Delaware Chancery Court Cites the Disconnect Between Ocean Power Technologies Financial Picture and Its Public Statements

EASTON, PA / ACCESSWIRE / November 17, 2023 / Paragon Technologies, Inc. ("Paragon") (OTC PINK:PGNT), a diversified holding company, owns approximately 4.0% of the outstanding shares of Ocean Power Technologies, Inc. ("Company") ("OPT"), which we believe makes Paragon OPT's single largest shareholder.

On July 11, 2023, OPT issued a public response to Paragon's publicly disclosed concerns about the Company's degrading financial performance by stating the following:

OPT's "Board and leadership team are committed to driving sustainable value creation and we will continue to take decisive actions to protect the best interests of all our shareholders. We have been executing a clear, long-term growth strategy that has yielded a significant increase in defense and security bookings during fiscal 2023…"

Since July 11, 2023, OPT's share price has nosedived by nearly 60% from $0.67 a share to nearly $0.29 a share.

Since July 11, OPT has announced two quarterly earnings results with combined losses of $17 million.

In delivering those results, CEO Stratmann tells shareholders on earnings calls that he is "pleased" with the progress at OPT and CFO Bob Powers tells shareholders they are "managing costs tightly" as OPT's expenses continue to increase.

On August 7, OPT announced that they will raise another $13.8 million by issuing more equity. With a current market value of approximately $17.3 million, this equity raise, if fully executed, represents 75% of OPT's current market cap.

We ask OPT's Board: How does diluting shareholders by an astounding 75% or more demonstrate your clearly stated objective of taking decisive actions to protect the best interests of all our shareholders?

Indeed, since that announcement of an equity raise, OPT's share price has declined by nearly 50% from $0.55 to $0.29 a share.

We have firmly believed for some time now that OPT's Board and management are out of sync with reality. After reading and evaluating a preponderance of evidence, an unbiased Magistrate arrived at a similar conclusion when the Delaware Chancery Court ruled that Paragon had demonstrated a credible basis that wrongdoing has occurred at OPT. In citing the opinion, the Magistrate stated,

"The disconnect between [Ocean Power's] financial picture and [OPT's] public statements raises credible suspicions about [OPT's] management and operations."

Even still, OPT continues to issue press releases touting "record" new orders and other seemingly insignificant announcements, which we believe are further attempts to spin a misleading narrative that all is well at OPT.