UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
To Section 13 Or 15(D) of The Securities Exchange Act of
1934
Date
of report (date of earliest event reported): April 10,
2007
WPCS
INTERNATIONAL INCORPORATED
(Exact
name of registrant as specified in its charter)
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Delaware
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0-26277
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98-0204758
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(State
or Other Jurisdiction of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer Identification
No.)
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One
East Uwchlan Avenue, Suite 301, Exton, PA 19341
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (610) 903-0400
Copy
of correspondence to:
Marc
J.
Ross, Esq.
Thomas
A.
Rose, Esq.
Sichenzia
Ross Friedman Ference LLP
1065
Avenue of the Americas
New
York,
New York 10018
ITEM
1.01 Entry
Into a Material Definitive Agreement; and
ITEM
2.03 Creation
of a Direct Financial Obligation.
On
April
10, 2007, WPCS International Incorporated (the “Company”), and each of its
subsidiaries entered into a loan agreement with Bank of America, N.A. (“BOA”).
The loan agreement (the “Loan Agreement”), provides for a revolving line of
credit in an amount not to exceed $12,000,000, together with a letter of credit
facility not to exceed $2,000,000. The Company and its subsidiaries also entered
into security agreements with BOA, pursuant to which each entity granted a
security interest to BOA in all of their assets.
Pursuant
to the terms of the Loan Agreement, the Company is permitted to borrow up to
$12,000,000 under the revolving credit line. The Loan Agreement contains
customary covenants, including but not limited to (i) funded debt to tangible
net worth, and (ii) minimum interest coverage ratio. The loan commitment shall
expire on April 10, 2010. The Company may prepay the loan at any
time.
Loans
under the Loan Agreement bear interest at a rate equal to BOA’s prime rate,
minus one percentage point. The Company has the option to elect to use the
optional interest rate of LIBOR plus one hundred seventy-five percentage points.
The
Company used the initial funds provided by the loan, in the gross amount of
$4,454,217.24 to repay the existing credit agreement with Bank Leumi USA, which
credit agreement was terminated in connection with the Loan Agreement.
ITEM
9.01 Financial
Statements and Exhibits.
(a) Financial
statements of businesses acquired.
Not
Applicable.
(b) Pro
forma
financial information.
Not
Applicable.
(c) Exhibits.
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10.1
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Loan
Agreement, dated April 10, 1007, by and among WPCS
International Incorporated, Bank of America, N.A. Clayborn Contracting
Group, Inc., Heinz Corporation, New England Communications Systems,
Inc.,
Quality Communications & Alarm Company., Inc., Southeastern
Communication Service, Inc., and Walker Comm,
Inc.
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10.2
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Security
Agreement, dated April 10, 1007, by and among
WPCS International Incorporated, Bank of America, N.A. Clayborn
Contracting Group, Inc., Heinz Corporation, New England Communications
Systems, Inc., Quality Communications & Alarm Company., Inc.,
Southeastern Communication Service, Inc., and Walker Comm,
Inc.
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SIGNATURE
Pursuant
to the requirement of the Securities and Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
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WPCS
INTERANTIONAL INCORPORATED
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| Date: April
16, 2007 |
By: |
/s/ ANDREW
HIDALGO |
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Andrew
Hidalgo |
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President
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