Ocean Thermal Energy Corporation Reports Q3 2024 Financial Turnaround with $4.26 Million Net Income

Ocean Thermal Energy Corporation (OTEC) reported its financial results for the third quarter of 2024, revealing a net income of $4.26 million, a significant turnaround from a net loss of $335.77 million in the same period last year. This change was primarily driven by a substantial decrease in the fair value of derivative liabilities, which fell by $5.26 million compared to a $334.75 million increase in the previous year. The company’s total operating expenses for the quarter were $378,510, down from $410,548 in the prior year, reflecting cost-cutting measures and a reduction in professional fees.

For the nine months ending September 30, 2024, OTEC reported a net loss of $907,550, a notable improvement from a loss of $339.03 million during the same period in 2023. The company’s operating expenses increased slightly to $1.17 million from $1.14 million year-over-year, with salaries and compensation rising by 4.04% to $692,485. Professional fees also increased by 11.74% to $394,838, as the company focused on completing securities filings and developing existing projects. However, general and administrative expenses decreased by 27.20% to $85,934, indicating effective cost management.

OTEC's balance sheet as of September 30, 2024, showed total assets of $54,105, a decrease from $120,149 at the end of 2023. Current liabilities increased to $44.33 million from $44.05 million, leading to a working capital deficiency of $44.27 million. The company’s stockholders’ deficiency also widened slightly to $44.27 million, compared to $43.93 million at the end of the previous fiscal year. The decline in cash reserves, which fell to $49,105 from $115,149, raises concerns about the company’s liquidity and ability to fund operations in the near term.

In terms of strategic developments, OTEC is actively pursuing external funding opportunities, including grant applications to the U.S. Department of Energy for projects related to desalinated water and hydrogen production. The company is also engaged in a $3.5 million contract with the U.S. Army for engineering and design work on an Ocean Thermal Energy Conversion (OTEC) power system at the Kwajalein Atoll. This contract represents a significant step in advancing OTEC's commercialization efforts and expanding its market presence in the Indo-Pacific region.

Looking ahead, OTEC's management has expressed concerns regarding its ability to continue as a going concern, given its recurring operating losses and significant working capital deficiency. The company is focused on increasing sales and securing external funding to support its projects. While OTEC has not generated revenue since its inception, it is transitioning from research and development to contract execution, with hopes of establishing revenue-generating power purchase agreements in the future.