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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended April 30,
    2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission File Number
    001-33417
  
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

22-2535818(I.R.S. Employer
    Identification No.)   1590 REED
    ROAD
 PENNINGTON, NJ 08534
 (Address of principal executive
    offices, including zip code)
  Registrants telephone number, including area code:
    (609) 730-0400
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, par value $0.001

The Nasdaq Global Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Document

Part of the Form 10-K into Which IncorporatedProxy Statement for the registrants 2010 Annual Meeting of
    Stockholders

III




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##### 





OCEAN
    POWER TECHNOLOGIES, INC.
  INDEX TO
    REPORT ON
    FORM 10-K
   
 PagePART IItem 1:

Business


4Item 1A:

Risk Factors


25Item 1B:

Unresolved Staff Comments


41Item 2:

Properties


41Item 3:

Legal Proceedings


41Item 4:

(Removed and Reserved)


41PART IIItem 5:

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


42Item 6:

Selected Financial Data


43Item 7:

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


44Item 7A:

Quantitative and Qualitative Disclosures About
    Market Risk


57Item 8:

Financial Statements and Supplementary Data


58Item 9:

Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


58Item 9A:

Controls and Procedures


58Item 9B:

Other Information


58PART IIIItem 10:

Directors, Executive Officers and Corporate
    Governance


59Item 11:

Executive Compensation


59Item 12:

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


59Item 13:

Certain Relationships and Related Transactions,
    and Director Independence


59Item 14:

Principal Accountant Fees and Services


59PART IVItem 15:

Exhibits and Financial Statement Schedules


59EX-23.1: CONSENT OF KPMG LLPEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATIONEX-10.28EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2    ® tm tm SM
 2




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Special
    Note Regarding Forward-Looking Statements
  Form 10-K
     3




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  Overview
    ®
  
    Our utility PowerBuoy system is capable of supplying
    electricity to a local or regional electric power grid. Our wave
    power stations will be comprised of a single PowerBuoy system or
    an integrated array of PowerBuoy systems, plus the remaining
    components required to deliver electricity to a power grid. We
    intend to sell our utility PowerBuoy system to utilities and
    other electrical power producers seeking to add electricity
    generated by wave energy to their existing electricity supply.
    In July 2007, our PowerBuoy interface with the electrical
    utility power grid was certified as compliant with international
    standards. An independent laboratory provided testing and
    evaluation services to certify that our systems comply with
    designated national and international standards. The PowerBuoy
    grid interface bears the Electrical Testing Laboratories (ETL)
    listing mark, and can be connected to the utility grid.
    Our autonomous PowerBuoy system is designed to generate
    power for use independent of the power grid in remote locations.
    There are a variety of potential applications for this system,
    including sonar and radar surveillance, tsunami warning,
    oceanographic data collection, offshore platforms and offshore
    aquaculture.        
    The United States Navy  
    To develop and build wave power systems at the US Marine Corps
    base in Hawaii. 4




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
    To provide PowerBuoy technology to a unique program for ocean
    data gathering. Under this program, the Navy will conduct an
    ocean test of an advanced design of our autonomous PowerBuoy as
    the power source for the Navys Deep Water Active Detection
    System.


    To provide our PowerBuoy wave conversion system to the
    Navys Littoral Expeditionary Autonomous PowerBuoy (LEAP)
    Program.  
    Pacific Northwest Generating Cooperative (PNGC Power) and the US
    Department of Energy, both of which are providing funding toward
    the fabrication and ocean installation of a 150kW PowerBuoy near
    Reedsport, Oregon.
    The Scottish Government, to develop a 150kW PowerBuoy for
    deployment in Scotland.
    Iberdrola S.A., or Iberdrola, which is a large electric utility
    company located in Spain and one of the largest renewable energy
    producers in the world, Total S.A., or Total, which is one of
    the worlds largest oil and gas companies, and two Spanish
    governmental agencies, for the first phase of the construction
    of a wave power station off the coast of Santoña, Spain.
    The US Department of Energy (DOE) to help fund the
    scale-up of
    the power output per PowerBuoy from the current level of 150kW
    to 500kW.
    Mitsui Engineering and Shipbuilding, with which we are working
    to develop a wave power project in Japan.
    Leighton Contractors, a major Australian construction and
    infrastructure company, for the development of a wave power
    station in Victoria, Australia.  (609) 730-0400. www.oceanpowertechnologies.com. Form 10-K, Form 10-Q, Form 8-K
  Our
    Market
      
    Rising cost of fossil fuels.  Although subject
    to short-term fluctuations, the cost of fossil fuel used to
    generate electricity has been generally rising and is likely to
    continue to rise in the future.
    Dependence on energy from foreign
    sources.  Many countries, including the United
    States, Japan and much of Europe, depend on foreign resources
    for a majority of their domestic energy needs. Concerns over
    political and economic instability in some of the leading fossil
    fuel producing regions of the world are encouraging consuming
    countries to diversify their sources of energy. 5




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
    Environmental concerns.  Environmental concerns
    regarding the contamination, pollution and by-products from
    fossil fuels have led many countries and several US states to
    agree to reduce emissions of carbon dioxide and other gases
    associated with the use of fossil fuels and to adopt policies
    promoting the development of cleaner technologies.
    Government incentives.  Many countries have
    adopted policies to provide incentives for the development and
    use of renewable energy sources, such as subsidies to encourage
    the commercialization of renewable energy power generation.    Wave
    Energy
      
    Scalability within a small site area.  Due to
    the tremendous energy in ocean waves, wave power stations with
    high capacity  50 MegaWatts (MW) and
    above  can be installed in a relatively small area.
    We estimate that, upon completion of the development of our
    500kW PowerBuoy system, we would be able to construct a wave
    power station that would occupy approximately one-tenth of the
    ocean surface occupied by an offshore wind power station of
    equivalent capacity.
    Predictability.  The supply of electricity from
    wave energy can be forecasted in advance. The amount of energy a
    wave hundreds of miles away will have when it arrives at a wave
    power station days later can be calculated based on satellite
    images and meteorological data with a high degree of accuracy.
    Power producers can use this information to develop sourcing
    plans to meet their short-term electricity needs.
    Constant source of energy.  The annual flow of
    waves at specific sites can be relatively constant. Based on our
    studies and analysis of our target sites, we believe our wave
    power stations will be able to produce usable electricity for
    approximately 90% of all hours during a year.
    Close to population centers.  The proximity of
    wave energy resources to large population areas means that power
    transmission infrastructure is often already in place and may be
    utilized for wave energy generation projects.   6




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Our
    Products
      
       wave-by-wave
      Utility
    PowerBuoy System
   7




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Status of
    Utility PowerBuoy System
        
    Autonomous
    PowerBuoy System
   8




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Status of
    Autonomous PowerBuoy System
      Our
    Competitive Advantages
    Our PowerBuoy system uses an ocean-tested technology to
    generate electricity.
  
    We have been conducting ocean tests for over a decade in order
    to demonstrate the viability of our technology. We initiated our
    first ocean installation in 1997 and have had several
    deployments of our systems for testing and operation since then,
    the longest of which has had continuous operation of
    12 months. Our PowerBuoy systems have survived several
    hurricanes and winter storms while installed in the ocean. Since
    its installation in Hawaii in December 2009, our 40kW-rated
    PowerBuoy has produced power consistent with our predictive
    models.  Our PowerBuoy systems grid connection has been
    certified.
  
    In July 2007, we announced that our PowerBuoy grid connection
    system had been certified as compliant with designated national
    and international standards. This qualifies our technology for
    integration into utility grid systems.  Our PowerBuoy system design is efficient in harnessing wave
    energy.
  
    Our PowerBuoy system is designed to efficiently convert wave
    energy into electricity by using onboard sensors to detect
    actual wave conditions and then to automatically adjust, or
    tune, the performance of the generator using our
    proprietary electrical and electronics-based control systems in
    response to that information.
    One measure of the efficiency of an electric power generation
    system is capacity factor. The capacity factor is the percent of
    kilowatt hours produced by a specific system in a given period
    as compared to the maximum kilowatt hours that could be produced
    by the system in that period. A high capacity factor indicates a
    high degree of utilization of the capacity of the system and
    provides a means to compare the effectiveness of different
    energy sources. Since we have not yet operated a complete wave
    power station, we do not have a measured capacity factor.
    However, based on our research and analysis, we believe the
    design capacity factor for a PowerBuoy wave power station
    located at many of our targeted sites would be favorably
    positioned in the range of 30% to 45%. 9




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Numerous potential sites for our wave power stations are
    located near major population centers worldwide.
  
