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2007 audio webcast. Today’s conference is being recorded and webcast. At this time for

opening remarks, I would like to turn the call over to the Chief Financial Officer of

Ocean Power Technologies, Mr. Charles Dunleavy. Please go ahead sir.

Thank you. Good afternoon and welcome to Ocean Power Technologies’ Audio Webcast

for the fiscal year ended April 30, 2007. OPT has filed its annual report on Form 10-K

with the Securities and Exchange Commission. For access to this document you can view

click on SEC Filings.

During the course of this conference call, management may make projections or other

forward-looking statements regarding future events or financial performance of the

company within the meaning of the Safe Harbor Provision of the Private Securities

Litigation Reform Act of 1995. These statements may relate to, among other things,

future financial performance indicating expected cash flow, the ability to reduce costs

and improve operational efficiencies, revenue growth and increased sales volume,

success in key markets, our ability to enter into relationships with partners and other third

PowerBuoys, hiring new key employees, and the expected costs of our PowerBuoy

product. These forward-looking statements are subject to numerous assumptions made

by management regarding future circumstances over which the company may have little

or no control and involve risks and 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.

We refer you to the company’s Form 10-K and other recent filings with the Securities

and Exchange Commission for a description of these and other risk factors. I’ll now turn

the call over to George Taylor our Chief Executive Officer.

Thank you, Chuck. I am delighted to host our first earnings webcast since our IPO and

listing on Nasdaq and would also like to welcome all our shareholders.

The global market for renewable energy is seeing an unprecedented level of interest and

potential growth. Our successful public capital-raising means that the Company has the

capital base and the credibility of listings on two of the world’s premier stock exchanges

to benefit from this trend. As a leading wave power company, our systems have been

extensively ocean tested over the past ten years. OPT is now moving rapidly to full

commercialisation with exciting projects in the US and Europe.

Before we discuss the financial results, I would like to take a few minutes to highlight

OPT’s business strategy and the progress being made to capitalize on our world-wide

opportunities.

OPT has an early mover advantage in wave power systems. Our strategy is to sell turnkey

power stations, and to obtain long term contracts from our customers for the

operation and maintenance of these wave farms.

Our product development effort is aimed at increasing the output of our PowerBuoy

systems – up to 500 kW in the next several years. This, with high production volume, we

believe will enable us to achieve our goal of competing with fossil fuel energy without

the need for subsidies.

Most of the system steel fabrication for the PowerBuoys is outsourced to sub-contractors,

often locally. The "smart part" of the system (the power generation and control modules)

is assembled and tested at OPT’s facility, then shipped to a location close to the wave

power station site for integration into the PowerBuoys.

Our primary target markets are the world’s advanced economies where demand for

renewable energy is growing due to environmental pressures and the ever-increasing

need for energy in general.

To accelerate market adoption we plan to build demonstration wave power stations on a

selective basis and will discuss these later.

OPT has blue chip partners such as Iberdrola, Total and the US Navy, which will help to

leverage acceptance of OPT’s systems.

Our strategy is to broaden the company’s addressable market, such as through the

development of autonomous power buoys for remote locations that are non-grid

connected.

We enjoy considerable competitive advantages.

Our patented PowerBuoy system has been refined and tested through long term ocean

trials over many years. It has a simple structure, most of which is below the surface of the

ocean, and is easily deployed with existing maritime infrastructure.

The system is designed for maintainability and to survive 100-year storm wave

conditions.

The system has been independently tested and approved for connection to electricity

grids. It has also passed environmental assessment studies which concluded that there is

no significant impact.

A major advantage of our system is that it can automatically tune itself to changing wave

conditions, allowing for maximum power output. Also, each PowerBuoy installed

around the world can be monitored continuously at OPT’s headquarters.

As mentioned earlier, our strong capital and customer base provides a solid springboard

for growth as well as comfort for existing and potential new customers.

During the past year we have made excellent progress to position the Company for its

commercial ramp-up.

