As filed
with the Securities and Exchange Commission on March 27, 2009
Registration No.
333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-8
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
WPCS
International Incorporated
(Exact
name of registrant as specified in its charter)
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Delaware
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98-0204758
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer identification
No.)
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One East
Uwchlan Avenue, Suite 301, Exton, Pennsylvania 19341
(Address
of principal executive offices) (Zip Code)
2007
Incentive Stock Plan
(full
title of the plan)
Andrew
Hidalgo, Chief Executive Officer
WPCS
INTERNATIONAL INCORPORATED
One East
Uwchlan Avenue
Suite
301
Exton,
Pennsylvania 19341
(Name
and address of agent for service)
(610)
903-0400
(Telephone
number, including area code, of agent for service)
With a
copy to:
Marc J.
Ross, Esq.
Thomas A.
Rose, Esq.
James M.
Turner, Esq.
Sichenzia
Ross Friedman Ference LLP
61
Broadway, 32nd
Floor
New York,
NY 10006
Phone
(212) 930-9700
Fax (212)
930-9725
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.
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Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
(do
not check if a smaller reporting company)
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Smaller
reporting company x
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CALCULATION
OF REGISTRATION FEE
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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 Security
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Proposed
Maximum Aggregate Offering Price
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Amount
of Registration Fee
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Common
Stock, $.0001 par value
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180,000 |
(2) |
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$ |
4.04 |
(4) |
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$ |
727,200 |
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$ |
40.58 |
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Common
Stock, $.0001 par value
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220,000 |
(3) |
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$ |
1.74 |
(5) |
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$ |
382,800 |
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$ |
21.36 |
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Total
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400,000 |
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$ |
1,110,000 |
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$ |
61.94 |
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(1)
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Pursuant
to Rule 416 promulgated under the Securities Act of 1933, as amended,
there are also registered hereunder such indeterminate number of
additional shares as may be issued to the selling stockholders to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
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(2)
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Represents
shares of common stock issuable upon exercise of issued and outstanding
stock options pursuant to our 2007 Incentive Stock
Plan.
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(3)
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Represents
shares of common stock reserved for issuance under our under the 2007
Incentive Stock Plan.
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(4)
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The
Proposed Maximum Offering Price Per Security is calculated in accordance
with Rule 457(h) of the Securities Act of 1933,
as amended, based upon: (i) the average exercise price of $4.04 per common
share of outstanding options to purchase 180,000 shares of common stock
that have been issued to date pursuant to our 2007 Incentive Stock
Plan.
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(5)
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Estimated
solely for purposes of calculating the registration fee in accordance with
Rule 457(c) under the Securities Act of 1933,
using the average of the high and low price as reported on the Nasdaq
Global Market on March 24, 2009 of $1.74 per
share.
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PART
I
INFORMATION
REQUIRED IN THE SECTION 10(a) PROSPECTUS
This
Registration Statement relates to two separate prospectuses.
Section 10(a)
Prospectus: Items 1 and 2, from this page, and the documents incorporated
by reference pursuant to Part II, Item 3 of this prospectus, constitute a
prospectus that meets the requirements of Section 10(a) of the Securities Act of
1933, as amended (the "Securities Act").
Reoffer Prospectus:
The material that follows Item 2, up to but not including Part II of this
Registration Statement, of which the reoffer prospectus is a part, constitutes a
"reoffer prospectus," prepared in accordance with the requirements of Part I of
Form S-3 under the Securities Act. Pursuant to Instruction C of Form S-8, the
reoffer prospectus may be used for reoffers or resales of common shares which
are deemed to be "control securities" or "restricted securities" under the
Securities Act that have been acquired by the selling shareholders named in the
reoffer prospectus.
Item
1. Plan
Information.
WPCS International Incorporated ("We",
"us", "our company" or "WPCS") will provide each participant (the "Recipient")
with documents that contain information related to our 2007 Incentive Stock
Plan, and other information including, but
not limited to, the disclosure required by Item 1 of Form S-8, which information
is not filed as a part of this Registration Statement on Form S-8 (the
"Registration Statement"). The foregoing information and the documents
incorporated by reference in response to Item 3 of Part II of this Registration
Statement taken together constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act. A Section 10(a) prospectus will be given to
each Recipient who receives common shares covered by this Registration
Statement, in accordance with Rule 428(b)(1) under the Securities
Act.
Item
2. Registrant
Information and Employee Plan Annual Information.
We will
provide to each Recipient a written statement advising it of the availability of
documents incorporated by reference in Item 3 of Part II of this Registration
Statement and of documents required to be delivered pursuant to Rule 428(b)
under the Securities Act without charge and upon written or oral notice by
contacting:
Joseph
Heater, Chief Financial Officer
WPCS
INTERNATIONAL INCORPORATED
One East
Uwchlan Avenue
Suite
301
Exton,
Pennsylvania 19341
Telephone:
(610) 903-0400
*
Information
required by Part I to be contained in Section 10(a) prospectus is omitted from
the Registration Statement in accordance with Rule 428 under the Securities Act
of 1933, and Note to Part I of Form S-8.
REOFFER
PROSPECTUS
WPCS
INTERNATIONAL INCORPORATED
180,000 Shares
of
Common
Stock
This
reoffer prospectus relates to the sale of 180,000 shares of our common stock,
$.0001 par value per share, that may be offered and resold from time to time by
certain eligible participants and existing selling shareholders identified in
this prospectus for their own account issuable upon exercise of currently
outstanding stock options which have been issued pursuant to our 2007 Incentive
Stock Plan. After the selling stockholders exercise their stock
options, it is anticipated that the selling shareholders will offer common
shares for sale at prevailing prices on the Nasdaq Global Market on the date of
sale. We will receive no part of the proceeds from sales made under this reoffer
prospectus. The selling shareholders will bear all sales commissions and similar
expenses. Any other expenses incurred by us in connection with the registration
and offering and not borne by the selling shareholders will be borne by
us.
