As filed with the Securities and Exchange
Commission on January 25, 2017
Registration No. 333-_____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
WPCS INTERNATIONAL INCORPORATED
(Exact name of registrant as specified in
its charter)
Delaware
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98-0204758
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification Number)
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521 Railroad Avenue
Suisun City, California 94585
(707) 421-1300
(Address, including zip code, and telephone
number, including area code,
of registrant's principal executive offices)
The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
(302) 658-7581
(Name, address, including zip code, and
telephone number, including area code, of
agent for service)
Copy to:
Robert S. Matlin, Esq.
Jonathan M. Barron, Esq.
K&L Gates LLP
599 Lexington Avenue
New York, NY 10022
212-536-3900
Approximate date of commencement of proposed sale to the public:
from time to time after the registration statement becomes effective.
If the only securities being registered
on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
¨
If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest reinvestment plans, check the following box.
x
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
¨
If this Form is a registration statement
pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box.
¨
If this Form is a post-effective amendment
to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes
of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
x
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CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS
OF SECURITIES TO BE
REGISTERED
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AMOUNT
TO
BE
REGISTERED (1)
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PROPOSED
MAXIMUM
OFFERING
PRICE PER
SHARE (2)
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PROPOSED
MAXIMUM
AGGREGATE
OFFERING
PRICE
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AMOUNT OF
REGISTRATION
FEE (3)
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Common Stock, par value $0.0001 per share
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826,250
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$
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1.44
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$
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1,189,800.00
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$
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137.90
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(1) 826,250 shares of Common Stock, par
value $0.0001 per share (the “Common Stock”), of WPCS International Incorporated, a Delaware corporation (the “Company”),
are being registered hereunder. These shares consist of (i) 330,500 shares of Common Stock issued or issuable upon conversion of
the Series H-2 Convertible Preferred Stock of the Company (the “Series H-2 Preferred Stock”) and (ii) 495,750 shares
of Common Stock issued or issuable upon exercise of warrants of the Company (the “Warrants”). In accordance with Rule
416(a) under the Securities Act of 1933, as amended (the “Securities Act”), the Registrant is also registering hereunder
an indeterminate number of shares that may be issued and resold resulting from stock splits, stock dividends or similar transactions.
(2) Estimated solely for the purpose of
calculating the registration fee pursuant to Rule 457(c) of the Securities Act based upon the price of $1.44, which was the average
of the high and low bid prices for the Company’s Common Stock on NASDAQ Capital Market on January 24, 2017.
(3) Computed in accordance with Section
6(b) of the Securities Act. Paid herewith.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION
STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT
WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
The information in this preliminary prospectus is not complete
and may be changed. We may not sell securities under this registration statement until the registration statement filed with the
Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell any securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PROSPECTUS
SUBJECT TO COMPLETION, DATED JANUARY
25, 2017
826,250 Shares of Common Stock
WPCS INTERNATIONAL INCORPORATED
We are registering
826,250 shares of our common stock, par value $0.0001 per share (the “Common Stock”) for sale by the selling stockholders
set forth herein. Such aggregate number of shares represents the sum of (i) 330,500 shares of Common Stock issued or issuable upon
conversion of the Series H-2 Preferred Stock and (ii) 495,750 shares of Common Stock issued or issuable upon exercise of the Warrants.
The selling stockholders
identified in this prospectus, or their pledgees, donees, transferees or other successors-in-interest, may offer the shares from
time to time through public or private transactions at prevailing market prices, at prices related to prevailing market prices
or at privately negotiated prices. We will not receive any proceeds from the sale of the shares of Common Stock. However, we may
receive proceeds in connection with the exercise of the Warrants, if they are exercised for cash. The selling stockholders will
sell the shares of Common Stock and Warrants in accordance with the “Plan of Distribution” set forth in this prospectus.
The selling stockholders will bear all commissions and discounts, if any, attributable to the sales of shares of Common Stock and
Warrants. We will bear all costs, expenses and fees in connection with the registration of the shares of Common Stock and Warrants.
Investing in our
securities involves risks. See ‘‘Risk Factors’’ beginning on page 4.
Our Common Stock is
traded on The NASDAQ Capital Market under the symbol “WPCS.” The last reported price of our Common Stock on January
24, 2017, was $1.47 per share.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is ___________
__ , 2017
TABLE OF CONTENTS
You should rely only
on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different
from that contained in this prospectus. This prospectus is not an offer to sell these securities and is not soliciting an offer
to buy these securities in any state where the offer or sale is not permitted. The information in this prospectus is complete and
accurate only as of the date of the front cover regardless of the time of delivery of this prospectus or of any sale of shares.
Except where the context requires otherwise, in this prospectus, the words “Company,” “WPCS,” “we,”
“us” and “our” refer to WPCS International Incorporated, a Delaware corporation.
PROSPECTUS SUMMARY
This summary highlights
selected information from this prospectus. It does not contain all of the information that is important to you. We encourage you
to carefully read this entire prospectus and the documents to which we refer you. The following summary is qualified in its entirety
by reference to the detailed information appearing elsewhere in this prospectus.
Our Company
WPCS International
Incorporated (“WPCS” or “we”) specializes in providing contracting services for communications, security
and audio-visual infrastructure primarily to markets such as public service, healthcare, energy and education markets, through
our wholly-owned domestic subsidiary, WPCS International - Suisun City, Inc. (“Suisun City Operations”).
