SCHEDULE 14C
(RULE 14C-101)
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Definitive Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
WPCS INTERNATIONAL INCORPORATED
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the Appropriate Box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which the transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
WPCS INTERNATIONAL INCORPORATED
140 South Village Avenue
Exton, Pennsylvania 19341
INFORMATION STATEMENT
PURSUANT TO SECTION 14
OF THE SECURITIES EXCHANGE ACT OF 1934
AND REGULATION 14C AND SCHEDULE 14C THEREUNDER
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE NOT REQUESTED TO SEND US A PROXY
Exton, Pennsylvania
*, 2003
This information statement has been mailed on or about *, 2003 to the
stockholders of record on *, 2003 (the "Record Date") of WPCS International
Incorporated, a Delaware corporation (the "Company") in connection with certain
actions to be taken by the written consent by the majority of stockholders of
the Company, dated as of October 30, 2003. The actions to be taken pursuant to
the written consent shall be taken on or about *, 2003, 20 days after the
mailing of this information statement.
THIS IS NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER
MEETING WILL BE HELD TO CONSIDER ANY MATTER WHICH WILL BE DESCRIBED HEREIN.
By Order of the Board of Directors,
/s/ Andrew Hidalgo
------------------
Andrew Hidalgo
Chairman of the Board and
Chief Executive Officer
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NOTICE OF ACTION TO BE TAKEN PURSUANT THE WRITTEN CONSENT OF MAJORITY
STOCKHOLDERS IN LIEU OF AN ANNUAL MEETING OF THE STOCKHOLDERS, DATED OCTOBER 30,
2003
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the following action will be taken pursuant to
the written consent of a majority of stockholders dated October 30, 2003, in
lieu of an annual meeting of the stockholders. Such action will be taken on or
about *, 2003:
1. To elect five directors to the Corporation's Board of Directors, to hold
office until their successors are elected and qualified or until their earlier
resignation or removal
2. To amend the Company's certificate of incorporation to increase the
authorized number of shares of common stock from 30,000,000 shares to
100,000,000 shares.
3. To adopt the Company's 2002 Stock Option Plan
OUTSTANDING SHARES AND VOTING RIGHTS
As of the Record Date, the Company's authorized capitalization consisted of
30,000,000 shares of Common Stock, of which 20,135,690 shares were issued and
outstanding as of the Record Date. Holders of Common Stock of the Company have
no preemptive rights to acquire or subscribe to any of the additional shares of
Common Stock.
Each share of Common Stock entitles its holder to one vote on each matter
submitted to the stockholders. However, because stockholders holding at least a
majority of the voting rights of all outstanding shares of capital stock as of
October 30, 2003 have voted in favor of the foregoing proposals by resolution
dated October 30, 2003; and having sufficient voting power to approve such
proposals through their ownership of capital stock, no other stockholder
consents will be solicited in connection with this Information Statement.
Pursuant to Rule 14c-2 under the Securities Exchange Act of 1934, as
amended, the proposals will not be adopted until a date at least 20 days after
the date on which this Information Statement has been mailed to the
stockholders. The Company anticipates that the actions contemplated herein will
be effected on or about the close of business on *, 2003.
The Company has asked brokers and other custodians, nominees and
fiduciaries to forward this Information Statement to the beneficial owners of
the Common Stock held of record by such persons and will reimburse such persons
for out-of-pocket expenses incurred in forwarding such material.
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ELECTION OF DIRECTORS
The following persons will be elected as members of the Company's Board of
Directors, for a term of one year and until their successors are duly elected
and qualified:
NAME AGE POSITION
----------------- --- ----------------------------------------------
Andrew Hidalgo 47 Chairman, Chief Executive Officer and Director
----------------- --- ----------------------------------------------
Norm Dumbroff 42 Director
----------------- --- ----------------------------------------------
Neil Hebenton 47 Director
----------------- --- ----------------------------------------------
Gary Walker 49 Director
----------------- --- ----------------------------------------------
William Whitehead 47 Director
----------------- --- ----------------------------------------------
Andrew Hidalgo, Chairman and Chief Executive Officer
Mr. Hidalgo became our Chairman of the Board and Chief Executive Officer in
June 2002. He is responsible for our operations and direction. From September
2000 until June 2002, Mr. Hidalgo was President of Wireless Professional
Communication Services, Inc. From November 1999 to September 2000, Mr. Hidalgo
was Chairman and Chief Executive Officer of CommSpan Incorporated. From December
1997 to September 1999, Mr. Hidalgo was Senior Vice President at Applied Digital
Solutions, a communications infrastructure company, where he was responsible for
implementing a strategic direction involving acquisitions, business integration
and sales development while managing overall operations for the company's five
core business divisions and 25 subsidiary companies. Prior to that, Mr. Hidalgo
held various positions in operations, sales and marketing with the 3M Company,
Schlumberger and General Electric. He attended Fairfield University in
Fairfield, Connecticut where he majored in Marketing and Finance.