The
shares of common stock will be issued pursuant to awards granted under our 2007
Incentive Stock Plan and will be "control securities" under the Securities Act
before their sale under this reoffer prospectus. This reoffer prospectus has
been prepared for the purposes of registering the common shares under the
Securities Act to allow for future sales by selling shareholders on a continuous
or delayed basis to the public without restriction.
The
selling shareholders and any brokers executing selling orders on their behalf
may be deemed to be "underwriters" within the meaning of the Securities Act, in
which event commissions received by such brokers may be deemed to be
underwriting commissions under the Securities Act.
Our
common stock is quoted on the Nasdaq Global Market under the symbol WPCS. The
closing sale price for our common stock on March 24, 2009 was $1.75 per
share.
Investing
in our common stock involves risks. See "Risk Factors" on page 3 of this reoffer
prospectus. These are speculative securities.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date
of this prospectus is March 27, 2009.
WPCS
INTERNATIONAL INCORPORATED
TABLE OF
CONTENTS
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Page
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Prospectus
Summary
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1
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Risk
Factors
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3
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Cautionary
Note Regarding Forward Looking Statements
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10
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Determination
of Offering Price
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10
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Use
of Proceeds
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10
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Selling
Stockholders
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11
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Plan
of Distribution
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13 |
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Legal
Matters
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14
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Experts
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14
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Incorporation
of Certain Documents by Reference
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15
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Disclosure
of Commission Position on Indemnification For Securities Act
Liabilities
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16
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Available
Information to You
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16
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NO PERSON
HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS,
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFERING
MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.
PROSPECTUS
SUMMARY
Business
Overview
We
provide design-build engineering services that focus on the implementation
requirements of communications infrastructure. We serve the specialty
communication systems and wireless infrastructure sectors. Our range of services
includes wireless communication, specialty construction, and electrical power to
the public services, healthcare, energy and corporate enterprise markets
worldwide. Because we are technology independent, we can integrate multiple
products and services across a variety of communication requirements. This
ability gives our customers the flexibility to obtain the most appropriate
solution for their communication needs on a cost effective basis.
Specialty
Communication Systems
We provide specialty communication
systems which are designed to improve productivity for a specified application
by communicating data, voice or video information in situations which were
previously non-existent, more difficult to deploy or too expensive. We have the
design-build engineering capabilities including wireless communications,
specialty construction and electrical power, to engineer a cost effective
solution for a customer’s communications infrastructure requirements. In
specialty communications, we focus on four primary vertical markets to provide
our services. These vertical sectors include public services, healthcare,
energy, and corporate enterprise.
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Public services. We
provide communications infrastructure for public services (which includes
police, fire and emergency systems), public utilities (which includes
water treatment and sewage), education, military and transportation
infrastructure.
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Healthcare. We provide
communications infrastructure for hospitals, medical centers and
healthcare networks.
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Energy. We provide
communications infrastructure for petrochemical, natural gas, electric
utilities and alternative energy (solar and
wind).
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Corporate enterprise.
We provide communications infrastructure for property management, gaming,
logistics, and multinational
companies.
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For the nine months ended January
31, 2009 and 2008, specialty communication systems represented approximately 89%
and 88% of our total revenue, respectively. The percentage of revenue from
specialty communication systems varies based on the mix of work performed during
each period. We have experienced and continue to experience quarterly
fluctuations in specialty communication systems revenue as a result of various
factors, which include the timing and volume of customers’ projects, changes in
mix of customers, contracts, capital expenditure and maintenance budgets, and
changes in the general level of construction activity. However, we expect our
mix to remain consistent with historical performance, in which over 80% of our
total revenue is derived from specialty communications.
Wireless
Infrastructure Services
We
provide wireless infrastructure services to major wireless carriers, which are
services that include the engineering, installation, integration and maintenance
of wireless carrier equipment. Wireless carriers continue to be focused on
building and expanding their networks, increasing capacity, upgrading their
networks with new technologies and maintaining their existing infrastructure.
Our engineers install and test base station equipment at the carrier cell site,
including installation of new equipment, technology upgrades, equipment
modifications and reconfigurations. These services may also include tower
construction. For the nine months ended January 31, 2009 and 2008, wireless
infrastructure services represented approximately 11% and 12% of our total
revenue, respectively. We have experienced and continue to experience quarterly
fluctuations in wireless infrastructure services as a result of the capital
expenditure and maintenance needs of the wireless carriers.
We
maintain our principal office at One East Uwchlan Avenue, Suite 301, Exton,
Pennsylvania 19341 and our telephone number is (610) 903-0400. Our
website is www.wpcsinternational.com. We are a Delaware
corporation.
The
Offering
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Common
stock outstanding before the offering
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6,942,266
shares.
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Common
stock offered by selling stockholders
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180,000
shares issuable upon exercise of outstanding stock options.
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Common
stock to be outstanding after the offering
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7,122,266
shares, which includes 180,000 shares issuable upon exercise of
outstanding stock options registered herewith.
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Use
of proceeds
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We
will receive the exercise price from the sale of shares to the selling
stockholders when, and if, such selling stockholders exercise their stock
options. Any proceeds received by us from the exercise of such
stock options will be used for general working capital
purposes.
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Nasdaq
Global Market Symbol
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WPCS
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Forward-Looking
Statements
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This
prospectus contains forward-looking statements that address, among other
things, our strategy to develop and grow our business, projected capital
expenditures, liquidity, and our development of additional revenue
sources. The forward-looking statements are based on our current
expectations and are subject to risks, uncertainties and
assumptions. We base these forward-looking statements on
information currently available to us, and we assume no obligation to
update them. Our actual results may differ materially from the
results anticipated in these forward-looking statements, due to the
various factors described under “Risk
Factors.”
