Good morning, ladies and gentlemen, and welcome to the Ocean Power Technologies Fiscal 2013 Third Quarter Conference Call. [Operator Instructions] As a reminder, this conference is being recorded and webcast. I would now like to turn the conference over to Mr. Brian Posner, the Chief Financial Officer of Ocean Power Technologies. Please go ahead, sir.

Thank you. Welcome to Ocean Power Technologies' earnings conference call for the third quarter ended January 31, 2013. OPT issued its earnings press release earlier today, and the company will soon file its quarterly report on Form 10-Q with the Securities and Exchange Commission. All public filings can be viewed on the SEC website at sec.gov or you may go to the OPT website, oceanpowertechnologies.com. With me on today's call is Chuck Dunleavy, OPT's Chief Executive Officer. Please advance to Slide 2 of our presentation. 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 this 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 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. Now let me turn the call over to Chuck Dunleavy.

Thanks, Brian, and good morning, everyone. Brian and I will be available to answer questions following our prepared remarks. Turning to Slide 3. Let me first provide an update on OPT's recent activity. This past quarter, OPT made several important steps to strengthen the company, to provide more focus on specific growth areas and to expand our business development opportunities. First, we've created a separate Autonomous PowerBuoy business unit. This organizational change highlights the importance of the potential markets for the company's non-grid-connected PowerBuoys and the associated opportunity for Ocean Power Technologies. Furthermore, this quarter, we hired Dr. Mike Mekhiche, as our new Vice President of Engineering. Mike joins OPT from BAE systems, where he most recently held the position of Director of Programs. Mike will oversee all our engineering activity and the development of the next-generation PowerBuoy systems, in conjunction with the company's technology partners around the globe. We continued our work under a contract from Mitsui Engineering & Shipbuilding for further development of wave energy opportunities in Japan. OPT and Lockheed Martin are developing the planned 19-megawatt wave energy project at the site of Portland, Victoria, Australia. Now I'll talk more about both Japan and Australia in a moment. We have changed the nomenclature of our Utility and Autonomous PowerBuoy products so as to emphasize product classes. Finally, OPT received approximately $1.5 million under the state of New Jersey's Business Tax Credit Certificate Transfer Program, which funds are being used to advance our technology development. Overall, we have a very high level of focused activity. Please advance to Slide 4. With respect to the nomenclature of our PowerBuoys, among the Utility PowerBuoy products, the PB150 will be called the Mark 3 PowerBuoy, which currently drives a peak rated generator with a maximum power output of 866 kilowatts. The…

Thank you, Chuck. As we move to Slide 8, for the 3 months ended January 31, 2013, and January 31, 2012, OPT reported revenues of $0.9 million. There was a slight decrease in revenue related to our Mark 4 PowerBuoy development project, partially offset by an increase in revenue related to our project with Mitsui Engineering & Shipbuilding. The net loss for the 3 months ended January 31, 2013, was $1.5 million as compared to a net loss of $2.2 million for the 3 months ended January 31, 2012. The favorable decrease in net loss year-over-year was due primarily to lower product development costs, relating to a lower level of activity for OPT's project in Oregon and our project in Hawaii, which was completed in FY 2012. In addition, there was a gain on foreign currency transactions and a higher recorded income tax benefit due to the sale of New Jersey tax net operating losses. These decreases in net loss were offset by an increase in SG&A expenses due primarily to an increase in legal fees, pipe development expenses related to the planned project in Australia and certain employee-related costs. For the 9 months ended January 31, 2013, OPT reported revenues of $3.2 million as compared to revenues of $4.3 million for the 9 months ended January 31, 2012. This decrease primarily reflects the completion in the prior fiscal year of the LEAP project with the U.S. Navy for coastal security and maritime surveillance, in addition to a decrease in billable work related to the Mark 4 PowerBuoy development project. These declines were partially offset by increases in revenue from the company's wave power project in Spain, the project in Oregon and the Mitsui project. The net loss was $10.6 million for the 9 months ended January 31, 2013, compared to $11.1 million for the same period in the prior year. This decrease in net loss was due primarily to lower product development costs relating to the completion of our project in Scotland in the prior fiscal period, a gain on foreign currency transactions and a higher recorded income tax benefit due to the sale of the New Jersey net operating tax losses. These decreases in net loss were offset by an increase in SG&A expenses due to an increase in legal fees and site development expenses related to the planned project in Australia. Turning to Slide 9. On January 31, 2013, total cash, cash equivalent, restricted cash and investments were $24.5 million as compared to $26.4 million as of October 31, 2012. The net decrease in cash and investments was $1.9 million for the 3 months ended January 31, 2013, compared to $2.1 million for the 3 months ended January 31, 2012. OPT received approximately $1.5 million and $1.1 million from the sale of New Jersey net operating tax losses for the 3 months ended January 31, 2013, and 2012, respectively. I will now turn the call back over to Chuck.

