Ocean Power Technologies Inc (NASDAQ:OPTT) Explodes Higher

Shares of Ocean Power Technologies Inc (NASDAQ:OPTT) rocketed higher last week after the company signed a PB3 PowerBuoy lease agreement with Mitsui Engineering and Shipbuilding (MES), which is valued at approximately $975,000. On the surface, the number isn't that impressive, but what it allows for is expansion in Asia. That's the key for OPTT and why investors are so excited and hoping a bull run is just getting started.OPTT is a pioneer of ocean wave power generation and energy storage systems. OPT’s proprietary PowerBuoy technology is based on a cost-effective, scalable, modular, and environmentally sound design which provides power and communications for a number of markets and applications.The PB3 PowerBuoy leased by MES is planned to be deployed off Kozu-island in Japan following a planned stage gate review. Under the Agreement, OPT will also provide engineering support, associated deployment planning and logistics and ocean performance data collection and analysis. OPT and MES will also jointly develop and test an advanced control algorithm with the goal of assessing increased ocean wave energy capture and electric power generation for potential customers in Japan and surrounding countries. Work on the project began in March 2016 following the signing of a letter of intent by OPT and MES. CEO George Kirby said:

“This first commercial agreement with MES is a significant and exciting commercialization milestone for OPT. MES has been a strong strategic partner in the development of the PowerBuoy, and this milestone will allow MES to demonstrate the flexibility of the PB3 power and communications platform in sea conditions off the coast of Japan. We believe that the deployment under this Agreement could provide access to a potentially huge market in Japan and the surrounding areas, and we’re looking forward to potentially leveraging these events with other interested parties. Market applications could include national defense and security, such as early detection and warning systems for subsea and surface threats, or oil field management and metocean applications for the oil and gas industry and scientific communities. We’re looking forward to working closely with MES to commercialize the PB3 throughout Asia. We hope that it will serve the many markets in need of new and better power and communications solutions.”

OPTT also last week announced the pricing of a registered direct offering of 417,000 shares of common stock and warrants to purchase an aggregate of 145,950 shares of its common stock. Each share of common stock is being sold together with a warrant to purchase 0.35 shares of common stock of the company at a combined purchase price of $4.60 per share. The warrants will be exercisable beginning six months and one day after the date of issuance at a price of $6.04 per full share of common stock and will be exercisable for a period of five years from closing, which is expected to occur on June 7, 2016.

OPTT expects to receive net proceeds of approximately $1.6 million from the offering, after deducting placement agent fees and estimated offering expenses payable by the company. The offering is expected to close on June 7, 2016, subject to customary closing conditions. The company intends to use the net proceeds from the sale of securities for general corporate purposes.

Last month, OPTT settled claims asserted in the lawsuit by the lead plaintiff individually and on behalf of a class that consists of investors in the company from January 14, 2014 through July 29, 2014, and investors who purchased the Company’s securities in the Company’s April 4, 2014 offering of shares of common stock. The agreement will settle the class action litigation without any admission or concession of wrongdoing or liability by the company or the other defendants. The terms of the settlement are subject to notice to the class and final approval by the Court.

Currently trading with a market cap of $7 million, OPTT looks to have finally made its pivot and is on the right track now. We believe the Mitsui Lease Agreement is the first of many to come in Asia and we look for further expansion to drive OPTT's share price. Considering how small OPTT's market cap is, it won't take much to get the stock moving to higher levels. We will be updating Insider Financial as soon as we know more. For continuing coverage on OPTT, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in OPTT and have not been compensated for this article.