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RISK
FACTORS
An
investment in our common stock has a high degree of risk. Before you invest you
should carefully consider the risks and uncertainties described below and the
other information in this report. Each of the following risks may materially and
adversely affect our business, results of operations and financial condition.
These risks may cause the market price of our common stock to decline, which may
cause you to lose all or a part of the money you paid to buy our common
stock
Our
success is dependent on growth in the deployment of wireless networks, and to
the extent that such growth slows down, our revenues may decrease and our
ability to continue operating profitably may be harmed.
Customers
are constantly re-evaluating their network deployment plans in response to
trends in the capital markets, changing perceptions regarding industry growth,
the adoption of new wireless technologies, increasing pricing competition and
general economic conditions in the United States and internationally. If the
rate of network deployment growth slows and customers reduce their capital
investments in wireless technology or fail to expand their networks, our
revenues and profits could be reduced.
If
we fail to accurately estimate costs associated with our fixed-price contracts
using percentage-of-completion, our actual results may 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 may result in unanticipated costs or
claims.
Our
wireless network 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.
The
industry in which we operate has relatively low barriers to entry and increased
competition could result in margin erosion, which would 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 deploying wireless networks 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.
Our
failure to attract and retain engineering personnel or maintain appropriate
staffing levels could adversely affect our business.
Our
success depends upon our attracting and retaining skilled engineering personnel.
Competition for such skilled personnel in our industry is high and at times can
be extremely intense, especially for engineers and project managers, and we
cannot be certain that we will be able to hire sufficiently qualified personnel
in adequate numbers to meet the demand for our services. We also believe that
our success depends to a significant extent on the ability of our key personnel
to operate effectively, both individually and as a group. Additionally, we
cannot be certain that we will be able to hire the requisite number of
experienced and skilled personnel when necessary in order to service a major
contract, particularly if the market for related personnel is competitive.
Conversely, if we maintain or increase our staffing levels in anticipation of
one or more projects and the projects are delayed, reduced or terminated, we may
underutilize the additional personnel, which could reduce our operating margins,
reduce our earnings and possibly harm our results of operations. If we are
unable to obtain major contracts or effectively complete such contracts due to
staffing deficiencies, our revenues may decline and we may experience a drop in
net income.
If
we are unable to identify and complete future acquisitions, we may be unable to
continue our growth.
Since
November 1, 2001, we have acquired 16 companies and we intend to further expand
our operations through targeted strategic acquisitions. However, we may not be
able to identify suitable acquisition opportunities. Even if we identify
favorable acquisition targets, there is no guarantee that we can acquire them on
reasonable terms or at all. If we are unable to complete attractive
acquisitions, the growth that we have experienced over the last five fiscal
years may decline.
Future
acquired companies could be difficult to assimilate, disrupt our business,
diminish stockholder value and adversely affect our operating
results.
Completing
acquisitions may require significant management time and financial resources
because we may need to assimilate widely dispersed operations with distinct
corporate cultures. Our failure to manage future acquisitions successfully could
seriously harm our operating results. Also, acquisitions could cause our
quarterly operating results to vary significantly. Furthermore, our stockholders
would be diluted if we financed the acquisitions by issuing equity securities.
In addition, acquisitions expose us to risks such as undisclosed liabilities,
increased indebtedness associated with an acquisition and the potential for cash
flow shortages that may occur if anticipated financial performance is not
realized or is delayed from such acquired companies.
Amounts
included in our backlog may not result in actual revenue or translate into
profits.
As of
January 31, 2009, we had a backlog of unfilled orders of approximately $41
million. 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 reduction in revenue, profitability and liquidity.
If
we are unable to retain the services of Messrs. Hidalgo, Heinz, James,
Madenford, Polulak or Walker, operations could be disrupted.
Our
success depends to a significant extent upon the continued services of Mr.
Andrew Hidalgo, our Chief Executive Officer and Messrs. James Heinz, Steven
James Charles Madenford, Myron Polulak and Donald Walker, our Executive Vice
Presidents. Mr. Hidalgo has overseen our company since inception and provides
leadership for our growth and operations strategy. Messrs. Heinz, James,
Madenford, Polulak and Walker oversee the day-to-day operations of our operating
subsidiaries. Loss of the services of Messrs. Hidalgo, Heinz, James, Madenford,
Polulak or Walker could disrupt our operations and harm our growth, revenues,
and prospective business. We do not maintain key-man insurance on the lives of
Messrs. Hidalgo, Heinz, James, Madenford, Polulak or Walker.
Employee
strikes and other labor-related disruptions may adversely affect our
operations.
Our
business is labor intensive, with certain projects requiring large numbers of
engineers. Over 44% of our workforce is unionized. 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.
We
may incur goodwill impairment charges in our reporting entities which could harm
our profitability.
In
accordance with Statement of Financial Accounting Standards, or SFAS, No. 142,
“Goodwill and Other Intangible Assets,” we periodically review the carrying
values of our goodwill to determine whether such carrying values exceed the fair
market value. Except for TAGS, each of our acquired companies, of which each is
a reporting unit, is subject to an annual review for goodwill impairment. If
impairment testing indicates that the carrying value of a reporting unit exceeds
its fair value, the goodwill of the reporting unit is deemed impaired.
Accordingly, an impairment charge would be recognized for that reporting unit in
the period identified, which could reduce our profitability.
