Ocean Power Technologies, Inc.

Good morning. Welcome to Ocean Power Technologies third quarter fiscal year 2022 conference call. A webcast of this call is also available on the company's website at oceanpowertechnologies.com. This conference call is being recorded and will be available for replay shortly after its completion. On today's call are Dr. Philip Stratman, President, Chief Executive Officer of Bob Powers, Senior Vice President and Chief Financial Officer, and Joseph DiPietro, Controller, Treasurer, and Principal Accounting Officer. Following their prepared remarks, there will be a question and answer session. I am now pleased to introduce Joseph DiPietro.

Thank you. After the market closed on March 14, 2022, OPT issued its earnings press release and filed its quarterly report on Form 10Q, for the quarter that ended January 31st, 2022. All OPT public filings are available on the SEC website at sec.gov or within the investor relations section of the OPT website. This call will include forward-looking statements that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include financial projections or other statements of the company's plans, objectives, expectations, or intentions. These statements are based on assumptions made by management regarding future circumstances over which the company may have little or no control and involve risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. Additional information about these risks and uncertainties can be found in the company's most recent Form 10-K and subsequent filings with the SEC. The company disclaims any obligation or intent to update the forward-looking statements made on this call. Now I am pleased to introduce Dr. Philip Stratman.

Thank you, Joe. Good morning, and thank you for taking the time to join us for our business update. I will start with a broad overview of our strategy. We're moving fast, and I want to make sure everyone fully understands what we are doing, why we're doing it, and where we are heading. I feel that it is important since we've added several new revenue streams to what we've been known for in recent years, the power booty. Our vision is to be the first company that someone thinks of when it comes to monitoring assets or areas in our oceans. This vision is bold and our recently expanded business strategy has three main components. First is data as a service. Here we are providing robust data to customers. We believe long-term that this will be the part of our strategy that is our largest recurring revenue producer. We can do this through our maritime domain awareness software and WAMV autonomous surface vessels. Our MDA software in development will be used with our power buoys and WAMVs. Plus, it can also work with other vessels, offshore assets, and structures to provide real-time data. Applications for tracking and monitoring include illegal fishing, crude oil theft, and national security. Second is power as a service. We will continue to manufacture and upgrade our category leading power buoys, which can be leased or owned. For example, we're making iterative design changes to our hybrid power buoy to increase solar power conversion capabilities and improve stability. We're also developing the next generation power buoy with the development of the mass on spring wave energy converter, or what we refer to as MOSWAG. We're in the final stage of the phase one study for this development, with the US Department of Energy, and we've already commenced scoping our submission for phase two funding that would bring us closer to a first of a class system if granted. We're currently targeting a late fiscal 2023 completion date of this development. Finally, is our strategic consulting services. We will continue to provide the most robust offering of consulting services available to those who do business in the oceans. As noted on our last call, activity for offshore energy related engineering consulting services has been steadily ramping back up as companies restart exploration and production projects that paused during the pandemic. We are also broadening our non-oil and gas services, including the delivery of our first WIMP farm support project. OPT's Strategic Consulting Services team is also increasingly in demand to provide expert engineering analysis on legal matters. Our highly respected engineers use data analysis and proprietary simulation techniques, to model vessels and equipment using environmental and other case-specific data to simulate incident conditions. With that as an overview, I'd like to take you through an update of each component of our growth strategy in a little more detail. Ocean intelligence is at the core of data as a service, and it's a component of our strategy that we believe has the most opportunity long-term. In the short term, recently acquired marine advanced robotics will drive a significant portion of our revenue growth. Not only did the existing team come over to us, but so did the existing customer base and customer pipeline. We now have autonomous roaming assets in the 1V to provide intelligence and data to customers. This includes the hydrographic survey market, providing customers with critical seafloor data nearshore in ports and harbors, far offshore in shipping lanes, and wind farm development sites. It can also include defense and security maritime domain awareness applications. For example, WAMVs can identify suspicious vessels, patrol security perimeters, and inspect objects of interest. Longer term, we expect to provide robust, reliable data through our autonomous maritime domain awareness software in development with software and integration experts such as Fathom5 and GreenSea. We identified this need over the course of the past two years in working with our targeted customer group. There is significant demand from commercial entities and government agencies. who are monitoring areas offshore and want to do so without the need for crude vessel or the human capital, which significantly increases the costs. We believe we can deliver a better solution that reduces the ongoing cost considerably and takes out human error. Examples include offshore national