Public Services
We provide communications
infrastructure for public services, which includes utilities, education, military and transportation infrastructure. We believe
there is an active market for communications infrastructure in the public service sector due to the need to create cost efficiencies
through the implementation of new communications technology.
Healthcare
We provide communications
infrastructure for hospitals and medical centers. In the healthcare market, the aging population is resulting in demands for upgraded
and additional hospital infrastructure. New construction and renovations are occurring for hospitals domestically and internationally.
In addition, there is a need to reduce the cost of delivering healthcare by implementing new communications technology. Our services
include electrical power, structured cabling, security systems, life safety systems, environmental controls and communication systems.
Energy
We provide communications
infrastructure for petrochemical, natural gas and electric utility companies. The need to deliver basic energy more efficiently
is driving the growth in energy construction. This creates opportunities to upgrade and deploy new communications technology.
Education
We provide communication
infrastructure for the education market. Many schools are upgrading technology backbone and wireless communications.
Principal Executive Offices
Our principal executive
office is located at 521 Railroad Avenue, Suisun City, California, 94585, and our telephone number is (707) 421-1300.
The Offering
Shares of Common Stock being registered hereunder
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826,250 shares of Common Stock
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Common stock outstanding as of January 24, 2017
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3,352,159
shares of Common Stock
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Use of Proceeds
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We will not receive any of the proceeds from the sale of the shares of Common Stock. We may receive proceeds in connection with the exercise of the Warrants, if exercised for cash. We intend to use any proceeds from the exercise of any of the Warrants for working capital and other general corporate purposes. There is no assurance that any of the Warrants will ever be exercised for cash, if at all.
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Risk Factors
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An investment in our securities involves a high degree of risk and could result in a loss of your entire investment. Prior to making an investment decision, you should carefully consider all of the information in this prospectus and, in particular, you should evaluate the risk factors set forth under the caption “Risk Factors” beginning on page 4.
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The NASDAQ Capital Market Symbol
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WPCS
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SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this prospectus
other than statements of historical fact, including statements regarding our future results of operations and financial position,
our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe,"
"may," "will," "estimate," "continue," "anticipate," "intend," "expect,"
and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely
on our current expectations and projections about future events and trends that we believe may affect our financial condition,
results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These
forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described under the
heading "Risk Factors" in this prospectus. It is not possible for our management to predict all risks, nor can we assess
the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties
and assumptions, the future events and trends discussed in this prospectus may not occur and actual results could differ materially
and adversely from those anticipated or implied in the forward-looking statements.
We assume no obligation to revise or publicly
release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties,
readers are cautioned not to place undue reliance on such forward-looking statements.
1
The 826,250 shares are comprised of the sum of (i) 330,500 shares of Common Stock issued or issuable upon conversion of the
Series H-2 Preferred Stock and (ii) 495,750 shares of Common Stock issued or issuable upon exercise of the Warrants.
RISK FACTORS
You should carefully
consider the risks described below together with all of the other information included in this report before making an investment
decision with regard to our securities. The statements contained herein that are not historical facts are forward-looking
statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth
in or implied by forward-looking statements. If any of the following risks actually occur, our business, financial condition
or results of operations could be harmed. In that case, the trading price of our Common Stock could decline, and you may lose all
or part of your investment.
RISKS RELATED TO OUR COMPANY
Our Suisun City Operations line of credit
contains various covenants which, if not complied with, could accelerate our repayment obligations, thereby materially and adversely
affecting our liquidity, financial conditions and results of operations.
The agreement governing our Suisun City
Operations’ line of credit requires our Suisun City Operations to comply with certain financial and operational covenants.
These covenants require our Suisun City Operations to, among other things, maintain a certain quick ratio and a minimum net worth.
As of the filing date of this report, our Suisun City Operations were in compliance with these covenants. However, our Suisun City
Operations’ continued compliance with these covenants depends on many factors, and could be impacted by current or future
economic conditions, and thus there are no assurances that our Suisun City Operations will continue to comply with these covenants.
Failure to comply with these covenants would result in a default that, if we were unable to obtain a waiver from the lender, could
accelerate our repayment obligations under the line of credit and thereby have a material adverse impact on our liquidity, financial
condition and results of operations.
We may be unable to successfully implement
Organic Growth Initiatives, including into new geographic markets and market segments, and manage our growth.
We define “Organic Growth Initiatives”
as our efforts to increase revenues by: (i) expanding in existing markets, such as Suisun, by offering, amongst other things, new
products and services, building a direct sales force, and forming strategic alliances; (ii) opening new markets without any existing
operations, otherwise known as “greenfielding”; and (iii) entering into new markets via acquisition and then subsequently
growing such businesses through various methods other than further acquisition.
As such, our long-term growth strategy
depends, in part, in addition to possible strategic acquisitions, on the Organic Growth Initiatives, including the expansion of
our operations into new geographic markets and market segments. Our ability to effectively implement Organic Growth Initiatives
depends, among other things, on our ability to identify and successfully enter and market our services in new geographic markets
and market segments, our ability to recruit and retain qualified personnel, our ability to coordinate our efforts across various
geographic markets and market segments, our ability to maintain and grow relationships with our existing customers and expand our
customer base, our ability to offer new products and services, our ability to form strategic alliances and partnerships, our ability
to secure key vendor and/or distributor relationships, and the availability of sufficient capital. In connection with expanding
our operations into new geographic markets, we may be unable to replicate the Suisun City Operations, in other markets, based solely
upon greenfielding.