Our
quarterly results fluctuate and may 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 network deployments and technology upgrades by our
customers;
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fluctuations
in demand for outsourced network
services;
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the
ability of certain customers to sustain capital resources to pay their
trade accounts receivable balances and required changes to our allowance
for doubtful accounts based on periodic assessments of the collectibility
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
stock price may be volatile, which may 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 March 1, 2008 and March 1, 2009,
our common stock has traded as low as $1.51 and as high as $7.60 per share,
based upon information provided by the NASDAQ Global Market. Factors which 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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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 object of securities class action litigation. Class action
and derivative lawsuits could result in substantial costs to us and a diversion
of our management’s attention and resources, which could materially harm our
financial condition and results of operations.
Future
changes in financial accounting standards may adversely affect our reported
results of operations.
A change
in accounting standards could have a significant effect on our reported results
and may even affect our reporting of transactions completed before the change is
effective. New pronouncements and varying interpretations of pronouncements have
occurred and may occur in the future. Changes to existing rules or the
questioning of current practices may adversely affect our reported financial
results or the way we conduct our business.
Compliance
with changing regulation of corporate governance and public disclosure may
result in additional expenses.
Changing
laws, regulations and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act of 2002, newly enacted SEC
regulations and NASDAQ Stock Market rules, have created additional burdens for
companies such as ours. We are committed to maintaining high standards of
corporate governance and public disclosure. As a result, we intend to invest
appropriate resources to comply with evolving standards. This investment will
result in increased general and administrative costs and a diversion of
management time and attention from revenue-generating activities to compliance
activities.
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.
There
may be an adverse effect on the market price of our shares as a result of shares
being available for sale in the future.
As of
March 1, 2009, holders of our outstanding options and warrants have the right to
acquire 2,530,096 shares of common stock issuable upon the exercise of stock
options and warrants, at exercise prices ranging from $2.37 to $12.10 per share,
with a weighted average exercise price of $6.68. The sale or availability for
sale in the market of the shares underlying these options and warrants could
depress our stock price. We have registered substantially all of the underlying
shares described above for resale. Holders of registered underlying shares may
resell the shares immediately upon issuance upon exercise of an option or
warrant.
If our
stockholders sell substantial amounts of our shares of common stock, including
shares issued upon the exercise of outstanding options and warrants, the market
price of our common stock may decline. These sales also might make it more
difficult for us to sell equity or equity-related securities in the future at a
time and price that we deem appropriate.
We
are subject to the risks associated with doing business in the People’s Republic
of China (PRC).
We
conduct certain business in China through our TAGS joint venture, which is
organized under the laws of the PRC. Our China operations are directly related
to and dependent on the social, economic and political conditions in this
country, many of which we have no control over, and are influenced by many
factors, including:
|
|
•
|
changes
in the region’s economic, social and political conditions or government
policies;
|
|
|
•
|
changes
in trade laws, tariffs and other trade restrictions or
licenses;
|
|
|
•
|
changes
in foreign exchange regulation in China may limit our ability to freely
convert currency to make dividends or other payments in U.S.
dollars;
|
|
|
•
|
fluctuation
in the value of the RMB (Chinese Yuan) could adversely affect the value of
our investment in China;
|
|
|
•
|
limitations
on the repatriation of earnings or assets, including
cash;
|
|
|
•
|
adverse
changes in tax laws and
regulations;
|
|
|
•
|
difficulties
in managing or overseeing our China operations, including the need to
implement appropriate systems, policies, benefits and compliance programs;
and
|
|
|
•
|
different
liability standards and less developed legal systems that may be less
predictable than those in the United
States.
|
The
occurrence or consequences of any of these conditions may restrict our ability
to operate and/or decrease the profitability of our operations in
China.
Our
Common Stock is Subject to the "Penny Stock" Rules of the SEC and the Trading
Market in Our Securities is Limited, Which Makes Transactions in Our Stock
Cumbersome and May Reduce the Value of an Investment in Our Stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:
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|
·
|
that
a broker or dealer approve a person's account for transactions in penny
stocks; and
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|
·
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the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
|
In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
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·
|
obtain
financial information and investment experience objectives of the person;
and
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·
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make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
|
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
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·
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sets
forth the basis on which the broker or dealer made the suitability
determination; and
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·
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that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
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Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our common stock and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
We and
our representatives may from time to time make written or oral statements that
are “forward-looking,” including statements contained in this prospectus and
other filings with the Securities and Exchange Commission, reports to our
stockholders and news releases. All statements that express expectations,
estimates, forecasts or projections are forward-looking statements. In addition,
other written or oral statements which constitute forward-looking statements may
be made by us or on our behalf. Words such as “expects,” “anticipates,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “forecasts,”
“may,” “should,” variations of such words and similar expressions are intended
to identify forward-looking statements. These statements are not guarantees of
future performance and involve risks, uncertainties, and assumptions which are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in or suggested by such
forward-looking statements. Factors that could cause differences include, but
are not limited to, expected market demand for the Company’s services,
fluctuations in pricing for materials, and competition.
DETERMINATION
OF OFFERING PRICE
The
selling security holders may sell the common shares issued to them from
time-to-time at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions.
USE
OF PROCEEDS
This
prospectus relates to sale of shares of common stock issuable upon exercise of
currently outstanding stock options that may be offered and sold from time to
time by the selling stockholders. We will receive the exercise price from the
sale of shares to the selling stockholders when, and if, such selling
stockholders exercise their stock options. Any proceeds received by
us from the exercise of such stock options will be used for general working
capital purposes.
SELLING
STOCKHOLDERS
The
selling shareholders named in this prospectus (the "Selling Shareholders") are
offering all of the 180,000 shares offered through this prospectus pursuant to
the exercise of stock options granted to the selling shareholders pursuant to
our 2007 Incentive Stock Plan.
A total
of 400,000 shares of common stock have been reserved for issuance under all
awards that may be granted under our 2007 Incentive Stock Plan.