Norm Dumbroff
Mr. Dumbroff became a Director of WPCS in 2002. He has been the Chief
Executive Officer of Wav Incorporated since April 1990, a distributor of
wireless products in North America. Prior to Wav Incorporated, Mr. Dumbroff was
an engineer for Hughes Aircraft. He holds a B.S. degree in Computer Science from
Albright College.
Neil Hebenton
Mr. Hebenton became a director of WPCS in October 2002. Since 1996, he has
been the Managing Director for the U.K. based FW Pharma Systems, a multi-million
dollar application software company serving the pharmaceutical and biotechnology
sectors. Mr. Hebenton has held a variety of operational, scientific and
marketing positions in Europe with Bull Information Systems (BULP-Paris,
Frankfurt, Zurich) and Phillips Information Systems. He received his B.S. in
Mathematics from the University of Edinburgh, Scotland.
Gary Walker
Mr. Walker has been a director of WPCS since December 2002. He is currently
the president of the Walker Comm subsidiary for WPCS International, a position
he has held since November 1996. Prior to his involvement at Walker Comm, Mr.
Walker had a distinguished career with the U.S. Navy and also held an elected
political position in Fairfield, California. He holds a B.A. in Business
Management from St. Mary's College in Moraga, California.
William Whitehead
Mr. Whitehead became a director of WPCS in October 2002. Since October
1998, he has been the Chief
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Financial Officer for Neutronics Incorporated, a multi-million dollar process
and safety systems manufacturer. Mr. Whitehead has held a variety of financial
management positions with Deloitte & Touche and was Division Controller for
Graphic Packaging Corporation from April 1990 to March 1998. After attending
West Point, Mr. Whitehead received a B.S. in Accounting from the Wharton School
at the University of Pennsylvania and received his M.B.A. from the Kellogg
Graduate School at Northwestern University.
Director Compensation
We do not pay directors fees or other cash compensation for services
rendered as a director. We reimburse our directors for expenses incurred in
connection with attending Board meetings.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and
directors and persons who own more than 10% of a registered class of our equity
securities to file reports of their ownership thereof and changes in that
ownership with the Securities and Exchange Commission and the National
Association of Securities Dealers, Inc. Executive officers, directors and
greater than 10% stockholders are required by SEC regulations to furnish us with
copies of all such reports they file.
Based solely upon a review of Forms 3, 4 and 5, and amendments thereto,
furnished to us during fiscal year 2003, we are not aware of any director,
officer or beneficial owner of more than ten percent of our Common stock that,
during fiscal year 2003, failed to file on a timely basis reports required by
Section 16(a) of the Securities Exchange Act of 1934.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
On October 30, 2003, the majority stockholders of the Company approved an
amendment to the Company's Certificate of Incorporation, as amended, to replace
Article IV in its entirety, which will result in an increase to the number of
authorized shares of Common Stock. The Company's Certificate of Incorporation,
as amended, currently authorizes for issuance 35,000,000 shares consisting of
30,000,000 of common stock and 5,000,000 shares of preferred stock. The approval
of this amendment to the Certificate of Incorporation will increase the
Company's authorized shares of common stock to 105,000,000. The Company
currently has (i) approximately 20,135,690 shares of common stock issued and
outstanding as of the Record Date and (ii) no shares of preferred stock
outstanding. The Board believes that the increase in authorized common shares
would provide the Company greater flexibility with respect to the Company's
capital structure for such purposes as additional equity financing and stock
based acquisitions.
