospectus is a part. We have not offered or sold any securities pursuant to General Instruction I.B.6.
of Form S-3 during the 12 calendar month period that ends on and includes the date of this prospectus supplement.
Investing
in our common stock involves a high degree of risk. See “Risk Factors” beginning on page S-4 of this prospectus
supplement, on page 4 of the accompanying prospectus and in our reports filed with the Securities and Exchange Commission
which are incorporated by reference herein for a discussion of information that should be considered in connection with an
investment in our common stock.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
A.G.P.
The
date of this prospectus supplement date is January 8, 2019
Table
of Contents
Prospectus
Supplement
About
This Prospectus Supplement
You
should assume that the information contained in this prospectus supplement and the accompanying prospectus is accurate only as
of the date on the front of the applicable document and that any information we have incorporated by reference into this prospectus
supplement and the accompanying prospectus is accurate only as of the date of the document incorporated by reference, regardless
of the time of delivery of this prospectus supplement or the accompanying prospectus, or any sale of a security.
This
document is in two parts. The first part is the prospectus supplement, which describes the specific terms of this offering. The
second part, the accompanying prospectus, provides more general information about securities we may offer from time to time, some
of which may not apply to the securities we are offering under this prospectus supplement. In addition, we incorporate important
information into this prospectus supplement and the accompanying prospectus by reference. You may obtain the information incorporated
by reference into this prospectus supplement and the accompanying prospectus without charge by following the instructions under
“Where You Can Find More Information” in this prospectus supplement. Generally, when we refer to this prospectus,
we are referring to both parts of this document combined. We urge you to carefully read this prospectus supplement, the information
incorporated by reference and the accompanying prospectus before buying any of the securities being offered under this prospectus
supplement. This prospectus supplement may add, update or change information contained in the accompanying prospectus.
To
the extent that any statement that we make in this prospectus supplement is inconsistent with statements made in the accompanying
prospectus or any documents incorporated by reference herein or therein, the statements made in this prospectus supplement will
be deemed to modify or supersede those made in the accompanying prospectus and such documents incorporated by reference herein
or therein.
You
should rely only on the information contained, or incorporated herein by reference, in this prospectus supplement and contained,
or incorporated herein by reference, in the accompanying prospectus. We have not authorized anyone to provide you with different
information. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained
in this prospectus supplement and the accompanying prospectus. You should not rely on any unauthorized information or representation.
This prospectus supplement is an offer to sell only the securities offered hereby, and only under circumstances and in jurisdictions
where it is lawful to do so.
This
prospectus supplement and the accompanying prospectus dated December 12, 2017 are part of a registration statement on Form S-3
(File No. 333-221867) we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration process.
Under this “shelf” process, we may sell from time to time in one or more offerings up to $30,000,000 of our common
stock, preferred stock, debt securities, warrants, depositary shares, subscription rights, purchase contracts and units.
Unless
expressly stated otherwise, all references in this prospectus supplement and the accompanying prospectus to “we,”
“us,” “our” or similar references mean Ocean Power Technologies, Inc. and its subsidiaries on a consolidated
basis.
Prospectus
Summary
This
summary highlights certain information about us, this offering and information appearing elsewhere in this prospectus supplement,
in the accompanying prospectus and in the documents we incorporate by reference. This summary is not complete and does not contain
all of the information that you should consider before investing in our securities. To fully understand this offering and its
consequences to you, you should read this entire prospectus supplement and the accompanying prospectus carefully, including the
information referred to under the heading “Risk Factors” in this prospectus supplement on page S-4, and the financial
statements and other information incorporated by reference in this prospectus supplement and the accompanying prospectus when
making an investment decision. In this prospectus supplement, the terms “we,” “us,” and the “company”
refer to Ocean Power Technologies, Inc. and its subsidiaries.
Our
Company
Nearly
70% of the earth’s surface is covered by water, and over 40% of the world’s population lives within approximately
150 miles of a coast. Thousands of information gathering and/or power systems are deployed in the oceans today to increase our
understanding of weather, climate change, biological processes, and marine mammal patterns as well as supporting exploration,
security and defense and operations for industries such as oil and gas. Most of these systems are powered by battery, solar, wind,
fuel cell, or fossil fuel generators that may be unreliable and expensive to operate while they also may be limited in their ability
to deliver ample electric power. These current systems often necessitate significant tradeoffs in sensor accuracy, data processing
and communications bandwidth and frequency in order to operate given limited available power. More persistent power systems requiring
less maintenance, such as our systems, may have the ability to save costs over these current systems. Equally important are increases
in available power, which may allow for better sensors, faster data sampling and higher frequency communication intervals up to
real-time which could as a result improve scientific, safety, security and economic returns.
Founded
in 1984 and headquartered in Monroe Township, New Jersey, we believe we are the leader in ocean wave power conversion technology.
Our PB3 PowerBuoy™ is our first fully commercial product which generates electricity by harnessing the renewable energy
of ocean waves. In addition to our PB3 PowerBuoy™, we continue to develop our PowerBuoy™ product line based on modular,
ocean-going buoys, which we have been periodically ocean testing since 1997.
The
PB3 PowerBuoy™ generates power for use in remote offshore locations, independent of a conventional power grid. It features
a unique onboard power take-off (“PTO”) system, which incorporates both energy storage and energy management and control
systems. The PB3 generates a nominal name-plated capacity rating of up to 3 kilowatts (“kW”) of peak power during
recharging of the onboard batteries. Power generation is deployment-site dependent whereby average power generated can increase
substantially at very active sites. Our standard energy storage system (“ESS”) has an energy capacity of up to a nominal
150 kilowatt-hours (“kWh”) to meet specific application requirements. We believe there is a substantial addressable
market for the current capabilities of our PB3, which we believe could be utilized in a variety of applications.
In
addition to leveraging earlier design aspects of our autonomous PowerBuoy™, the PB3 has undergone extensive factory and
in-ocean design validation testing. Currently, our engineering efforts are continuing to expand the PowerBuoy™ capability
with simplified deployment and mooring options and working together with our customer base to ensure flexible systems integration
and to optimize energy output. Our marketing efforts are focused on applications in remote offshore locations that require reliable
and persistent power and communications, either by supplying electric power to payloads that are integrated directly in or on
our PowerBuoy™ or located in its vicinity, such as on the seabed and in the water column.
Based
on our market research and publicly available data, we believe that numerous markets have a direct need for our PowerBuoys™,
including oil and gas, security and defense, science and research, and communications. Depending on payload power requirements,
sensor types and other considerations, we have found that our PowerBuoy™ could satisfy several application requirements
within these markets. We believe that the PB3 persistently generates sufficient power to meet the requirements of many potential
customer applications within our target markets.
Since
fiscal 2002, government agencies have accounted for a significant portion of our revenues. These revenues were largely for the
support of our development efforts relating to our technology. Today our goal is to generate the majority of our revenue from
the sale or lease of our products, and sales of services to support our business operations. As we continue to develop and commercialize
our products, we expect to have a net loss of cash from operating activities unless and until we achieve positive cash flow from
the commercialization of our products and services. During fiscal 2018 and the first six months of fiscal year 2019, we continued
work on projects with the Premier Oil (“PMO”) and Eni S.p.A. (“Eni”).
Corporate
Information
Our
principal executive offices are located at 28 Engelhard Drive, Monroe Township, New Jersey 08831. Our telephone number is (609)
730-0400. We were incorporated in New Jersey in 1984 and reincorporated in Delaware in 2007. We maintain a website at www.oceanpowertechnologies.com
where general information about us is available. We are not incorporating the contents of the website into this prospectus supplement.
The
Offering
Common
stock offered by us
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Shares
of common stock having an aggregate offering price of up to $3,645,000. The actual number of shares issued will vary
depending on the sales price under this offering.
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Plan
of Distribution
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“At
the market offering” that may be made from time to time to or through our sales agent, A.G.P. See “Plan of Distribution”
on page S-7.
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Use
of proceeds
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We
intend to use the net proceeds from this offering for enabling our sales and marketing, building additional PowerBuoys to
meet potential market demand, advancing the development of new products, and for other general corporate purposes. This may
include additional development, testing and demonstrations of our PowerBuoy system with the goal of furthering and accelerating
our commercialization efforts. However, we will retain broad discretion over how the net proceeds are used. See “Use
of Proceeds.”
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Risk
factors
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Investing
in our securities involves a high degree of risk. You should carefully consider all of the information in this prospectus
supplement, the accompanying prospectus and the documents incorporated by reference in this prospectus supplement and the
accompanying prospectus. In particular, see “Risk Factors” beginning on page S-4 of this prospectus supplement.
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Nasdaq
Capital Market symbol
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“OPTT”
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RISK
FACTORS
Investing
in our common stock involves substantial risk. You should carefully consider the risk factors disclosed below as well as those
contained in our most recent Annual Report on Form 10-K, which is incorporated by reference herein, as updated by our subsequent
filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the other information contained
in this prospectus supplement and the accompanying prospectus before acquiring any of our common stock. These risks could have
a material adverse effect on our business, results of operations or financial condition and cause the value of our common stock
to decline. You could lose all or part of your investment.
This
prospectus supplement and the accompanying prospectus also contain or incorporate by reference forward-looking statements that
involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements
as a result of certain factors, including the risks faced by us described or incorporated by reference in this prospectus supplement
and the accompanying prospectus. See “Cautionary Note Regarding Forward-Looking Statements.”
Risks
Related to our Common Stock and the Offering
Our
historic stock price has been volatile and the future market price for our common stock is likely to continue to be volatile.
The
public market for our common stock has historically been very volatile. Any future market price for our shares is likely to continue
to be very volatile. Since we began trading on the Nasdaq Stock Market on November 2, 2007, our common stock has traded at prices
as low as $0.28 per share and as high as $15.92 per share. This price volatility may make it more difficult for our stockholders
to sell shares when they want at prices that they find attractive. We do not know of any one particular factor that has caused
volatility in our stock price. However, the stock market in general has experienced extreme price and volume fluctuations that
have often been unrelated or disproportionate to the operating performance of companies. Broad market factors and the investing
public’s negative perception of our business may reduce our stock price, regardless of our operating performance.
Our
common stock is thinly traded on The Nasdaq Stock Market.
Although
our common stock is traded on The Nasdaq Stock Market, the trading volume has historically been low and we cannot assure investors
that this will increase the trading volume or decrease the volatility of the trading price of our common stock. We cannot assure
investors that a more active trading market will develop even if we issue more equity in the future.
The
market valuation of our business may fluctuate due to factors beyond our control and the value of the investment of our stockholders
may fluctuate correspondingly.
The
market valuation of energy companies, such as us, frequently fluctuate due to factors unrelated to the past or present operating
performance of such companies. Our market valuation may fluctuate significantly in response to a number of factors, many of which
are beyond our control, including:
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Changes
in securities analysts’ estimates of our financial performance;
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Fluctuations
in stock market prices and volumes, particularly among securities of energy companies;
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Changes
in market valuations of similar companies;
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Announcements
by us or our competitors of significant contracts, new technologies, acquisitions, commercial relationships, joint ventures
or capital commitments;
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Variations
in our quarterly operating results;
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Fluctuations
in coal, oil, natural gas, methanol and ammonia prices;
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Loss
of a major customer of failure to complete significant commercial contracts;
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Loss
of a relationship with a partner; and
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Additions
or departures of key personnel.
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As
a result, the value of your investment may fluctuate.
Our
management will have broad discretion over the use of proceeds from this offering and may not use the proceeds effectively.
Our
management will have broad discretion as to the application of the net proceeds from this offering and could spend the proceeds
in a variety of ways that may ultimately fail to improve our operating results or enhance the value of our common stock. Our failure
to apply these funds effectively could have a negative effect on our business and cause the price of our common stock to decline.
A
large number of shares may be sold in the market following this offering, which may depress the market price of our common stock.
All
of our shares of common stock sold in the offering will be freely tradable without restriction or further registration under the
Securities Act. As a result, a substantial number of our shares of common stock may be sold in the public market following this
offering, which may cause the market price of our common stock to decline. If there are more shares of common stock offered for
sale than buyers are willing to purchase, then the market price of our common stock may decline to a market price at which buyers
are willing to purchase the offered shares of common stock and sellers remain willing to sell the shares of common stock.
The
actual number of shares we will issue under the sales agreement, at any one time or in total, is uncertain.
Subject
to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a placement
notice to A.G.P. at any time and from time to time during the term of the sales agreement. The actual number of shares common
stock that are sold to or through A.G.P. on our behalf pursuant to any placement notice we deliver to A.G.P. will depend on the
market price of the common stock during the periods in which sales are made and any restrictions or limitations applicable to
such sales, such as a minimum price below which sales may not be made, that we may include in such placement notice or that otherwise
apply under the sales agreement. Because the price per share of each share of common stock sold will fluctuate based on the market
price of our common stock during the sales period, it is not possible at this stage to predict the number of shares that will
ultimately be issued.
You
may experience immediate dilution in the book value per share of the common stock you purchase.
Because
the price per share of our common stock being offered from time to time may be substantially higher than the book value per share
of our common stock at the time of the sale, you may suffer substantial dilution in the net tangible book value of the common
stock you purchase in this offering.
We
are at risk of being de-listed from The Nasdaq Stock Market if we do not regain compliance with the minimum $1 bid price per share
required by Nasdaq rules
.
On
August 9, 2018, we received a letter from The Nasdaq Stock Market informing us that the closing bid price of our common stock
has been below $1.00 per share for a period of 30 consecutive trading days, and as a result, we are not in compliance with the
minimum bid price requirement for continued listing. Under the Nasdaq Listing Rules, we have a grace period of 180 calendar days,
or until February 5, 2019, in which to regain compliance with the minimum bid price rule. To regain compliance, the closing bid
price of our common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this grace
period. If we do not regain compliance before February 5, 2019, the Nasdaq stated that it will provide us with written notice
that our securities are subject to delisting. At that time, we may appeal the Nasdaq’s determination to a Nasdaq Listing
Qualifications Panel, which would stay any further delisting action by the Nasdaq pending a final decision by the panel. Alternatively,
we may be eligible for an additional 180 calendar day grace period if we meet the continued listing standards, with the exception
of bid price, for The Nasdaq Capital Market, and we state our intent to affect a reverse split, if necessary, to cure such deficiency.
USE
OF PROCEEDS
The
amount of proceeds from this offering will depend upon the number of shares of our common stock sold to or through A.G.P. under
the sales agreement and the prices at which they are sold. There can be no assurance that we will be able to sell any shares of
common stock under the sales agreement with A.G.P. or to what extent we will be able to utilize the sales agreement.
We
intend to use the net proceeds from this offering, if any, for enabling our sales and marketing, building additional PowerBuoys
to meet potential market demand, advancing the development of new products, and for other general corporate purposes. This may
include additional development, testing and demonstrations of our PowerBuoy system with the goal of furthering and accelerating
our commercialization efforts. The amounts and timing of these expenditures will depend on a number of factors, such as the timing,
scope, progress and results of our research and development efforts, the timing and progress of any partnering efforts, and the
regulatory and competitive environment. As of the date of this prospectus supplement, we have not determined the amount of net
proceeds to be used specifically for any particular purpose or the timing of any expenditures. Accordingly, management will retain
broad discretion and flexibility in applying the net proceeds from the sale of the securities, if any. Pending any use of the
net proceeds from this offering, if any, we intend to invest the net proceeds in repurchase contracts or deposit them in checking
accounts at financial institutions.