If,
subsequent to the date of this reoffer prospectus, we grant any further awards
under the 2007 Incentive Stock Plan, as amended, to any eligible participants
who are affiliates of our company (as defined in Rule 405 under the Securities
Act), Instruction C of Form S-8 requires that we supplement this reoffer
prospectus with the names of such affiliates and the amounts of securities to be
reoffered by them as selling stockholders.
The
following table provides, as of March 24, 2009 information regarding the
beneficial ownership of our common shares held by each of the selling
shareholders, including:
|
1.
|
the
number of common shares owned by each selling shareholder prior to this
offering;
|
2. the
total number of common shares that are to be offered by each selling
shareholder;
|
|
3.
|
the
total number of common shares that will be owned by each selling
shareholder upon completion of the offering;
and
|
|
|
4.
|
the
percentage owned by each selling
shareholder.
|
Information
with respect to beneficial ownership is based upon information obtained from the
selling shareholders. Information with respect to "Shares Beneficially Owned
Prior to the Offering" includes the shares issuable upon exercise of the stock
options held by the selling shareholders to the extent these options are
exercisable within 60 days of March 24, 2009. The "Number of Shares Being
Offered" includes the common shares that may be acquired by the selling
shareholders pursuant to the exercise of stock options granted to the selling
shareholders pursuant to our 2007 Incentive Stock Plan, as amended. Information
with respect to "Shares Beneficially Owned After the Offering" assumes the sale
of all of the common shares offered by this prospectus and no other purchases or
sales of our common shares by the selling shareholders. Except as described
below and to our knowledge, the named selling shareholder beneficially owns and
has sole voting and investment power over all common shares or rights to these
common shares.
Because
the selling shareholders may offer all or part of the common shares currently
owned or the common shares received upon exercise of the options, which they own
pursuant to the offering contemplated by this reoffer prospectus, and because
its offering is not being underwritten on a firm commitment basis, no estimate
can be given as to the amount of options that will be held upon termination of
this offering. The common shares currently owned and the common shares received
upon exercise of the options offered by this reoffer prospectus may be offered
from time to time by the selling shareholders named below.
|
|
|
Shares
Beneficially Owned Prior To This
Offering
|
|
|
Number
of Shares That May Be Re-Offered Pursuant to the Prospectus (3)
|
|
|
Shares
Beneficially Owned Upon Completion of the
Offering
|
|
Name of Selling Shareholder
**
|
|
Number(1)
|
|
|
Percent (2)
|
|
|
|
Number(1)
|
|
|
|
|
|
|
Andrew
Hidalgo
|
|
|
416,203 |
(4) |
|
|
6.40 |
% |
|
|
50,000 |
|
|
|
409,953 |
|
|
|
5.74 |
% |
|
Joseph
Heater
|
|
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74,595 |
(5) |
|
|
1.40 |
% |
|
|
27,500 |
|
|
|
70,845 |
|
|
|
1.01 |
% |
|
Michael
Doyle
|
|
|
0 |
|
|
|
* |
|
|
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10,000 |
|
|
|
0 |
|
|
|
0 |
% |
|
Norm
Dumbroff
|
|
|
96,072 |
(6) |
|
|
1.50 |
% |
|
|
10,000 |
|
|
|
94,822 |
|
|
|
1.36 |
% |
|
Neil
Hebenton
|
|
|
13,154 |
(5) |
|
|
* |
|
|
|
10,000 |
|
|
|
11,904 |
|
|
|
* |
|
|
James
Heinz
|
|
|
108,781 |
(7) |
|
|
1.76 |
% |
|
|
17,500 |
|
|
|
107,531 |
|
|
|
1.54 |
% |
|
Charles
Madenford
|
|
|
5,334 |
(5) |
|
|
* |
|
|
|
17,500 |
|
|
|
4,084 |
|
|
|
* |
|
|
Donald
Walker
|
|
|
3,750 |
(5) |
|
|
* |
|
|
|
17,500 |
|
|
|
0 |
|
|
|
0 |
% |
|
Gary
Walker
|
|
|
68,814 |
(8) |
|
|
1.12 |
% |
|
|
10,000 |
|
|
|
67,564 |
|
|
|
* |
|
|
William
Whitehead
|
|
|
29,238 |
(9) |
|
|
* |
|
|
|
10,000 |
|
|
|
27,988 |
|
|
|
* |
|
|
|
|
|
815,941 |
(10) |
|
|
12.99 |
% |
|
|
180,000 |
|
|
|
794,691 |
(10) |
|
|
10.85 |
% |
*
Represents less than 1%
** The
address for the above listed officers and directors is c/o WPCS International
Incorporated, One East Uwchlan Avenue, Suite 301, Exton, Pennsylvania
19341.
(1) Under
Rule 13d-3, a beneficial owner of a security includes any person who, directly
or indirectly, through any contract, arrangement, understanding, relationship,
or otherwise has or shares: (i) voting power, which includes the power to vote,
or to direct the voting of shares; and (ii) investment power, which includes the
power to dispose or direct the disposition of shares. Certain shares may be
deemed to be beneficially owned by more than one person (if, for example,
persons share the power to vote or the power to dispose of the shares). In
addition, shares are deemed to be beneficially owned by a person if the person
has the right to acquire the shares (for example, upon exercise of an option)
within 60 days of the date as of which the information is provided. In computing
the percentage ownership of any person, the amount of shares outstanding is
deemed to include the amount of shares beneficially owned by such person (and
only such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table does not
necessarily reflect the person's actual ownership or voting power with respect
to the number of common shares actually outstanding on March 24,
2009.
(2)
Applicable percentage of ownership is based on 6,942,266 common shares
outstanding as of March 24, 2009.
(3)
Consists of all shares of our common stock which the Selling Stockholder has the
right to acquire through the exercise of options granted under the 2007
Incentive Stock Plan, whether or not such right has yet become exercisable or
will become exercisable within 60 days after March 24, 2009.
