UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (date of earliest event
reported): September 18, 2014
WPCS INTERNATIONAL INCORPORATED
(Exact name of registrant as specified
in its charter)
Delaware |
001-34643 |
98-0204758 |
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
600 Eagleview Boulevard, Suite 300,
Exton, PA 19341
(Address of principal executive offices
and zip code)
Registrant’s telephone number,
including area code: (484) 359-7228
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
On September 18, 2014, WPCS International
Incorporated (the “Company”) issued an open letter to stockholders in a press release providing for a year in review
and a discussion on a proposal at the upcoming annual meeting of stockholders. The letter to stockholders contained within the
press release will also be mailed to stockholders of record. A copy of the press release that discusses this matter is filed as
Exhibit 99.01 to, and incorporated by reference in, this report. The information in this Current Report is being furnished and
shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject
to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration
statement or other document pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference
in any such filing.
| Item 9.01 | Financial Statements and Exhibits. |
| 99.01 | Press Release, dated September 18, 2014, issued by WCPS International Incorporated |
SIGNATURE
Pursuant to the requirement
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
|
WPCS INTERNATIONAL INCORPORATED |
|
|
|
|
|
Date: September 18, 2014 |
By: |
/s/
Sebastian Giordano |
|
|
|
Sebastian Giordano |
|
|
|
Interim Chief Executive Officer |
|
Exhibit 99.01
WPCS Provides Shareholders with a Year
in Review and
Why a “YES” Vote to Increase
Authorized Shares is Crucial
Suisun City, CA - (Marketwired –
September 18, 2014) - WPCS International Incorporated (NASDAQ: WPCS) (the “Company”), which specializes in
contracting services for communications infrastructure and the development of a digital currency trading platform, today is
providing a letter to shareholders with a year in review and why a “YES” vote to increase the authorized shares
is crucial.
Dear Shareholders,
As we reflect upon the 2014 fiscal year
that recently concluded, it was clearly a period of transition, restructuring, planning and preparing for the future. I am writing
this letter to you today because your management team and Board of Directors (“Board”) wish to remain transparent throughout
this process so that you may understand the critical juncture we are at today and how your vote at the upcoming annual shareholder
meeting will help pave the way for our future success.
We want you to know that we are entering
the final stages of our current restructuring. The Board believes that once our proposal to increase the number of common shares
authorized by the Certificate of Incorporation and other proposals are approved, it will enable WPCS to seek key strategic initiatives
to enhance our balance sheet through debt reduction, which we believe will ultimately improve our shareholders’ equity and
cash position.
With these changes, we believe that the
Company will also have the ability to pursue strategic opportunities to create new value for shareholders. While the very important
decisions WPCS shareholders face today are driving this letter, it is my intention to continually and consistently ensure that
management and the Board maintain direct communication activities with you.
Since commencing the restructuring of WPCS
in August 2013, our entire team has been totally committed to the vision of moving towards creating opportunities to develop growth
businesses. We are, and will continue, to be steadfast in our goal of building shareholder value.
Restructuring Accomplishments:
| a) | Overcame approximately $2.0 million in projected cash flow shortages by closing Trenton operations,
implementing cost reductions and renegotiating vendor payment terms; |
| b) | Financial results that include increased revenue and an improved balance sheet: |
| a. | For the 2014 fiscal fourth quarter, revenue increased 25.7% from the same period in fiscal 2013.