Dividend
Policy
We
have never declared or paid any cash dividends on our common stock, and we do not currently anticipate declaring or paying cash
dividends on our common stock in the foreseeable future. We currently intend to retain all of our future earnings, if any, to
finance the growth and development of our business. Any future determination relating to our dividend policy will be made at the
discretion of our Board of Directors and will depend on a number of factors, including future earnings, capital requirements,
financial conditions, future prospects, contractual restrictions and covenants and other factors that our Board of Directors may
deem relevant.
Description
of Securities
In
this offering, we are offering shares of our common stock
having an aggregate gross sales
price
of up to $3,645,000.
The
material terms and provisions of our common stock are described under the caption “Description of Capital Stock” starting
on page 23 of the accompanying prospectus.
PLAN
OF DISTRIBUTION
We
have entered into the sales agreement with A.G.P. under which we may issue and sell shares of our common stock having an aggregate
gross sales price of up to $25.0 million from time to time to or through A.G.P., acting as our sales agent.
However,
due to the offering limitations applicable to us under General Instruction I.B.6. of Form S-3 and our public float as of the date
of this prospectus supplement, and in accordance with the terms of the sales agreement, we are offering shares of common stock
having an aggregate gross sales price of up to $3,645,000 pursuant to this prospectus.
If our public float increases
such that we may sell additional amounts under the sales agreement and the registration statement of which this prospectus is
a part, we will file another prospectus supplement prior to making additional sales. The sales of our common stock, if any, under
this prospectus will be made at market prices by any method deemed to be an “at the market offering” as defined in
Rule 415(a)(4) under the Securities Act, including sales made directly on The Nasdaq Capital Market, on any other existing trading
market for our common stock, or to or through a market maker.
Each
time that we wish to issue and sell shares of our common stock under the sales agreement, we will provide A.G.P. with a placement
notice describing the amount of shares to be sold, the time period during which sales are requested to be made, any limitation
on the amount of shares of common stock that may be sold in any single day, any minimum price below which sales may not be made
or any minimum price requested for sales in a given time period and any other instructions relevant to such requested sales. Upon
receipt of a placement notice, A.G.P., acting as our sales agent, will use commercially reasonable efforts, consistent with its
normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of The Nasdaq Capital
Market, to sell shares of our common stock under the terms and subject to the conditions of the placement notice and the sales
agreement. We or A.G.P. may suspend the offering of common stock pursuant to a placement notice upon notice and subject to other
conditions.
Settlement
for sales of common stock, unless the parties agree otherwise, will occur on the second trading day following the date on which
any sales are made in return for payment of the net proceeds to us. There are no arrangements to place any of the proceeds of
this offering in an escrow, trust or similar account. Sales of our common stock as contemplated in this prospectus will be settled
through the facilities of The Depository Trust Company or by such other means as we and A.G.P. may agree upon.
We
will pay A.G.P. commissions for its services in acting as our sales agent in the sale of our common stock pursuant to the sales
agreement. A.G.P. will be entitled to compensation at a fixed commission rate of 3.25% of the gross proceeds from the sale of
our common stock on our behalf pursuant to the sales agreement. We have also agreed to reimburse A.G.P. for certain specified
expenses incurred by A.G.P., including the fees and disbursements of its legal counsel incurred by A.G.P. in connection with entering
into the sales agreement in an amount not to exceed $35,000, plus additional amounts to be mutually agreed upon for reimbursement
of legal fees that may be incurred by A.G.P. after the date of this prospectus supplement in connection with its further periodic
due diligence investigation of our company in connection with this offering. We estimate that the total expenses of the offering
payable by us, excluding discounts, commissions and reimbursements payable to A.G.P. under the sales agreement, will be approximately
$200,000.
The remaining sales proceeds, after deducting any expenses payable by us and any
transaction fees imposed by any governmental, regulatory, or self-regulatory organization in connection with the sales, will equal
our net proceeds for the sale of such common stock.
Because
there are no minimum sale requirements as a condition to this offering, the actual total public offering price, commissions and
net proceeds to us, if any, are not determinable at this time. The actual dollar amount and number of shares of common stock we
sell through this prospectus will be dependent, among other things, on market conditions and our capital raising requirements.
We
will report at least quarterly the number of shares of common stock sold through A.G.P. under the sales agreement, the net proceeds
to us and the compensation paid by us to A.G.P. in connection with the sales of common stock under the sales agreement.
In
connection with the sale of the common stock on our behalf, A.G.P. will be deemed to be an “underwriter” within the
meaning of the Securities Act, and the compensation of A.G.P. will be deemed to be underwriting commissions or discounts. We have
agreed to provide indemnification and contribution to A.G.P. against certain civil liabilities, including liabilities under the
Securities Act.
A.G.P.
will not engage in any market making activities involving our common stock while the offering is ongoing under this prospectus
if such activity would be prohibited under Regulation M or other anti-manipulation rules under the Securities Act.
As
our sales agent, A.G.P. will not engage in any transactions that stabilizes our common stock.
The
offering pursuant to the sales agreement will terminate upon the earlier of (i) the sale of all shares of common stock subject
to the agreement and (ii) termination of the sales agreement as permitted therein. We may terminate the sales agreement in our
sole discretion at any time by giving 10 days’ prior notice to A.G.P. A.G.P. may terminate the sales agreement under the
circumstances specified in the sales agreement and in its sole discretion at any time by giving 10 days’ prior notice to
us.
The
sales agreement has been filed as an exhibit to a current report on Form 8-K that we filed with the Commission in connection with
this offering and is incorporated into this prospectus supplement by reference.
A.G.P.
and its affiliates have provided, and may in the future provide, investment banking, commercial banking and other financial services
for us in the ordinary course of business, for which services that may in the future receive customary fees.
This
prospectus in electronic format may be made available on a website maintained by A.G.P., and A.G.P. may distribute this prospectus
electronically.
LEGAL
MATTERS
The
validity of the securities being offered by this prospectus supplement and other legal matters concerning this offering
will
be passed on for us by Porter Hedges LLP, Houston, Texas.
A.G.P. is being represented in connection with this offering
by
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, New York.
EXPERTS
The
consolidated financial statements of Ocean Power Technologies, Inc. and subsidiaries as of April 30, 2018 and 2017, and for each
of the years in the two-year period ended April 30, 2018, have been incorporated by reference herein to the Annual Report on Form
10-K for the year ended April 30, 2018, in reliance upon the report of KPMG LLP, independent registered public accounting firm,
which are incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The
audit report covering the April 30, 2018 consolidated financial statements contains an explanatory paragraph that states that
our cash balance, recurring losses from operations, and accumulated deficit raise substantial doubt about our ability to continue
as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of
that uncertainty.
Certain
Documents Incorporated By Reference
The
following documents, which have previously been filed by us with the SEC under the Exchange Act, are incorporated herein by reference:
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Our
Annual Report on Form 10-K for the fiscal year ended April 30, 2018, filed with the SEC on July 17, 2018 (File No. 001-33417);
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Our
Quarterly Report on Form 10-Q for the fiscal periods ended July 31, 2018 and October 31, 2018, filed with the SEC on September
12, 2018 and December 10, 2018 (File No. 001-33417);
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A
description of our capital stock contained in our Form 8-A filed with the SEC on April 18, 2007 (File No. 001-33417); and
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Our
Current Reports on Form 8-K, filed with the SEC on May 3, 2018, May 18, 2018, June 6, 2018, June 28, 2018, July 10, 2018,
July 17, 2018, July 18, 2018, August 13, 2018, August 16, 2018, August 17, 2018, August 21, 2018, August 31, 2018, September
12, 2018, September 13, 2018, September 20, 2018, September 24, 2018, October 31, 2018, November 7, 2018, November 8, 2018,
November 9, 2018, November 14, 2018, November 19, 2018, November 21, 2018, December 6, 2018, December 7, 2018, December 11,
2018, December 20, 2018 and January 7, 2019 (File No. 001-33417) (excluding any information furnished pursuant to Item 2.02
or Item 7.01 of any such Current Report on Form 8-K).
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All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished
pursuant to Item 2.02 or Item 7.01 on any current report on Form 8-K) after the date of the initial registration statement and
prior to the effectiveness of the registration statement and after the date of this prospectus supplement and prior to the termination
of this offering shall be deemed to be incorporated in this prospectus supplement and the accompanying prospectus by reference
and to be a part hereof from the date of filing of such documents. Any statement contained herein, or in a document incorporated
or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this prospectus
supplement and the accompanying prospectus to the extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement
or the accompanying prospectus.
You
may request a free copy of these filings, other than any exhibits, unless the exhibits are specifically incorporated by reference
into this prospectus supplement, by writing or telephoning us at the following address:
Ocean
Power Technologies, Inc.
28
Engelhard Drive, Suite B
Monroe
Township, NJ 08831
Attention:
Chief Financial Officer
(609)
730-0400
Where
You Can Find More Information
We
are subject to the informational requirements of the Exchange Act and in accordance therewith, file reports, proxy statements
and other information with the SEC. These reports, proxy statements and other information can be inspected and copied at the SEC’s
Public Reference room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site at www.sec.gov that
contains reports, proxy and information statements, and other information regarding issuers that file electronically with the
SEC. We maintain a website at www.oceanpowertechnologies.com. Information on our website or any other website is not incorporated
by reference into this prospectus supplement and does not constitute part of this prospectus supplement. Please note that information
contained in our website, whether currently posted or posted in the future, is not a part of this prospectus supplement or the
documents incorporated by reference in this prospectus supplement.
Cautionary
Note Regarding Forward-Looking Statements
The
information discussed in this prospectus supplement, our filings with the SEC and our public releases include “forward-looking
statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. Forward-looking
statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those
projected. Among those risks, trends and uncertainties are:
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ability to commercialize our PowerBuoys™, and achieve and sustain profitability;
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continued development of our proprietary technologies, and expected continued use of cash from operating activities unless
or until we achieve positive cash flow from the commercialization of our products and services;
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our
ability to obtain additional funding, as and if needed which will be subject to a number of factors, including market conditions,
and our operating performance;
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estimates regarding expenses, future revenues and capital requirements;
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adequacy of our cash balances and our need for additional financings;
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ability to develop and manufacture a commercially viable PowerBuoy™ product;
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our
ability to successfully develop and market new products, such as a hybrid PowerBuoy™ or subsea battery solutions;
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that
we will be successful in our efforts to commercialize our PowerBuoy™ or the timetable upon which commercialization can
be achieved, if at all;
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our
ability to identify and penetrate markets for our PowerBuoys™ and our wave energy technology;
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the
reliability of our technology and our PowerBuoys™;
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the
power output, survivability and reliability of our PowerBuoys™;
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ability to improve the power output, survivability and reliability of our PowerBuoys™;
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ability to implement our commercialization strategy as planned, or at all;
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our
ability to maintain the listing of our common stock on the Nasdaq Capital Market;
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the
impact of pending and threatened litigation on our business, financial condition and liquidity;
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changes
in current legislation, regulations and economic conditions that affect the demand for renewable energy;
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ability to compete effectively in our target markets;
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limited operating history and history of operating losses;
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sales and marketing capabilities and strategy in the United States and internationally; and
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ability to protect our intellectual property portfolio.
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These forward-looking statements are identified by their use of terms and phrases such as “expect,” “estimate,”
“project,” “plan,” “believe,” “achievable,” “anticipate” and similar
terms and phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they
do involve certain assumptions, risks and uncertainties. Our actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including but not limited to the risks and uncertainties discussed
in the section entitled “Risk Factors” included elsewhere in this prospectus supplement and the accompanying prospectus
and in the documents that we include in or incorporate by reference into this prospectus supplement and the accompanying prospectus,
including our Annual Report on Form 10-K for the fiscal year ended April 30, 2018 and our subsequent SEC filings.
All
forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements in this section and elsewhere in this prospectus supplement and in the documents incorporated by reference.
Other than as required under the securities laws, we do not assume a duty to update these forward-looking statements, whether
as a result of new information, subsequent events or circumstances, changes in expectations or otherwise.
PROSPECTUS
OCEAN
POWER TECHNOLOGIES, INC.
$30,000,000
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Warrants
Subscription Rights
Purchase Contracts
Units
We may offer from time to time debt securities,
shares of our common stock, shares of our preferred stock, depositary shares, warrants, subscription rights, purchase contracts
and units.
The aggregate initial offering price of
the securities that we offer will not exceed $30,000,000. We will offer the securities in amounts, at prices and on terms to be
determined at the time of the offering.
Our common stock is quoted on the NASDAQ
under the symbol “OPTT.” The last reported sale price of our common stock on November 30, 2017 was $1.26 per share.
We will provide the specific terms of the
offering in supplements to this prospectus. You should read this prospectus and any supplement carefully before you invest. This
prospectus may not be used to offer and sell our securities unless accompanied by a prospectus supplement.
Investing in our securities involves
significant risks that are described in the “Risk Factors” section beginning on page 4 of this prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus
is December 12, 2017.
TABLE OF CONTENTS
Page
ABOUT THIS
PROSPECTUS
This prospectus is part of a registration
statement that we filed with the Securities and Exchange Commission, or the Commission or the SEC, utilizing a “shelf”
registration process. Under this shelf registration process, we may sell any combination of the securities described in this prospectus
in one or more offerings up to a total dollar amount of $30 million. This prospectus provides you with a general description of
the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information
about the terms of the offering and the offered securities. This prospectus, together with applicable prospectus supplements, any
information incorporated by reference, and any related free writing prospectuses we file with the Commission, includes all material
information relating to these offerings and securities. We may also add, update or change in the prospectus supplement any of the
information contained in this prospectus or in the documents that we have incorporated by reference into this prospectus, including
without limitation, a discussion of any risk factors or other special considerations that apply to these offerings or securities
or the specific plan of distribution. If there is any inconsistency between the information in this prospectus and a prospectus
supplement or information incorporated by reference having a later date, you should rely on the information in that prospectus
supplement or incorporated information having a later date. We urge you to read carefully this prospectus, any applicable prospectus
supplement and any related free writing prospectus, together with the information incorporated herein by reference as described
under the heading “Incorporation of Certain Documents By Reference” and the additional information described under
the heading “Where You Can Find More Information,” before buying any of the securities being offered.
You should rely only on the information
we have provided or incorporated by reference in this prospectus, any applicable prospectus supplement and any related free writing
prospectus. We have not authorized anyone to provide you with different information. No dealer, salesperson or other person is
authorized to give any information or to represent anything not contained in this prospectus, any applicable prospectus supplement
or any related free writing prospectus.
Neither the delivery of this prospectus
nor any sale made under it implies that there has been no change in our affairs or that the information in this prospectus is correct
as of any date after the date of this prospectus. You should assume that the information in this prospectus, any applicable prospectus
supplement or any related free writing prospectus is accurate only as of the date on the front of the document and that any information
we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the
time of delivery of this prospectus, any applicable prospectus supplement or any related free writing prospectus, or any sale of
a security.