(5)
Represents shares of common stock underlying options that are currently
exercisable or exercisable within 60 days.
(6)
Includes 25,238 shares of common stock underlying options that are currently
exercisable or exercisable within 60 days.
(7)
Includes 49,257 shares of common stock underlying options that are currently
exercisable or exercisable within 60 days.
(8)
Includes 1,250 shares of common stock underlying options that are currently
exercisable or exercisable within 60 days.
(9)
Includes 25,238 shares of common stock underlying options that are currently
exercisable or exercisable within 60 days.
(10)
Includes 403,802 shares of common stock underlying options that are currently
exercisable or exercisable within 60 days.
PLAN
OF DISTRIBUTION
Timing
of Sales
Under our
2007 Incentive Stock Plan (the “Plan”), we are authorized to issue up to 400,000
shares of our common stock.
Subject
to the foregoing, the selling stockholders may offer and sell the shares covered
by this prospectus at various times. The selling stockholders may offer and sell
the shares covered by this prospectus at various times. The selling stockholders
will act independently of our company in making decisions with respect to the
timing, manner and size of each sale.
No
Known Agreements to Resell the Shares
To our
knowledge, no selling stockholder has any agreement or understanding, directly
or indirectly, with any person to resell the common shares covered by this
prospectus.
Offering
Price
The sales
price offered by the selling stockholders to the public may be:
|
1.
|
the
market price prevailing at the time of
sale;
|
|
2.
|
a
price related to such prevailing market price;
or
|
|
3.
|
such
other price as the selling shareholders determine from time to
time.
|
Manner
of Sale
The
common shares may be sold by means of one or more of the following
methods:
|
1.
|
a
block trade in which the broker-dealer so engaged will attempt to sell the
common shares as agent, but may position and resell a portion of the block
as principal to facilitate the
transaction;
|
|
2.
|
purchases
by a broker-dealer as principal and resale by that broker-dealer for its
account pursuant to this
prospectus;
|
|
3.
|
ordinary
brokerage transactions in which the broker solicits
purchasers;
|
|
4.
|
through
options, swaps or derivatives;
|
|
5.
|
in
transactions to cover short sales;
|
|
6.
|
privately
negotiated transactions; or
|
|
7.
|
in
a combination of any of the above
methods.
|
The
selling shareholders may sell their common shares directly to purchasers or may
use brokers, dealers, underwriters or agents to sell their common shares.
Brokers or dealers engaged by the selling shareholders may arrange for other
brokers or dealers to participate. Brokers or dealers may receive commissions,
discounts or concessions from the selling shareholders, or, if any such
broker-dealer acts as agent for the purchaser of common shares, from the
purchaser in amounts to be negotiated immediately prior to the sale. The
compensation received by brokers or dealers may, but is not expected to, exceed
that which is customary for the types of transactions involved.
Broker-dealers
may agree with a selling shareholder to sell a specified number of common shares
at a stipulated price per common share, and, to the extent the broker-dealer is
unable to do so acting as agent for a selling shareholder, to purchase as
principal any unsold common shares at the price required to fulfill the
broker-dealer commitment to the selling shareholder.
Broker-dealers
who acquire common shares as principal may thereafter resell the common shares
from time to time in transactions, which may involve block transactions and
sales to and through other broker-dealers, including transactions of the nature
described above, in the over-the-counter market or otherwise at prices and on
terms then prevailing at the time of sale, at prices then related to the
then-current market price or in negotiated transactions. In connection with
resales of the common shares, broker-dealers may pay to or receive from the
purchasers of shares commissions as described above.
If our
selling shareholders enter into arrangements with brokers or dealers, as
described above, we are obligated to file a post-effective amendment to this
registration statement disclosing such arrangements, including the names of any
broker-dealers acting as underwriters.
The
selling shareholders and any broker-dealers or agents that participate with the
selling shareholders in the sale of the common shares may be deemed to be
"underwriters" within the meaning of the Securities Act. In that event, any
commissions received by broker-dealers or agents and any profit on the resale of
the common shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act.
Sales
Pursuant to Rule 144
Any
common shares covered by this prospectus which qualify for sale pursuant to Rule
144 under the Securities Act may be sold under Rule 144 rather than pursuant to
this prospectus.
Regulation M
The
selling shareholders must comply with the requirements of the Securities Act and
the Exchange Act in the offer and sale of the common stock. In particular we
will advise the selling shareholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of common shares in
the market and to the activities of the selling shareholders and their
affiliates. Regulation M under the Exchange Act prohibits, with certain
exceptions, participants in a distribution from bidding for, or purchasing for
an account in which the participant has a beneficial interest, any of the
securities that are the subject of the distribution.
Accordingly,
during such times as a selling shareholder may be deemed to be engaged in a
distribution of the common stock, and therefore be considered to be an
underwriter, the selling shareholder must comply with applicable law and, among
other things:
|
1.
|
may
not engage in any stabilization activities in connection with our common
stock;
|
|
2.
|
may
not cover short sales by purchasing shares while the distribution is
taking place; and
|
|
3.
|
may
not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under the
Exchange Act.
|
In
addition, we will make copies of this prospectus available to the selling
shareholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act.
Penny
Stock Rules
The SEC
has adopted regulations which generally define "penny stock" to be any equity
security that has a market price (as defined) of less than $5.00 per share or an
exercise price of less than $5.00 per share, subject to certain exceptions. Our
securities are covered by the penny stock rules, which impose additional sales
practice requirements on broker-dealers who sell to persons other than
established customers and "institutional accredited investors." The term
"institutional accredited investor" refers generally to those accredited
investors who are not natural persons and fall into one of the categories of
accredited investor specified in subparagraphs (1), (2), (3), (7) or (8) of
Rule 501 of Regulation D promulgated under the Securities Act,
including institutions with assets in excess of $5,000,000.