While continuing to weigh all strategic
options available to us, the Company decided, based upon the prior experience of key members of its operational management team
in the Texas market, to launch a greenfielding effort in Texas. As such, the Company began operations in San Antonio, Texas in
January 2016 and in Dallas, Texas in April 2016 (the “Texas Operations”). While the Company anticipated expending approximately
$750,000 to develop such markets, the Texas Operations were taking longer than anticipated to begin generating the expected level
of revenue to warrant continued operation. Therefore, late December 2016, we decided to close the Texas Operations and expect to
have the San Antonio and Dallas offices closed by the end of January 2017.
Acquisitions involve risks that could
result in a reduction of our operating results, cash flows and liquidity.
We have made, and in the future may continue
to make strategic acquisitions. However, we may not be able to identify suitable acquisition opportunities, or may be unable to
obtain the consent of our shareholders and therefore, may not be able to complete such acquisitions. We may pay for acquisitions
with our common stock or with convertible securities, which may dilute your investment in our common stock, or we may decide to
pursue acquisitions that investors may not agree with. In connection with most of the Company’s acquisitions in the past,
we had also agreed to substantial earn-out arrangements, although none exist currently. To the extent we may enter into such transactions
in the future, which may result in the deferral of payment of the purchase price for any acquisition through a cash earn-out arrangement,
it could potentially reduce our cash flows in subsequent periods. In addition, acquisitions may expose us to operational challenges
and risks, including:
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the ability to profitably manage acquired businesses or
successfully integrate the acquired business’ operations and financial reporting and accounting control systems into our
business;
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increased indebtedness and contingent purchase price obligations
associated with an acquisition;
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the ability to fund cash flow shortages that may occur
if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal
difficulties;
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the availability of funding sufficient to meet increased
capital needs;
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diversion of management’s attention; and
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the ability to retain or hire qualified personnel required
for expanded operations.
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Completing acquisitions may require significant
management time and financial resources because we may need to assimilate widely dispersed operations with distinct corporate cultures.
In addition, acquired companies may have liabilities that we failed, or were unable, to discover in the course of performing due
diligence investigations. We cannot assure you that the indemnification granted to us by sellers of acquired companies will be
sufficient in amount, scope or duration to fully offset the possible liabilities associated with businesses or properties we assume
upon consummation of an acquisition. We may learn additional information about our acquired businesses that materially adversely
affect us, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. Any such liabilities,
individually or in the aggregate, could have a material adverse effect on our business.
Failure to successfully manage the operational
challenges and risks associated with, or resulting from, acquisitions could adversely affect our results of operations, cash flows
and liquidity. Borrowings or issuances of convertible securities associated with these acquisitions may also result in higher levels
of indebtedness, which could impact our ability to service our debt within the scheduled repayment terms.
RISKS RELATED TO OUR COMMUNICATIONS
INFRASTRUCTURE CONTRACTING SERVICES BUSINESS
If we fail to accurately estimate costs
associated with our fixed-price contracts using percentage-of-completion, our actual results could vary from our assumptions, which
may reduce our profitability or impair our financial performance.
A substantial portion of our revenue is
derived from fixed price contracts. Under these contracts, we set the price of our services on an aggregate basis and assume the
risk that the costs associated with our performance may be greater than we anticipated. We recognize revenue and profit on these
contracts as the work on these projects progresses on a percentage-of-completion basis. Under the percentage-of-completion method,
contracts in process are valued at cost plus accrued profits less earned revenues and progress payments on uncompleted contracts.
The percentage-of-completion method therefore
relies on estimates of total expected contract costs. These costs may be affected by a variety of factors, such as lower than anticipated
productivity, conditions at work sites differing materially from what was anticipated at the time we bid on the contract and higher
costs of materials and labor. Contract revenue and total cost estimates are reviewed and revised monthly as the work progresses,
such that adjustments to profit resulting from revisions are made cumulative to the date of the revision. Adjustments are reflected
in contract revenue for the fiscal period affected by these revised estimates. If estimates of costs to complete long-term contracts
indicate a loss, we immediately recognize the full amount of the estimated loss. Such adjustments and accrued losses could result
in reduced profitability and liquidity.
Failure to properly manage projects
could result in unanticipated costs or claims.
Our project engagements may involve large
scale, highly complex projects. The quality of our performance on such projects depends in large part upon our ability to manage
the relationship with our customers, and to effectively manage the project and deploy appropriate resources, including third-party
contractors and our own personnel, in a timely manner. Any defects or errors or failure to meet customers’ expectations could
result in claims for substantial damages against us. Our contracts generally limit our liability for damages that arise from negligent
acts, errors, mistakes or omissions in rendering services to our customers. However, we cannot be sure that these contractual provisions
will protect us from liability for damages in the event we are sued. In addition, in certain instances, we guarantee customers
that we will complete a project by a scheduled date or that the network will achieve certain performance standards. If the project
or network experiences a performance problem, we may not be able to recover the additional costs we would incur, which could exceed
revenues realized from a project.
We may be unable to obtain sufficient
bonding capacity to undertake certain projects.
Some of our contracts require performance
and payment bonds. If we are not able to renew or obtain a sufficient level of bonding capacity in the future, we may be precluded
from being able to bid for certain contracts or successfully contract with certain customers. In addition, even if we are able
to successfully renew or obtain performance or payment bonds, we may be required to post letters of credit in connection with the
bonds, which could negatively affect our cash flow.