    Our systems are designed to work in sites with average annual
    wave energy of at least 20kW per meter of wave front, which can
    be found in many coastal locations around the world. In
    particular, we are currently targeting the west coast of North
    America, the west coast of Europe, the coasts of Australia and
    the east coast of Japan. These potential sites not only have
    appropriate natural resources for harnessing wave energy, but
    they are also located near large population centers with
    significant and increasing electricity requirements and access
    to existing power transmission infrastructure.  We have significant commercial relationships.
  
    Our current projects with PNGC Power, the US Department of
    Energy, the US Navy, the Scottish Government, and Iberdrola
    provide us with an initial opportunity to sell our wave power
    stations for utility applications. By collaborating with leaders
    in renewable energy development, we believe we are able to
    accelerate both our in-house knowledge of the utility power
    generation market and our reputation as a credible renewable
    energy equipment supplier. If these projects are successful, we
    intend to leverage our experiences with our projects to add wave
    power stations, new customers and complementary revenue streams
    from operations and maintenance contracts.
    With the funding from the US Navy, we have been able to refine
    our PowerBuoy system while simultaneously preparing for
    commercial deployment to address a particular customer need. We
    believe that the successful deployment of our PowerBuoy system
    for the US Navy will significantly enhance market visibility.  Our PowerBuoy system has the potential to offer a cost
    competitive renewable energy power generation solution.
  
    Our product development and engineering efforts are focused on
    increasing the maximum rated output and reliability of the
    design of our utility PowerBuoy system. Currently we are
    marketing PowerBuoys rated at 40kW and 150kW. Assuming we are
    able to reach manufacturing levels of at least 300 units of
    500kW PowerBuoy systems per year, we believe, based upon our
    research and analysis, that the economies of scale we would have
    with our fabricators would allow us to offer a renewable
    electricity solution that competes with other existing renewable
    energy systems and, in certain cases, with existing fossil fuel
    systems in key markets.
    Prior to achieving full production levels of the 500kW PowerBuoy
    system, if we achieve economies of scale for our 150kW PowerBuoy
    systems, we expect to be able to offer a renewable electricity
    solution that competes with the price of electricity in certain
    local markets where the current retail price of electricity is
    relatively high or where sufficient subsidies are available.  Our systems are environmentally benign and aesthetically
    non-intrusive.
  
    We believe that our PowerBuoy system does not present
    significant risks to marine life and does not emit significant
    levels of pollutants. In connection with our project at the US
    Marine Corps Base in Hawaii, our customer, the US Navy, obtained
    an independent environmental assessment of our PowerBuoy system
    prior to installation, as required by the National Environmental
    Policy Act. This assessment resulted in a Finding of No
    Significant Impact, the highest such level of approval. Although
    our project for the US Navy only contemplates an array of up to
    six PowerBuoy systems in Hawaii, we believe that PowerBuoy
    systems deployed in other geographic locations, including larger
    PowerBuoy systems under development and multiple- buoy wave
    power stations, would have minimal environmental impact due to
    the physical similarities with the tested system.
    Since our PowerBuoy systems are typically located one to five
    miles offshore, PowerBuoy wave power stations are usually not
    visible from the shore. Visual impact is often cited as one of
    the reasons that many communities have opposed plans to develop
    power stations, in particular wind power stations. Our PowerBuoy
    system has the distinct advantage of having only a minimal
    visual profile. Only a small portion of the unit is visible at
    close range, with the bulk of the unit hidden below the water. 10




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Customers/Projects
    Fiscal

Fiscal

FiscalCustomer

2010

2009

2008US Navy


80
%


67
%


58
%Iberdrola and Total


4
%


18
%


31
%Scottish Government


5
%


8
%


10
%       US
    Navy
      (PICTURE)

(PICTURE)   18-month
   11




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Reedsport,
    Oregon Project
       12




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(PICTURE)

(PICTURE)(PICTURE)

(PICTURE)     Next
    Generation PowerBuoy
  scale-up
  Scotland
    Project
   13




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(PICTURE)

(PICTURE)   
  Spain
   14




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30-day 30-day
   15




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wave-by-wave
    (PICTURE)

(PICTURE)   Other
    Projects
       16




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Backlog
    percentage-of-completion
  Our
    Business Strategy
    
    Sell turn-key power stations and operating and maintenance
    contracts.  Our fundamental business plan is to
    sell turn-key power stations, rather than to take on the capital
    requirements of building and owning power stations and selling
    the energy generated. In addition, in order to create recurring
    revenue streams, we seek to sell operating and maintenance
    (O&M) contracts over the life-cycle of the plants.
    Outsource most of the plant construction and
    deployment.  We outsource all metal fabrication,
    anchoring, mooring, cabling supply and deployment in order to
    minimize our capital requirements as we scale up production
    volumes. The high value-added smart part of the
    system is assembled and tested at our facilities and shipped to
    project sites for integration into the PowerBuoys.
    Concentrate sales and marketing efforts on four geographic
    markets.  We are currently focusing our sales and
    marketing efforts on the west coast of North America, the west
    coast of Europe, the coasts of Australia and the east coast of
    Japan. We believe that each of these areas represents a strong
    potential market for our PowerBuoy wave power stations because
    they combine appropriate wave conditions, political and economic
    stability, large population centers, high levels of
    industrialization and significant and increasing electricity
    requirements.
    Continue to increase PowerBuoy system
    output.  Our product development and engineering
    efforts are focused on increasing the rated output of the design
    of our PowerBuoy systems from 40kW to 150kW, and thereafter to
    500kW. If we increase the size of a PowerBuoy system, we will be
    able to increase the amount of wave energy the system can
    capture and, in turn, increase the output of the system. For
    example, if we double the size of the units float
    diameter, we will approximately quadruple its power capacity. We
    believe that by increasing system output of the individual
    PowerBuoy, and also by increasing volume production of 17




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the PowerBuoys, we will be able to decrease the cost per kW of
    our PowerBuoy system and the cost per kilowatt hour of the
    energy generated.  
    Leverage customer relationships to enhance the commercial
    acceptance of our utility PowerBuoy system.  We
    believe that our projects at the US Marine Corps base in Oahu,
    Hawaii will serve as a prototype wave power station for the
    installation of wave power stations at other US Navy bases. Our
    relationship with PNGC Power regarding our Reedsport, Oregon
    project is the first such utility relationship on the west coast
    of the United States. We intend to build on these existing
    commercial relationships both by expanding the number and size
    of projects we have with our current customers and by entering
    into new alliances and commercial relationships with other
    utilities and independent power producers.
    Expand revenue streams from our autonomous PowerBuoy
    system.  The autonomous PowerBuoy system addresses
    specific power generation needs of customers requiring off-grid
    electricity generation in remote locations in the open ocean.
    Since our PowerBuoy systems are well suited for many of these
    uses, we do not expect that they will require subsidies or other
    price incentives for commercial acceptance. This equipment might
    be used for powering sonar and radar surveillance, tsunami
    warning, oceanographic data collection, offshore platforms and
    offshore aquaculture. We have entered into contracts with the US
    Navy for the testing of our autonomous PowerBuoy in connection
    with a unique program for ocean data gathering, as well as for
    the LEAP program for homeland security. We believe that
    successful testing of our autonomous PowerBuoy System under
    these contracts may result in additional revenues from the US
    Navy and other prospective customers.
    Maximize customer funding of technology
    development.  We actively seek to obtain external
    funding for the development of our technology, including the
    scale-up of
    power capacity per PowerBuoy. In April 2010, we were awarded
    $1.5 million from the US Department of Energy for the
    development of our PB500 product.
    Expand our partnerships in key market
    areas.  We believe that an important element of
    our business strategy is to collaborate with other organizations
    to leverage our combined expertise, market presence and core
    competences. We have formed such partnerships more recently with
    Leighton Contractors in Australia, Mitsui Engineering and
    Shipbuilding in Japan, and Lockheed Martin in the US.  Marketing
    and Sales
      Utility
    PowerBuoy System Marketing
   18




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Autonomous
    PowerBuoy System Marketing
    Manufacturing
    and Deployment
  Manufacturing
    and Raw Materials
    ready-to-install
  project-by-project ready-to-install
     19




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Deployment
          (PICTURE)

(PICTURE)(PICTURE)

(PICTURE)  20




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Research
    and Development
      on-site.
        Intellectual
    Property
     21




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
    system design;
    control systems;
    power conversion;
    anchoring and mooring; and
    wave farm architecture.    ® tm tm sm
  Competition
         22




