Good day, everyone, and welcome to Ocean Power Technologies audio webcast for the second quarter of fiscal year 2011. 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. Brian Posner. Please proceed.

Thank you. Welcome to Ocean Power Technologies audio webcast for the second quarter, ended October 31st, 2010 of our fiscal year ending April 30th, 2011. Today, we issued our earnings press release and will file our quarterly report on Form 10-Q with the Securities and Exchange Commission. Our public filings can be viewed on the SEC Website at sec.gov or you may go to our Website, oceanpowertechnologies.com. I will be joined on today's webcast by Charles Dunleavy, our Chief Executive Officer. Please advance to Slide 2. 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. As indicated in the slide, 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 the 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 will now turn the call over to Charles Dunleavy.

Thank you, Brian, and thanks to everyone who has joined us for today’s webcast. Brian and I will be available to answer questions, following our prepared statements. On Slide Number 3, I would like to note some of the highlights of the first six month of this fiscal year. Several important technical milestones were achieved during this period. We accomplished the grid connection of our PowerBuoy at the Marine Corps Base in Hawaii in conjunction with the US Navy. This is the first grid connection of a wave energy device in the U.S. In Scotland, we successfully completed the integration of the energy conversion and power take-off subassemblies with the new PB150 PowerBuoy structure. For our Reedsport, Oregon project, also for our PB150 PowerBuoy, we finished construction of this steel structure. And in connection with that Oregon project, we signed a ground-breaking agreement with 14 different federal, state and local stakeholders. OPT also made great strides in its two autonomous PowerBuoy projects with the US Navy. OPT achieved strong top line growth, with an increase in revenue for both the three and six months ended October 31, 2010, as well as an increase in contract order backlog to $7.5 million. We announced approximately $10 million of awards from customers in the U.S., UK and Japan, since our current fiscal year 2011 began this past May. Let me now take you through these developments in more detail. Moving to Slide 4. OPT has identified two application-driven markets for its core PowerBuoy technology, the utility or grid-connected markets, which needs large amounts of power and the non-grid connected autonomous market where lower levels of power output are needed for use out in the deep ocean. Good operational progress is made with our utility PowerBuoy projects during the second quarter. In September 2010,…

Thank you, Chuck. As you will see on Slide 14, our revenues increased 220% for the second quarter of fiscal 2011 to $1.9 million compared to $600,000 for the same period in the prior year. The growth in revenues primarily reflects an increase in revenues from the US Navy under the LEAP program. In addition, there was an increase in revenues from OPT's PB150 PowerBuoy project in Reedsport, Oregon and revenues from OPT's PB500 development project. The growth in these projects was partially offset by a decline in revenues from OPT's PB150 PowerBuoy project in Scotland and its utility PowerBuoy project with the US Navy at the Marine Corps Base in Hawaii, which is now grid-connected. Gross profit was approximately $87,000 for the quarter, as compared to a gross profit of approximately $54,000 for the second quarter of the prior year. Gross profit for the second quarter ended October 31st, 2009 benefited from an approximate $300,000 favorable reduction in provision for contract losses. Our future gross margins will be dependent on the nature of the new contracts, our success at increasing sales of our PowerBuoy systems, and our ability to manage costs incurred on fixed price commercial contracts. Product development costs increased to $3.7 million as compared to $3.4 million for the second quarter of the prior year. These planned cost increases were primarily due to our efforts to increase the power output and reliability of our utility PowerBuoy system, especially the 150-kilowatt PowerBuoy. SG&A costs decreased by 2% to $2.1 million compared with $2.2 million for the previous year. This decrease was largely due to a decrease in employee-related expenses, which will partially offset by increased marketing and business development expenses. Interest income for the quarter decreased to $161,000 compared with $248,000 for the same period last year. This…

Thank you, Brian. Now, turning to Slide Number 17. The board and management of OPT are committed to the company becoming profitable as soon as possible. We believe we have two paths to profitability with each of the two major market areas we mentioned earlier. The first path with our utility PowerBuoy product target to market size of approximately $50 billion per annum and it’s all about large amounts of power being provided to the grid. This utility market opportunity is driving our product development and investment to increase the power output rating for PowerBuoy to 150-kilowatts and further to 500-kilowatts. As we stated earlier, we are pleased with the progress that we continue to make with this product. We also have made very strong progress with our autonomous PowerBuoy contract, the ability of the PowerBuoy to operate autonomously in remote locations is truly an enabling technology. In addition to homeland security, we believe there is strong potential for our systems to be used for offshore oil and gas platforms, aquaculture or fish farming, and ocean-based communication and data gathering such as for tsunami warnings. We estimate this market size to be approximately $10 billion per annum worldwide. It’s important to note that the fundamental PowerBuoy technology is the same for both of these markets. The difference in the PowerBuoy is addressing the two market areas primarily lies in the size and rated power output of the systems. In the slide, we have also shown how our present project as well as our ongoing marketing initiatives support progress along both paths to profitability. We believe that either of these paths alone can move us to profitability and positive cash generation from operations. Turning to Slide 18, we are excited about our longer-term prospects and we also believe OPT remains on…

(Operator instructions) And our first question comes from the line of Winnie Clark with UBS. Please proceed.