Furthermore, under standard terms in the
surety market, sureties issue or continue bonds on a project-by-project basis and can decline to issue bonds at any time or require
the posting of additional collateral as a condition to issuing or renewing any bonds. If we were to experience an interruption
or reduction in the availability of bonding capacity as a result of these or any other reasons, we may be unable to compete for
or work on certain projects that would require bonding.
The ability of our Suisun City Operations
to obtain performance and payment bonds from traditional surety markets within the insurance industry has been adversely impacted
by our operating losses and negative working capital at the consolidated Company level.
An economic downturn in any of the industries
we serve could lead to less demand for our services.
Because the vast majority of our revenue
is derived from a few industries, a downturn in any of those industries would adversely affect our results of operations. Specifically,
an economic downturn in any industry we serve could result in the delay, reduction or cancellation of projects by our customers
as well as cause our customers to outsource less work, resulting in decreased demand for our services and potentially impacting
our operations and our ability to grow at historical levels. A number of other factors, including financing conditions and potential
bankruptcies in the industries we serve or a prolonged economic downturn or recession, could adversely affect our customers and
their ability or willingness to fund capital expenditures in the future. Consolidation, competition, capital constraints or negative
economic conditions in the private sector, public services, healthcare or energy industries and the K-12 education market may also
result in reduced spending by, or the loss of, one or more of our customers.
We have a significant amount of accounts
receivable and costs and estimated earnings in excess of billings assets.
We extend credit to our customers as a
result of performing work under contracts prior to billing our customers for that work. At December 31, 2016, we had net accounts
receivable of approximately $4,661,000 and costs and estimated earnings in excess of billings of approximately $468,000. We periodically
assess the credit risk of our customers and continuously monitor the timeliness of payments. Slowdowns in the industries we serve
may impair the financial condition of one or more of our customers and hinder their ability to pay us on a timely basis or at all.
Further, bankruptcies or financial difficulties within the markets we serve could hinder the ability of our customers to pay us
on a timely basis or at all, reducing our cash flows and adversely impacting our liquidity and profitability. Additionally, we
could incur losses in excess of current bad debt allowances.
The industry in which we operate has
relatively low barriers to entry and increased competition could result in margin erosion, which could make profitability even
more difficult to sustain.
Other than the technical skills required
in our business, the barriers to entry in our business are relatively low. We do not have any intellectual property rights to protect
our business methods and business start-up costs do not pose a significant barrier to entry. The success of our business is dependent
on our employees, customer relations and the successful performance of our services. If we face increased competition as a result
of new entrants in our markets, we could experience reduced operating margins and loss of market share and brand recognition.
Our business depends upon our ability
to keep pace with the latest technological changes, and our failure to do so could make us less competitive in our industry.
The market for our services is characterized
by rapid change and technological improvements. Failure to respond in a timely and cost-effective way to these technological developments
may result in serious harm to our business and operating results. We have derived, and we expect to continue to derive, a substantial
portion of our revenues from design-build services that are based upon today’s leading technologies and that are capable
of adapting to future technologies. As a result, our success will depend, in part, on our ability to develop and market service
offerings that respond in a timely manner to the technological advances of our customers, evolving industry standards and changing
preferences.
Amounts included in our backlog may
not result in actual revenue or translate into profits.
As of December 31,
2016, we had a backlog of unfilled orders of approximately $17,557,000. This backlog amount is based on contract values and purchase
orders and may not result in actual receipt of revenue in the originally anticipated period or at all. In addition, contracts included
in our backlog may not be profitable. We have experienced variances in the realization of our backlog because of project delays
or cancellations resulting from external market factors and economic factors beyond our control and we may experience delays or
cancellations in the future. If our backlog fails to materialize, we could experience a further reduction in revenue, profitability
and liquidity.
Employee strikes and other labor-related
disruptions could adversely affect our operations.
Our business is labor intensive. As of
December 31, 2016, approximately 80% of our workforce was unionized, including 5% of our project managers. Strikes or labor disputes
with our unionized employees may adversely affect our ability to conduct our business. If we are unable to reach agreement with
any of our unionized work groups on future negotiations regarding the terms of their collective bargaining agreements, or if additional
segments of our workforce become unionized, we may be subject to work interruptions or stoppages. Any of these events could be
disruptive to our operations and could result in negative publicity, loss of contracts and a decrease in revenues. Our current
union contract expires in October 2017.
Our quarterly results fluctuate and
could cause our stock price to decline.
Our quarterly operating results have fluctuated
in the past and will likely fluctuate in the future. As a result, we believe that period-to-period comparisons of our results of
operations are not a good indication of our future performance. A number of factors, many of which are beyond our control, are
likely to cause these fluctuations. Some of these factors include:
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the timing and size of design-build projects and technology
upgrades by our customers;
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fluctuations in demand for outsourced contracting services;
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the ability of certain customers to sustain capital resources
to pay their trade account balances and required changes to our allowance for doubtful accounts based on periodic assessments
of the collectability of our accounts receivable balances;
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reductions in the prices of services offered by our competitors;
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our success in bidding on and winning new business; and
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our sales, marketing and administrative cost structure.
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Because our operating results may vary
significantly from quarter to quarter, our operating results may not meet the expectations of securities analysts and investors,
and our common stock could decline significantly which may expose us to risks of securities litigation, impair our ability to attract
and retain qualified individuals using equity incentives and make it more difficult to complete acquisitions using equity as consideration.
Our future plans and growth are dependent
on maintaining sufficient working capital.