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Government
    Regulation
  EU-level
      Sale
    and Transmission of Electricity
      Site
    Approval
     23




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Environmental
    Approval and Compliance
      Subsidies
    and Incentives
           24




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kilowatt-hour
    Employees
      Product
    Insurance
    ITEM 1A.
    RISK
    FACTORS   25




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Risks
    Relating to Our Business
  We
    have a history of operating losses and may never achieve or
    maintain profitability.
      Wave
    energy technology may not gain broad commercial acceptance, and
    therefore our revenues may not increase, and we may be unable to
    achieve and then sustain profitability.
    
    performance, reliability and cost-effectiveness of wave energy
    technology compared to conventional and other renewable energy
    sources and products;
    developments relating to other renewable energy generation
    technologies;
    fluctuations in economic and market conditions that affect the
    cost or viability of conventional and renewable energy sources,
    such as increases or decreases in the prices of oil and other
    fossil fuels;
    overall growth in the renewable energy equipment market;
    availability and terms of government subsidies and incentives to
    support the development of renewable energy sources, including
    wave energy;
    fluctuations in capital expenditures by utilities and
    independent power producers, which tend to decrease when the
    economy slows and interest rates increase; and
    the development of new and profitable applications requiring the
    type of remote electric power provided by our autonomous wave
    energy systems.    If
    sufficient demand for our PowerBuoy systems does not develop or
    takes longer to develop than we anticipate, our revenues may
    decline, and we may be unable to achieve and then sustain
    profitability.
   26




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The
    reduction or elimination of government subsidies and economic
    incentives for renewable energy sources could prevent demand for
    our PowerBuoy systems from developing, which in turn would
    adversely affect our business, financial condition and results
    of operations.
      Our
    product development costs have been steadily increasing and may
    continue to increase.
    We
    have invested, and will continue to invest, funds to construct
    demonstration wave power stations that may generate little or no
    direct revenue.
   27




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Our
    PowerBuoy systems do not have a sufficient operating history to
    confirm how they will perform over their estimated
    30-year
    useful life.
  30-year
  Our
    future success in the utility power markets depends on our
    ability to increase the maximum rated power output of our
    utility PowerBuoy system. If we are unable to increase the
    maximum rated output of our utility PowerBuoy system, the
    commercial prospects for our utility PowerBuoy system would be
    adversely affected.
    If we
    do not reach full commercial scale, we may not be able to offer
    a cost competitive power station and the commercial prospects of
    our utility PowerBuoy system would be adversely
    affected.
    We
    have not yet deployed a wave power station consisting of an
    array of two or more PowerBuoy systems. If we are unable to
    deploy a multiple-system wave power station, our revenues may
    not increase, and we may be unable to achieve and then maintain
    profitability.
     28




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If we
    are unable to deploy larger PowerBuoy systems cost effectively
    and without damage to the systems, we may be unable to compete
    effectively.
    If we
    are not successful in completing the development of wave power
    stations in Spain, it could adversely affect our business,
    financial condition and results of operations.
  30-day 30-day
   29




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If we
    are unable to successfully negotiate and enter into operations
    and maintenance contracts with our customers on terms that are
    acceptable to us, our ability to diversify our revenue stream
    will be impaired.
    If we
    are unable to fulfill our obligations under our current
    operations and maintenance contract in a cost effective manner,
    our financial condition and results of operations could be
    adversely affected.
    Our
    inability to effectively manage our growth could adversely
    affect our business and operations.
      Problems
    with the quality or performance of our PowerBuoy systems could
    adversely affect our business, financial condition and results
    of operations.
   30




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We
    currently depend on a limited number of customers for
    substantially all of our revenues. The loss of, or a significant
    reduction in revenues from, any of these customers could
    significantly reduce our revenues and harm our operating
    results.
    percentage-of-completion
    Our
    relationships with our alliance partners may not be successful
    and we may not be successful in establishing additional
    relationships, which could adversely affect our ability to
    commercialize our products and services.
   31




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Our
    investments in joint ventures could be adversely affected by our
    lack of sole decision-making authority, our reliance on a
    co-venturers financial condition and disputes between us
    and our
    co-venturers.
  and/or
  Our
    targeted markets are highly competitive. We compete with other
    renewable energy companies and may have to compete with larger
    companies that enter into the renewable energy business. If we
    are unable to compete effectively, we may be unable to increase
    our revenues and achieve or maintain
    profitability.
        We
    have limited manufacturing experience. If we are unable to
    increase our manufacturing capacity in a cost-effective manner,
    our business will be materially harmed.
     32




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Failure
    by third parties to supply or manufacture components of our
    products or to deploy our systems timely or properly could
    adversely affect our business, financial condition and results
    of operations.
        Business
    activities conducted by our third-party contractors and us
    involve the use of hazardous materials, which require compliance
    with environmental and occupational safety laws regulating the
    use of such materials. If we violate these laws, we could be
    subject to significant fines, liabilities or other adverse
    consequences.
      If we
    become ineligible for or are otherwise unable to replace any
    contract with the US federal government that is not extended or
    is terminated, our business, financial condition and results of
    operations will be adversely affected.
     33




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We
    market and plan to market our products in numerous international
    markets. If we are unable to manage our international operations
    effectively, our business, financial condition and results of
    operations could be adversely affected.
    
    changes in general economic and political conditions in the
    countries in which we operate;
    unexpected adverse changes in foreign laws or regulatory
    requirements, including those with respect to renewable energy,
    environmental protection, permitting, export duties and quotas;
    trade barriers such as export requirements, tariffs, taxes and
    other restrictions and expenses, which could increase the prices
    of our PowerBuoy systems and make us less competitive in some
    countries;
    fluctuations in exchange rates may affect demand for our
    PowerBuoy systems and may adversely affect our profitability in
    US dollars to the extent the price of our PowerBuoy systems and
    cost of raw materials and labor are denominated in a foreign
    currency;
    difficulty with staffing and managing widespread operations;
    complexity of, and costs relating to compliance with, the
    different commercial and legal requirements of the overseas
    markets in which we offer and sell our PowerBuoy systems;
    inability to obtain, maintain or enforce intellectual property
    rights; and
    difficulty in enforcing agreements in foreign legal systems.    We may
    not be able to raise sufficient capital to grow our
    business.
    Our
    financial results may fluctuate from quarter to quarter, which
    may make it difficult to predict our future
    performance.
  period-to-period
 34




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
    delays in permitting or acquiring necessary regulatory consents;
    delays in the timing of contract awards and determinations of
    work scope;
    delays in funding for or deployment of wave energy projects;
    changes in cost estimates relating to wave energy project
    completion, which under percentage of completion accounting
    principles could lead to significant fluctuations in revenue or
    to changes in the timing of our recognition of revenue from
    those projects;
    delays in meeting specified contractual milestones or other
    performance criteria under project contracts or in completing
    project contracts that could delay the recognition of revenue
    that would otherwise be earned;
    reductions in the availability or level of subsidies and
    incentives for renewable energy sources;
    decisions made by parties with whom we have commercial
    relationships not to proceed with anticipated projects;
    increases in the length of our sales cycle; and
    reductions in the efficiency of our manufacturing processes.  Currency
    translation and transaction risk may adversely affect our
    business, financial condition and results of
    operations.
    Existing
    regulations and policies and changes to these or new regulations
    and policies may present technical, regulatory and economic
    barriers to the use of wave energy technology, which may
    significantly reduce demand for our PowerBuoy
    systems.
     35




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##### Table of Contents



If we
    are unable to obtain all necessary regulatory permits and
    approvals, we will not be able to implement our planned
    projects.
      We
    face hurricane- and storm-related risks and other risks typical
    of a marine environment which could adversely affect our
    business, financial condition and results of
    operations.
    Since
    our PowerBuoy systems can only be deployed in certain geographic
    locations, our ability to grow our business could be adversely
    affected.
    We
    face numerous accident and safety risks and hazards that are
    inherent in offshore energy operations.
   36




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##### Table of Contents



If we
    are unable to attract and retain management and other qualified
    personnel, we may not be able to achieve our business
    objectives.
      Any
    acquisitions that we make or joint venture agreements that we
    enter into, or any failure to identify appropriate acquisition
    or joint venture candidates, could adversely affect our
    business, financial condition and results of
    operations.
      In the
    event we are unable to satisfy regulatory requirements relating
    to internal control over financial reporting, or if our internal
    controls are not effective, our business and financial results
    may suffer.
   37