Good morning.

Hi, Winnie, how are you?

Good. Congratulations first of all on a good quarter.

Thank you.

And first, I would like to ask about your goal of accelerating the sales of your autonomous buoys to new markets that you talked about again today. Any development in your efforts there worth highlighting to us this morning?

We have been conducting a very aggressive marketing activity from business development side, and I think one thing that’s different over this past quarter is that we have broadened the scope of those efforts. We had previously been focusing largely on homeland security and related markets, particularly with Department of Defense and DHS, Homeland Security, but we are now broadening that as I noted to some of the other areas we mentioned in the prepared portion of our call, which includes oil and gas applications for the offshore platforms, and as well looking to engage in greater conversation and dialog with some of the providers of devices internationally for oceanographic data generation, such as for storm warnings including tsunamis, and also a lot of the very active programs that are out there with respect to monitoring such things as any changes in salinity. So, as a result of these efforts, we have noted great substantiation of the market estimates that we have made for these. There are some very substantial markets out there. So, from the view of our activity, it’s broadened, and that definitely is a change. No specific contracts to report yet, of course we will make those known publicly as soon as we do have something in hand.

Okay, great. Thanks for that. And then, on the Australia project, it seems, obviously it would be one of your largest potential projects, do you have a sense of when you could obtain the additional funding needed to move forward there?

Sorry, I missed that. Do we have a sense of when –?

On when you could obtain the additional funding you need to move forward?

Sure. When we put out our press announcement about that, we highlighted two major steps that needed to be accomplished. One was the signing of a funding deed, which is now been signed and sets out the terms of the grants including funding milestones. The second big milestone or accomplishment that needs to follow on is exactly the one you asked about, which is with respect to funding. Now, the special purpose company that had been set up by Leighton called the Victorian Wave Partners is the entity that actually received the grant from the Commonwealth government, and in addition, it is that entity which is seeking to raise the balance of funds, but clearly, it is Leighton that is leading that effort. And I think it looks really interesting from our view to give you a little more color about it is that Leighton has a very sophisticated in-house project finance team with whom we have had meetings and they are taking a lead as I noted in this. With respect to timing, which I think was another part of your question, the target is for the middle or latter part of this coming calendar year 2011 within which we would bring in additional funding. So, we have seen interest on that, and for this project, and what’s also interesting to note is that not only within the Australasian region, but other parts of the world, we have been following a lot of new project-financed deals that are actually being closed, which is counterintuitive as you take a look at the credit market scene.

Okay, great. And then, on the – so you successfully raised 6.2 million for the PB500. How much in total do you need to raise, and can you give us any color on a realistic timeframe for that development completion?

Sure. Just to give you a view, I will start with the second part of your question, which is to just set context as to timing. We have begun just this fiscal year 2011 the concept work, the design efforts, we are well into it, and further steps to be undertaken with the front-end design stage includes wave tank testing, a lot of modeling effort and generally speaking, that design phase should be completed at the tail end of calendar 2012. In 2013, by the end of that calendar year, we expect to build the first PB500 system itself, that would be a demonstration system obviously being the very first one. But it’s a three-year program, we are targeting from the cold start if you will, of the initial design and culminating in the ocean testing of the PB500. I will also add, I mentioned it was a cold start, but we have benefited tremendously from the work that’s now being conducted in connection with our PB150s, not just structural mechanical, engineering and hydrodynamic issues, but also with respect to the tuning capability of our system, which we think is a real game changer and a discriminator of our technology, the capability to do electronic tuning. So, those are elements of the task before us, but which are being facilitated by work done today particularly on the PB150. The first part of your question in terms of overall cost picture, the guidance we are giving at this point is that the 6.2 million is a very substantial proportion of the total we need, we are well along the way to what we need to complete that full three-year cycle that I just mentioned.

Okay, great. And then, I will just sneak one more if I can. A fair amount of your funding comes from government and military sources, any indication of recent government austerity measures around the world could make attaining additional funding more challenging for you?

Really great point, and we are asked that question quite a bit. The visibility that we have had is, and I say this to your point, internationally. So, we are talking with parties not just within the U.S. legislative and regulatory contacts but in other nations as well that there is still a very strong compelling interest and as well existing legislation that we think can provide in a very short term of continuing underpinning or support of renewable energy. Our view is that you just can’t rely on that though, we are trying to engineer a product that does not need subsidies and grants in order to have real legs to it on an international basis and being able to compete with other choices our customers can make. So, our experience has been on the BD, business development side that there is still a tremendous amount of interest in our product, we think as well, it extends to other technologies within the marine energy sector, which includes tidal and ocean thermal. So, there is nothing that we see specifically that would indicate, I will call it a threat or in any way a jeopardy to our ongoing business plan. And so, we are still quite confident about not only the fund-raising we have done in the current difficult environment, but also as we look ahead and to the prospects of additional funding.

Okay, great. And thanks again, and congratulations again on good progress in the quarter.

Thanks for joining the call, Winnie.

