Ocean Thermal Energy Corporation

What they do

The company develops proprietary designs for Ocean Thermal Energy Conversion (OTEC), Seawater Air Conditioning (SWAC), and Lake Source Cooling (LSC) systems that extract energy from temperature differences between warm surface water and cold deep water. It targets tropical and subtropical markets for power, desalinated water, and air conditioning, and has not completed any commercial projects to date. Its first active contract is a U.S. Army engineering and design project for an OTEC unit at Kwajalein Atoll, performed in partnership with Johnson Controls.

Revenue drivers

• U.S. Army Kwajalein Atoll engineering and design contract — In 2025, the company recognized $3.0 million in revenue from this DoD contract (valued at approximately $3.5–3.6 million), the sole source of revenue for the year. In Q1 2026, this contract generated $403,517 in revenue.

Recent performance

For fiscal year 2025, the company reported revenue of $3.0 million, its first revenue since inception, versus $0 in 2024. Net loss for 2025 was $69.3 million, driven largely by a ~$66 million increase in the fair value of derivative liabilities from a rise in its common stock price. Quarterly revenue has fluctuated: $846,382 (Q2 2025), $413,567 (Q3 2025), $1.6 million (Q4 2025), and $403,517 (Q1 2026). Operating cash use improved to $93,395 in 2025 from $562,627 in 2024. As of March 31, 2026, the company had $166,220 in cash, total assets of $430,416, total liabilities of $51.8 million, and negative shareholder equity of $51.4 million.

Strategy

Management is transitioning from R&D to contract execution and revenue-generating power purchase agreements, with immediate focus on completing the Kwajalein Atoll contract. It is seeking to expand into additional Indo-Pacific markets, including Guam, Diego Garcia, and the Northern Marianas, and has a project pipeline in the Caribbean and Southeast Asia (India, Indonesia). The company aims to become the first to build a commercial-scale OTEC plant and plans to pursue a NYSE uplisting, though it continues to rely on external funding.

Risks

• Going concern — Auditors have raised substantial doubt about the company's ability to continue as a going concern.
• No near-term revenue beyond current contract — No current project other than the U.S. Army contract will generate revenues in the near future, and project development cycles are long.
• Negative equity and liquidity — Shareholder equity is negative ($51.4 million) and cash is minimal ($166,220), with reliance on external funding to sustain operations.
• Derivative liability volatility — A $66 million non-cash charge from increased derivative fair value drove a 2025 net loss, and future stock price movements could cause similar volatility.

Outlook

Management expects the Kwajalein Atoll contract to lead to further discussions with the U.S. Army on building an OTEC plant, and anticipates development fees of about 3% of project cost when financing closes for future projects. Revenue from operating plants is expected only after construction and commissioning. The company plans to continue cost reductions and seek additional funding for the planned NYSE uplisting and pipeline expansion.