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##### Table of Contents



Risks
    Related to Intellectual Property
  If we
    are unable to obtain or maintain intellectual property rights
    relating to our technology and products, the commercial value of
    our technology and products may be adversely affected, which
    could in turn adversely affect our business, financial condition
    and results of operations.
    Our
    contracts with the government could negatively affect our
    intellectual property rights, and our ability to commercialize
    our products could be impaired.
      If we
    are unable to protect the confidentiality of our proprietary
    information and know-how, the value of our technology and
    products could be adversely affected, which could in turn
    adversely affect our business, financial condition and results
    of operations.
   38




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##### Table of Contents



If we
    infringe or are alleged to infringe intellectual property rights
    of third parties, our business, financial condition and results
    of operations could be adversely affected.
        Risks
    Related to our Common Stock
  Provisions
    in our corporate charter documents and under Delaware law may
    delay or prevent attempts by our stockholders to change our
    management and hinder efforts to acquire a controlling interest
    in us.
    
    advance notice requirements for stockholder proposals and
    nominations;
    the inability of stockholders to act by written consent or to
    call special meetings; and
    the ability of our board of directors to designate the terms of
    and issue new series of preferred stock without stockholder
    approval, which could be used to institute a poison
    pill that would work to dilute the stock ownership of a
    potential hostile acquirer, effectively preventing acquisitions
    that have not been approved by our board of directors.   39




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##### Table of Contents



We
    have never paid cash dividends on our common stock, and we do
    not anticipate paying any cash dividends in the foreseeable
    future.
    Our
    stock price is likely to be volatile, and purchasers of our
    common stock could incur substantial losses.
    
    the success of competitive products or technologies;
    regulatory developments in the United States and foreign
    countries;
    developments or disputes concerning patents or other proprietary
    rights;
    the recruitment or departure of key personnel;
    quarterly or annual variations in our financial results or those
    of companies that are perceived to be similar to us;
    market conditions in the conventional and renewable energy
    industries and issuance of new or changed securities
    analysts reports or recommendations;
    the failure of securities analysts to cover our common stock or
    changes in financial estimates by analysts;
    the inability to meet the financial estimates of analysts who
    follow our common stock;
    investor perception of our company and of the renewable energy
    industry; and
    general economic, political and market conditions.  Provisions
    in our bylaws will require disclosure of information by
    shareholders that would not otherwise be required to be
    disclosed under applicable US state or US federal
    laws.
   40




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##### Table of Contents



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES        ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    (REMOVED AND RESERVED) 41




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##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Stock
    Price Information and Stockholders
      Nasdaq Global MarketHigh


LowYear Ended April 30, 2010First quarter

$
7.72


$
4.73Second quarter


9.50



3.81Third quarter


11.22



6.00Fourth quarter


7.69



6.00Year Ended April 30, 2009First quarter

$
12.44


$
7.82Second quarter


9.34



4.61Third quarter


9.84



4.60Fourth quarter


7.20



3.78   Dividend
    Policy
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Use of
    Proceeds
  Form S-1 No. 333-138595),
   42




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA    Fiscal Years Ended April 30,2010


2009


2008


2007


2006Consolidated Statement of Operations Data:Revenues

$
5,101,311


$
4,049,445


$
4,772,017


$
2,531,315


$
1,747,715Cost of revenues


4,298,955



4,840,403



7,960,042



3,983,742



2,059,318Gross profit (loss)


802,356



(790,958
)


(3,188,025
)


(1,452,427
)


(311,603
)Operating expenses:Product development costs


13,001,550



8,372,244



8,255,123



6,219,893



4,224,997Selling, general and administrative costs


9,063,482



9,529,071



7,732,577



4,893,580



3,190,687Total operating expenses


22,065,032



17,901,315



15,987,700



11,113,473



7,415,684Operating loss


(21,262,676
)


(18,692,273
)


(19,175,725
)


(12,565,900
)


(7,727,287
)Interest income, net


1,032,484



1,672,350



4,434,844



1,389,702



1,408,361Other income


557,540











13,906



74,294Foreign exchange gain (loss)


540,644



(1,295,227
)


84,158



1,523,527



(978,242
)Loss before income taxes


(19,132,008
)


(18,315,150
)


(14,656,723
)


(9,638,765
)


(7,222,874
)Income tax benefit


















143,963Net loss


(19,132,008
)


(18,315,150
)


(14,656,723
)


(9,638,765
)


(7,078,911
)Less: Net income attributable to the noncontrolling interest in
    Ocean Power Technologies (Australasia) Pty Ltd.


(38,299
)














Net loss attributable to Ocean Power Technologies, Inc.

$
(19,170,307
)

$
(18,315,150
)

$
(14,656,723
)

$
(9,638,765
)

$
(7,078,911
)Basic and diluted net loss per share

$
(1.88
)

$
(1.79
)

$
(1.44
)

$
(1.83
)

$
(1.37
)Basic and diluted weighted average shares outstanding


10,217,003



10,210,354



10,200,729



5,260,794



5,162,340   43




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##### Table of Contents



As of April 30,2010


2009(2)


2008


2007


2006Consolidated Balance Sheet Data:Cash, cash equivalents and short-term investments

$
36,772,598


$
53,117,566


$
88,836,304


$
115,895,619
(1)

$
32,439,365Working capital


32,569,351



51,129,985



85,870,307



111,187,195



30,886,029Long-term investments


28,865,046



28,619,528



12,233,437







Total assets


72,978,193



88,793,906



107,550,965



119,711,546



33,996,138Long-term debt, net of current portion


250,000



345,386



188,784



231,585



233,959Accumulated deficit


(90,413,098
)


(71,242,791
)


(52,927,641
)


(38,270,918
)


(28,632,153
)Total Ocean Power Technologies, Inc. stockholders equity


64,814,200



82,783,027



100,098,609



112,541,209



31,066,704     (1)
    
    On April 30, 2007, we completed our initial public offering
    in the United States resulting in net proceeds to us of
    $89.9 million.(2)
    
    The April 30, 2009 balance of marketable securities was
    changed to increase the current portion and decrease the
    non-current portion by $12,009,337 to reflect the maturities of
    the securities as of such date.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  You should read the following discussion and analysis of our
    financial condition and results of operations together with our
    consolidated financial statements and the related notes and
    other financial information included elsewhere in this Annual
    Report. Some of the information contained in this discussion and
    analysis or set forth elsewhere in this Annual Report, including
    information with respect to our plans and strategy for our
    business and related financing, includes forward-looking
    statements that involve risks and uncertainties. You should
    review the Risk Factors section of this Annual
    Report for a discussion of important factors that could cause
    actual results to differ materially from the results described
    in or implied by the forward-looking statements contained in the
    following discussion and analysis.
  Overview
  ®
       44




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45




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##### Table of Contents



Financial
    Operations Overview
    Revenues
  percentage-of-completion
  percentage-of-completion percentage-of-completion percentage-of-completion
    Years Ended April 30,2010


2009


2008($ millions)US Navy

$
4.1


$
2.7


$
2.8Iberdrola and Total (Spain)


0.2



0.7



1.4Scottish Government


0.3



0.3



0.5Other


0.5



0.3



0.1$
5.1


$
4.0


$
4.8      46




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##### Table of Contents



Percentage of RevenuesYear Ended


Year Ended


Year EndedApril 30,


April 30,


April 30,Customer Location

2010


2009


2008United States


89
%


73
%


59
%Europe


9



25



41Australia


2



2



Total


100
%


100
%


100
%   Cost
    of revenues
      Product
    development costs
  17-year
    Selling,
    general and administrative costs
   47




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Interest
    income, net
    Foreign
    exchange gain (loss)
          Income
    taxes
    Outlook
   48




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##### Table of Contents



Results
    of Operations
  Fiscal
    Years Ended April 30, 2010 and 2009
    Fiscal Year Ended


Fiscal Year EndedApril 30, 2010


April 30, 2009


% ChangeAs a % of





As a % of


2010 Period toAmount


Revenues


Amount


Revenues(1)


2009 PeriodRevenues

$
5,101,311



100
%

$
4,049,445



100
%


26
%Cost of revenues


4,298,955



84



4,840,403



120



(11
)Gross profit (loss)


802,356



16



(790,958
)


(20
)


201Operating expenses:Product development costs


13,001,550



255



8,372,244



207



55Selling, general and administrative costs


9,063,482



178



9,529,071



235



(5
)Total operating expenses


22,065,032



433



17,901,315



442



23Operating loss


(21,262,676
)


(417
)


(18,692,273
)


(462
)


14Interest income, net


1,032,484



20



1,672,350



41



(38
)Other income


557,540



11











Foreign exchange gain (loss)


540,644



11



(1,295,227
)


(32
)


142Net loss


(19,132,008
)


(375
)


(18,315,150
)


(452
)


4Less: Net income attributable to the noncontrolling interest in
    Ocean Power Technologies (Australasia) Pty Ltd


(38,299
)


(1
)










Net loss attributable to Ocean Power Technologies, Inc.