The registration statement containing this
prospectus, including exhibits to the registration statement, provides additional information about us and the securities offered
under this prospectus and any prospectus supplement. We have filed and plan to continue to file other documents with the Commission
that contain information about us and our business. Also, we will file legal documents that control the terms of the securities
offered by this prospectus as exhibits to the reports that we file with the Commission. The registration statement and other reports
can be read at the Commission website or at the Commission offices mentioned under the heading “Where You Can Find More Information.”
This prospectus contains summaries of certain
provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information.
All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein
have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus
is a part, and you may obtain copies of those documents as described below under “Where You Can Find More Information.”
ocean power
technologies, Inc.
As used in this prospectus, unless otherwise
indicated, “we,” “our,” “us,” “Company” or similar terms refer collectively to
Ocean Power Technologies, Inc., and not the subsidiaries of Ocean Power Technologies, Inc.
Nearly 70% of the earth’s surface
is covered by water, with over 40% of the world’s population living within approximately 150 miles of a coast. Thousands
of information gathering and/or power systems are deployed in the oceans today to increase our understanding of weather, climate
change, biological processes, and marine mammal patterns and to support exploration and operations for industries such as oil and
gas. Most of these systems are powered by battery, solar, wind, fuel cell, or fossil fuel generators that may be unreliable and
expensive to operate while they also may be limited in their ability to deliver ample electric power. These current systems often
necessitate significant tradeoffs in sensor accuracy, data processing and communications bandwidth and frequency in order to operate
given limited available power. More persistent power systems requiring less maintenance, such as our systems, may have the ability
to save costs over these current systems. Just as importantly, increases in available power may allow for better sensors, faster
data sampling, and higher frequency communication intervals up to real-time which could as a result improve scientific and economic
returns.
Founded in 1984 and headquartered in Pennington,
New Jersey, we believe we are the leader in ocean wave power conversion technology. We are commercializing our PB3 PowerBuoy which
generates electricity by harnessing the renewable energy of ocean waves. In addition to our PB3 PowerBuoy, we continue to develop
our PowerBuoy product line which is based on modular, ocean-going buoys, which we have been periodically ocean testing since 1997.
Our principal executive
offices are currently located at 1590 Reed Road, Pennington, New Jersey 08534, though we are relocating our corporate headquarters
in the second half of calendar year 2017 to 28 Engelhard Drive, Monroe Township, New Jersey. Our telephone number is (609) 730-0400.
We were incorporated in New Jersey in 1984 and reincorporated in Delaware in 2007. We maintain a website at
www.oceanpowertechnologies.com
where general information about us is available. We are not incorporating the contents of the website into this prospectus.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information discussed
in this prospectus, our filings with the SEC and our public releases include “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (the “PSLRA”),
or in releases made by the SEC. Such forward-looking statements involve known and unknown risks, uncertainties and other important
factors that could cause the actual results, performance or achievements of us to differ materially from any future results, performance
or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking
statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the
words “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,”
“project,” “may,” “will,” “would,” “could,” “should,” “seeks,”
or “scheduled to,” or other similar words, or the negative of these terms or other variations of these terms or comparable
language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act,
the Exchange Act and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such
laws.
The forward-looking
statements contained in or incorporated by reference into this prospectus are largely based on our expectations, which reflect
estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently
known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently
uncertain and involve a number of risks and uncertainties that are beyond our control, including:
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our ability to commercialize our PowerBuoys, and achieve and sustain profitability;
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our continued development of our proprietary technologies, and expected continued use of cash from
operating activities unless or until we achieve positive cash flow from the commercialization of our products and services;
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our ability to obtain additional funding as and if needed which will be subject to a number of
factors, including market conditions and our operating performance;
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our estimates regarding expenses, future revenues and capital requirements;
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the adequacy of our cash balances and our need for additional financings;
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our ability to develop and manufacture a commercially viable PowerBuoy product;
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that we will be successful in our efforts to commercialize our PowerBuoy or the timetable upon
which commercialization can be achieved, if at all;
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our ability to identify and penetrate markets for our PowerBuoys and our wave energy technology;
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our ability to implement our commercialization strategy as planned, or at all;
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our ability to maintain the listing of our common stock on the NASDAQ Capital Market;
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the reliability of our technology and our PowerBuoys;
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our ability to improve the power output, survivability and reliability of our PowerBuoys;
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the impact of pending and threatened litigation on our business, financial condition and liquidity;
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changes in current legislation, regulations and economic conditions that affect the demand for
renewable energy;
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our ability to compete effectively in our target markets;
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our limited operating history and history of operating losses;
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our sales and marketing capabilities and strategy in the United States and internationally; and
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our ability to protect our intellectual property portfolio.
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Many of these factors
are beyond our ability to control or predict. These factors are not intended to represent a complete list of the general or specific
factors that may affect us.
In addition, management’s
assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained
in this prospectus and in the documents incorporated by reference into this prospectus are not guarantees of future performance,
and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will
occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors
described in “Risk Factors” included elsewhere in this prospectus and in the documents that we include in or incorporate
by reference into this prospectus, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2017, as amended,
and our subsequent SEC filings. All forward-looking statements speak only as of the date they are made. We do not intend to update
or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by law.
These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.
WHERE YOU
CAN FIND MORE INFORMATION
This prospectus forms a part of a registration
statement on Form S-3 we filed with the SEC. This prospectus does not contain all of the information found in the registration
statement. For further information regarding us and our securities, you may desire to review the full registration statement, including
its exhibits and schedules, filed under the Securities Act, as well as
our proxy statement,
annual, quarterly and other reports and other information we file with the SEC
. You may read and copy any document we file
with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information
on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website on the Internet
at
www.sec.gov
that contains reports, proxy and information statements, and other information regarding companies that file
electronically with the SEC. We maintain a website on the Internet at
www.oceanpowertechnologies.com.
Our registration statement,
of which this prospectus constitutes a part, can be downloaded from the SEC’s website or from our website at
www.oceanpowertechnologies.com
.
Information on the SEC website, our website or any other website is not incorporated by reference in this prospectus and does not
constitute part of this prospectus.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have previously
been filed by us with the SEC under the Exchange Act, are incorporated herein by reference:
•
our Annual Report on Form 10-K for the fiscal year ended April 30, 2017, filed with the SEC on July 14, 2017 (File No. 001-33417);
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our Quarterly Report on Form 10-Q for the quarter ended July 31, 2017, filed with the SEC on September 7, 2017 (File No.
001-33417);
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our Definitive Proxy Statement on Schedule 14A, filed with the SEC on August 25, 2017 (File No. 001-33417);
•
the description of our common stock set forth in our registration statement on Form 8-A filed on April 18, 2007 (File No.
001-33417) and in any and all subsequent amendments and reports filed for the purpose of updating that description; and
•
our Current Reports on Form 8-K, filed with the SEC on July 14, 2017, July 25, 2017, July 31, 2017, August 28, 2017, September
8, 2017, October 19, 2017, October 24, 2017, and October 25, 2017 (File No. 001-33417) (excluding any information furnished pursuant
to Item 2.02 or Item 7.01 of any such Current Report on Form 8-K).
All documents filed by us pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished pursuant to Item 2.02 or Item 7.01 on any current
report on Form 8-K and any corresponding information furnished under Item 9.01 or included as an exhibit) after the date of the
initial registration statement of which this prospectus forms a part and until the termination of the offering under this prospectus
shall be deemed to be incorporated in this prospectus by reference and to be a part hereof from the date of filing of such documents.
Any statement contained herein, or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any subsequently
filed document which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You may request a free copy of these filings,
other than any exhibits, unless the exhibits are specifically incorporated by reference into this prospectus, by writing or telephoning
us at the following address:
Ocean Power Technologies, Inc.
1590 Reed Road
Pennington, New Jersey 08534
Attention: Chief Financial Officer
(609) 730-0400
RISK FACTORS
An investment in our securities involves
a high degree of risk. You should carefully consider the risk factors and all of the other information included in, or incorporated
by reference into, this prospectus, including those risk factors included in our Annual Report on Form 10-K for the year ended
April 30, 2017, as amended, our Quarterly Report on Form 10-Q for the quarterly period ended July 31, 2017 and our subsequent
Commission filings, in evaluating an investment in our securities. If any of these risks were to occur, our business, financial
condition or results of operations could be adversely affected. In that case, the trading price of our securities could decline
and you could lose all or part of your investment. When we offer and sell any securities pursuant to a prospectus supplement, we
may include additional risk factors relevant to such securities in the prospectus supplement.
USE OF PROCEEDS
Unless we inform you otherwise in the prospectus
supplement or any pricing supplement, we will use the net proceeds from the sale of the securities offered by us for general corporate
purposes. These purposes may include capital expenditures, repayment or refinancing of indebtedness, acquisitions and repurchases
and redemptions of securities. Pending any specific application, we may initially invest funds in short-term marketable securities
or apply them to the reduction of indebtedness.
DILUTION
Our net tangible book value at July 31,
2017, was approximately $10,085,231, or approximately $0.80 per share of common stock. Net tangible book value per share of common
stock is determined by dividing our tangible net worth, which is tangible assets less liabilities, by the total number of shares
of our common stock outstanding. If we offer shares of our common stock, purchasers of our common stock in that offering may experience
immediate dilution in net tangible book value per share. The prospectus supplement relating to an offering of shares of our common
stock will set forth the information regarding any dilutive effect of that offering.
DESCRIPTION
OF DEBT SECURITIES
The following is a general description of the debt securities
that we may issue from time to time. The particular terms relating to each debt security, which may be different from or in addition
to the terms described below, will be set forth in a prospectus supplement relating to such securities.
The debt securities will be our direct obligations.
The senior debt securities will rank equally with all of our other senior and unsubordinated debt. The senior subordinated debt
securities will have a junior position to all of our senior debt, which is generally defined in both the subordinated debt indenture
and senior subordinated debt indenture to include all debt other than debt that is expressly subordinated to or pari passu with
the subordinated debt securities or senior subordinated debt securities, as the case may be. The subordinated debt securities will
have a junior position to all of our senior debt and all of our senior subordinated debt. The senior debt securities will be issued
under a senior debt indenture, the senior subordinated debt securities will be issued under a senior subordinated debt indenture,
and the subordinated debt securities will be issued under a subordinated debt indenture. The indentures will be qualified under
the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). The type and terms of the debt securities
we offer under this prospectus may be limited by the other debt instruments to which we are a party at the time of the offering.
Any securities we issue will be structurally
subordinated to the indebtedness and other liabilities, if any, of our subsidiaries, including claims of our subsidiaries’
creditors, and any taxing authorities. Any claims we have as an unsecured creditor of one of our subsidiaries would be subordinate
to any security interest in the assets of that subsidiary and any indebtedness of that subsidiary senior to the indebtedness held
by us.
We have summarized below the material provisions
of the three indentures. The summary is not complete and is subject in all respects to the provisions of and is qualified in its
entirety by reference to the forms of indentures, which are filed as exhibits and incorporated by reference into the registration
statement of which this prospectus forms a part. The prospectus supplement relating to the applicable issuance of debt securities
will describe any significant differences between the indentures and the summary below. The forms of senior indenture, senior subordinated
indenture and subordinated indenture are substantially the same, except for certain covenants of ours and provisions relating to
subordination. You should read the indentures for provisions that may be important to you. The forms of indentures may be supplemented
or revised in connection with the filing of a prospectus supplement with respect to a particular series of debt securities and
such later version will govern any debt securities issued in conjunction with that prospectus supplement.
Terms Applicable to All Debt Securities
No Limit on Debt Amounts
. The indentures
do not limit the amount of debt that can be issued under the indentures. These amounts will be set from time to time by our board
of directors.
Prospectus Supplements
. The prospectus
supplement relating to a series of debt securities will summarize the specific terms of such debt securities and the related offering
including, with respect to each series of debt securities, some or all of the following, as well as any other material terms of
the debt securities:
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the title of the securities
of the series (which title will distinguish the securities of the series from all other series of securities);
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any limit upon the aggregate
principal amount of the securities of the series which may be authenticated and delivered (which limit will not pertain to securities
authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other securities of the series
or any securities that are deemed never to have been authenticated and delivered);
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the date or dates on which
the principal of and premium, if any, on the securities of the series is payable or the method or methods of determination thereof;
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the rate or rates at which
the securities of the series will bear interest, if any, or the method or methods of calculating such rate or rates of interest,
the date or dates from which such interest will accrue or the method or methods by which such date or dates will be determined,
the dates on which any such interest will be payable, our right, if any, to defer or extend an interest payment date, the record
date, if any, for the interest payable on any such security on any interest payment date, and the basis upon which interest will
be calculated if other than that of a 360-day year of twelve 30-day months;
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the place or places where
the principal of, premium, if any, and interest, if any, on securities of the series will be payable, any securities of the series
may be surrendered for registration of transfer, securities of the series may be surrendered for exchange and notices and demands
to or upon us in respect of the securities of the series and the indenture may be served and notices to holders will be published;
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the period or periods within
which, the price or prices at which, the currency or currencies (including currency unit or units) in which, and the other terms
and conditions upon which, securities of the series may be redeemed, in whole or in part, at our option and, the manner in which
the particular securities of such series (if less than all securities of such series are to be redeemed) are to be selected for
redemption;
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our right or obligation,
if any, to redeem or purchase securities of the series pursuant to any sinking fund or analogous provisions or upon the happening
of a specified event or at the option of a holder thereof, and the period or periods within which, the price or prices at which,
the currency or currencies (including currency unit or units) in which, and the other terms and conditions upon which, securities
of the series will be redeemed or purchased, in whole or in part, pursuant to such obligation;
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if other than denominations
of $1,000 and any integral multiple thereof, the denominations in which securities of the series will be issuable;
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if other than U.S. dollars,
the currency or currencies (including currency unit or units) in which the principal of, premium, if any, and interest, if any,
on the securities of the series will be payable, or in which the securities of the series will be denominated, and the particular
provisions applicable thereto;
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if the payments of principal
of, premium, if any, or interest, if any, on the securities of the series are to be made, at our election or the election of a
holder, in a currency or currencies (including currency unit or units) other than that in which the securities of such series
are denominated or designated to be payable, the currency or currencies (including currency unit or units) in which such payments
are to be made, the terms and conditions of such payments and the manner in which the exchange rate with respect to such payments
will be determined, and the particular provisions applicable thereto;
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if the amount of payments
of principal of, premium, if any, and interest, if any, on the securities of the series will be determined with reference to an
index, formula or other method (which index, formula or method may be based, without limitation, on a currency or currencies (including
currency unit or units) other than that in which the securities of the series are denominated or designated to be payable), the
index, formula or other method by which such amounts will be determined and any special voting or defeasance provisions in connection
therewith;
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if other than the principal
amount thereof, the portion of the principal amount of such securities of the series which will be payable upon declaration of
acceleration thereof or the method by which such portion will be determined;
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the person to whom any
interest on any securities of the series will be payable;
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provisions, if any, granting
special rights to the holders of securities of the series upon the occurrence of such events as may be specified;
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any deletions from, modifications
of or additions to the events of default or covenants pertaining to the securities of the series;
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under what circumstances,
if any, and with what procedures and documentation we will pay additional amounts on the securities of the series held by a person
who is not a U.S. person (including any definition of such term) in respect of taxes, assessments or similar charges withheld
or deducted and, if so, whether we have the option to redeem such securities rather than pay such additional amounts (and the
terms of any such option);
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the forms of the securities
of the series;
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the applicability, if any,
of any means of defeasance or covenant defeasance as may be specified for the securities of such series;
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if other than the trustee,
the identity of the registrar, conversion agent (if any) and any paying agent;
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if the securities of the
series will be issued in whole or in part in global form, (A) the depositary for such global securities, (B) whether beneficial
owners of interests in any securities of the series in global form may exchange such interests for certificated securities of
such series, to be registered in the names of or to be held by such beneficial owners or their nominees and to be of like tenor
of any authorized form and denomination, and (C) the circumstances under which any such exchange may occur;
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the designation of the
depositary with respect to the securities of the series;
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any restrictions on the
registration, transfer or exchange of the securities of the series;
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if the securities of the
series may be issued or delivered (whether upon original issuance or upon exchange of a temporary security of such series or otherwise),
or any installment of principal or interest is payable, only upon receipt of certain certificates or other documents or satisfaction
of other conditions, the form and terms of such certificates, documents or conditions;
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if the securities of the
series will be convertible into or for other of our securities or property, and any deletions from, modifications of or additions
to the terms and conditions of any right to convert, exercise or exchange securities of the series into or for other of our securities
or property;
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whether the securities
of the series are secured or unsecured, and if secured, the security and related terms in connection therewith (which will be
provided for in a separate security agreement and/or other appropriate documentation); and
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any other terms of the
securities of the series, including any terms which may be required by or advisable under United States laws or regulations or
advisable (as we may determine) in connection with the marketing of securities of the series.