A notable milestone was the achievement of grid certification from an internationally

recognized testing agency. This means our systems have been quality-approved for

connection to electricity grids.

The design of our PB40 PowerBuoy is completed and the system has been successfully

ocean tested. I am pleased to report that the design of our larger PB150 PowerBuoy is

well underway and we expect to commence ocean testing in 2008.

The advanced control system, or "smart part", is now complete and will be utilized in our

range of PowerBuoys from the PB150 to the PB500.

Our intellectual property portfolio continues to strengthen with six new patent

applications filed during the fiscal year, and three new patents being issued.

I said at the outset that the Company was moving rapidly into a commercialization phase.

This is reflected by our increasing order book, or backlog, and project activity.

Our largest order won during the year, was for $3.2 million, for the second phase of

construction of the wave power station OPT is building for Iberdrola in northern Spain.

This was followed by a separate Operations & Maintenance contract for this project.

In the UK, a $1.2m contract was awarded by the Scottish Executive for the construction,

installation and in-ocean demonstration of our 150 kW PowerBuoy product.

In the US, the Company signed an agreement with the Oregon-based electric power

group PNGC Power to work cooperatively on OPT’s development of an initial 2MW

demonstration station in Reedsport on the coast of Oregon. OPT has been granted a

preliminary permit for this project from the Federal Energy Regulatory Commission

(FERC). OPT also has applied for FERC permits to build two other wave parks off the

coast of Oregon. In total, the permit applications submitted to FERC for Oregon are to

build three wave parks with a total capacity of up to 250 MW.

Since the fiscal year end, OPT has expanded its relationship with the US Navy with the

award of a $1.7 million order for the powering of a deep water acoustic detection system.

All this activity has translated into a strong order pipeline and we closed the year with a

total backlog of $5.2 million – double the level of the previous year.

OPT is currently working on projects in four countries.

The primary customer for our wave power station in Spain is Iberdrola, the utility with

the largest renewable power generating capacity in the world. We are building a 1.4 MW

wave power station for connection to the grid in Northern Spain. We have completed the

first phase, which was for assessment and planning. We received the second phase

contract in the first quarter of fiscal 2007. This current phase includes construction of the

infrastructure, installation of the first PowerBuoy and connection to the grid. We plan for

this first PowerBuoy to be ready for deployment by the end of 2007.

The French oil giant Total and Iberdrola are the customers for our project on the West

Coast of France. We are currently working under contract for the first phase of this

project, for the study and assessment of a 2 to 5 MW wave power station. We have

identified several possible sites with good wave resources and close connection points to

the French power grid.

In March 2007, we were awarded funding from the Scottish Ministers’ Wave and Tidal

Energy Support Scheme, managed by the Scottish Executive. This funding is to support

the design, manufacture and installation of a single 150 kW PowerBuoy system in

Orkney, Scotland. This site is fully permitted and a subsea power transmission cable is

already in place, allowing the electricity generated by our PB150 to be fed directly into

the UK grid. We expect the system to be ready for ocean deployment in the first half of

2008.

We received approval from the South West of England Regional Development Agency to

install a 5 MW demonstration wave power station off the coast of Cornwall, England.

The Agency is responsible for permitting of the site, the installation of the subsea power

transmission cable and its connection to the grid. We are currently in the planning and

development stage. This wave power station will serve as a demonstration wave power

station, which we intend to operate as an independent power producer. We plan to

collect revenue from the sale of power to electrical utilities.

Our contract in Hawaii with the US Navy is to develop and build wave power systems at

the US Marine Corps Base in Oahu. Two PowerBuoy systems have been tested at the

ocean site at various times over the past two years. Our second system was installed in

June 2007 for testing at this location. It operated well for four weeks generating power,

and was electronically monitored, controlled and observed via video feed to our

Pennington, New Jersey facility. Its automatic control features were also tested

successfully during this period. Subsequently, the system has been returned to shore for

analysis of a problem caused by one component. Work is currently in progress on the

design and construction of a third PowerBuoy system, which is expected to be ready for

deployment at the Marine Corps Base by the end of 2007.