The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form required by the Securities and Exchange Commission, obtain
from the customer a signed and dated acknowledgement of receipt of the
disclosure document and to wait two business days before effecting the
transaction. The risk disclosure document provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer's account.
The bid
and offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation. In addition, the penny stock rules require
that prior to a transaction in a penny stock not otherwise exempt from these
rules, the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction.
These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for the stock that is subject to these penny
stock rules. Consequently, these penny stock rules may affect the ability of
broker-dealers to trade our securities. We believe that the penny stock rules
discourage investor interest in and limit the marketability of our common
stock.
State
Securities Laws
Under the
securities laws of some states, the common shares may be sold in such states
only through registered or licensed brokers or dealers. In addition, in some
states the common shares may not be sold unless the shares have been registered
or qualified for sale in the state or an exemption from registration or
qualification is available and is complied with.
Expenses
of Registration
We are
bearing all costs relating to the registration of the common stock. These
expenses are estimated to be $15,000, including, but not limited to, legal,
accounting, printing and mailing fees. The selling shareholders, however, will
pay any commissions or other fees payable to brokers or dealers in connection
with any sale of the common stock.
LEGAL
MATTERS
The
validity of the common stock has been passed upon by Sichenzia Ross Friedman
Ference LLP, New York, New York.
EXPERTS
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
The SEC
allows us to incorporate by reference certain of our publicly filed documents
into this prospectus, which means that such information is considered part of
this prospectus. Information that we file with the SEC subsequent to
the date of this prospectus will automatically update and supersede this
information. We incorporate by reference the documents listed below
and any future filings made with the SEC under all documents subsequently filed
by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until the selling stockholders have sold all of the shares offered
hereby or such shares have been deregistered.
The
following documents filed with the SEC are incorporated herein by
reference:
|
·
|
Reference
is made to our annual report on Form 10-K for the fiscal year ended April
30, 2008, as filed with the SEC on July 29, 2008, which is hereby
incorporated by reference;
|
|
·
|
Reference
is made to our quarterly report on Form 10-Q for the fiscal quarter ended
July 31, 2008, as filed with the SEC on September 15, 2008, which is
hereby incorporated by reference;
|
|
·
|
Reference
is made to our quarterly report on Form 10-Q for the fiscal quarter ended
October 31, 2008, as filed with the SEC on December 15, 2008, which is
hereby incorporated by reference;
|
|
·
|
Reference
is made to our quarterly report on Form 10-Q for the fiscal quarter ended
January 31, 2009, as filed with the SEC on March 17, 2009, which is hereby
incorporated by reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on July 1,
2008, which is hereby incorporated by
reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on July
17, 2008, which is hereby incorporated by
reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on July
29, 2008, which is hereby incorporated by
reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on
September 15, 2008, which is hereby incorporated by
reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on October
10, 2008, which is hereby incorporated by
reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on
November 18, 2008, which is hereby incorporated by
reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on
December 2, 2008, which is hereby incorporated by
reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on
December 15, 2008, which is hereby incorporated by
reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on March
10, 2009, which is hereby incorporated by
reference;
|
|
·
|
Reference
is made to our current report on Form 8-K as filed with the SEC on March
17, 2009, which is hereby incorporated by reference;
and
|
|
·
|
The
description of our common stock is incorporated by reference to our
Registration Statement on Form SB-2/A, filed with the SEC
on April 7, 2006.
|
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
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 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 Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
ADDITIONAL
INFORMATION AVAILABLE TO YOU
This
prospectus is part of a Registration Statement on Form S-8 that we filed with
the SEC. Certain information in the Registration Statement has been
omitted from this prospectus in accordance with the rules of the
SEC. We file annual, quarterly and special reports, proxy statements
and other information with the SEC. You can inspect and copy the
Registration Statement as well as reports, proxy statements and other
information we have filed with the SEC at the public reference room maintained
by the SEC at 100 F Street N.E. Washington, D.C. 20549, You can obtain copies
from the public reference room of the SEC at 100 F Street N.E. Washington, D.C.
20549, upon payment of certain fees. You can call the SEC at
1-800-732-0330 for further information about the public reference
room. We are also required to file electronic versions of these
documents with the SEC, which may be accessed through the SEC's World Wide Web
site at http://www.sec.gov. No dealer, salesperson or other person is
authorized to give any information or to make any representations other than
those contained in this prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by
us. This prospectus does not constitute an offer to buy any security
other than the securities offered by this prospectus, or an offer to sell or a
solicitation of an offer to buy any securities by any person in any jurisdiction
where such offer or solicitation is not authorized or is unlawful. Neither
delivery of this prospectus nor any sale hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of our company since the date hereof.