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Unless otherwise provided in an applicable
indenture relating to debt securities, the debt securities will be issued in the form of one or more fully registered global securities
that will be deposited with and registered in the name of a depositary or its nominee. Upon issuance of a registered global security,
the depositary will credit, on its book-entry registration and transfer system, participants’ accounts with the principal
amount of the debt security beneficially owned by such participants. Each person owning a beneficial interest in a registered global
security will have to rely on the procedures of the depositary for such registered global security to exercise any rights of a
holder under the applicable indenture. No service charge will be made for any transfer or exchange of the debt securities, but
we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer
or exchange and any expenses payable in connection with any registration of transfer or exchange of debt securities, other than
exchanges not involving any transfer, such as the issuance of definitive securities in replacement of temporary securities or the
issuance of new securities upon surrender of a security that is transferred or redeemed in part.
A series of debt securities may be issued
under the relevant indenture as original issue discount securities, which are securities that are offered and sold at a discount
from their stated principal amount. In addition, debt securities offered and sold at their stated principal amount may under some
circumstances, pursuant to applicable Treasury Regulations, be treated as issued at an original issue discount for federal income
tax purposes. Federal income tax consequences and other special considerations applicable to any such original issue discount securities
(or other debt securities treated as issued at an original issue discount) will be described in the prospectus supplement relating
to those securities.
Covenants
. We will agree in the indentures
with respect to any series of debt securities to:
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pay the principal, interest
and any premium on the securities of the series when due;
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maintain an office or agency
where the securities of the series may be surrendered for registration of transfer, exchange, payment or conversion (if the debt
securities are convertible) and where notices and demands to or upon us in respect of the securities of the series and the relevant
indenture may be served;
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prepare and file or deliver
certain reports, as more fully specified in the relevant indenture, with the SEC, the trustee under the relevant indenture, and/or
registered holders of the securities of the series, as the case may be;
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deliver to the trustee
under the relevant indenture, as more fully specified in that indenture, officers’ certificates relating to our compliance
under the relevant indenture and the occurrence of any default or event of default under that indenture; and
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unless our board of directors
determines that it is no longer desirable in the conduct of our business and that there will be no adverse impact in any material
respect to the holders of the securities of the series, subject to those exceptions as more fully specified in the relevant indenture,
do or cause to be done all things necessary to preserve and keep in full force and effect our existence as a corporation and our
rights (charter and statutory rights) and franchises.
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Consolidation, Merger and Sale of Assets
.
We will agree in the indentures with respect to any series of debt securities that we will not consolidate with or merge into any
other entity or transfer all or substantially all of our assets unless:
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we are the surviving entity;
or
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the successor or surviving
entity assumes all of our obligations under the securities of such series and the indentures pursuant to supplemental indentures
in forms reasonably satisfactory to the trustee(s) under the relevant indentures and is organized or existing under the laws of
the United States of America and any state thereof or the District of Columbia; and, in either case,
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immediately after giving
effect to such transaction, no event of default under the relevant indenture will have happened and be continuing.
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Upon any such consolidation, merger or transfer
of all or substantially all of our assets, the successor will be substituted for us under the indenture and we will be relieved
of all obligations and covenants under the indenture with respect to such series of debt securities, except in the case of a lease
of all or substantially all of our assets.
Satisfaction and Discharge
. Upon
our request, the relevant indenture will no longer be effective with respect to any series of debt securities for all but certain
specified purposes if either:
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all outstanding securities
of that series have been delivered to the trustee for cancellation, we have paid all sums payable in respect of that series and
we have delivered to the trustee a certificate and opinion of legal counsel that all conditions precedent to satisfaction and
discharge have been fulfilled; or
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the only securities that
remain outstanding have, or within one year will, become due and payable or are to be called for redemption, we have deposited
with the trustee funds that are sufficient to make all future payments, no default or event of default will have occurred and
be continuing on the date of that deposit, we have paid all other sums payable in respect of that series, and we have delivered
to the trustee a certificate and opinion of counsel that all conditions precedent to satisfaction and discharge have been fulfilled.
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Legal Defeasance and Covenant Defeasance
.
Under each indenture, we may elect with respect to a series of debt securities, at our option and subject to the satisfaction of
the conditions described below, either:
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to be deemed to have paid
and discharged the entire indebtedness represented by the outstanding securities of the applicable series and to have satisfied
all of our other obligations under the securities of the applicable series and under the provisions of the relevant indenture,
which we refer to as legal defeasance; or
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to be released from some
of our obligations under the relevant indenture, which we refer to as covenant defeasance.
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We can exercise legal or covenant defeasance
with respect to any series of debt securities if the following conditions are met:
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we irrevocably deposit
with the applicable indenture trustee (or another trustee meeting certain eligibility requirements and agreeing to be bound by
the applicable provisions of the relevant indenture), in trust, for the benefit of the holders of the applicable series of debt
securities:
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cash in United States dollars;
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non-callable and non-redeemable
direct obligations of the United States of America or of an agency or instrumentality controlled or supervised by the United States
of America, in each instance, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the
United States of America; or
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a combination of the foregoing
that, in each case, is sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the
principal of, interest and premium, if any, on the outstanding debt securities of the applicable series on their stated maturity
or applicable redemption date, as the case may be, and any mandatory sinking fund payments applicable to that particular series
of debt securities on the day on which the payments are due;
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we deliver to the trustee
an opinion of counsel confirming that the holders of the outstanding securities of the applicable series will not recognize income,
gain or loss for federal income tax purposes as a result of the defeasance;
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no default or event of
default shall have occurred and be continuing on the date of the deposit of the amounts to be held in trust for the benefit of
the holders (other than a default or event of default resulting from the borrowing of funds to be applied to the deposit) or in
the case of any insolvency-related defaults, at any time in the period ending on the 91st day after the date of the deposit (or
greater period of time in which any such deposit of trust funds may remain subject to bankruptcy or insolvency laws that apply
to the deposit by us); and
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we deliver to the trustee
an officers’ certificate and an opinion of counsel, each stating that all conditions precedent provided for or relating
to legal defeasance or covenant defeasance, as the case may be, have been complied with.
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After satisfying the conditions for legal
defeasance, the debt securities of the applicable series will be deemed outstanding only for limited purposes as more fully set
forth in the relevant indenture. After legal defeasance, the holders of outstanding debt securities of the applicable series will
have to rely solely on the deposits we make to the trust for repayment of such debt securities.
After satisfying the conditions for covenant
defeasance, the debt securities of the applicable series will be deemed not outstanding for the purposes of the covenants from
which we have been released, but will continue to be deemed outstanding for all other purposes under the relevant indenture.
The prospectus supplement relating to a
series of debt securities may describe additional provisions, if any, permitting legal defeasance or covenant defeasance, and any
modifications to the provisions described above, with respect to the debt securities of a particular series.
Information Concerning the Trustee
.
The prospectus supplement relating to a series of debt securities will include information concerning the trustee under the applicable
indenture and our relationship with the trustee at the time any debt securities are offered. We may also maintain bank accounts,
borrow money and have other banking or investment banking relationships with the trustee, or its affiliates, in the ordinary course
of business.
Global Securities
. The registered
debt securities may be issued in the form of one or more fully registered global securities that will be deposited with and registered
in the name of a depositary or in the name of a nominee for a depositary identified in the prospectus supplement relating to such
debt securities. The specific terms of the depositary arrangement with respect to any debt securities to be represented by a registered
global security will be described in the prospectus supplement relating to such debt securities. We anticipate that the description
below will apply to all depositary arrangements.
Ownership of beneficial interests in a registered
global security will be limited to persons that have accounts with the depositary for such registered global security (“participants”)
or persons that may hold interests through participants. Upon the issuance of a registered global security, the depositary will
credit, on its book-entry registration and transfer system, the participants’ accounts with the principal amounts of the
debt securities represented by the registered global security beneficially owned by such participants. Ownership of beneficial
interests in such registered global security will be shown on, and the transfer of such ownership interests will be effected only
through, records maintained by the depositary for such registered global security or on the records of participants for interests
of persons holding through participants.
So long as the depositary for a registered
global security, or its nominee, is the registered owner of a registered global security, the depositary or the nominee will be
considered the sole owner or holder of the debt securities represented by the registered global security for all purposes. Except
as set forth below, owners of beneficial interests in a registered global security will not:
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be entitled to have the
debt securities represented by such registered global security registered in their names;
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receive or be entitled
to receive physical delivery of such debt securities in definitive forms; or
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be considered the owners
of record or holders of the debt securities.
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Each person owning a beneficial interest
in a registered global security will have to rely on the procedures of the depositary for such registered global security and,
if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise
any rights of a holder under the applicable indenture. We understand that under existing industry practices, if we were to request
any action of holders, or if an owner of a beneficial interest in a registered global security desired to take any action that
a holder is entitled to take under the applicable indenture, the depositary would authorize the participants holding the relevant
beneficial interests to take such action, and such participants would authorize beneficial owners owning through such participants
to take such action.
Principal of, interest and premium, if any,
on debt securities represented by a registered global security registered in the name of a depositary or its nominee will be made
to such depositary or its nominee, as the case may be, as the registered owner of such registered global security. Neither we nor
the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of
beneficial ownership interests in such registered global security.
We expect that the depositary for any debt
securities represented by a registered global security, upon receipt of any payment of principal, interest or premium, if any,
will immediately credit participants’ accounts with such payments in amounts proportionate to their respective beneficial
interests in such registered global security as shown on the records of such depositary. We also expect that payments by participants
to owners of beneficial interests in such a registered global security held by the participants will be governed by standing customer
instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered
in “street name.”
If the depositary notifies us that it is
unwilling or unable to continue as depositary for the global security or if at any time the depositary ceases to be a clearing
agency registered under the Securities Exchange Act of 1934, and such registration as a clearing agency is required by applicable
law or regulation to serve as a depositary, and, in either situation, we do not appoint a successor depositary within 90 days,
we will issue debt securities in certificated form in exchange for the global security. In addition, we may at any time in our
sole discretion decide not to have any debt securities represented by a global security. In such event we will issue debt securities
in certificated form in exchange for the global security. The debt securities in certificated form will be in the same minimal
denominations and be of the same aggregate outstanding principal amount and tenor as the portion of each global security to be
exchanged.
Any debt securities issued in certificated
form in exchange for a global security will be registered in such name or names as the depositary shall instruct the relevant trustee.
We expect that such instructions will be based upon directions received by the depositary from participants with respect to ownership
of beneficial interests in such registered global security.
If provided in a prospectus supplement relating
to a series of debt securities, the debt securities of that series also may be issued in the form of one or more global securities
that will be deposited with a common depositary identified in the prospectus supplement. The specific terms and procedures, including
the specific terms of the depositary arrangement, with respect to any portion of a series of debt securities to be represented
by a global security will be described in the prospectus supplement relating to that series.
Form, Exchange, Transfer
. Unless
otherwise specified in a prospectus supplement relating to a series of debt securities, debt securities will be issued in global
form with accompanying book-entry procedures as outlined above. They also may be issued in registered form without coupons.
A holder of debt securities of any series
may exchange the debt securities for other debt securities of the same series, in any authorized denomination and with the same
terms and aggregate principal amount. The securities are transferable at the corporate trust office or corporate trust agency office
of the trustee or at any transfer agent designated by us for that purpose. No service charge will be made for any transfer or exchange
of the debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection with a transfer or exchange and any expenses payable in connection with any registration of transfer or exchange of
debt securities, other than exchanges not involving any transfer, such as the issuance of definitive securities in replacement
of temporary securities or the issuance of new securities upon surrender of a security that is redeemed in part.
Particular Terms of the Senior Debt Securities
Ranking of Senior Debt Securities
.
Unless otherwise specified in a prospectus supplement relating to a series of senior debt securities, the senior debt securities
will constitute part of our senior debt and rank equally with all our other senior debt that is unsecured (and will effectively
rank junior to any secured debt). In addition to senior debt securities offered under this prospectus, senior debt includes obligations
under any credit facilities with banks or other institutional lenders. The senior debt securities will be senior to our senior
subordinated debt and subordinated debt. Our obligations under the senior debt securities will be structurally subordinated to
certain obligations of our subsidiaries.
Events of Default
. The following,
among others, are events of default under a series of senior debt securities:
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we fail to pay the principal,
premium, if any, or any sinking fund payment on any securities of that series when due;
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we fail to pay interest
on any securities of that series when due and that failure continues for a period of 30 days;
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upon exercise of a holder’s
conversion right, we fail to deliver conversion consideration in accordance with the indenture;
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we fail to comply with
our obligations in the event of a consolidation, merger or sale of assets, as set forth in the indenture;
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we fail to observe or perform
any other covenant or agreement in the senior indenture for the benefit of that series (other than a covenant or agreement with
respect to which a failure to observe or perform is dealt with otherwise in the senior indenture or is expressly included in the
senior indenture solely for the benefit of a series of debt securities other than such series of debt securities) and that failure
continues for 90 days after we receive notice to comply from the trustee or holders of at least 25% in aggregate principal amount
of the outstanding senior debt securities;
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we fail to pay our indebtedness
or to pay or discharge certain final judgments against us, as set forth in the indenture; and
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certain events of bankruptcy
or insolvency occur, whether voluntary or not.