$
(19,170,307
)


(376
)%

$
(18,315,150
)


(452
)%


5
%     (1)
    
    Certain subtotals may not add due to rounding.  Revenues
    
    Revenues relating to our autonomous PowerBuoy system increased
    by $1.8 million as a result of work on projects with the US
    Navy to provide our PowerBuoy technology to the US Navys
    Deep Water Active Detection System and Littoral Expeditionary
    Autonomous PowerBuoy program.
    Revenues relating to our utility PowerBuoy system decreased by
    $0.7 million due primarily to a decrease in billable work
    on our wave power station off the coast of Spain, as work under
    this phase of the project neared 49




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##### Table of Contents



completion, coupled with a reduction in the expected contract
    value of this project in late fiscal 2009. Also, a decrease in
    revenue related to our Hawaii project for the US Navy, partially
    offset by an increase in revenue related to our project off the
    coast of Reedsport, Oregon.  Cost of
    revenues
    percentage-of-completion
  Product
    development costs
    Selling,
    general and administrative costs
    Interest
    income
    Other
    income
    Foreign
    exchange gain (loss)
   50




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##### Table of Contents



Fiscal
    Years Ended April 30, 2009 and 2008
    Fiscal Year Ended


Fiscal Year EndedApril 30, 2009


April 30, 2008


% ChangeAs a % of





As a % of


2009 Period toAmount


Revenues(1)


Amount


Revenues(1)


2008 PeriodRevenues

$
4,049,445



100
%

$
4,772,017



100
%


(15
)%Cost of revenues


4,840,403



120



7,960,042



167



(39
)Gross loss


(790,958
)


(20
)


(3,188,025
)


(67
)


(75
)Operating expenses:Product development costs


8,372,244



207



8,255,123



173



1Selling, general and administrative costs


9,529,071



235



7,732,577



162



23Total operating expenses


17,901,315



442



15,987,700



335



12Operating loss


(18,692,273
)


(462
)


(19,175,725
)


(402
)


(3
)Interest income, net


1,672,350



41



4,434,844



93



(62
)Foreign exchange gain (loss)


(1,295,227
)


(32
)


84,158



2



1639Net loss

$
(18,315,150
)


(452
)%

$
(14,656,723
)


(307
)%


25
%     (1)
    
    Certain subtotals may not add due to rounding.  Revenues
    
    Revenues relating to our utility PowerBuoy system decreased by
    $0.8 million due primarily to a decrease in billable work
    on our wave power station off the coast of Spain, as this phase
    of the project neared completion, and also a reduction in the
    expected contract value related to the project. Also, decreases
    in revenue related to our Hawaii project for the US Navy and our
    EMEC project in Orkney, Scotland were offset by an increase in
    revenue related to our project off the coast of Reedsport,
    Oregon.
    Revenues relating to our autonomous PowerBuoy system increased
    by $0.1 million as a result of work on projects with the US
    Navy to provide our PowerBuoy technology to a program for data
    gathering in the ocean.  Cost of
    revenues
    Product
    development costs
   51




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##### Table of Contents



Selling,
    general and administrative costs
    Interest
    income
    Foreign
    exchange gain (loss)
    Liquidity
    and Capital Resources
    Year Ended April 30,2010


2009Net loss

$
(19,132,008
)

$
(18,315,150
)Adjustments for noncash operating items


1,181,318



3,669,017Net cash operating loss


(17,950,690
)


(14,646,133
)Net change in assets and liabilities


2,180,006



(2,061,794
)Net cash used in operating activities

$
(15,770,684
)

$
(16,707,927
)Net cash provided by (used in ) investing activities

$
7,309,086


$
(58,579,591
)Net cash (used in) provided by financing activities

$
(99,841
)

$
207,199Effect of exchange rates on cash and cash equivalents

$
530,206


$
(1,488,155
)   Net cash
    used in operating activities
       52




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##### Table of Contents



Net cash
    provided by (used in) investing activities
    Net cash
    (used in) provided by financing activities
    Effect of
    exchange rates on cash and cash equivalents
    Liquidity
    Outlook
    
    the cost of development efforts for our PowerBuoy systems;
    the success of our commercial relationships with major customers;
    the cost of manufacturing activities;
    the cost of commercialization activities, including
    demonstration projects, product marketing and sales;
    our ability to establish and maintain additional commercial
    relationships;
    the implementation of our expansion plans, including the hiring
    of new employees;
    potential acquisitions of other products or
    technologies; and
    the costs involved in preparing, filing, prosecuting,
    maintaining and enforcing patent claims and other patent-related
    costs.   53




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##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodLess than


One to


Three to


More thanTotal


One Year


Three Years


Five Years


Five YearsLong-term debt

$
345,000


$
95,000


$
100,000


$
150,000


$
Operating leases


842,000



331,000



511,000







Total

$
1,187,000


$
426,000


$
611,000


$
150,000


$
     Off-Balance
    Sheet Arrangements
    Critical
    Accounting Policies and Estimates
      Revenue
    recognition and unearned revenues
  percentage-of-completion
   54




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##### Table of Contents



Stock-based
    compensation
    Share-Based Payment
  and/or
   55




---



##### Table of Contents



Income
    taxes
    Recent
    Accounting Pronouncements
        other-than-temporarily
 56




---



##### Table of Contents



other-than-temporary other-than-temporary other-than-temporary
        ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK         57




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##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA    ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES    page F-2.
  page F-3.
    ITEM 9B.
    OTHER
    INFORMATION   58




---



##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Form 10-K.
  ITEM 11.
    EXECUTIVE
    COMPENSATION  Form 10-K.
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Form 10-K.
  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  Form 10-K.
  ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES  Form 10-K.
 PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  page F-1.
   59




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##### Table of Contents



SIGNATURES
        By:
    /s/  Charles
    F. Dunleavy   Chief Executive Officer
    Signature

Title

Date/s/  Charles
    F. DunleavyCharles
    F. Dunleavy

Director, Chief Executive Officer
    (Principal Executive Officer)

July 14, 2010/s/  George
    W. TaylorGeorge
    W. Taylor

Executive Chairman of the Board of Directors

July 14, 2010/s/  Brian
    M. PosnerBrian
    M. Posner

Chief Financial Officer,
    Secretary and Treasurer
    (Principal Financial Officer
    and Principal Accounting Officer)

July 14, 2010/s/  Seymour
    S. Preston IIISeymour
    S. Preston III

Director

July 14, 2010/s/  Thomas
    J. MeaneyThomas
    J. Meaney

Director

July 14, 2010/s/  Paul
    F. LozierPaul
    F. Lozier

Director

July 14, 2010/s/  J.
    Victor ChatignyJ.
    Victor Chatigny

Director

July 14, 2010  60




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##### Table of Contents



Exhibits Index
  ExhibitNumber

Description3
.1

Restated Certificate of Incorporation of the registrant
    (incorporated by reference from Exhibit 3.1 to
    Form 10-Q
    filed September 14, 2007)3
.2

Amended and Restated Bylaws of the registrant (incorporated by
    reference from Exhibit 3.2 to
    Form 10-Q
    filed September 14, 2007)4
.1

Specimen certificate of common stock (incorporated by reference
    from Exhibit 4.1 to
    Form S-1/A
    filed March 19, 2007)10
.1+

Engineering, Procurement and Construction of a Wave Energy Power
    Plant at Punta del Pescador (Santoña, Spain),
    dated July 27, 2006, between Iberdrola Energias Marinas de
    Cantabria, S.A. and Ocean Power Technologies Limited
    (incorporated by reference from Exhibit 10.1 to
    Form S-1
    filed November 13, 2006)10
.2+

Contract Number N00014-05-C-0384, dated September 20, 2005,
    between the Office of Naval Research, U.S. Navy and Ocean Power
    Technologies, Inc., as amended by the Amendment of
    Solicitation/Modification of Contract dated March 22, 2007
    (incorporated by reference from Exhibit 10.2 to
    Form S-1
    filed November 13, 2006)10
.3+

Contract Number N00014-02-C-0053, dated February 8, 2002,
    between the Office of Naval Research, U.S. Navy and Ocean Power
    Technologies Inc., as modified (incorporated by reference from
    Exhibit 10.3 to
    Form S-1
    filed November 13, 2006)10
.4