The terms of the additional shares of Common Stock will be identical to
those of the currently outstanding shares of Common Stock. However, because
holders of Common Stock have no preemptive rights to purchase or subscribe for
any unissued stock of the Company, the issuance of additional shares of Common
Stock will reduce the current stockholders' percentage ownership interest in the
total outstanding shares of Common Stock. This amendment and the creation of
additional shares of authorized common stock will not alter the current number
of issued shares. The relative rights and limitations of the shares of Common
Stock will remain unchanged under this amendment.
As of the Record Date, a total of 20,135,690 shares of the Company's
currently authorized 30,000,000 shares of Common Stock are issued and
outstanding. The increase in the number of authorized but unissued shares of
Common Stock would enable the Company, without further stockholder approval, to
issue shares from time to time as may be required for proper business purposes,
such as raising additional capital for ongoing operations, business and asset
acquisitions, stock splits and dividends, present and future employee benefit
programs and other
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corporate purposes.
The proposed increase in the authorized number of shares of Common Stock
could have a number of effects on the Company's stockholders depending upon the
exact nature and circumstances of any actual issuances of authorized but
unissued shares. The increase could have an anti-takeover effect, in that
additional shares could be issued (within the limits imposed by applicable law)
in one or more transactions that could make a change in control or takeover of
the Company more difficult. For example, additional shares could be issued by
the Company so as to dilute the stock ownership or voting rights of persons
seeking to obtain control of the Company. Similarly, the issuance of additional
shares to certain persons allied with the Company's management could have the
effect of making it more difficult to remove the Company's current management by
diluting the stock ownership or voting rights of persons seeking to cause such
removal. Except as further discussed herein, the Board of Directors is not aware
of any attempt, or contemplated attempt, to acquire control of the Company, and
this proposal is not being presented with the intent that it be utilized as a
type of anti- takeover device.
There are currently no plans, arrangements, commitments or understandings
for the issuance of the additional shares of Common Stock which are to be
authorized.
Stockholders do not have any preemptive or similar rights to subscribe for
or purchase any additional shares of Common Stock that may be issued in the
future, and therefore, future issuances of Common Stock may, depending on the
circumstances, have a dilutive effect on the earnings per share, voting power
and other interests of the existing stockholders.
ADOPTION OF 2002 EMPLOYEE STOCK INCENTIVE PLAN
The 2002 Stock Option Plan was adopted by the board of directors in
September 2002 and increased from 500,000 to 5,000,000 options on March 3, 2003,
and approval by the shareholders is pending. The Plan provides for the issuance
of up to 5,000,000 options.
Option Grants to the Named Executive Officers and Directors as of October 30,
2003:
Name of Beneficial Owner Title Options
- ------------------------ ------------------------ -----------
Donald Walker Executive Vice President 200,000
E.J. von Schaumburg Executive Vice President 300,000
Joseph Heater Chief Financial Officer 400,000
Neil Hebenton Director 25,000
Gary Walker Director 200,000
William Whitehead Director 75,000
===========
1,200,000
===========
Under the plan, options may be granted which are intended to qualify as
incentive stock options, or ISOs, under Section 422 of the Internal Revenue Code
of 1986, as amended, or which are not intended to qualify as incentive stock
options thereunder, or Non-ISOs. The 2002 Stock Option Plan and the right of
participants to make purchases thereunder are intended to qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code of
1986, as amended. The 2002 Stock Option Plan is not a qualified deferred
compensation plan under Section 401(a) of the Internal Revenue Code and is not
subject to the provisions of the Employee Retirement Income Security Act of
1974.
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Purpose
The primary purpose of the 2002 Stock Option Plan is to attract and retain
the best available personnel for us in order to promote the success of our
business and to facilitate the ownership of our stock by employees. The ability
of a company to offer a generous stock option program has now become a standard
feature in the industry in which we operates.
Administration
The 2002 Stock Option Plan is administered by our board of directors, as
the board of directors may be composed from time to time. All questions of
interpretation of the 2002 Stock Option Plan are determined by the board, and
its decisions are final and binding upon all participants. Any determination by
a majority of the members of the board of directors at any meeting, or by
written consent in lieu of a meeting, shall be deemed to have been made by the
whole board of directors.