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The indenture and the prospectus supplement
relating to a series of senior debt securities may describe additional or different events of default that apply to that series.
An event of default with respect to one series of senior debt securities will not necessarily constitute an event of default with
respect to any other series of senior debt securities.
If a default or an event of default occurs
and is continuing, the trustee will mail to the holders of senior debt securities of the affected series a notice to that effect
within 90 days after the default occurs, if a responsible officer of the trustee under the indenture has actual knowledge of the
default or event of default. Except in the case of a default in the payment of principal or interest, the trustee under the senior
indenture may withhold notice if, and so long as, a committee of the trustee’s responsible officers in good faith determines
that withholding the notice is in the interests of the holders.
If an event of default with respect to one
or more series of senior debt securities occurs and is continuing, the trustee or the holders of at least 25% in aggregate principal
amount of the then outstanding senior debt securities of all series with respect to which the event of default occurs and is continuing,
treating all those series as a single class, may declare all the principal of, accrued and unpaid interest or premium (or a lesser
amount as may be provided for in the senior debt securities of the series), if any, of all the senior debt securities of those
series to be immediately due and payable. The holders of a majority in aggregate principal amount of the then outstanding senior
debt securities of all series covered by such declaration may annul or rescind the declaration and any related payment default
that resulted from the declaration but not any other payment default. Certain events of bankruptcy and insolvency will result in
all outstanding series of senior debt securities becoming due and payable immediately without any further action on the part of
the trustee or the holders.
The senior indenture entitles the trustee
to be indemnified by the holders before proceeding to exercise any right or power at the request of any of the holders.
The holders of a majority in principal amount
of the outstanding senior debt securities of all series with respect to which an event of default occurs and is continuing, treating
all those series as a single class, may direct the time, method and place of conducting any proceeding for any remedy available
to the trustee or exercising any trust power conferred on it, except that:
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the direction cannot conflict
with any law or regulation or the indenture;
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the trustee may take any
other action deemed proper by the trustee that is not inconsistent with the direction; and
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the trustee need not take
any action that might subject it to personal liability or be unduly prejudicial to the holders of the senior debt securities not
joining in the action.
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A holder may pursue a remedy directly under
the senior indenture or a particular series of senior debt securities but, before doing so, the following must occur:
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the holder must give to
the trustee written notice that an event of default has occurred and is continuing;
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the holders of at least
25% in principal amount of the then outstanding senior debt securities of all affected series, treating all those series as a
single class, must make a written request to the trustee to pursue the remedy;
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the holder, or holders,
must offer and, if requested, provide to the trustee an indemnity satisfactory to the trustee against any loss, liability or expense
from the taking of the action;
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the trustee does not comply
with the request within 60 days after receipt of the request and offer and, if requested, the provision of indemnity; and
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during the 60-day period,
the holders of a majority in principal amount of the then outstanding senior debt securities of all those series, treating all
those series as a single class, do not give the trustee a direction inconsistent with the written request.
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However, holders have an absolute right
to receipt of principal, interest or premium, if any, on or after the respective due dates and to institute suit for the enforcement
of those payments. The right of a holder of senior debt securities to bring suit for the enforcement of any payments of principal,
interest or premium, if any, on senior debt securities on or after the respective due dates may not be impaired or affected without
the consent of that holder.
The holders of a majority in principal amount
of the senior debt securities then outstanding of all affected series, treating all such series as a single class, may, by notice
to the trustee on behalf of all holders of the senior debt securities of all those series, waive any past defaults, except:
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a continuing default in
payment of the principal of, interest or premium, if any, on, or any sinking fund payment on, senior debt securities of the series;
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a continuing default in
respect of a covenant or provision of the indenture that cannot be amended or modified without the consent of each holder of senior
debt securities affected;
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one arising from a failure
to pay or deliver to converting holders consideration due upon conversion; and
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in respect of a covenant
or provision that under the senior indenture cannot be modified or amended without the consent of the holder of each outstanding
note affected.
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We periodically will file statements with
the trustees regarding our compliance with covenants in the senior indenture.
Modifications and Amendments
. Except
as provided below, or more fully specified in the senior indenture and described in the applicable prospectus supplement, the senior
indenture may be amended or supplemented by us and the trustee with the consent of holders of a majority in principal amount of
all series of senior debt securities affected by the amendment or supplement, treating all such series as a single class. In addition,
the record holders of a majority in principal amount of the outstanding senior debt securities of all series affected by the waiver,
treating all such series as a single class, may, with respect to those series, waive defaults under, or compliance with, the provisions
of the senior indenture. Some amendments or waivers, however, require the consent of each holder of any senior debt security affected.
Without the consent of each affected holder, an amendment or waiver regarding a series of senior debt securities may not:
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change the maturity date,
or the payment date of any installment interest on, any securities;
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reduce the principal amount
of, or interest on, any securities;
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change the place, manner
or currency of payment of principal of, or interest on, any securities;
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impair the right to institute
a suit for the enforcement of any payment on, or with respect to, or of the conversion of, any security;
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change the ranking of the
securities in a manner adverse to the holders of securities;
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adversely affect the right
of holders of securities to convert their securities in accordance with the indenture, or reduce the amount of consideration due
upon conversion;
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reduce the percentage in
aggregate principal amount of outstanding securities whose holders must consent to a modification or amendment of the indenture
or the securities;
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reduce the percentage in
aggregate principal amount of outstanding securities whose holders must consent to a waiver of compliance with any provision in
the indenture, or the securities or a waiver of any default or event of default; or
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modify the applicable provisions
of the indenture, except to increase the percentage required for modification or waiver or to provide for the consent of each
affected holder.
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We and the trustee under the senior indenture
may amend or supplement the senior indenture or the senior debt securities issued thereunder without notice to or the consent of
any holder to:
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provide for the assumption
by a successor company of the Company's obligations under the securities and the indenture;
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add guarantees with respect
to the securities;
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add to the covenants for
the benefit of the holders or surrender any right or power conferred upon the Company;
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make any change, including
to cure any omission, ambiguity, manifest error or defect or to correct any inconsistency in the indenture that does not adversely
affect the rights of any holder in any material respect;
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comply with any requirement
of the SEC in connection with the qualification of the indenture under the Trust Indenture Act or with the rules of any applicable
securities depositary;
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provide for the issuance
of and establish the form and terms and conditions of the securities of any series, to establish the form of any certifications
required to be furnished, or to add to the rights of the holders of any series of securities;
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add additional events of
default;
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evidence the acceptance
or appointment of a successor trustee or to add an additional trustee or agent in accordance with the indenture; or
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conform the provisions
of the indenture and the securities to the "Description of Notes" section as set forth in a preliminary prospectus supplement
related to the offering and sale of the securities, as supplemented by the related pricing term sheet.
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Particular Terms of the Senior Subordinated Debt Securities
Ranking of Senior Subordinated Debt Securities
.
As described below, the senior subordinated debt securities will rank senior to any subordinated debt securities and will be subordinated
and junior in right of payment to any senior debt securities issued by us, as well as certain other indebtedness incurred by us
to the extent set forth in the applicable indenture and described in the prospectus supplement relating to a series of senior subordinated
debt securities. Unless the prospectus supplement relating to a series of senior subordinated debt securities indicates otherwise,
the following description will apply to our senior subordinated debt securities.
Subordination
. Our obligations under
the senior subordinated debt securities will be subordinated in right of payment to our obligations under our senior debt and will
be structurally subordinated to certain obligations of our subsidiaries, including claims payable. In the indenture relating to
the senior subordinated securities, we will agree not to create, incur or otherwise be liable for any other indebtedness that ranks
junior to the senior debt in right of payment, but senior to the senior subordinated securities. For this purpose, “senior
debt” generally includes any indebtedness that does not expressly provide that it is on a parity with or subordinated in
right of payment to the senior subordinated debt securities. Specifically, senior debt includes obligations under any credit facility
with banks or other institutional lenders and obligations under the senior debt securities described in this prospectus. Senior
debt will not include:
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any liability for federal,
state, local or other taxes;
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any indebtedness to any
of our subsidiaries or other affiliates;
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any indebtedness that we
may incur in violation of the senior subordinated indenture; or
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obligations under any subordinated
debt securities.
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If we distribute our assets to creditors
upon any dissolution, winding-up, liquidation or reorganization or in bankruptcy, insolvency, receivership or similar proceedings,
we must first pay all amounts due or to become due on all senior debt before we pay the principal of, or make any other payment
on, the senior subordinated debt securities. The provisions of the senior subordinated debt indenture providing these payment restrictions
will not limit the right, if any, of a holder of senior subordinated debt securities to convert the debt securities into equity
securities.
We may not make any payment on the senior
subordinated debt securities if a default in the payment of the principal, interest or premium, if any, including a default under
any repurchase or redemption obligation in respect of designated senior debt, occurs and continues beyond any applicable grace
period. We may not make any payment on the senior subordinated debt securities if any other default occurs and continues with respect
to designated senior debt that permits holders of the designated senior debt to accelerate its maturity and the trustee receives
a notice of default from any person permitted to give notice. We may not resume payments on the senior subordinated debt securities
until the defaults are cured or specified time periods pass, unless the senior debt is paid in full. The provisions of the senior
subordinated debt indenture providing these payment restrictions will not limit the right, if any, of a holder of senior subordinated
debt securities to convert the debt securities into equity securities.
The term “designated senior debt”
means our obligations under our principal bank or other institutional credit facility, if any, and any other debt expressly designated
as senior debt with respect to the applicable senior subordinated debt securities.
We expect that the terms of some of our
senior debt will provide that an event of default under the senior subordinated debt securities or an acceleration of their maturity
will constitute an event of default under the senior debt. In that case, if the maturity of the senior subordinated debt securities
is accelerated because of an event of default, we may not make any payment on the senior subordinated debt securities until we
have paid all senior debt or the acceleration has been rescinded. If the payment of the senior subordinated debt securities is
accelerated because of an event of default, we must promptly notify the holders of senior debt of the acceleration.
If we experience a bankruptcy, dissolution
or reorganization, holders of senior debt may receive more, ratably, and holders of the senior subordinated debt securities may
receive less, ratably, than our other creditors.
The indenture for senior subordinated debt
securities may not limit our ability to incur additional senior debt.
Events of Default
. The following,
among others, are events of default under a series of senior subordinated debt securities:
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we fail to pay the principal,
premium, if any, or any sinking fund payment on any securities of that series when due;
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we fail to pay interest
on any securities of that series when due and that failure continues for a period of 30 days;
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upon exercise of a holder’s
conversion right, we fail to deliver conversion consideration in accordance with the indenture;
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we fail to comply with
our obligations in the event of a consolidation, merger or sale of assets, as set forth in the indenture;
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we fail to observe or perform
any other covenant or agreement in the senior subordinated indenture for the benefit of that series (other than a covenant or
agreement with respect to which a failure to observe or perform is dealt with otherwise in the senior subordinated indenture or
is expressly included in the senior subordinated indenture solely for the benefit of a series of debt securities other than such
series of debt securities) and that failure continues for 90 days after we receive notice to comply from the trustee or holders
of at least 25% in aggregate principal amount of the outstanding senior subordinated debt securities;
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we fail to pay our indebtedness
or to pay or discharge certain final judgments against us, as set forth in the indenture; and
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certain events of bankruptcy
or insolvency occur, whether voluntary or not.
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The indenture and prospectus supplement
relating to a series of senior subordinated debt securities may describe additional or different events of default that apply to
that series. An event of default with respect to one series of senior subordinated debt securities will not necessarily constitute
an event of default with respect to any other series of senior subordinated debt securities.
If a default or an event of default occurs
and is continuing, the trustee will mail to the holders of senior subordinated debt securities of the affected series a notice
to that effect within 90 days after the default occurs, if a responsible officer of the trustee under the indenture has actual
knowledge of the default or event of default.
Except in the case of a default in the payment
of principal or interest, the trustee under the senior subordinated indenture may withhold notice if, and so long as, a committee
of the trustee’s responsible officers in good faith determines that withholding the notice is in the interests of the holders.
If an event of default with respect to one
or more series of senior subordinated debt securities occurs and is continuing, the trustee or the holders of at least 25% in aggregate
principal amount of the then outstanding senior subordinated debt securities of all series with respect to which the event of default
occurs and is continuing, treating all those series as a single class, may declare all the principal of, accrued and unpaid interest
and premium (or such lesser amount as may be provided for in the senior subordinated debt securities of the series), if any (subject
to applicable subordination provisions in the senior subordinated indenture) of all the senior subordinated debt securities of
those series, to be immediately due and payable. The holders of a majority in aggregate principal amount of the then outstanding
senior subordinated debt securities of all series covered by such declaration may annul and rescind the declaration and any related
payment default that resulted from the declaration but not any other payment default. Certain events of bankruptcy and insolvency
will result in all outstanding series of senior subordinated debt securities becoming due and payable immediately without any further
action on the part of the trustee or the holders.
The senior subordinated indenture entitles
the trustee to be indemnified by the holders before proceeding to exercise any right or power at the request of any of the holders.
The holders of a majority in principal amount
of the outstanding senior subordinated debt securities of all series with respect to which an event of default occurs and is continuing,
treating all those series as a single class, may direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust power conferred on it, except that:
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the direction cannot conflict
with any law or regulation or the indenture;
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the trustee may take any
other action deemed proper by the trustee that is not inconsistent with the direction; and
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the trustee need not take
any action that might subject it to personal liability or be unduly prejudicial to the holders of the senior subordinated debt
securities not joining in the action.
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A holder may pursue a remedy directly under
the senior subordinated indenture or a particular series of senior subordinated debt securities but, before doing so, the following
must occur:
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the holder must give to
the trustee written notice that an event of default has occurred and is continuing;
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the holders of at least
25% in principal amount of the then outstanding senior subordinated debt securities of all affected series, treating all those
series as a single class, must make a written request to the trustee to pursue the remedy;
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the holder, or holders,
must offer and, if requested, provide to the trustee an indemnity satisfactory to the trustee against any loss, liability or expense
from the taking of the action;
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the trustee does not comply
with the request within 60 days after receipt of the request and offer and, if requested, the provision of indemnity; and
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during the 60-day period,
the holders of a majority in principal amount of the then outstanding senior subordinated debt securities of all affected series,
treating all those series as a single class, do not give the trustee a direction inconsistent with the written request.
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However, holders have an absolute right
to receipt of principal, interest or premium, if any, on or after the respective due dates and to institute suit for the enforcement
of those payments. The right of a holder of senior subordinated debt securities to bring suit for the enforcement of any payments
of principal, interest or premium, if any, on senior subordinated debt securities on or after the respective due dates, without
regard to acceleration or default, may not be impaired or affected without the consent of that holder.
The holders of a majority in principal amount
of the senior subordinated debt securities then outstanding of all affected series, treating all those series as a single class,
may, by notice to the trustee on behalf of all holders of the senior subordinated debt securities of those series, waive any past
defaults, except:
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a continuing default in
payment of the principal of, interest or premium, if any, on, or any sinking fund payment on, senior subordinated debt securities
of the series;
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a continuing default in
respect of a covenant or provision of the indenture that cannot be amended or modified without the consent of each holder of senior
subordinated debt securities affected;
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one arising from a failure
to pay or deliver to converting holders consideration due upon conversion; and
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in respect of a covenant
or provision that under the senior subordinated indenture cannot be modified or amended without the consent of the holder of each
outstanding note affected.