In February 2007, the US Federal Energy Regulatory Commission, or FERC, granted us a

preliminary permit to evaluate the feasibility of a location off the coast of Reedsport,

Oregon for the proposed construction and operation of a wave power station with an

anticipated maximum rated output of 50 MW, of which up to the first 5 MW will be a

demonstration wave power station. In February 2007, we signed a cooperative agreement

with a utility partner, PNGC Power for the development of a wave power station. In July

2007, we filed a Pre-Application Document and Notice of Intent with FERC for

Reedsport, which provides notice of our intent to seek a license for the Reedsport wave

park and information regarding the project. We believe this is the first Pre-Application

Document and Notice of Intent filed by a wave power company, and is an important step

in the full licensing process for the Reedsport project. We plan to generate revenue from

this demonstration wave power station in Reedsport by selling electricity to utilities.

Our PowerBuoy system off the coast of New Jersey was ocean-deployed for a twelve

month period and removed for planned maintenance. During the test period the

PowerBuoy was subjected to hurricane storm forces. We are very pleased that after

extensive diagnostic testing, there were no significant problems with the system. The

system will be re-deployed shortly for demonstration and marketing purposes.

The Company has significantly increased investment in management and staff to support

the growth of the business.

Over the last fiscal year, six new staff members have been added to our UK and US

offices. I am very pleased that Mark Draper has been appointed to the position of Chief

Operating Officer. As Chief Executive of our European-subsidiary, Mark has been

instrumental in the Company’s success in that region. Our efforts to increase staffing in

various operational areas include the filling of key positions in the areas of business

development, production and engineering.

I also want to acknowledge the strong on-going efforts of our current employees, whose

dedication and expertise is so important to growing our Company.

After this business update I would like to hand over the presentation to Chuck to discuss

last year’s results:

Thank you George.

Our revenues increased by 45% in fiscal 2007 to $2.5 million, as compared to $1.7

million in fiscal 2006. The increase in revenues was primarily attributable to the

following factors:

$1.1 million due to three major areas: First, work that commenced on the first

phase of construction of a 1.39MW wave power station off the coast of Spain;

secondly, increased revenues relating to our US Navy project in Hawaii from a

higher activity level; and third, work that began on the design, manufacture and

installation of an OPT wave power station consisting of a PB150 (150kW)

PowerBuoy system in Orkney, Scotland.

approximately $0.3 million primarily as a result of the completion of a

development and construction contract with Lockheed Martin in the fiscal year

ended April 30, 2006. It is important to note that we were awarded a $1.7 million

contract in July 2007 from the US Navy for the use of our autonomous buoy in

connection with a deep water ocean sensing application.

Cost of revenues increased by $1.9 million, or 93%, to $4.0 million in fiscal 2007, as

compared to $2.1 million in fiscal 2006. The main driver of the decrease in gross profit in

fiscal 2007 was our providing for an anticipated loss of $1.3 million on our contract for a

wave power station off the coast of Spain. The anticipated loss of $1.3 million was

recognized based on a change in estimated costs upon completion associated with this

contract. This was partially offset by an increase in gross profit recognized in connection

with our US Navy project in Hawaii. In addition, approximately $0.3 million of

compensation expense was recorded as cost of revenues under Statement of Financial

Accounting Standards, or SFAS, No. 123(R), which requires companies to recognize

compensation expense for all stock-based payments to employees. Because we adopted

SFAS 123(R) effective May 1, 2006, we did not record similar compensation expense in

fiscal 2006.

Product development costs increased by 47% to $6.2 million in fiscal 2007, as compared

to $4.2 million in fiscal 2006. This increase in product development costs was primarily

attributable to our efforts to increase the power output of our utility PowerBuoy system,

including the 150kW PowerBuoy. In addition, we recorded approximately $0.3 million

of compensation expense as product development costs under SFAS 123(R). We

anticipate that our product development costs related to the planned increase in the output

of our utility PowerBuoy system will increase significantly over the next several years

and that the amount of these expenditures will not necessarily be affected by the level of

revenue generated over that time period.