Our future plans and growth are dependent
on our ability to increase revenues and continue our business development efforts surrounding our contract award backlog. If we
continue to incur losses and revenues do not generate from the backlog as expected, we may need to raise additional capital to
expand our business and continue as a going concern. We recently raised funds via the sale of Series H-2 Preferred Stock and Warrants,
as disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on December
22, 2016 to support our cash position. In the future, however, if our plans or assumptions regarding the sufficiency of our working
capital change or prove to be inaccurate, we may need to raise additional funds through public or private debt or equity offerings,
financings, corporate collaborations, or other means. We may also be required to reduce operating expenditures or investments in
our infrastructure.
RISKS RELATED TO OUR COMMON STOCK
If our common stock were delisted from
The NASDAQ Stock Market, the Company would be subject to the risks relating to penny stocks.
As reported on our Current Report on Form
8-K filed with the SEC on December 19, 2016, the Company has received a notification from The NASDAQ Stock Market of a failure
to satisfy a continued listing rule. The Company is preparing a plan to regain compliance and is considering all available options.
If our common stock were to be delisted from trading on The NASDAQ Stock Market and the trading price of the common stock were
below $5.00 per share on the date the common stock were delisted, trading in our common stock would also be subject to the requirements
of certain rules promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These rules
require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a "penny stock"
and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers
and accredited investors, generally institutions. These additional requirements may discourage broker-dealers from effecting transactions
in securities that are classified as penny stocks, which could severely limit the market price and liquidity of such securities
and the ability of purchasers to sell such securities in the secondary market. A penny stock is defined generally as any non-exchange
listed equity security that has a market price of less than $5.00 per share, subject to certain exceptions.
Our stock price may be volatile, which
could result in lawsuits against us and our officers and directors.
The stock market in
general and the stock prices of technology and telecommunications companies in particular, have experienced volatility that has
often been unrelated to or disproportionate to the operating performance of those companies. The market price of our common stock
has fluctuated in the past and is likely to fluctuate in the future. Between May 1, 2016 and January 24, 2017, our common stock
has traded as low as $1.13 and as high as $1.96 per share, based upon information provided by the NASDAQ Capital Market. Factors
that could have a significant impact on the market price of our common stock include, but are not limited to, the following:
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quarterly variations in operating results;
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announcements of new services by us or our competitors;
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the gain or loss of significant customers;
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changes in analysts’ earnings estimates;
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rumors or dissemination of false information;
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short selling of our common stock;
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general conditions in the market;
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changing the exchange or quotation system on which we list
our common stock for trading;
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announcements regarding acquisitions by or of our company;
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political and/or military events associated with current
worldwide conflicts; and
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events affecting other companies that investors deem comparable
to us.
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Companies that have experienced volatility
in the market price of their stock have frequently been the objects of securities class action litigation. Class action and derivative
lawsuits could result in substantial costs to us and cause a diversion of our management’s attention and resources, which
could materially harm our financial condition and results of operations.
We can issue shares of preferred stock
without shareholder approval, which could adversely affect the rights of common shareholders.
Our certificate of
incorporation permits us to establish the rights, privileges, preferences and restrictions, including voting rights, of future
series of our preferred stock and to issue such stock without approval from our stockholders. The rights of holders of our common
stock may suffer as a result of the rights granted to holders of preferred stock that we may issue in the future. In addition,
we could issue preferred stock to prevent a change in control of our company, depriving common shareholders of an opportunity
to sell their stock at a price in excess of the prevailing market price.
Certain provisions
of our corporate governing documents could make an acquisition of our Company more difficult.
The following provisions of our certificate
of incorporation and bylaws, as currently in effect, as well as Delaware law, could discourage potential proposals to acquire us,
delay or prevent a change in control of us or limit the price that investors may be willing to pay in the future for shares of
our common stock:
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our certificate of incorporation permits our Board of Directors to issue “blank check”
preferred stock and to adopt amendments to our bylaws;
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·
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our bylaws contain restrictions regarding the right of stockholders to nominate directors and to
submit proposals to be considered at stockholder meetings; and
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we are subject to provisions of Delaware law which prohibit us from engaging in any of a broad
range of business transactions with an “interested stockholder” for a period of three years following the date such
stockholder became classified as an interested stockholder.
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USE OF PROCEEDS
We will not receive
any proceeds from the sale of the Common Stock by the selling stockholders. We may receive proceeds from the issuance of shares
of our Common Stock upon the exercise of the Warrants, if exercised for cash. We intend to use any proceeds from exercise of the
Warrants for working capital and other general corporate purposes.
SELLING STOCKHOLDERS
The shares of Common
Stock being offered by the selling stockholders are those issued upon conversion of the Series H-2 Preferred Stock and exercise
of Warrants that were issued to the selling stockholders pursuant to the Securities Purchase Agreement dated as of December 21,
2016 (the “Securities Purchase Agreement”), by and among the Company and the investors named therein, and upon exercise
of the Warrants. We are registering the shares of Common Stock in order to permit the selling stockholders to offer the shares
for resale from time to time.
In addition to the
selling stockholders’ ownership of the shares of Series H-2 Preferred Stock and the Warrants issued pursuant to the Securities
Purchase Agreement, Alpha Capital Anstalt was previously, within the past 3 years and as disclosed in the Company’s Exchange
Act reports, the beneficial owner of 9.99% of the Company’s outstanding common stock. Alpha Capital Anstalt’s ownership
was subject to a 9.99% ownership limitation in prior series of the Company’s preferred stock, and would otherwise have represented
a larger ownership percentage in the Company’s outstanding common stock.