And our next question comes from the line of George Santana with New Earth Capital Group. Please proceed.

Hi good morning, and thanks for taking my question.

Sure, good morning, George.

Could you speak a bit to the competitive landscape you are seeing there? You mentioned there were about four winners of a contract in Australia. So, what are you seeing out there, and how far along are you? And congratulations, by the way, on excellent progress in the quarter.

Thank you, appreciate it. Just to the specific aspect of your question as it related to Australia, the other three technologies were very much unrelated to marine technology, they were more focused on solar and biomass. So, not only were we the only wave power company, but the four grants really focused on, in addition to OPT, those other areas. The competitive landscape to which you referred is something that we are pleased to see is actually improving. And (inaudible) our belief, and we have really said this for sometime is we think that for this industry to attain the multi-billion dollar status that we are firmly convinced can achieve, there’s got to be more than just one player within it. There needs to be competent competition within this space, and we welcome the fact that there are some other companies, particularly there has been new funding announced for some companies within the marine energy space just over the last six months, which we take as a very positive sign. So, we do see competition out there with our engineering staff and our business development staff, aim to keep very much on top of what the developments are out there, and we do welcome the competition because that’s exactly what you need to grow a new industry. It helps to accrete the infrastructure that facilitates it, which includes not only companies that help in the fabrication but also such things as insurance products and finance. OPT has been very fortunate, we have had coverage, insurance coverage from the Lloyd’s syndicates really for a little over 10 years. So, again, a broadening of the competition I think is healthy. Obviously as a company, we aim to stay on top of that and we seek to maintain a leadership role within that sector.

Thank you. And I will jump back in the queue.

Okay, thanks George.

Our next question comes from the line of Robert Littlehale with JP Morgan. Please proceed.

Good morning, Bob.

The technological transition that obviously you are making from the PB150 to the PB500, is it safe to say that those technological hurdles perhaps are not as great as the ones that you faced when you went from the PB40 to the PB150, just given all the inherent knowledge and experience that you have garnered already, or is it too early to say?

No, no, it’s definitely not too early. And it’s an important point, I think, goes a lot as one thinks about the prospects for OPT, not only for improving the technology, but also just cash burn. It is a start to a PB500 development process, which has truly been greatly facilitated by our learning, not only the PB40, but also the 150. And to get to the PB500, we don’t have to create or invent any wheels. We are building on the tuning capability, which we have already demonstrated. That tuning capability to which I refer is the ability of our system to using electronic and electrical means, not just brute force mechanical, but electronically enabling our system to amend its behavior as wave conditions change, which just simply translates to our customers to more kilowatt hours per ton steel that they have bought. So, we have done a tremendous amount of learning about that to date. And as we look at the transition from the PB150 to the 500, while it’s a two-year design phase, what we are looking at in that process again is not any new wheels that have to be invented, but instead the expression mechanically and electrically as well as hydrodynamically of some tremendous lessons that we have learned with our almost 13 years of experience of system in and out of the ocean. So, we are doing the 500, conducting the 500 development product in a very deliberate way and that is a part of our – the way we are managing the company just to make sure that we are very thorough, we call it stage gate process of our product development, but does not require any new technology and definitely is a process as much facilitated by our learning to date.

Great. The other quick question I had was in Reedsport, you have faced 11 federal and state agencies that obviously you have had to obviously work with. How does that break down, that 11, between federal and state?

Sure. There is basically three federal, Fish and Wildlife, Marine Fisheries, Forest Service. There is the balance then of eight Oregon state groups such as Department of State Lands, Environmental Quality, Water Resources, Fish and Wildlife, the Department of Energy. I am not mentioning all of them, but that gives you a feeling for –

Yes, okay.

What also is really neat, Bob, in terms of this so-called settlement agreement that we signed is that we are very, very careful to try to engage with and involve some other groups that may not necessarily be in the form of state or federal regulatory chain, but instead speak volumes for the interest of local stakeholders. So, in addition to those groups, the 11 or so, which are strictly governmental, there is also the (inaudible) foundation represented, a group called the Southern, if I remember this, correct me now, it’s the Southern Oregon Ocean Resource Coalition that includes a lot of the fishermen’s groups. And so, we are very proud about that, the inclusiveness of the settlement agreement, but I got to tell you, but it’s nothing that we take for granted. We are not done just because these groups are assigned to this. We, as part of our engagement in this agreement, have agreed that we would conduct our work, our projects in a way that’s very responsive and sensitive to not only environmental but also cultural concerns. There are a number of tribal groups that have very keen interest in the land over which some of our cabling would pass. So, again, I just want to give you, to answer your question, just give you a little feeling of some of the breadth of what we did to achieve this.

Great, thank you. Appreciate it, Chuck.

Thanks for coming on the call, Bob.

Thank you very much. That concludes our questioning period. I will now turn the call back over to Charles Dunleavy for any closing remarks.

Thank you. And with that, I would like to thank you all for attending today’s webcast, and for your continued support and interest. We look forward to giving you another update after the completion of our third fiscal quarter.

Thank you, everyone. That concludes today’s webcast. You may now disconnect, and everyone have a great day.