WPCS
INTERNATIONAL INCORPORATED
__________________
180,000
SHARES OF COMMON STOCK
_______________
PROSPECTUS
_______________
March 27,
2009
PART
II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
Item
3. Incorporation of Documents by Reference.
The
Registrant hereby incorporates by reference into this Registration Statement the
documents listed below. In addition, all documents subsequently filed pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
(the “Exchange Act”), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents:
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·
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Reference
is made to our annual report on Form 10-K for the fiscal year ended April
30, 2008, as filed with the SEC on July 29, 2008, which is hereby
incorporated by reference;
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·
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Reference
is made to our quarterly report on Form 10-Q for the fiscal quarter ended
July 31, 2008, as filed with the SEC on September 15, 2008, which is
hereby incorporated by reference;
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·
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Reference
is made to our quarterly report on Form 10-Q for the fiscal quarter ended
October 31, 2008, as filed with the SEC on December 15, 2008, which is
hereby incorporated by reference;
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·
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Reference
is made to our quarterly report on Form 10-Q for the fiscal quarter ended
January 31, 2009, as filed with the SEC on March 17, 2009, which is hereby
incorporated by reference;
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·
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Reference
is made to our current report on Form 8-K as filed with the SEC on July 1,
2008, which is hereby incorporated by
reference;
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·
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Reference
is made to our current report on Form 8-K as filed with the SEC on July
17, 2008, which is hereby incorporated by
reference;
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·
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Reference
is made to our current report on Form 8-K as filed with the SEC on July
29, 2008, which is hereby incorporated by
reference;
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·
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Reference
is made to our current report on Form 8-K as filed with the SEC on
September 15, 2008, which is hereby incorporated by
reference;
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·
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Reference
is made to our current report on Form 8-K as filed with the SEC on October
10, 2008, which is hereby incorporated by
reference;
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·
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Reference
is made to our current report on Form 8-K as filed with the SEC on
November 18, 2008, which is hereby incorporated by
reference;
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|
·
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Reference
is made to our current report on Form 8-K as filed with the SEC on
December 2, 2008, which is hereby incorporated by
reference;
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·
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Reference
is made to our current report on Form 8-K as filed with the SEC on
December 15, 2008, which is hereby incorporated by
reference;
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·
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Reference
is made to our current report on Form 8-K as filed with the SEC on March
10, 2009, which is hereby incorporated by
reference;
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·
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Reference
is made to our current report on Form 8-K as filed with the SEC on March
17, 2009, which is hereby incorporated by reference;
and
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·
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The
description of our common stock is incorporated by reference to our
Registration Statement on Form SB-2/A, filed with the SEC
on April 7, 2006.
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Item
4. Description of Securities.
Not
applicable.
Item
5. Interests of Named Experts and Counsel.
Not
applicable.
Item
6. 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 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 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.
Item
7. Exemption from Registration Claimed.
The 180,000 shares of common stock to
be sold by the selling stockholders pursuant to this Registration Statement are
issuable upon exercise of outstanding stock options issued pursuant to the
Registrant’s 2007 Incentive Stock Plan. The stock options were issued
pursuant to the exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended.
Item
8. Exhibits.
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Description
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5.01
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Opinion
of Sichenzia Ross Friedman Ference LLP
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10.01
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2007
Incentive Stock Plan, filed as an exhibit to quarterly report on Form
10-Q, filed with the Commission on September 14, 2008 and incorporated
herein by reference.
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23.01
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Consent
of Sichenzia Ross Friedman Ference LLP (included in Exhibit
5.1)
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23.02
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Consent
of J.H. COHN LLP
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24.01
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Power
of Attorney (included on the signature
page)
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Item
9. Undertakings.
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(1)
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The
undersigned Registrant hereby undertakes
to:
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(a) File,
during any period in which it offers or sells securities, a post-effective
amendment to this Registration Statement to include any additional or changed
material information on the plan of distribution.
(b) For
determining liability under the Securities Act, treat each post-effective
amendment as a new registration statement of the securities offered, and the
offering of the securities at the time to be the initial bona fide
offering.
(c) File
a post-effective amendment to remove from registration any of the securities
that remain unsold at the end of the offering.
(2) The
undersigned Registrant hereby undertakes that, for the purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the 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.
(3) 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 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 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-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Exton, Commonwealth of Pennsylvania, on March 27, 2009.
WPCS
INTERNATIONAL INCORPORATED
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Date: March
27, 2009
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By: /s/ ANDREW HIDALGO
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Andrew
Hidalgo
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Chief
Executive Officer (Principal Executive Officer)
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Date: March
27, 2009
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By: /s/ JOSEPH HEATER
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Joseph
Heater
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Chief
Financial Officer (Principal Accounting
Officer)
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POWER
OF ATTORNEY
KNOW
ALL PERSONS BY THESE PRESENTS:
That the
undersigned officers and directors of WPCS International Incorporated, a
Delaware corporation, do hereby constitute and appoint Andrew Hidalgo and Joseph
Heater and each of them his or her true and lawful attorney-in-fact and agent
with full power and authority to do any and all acts and things and to execute
any and all instruments which said attorney and agent, determine may be
necessary or advisable or required to enable said corporation to comply with the
Securities Act of 1933, as amended, and any rules or regulations or requirements
of the Securities and Exchange Commission in connection with this Registration
Statement. Without limiting the generality of the foregoing power and authority,
the powers granted include the power and authority to sign the names of the
undersigned officers and directors in the capacities indicated below to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, including post-effective amendments, to this Registration
Statement or any registration statement relating to this offering to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of
1933, and each of the undersigned hereby ratifies and confirms that said
attorney and agent, shall do or cause to be done by virtue thereof. This Power
of Attorney may be signed in several counterparts.
IN
WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney. In
accordance with the requirements of the Securities Act of 1933, as amended, this
registration statement was signed by the following persons in the capacities and
on the dates stated:
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Title
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Date
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/s/
ANDREW HIDALGO
Andrew
Hidalgo
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Chairman,
Chief Executive Officer (Principal Executive Officer) and
Director
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March
27, 2009
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/s/
JOSEPH HEATER
Joseph
Heater
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Chief
Financial Officer (Principal Financial Officer and Principal Accounting
Officer)
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March
27, 2009
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/s/
MICHAEL A. DOYLE
Michael
A. Doyle
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Director
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March
27, 2009
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Norm
Dumbroff
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Director
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March
27, 2009
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/s/
NEIL HEBENTON
Neil
Hebenton
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Director
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March
27, 2009
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Gary
Walker
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Director
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March
27, 2009
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/s/
WILLIAM WHITEHEAD
William
Whitehead
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Director
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March
27,
2009 |
II-3