Selling, general and administrative costs increased 53% to $4.9 million in fiscal 2007, as

compared to $3.2 million in fiscal 2006. The increase was primarily attributable to an

increase of $0.4 million related to additional marketing expenses and consulting costs,

$0.3 million in professional fees, $0.5 million in employee incentive-based compensation

and $0.5 million of compensation expense recorded under SFAS 123(R). As George

noted previously, we expect to hire a vice president of business development and

marketing, and to increase our spending in that area as we accelerate our marketing

efforts in Europe, North America, Australia and Japan.

Interest income in fiscal 2007 was relatively flat at $1.4 million, as compared to the prior

fiscal year, due to a reduction in cash and certificates of deposit, offset by higher interest

rates in fiscal 2007. We closed on the US IPO on April 30, 2007, so the net proceeds of

that offering will not affect interest income reported until our first quarter of fiscal 2008.

Foreign exchange gain was $1.5 million in fiscal 2007, compared to a loss of $1.0 million

in fiscal 2006. The difference was primarily attributable to the appreciation of the British

pound compared to the US dollar between the two periods.

We finished the year with very strong liquidity. At April 30, 2007 our total cash, cash

equivalents and certificates of deposit were $116 million. Long-term debt of $232,000

represents amounts due to the State of New Jersey under a non-interest bearing loan

which must be repaid no later than January 2012. Stockholders’ equity and common

shares outstanding reflect the closing in late April 2007 of the US IPO and listing on the

Nasdaq Global Market. We raised a net amount of approximately $90 million through the

sale of 5 million common shares. Also in connection with that transaction, we reincorporated

Ocean Power Technologies, Inc. in Delaware, and gave effect to a one-forten

reverse stock split, as approved by Shareholders at the January 12, 2007 Shareholders

meeting.

Net cash used in operating activities was $7.5 million for fiscal 2007. This primarily

resulted from the net loss for the fiscal year of $9.6 million, decreased by a net change in

operating assets and liabilities, non-cash charges for depreciation and amortization, and

SFAS 123(R) Compensation expense. This was partially offset by a non-cash foreign

exchange gain.

Net cash used in investing activities was $9.3 million for fiscal 2007, resulting primarily

from a net purchase of $7.9 million of certificates of deposit, a $1.0 million restricted

cash balance related to a bank credit facility for Ocean Power Technologies Limited, and

$0.3 million in purchases of equipment and patent costs.

We invested in expanding our assembly and test facilities and developed several new

patent applications as part of our on-going investment in technology development.

Net cash provided by financing activities was $90.8 million for fiscal 2007 resulting

primarily from the initial public offering in the United States.

Now let me turn the conference back over to George.

I would like to close our webcast by summarizing the pioneer achievements of the

Company, as well as the highlights over the past fiscal year.

Among the Company’s pioneering "firsts" are:

market and Nasdaq

Let me now summarize the highlights of the past fiscal year:

and the Orkney Islands.

underway and grid certification has been received

manufacture shortly

three separate sites

I believe OPT is now perfectly poised as a company to grow into a major corporation.

We have established a significant customer base, which by itself would allow the

Company to grow to a large size. The Company is actively working to increase its

customer base in the four regions of the world we are now focused on, and to fully

commercialize its technology.

The technology that OPT has successfully developed and ocean tested has clear

advantages over competing technologies. We have a well defined production plan which

minimizes capital expenditures and risks.

The world recognizes the need for renewable energy, because of global warming and

pollution. As a company, we are excited to provide a new and completely benign

renewable energy solution, which has the ability on a large scale to provide a significant

amount of energy at an economical price.

I would like to thank all of you for attending and listening to OPT’s earnings presentation

today and also thank all Shareholders for their continuing support and interest as we grow

the Company.

disconnect.