Option Agreement for Purchase of Emissions Credits, dated
    November 24, 2000 between Ocean Power Technologies, Inc.
    and its affiliates and Woodside Sustainable Energy Solutions
    Pty. Ltd. (incorporated by reference from Exhibit 10.4 to
    Form S-1
    filed November 13, 2006)10
.5

1994 Stock Option Plan (incorporated by reference from
    Exhibit 10.5 to
    Form S-1
    filed November 13, 2006)*10
.6

Incentive Stock Option Plan (incorporated by reference from
    Exhibit 10.6 to
    Form S-1
    filed November 13, 2006)*10
.7

2001 Stock Plan (incorporated by reference from
    Exhibit 10.7 to
    Form S-1
    filed November 13, 2006)*10
.8

2006 Stock Incentive Plan (incorporated by reference from
    Exhibit 10.8 to
    Form S-1/A
    filed March 19, 2007)*10
.9

Amended and Restated Voting and Right of First Refusal
    Agreement, dated April 18, 2005, between Ocean Power
    Technologies, Inc., George W. Taylor and JoAnne E. Burns
    (incorporated by reference from Exhibit 10.9 to
    Form S-1
    filed November 13, 2006)10
.10

Agreement to Refinance, dated November 14, 1993 between
    Joseph R. Burns, Michael Y. Epstein, George W. Taylor and Ocean
    Power Technologies, Inc. (incorporated by reference from
    Exhibit 10.10 to
    Form S-1
    filed November 13, 2006)10
.11

Amended and Restated Employment Agreement, dated April 8,
    2009, between Charles F. Dunleavy and Ocean Power Technologies,
    Inc. (incorporated by reference from Exhibit 10.2 to
    Form 8-K
    filed April 13, 2009)*10
.12

Amended and Restated Employment Agreement, dated April 8,
    2009, between George W. Taylor and Ocean Power Technologies,
    Inc. (incorporated by reference from Exhibit 10.1 to
    Form 8-K
    filed April 13, 2009)*10
.13

Consultant Agreement, dated August 1, 1999, between Thomas
    J. Meaney and Ocean Power Technologies, Inc. (incorporated by
    reference from Exhibit 10.13 to
    Form S-1
    filed November 13, 2006)10
.14

Employment Agreement, dated September 9, 2004, between Mark
    R. Draper and Ocean Power Technologies Ltd. (incorporated by
    reference from Exhibit 10.14 to
    Form S-1
    filed November 13, 2006)*10
.15

Lease Agreement, dated August 30, 2005 between Ocean Power
    Technologies, Inc. and Reed Road Industrial Park LLC #1, as
    amended on January 27, 2006 (incorporated by reference from
    Exhibit 10.16 to
    Form S-1
    filed November 13, 2006)10
.16

Lease, dated January 15, 2007, between University of
    Warwick Science Park Innovation Centre Limited and Ocean Power
    Technologies Ltd. (incorporated by reference from
    Exhibit 10.17 to
    Form S-1/A
    filed March 19, 2007) 61




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##### Table of Contents



ExhibitNumber

Description10
.17

Agreement for Renewable Energy Economic Development Grants,
    dated November 3, 2003, between State of New Jersey Board
    of Public Utilities and Ocean Power Technologies, Inc.
    (incorporated by reference from Exhibit 10.18 to
    Form S-1/A
    filed March 19, 2007)10
.18

Contract Number DM259735, dated September 17, 2005 between
    Lockheed Martin Corporation Maritime Systems and Sensors (MS2)
    and Ocean Power Technologies, Inc., as modified (incorporated by
    reference from Exhibit 10.20 to
    Form S-1/A
    filed March 19, 2007)10
.19

Marketing Cooperation Agreement, dated September 9, 2006,
    between Ocean Power Technologies, Inc. and Lockheed Martin
    Corporation through its Maritime Systems and Sensors business
    unit (incorporated by reference from Exhibit 10.21 to
    Form S-1/A
    filed April 10, 2007)10
.20

Contract Number N00014-07-C-0617, dated May 24, 2007,
    between the Office of Naval Research, U.S. Navy and Ocean Power
    Technologies, Inc. (incorporated by reference from
    Exhibit 99.1 to
    Form 8-K
    filed June 8, 2007)10
.21

Modification of Contract, dated September 13, 2007,
    modifying Contract Number N00014-02-C-0053, between the Office
    of Naval Research, U.S. Navy and Ocean Power Technologies, Inc.,
    as modified (incorporated by reference from Exhibit 10.1 to
    Form 10-Q
    filed December 17, 2007)10
.22

Modification of Contract, dated September 26, 2007,
    modifying Contract Number N00014-05-C-0384, between the Office
    of Naval Research, U.S. Navy and Ocean Power Technologies, Inc.,
    as modified. (incorporated by reference from Exhibit 10.2
    to
    Form 10-Q
    filed December 17, 200710
.23

Addendum to the Agreement for the Engineering, Procurement and
    Construction of a Wave Energy Power Plant at Punta del
    Pescador (Santoña, Spain), between Iberdrola Energias
    Marinas de Cantabria, S.A. and Ocean Power Technologies Limited,
    dated February 18, 2008 (incorporated by reference from
    Exhibit 10.27 to
    Form 10-K
    filed July 14, 2008)10
.24

Lease, dated February 1, 2008, between KUC Properties
    Limited and Ocean Power Technologies Ltd. (incorporated by
    reference from Exhibit 10.28 to
    Form 10-K
    filed July 14, 2008)10
.25

Financial Assistance Award agreement between Ocean Power
    Technologies, Inc. and US Department of Energy date
    September 23, 2008 (incorporated by reference from
    Exhibit 10.1 to
    Form 10-Q
    filed December 10, 2008)10
.26

Modification of Financial Assistance Award agreement between
    Ocean Power Technologies, Inc. and US Department of Energy dated
    October 16, 2008 (incorporated by reference from
    Exhibit 10.2 to
    Form 10-Q
    filed December 10, 2008)10
.27

Agreement between Ocean Power Technologies, Inc. and the Office
    of Naval Research of the US Navy dated October 31, 2008
    (incorporated by reference from Exhibit 10.3 to
    Form 10-Q
    filed December 10, 2008)10
.28

Employment Agreement, dated May 19, 2010, between Brian M.
    Posner and Ocean Power Technologies, Inc.21
.1

Subsidiaries of the registrant23
.1

Consent of KPMG LLP31
.1

Certification of Chief Executive Officer31
.2

Certification of Chief Financial Officer32
.1

Certification of Chief Executive Officer pursuant to
    Section 906 of Sarbanes-Oxley Act of 200232
.2

Certification of Chief Financial Officer pursuant to
    Section 906 of Sarbanes-Oxley Act of 2002     +
    
    Confidential treatment requested as to certain portions, which
    portions have been omitted and filed separately with the SEC.*
    
    Management contract or compensatory plan or arrangement 62




---



##### 



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Index to
    Consolidated Financial Statements
   
 PageReports of Management


F-2Reports of Independent Registered Public
    Accounting Firm


F-3Consolidated Balance Sheets, April 30, 2010
    and 2009


F-5Consolidated Statements of Operations, Years
    ended April 30, 2010, 2009 and 2008


F-6Consolidated Statements of Stockholders
    Equity and Comprehensive Loss, Years ended April 30, 2010,
    2009 and 2008


F-7Consolidated Statements of Cash Flows, Years
    ended April 30, 2010, 2009 and 2008


F-8Notes to Consolidated Financial Statements


F-9   F-1




---



##### Table of Contents



Reports
    of Management  Managements
    Report on Consolidated Financial Statements
      Managements
    Report on Internal Control Over Financial Reporting
    
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the Company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the Company are being made
    only in accordance with authorizations of management and
    directors of the Company; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on the
    financial statements.    Internal
    Control  Integrated Framework
     CHARLES
    F. DUNLEAVY
  
   BRIAN
    M. POSNER
  
 F-2




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm     Internal Control 
    Integrated Framework
        Internal Control  Integrated
    Framework
         F-3




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
           Internal Control  Integrated
    Framework
       F-4




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Consolidated Balance Sheets
  April 30,2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
4,236,597