The table below lists
the selling stockholders and other information regarding the beneficial ownership of the shares of Common Stock by each of the
selling stockholders. The second column lists the number of shares of Common Stock beneficially owned by each selling stockholder,
based on its ownership of the Series H-2 Preferred Stock and the Warrants, as of January 25, 2017, assuming exercise of all Warrants
held by the selling stockholder on that date, without regard to any limitations on exercise.
The third column lists
the shares of Common Stock being offered by this prospectus by the selling stockholders and does not take in account any limitations
on (i) conversion of the Series H-2 Preferred Stock or issuance of Common Stock or (ii) exercise of the Warrants.
In accordance with
the terms of a registration rights agreement with the selling stockholders (the “Registration Rights Agreement”), this
prospectus generally covers the resale of at least the sum of (i) the number of shares of Common Stock issued upon conversion of
the Series H-2 Preferred Stock issued pursuant to the Securities Purchase Agreement as of the trading day immediately preceding
the date the registration statement is initially filed with the SEC, and (ii) the maximum number of shares of common stock issued
and issuable upon exercise of the related Warrants as of the trading day immediately preceding the date the registration statement
is initially filed with the SEC.
The fourth column assumes the sale of all of the shares offered by the selling stockholders
pursuant to this prospectus.
Under the terms of
the Series H-2 Preferred Stock, a selling stockholder may not convert the Series H-2 Preferred Stock to the extent such exercise
would cause such selling stockholder, together with its affiliates, to beneficially own a number of shares of Common Stock which
would exceed 9.99% of our then outstanding shares of Common Stock following such exercise. Under the terms of the Warrants, a
selling stockholder may not exercise the Warrants to the extent such exercise would cause such selling stockholder, together with
its affiliates, to beneficially own a number of shares of common stock which would exceed 9.99% of our then outstanding shares
of common stock following such exercise, excluding for purposes of such determination shares of common stock issuable upon exercise
of the Warrants which have not been exercised. The number of shares in the second column does not reflect these limitations. The
selling stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”
Name of Selling Stockholder
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Number of Shares of
Common Stock Owned
Prior to Offering
(1)(2)
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Maximum Number
of Shares of
Common Stock to
be Sold Pursuant to
this Prospectus
(3)
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Number of Shares of
Common Stock Owned After
Offering
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Number
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Percent
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Alpha Capital Anstalt
(4)
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516,500
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516,500
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0
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*
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Brio Capital Master Fund Ltd.
(5)
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309,750
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309,750
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0
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*
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(1)
Beneficial
ownership is determined in accordance with the rules of the SEC. Shares of Common Stock subject to options or warrants currently
exercisable or exercisable within 60 days of the date of this prospectus, are deemed outstanding for computing the percentage ownership
of the stockholder holding the options or warrants and securities that are currently convertible or convertible within 60 days
of the date of this prospectus, but are not deemed outstanding for computing the percentage ownership of any other stockholder.
Unless otherwise indicated in the footnotes to this table, we believe stockholders named in the table have sole voting and sole
investment power with respect to the shares set forth opposite such stockholder’s name.
(2)
Under
the terms of the Series H-2 Preferred Stock, a selling stockholder may not convert the Series H-2 Preferred Stock to the extent
such exercise would cause such selling stockholder, together with its affiliates, to beneficially own a number of shares of Common
Stock which would exceed 9.99% of our then outstanding shares of Common Stock following such exercise. Under the terms of the Warrants,
a selling stockholder may not exercise the Warrants to the extent such exercise would cause such selling stockholder, together
with its affiliates, to beneficially own a number of shares of common stock which would exceed 9.99% of our then outstanding shares
of common stock following such exercise, excluding for purposes of such determination shares of common stock issuable upon exercise
of the Warrants which have not been exercised. The number of shares in the second column does not reflect these limitations. The
selling stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”
(3)
Includes
the maximum number of shares of Common Stock that each selling stockholder may sell, regardless of the 9.99% beneficial ownership
limitation explained in footnote 2 above.
(4)
Konrad
Ackermann shares voting and investment control over these shares.
(5)
Brio
Capital Management LLC and Shaye Hirsch share voting and investment control over these shares.
* Less than 1%.
PLAN OF DISTRIBUTION
We are registering
the shares of Common Stock that may be issued upon conversion of the Series H-2 Preferred Stock issued pursuant to the Securities
Purchase Agreement and upon exercise of the Warrants issued pursuant to the terms of the Securities Purchase Agreement to permit
the resale of these shares of Common Stock by the holders of such shares and Warrants from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of Common Stock. We
will bear all fees and expenses incident to our obligation to register the shares of Common Stock.
The selling stockholders
may sell all or a portion of the shares of Common Stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of Common Stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent's commissions. The shares of Common
Stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying
prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve
crosses or block transactions, pursuant to one or more of the following methods:
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on any national securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale;
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in the over-the-counter market;
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in transactions otherwise than on these exchanges or systems or in the over-the-counter market;
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through the writing of options, whether such options are listed on an options exchange or otherwise;
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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·
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block trades in which the broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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sales pursuant to Rule 144;
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broker-dealers may agree with the selling securityholders to sell a specified number of such shares
at a stipulated price per share;
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·
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a combination of any such methods of sale; and
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·
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any other method permitted pursuant to applicable law.
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If the selling stockholders
effect such transactions by selling shares of Common Stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders
or commissions from purchasers of the shares of Common Stock for whom they may act as agent or to whom they may sell as principal
(which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of the shares of Common Stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of
Common Stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of Common Stock short
and deliver shares of Common Stock covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales. The selling stockholders may also loan or pledge shares of Common Stock to broker-dealers that in turn may
sell such shares.