security efforts, enforcement of fishing activity and marine protected areas, protection of shipping lanes, and prevention of crude oil theft. Our proprietary cutting-edge system will interact with multiple hardware sources, It can be mounted on power buoys, WAMVs, platforms, vessels, or elsewhere to provide real-time analytics about activity in a designated area. Beyond the capabilities to track vessels and capture and store evidentiary vessel data in the cloud, including radar and video, our software will facilitate the integration of public and private third-party data sources and analytics. This capability can only further enhance the site-specific information and data for a customer. Our investment in continuous improvement cycles of the software will be ongoing. We expect a strong return on this investment through monthly fees for this data. This is valuable data with high interest, and we're currently building the customer pipeline to support its launch. Other data intelligence we can collect and provide includes ocean environmental condition monitoring, weather data collection, mammal tracking, and additional sensor-based information critical for a broad range of needs. from wind farm development to ensuring the vitality of marine protected areas for future generations. Our value proposition is strong, since we can do this autonomously with sensors and software, eliminating the use of carbon-producing vessels and crews, which are very expensive and have varying degrees of human risk. We believe our data-as-a-service business directly addresses the single biggest hurdle we have to ramping up sales of power buoys. Buying cycles for our platforms are generally very long, especially in end markets with government involvement or dependent on the primary projects to be developed, such as oil and gas projects. Our data as a service models are closer to subscriptions, where the monthly fee is significantly lower, which we believe will speed up the decision-making process for our customers and result in a materially bigger customer pipeline. For this reason, we are focusing on creating a leading-edge maritime domain awareness offering that combines autonomous, low-carbon OPT hardware and proprietary OPT software. We are continuing to refine system operation with continued ocean trials off the coast of New Jersey with PB3 and hybrid power buoys before moving on to future incorporation of WAMVs. The integration of marine advanced robotics continues diligently and remains on plan. We've recently added and continue to actively recruit additional staff to accelerate fulfilling the backlog and delivering on the growing pipeline. Interest in WAMVs remains high and it's why we pursued this acquisition. Marine Advanced Robotics contributed $257,000 to revenue in the third quarter. We expect this line of business to ramp and contribute approximately $2 million to our revenue in fiscal year 2023. The immediate response we have seen for WAMVs with our customer group has been strong and gives us even more confidence about the long-term opportunity MAR gives us. To meet this initial demand, we currently have approximately 20 WAMVs being built. Power as a service is where we have most of our legacy business. Our autonomous power buoy platforms convert wave energy or solar energy into electrical power for offshore applications and payloads. Producing and delivering that power to the end user is a service OPT provides via the power buoy and subsea battery platforms, which could be sold or leased to a customer. But again, these buying cycles are long and unpredictable. Therefore, we recently expanded our service offering here based on customer feedback. We now have a model where the power buoy or subsea battery platform is owned and operated by OPT or an affiliate who then sells the power produced to the customer for a recurring fee. Additional services can also be built into sales and leases, including routine maintenance, specialized integrations, and hardware and software updates. The revenues for this service are in the $20,000 to $30,000 per month per buoy range. Finally, in addition to expert witness services, OPT strategic consulting services provides engineering and design services for oil and gas, wave energy, and offshore wind customers, such as drilling contractors, defense contractors, construction yards, and engineering and service firms. Our dedicated team has expertise in structural engineering, hydrodynamics, and naval architecture, applied to services including simulation engineering, software engineering, concept design, and motions monitoring, all of which help our customers increase operational efficiencies and reduce risk. We are quickly becoming known as a very effective firm to help address a wide range of issues for companies with their ocean assets. I want to switch gears now and provide you with an update on several of our important projects in process throughout the world. First is our project in Chile, which we classify as data as a service. We have team members on site this week finalizing our work for our customer there, which was delayed due to COVID-19 and recent inclement weather. If everything goes well, we should complete work this quarter and have full acceptance from the customer. We're discussing ocean monitoring with other entities as a result of our work in Chile. Another data as a service project is our work with the U.S. Naval Postgraduate School's SLAMA initiative to support its autonomous offshore defense network initiative. Like most initiatives involving government agencies at home or abroad, most of the information is classified. Well, we believe we provide an incredible value proposition to government agencies with our technology and teams and look forward to additional projects like this. Based on the business drivers of data, power, and strategic consulting services, we're very optimistic about the future of OPT. We believe that there are solid opportunities for business growth and creating shareholder value and that we're on the right path for making that happen. With that, let me turn the call over to Bob to discuss the financial results in more detail.