12,267,830Marketable securities


32,536,001



40,849,736Accounts receivable


1,474,600



985,149Unbilled receivables


448,686



988,418Other current assets


1,005,885



1,082,696Total current assets


39,701,769



56,173,829Property and equipment, net


710,563



897,718Patents, net


1,036,881



909,727Restricted cash


1,205,288



951,552Marketable securities


28,865,046



28,619,528Other noncurrent assets


1,458,646



1,241,552Total assets

$
72,978,193



88,793,906LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,843,378



908,837Accrued expenses


4,092,113



3,760,039Unearned revenues


1,101,541



281,570Current portion of long-term debt


95,386



93,398Total current liabilities


7,132,418



5,043,844Long-term debt


250,000



345,386Deferred rent






21,649Deferred credits


600,000



600,000Other noncurrent liabilities


140,685



Total liabilities


8,123,103



6,010,879Commitments and contingencies (note 13)Ocean Power Technologies, Inc. Stockholders equity:Preferred stock, $0.001 par value; authorized
    5,000,000 shares, none issued or outstanding






Common stock, $0.001 par value; authorized
    105,000,000 shares, issued and outstanding 10,390,563 and
    10,210,354 shares, respectively


10,391



10,210Treasury stock, 1,072 and 0 shares at cost, respectively


(6,443
)


Additional paid-in capital


155,726,672



154,568,931Accumulated deficit


(90,413,098
)


(71,242,791
)Accumulated other comprehensive loss


(503,322
)


(553,323
)Total Ocean Power Technologies, Inc. stockholders equity


64,814,200



82,783,027Noncontrolling interest in Ocean Power Technologies
    (Australasia) Pty Ltd.


40,890



Total equity


64,855,090



82,783,027Total liabilities and stockholders equity

$
72,978,193



88,793,906    F-5




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Consolidated Statements of Operations
  Year Ended April 30,2010


2009


2008Revenues

$
5,101,311



4,049,445



4,772,017Cost of revenues


4,298,955



4,840,403



7,960,042Gross profit (loss)


802,356



(790,958
)


(3,188,025
)Operating expenses:Product development costs


13,001,550



8,372,244



8,255,123Selling, general and administrative costs


9,063,482



9,529,071



7,732,577Total operating expenses


22,065,032



17,901,315



15,987,700Operating loss


(21,262,676
)


(18,692,273
)


(19,175,725
)Interest income, net


1,032,484



1,672,350



4,434,844Other income


557,540







Foreign exchange gain (loss)


540,644



(1,295,227
)


84,158Net loss


(19,132,008
)


(18,315,150
)


(14,656,723
)Less: Net income attributable to the noncontrolling interest in
    Ocean Power Technologies (Australasia) Pty Ltd


(38,299
)






Net loss attributable to Ocean Power Technologies, Inc

$
(19,170,307
)


(18,315,150
)


(14,656,723
)Basic and diluted net loss per share

$
(1.88
)


(1.79
)


(1.44
)Weighted average shares used to compute basic and diluted net
    loss per share


10,217,003



10,210,354



10,200,729    F-6




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Consolidated Statements of Stockholders
    Equity and Comprehensive Loss
  Total OceanAccumulated


PowerAdditional





Other


Technologies, Inc,Common Shares


Treasury Shares


Paid-In


Accumulated


Comprehensive


Stockholders


Noncontrolling


TotalShares


Amount


Shares


Amount


Capital


Deficit


Loss


Equity


Interest


EquityBalance, May 1, 2007


10,186,254


$
10,186











150,842,671



(38,270,918
)


(40,730
)


112,541,209







112,541,209Net loss






















(14,656,723
)






(14,656,723
)






(14,656,723
)Foreign currency translation adjustment


























(495
)


(495
)






(495
)Total comprehensive loss






























(14,657,218
)






(14,657,218
)Compensation related to stock option grants issued to employees


















1,788,841











1,788,841







1,788,841Compensation related to stock option grants issued for services


















137,982











137,982







137,982Proceeds from exercise of stock options


24,100



24











287,771











287,795







287,795Balance, April 30, 2008


10,210,354



10,210











153,057,265



(52,927,641
)


(41,225
)


100,098,609







100,098,609Net loss






















(18,315,150
)






(18,315,150
)






(18,315,150
)Foreign currency translation adjustment


























(512,098
)


(512,098
)






(512,098
)Total comprehensive loss






























(18,827,248
)






(18,827,248
)Compensation related to stock option grants and restricted stock
    issued to employees


















1,475,215











1,475,215







1,475,215Compensation related to stock option grants and restricted stock
    issued for services


















36,451











36,451







36,451Balance, April 30, 2009


10,210,354



10,210











154,568,931



(71,242,791
)


(553,323
)


82,783,027







82,783,027Net loss attributable to Ocean Power Technologies, Inc.






















(19,170,307
)






(19,170,307
)


38,299



(19,132,008
)Foreign currency translation adjustment


























50,001



50,001



2,591



52,592Total comprehensive loss






























(19,120,306
)


40,890



(19,079,416
)Compensation related to stock option grants and restricted stock
    issued to employees


















1,072,935











1,072,935







1,072,935Compensation related to stock option grants and restricted stock
    issued to non-employees


















45,000











45,000







45,000Issuance of vested and unvested restricted stock to employees


168,000



168











(168
)


















Issuance of vested and unvested restricted stock to non-employees


12,209



13











39,974











39,987







39,987Acquisition of treasury stock










(1,072
)


(6,443
)














(6,443
)






(6,443
)Balance, April 30, 2010


10,390,563


$
10,391



(1,072
)


(6,443
)


155,726,672



(90,413,098
)


(503,322
)


64,814,200



40,890



64,855,090    F-7




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Consolidated Statements of Cash Flows
   Year Ended April 30,2010


2009


2008Cash flows from operating activities:Net loss

$
(19,132,008
)


(18,315,150
)


(14,656,723
)Adjustments to reconcile net loss to net cash used in operating
    activities:Foreign exchange (gain) loss


(540,644
)


1,295,227



(84,158
)Depreciation and amortization


365,755



299,405



241,721Loss on disposal of equipment


113,087



268,976



Treasury note premium amortization


146,834



288,331



Compensation expense related to stock option grants and
    restricted stock


1,117,935



1,511,666



1,926,823Deferred rent


(21,649
)


5,412



5,412Changes in operating assets and liabilities:Accounts receivable


(474,407
)


472,422



(878,643
)Unbilled receivables


603,765



(589,970
)


(270,136
)Other current assets


77,278



140,418



(918,380
)Other noncurrent assets


(202,731
)


(857,060
)


(76,571
)Accounts payable


953,815



(354,740
)


(122,323
)Accrued expenses


246,816



(454,682
)


496,838Unearned revenues


827,786



(418,182
)


699,752Other current liabilities










(26,106
)Other noncurrent liabilities


147,684







Net cash used in operating activities


(15,770,684
)


(16,707,927
)


(13,662,494
)Cash flows from investing activities:Purchases of marketable securities


(33,884,604
)


(124,675,859
)


(21,201,607
)Maturities of marketable securities


41,838,886



67,151,702



17,358,316Restricted cash


(252,080
)






Purchases of equipment


(239,449
)


(811,493
)


(419,835
)Payments of patent costs


(153,667
)


(243,941
)


(112,705
)Investments in joint ventures and other noncurrent assets










(27,714
)Net cash provided by (used in) investing activities


7,309,086



(58,579,591
)


(4,403,545
)Cash flows from financing activities:Proceeds from long-term debt






250,000



Repayment of long-term debt


(93,398
)


(42,801
)


Sale of common stock, net of issuance costs










(870,116
)Proceeds from exercise of stock options










287,795Acquisition of treasury stock


(6,443
)






Net cash (used in) provided by financing activities


(99,841
)


207,199



(582,321
)Effect of exchange rate changes on cash and cash equivalents


530,206



(1,488,155
)


(20,809
)Net decrease in cash and cash equivalents


(8,031,233
)


(76,568,474
)


(18,669,169
)Cash and cash equivalents, beginning of period


12,267,830



88,836,304



107,505,473Cash and cash equivalents, end of period

$
4,236,597



12,267,830



88,836,304Supplemental disclosure of noncash investing and financing
    activities:Capitalized patent costs financed through accounts payable and
    accrued expenses

$
66,513



23,255



35,048Capitalized purchases of equipment financed through accounts
    payable


6,360



96,304



36,964Capitalized investment in joint ventures financed through
    accrued expenses






175,803



    F-8




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes
    to Consolidated Financial Statements
  (1)
    Background    The Financial Accounting Standards Board (FASB) Accounting
    Standards Codification (ASC or Codification) and the Hierarchy
    of Generally Accepted Accounting Principles (GAAP),
  (2)
    Summary
    of Significant Accounting Policies  (a)
    Consolidation
    and Cost Method Investment        (b)
    Use of
    Estimates    (c)
    Revenue
    Recognition  percentage-of-completion
 F-9