The selling stockholders
may pledge or grant a security interest in some or all of the shares of Common Stock, Series H-2 Preferred Stock or Warrants owned
by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell
the shares of Common Stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders
to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of Common Stock in other circumstances in which case the transferees, donees, pledgees
or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders
and any broker-dealer participating in the distribution of the shares of Common Stock may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer
may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares
of Common Stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of
shares of Common Stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents,
any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions
or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities
laws of some states, the shares of Common Stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of Common Stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance
that any selling stockholder will sell any or all of the shares of Common Stock registered pursuant to the registration statement,
of which this prospectus forms a part.
The selling stockholders
and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases
and sales of any of the shares of Common Stock by the selling stockholders and any other participating person. Regulation M may
also restrict the ability of any person engaged in the distribution of the shares of Common Stock to engage in market-making activities
with respect to the shares of Common Stock. All of the foregoing may affect the marketability of the shares of Common Stock and
the ability of any person or entity to engage in market-making activities with respect to the shares of Common Stock.
We will pay all expenses
of the registration of the shares of Common Stock pursuant to the Registration Rights Agreement, estimated to be $33,137.90 in
total, including, without limitation, SEC filing fees and expenses of compliance with state securities or "blue sky"
laws; provided, however, that a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will
indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act, in accordance with
the Registration Rights Agreement, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling
stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information
furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the Registration Rights
Agreement, or we may be entitled to contribution.
Once sold under the
registration statement, of which this prospectus forms a part, the shares of Common Stock will be freely tradable in the hands
of persons other than our affiliates.
LEGAL MATTERS
K&L Gates LLP will
pass upon the validity of the securities being offered hereby.
EXPERTS
The consolidated financial
statements of the Company as of April 30, 2016 and 2015 and for the years then ended have been audited by Marcum LLP, independent
registered public accounting firm, as set forth in their report thereon and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts
in accounting and auditing.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
The SEC allows us to incorporate by reference
the information we file with them, which means:
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Incorporated documents are
considered part of the prospectus;
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We can disclose important
information to you by referring you to those documents; and
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Information that we file
with the SEC after the date of this prospectus will automatically update and supersede the information contained in this prospectus
and incorporated filings.
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We incorporate by reference the documents
listed below that we filed with the SEC under the Exchange Act:
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·
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Our Annual Report on Form 10-K for the year ended April
30, 2016, as filed on July 28, 2016;
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·
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Our Quarterly Reports on Form 10-Q for the quarters ended
July 31, 2016, as filed on September 12, 2016, and October 30, 2016, as filed on December 15, 2016;
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Our Current Reports on Form 8-K filed on July 28, 2016; August 5, 2016; August 17, 2016; September 29,
2016; October 20, 2016; December 2, 2016; December 12, 2016; December 19, 2016; December 22, 2016; and January 19, 2017.
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Our Proxy Statement on Schedule 14A filed on August 16,
2016;
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·
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The description of our Common Stock contained in the registration
statement on Form S-3/A (Registration No. 333-165927) filed with the SEC on April 15, 2010, and all amendments and reports filed
for the purpose of updating that description.
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We also incorporate
by reference each of the documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (1) after
the date of the initial filing of this registration statement, of which this prospectus forms a part, prior to the effectiveness
of this registration statement and (2) after the date of this prospectus until the offering of the securities terminates. We will
not, however, incorporate by reference in this prospectus any documents or portions thereof that are not deemed “filed”
with the SEC, including any information furnished pursuant to Item 2.02 or Item 7.01 of our current reports on Form 8-K after the
date of this prospectus unless, and except to the extent, specified in such current reports.
We will provide you
with a copy of any of these filings (other than an exhibit to these filings, unless the exhibit is specifically incorporated by
reference into the filing requested) at no cost, if you submit a request to us by writing or telephoning us at the following address
and telephone number:
WPCS International Incorporated
521 Railroad Avenue
Suisun City, California 94585
(707) 421-1300
Any statement contained
or incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained herein, or in any subsequently filed document which also is incorporated herein by reference,
modifies or supersedes such earlier statement. Any statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus. Any statement made in this prospectus concerning the contents of any contract,
agreement or other document is only a summary of the actual contract, agreement or other document. If we have filed or incorporated
by reference any contract, agreement or other document as an exhibit to the registration statement, you should read the exhibit
for a more complete understanding of the document or matter involved. Each statement regarding a contract, agreement or other document
is qualified by reference to the actual document.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with
the SEC a registration statement on Form S-3 under the Securities Act with respect to the shares of Common Stock offered hereby.
This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the
registration statement or the exhibits and schedules filed therewith. For further information about us and the Common Stock offered
hereby, reference is made to the registration statement and the exhibits and schedules filed therewith.
A copy of the registration
statement and the exhibits and schedules filed therewith may be inspected without charge at the public reference room maintained
by the SEC, located at 100 F Street, N.E., Washington, D.C. 20549, and copies of all or any part of the registration statement
may be obtained from such offices upon the payment of the fees prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for
further information about the public reference room. We also file annual, quarterly and current reports, proxy statements and other
information with the SEC. The SEC also maintains an Internet web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC. The address of the site is http://www.sec.gov.
You should rely only on the information
contained in this document. We have not authorized anyone to give any information that is different. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not
permitted. The information in this prospectus is complete and accurate as of the date on the cover, but the information may change
in the future.
