Ocean Power Technologies, Inc. (NASDAQ:OPTT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On May 6, 2020, the Company received approximately $890,000 from the PPP Loan. The PPP Loan is unsecured and is evidenced by a note in favor of Santander Bank, N.A. (“Santander”) as the lender (the “Note”), and is governed by a Loan Agreement with Santander (the “Loan Agreement”).
The interest rate on the Note is 1.0% per annum. Payments of principal and interest are deferred for 180 days from the date of the Note. The Paycheck Protection Program provides a mechanism for forgiveness of up to the full amount borrowed as long as the Company uses the loan proceeds during the eight-week period after the loan origination for eligible purposes, including U.S. payroll costs, certain benefits costs, rent and utilities costs, and maintains its employment and compensation levels, subject to certain other requirements and limitations. The amount of loan forgiveness is subject to reduction, among other reasons, if the Company terminates employees or reduces salaries or wages during the eight-week period. Any unforgiven portion of the PPP Loan is payable over a two-year term, with payments deferred during the deferral period. The Company is permitted to prepay the Note at any time without payment of any premium. The Note contains customary events of default, including, among others, those relating to failure to make a payment, bankruptcy, material defaults on other indebtedness, breaches of representations, and material adverse changes.
The description above is only a summary of the material provisions of the PPP Loan, the Note and the Loan Agreement and is qualified in its entirety by reference to copies of the Note and the Loan Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information disclosed in Item 1.01 above is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
| 10.1 | U.S. Small Business Administration Note dated May 3, 2020 of Ocean Power Technologies, Inc. in favor of Santander Bank, N.A. as the Lender |
| 10.2 | Loan Agreement dated May 3, 2020 between Santander Bank, N.A. and Ocean Power Technologies, Inc. |
Ocean Power Technologies, Inc. Exhibit
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About Ocean Power Technologies, Inc. (NASDAQ:OPTT)
Ocean Power Technologies, Inc. is developing and seeking to commercialize its systems that generate electricity by connecting the renewable energy of ocean waves. The Company’s PowerBuoy systems use technologies that convert the mechanical energy created by the rising and falling of ocean waves into electricity. The Company focuses on developing its PowerBuoy product line, which is based on modular, ocean-going buoys. Its autonomous PowerBuoy generates power for use in remote locations, independent of an existing power grid. The Company focuses on developing and commercializing its PowerBuoy products and services for use in autonomous power applications. The Company markets its PowerBuoys in the United States and internationally. The autonomous PowerBuoy integrates a power take-off (PTO) and onboard system for energy storage and management. Its PowerBuoy product is the PB3. PB3 can act as an uninterruptable power supply (UPS), which recharges itself by harvesting energy from the waves.