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We periodically will file statements with
the trustees regarding our compliance with covenants in the senior subordinated indenture.
Modifications and Amendments
. Except
as provided below, or more fully specified in the senior subordinated indenture and described in the applicable prospectus supplement,
the senior subordinated indenture may be amended or supplemented by us and the trustee with the consent of holders of a majority
in principal amount of all series of senior subordinated debt securities affected by the amendment or supplement, treating all
such series as a single class. In addition, the record holders of a majority in principal amount of the outstanding senior subordinated
debt securities of all series affected by the waiver, treating all such series as a single class, may, with respect to those series,
waive defaults under, or compliance with, the provisions of the senior subordinated indenture. Some amendments or waivers, however,
require the consent of each holder of any senior subordinated debt security affected. Without the consent of each affected holder,
an amendment or waiver regarding a series of senior subordinated debt securities may not:
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change the maturity date,
or the payment date of any installment interest on, any securities;
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reduce the principal amount
of, or interest on, any securities;
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change the place, manner
or currency of payment of principal of, or interest on, any securities;
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impair the right to institute
a suit for the enforcement of any payment on, or with respect to, or of the conversion of, any security;
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change the ranking of the
securities in a manner adverse to the holders of securities;
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adversely affect the right
of holders of securities to convert their securities in accordance with the indenture, or reduce the amount of consideration due
upon conversion;
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reduce the percentage in
aggregate principal amount of outstanding securities whose holders must consent to a modification or amendment of the indenture
or the securities;
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reduce the percentage in
aggregate principal amount of outstanding securities whose holders must consent to a waiver of compliance with any provision in
the indenture, or the securities or a waiver of any default or event of default; or
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modify the applicable provisions
of the indenture, except to increase the percentage required for modification or waiver or to provide for the consent of each
affected holder.
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We and the trustee under the senior subordinated
indenture may amend or supplement the senior subordinated indenture or the senior subordinated debt securities of any series issued
thereunder without the consent of any holder to:
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provide for the assumption
by a successor company of the Company’s obligations under the securities and the indenture;
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add guarantees with respect
to the securities;
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add to the covenants for
the benefit of the holders or surrender any right or power conferred upon the Company;
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make any change, including
to cure any omission, ambiguity, manifest error or defect or to correct any inconsistency in the indenture that does not adversely
affect the rights of any holder in any material respect;
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comply with any requirement
of the SEC in connection with the qualification of the indenture under the Trust Indenture Act or with the rules of any applicable
securities depositary;
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provide for the issuance
of and establish the form and terms and conditions of the securities of any series, to establish the form of any certifications
required to be furnished, or to add to the rights of the holders of any series of securities;
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add additional events of
default;
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evidence the acceptance
or appointment of a successor trustee or to add an additional trustee or agent in accordance with the indenture; or
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conform the provisions
of the indenture and the securities to the “Description of Notes” section as set forth in a preliminary prospectus
supplement related to the offering and sale of the securities, as supplemented by the related pricing term sheet.
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Particular Terms of the Subordinated Debt Securities
Ranking of Subordinated Debt Securities
.
The subordinated debt securities will be subordinated and junior in right of payment to any senior debt securities and senior subordinated
debt securities issued by us, as well as certain other indebtedness incurred by us to the extent set forth in the applicable indenture
described in the prospectus supplement relating to a series of subordinated debt securities.
Subordination
. Unless the prospectus
supplement relating to a series of subordinated debt securities indicates otherwise, the subordination provisions of the subordinated
debt securities will be the same as those of the senior subordinated debt securities just described, except that:
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“Senior debt”
will include our obligations under the senior subordinated debt securities, as well as under the other debt specified above, including
the “designated senior debt;” and
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different series of subordinated
debt securities may rank senior to other series. In that case, our obligations under the higher-ranking series will be “senior
debt” in relation to the lower-ranking series, as set forth in the prospectus supplement.
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The subordinated indenture does not limit
the amount of additional senior debt that we may incur. We expect from time to time to incur additional indebtedness constituting
senior debt.
Events of Default
. The following,
among others, are events of default under a series of subordinated debt securities:
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we fail to pay the principal,
premium, if any, or any sinking fund payment on any securities of that series when due;
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we fail to pay interest
on any securities of that series when due and that failure continues for a period of 30 days;
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upon exercise of a holder’s
conversion right, we fail to deliver conversion consideration in accordance with the indenture;
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we fail to comply with
our obligations in the event of a consolidation, merger or sale of assets, as set forth in the indenture;
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we fail to observe or perform
any other covenant or agreement in the subordinated indenture for the benefit of that series (other than a covenant or agreement
with respect to which a failure to observe or perform is dealt with otherwise in the subordinated indenture or is expressly included
in the subordinated indenture solely for the benefit of a series of debt securities other than such series of debt securities)
and that failure continues for 90 days after we receive notice to comply from the trustee or holders of at least 25% in aggregate
principal amount of the outstanding subordinated debt securities;
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we fail to pay our indebtedness
or to pay or discharge certain final judgments against us, as set forth in the indenture; and
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certain events of bankruptcy
or insolvency occur, whether voluntary or not.
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The indenture and prospectus supplement
relating to a series of subordinated debt securities may describe additional or different events of default that apply to that
series. An event of default with respect to one series of subordinated debt securities will not necessarily constitute an event
of default with respect to any other series of subordinated debt securities.
If a default or an event of default occurs
and is continuing, the trustee will mail to the holders of subordinated debt securities of the affected series a notice to that
effect within 90 days after the default occurs, if a responsible officer of the trustee under the indenture has actual knowledge
of the default or event of default. Except in the case of a default in the payment of principal or interest, the trustee under
the subordinated indenture may withhold notice if, and so long as, a committee of the trustee’s responsible officers in good
faith determines that withholding the notice is in the interests of the holders.
If an event of default with respect to one
or more series of subordinated debt securities occurs and is continuing, the trustee or the holders of at least 25% in aggregate
principal amount of the then outstanding subordinated debt securities of all series with respect to which the event of default
occurs and is continuing, treating all those series as a single class, may declare all the principal of, accrued and unpaid interest
and premium (or a lesser amount as may be provided for in the subordinated debt securities of the series), if any, (subject to
applicable subordination provisions in the relevant indenture) of all the subordinated debt securities of those series to be immediately
due and payable. The holders of a majority in aggregate principal amount of the then outstanding subordinated debt securities of
all series covered by such declaration may annul and rescind the declaration and any related payment default that resulted from
the declaration but not any other payment default. Certain events of bankruptcy and insolvency will result in all outstanding series
of subordinated debt securities becoming due and payable immediately without any further action on the part of the trustee or the
holders.
The subordinated indenture entitles the
trustee to be indemnified by the holders before proceeding to exercise any right or power at the request of any of the holders.
The holders of a majority in principal amount
of the outstanding subordinated debt securities of all series with respect to which an event of default occurs and is continuing
and that rank equal with each other, treating all those series as a single class, may direct the time, method and place of conducting
any proceeding for any remedy available to the trustee or exercising any trust power conferred on it with respect to those series,
except that:
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the direction cannot conflict
with any law or regulation or the subordinated indenture;
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the trustee may take any
other action deemed proper by the trustee that is not inconsistent with the direction; and
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the trustee need not take
any action that might subject it to personal liability or be unduly prejudicial to the holders of the subordinated debt securities
not joining in the action.
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A holder may pursue a remedy directly under
the subordinated indenture or a particular series of subordinated debt securities but, before doing so, the following must occur:
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the holder must give to
the trustee written notice that an event of default has occurred and is continuing;
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the holders of at least
25% in principal amount of the then outstanding subordinated debt securities of all affected series that rank equal with each
other, treating all those series as a single class, must make a written request to the trustee to pursue the remedy;
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the holder, or holders,
must offer and, if requested, provide to the trustee an indemnity satisfactory to the trustee against any loss, liability or expense
from the taking of the action;
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the trustee does not comply
with the request within 60 days after receipt of the request and offer and, if requested, the provision of indemnity; and
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during the 60-day period,
the holders of a majority in principal amount of the then outstanding subordinated debt securities of all those series, treating
all those series as a single class, do not give the trustee a direction inconsistent with the written request.
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However, holders have an absolute right
to receipt of principal, interest and premium, if any, on or after the respective due dates and to institute suit for the enforcement
of those payments. The right of a holder of subordinated debt securities to bring suit for the enforcement of any payments of principal,
interest and premium, if any, on subordinated debt securities on or after the respective due dates may not be impaired or affected
without the consent of that holder.
The holders of a majority in principal amount
of the then outstanding subordinated debt securities of all affected series that rank equal with each other treating all such series
as a single class, may, by notice to the trustee on behalf of all holders of the subordinated debt securities of such series, waive
any past defaults, except:
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a continuing default in
payment of the principal of, interest or premium, if any, on, or any sinking fund payment on, subordinated debt securities of
the series;
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a continuing default in
respect of a covenant or provision of the indenture that cannot be amended or modified without the consent of each holder of subordinated
debt securities affected;
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one arising from a failure
to pay or deliver to converting holders consideration due upon conversion; and
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in respect of a covenant
or provision that under the subordinated indenture cannot be modified or amended without the consent of the holder of each outstanding
note affected.
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We periodically will file statements with
the trustee regarding our compliance with covenants in the subordinated indenture.
Modifications and Amendments
. Except
as provided below, or more fully specified in the subordinated indenture and described in the applicable prospectus supplement,
the subordinated indenture may be amended or supplemented by us and the trustee with the consent of holders of a majority in principal
amount of all affected series of subordinated debt securities that rank equal with each other, treating all such series as a single
class. In addition, the record holders of a majority in principal amount of the outstanding subordinated debt securities of all
series affected by the waiver that rank equal with each other, treating such series as a single class, may, with respect to those
series, waive defaults under, or compliance with, the provisions of the subordinated indenture. Some amendments or waivers, however,
require the consent of each holder of any subordinated debt security affected. Without the consent of each affected holder, an
amendment or waiver regarding a series of subordinated debt securities may not:
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change the maturity date,
or the payment date of any installment interest on, any securities;
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reduce the principal amount
of, or interest on, any securities;
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change the place, manner
or currency of payment of principal of, or interest on, any securities;
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impair the right to institute
a suit for the enforcement of any payment on, or with respect to, or of the conversion of, any security;
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change the ranking of the
securities in a manner adverse to the holders of securities;
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adversely affect the right
of holders of securities to convert their securities in accordance with the indenture, or reduce the amount of consideration due
upon conversion;
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reduce the percentage in
aggregate principal amount of outstanding securities whose holders must consent to a modification or amendment of the indenture
or the securities;
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reduce the percentage in
aggregate principal amount of outstanding securities whose holders must consent to a waiver of compliance with any provision in
the indenture, or the securities or a waiver of any default or event of default; or
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modify the applicable provisions
of the indenture, except to increase the percentage required for modification or waiver or to provide for the consent of each
affected holder.
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We and the trustee under the subordinated
indenture may amend or supplement the subordinated indenture or the subordinated debt securities issued thereunder without the
consent of any holder to:
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provide for the assumption
by a successor company of the Company’s obligations under the securities and the indenture;
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add guarantees with respect
to the securities;
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add to the covenants for
the benefit of the holders or surrender any right or power conferred upon the Company;
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make any change, including
to cure any omission, ambiguity, manifest error or defect or to correct any inconsistency in the indenture that does not adversely
affect the rights of any holder in any material respect;
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comply with any requirement
of the SEC in connection with the qualification of the indenture under the Trust Indenture Act or with the rules of any applicable
securities depositary;
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provide for the issuance
of and establish the form and terms and conditions of the securities of any series, to establish the form of any certifications
required to be furnished, or to add to the rights of the holders of any series of securities;
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add additional events of
default;
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evidence the acceptance
or appointment of a successor trustee or to add an additional trustee or agent in accordance with the indenture; or
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conform the provisions
of the indenture and the securities to the “Description of Notes” section as set forth in a preliminary prospectus
supplement related to the offering and sale of the securities, as supplemented by the related pricing term sheet.
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DESCRIPTION
OF CAPITAL STOCK
In
the discussion that follows, we have summarized selected provisions of our certificate of incorporation and bylaws. You should
read our certificate of incorporation and bylaws as currently in effect for more details regarding the provisions we describe below
and for other provisions that may be important to you. We have filed copies of those documents with the SEC, and they are incorporated
by reference herein. Please read “Where You Can Find More Information.”
Authorized and Outstanding Capital Stock
The following description
of our common stock and provisions of our certificate of incorporation and bylaws are summaries and are qualified by reference
to our certificate of incorporation and bylaws, which have been incorporated by reference as exhibits to the registration statement
of which this prospectus forms a part.
Our authorized capital
stock consists of 50,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value
$0.001 per share, all of which are undesignated. Unless otherwise indicated, all information in this prospectus gives effect to
the 1-for-10 reverse stock split of the common stock that went into effect on October 27, 2015.
As of November 30,
2017, there were 18,263,878 shares of common stock outstanding, and no shares of preferred stock were issued or outstanding. As
of November 30, there also were outstanding warrants to purchase up to 149,952 shares of our common stock which are exercisable
at a price of $6.08, warrants to purchase up to 178,500 shares of our common stock which are exercisable at a price of $9.36, and
options to purchase a total of 226,293 shares of common stock at a weighted average exercise price of approximately $10.00 per
share.
Description of Common Stock
Voting
. Holders
of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have
cumulative voting rights. Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of
directors may elect all of the directors standing for election.
Dividends
. Holders
of common stock are entitled to receive proportionately any dividends that may be declared by our Board, subject to any preferential
dividend rights of outstanding preferred stock.
Liquidation and
Distribution
. Upon our liquidation, dissolution or winding up, the holders of common stock are entitled to receive proportionately
our net assets available after the payment of all debts and other liabilities and subject to the prior rights of any outstanding
preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. Our outstanding shares
of common stock are, and the shares offered by us in this offering will be, when issued and paid for, fully paid and nonassessable.
The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights
of the holders of shares of any series of preferred stock that we may designate and issue in the future.
Anti-Takeover Effects of Delaware Law; Our Certificate of
Incorporation and Our Bylaws
Delaware law, our certificate
of incorporation and our bylaws contain provisions that could have the effect of delaying, deferring or discouraging another party
from acquiring control of us. These provisions, which are summarized below, are intended to discourage coercive takeover practices
and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first
negotiate with our Board.
Removal of Directors
Our certificate of
incorporation currently provides that directors may be removed only for cause and only by the affirmative vote of the holders of
75% of our shares of capital stock present in person or by proxy and entitled to vote. However, our Board approved an amendment
to our bylaws that became effective on June 17, 2016, which permits our directors to be removed either for cause or without cause
by our stockholders. At our annual meeting of stockholders for the year ended April 30, 2016 that was held on October 21, 2016
(the “2016 Annual Meeting”), we submitted a proposal to stockholders seeking stockholder approval to amend our certificate
of incorporation to delete the reference to “for cause” in Section 6 of Article IX of the certificate of incorporation.