826,250 Shares of Common Stock
WPCS INTERNATIONAL INCORPORATED
PROSPECTUS
___________, ____
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table
sets forth the expenses payable by the Registrant in connection with the sale and distribution of the securities being registered
hereby. All amounts are estimated except the SEC registration fee.
Securities and Exchange Commission registration fee
|
|
$
|
137.90
|
|
Accounting fees and expenses
|
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$
|
10,000.00
|
|
Printing and engraving
|
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$
|
3,000.00
|
|
Legal fees and expenses
|
|
$
|
20,000.00
|
|
|
|
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Total
|
|
$
|
33,137.90
|
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Item 15. Indemnification of Directors and Officers
Our Certificate of
Incorporation limits, to the maximum extent permitted by Delaware law, the personal liability of directors for monetary damages
for breach of their fiduciary duties as a director. Our Bylaws provide that we shall indemnify our officers and directors and may
indemnify our employees and other agents to the fullest extent permitted by Delaware law.
Section 145 of the
Delaware General Corporation Law (“DGCL”) provides that a corporation may indemnify a director, officer, employee or
agent made a party to an action by reason of the fact that he or she was a director, officer, employee or agent of the corporation
or was serving at the request of the corporation against expenses actually and reasonably incurred by him or her in connection
with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the
best interests of the corporation and with respect to any criminal action, had no reasonable cause to believe his or her conduct
was unlawful.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to
the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
Section
102(b)(7) of the DGCL provides that a certificate of incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director,
provided that such provision may not eliminate or limit the liability of a director (i) for any breach of the director’s
duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 (relating to liability for unauthorized acquisitions or redemptions
of, or dividends on, capital stock) of the DGCL, or (iv) for any transaction from which the director derived an improper personal
benefit. Our certificate of incorporation contains such a provision.
The indemnification
provisions contained in our certificate of incorporation are in addition to any other right that a person may have or acquire under
any statute, bylaw, resolution of shareholders or directors or otherwise.
We have obtained liability
insurance for the benefit of our directors and officers which provides coverage for losses of directors and officers for liabilities
arising out of claims against such persons acting as our directors or officers due to any breach of duty, neglect, error, misstatement,
misleading statement, omission or act done by such directors and officers, except as prohibited by law.
Item 16. Exhibits and Financial Statement Schedules
The following documents are exhibits to
the registration statement:
Exhibit Number
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Description
|
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5.1*
|
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Opinion of K&L Gates LLP
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23.1*
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Consent of Marcum LLP, Independent Registered Public Accounting Firm
|
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23.2*
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Consent of K&L Gates LLP (contained in Exhibit 5.1)
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24.1
|
|
Power of Attorney (included in the signature page to the Registration Statement)
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* Filed herewith.
Item 17. Undertakings
The undersigned registrant
hereby undertakes:
|
1.
|
To file, during any period in which offers or sales are being made, a post-effective amendment
to this registration statement:
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(i) To include any prospectus
required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the
prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement;
provided
,
however
, that the
undertakings set forth in paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration
statement.
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2.
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That, for the purpose of
determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial
bona fide
offering thereof.
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|
3.
|
To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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|
4.
|
That, for the purpose of
determining liability under the Securities Act of 1933 to any purchaser:
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(i) Each prospectus filed by
the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement; and
(ii) Each prospectus required
to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be a part of and included in the registration statement
as of the earlier date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities
in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time
shall be deemed to be the initial
bona fide
offering thereof.
Provided, however
, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is a part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
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5.
|
That, for the purpose of
determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities
the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to such purchaser:
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(i) Any preliminary prospectus
or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other
free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and
(iv) Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
The undersigned registrant
hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s
annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
The undersigned registrant
hereby undertakes to supplement the prospectus, after the expiration of the subscription period, to set forth the results of the
subscription offer, the transactions by the underwriters during the subscription period, the amount of unsubscribed securities
to be purchased by the underwriters, and the terms of any subsequent reoffering thereof. If any public offering by the underwriters
is to be made on terms differing from those set forth on the cover page of the prospectus, a post-effective amendment will be filed
to set forth the terms of such offering.
Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in New York, New York, on the 25th day of January, 2017.
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WPCS INTERNATIONAL INCORPORATED
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By:
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/s/ Sebastian Giordano
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Sebastian Giordano
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Chief Executive Officer
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KNOW ALL PERSONS
BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Sebastian Giordano and David Allen,
and each of them acting individually, his true and lawful attorneys-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to sign any registration statement for the same offering covered by this Registration Statement
that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933, as amended, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents or any of them, or
his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the
dates indicated.
/s/ Sebastian Giordano
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Chief Executive Officer and Director
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January 25, 2017
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Sebastian Giordano
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(Principal Executive Officer)
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/s/ David Allen
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Chief Financial Officer
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January 25, 2017
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David Allen
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(Principal Financial Officer and Principal Accounting Officer)
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/s/ Charles Benton
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Director
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January 25, 2017
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Charles Benton
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/s/ Norm Dumbroff
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Director
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January 25, 2017
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Norm Dumbroff
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EXHIBIT INDEX
Exhibit Number
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Description
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5.1*
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Opinion of K&L Gates LLP
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23.1*
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Consent of Marcum LLP, Independent Registered Public Accounting Firm
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23.2*
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Consent of K&L Gates LLP (contained in Exhibit 5.1)
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24.1
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Power of Attorney (included in the signature page to the Registration Statement)
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* Filed herewith.
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