Thanks, Brian. Turning to Slide 10. I'd like to note some of our key initiatives. OPT has recently undertaken a number of steps to reduce significantly its fixed cost. This has been across the company and includes reduced personnel-related costs, consultants and facilities' expenses. With this reduced cost structure, we will continue to pursue, on a selective basis, both the utility and autonomous market sectors with emphasis on our existing customer-funded contracts and opportunities in markets where we see strong economics. We'll build on our PowerBuoy technology platform with investment in specific high payback technology enhancements. This includes working along a very clear path that we have set to decrease the levelized cost of energy of our Utility PowerBuoys and also expansion of the Autonomous PowerBuoy product offering. With a focus on opportunities to generate cash in the near-term, the key is to enhance the saleability of our product offerings and resulting contribution to profits. In addition, continuing work with strategic partners like Lockheed Martin and Mitsui is important part of driving toward our goal of OPT becoming a profitable company in the years to come. This concludes our prepared statement. I will now open the call for questions. Please go ahead, operator.

[Operator Instructions] We have our first question. It's from the line of George Santana from Ascendiant.

Could you just give us a little bit more color on the progress in Australia?

Great, George. Chuck here. I think one key aspect of the progress is our work, as we've mentioned very quickly, with Brookfield Financial, a very strong company. They're a unit of Brookfield Asset Management, which I believe is listed on both the NYSE and the Toronto exchanges, and they have a strong presence in Australia with respect to infrastructure projects. So a lot of what we've been doing over the last quarter has included working directly with them and in meeting with a number of entities that would provide the power purchase agreements for this project. Obviously, that's the main driver of the revenue model for the project as we talk with prospective investors. So the PPA focus with Brookfield, I think, is an important part of what we've been doing over the last quarter. We've expanded as well the field -- or of the number of potential investors with whom we're going to be meeting. As a matter fact, I'm going to be going to Australia in a couple of weeks and with the primary purpose to meet with some of these parties that Brookfield is lining up. One other note, over the last few months is that, George, we've been doing work associated with the permitting for this site, specifically the environmental impact statements submittal to the state of Victoria. That's been very busy. And as we noted, we've been keeping close touch with ARENA, the Australian Renewable Energy Agency, and I think that also has been a big piece of what we've accomplished over the last 3 months.

Should we read into this that your big contracting partner, your EPC is stepping back from a financing, or are they still active in the discussion in terms of contributing?

The Lockheed has really been a great positive influence on the activity that I just explained to you. And I'm glad you brought up the point, because it is important to note that Lockheed is very -- strongly engaged with us. What they have been doing is providing not only a large group of their Australia-based people but some of the U.S. folks, as well, have made trips to Australia in support of these various meetings and activities that I outlined, so very strong and continuing engagement from Lockheed on this project.

Next question is from the line of Robert Littlehale from JPMorgan.

In terms of Reedsport, were you surprised by the seemingly change of thinking on FERC--FERC's part? And what kind of -- do you have any sense of what the increased costs that would be incurred to pursue that opportunity?