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
      (d)
    Cash
    and Cash Equivalents    (e)
    Marketable
    Securities  held-to-maturity held-to-maturity held-to-maturity.
  (f)
    Restricted
    Cash and Credit Facility       F-10




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (g)
    Property
    and Equipment    (h)
    Other
    Income    (i)
    Foreign
    Exchange Gains and Losses    (j)
    Patents    (k)
    Long-Lived
    Assets   F-11




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (l)
    Concentration
    of Credit Risk      Years Ended April 30,Customer

2010


2009


2008US Navy


80
%


67
%


58
%Iberdrola and Total


4
%


18
%


31
%Scottish Government


5
%


8
%


10
%     (m)
    Net
    Loss per Common Share      (n)
    Stock-Based
    Compensation    Valuation
    Assumptions for Options Granted During the Years Ended
    April 30, 2010, 2009 and 2008
  Share-Based Payment.
 F-12




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Years Ended April 30,2010


2009


2008Risk-free interest rate


2.98
%


3.36
%


4.69
%Expected dividend yield


0.0
%


0.0
%


0.0
%Expected life


6.42 years



6.29 years



5.99 yearsExpected volatility


81.8
%


79.3
%


77.9
%     (o)
    Income
    Taxes    (p)
    Accumulated
    Other Comprehensive Loss    (q)
    Recent
    Accounting Pronouncements     F-13




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
      other-than-temporarily other-than-temporary other-than-temporary other-than-temporary
       F-14




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (3)
    Marketable
    Securities    April 30,2010


2009Certificates of deposit denominated in USD

$




3,685,370Certificates of deposit denominated in GBP






3,217,152Certificates of deposit denominated in AUD


519,232



US Treasury obligations


32,016,769



33,947,214$
32,536,001



40,849,736   held-to-maturity,
  Gross


GrossAmortized


Unrealized


Unrealized


MarketCost


Gains


Losses


ValueApril 30, 2010US Treasury obligations

$
25,058,238



158,672







25,216,910Certificate of deposit


3,806,808











3,806,808$
28,865,046



158,672







29,023,718April 30, 2009US Treasury obligations

$
28,619,528



423,095



(20,963
)


29,021,660     (4)
    Property
    and Equipment    April 30,Life


2010


2009Computers and software


3 years


$
654,400



581,790Equipment


3 to 7 years



661,120



699,838Office furniture and equipment


3 to 7 years



303,918



290,812Leasehold improvements


3 to 8 years



147,640



141,1291,767,078



1,713,569Less accumulated depreciation and amortization






(1,056,515
)


(815,851
)$
710,563



897,718  F-15




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (5)
    Accrued
    Expenses    April 30,2010


2009Project costs

$
1,072,635



262,166Contract loss reserves


785,000



1,152,216Employee incentive payments


682,400



672,286Other


308,514



227,739Employee-related costs


491,621



150,786Payroll tax withholdings


374,208



306,228Investment in joint venture


176,121



175,803Legal and accounting fees


154,567



484,459Value-added tax


47,047



328,356$
4,092,113



3,760,039   (6)
    Related
    Party Transactions    (7)
    Debt      (8)
    Deferred
    Credits   F-16




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (9)
    Common
    Stock    (10)
    Preferred
    Stock    (11)
    Share-Based
    Compensation       F-17




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (a)
    Stock
    Options    WeightedAverageWeighted


RemainingShares Under


Average


ContractualOption


Exercise Price


Term(In Years)Outstanding May 1, 2007


1,303,574


$
14.49Forfeited


(154,214
)


16.01Exercised


(24,100
)


11.94Granted


320,042



15.59Outstanding April 30, 2008


1,445,302



14.61



5.2Forfeited


(130,510
)


15.40Granted


317,471



8.88Outstanding April 30, 2009


1,632,263



13.43



5.1Forfeited


(588,018
)


13.21Granted


331,208



6.10Outstanding April 30, 2010


1,375,453



11.87



5.2Exercisable April 30, 2010


892,115



13.64



3.4       (b)
    Restricted
    Stock  and/or
 F-18




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    WeightedAverageNumber


Price perof Shares


ShareIssued and unvested at May 1, 2008





$
Granted


40,000



6.48Forfeited






Vested






Issued and unvested at April 30, 2009


40,000



6.48Granted


150,000



6.36Forfeited


(22,000
)


6.27Vested


(15,000
)


6.48Issued and unvested at April 30, 2010


153,000



6.39     (c)
    Common
    Stock      (d)
    Treasury
    Stock   F-19




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (12)
    Income
    Taxes    April 30,2010


2009Deferred tax assets:Federal net operating loss carryforwards

$
20,818,000



15,519,000Foreign net operating loss carryforwards


3,777,000



3,380,000New Jersey state operating loss carryforwards


3,035,000



1,792,000Federal research and development tax credits


1,562,000



1,089,000Foreign research and development tax credits


670,000



646,000Stock compensation


2,307,000



2,151,000Unrealized foreign exchange loss


231,000



224,000Accrued expenses


428,000



515,000Other


271,000



233,000Gross deferred tax assets


33,099,000



25,549,000Valuation allowance


(33,099,000
)


(25,549,000
)Net deferred tax assets

$




     Years Ended April 30,2010


2009


2008Computed expected tax benefit


(34
)%


(34
)%


(34
)%Increase (reduction) in income taxes resulting from:State income taxes, net of federal benefit


(5
)


(5
)


(6
)Stock-based compensation expense


1



1



5Federal research and development tax credits


(2
)


(1
)


(1
)Foreign research and development tax credits










(6
)Foreign rate differential






1



Other non-deductible expenses


2



1



Other


(1
)


4



Increase in valuation allowance


39



33



42
%



%



%    F-20




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
        (13)
    Commitments
    and Contingencies  (a)
    Operating
    Lease Commitments    Year ending April 30:2011

$
331,0002012


263,0002013


248,000$
842,000   (b)
    Litigation   F-21




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (c)
    Spain
    Construction Agreement    (14)
    Quarterly
    Financial Data (Unaudited)  Three Months EndedFiscal Year 2010

Jul 31


Oct 31


Jan 31


Apr 30Revenues

$
1,310,937



581,875



856,482



2,352,017Gross profit


286,710



53,727



165,392



296,527Operating loss


(3,240,961
)


(5,562,854
)


(6,073,657
)


(6,385,204
)Net loss attributable to Ocean Power Technologies, Inc


(2,098,477
)


(5,191,771
)


(5,649,496
)


(6,230,563
)Basic and diluted net loss per share

$
(0.21
)


(0.51
)


(0.55
)


(0.61
)   Three Months EndedFiscal Year 2009

Jul 31


Oct 31


Jan 31


Apr 30Revenues

$
1,786,628



667,124



964,803



630,890Gross (loss) profit


(161,518
)


(702,454
)


326,211



(253,197
)Operating loss


(4,416,283
)


(5,426,265
)


(3,882,472
)


(4,967,253
)Net loss attributable to Ocean Power Technologies, Inc


(3,893,164
)


(6,115,701
)


(3,597,665
)


(4,708,620
)Basic and diluted net loss per share

$
(0.38
)


(0.60
)


(0.35
)


(0.46
)   (15)
    Operating
    Segments and Geographic Information      Year Ended April 30, 2010North America


Europe


Australia


TotalRevenues from external customers

$
4,580,872



431,801



88,638



5,101,311Operating loss


(20,068,920
)


(934,638
)


(259,118
)


(21,262,676
)Long-lived assets


448,022



262,541







710,563Total assets

$
67,424,387



4,684,104



869,702



72,978,193   F-22




---



##### Table of Contents



OCEAN
    POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Year Ended April 30, 2009North America


Europe


Australia


TotalRevenues from external customers

$
2,944,361



1,016,223



88,861



4,049,445Operating loss


(15,870,696
)


(2,475,659
)


(345,918
)


(18,692,273
)Long-lived assets


524,231



373,429



58



897,718Total assets

$
81,006,430



7,677,316



110,160



88,793,906   Year Ended April 30, 2008North America


Europe


Australia


TotalRevenues from external customers

$
2,831,122



1,940,895







4,772,017Operating loss


(15,695,543
)


(3,221,882
)


(258,300
)


(19,175,725
)Long-lived assets


392,980



234,497



977



628,454Total assets

$
103,873,654



3,624,686



52,625



107,550,965  F-23