Taking into account the strategic reduction of WPCS’ Trenton operations, revenue for the quarter and full year ended April
30, 2014 increased 47.2% and 34.4%, respectively, compared to the same periods in 2013; |
| b. | Cash and cash equivalents increased from $1.4 million as of April 30, 2013 to $2.2 million as of
April 30, 2014; and |
| c. | Shareholders’ equity increased by approximately $6.9 million from a deficit of $900,000 at
April 30, 2013 to equity of $6.0 million at April 30, 2014; |
| c) | Annualized savings of over $1.1 million achieved through administrative and operating cost reductions; |
| d) | Completed the sale of Australia Operations; |
| e) | Negotiated $1 million severance reduction with Chief Financial Officer; and |
| f) | Negotiated the removal of certain onerous default provisions contained within outstanding secured
convertible notes. |
Other
News:
| a) | Suisun City, for the period January 1, 2014 through May 31, 2014, announced approximately $5.5
million in new contracts as compared to $2.3 million for the same period year-over-year, an increase of 139%; |
| b) | Since acquiring the BTX Trader software platform in December 2013, the online platform has grown
to 5,000 users and over 1,500 unique visitors per month; and |
| c) | BTX Trader has launched Celery (www.gocelery.com), a new product providing consumers with a simple
and fast way to buy digital currency using direct bank transfers, initially focused on Bitcoin and Dogecoin. |
These positive strides to-date have helped
curtail losses, reduce cash flow deficiencies and have set the stage for future growth potential. Going forward, we are continuing
these restructuring efforts by moving towards the divestiture of our Seattle operations, which we expect to occur at the end of
this month, and looking to find a buyer for our China Joint Venture interest. The successful closing of these transactions could
generate approximately $3.5 million for the Company.
The upcoming proxy statement proposal to
increase the authorized shares of the Company, which shareholders did not approve when last presented, is required for us to meet
the existing equity conversion and warrant obligations under our secured convertible notes, convertible preferred stock and warrants.
We are required to continue to seek this approval, which will result in additional cost and expenses to WPCS, until our obligation
is met. We believe that an increase in authorized common stock could lead to the reduction or elimination of our outstanding secured
debt, which has been highly restrictive on the Company and our ability to create value for all shareholders going forward. Additionally,
the increase in authorized shares would better position the Company to attract talent through a new stock option plan, provide
the Company with flexibility for potential growth capital and enhance our ability to leverage our position as a publicly-traded
company to pursue selected strategic acquisitions that we believe could enhance our business.
When developing the restructuring plan
last year, I envisioned that at this time, the Company would be debt-free, with several million dollars of working capital, and
the equity available to focus entirely on revenue growth and profitability. The steps management and the Board have taken has
prepared us to accomplish just that. But, we need your support.
The way to accomplish these objectives
is to once again seek your approval to increase the number of authorized shares of the Company. If any such proposal is not approved,
I feel that WPCS will remain constrained by its debt, find it difficult to attract talent, be unable to secure necessary financing,
and limit its ability to close any substantive value-enhancing acquisitions.
I am pleased with the progress we have
made. I am also very encouraged by the opportunities being presented to WPCS and highly optimistic about the future prospects of
this Company. There may be no better time to help us finish the task at hand and finally change the direction of WPCS for the better.
Right now is your chance as a shareholder to be an important part of the next significant decision facing your company. We have
filed a new proxy statement and are asking you to please vote “yes” with management and the Board on the proposal to
increase the number of shares of common stock authorized by the Certificate of Incorporation of the Company.
We wish to thank our shareholders, customers,
partners and employees for their continued trust, confidence, and support as we hope to move into the next exciting phase of WPCS’
history.
Sincerely,
Sebastian Giordano
Interim CEO
About WPCS International Incorporated
WPCS operates
in two business segments: (1) providing communications infrastructure contracting services to the public
services, healthcare, energy and corporate enterprise markets worldwide; and (2) developing a digital currency trading platform.
For more information, please visit www.wpcs.com, www.btxtrader.com and www.gocelery.com.
Statements
about the Company's future expectations, including future revenue and earnings and all other statements in this press release,
other than historical facts, are "forward looking" statements and are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and
are subject to change at any time. The Company's actual results could differ materially from expected results. In reflecting
subsequent events or circumstances, the Company undertakes no obligation to update forward-looking statements.
INVESTOR CONTACT:
Capital Markets Group, LLC
Valter Pinto
PH: (914) 669-0222 or (212) 398-3486
valter@capmarketsgroup.com
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