Sure. Yes, first of all, it was very much a surprise. The whole permitting and all the other things that when -- we have done, rather, associated with that first non-grid-connected buoy was all but -- has been buttoned up for some time and accomplished, particularly vis-a-vis permitting requirements associated with the Army Corps of Engineers and a couple of other parties. But it's very small group of permitting authorities that we needed to work with associated with that first PowerBuoy. But -- as I noted in answering your question, at the outset, it was a -- it is a surprise to us that the FERC staff considers this first buoy to be subject to their jurisdiction at the time that it's not grid connected, so just surprised. I think the measure of its cost is associated with not only some additional out-of-pocket expenses, but just the elapsed time that it takes to prepare reports that includes the use of our own people to prepare some of the plans that would be required, if, in fact, we are -- that this jurisdictional issue is sustained. For example, Bob, we would have to do a project financing plan for all 10 buoys, which includes getting prospective commitments on that financing. So the cost of that, coupled with some of the other plans that would need to be submitted to FERC, were -- if this first non-grid-connected buoy were subject to their regs, is really a cost that's measured in elapsed time. And that just simply delays deployment of the PowerBuoy, it's less because let's -- it does include out-of-pocket expenses, but the real cost is an opportunity cost to us.

There are 2 hotbeds of opportunity in wave power that you hadn't mentioned, well you've touched on Scotland, but also Chile. Would it be safe to say that the reasons that you -- and maybe there's an ongoing interest. But it seems like you're more laser focused on specific areas, and those 2 areas of Scotland and Chile are tangential to sort of the focus of the company at this point.

Yes. Well, you're absolutely right about that, your use of the term laser focused. Man, that is exactly one of the messages we wanted to convey in this call. It relates to costs, just out-of-pocket costs, to support the business development efforts that otherwise would be undertaken and as well as the need to just strive for the kind of focus that delivers result. So we -- you're right in your overall perception that we are being very selective on the opportunities that we're pursuing. I would say, though, that while I didn't mention Scotland specifically, that is an area of potential involvement for OPT, and in fact, we do have some ongoing business development activity that's focused or centered, rather, out of our U.K. office. And we have some ongoing discussions with potential partners to develop a possible site in Scotland. But that is nothing that has borne results to the extent that we would report directly on it and, in fact, on early stage. Hence, we didn't focus on it. But Scotland is still a strong prospective opportunity for us, particularly on the -- both the utility side of things, but also, importantly, that's well known of course, is the fact that there's a lot of oil and gas activity in the North Sea. So that's another aspect of opportunities that we're pursuing off of Scotland. In the case of Chile, no, we've not mentioned that. We're certainly aware of a lot of the activity down there. And it is possible that some opportunities might present themselves there for us, but we do not have a high -- as high a level of focus on those as we do in Australia, Japan, America and parts of Europe.

[Operator Instructions] Next question is from the line of George Santana from Ascendiant.

Chuck, just a quick follow-up. What happens to the network of subcontractors that you assembled on the Oregon project?

Yes. They're -- well, they're still very much in business, and I don't mean to be answering your question with a quip here. They still have a lot of business and staying power to them, and that's been part of the selection process we went to identify them. So if there is a delay from us, certainly, the value add of our supply chain in Oregon is still very vital, and it'll be present and ready, we believe, to help us. So I think that's probably an overarching point I would make. We need to keep in touch with these people as we are. On my way to Australia, as a matter of fact, I'm going to be in Oregon next week, so -- in talking with parties there and meeting with at least one of our primary suppliers in Oregon. And just making sure that we communicate directly, not only with our supply chain members, but as well as with other stakeholders in Oregon about the status of the project. So you had your finger on an important point, which is to maintain that supply chain, and we intend to do so and to engage with them through active communication.

The company doesn't have any exposure to payments on delays or things like that if the government -- if the project is delayed.

No. We don't get ahead of ourselves in terms of payment, payments from the government, as well as those that might be flowed to subcontractors from this -- in terms of any delays on this project. There are other business issues that present themselves with our suppliers, and we deal with those. And we have -- and there's an open question right now with respect to one of the suppliers who was -- actually, a subcontractor that was helping out in connection with some of our marine operations last fall, but that's not at all related to the FERC -- the prospective delay that could come from this FERC jurisdiction issue.

There are no more of questions in the queue. I will turn the call back to Mr. Dunleavy for any closing remarks.

Okay, thank you very much, and thank you, all, once again, for attending today's call. If you have any further questions, please do not hesitate to contact us. Otherwise, we look forward to speaking with you next quarter.

Thank you, everyone. That concludes your call. You may now disconnect.