This proposal to amend the certificate of incorporation did not receive the required affirmative vote of the holders of at least
75% of the outstanding shares of common stock entitled to vote at the meeting, so the proposal did not pass. However, we also submitted
a proposal to stockholders at the 2016 Annual Meeting seeking approval to amend our certificate of incorporation to add a clause
that specified that, to the fullest extent permitted by law, any provision in the Certificate of Incorporation that is contrary
to a requirement of the Delaware General Corporate Law (the “DGCL”) shall be read in conformity with the applicable
requirement of the DGCL. This second proposal only required the affirmative vote of the holders of a majority of the outstanding
shares of common stock entitled to vote at the 2016 Annual Meeting, and it passed.
The Board takes the
position that under current Delaware law, the “only for cause” provision in the certificate of incorporation regarding
removal of the Company’s directors is not enforceable, and is therefore not in conformity with the applicable requirement
of the DGCL. Accordingly, we will comply with the provisions of our bylaws, as amended and as described above, relating to director
removal and will not seek to enforce that provision of our certificate of incorporation relating to stockholder removal of directors
only for cause, as presently in effect. Under our certificate of incorporation and bylaws, any vacancy on the Board, including
a vacancy resulting from an enlargement of the Board, may be filled only by vote of a majority of our directors then in office.
The limitations on
the ability of our stockholders to remove directors and fill vacancies could make it more difficult for a third party to acquire,
or discourage a third party from seeking to acquire, control of us.
Stockholder Action by Written Consent; Special Meetings
Our certificate of
incorporation provides that any action required or permitted to be taken by our stockholders must be effected at a duly called
annual or special meeting of such holders and may not be effected by any consent in writing by such holders. Our certificate of
incorporation and our bylaws also provide that, except as otherwise required by law, special meetings of our stockholders can only
be called by our chairman of the board, our chief executive officer, our president or the Board.
Advance Notice Requirements for Stockholder Proposals
Our bylaws establish
an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed
nominations of persons for election to the Board. Stockholders at an annual meeting may only consider proposals or nominations
specified in the notice of meeting or brought before the meeting by or at the direction of the Board or by a stockholder of record
on the record date for the meeting, that is entitled to vote at the meeting and that has delivered to our secretary a timely written
notice in proper form of the stockholder’s intention to bring such business before the meeting. These provisions could have
the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of
our outstanding voting securities.
Delaware Business Combination Statute
We are subject to Section
203 of the Delaware General Corporation Law. Subject to certain exceptions, Section 203 prevents a publicly held Delaware corporation
from engaging in a “business combination” with any “interested stockholder” for three years following the
date that the person became an interested stockholder, unless the interested stockholder attained such status with the approval
of our Board or unless the business combination is approved in a prescribed manner. A “business combination” includes,
among other things, a merger or consolidation involving us and the “interested stockholder” and the sale of more than
10% of our assets. In general, an “interested stockholder” is any entity or person beneficially owning 15% or more
of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person.
Amendment of Certificate of Incorporation and Bylaws
The Delaware General
Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required
to amend a corporation’s certificate of incorporation or bylaws, unless a corporation’s certificate of incorporation
or bylaws, as the case may be, requires a greater percentage. Our bylaws may be amended or repealed by a majority vote of our Board
or the affirmative vote of the holders of at least 75% of the voting power of our capital stock issued and outstanding and entitled
to vote on the matter.
Limitation of Liability and Indemnification of Officers and
Directors
Our certificate of
incorporation limits the personal liability of directors for breach of fiduciary duty to the maximum extent permitted by the Delaware
General Corporation Law. Our certificate of incorporation provides that no director will have personal liability to us or to our
stockholders for monetary damages for breach of fiduciary duty or other duty as a director. However, these provisions do not eliminate
or limit the liability of any of our directors:
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for any breach of their duty of loyalty to us or our stockholders;
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for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation
of law;
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for voting or assenting to unlawful payments of dividends or other distributions; or
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for any transaction from which the director derived an improper personal benefit.
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Any amendment to or
repeal of these provisions will not eliminate or reduce the effect of these provisions in respect of any act or failure to act,
or any cause of action, suit or claim that would accrue or arise prior to any amendment or repeal or adoption of an inconsistent
provision. If the Delaware General Corporation Law is amended to provide for further limitations on the personal liability of directors
of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the Delaware
General Corporation Law.
In addition, our certificate
of incorporation provides that we must indemnify our directors and officers and we must advance expenses, including attorneys’
fees, to our directors and officers in connection with legal proceedings, subject to limited exceptions.
Notice of Share Ownership
Our bylaws contain
a provision requiring any beneficial owner of three percent or more of our outstanding common stock to notify us of his or her
stockholdings, as well as of any change in his or her beneficial ownership of one percent or more of our outstanding common stock.
Our bylaws do not provide for any specific remedy in the event a stockholder does not comply with this provision. We do not intend
to make any such information public, unless required by law or the rules of the SEC or the NASDAQ Capital Market.
Authorized but Unissued Shares
Our authorized but
unissued shares of common stock and preferred stock are available for future issuance without stockholder approval, subject to
any limitations imposed by the listing standards of the NASDAQ Capital Market. These additional shares may be used for a variety
of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved
common stock and preferred stock could make it more difficult or discourage an attempt to obtain control of us by means of a proxy
contest, tender offer, merger or otherwise.
Transfer Agent and Registrar
The transfer agent
and registrar for our common stock is Computershare Trust Company, N.A. Its address is 250 Royall Street, Canton, MA 02021-1011,
and its telephone number is 1-800-662-7232.
Our common stock is
listed on the NASDAQ Capital Market under the symbol “OPTT.”
DESCRIPTION
OF DEPOSITARY SHARES
General
We may, at our option, elect to have shares
of preferred stock be represented by depositary shares. The shares of any series of the preferred stock underlying the depositary
shares will be deposited under a separate deposit agreement between us and a bank or trust company selected by us as the depositary.
Subject to the terms of the deposit agreement, each owner of a depositary share will be entitled, in proportion to the applicable
interest in the number of shares of preferred stock underlying such depositary share, to all the rights and preferences of the
preferred stock underlying such depositary share, including dividend, voting, redemption, conversion, exchange and liquidation
rights.
The depositary shares will be evidenced
by depositary receipts issued pursuant to the deposit agreement, each of which will represent the applicable interest in a number
of shares of a particular series of the preferred stock described in the applicable prospectus supplement.
Unless otherwise specified in this prospectus
supplement, a holder of depositary shares is not entitled to receive the shares of preferred stock underlying the depositary shares.
Dividends and Other Distributions
The depositary will distribute all cash
dividends or other cash distributions received in respect of the preferred stock to the record holders of depositary shares representing
such preferred stock in proportion to the numbers of such depositary shares owned by such holders on the relevant record date.
In the event of a distribution other than
in cash, the depositary will distribute property received by it to the record holders of depositary shares entitled thereto or
the depositary may, with our approval, sell such property and distribute the net proceeds from such sale to such holders.
Redemption of Depositary Shares
If preferred stock underlying the depositary
shares is subject to redemption, the depositary shares will be redeemed from the proceeds received by the depositary resulting
from the redemption, in whole or in part, of the preferred stock held by the depositary. The redemption price per depositary share
will be equal to the aggregate redemption price payable with respect to the number of shares of preferred stock underlying the
depositary shares. Whenever we redeem preferred stock from the depositary, the depositary will redeem as of the same redemption
date a proportionate number of depositary shares representing the shares of preferred stock that were redeemed. If less than all
the depositary shares are to be redeemed, the depositary shares to be redeemed will be selected by lot, pro rata or by another
equitable method as may be determined by us.
After the date fixed for redemption, the
depositary shares so called for redemption will no longer be deemed to be outstanding and all rights of the holders of the depositary
shares will cease, except the right to receive the redemption price payable upon such redemption. Any funds deposited by us with
the depositary for any depositary shares which the holders thereof fail to redeem shall be returned to us after a period of two
years from the date such funds are so deposited.
Voting
Upon receipt of notice of any meeting or
action in lieu of any meeting at which the holders of any shares of preferred stock underlying the depositary shares are entitled
to vote, the depositary will mail the information contained in such notice to the record holders of the depositary shares relating
to such preferred stock. Each record holder of such depositary shares on the record date (which will be the same date as the record
date for the preferred stock) will be entitled to instruct the depositary as to the exercise of the voting rights pertaining to
the number of shares of preferred stock underlying such holder’s depositary shares. The depositary will endeavor, insofar
as practicable, to vote the number of shares of preferred stock underlying such depositary shares in accordance with such instructions,
and we will agree to take all action which may be deemed necessary by the depositary in order to enable the depositary to do so.
Amendment of the Depositary Agreement
The form of depositary receipt evidencing
the depositary shares and any provision of the deposit agreement may at any time be amended by agreement between us and the depositary,
provided, however, that any amendment which materially and adversely alters the rights of the existing holders of depositary shares
will not be effective unless such amendment has been approved by at least a majority of the depositary shares then outstanding.
Charges of Depositary
We will pay all transfer and other taxes
and governmental charges that arise solely from the existence of the depositary arrangements. We will pay charges of the depositary
in connection with the initial deposit of the preferred stock and any exchange or redemption of the preferred stock. Holders of
depositary shares will pay all other transfer and other taxes and governmental charges, and, in addition, such other charges as
are expressly provided in the deposit agreement to be for their accounts.
Miscellaneous
We, or at our option, the depositary, will
forward to the holders of depositary shares all reports and communications from us which we are required to furnish to the holders
of preferred stock.
Neither the depositary nor we will be liable
if either of us is prevented or delayed by law or any circumstances beyond our control in performing our obligations under the
deposit agreement. Our obligations and those of the depositary under the deposit agreement will be limited to performance in good
faith of our duties thereunder and we and the depositary will not be obligated to prosecute or defend any legal proceeding in respect
of any depositary share or preferred stock unless satisfactory indemnity has been furnished. We and the depositary may rely upon
written advice of counsel or accountants, or information provided by persons presenting preferred stock for deposit, holders of
depositary shares or other persons believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary; Termination of the
Deposit Agreement
The depositary may resign at any time by
delivering to us notice of its election to do so, and we may at any time remove the depositary, any such resignation or removal
to take effect upon the appointment of a successor depositary and its acceptance of such appointment. Such successor depositary
will be appointed by us within 60 days after delivery of the notice of resignation or removal. The deposit agreement may be terminated
at our direction or by the depositary if a period of 90 days has expired after the depositary has delivered to us written notice
of its election to resign and a successor depositary has not been appointed. Upon termination of the deposit agreement, the depositary
will discontinue the transfer of depositary receipts, will suspend the distribution of dividends to the holders thereof, and will
not give any further notices (other than notice of such termination) or perform any further acts under the deposit agreement except
that the depositary will continue to deliver preferred stock certificates, together with such dividends and distributions and the
net proceeds of any sales of rights, preferences, privileges or other property in exchange for depositary receipts surrendered.
Upon our request, the depositary shall deliver all books, records, certificates evidencing preferred stock, depositary receipts
and other documents relating to the subject matter of the depositary agreement to us.
DESCRIPTION
OF WARRANTS
We may issue warrants to purchase debt securities,
preferred stock, common stock, depositary shares, purchase contracts or units that are registered pursuant to the registration
statement to which this prospectus relates. We may issue warrants independently or together with other securities that are registered
pursuant to the registration statement to which this prospectus relates. Warrants sold with other securities may be attached to
or separate from the other securities. We will issue each series of warrants under a separate warrant agreement between us and
a warrant agent that we will name in the prospectus supplement. We will describe additional terms of the warrants and the applicable
warrant agreements in the applicable prospectus supplement.
General
If warrants are offered, the prospectus
supplement relating to a series of warrants will include the specific terms of the warrants, including:
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the title of the warrants;
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the aggregate number of warrants offered;
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the dates or periods during which the warrants can be exercised;
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whether the warrants will be issued in individual certificates to holders or in the form of global securities held by a depositary
on behalf of holders;
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the designation and terms of any securities with which the warrants are issued;
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if the warrants are issued as a unit with another security, the date, if any, on and after which the warrants and the other
security will be separately transferable;
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if the exercise price is not payable in U.S. dollars, the foreign currency, currency unit or composite currency in which the
exercise price is denominated;
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any terms, procedures and limitations relating to the transferability, exchange or exercise of the warrants;
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any special tax implications of the warrants or their exercise;
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any antidilution provisions of the warrants;
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any redemption or call provisions applicable to the warrants; and
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any other terms of the warrants.
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Transfers and Exchanges
A holder will be able to exchange warrant
certificates for new warrant certificates of different denominations, or to transfer warrants, at the corporate trust office of
the warrant agent or any other office indicated in the prospectus supplement. Prior to exercise, holders of warrants will have
none of the rights of holders of the underlying securities.
Exercise
Holders will be able to exercise warrants
up to 5:00 P.M. New York City time on the date set forth in the prospectus supplement as the expiration date.
After this time, unless we have extended
the expiration date, the unexercised warrants will be void.
Subject to any restrictions and additional
requirements that may be set forth in a prospectus supplement, holders of warrants may exercise them by delivering to the warrant
agent at its corporate trust office the following:
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warrant certificates properly completed; and
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payment of the exercise price.
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As soon as practicable after the delivery,
we will issue and deliver to the indicated holder the securities purchasable upon exercise. If a holder does not exercise all the
warrants represented by a particular certificate, we will also issue a new certificate for the remaining number of warrants.
No Rights of Security Holder Prior to Exercise
Prior to the exercise of their warrants,
holders of warrants will not have any of the rights of holders of the securities purchasable upon the exercise of the warrants,
and will not be entitled to:
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in the case of warrants to purchase debt securities, payments of principal of, premium, if any, or interest, if any, on the
debt securities purchasable upon exercise; or
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in the case of warrants to purchase equity securities, the right to vote or to receive dividend payments or similar distributions
on the securities purchasable upon exercise
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Enforceability of Rights by Holders of Warrants
Each warrant agent will act solely as our
agent under the relevant warrant agreement and will not assume any obligation or relationship of agency or trust for any warrantholder.
A single bank or trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no duty
or responsibility if we default in performing our obligations under the relevant warrant agreement or warrant, including any duty
or responsibility to initiate any legal proceedings or to make any demand upon us.
Title
We and the warrant agents and any of our
respective agents may treat the registered holder of any warrant certificate as the absolute owner of the warrants evidenced by
that certificate for any purpose and as the person entitled to exercise the rights attaching to the warrants so requested, despite
any notice to the contrary.
DESCRIPTION
OF SUBSCRIPTION RIGHTS
We may issue subscription rights to purchase
common stock, preferred stock, depositary shares, other securities described in this prospectus or any combination thereof. These
subscription rights may be issued independently or together with any other security offered by us and may or may not be transferable
by the securityholder receiving the subscription rights in such offering. In connection with any offering of subscription rights,
we may enter into a standby arrangement with one or more underwriters or other investors pursuant to which the underwriters or
other investors may be required to purchase any securities remaining unsubscribed for after such offering.