Notwithstanding the foregoing, the board of directors may at any time, or
from time to time, appoint a committee of at least two members of the board of
directors, and delegate to the committee the authority of the board of directors
to administer the plan. Upon such appointment and delegation, the committee
shall have all the powers, privileges and duties of the board of directors, and
shall be substituted for the board of directors, in the administration of the
plan, subject to certain limitations.
Members of the board of directors who are eligible employees are permitted
to participate in the 2002 Stock Option Plan, provided that any such eligible
member may not vote on any matter affecting the administration of the 2002 Stock
Option Plan or the grant of any option pursuant to it, or serve on a committee
appointed to administer the 2002 Stock Option Plan. In the event that any member
of the board of directors is at any time not a "disinterested person", as
defined in Rule 16b-3(c)(3)(i) promulgated pursuant to the Securities Exchange
Act of 1934, the plan shall not be administered by the board of directors, and
may only by administered by a committee, all the members of which are
disinterested persons, as so defined.
Eligibility
Under the 2002 Stock Option Plan, options may be granted to key employees,
officers, directors or consultants of ours, as provided in the 2002 Stock Option
Plan.
Terms Of Options
The term of each option granted under the plan shall be contained in a
stock option agreement between us and the optionee and such terms shall be
determined by the board of directors consistent with the provisions of the plan,
including the following:
(a) Purchase Price. The purchase price of the common shares subject to each
ISO shall not be less than the fair market value, or in the case of the grant of
an ISO to a principal stockholder, not less that 110% of fair market value of
such common shares at the time such option is granted. The purchase price of the
common shares subject to each Non-ISO shall be determined at the time such
option is granted, but in no case less than 85% of the fair market value of such
common shares at the time such option is granted.
(b) Vesting. The dates on which each option (or portion thereof) shall be
exercisable and the conditions precedent to such exercise, if any, shall be
fixed by the board of directors, in its discretion, at the time such option is
granted.
(c) Expiration. The expiration of each option shall be fixed by the board
of directors, in its discretion, at the
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time such option is granted; however, unless otherwise determined by the board
of directors at the time such option is granted, an option shall be exercisable
for ten (10) years after the date on which it was granted (the "Grant Date").
Each option shall be subject to earlier termination as expressly provided in the
2002 Stock Option Plan or as determined by the board of directors, in its
discretion, at the time such option is granted.
(d) Transferability. No option shall be transferable, except by will or the
laws of descent and distribution, and any option may be exercised during the
lifetime of the optionee only by him. No option granted under the plan shall be
subject to execution, attachment or other process.
(e) Option Adjustments. The aggregate number and class of shares as to
which options may be granted under the plan, the number and class shares covered
by each outstanding option and the exercise price per share thereof (but not the
total price), and all such options, shall each be proportionately adjusted for
any increase decrease in the number of issued common shares resulting from
split-up spin-off or consolidation of shares or any like capital adjustment or
the payment of any stock dividend.
Except as otherwise provided in the 2002 Stock Option Plan, any option
granted hereunder shall terminate in the event of a merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation of
us. However, the optionee shall have the right immediately prior to any such
transaction to exercise his option in whole or in part notwithstanding any
otherwise applicable vesting requirements.
(f) Termination, Modification and Amendment. The 2002 Stock Option Plan
(but not options previously granted under the plan) shall terminate ten (10)
years from the earlier of the date of its adoption by the board of directors or
the date on which the plan is approved by the affirmative vote of the holders of
a majority of the outstanding shares of our capital stock entitled to vote
thereon, and no option shall be granted after termination of the plan. Subject
to certain restrictions, the plan may at any time be terminated and from time to
time be modified or amended by the affirmative vote of the holders of a majority
of the outstanding shares of our capital stock present, or represented, and
entitled to vote at a meeting duly held in accordance with the applicable laws
of the State of Delaware.
Stock Appreciation Rights
The 2002 Stock Option Plan also permits the granting of one or more stock
appreciation rights to eligible participants. Such stock appreciation rights may
be granted either independent of or in tandem with options granted to the same
participant. Stock appreciation rights granted in tandem with options may be
granted simultaneously with, or, in the case of Non-ISOs, subsequent to, the
grant to the participant of the related options; provided, however, that: (i)
any option shall expire and not be exercisable upon the exercise of any stock
appreciation right with respect to the same share, (ii) any stock appreciation
right shall expire and not be exercisable upon the exercise of any option with
respect to the same share, and (iii) an option and a stock appreciation right
covering the same share of common stock may not be exercised simultaneously.
Upon exercise of a stock appreciation right with respect to a share of common
stock, the participant shall be entitled to receive an amount equal to the
excess, if any, of (A) the fair market value of a share of common stock on the
date of exercise over (B) the exercise price of such stock appreciation right.
Federal Income Tax Aspects Of The 2002 Stock Option Plan
The following is a brief summary of the effect of federal income taxation
upon the participants and us with respect to the purchase of shares under the
2002 Stock Option Plan. This summary does not purport to be complete and does
not address the federal income tax consequences to taxpayers with special tax
status. In addition, this summary does not discuss the provisions of the income
tax laws of any municipality, state or foreign country in which the participant
may reside, and does not discuss estate, gift or other tax consequences other
than income tax consequences. We advise each participant to consult his or her
own tax advisor regarding the tax consequences of
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participation in the 2002 option plan and for reference to applicable provisions
of the code.
The 2002 Stock Option Plan and the right of participants to make purchases
thereunder are intended to qualify under the provisions of Sections 421, 422 and
423 of the Code. Under these provisions, no income will be recognized by a
participant prior to disposition of shares acquired under the 2002 Stock Option
Plan.
If the shares are sold or otherwise disposed of (including by way of gift)
more than two years after the first day of the offering period during which
shares were purchased (the "Offering Date"), a participant will recognize as
ordinary income at the time of such disposition the lesser of (a) the excess of
the fair market value of the shares at the time of such disposition over the
purchase price of the shares or (b) 15% of the fair market value of the shares
on the first day of the offering period. Any further gain or loss upon such
disposition will be treated as long-term capital gain or loss. If the shares are
sold for a sale price less than the purchase price, there is no ordinary income
and the participant has a capital loss for the difference.
If the shares are sold or otherwise disposed of (including by way of gift)
before the expiration of the two-year holding period described above, the excess
of the fair market value of the shares on the purchase date over the purchase
price will be treated as ordinary income to the participant. This excess will
constitute ordinary income in the year of sale or other disposition even if no
gain is realized on the sale or a gift of the shares is made. The balance of any
gain or loss will be treated as capital gain or loss and will be treated as
long-term capital gain or loss if the shares have been held more than one year.
In the case of a participant who is subject to Section 16(b) of the
Securities Exchange Act of 1934, the purchase date for purposes of calculating
such participant's compensation income and beginning of the capital gain holding
period may be deferred for up to six months under certain circumstances. Such
individuals should consult with their personal tax advisors prior to buying or
selling shares under the 2002 Stock Option Plan.
The ordinary income reported under the rules described above, added to the
actual purchase price of the shares, determines the tax basis of the shares for
the purpose of determining capital gain or loss on a sale or exchange of the
shares.
We are entitled to a deduction for amounts taxed as ordinary income to a
participant only to the extent that ordinary income must be reported upon
disposition of shares by the participant before the expiration of the two-year
holding period described above.
Restrictions On Resale
Certain officers and directors may be deemed to be our "affiliates" as that
term is defined under the Securities Act. The Common stock acquired under the
2002 Stock Option Plan by an affiliate may be reoffered or resold only pursuant
to an effective registration statement or pursuant to Rule 144 under the
Securities Act or another exemption from the registration requirements of the
Securities Act.
Aggregated Option Exercises in Last Fiscal Year And Fiscal Year-end Option
Values
There were no option exercises in the last fiscal year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 13, 2002, we acquired all of the outstanding shares of
Invisinet from its shareholders in exchange for an aggregate of 1,000,000 newly
issued shares of our common stock. An additional 150,000 shares of our common
stock were to be issued to a shareholder, provided Invisinet achieved certain
financial targets over a two
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year period beginning on the first anniversary date of the merger. On May 27,
2003, we and the shareholder mutually agreed to cancel the issuance of bonus
shares and in exchange, issued options to purchase 300,000 shares of our common
stock.