To the extent appropriate, the applicable
prospectus supplement will describe the specific terms of the subscription rights to purchase shares of our securities offered
thereby, including the following:
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the date of determining the securityholders entitled to the subscription rights distribution;
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the price, if any, for the subscription rights;
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the exercise price payable for the common stock, preferred stock, depositary shares or other securities upon the exercise of
the subscription right;
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the number of subscription rights issued to each securityholder;
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the amount of common stock, preferred stock, depositary shares or other securities that may be purchased per each subscription
right;
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any provisions for adjustment of the amount of securities receivable upon exercise of the subscription rights or of the exercise
price of the subscription rights;
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the extent to which the subscription rights are transferable;
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the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights
shall expire;
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the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities;
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the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of
subscription rights;
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any applicable federal income tax considerations; and
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any other terms of the subscription rights, including the terms, procedures and limitations relating to the transferability,
exchange and exercise of the subscription rights.
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DESCRIPTION
OF PURCHASE CONTRACTS
We may issue purchase contracts obligating
holders to purchase from us, and us to sell to the holders, a specified number, or amount, of securities at a future date or dates.
The purchase contracts may be issued separately or as part of units consisting of a purchase contract and an underlying debt or
preferred security covered by this prospectus, U.S. Treasury security or other U.S. government or agency obligation. The holder
of the unit may be required to pledge the debt, preferred security, U.S. Treasury security or other U.S. government or agency obligation
to secure its obligations under the purchase contract.
If purchase contracts are offered, the prospectus
supplement will specify the material terms of the purchase contracts, the units and any applicable pledge or depository arrangements,
including one or more of the following:
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the stated amount that a holder will be obligated to pay under the purchase contract in order to purchase the underlying security;
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the settlement date or dates on which the holder will be obligated to purchase the underlying security and whether the occurrence
of any events may cause the settlement date to occur on an earlier date and the terms on which any early settlement would occur;
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the events, if any, that will cause our obligations and the obligations of the holder under the purchase contract to terminate;
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the settlement rate, which is a number that, when multiplied by the stated amount of a purchase contract, determines the number,
or amount, of securities that we will be obligated to sell and a holder will be obligated to purchase under that purchase contract
upon payment of the stated amount of that purchase contract;
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whether the purchase contracts will be issued separately or as part of units consisting of a purchase contract and an underlying
debt or preferred security with an aggregate principal amount or liquidation amount equal to the stated amount;
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the type of security, if any, that is pledged by the holder to secure its obligations under a purchase contract;
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the terms of the pledge arrangement relating to the security, including the terms on which distributions or payments of interest
and principal on the security will be retained by a collateral agent, delivered to us or be distributed to the holder; and
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the amount of the contract fee, if any, that may be payable by us to the holder or by the holder to us, the date or dates on
which the contract fee will be payable and the extent to which we or the holder, as applicable, may defer payment of the contract
fee on those payment dates.
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DESCRIPTION
OF UNITS
As specified in the applicable prospectus
supplement, we may issue units consisting of one or more shares of common stock, shares of preferred stock, warrants, debt securities,
subscription rights, purchase contracts or any combination of such securities. The applicable prospectus supplement will describe:
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the securities comprising the units, including whether and under what circumstances the securities comprising the units may
be separately traded;
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the terms and conditions applicable to the units, including a description of the terms of any applicable unit agreement governing
the units; and
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a description of the provisions for the payment, settlement, transfer or exchange of the units.
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FOrmS OF
SECURITIES
We
may issue the debt securities, warrants, purchase contracts and units of any series in the form of one or more fully registered
global securities that will be deposited with a depositary or with a nominee for a depositary and registered in the name of the
depositary or its nominee. In that case, one or more global securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal or face amount of outstanding registered securities of the series to be represented
by such global securities. Unless and until the depositary exchanges a global security in whole for securities in definitive registered
form, the global security may not be transferred except as a whole by the depositary to a nominee of the depositary or by a nominee
of the depositary to the depositary or another nominee of the depositary or by the depositary or any of its nominees to a successor
of the depositary or a nominee of such successor.
The specific terms of the depositary arrangement
with respect to any portion of a series of securities to be represented by a global security will be described in the prospectus
supplement relating to such series. We anticipate that the following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a global
security will be limited to persons that have accounts with the depositary for such global security known as “participants”
or persons that may hold interests through such participants.
Upon the issuance of a global security,
the depositary for such global security will credit, on its book-entry registration and transfer system, the participants’
accounts with the respective principal or face amounts of the securities represented by the global security beneficially owned
by the participants. The accounts to be credited shall be designated by any dealers, underwriters or agents participating in the
distribution of such securities.
Ownership of beneficial interests in such
global security will be shown on, and the transfer of such ownership interests will be effected only through, records maintained
by the depositary for such global security (with respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of some states may require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to own, transfer
or pledge beneficial interests in global securities.
So long as the depositary for a global security,
or its nominee, is the registered owner of such global security, such depositary or such nominee, as the case may be, will be considered
the sole owner or holder of the securities represented by such global security for all purposes under the applicable indenture,
warrant agreement, purchase contract or unit agreement. Except as set forth below, owners of beneficial interests in a global security
will not be entitled to have the securities represented by such global security registered in their names, will not receive or
be entitled to receive physical delivery of such securities in definitive form and will not be considered the owners or holders
thereof under the applicable indenture, warrant agreement, purchase contract or unit agreement. Accordingly, each person owning
a beneficial interest in a global security must rely on the procedures of the depositary for the global security and, if such person
is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights
of a holder under the applicable indenture, warrant agreement, purchase contract or unit agreement. We understand that under existing
industry practices, if we request any action of holders or if an owner of a beneficial interest in a global security desires to
give or take any action which a holder is entitled to give or take under the applicable indenture, warrant agreement, purchase
contract or unit agreement, the depositary for such global security would authorize the participants holding the relevant beneficial
interests to give or take such action, and such participants would authorize beneficial owners owning through such participants
to give or take such action or would otherwise act upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest
payments on debt securities, and any payments to holders with respect to warrants, purchase contracts or units represented by a
global security registered in the name of a depositary or its nominee will be made to such depositary or its nominee, as the case
may be, as the registered owner of such global security. None of us, the trustees, the warrant agents, the unit agents or any of
our other agents, agent of the trustees or agent of the warrant agents or unit agents will have any responsibility or liability
for any aspect of the records relating to or payments made on account of beneficial ownership interests in such global security
or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
We expect that the depositary for any securities
represented by a global security, or its nominee, upon receipt of any payment of principal, premium, interest or other distribution
of underlying securities or commodities to holders in respect of such global security, will immediately credit participants’
accounts in amounts proportionate to their respective beneficial interests in such global security as shown on the records of such
depositary or its nominee. We also expect that payments by participants to owners of beneficial interests in such global security
held through such participants will be governed by standing customer instructions and customary practices, as is now the case with
the securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility
of such participants.
If the depositary for any securities represented
by a global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency registered
under the Exchange Act, and we do not appoint a successor depositary registered as a clearing agency under the Exchange Act within
90 days, we will issue such securities in definitive form in exchange for such global security. In addition, we may at any time
and in our sole discretion determine not to have any of the securities of a series represented by one or more global securities
and, in such event, will issue securities of such series in definitive form in exchange for all of the global security or securities
representing such securities. Any securities issued in definitive form in exchange for a global security will be registered in
such name or names as the depositary shall instruct the relevant trustee, warrant agent or other relevant agent of ours. We expect
that such instructions will be based upon directions received by the depositary from participants with respect to ownership of
beneficial interests in such global security.
PLAN OF
DISTRIBUTION
We may sell our securities from time to
time through underwriters, dealers or agents or directly to purchasers, in one or more transactions at a fixed price or prices,
which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or
at negotiated prices. We may also sell our securities upon the exercise of subscription rights that may be distributed to security
holders. We may use these methods in any combination.
We will describe the terms of the offering
of the securities in a prospectus supplement, information incorporated by reference or any related free writing prospectus, including:
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the name or names of any underwriters, if any;
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the purchase price of the securities and the proceeds we will receive from the sale;
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any underwriting discounts and other items constituting underwriters’ compensation;
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any initial public offering price;
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any discounts or concessions allowed or reallowed or paid to dealers; and
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any securities exchange or market on which the securities may be listed.
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Only underwriters we name in the prospectus
supplement, information incorporated by reference or any related free writing prospectus are underwriters of the securities offered
thereby.
The distribution of securities may be effected,
from time to time, in one or more transactions, including:
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block transactions (which may involve crosses) and transactions on the NASDAQ or any other organized market where the securities
may be traded;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement;
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ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers;
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sales “at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise;
and
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sales in other ways not involving market makers or established trading markets, including direct sales to purchasers.
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By Underwriters
We may use an underwriter or underwriters
in the offer or sale of our securities.
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If we use an underwriter or underwriters, the offered securities will be acquired by the underwriters for their own account.
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We will include the names of the specific managing underwriter or underwriters, as well as any other underwriters, and the
terms of the transactions, including the compensation the underwriters and dealers will receive, in the prospectus supplement.
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The underwriters will use this prospectus and the prospectus supplement to sell our securities.
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We may also sell securities pursuant to
one or more standby agreements with one or more underwriters in connection with the call, redemption or exchange of a specified
class or series of any of our outstanding securities. In a standby agreement, the underwriter or underwriters would agree either:
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to purchase from us up to the number of shares of common stock that would be issuable upon conversion or exchange of all the
shares of the class or series of our securities at an agreed price per share of common stock; or
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to purchase from us up to a specified dollar amount of offered securities at an agreed price per offered security, which price
may be fixed or may be established by formula or other method and which may or may not relate to market prices of our common stock
or any other outstanding security.
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The underwriter or underwriters would also
agree, if applicable, to convert or exchange any securities of the class or series held or purchased by the underwriter or underwriters
into or for our common stock or other security.
The underwriter or underwriters may assist
in the solicitation of conversions or exchanges by holders of the class or series of securities.
By Dealers
We may use a dealer to sell our securities.
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If we use a dealer, we, as principal, will sell our securities to the dealer.
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The dealer will then resell our securities to the public at varying prices that the dealer will determine at the time it sells
our securities.
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We will include the name of the dealer and the terms of our transactions with the dealer in the prospectus supplement.
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If we offer securities in a subscription
rights offering to our existing security holders, we may enter into a standby underwriting agreement with dealers, acting as standby
underwriters. We may pay the standby underwriters a commitment fee for the securities they commit to purchase on a standby basis.
If we do not enter into a standby underwriting arrangement, we may retain a dealer-manager to manage a subscription rights offering
for us.
By Agents
We may designate agents to solicit offers
to purchase our securities.
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We will name any agent involved in offering or selling our securities and any commissions that we will pay to the agent in
the prospectus supplement.
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Unless we indicate otherwise in the prospectus supplement, our agents will act on a best efforts basis for the period of their
appointment.
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Our agents may be deemed to be underwriters under the Securities Act of any of our securities that they offer or sell.
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By Delayed Delivery Contracts
We may authorize our agents and underwriters
to solicit offers by certain institutions to purchase our securities at the public offering price under delayed delivery contracts.
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If we use delayed delivery contracts, we will disclose that we are using them in the prospectus supplement and will tell you
when we will demand payment and delivery of the securities under the delayed delivery contracts.
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These delayed delivery contracts will be subject only to the conditions that we set forth in the prospectus supplement.
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We will indicate in the prospectus supplement the commission that underwriters and agents soliciting purchases of our securities
under delayed delivery contracts will be entitled to receive.
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Direct Sales
We may directly solicit offers to purchase
our securities, and we may directly sell our securities to institutional or other investors, including our affiliates. We will
describe the terms of our direct sales in the prospectus supplement. We may also sell our securities upon the exercise of rights
which we may issue.
General Information
Underwriters, dealers and agents that participate
in the distribution of our securities may be underwriters as defined in the Securities Act, and any discounts or commissions they
receive and any profit they make on the resale of the offered securities may be treated as underwriting discounts and commissions
under the Securities Act. Any underwriters or agents will be identified and their compensation described in a prospectus supplement.
We may indemnify agents, underwriters and dealers against certain civil liabilities, including liabilities under the Securities
Act, or make contributions to payments they may be required to make relating to those liabilities. Our agents, underwriters and
dealers, or their affiliates, may be customers of, engage in transactions with or perform services for us in the ordinary course
of business.
Each series of securities offered by this
prospectus (other than common stock) may be a new issue of securities with no established trading market. Any underwriters to whom
securities offered by this prospectus are sold by us for public offering and sale may make a market in the securities offered by
this prospectus, but the underwriters will not be obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for any securities offered by this prospectus.
Representatives of the underwriters through
whom our securities are sold for public offering and sale may engage in over-allotment, stabilizing transactions, syndicate short
covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves syndicate
sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit bids to purchase
the offered securities so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve
purchases of the offered securities in the open market after the distribution has been completed in order to cover syndicate short
positions. Penalty bids permit the representative of the underwriters to reclaim a selling concession from a syndicate member when
the offered securities originally sold by such syndicate member are purchased in a syndicate covering transaction to cover syndicate
short positions. Such stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the offered
securities to be higher than it would otherwise be in the absence of such transactions. These transactions may be effected on a
national securities exchange and, if commenced, may be discontinued at any time. Underwriters, dealers and agents may be customers
of, engage in transactions with or perform services for, us and our subsidiaries in the ordinary course of business.
Fees and Commissions
In compliance with the guidelines of the
Financial Industry Regulatory Authority, or FINRA, the aggregate maximum discount, commission or agency fees or other items constituting
underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of any offering pursuant
to this prospectus and any applicable prospectus supplement or other offering materials; however, it is anticipated that the maximum
commission or discount to be received in any particular offering of securities will be less than this amount.
If 5% or more of the net proceeds of any
offering of securities made under this prospectus will be received by a FINRA member participating in the offering or affiliates
or associated persons of such FINRA member, the offering will be conducted in accordance with FINRA Rule 5121.
LEGAL MATTERS
Certain legal matters in connection with
the securities offered hereby will be passed on for us by Porter Hedges LLP, Houston, Texas. Any underwriters will be advised about
other issues relating to any offering by their own legal counsel.
EXPERTS
The financial statements of Ocean Power
Technologies, Inc., incorporated in this prospectus by reference from our Annual Report on Form 10-K for the year ended April 30,
2017 and 2016, and for each of the years in the two-year period ended April 30, 3017, have been incorporated by reference herein
to the Annual Reports on Form 10-K for the years ended April 30, 2017 and 2016, in reliance upon the reports of KPMG LLP, independent
registered public accounting firm, which are incorporated by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
The audit report covering the April 30,
2017 consolidated financial statements contains an explanatory paragraph that states that our cash balance, recurring losses from
operations, and accumulated deficit raise substantial doubt about our ability to continue as a going concern. Our consolidated
financial statements do not include any adjustments that might result from the outcome of that uncertainty.
Up
to $3,645,000
Shares
of Common Stock
Prospectus
Supplement
A.G.P.
January
8, 2019
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