On December 30, 2002, we acquired all of the outstanding shares of Walker
Comm in exchange for an aggregate of 2,486,000 newly issued shares of our common
stock and $500,000 cash consideration. An additional $500,000 is payable
contingent upon Walker Comm achieving certain net profits, to be paid in
quarterly distributions equal to 75% of net income, which would increase the
purchase price. At July 31, 2003, $208,207was payable to the Walker Comm
shareholders against this earn-out provision.
We owe $100,000 to Gary Walker, one of our directors. This loan bears
interest at 5.75% and is due on or before February 12, 2004.
In connection with the acquisition of Walker Comm, we assumed a lease with
trusts, of which, certain of our officers are the trustees, for a building and
land located in Fairfield, California, which is occupied by our Walker Comm
subsidiary. The lease calls for monthly rental payments of $4,642, with annual
increases, calculated using the San Francisco-Oakland-San Jose Consolidated
Metropolitan Statistical Area Consumer Price Index.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of October 30, 2003 (i) by each person who is
known by us to beneficially own more than 5% of our common stock; (ii) by each
of our officers and directors; and (iii) by all of our officers and directors as
a group.
Name and Address of Beneficial Shares of Percent
Owner** Common Stock of Class
- ------------------------------ -------------- ----------
Andrew Hidalgo 5,380,000 26.7%
Donald Walker 1,333,812(1) 6.6%
E.J. von Schaumburg 194,750(1) *
Joseph Heater 198,611(1) *
Norm Dumbroff 850,000(2) 4.2%
Neil Hebenton 15,625(1) *
Gary Walker 1,047,426(1) 5.2%
William Whitehead 60,083(1) *
All officers, directors and key 9,080,307 (1) 45.1%
executives (8 Persons)
* Less than 1%
** c/o WPCS International
Incorporated, 140 South Village
Avenue, Suite 20, Exton, PA 19341.
Beneficial Ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock subject to options or
warrants currently exercisable or convertible, or exercisable or convertible
within 60 days of October 30, 2003 are
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deemed outstanding for computing the percentage of the person holding such
option or warrant but are not deemed outstanding for computing the percentage of
any other person. Percentages are based on a total of 20,135,690 shares of
common stock outstanding on October 30 2003, and the shares issuable upon the
exercise of options and warrants exercisable on or within 60 days of October 30,
2003, as described below.
(1) Includes the following number of shares of common stock which may be
acquired by certain executive officers and directors through the exercise of
stock options which were exercisable as of October 30, 2003 or become
exercisable within 60 days of that date: Donald Walker , 100,000 shares; E.J.
von Schaumburg, 43,750 shares; Joseph Heater, 198,611 shares; Neil Hebenton,
15,625 shares; Gary Walker, 100,000 shares; William Whitehead, 60,083 shares;
and all directors and officers as a group, 543,403 shares.
(2) J. Johnson LLC is a Delaware corporation controlled by Norm Dumbroff, one of
our directors. J. Johnson LLC owned 85% of Invisinet, Inc. (Invisinet). On
November 13, 2002, we acquired all of the outstanding shares of Invisinet, and
were exchanged for 1,000,000 shares of our common stock. In connection with this
acquisition, J. Johnson LLC was issued 850,000 shares of our common stock.
INDEPENDENT AUDITORS
J.H. Cohn LLP serves as the Company's independent auditors.
Audit Fees. The Company paid J.H. Cohn LLP aggregate fees of $72,660 for
professional services rendered for the audit of the Company's annual financial
statements for the fiscal year 2003 and the reviews of the financial statements
included in the Company's forms 10-QSB for the fiscal year 2003.
Financial Information Systems Design and Implementation Fees. The Company
did not pay any fees for financial information systems design and implementation
services during the most recent fiscal year.
All Other Fees. The Company paid J.H. Cohn LLP $2,445 during the most
recent fiscal year for tax fees.
ADDITIONAL INFORMATION
The Company's annual report on Form 10-KSB for the fiscal year ended April
30, 2003 is being delivered to you with this Information Statement. The Company
will furnish a copy of any exhibit thereto or other information upon request by
a stockholder to WPCS International Incorporated, 140 South Village Avenue,
Exton, Pennsylvania 19341, Attn: Secretary.
By Order of the Board of Directors,
/s/ Andrew Hidalgo
------------------
Andrew Hidalgo
Chairman of the Board and
Chief Executive Officer
Exton, Pennsylvania
*, 2003
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