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Delaware
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98-0204758
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(State or other jurisdiction of
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(IRS Employer Identification No.)
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incorporation or organization)
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨
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Smaller reporting company x
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(Do not check if a smaller reporting company)
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PART I.
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FINANCIAL INFORMATION
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|
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ITEM 1.
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Financial Statements
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Condensed consolidated balance sheets at January 31, 2014 (unaudited) and April 30, 2013
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3-4
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Condensed consolidated statements of operations for the three and nine months ended January 31, 2014 and 2013 (unaudited)
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5
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Condensed consolidated statements of comprehensive loss for the three and nine months ended January 31, 2014 and 2013 (unaudited)
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6
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Condensed consolidated statement of equity (deficit) for the nine months ended January 31, 2014 (unaudited)
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7
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Condensed consolidated statements of cash flows for the nine months ended January 31, 2014 and 2013 (unaudited)
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8-9
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Notes to unaudited condensed consolidated financial statements
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10-30
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ITEM 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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31-49
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ITEM 3.
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Quantitative and Qualitative Disclosures About Market Risk
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50
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ITEM 4.
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Controls and Procedures
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51
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PART II.
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OTHER INFORMATION
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ITEM 1.
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Legal Proceedings
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52
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ITEM 1A.
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Risk Factors
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52
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ITEM 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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52
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ITEM 3.
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Defaults Upon Senior Securities
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52
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ITEM 4.
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Mine Safety Disclosures
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52
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ITEM 5.
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Other Information
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52
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ITEM 6.
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Exhibits
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52
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SIGNATURES
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53
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2 | ||
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January 31,
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April 30,
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ASSETS
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2014
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2013
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(unaudited)
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(Note 1)
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CURRENT ASSETS:
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|
|
|
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|
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|
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|
|
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Cash and cash equivalents
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$
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2,069,450
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$
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915,752
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Restricted cash
|
|
|
-
|
|
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1,869,178
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Accounts receivable, net of allowance of $998,493 and $1,107,593 at
January 31, 2014 and April 30, 2013, respectively |
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9,427,733
|
|
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7,085,969
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Costs and estimated earnings in excess of billings on uncompleted contracts
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996,389
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|
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1,079,367
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Deferred contract costs
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2,073,562
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1,597,894
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Prepaid expenses and other current assets
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383,643
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142,307
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Current assets held for sale
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1,707,332
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1,905,449
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Total current assets
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16,658,109
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14,595,916
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PROPERTY AND EQUIPMENT, net
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2,185,131
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2,754,734
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|
|
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CAPITALIZED SOFTWARE COSTS
|
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3,124,741
|
|
|
-
|
|
|
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|
|
|
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OTHER INTANGIBLE ASSETS, net
|
|
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-
|
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16,228
|
|
|
|
|
|
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OTHER ASSETS
|
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78,467
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|
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227,259
|
|
|
|
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OTHER ASSETS HELD FOR SALE
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329,725
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|
|
550,829
|
|
|
|
|
|
|
|
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Total assets
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|
$
|
22,376,173
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$
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18,144,966
|
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3 | ||
LIABILITIES AND EQUITY
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January 31,
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April 30,
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||
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2014
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2013
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(unaudited)
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(Note 1)
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CURRENT LIABILITIES:
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|
|
|
|
|
|
|
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|
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Current portion of loans payable
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|
$
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51,617
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|
$
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43,942
|
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Senior secured convertible notes, net of debt discount of $875,876 and $2,888,889,
January 31, 2014 and April 30, 2013, respectively |
|
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22,462
|
|
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1,111,111
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Derivative liability - senior secured convertible notes
|
|
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-
|
|
|
3,088,756
|
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Accounts payable and accrued expenses
|
|
|
4,763,502
|
|
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4,102,050
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Accrued severance
|
|
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1,300,000
|
|
|
-
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
|
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1,656,874
|
|
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1,619,307
|
|
Deferred revenue
|
|
|
294,827
|
|
|
113,503
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Due related party
|
|
|
799,116
|
|
|
-
|
|
Other payable to Zurich
|
|
|
1,533,757
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|
|
1,743,986
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Short-term bank loan
|
|
|
3,279,300
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|
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2,432,205
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Income taxes payable
|
|
|
11,371
|
|
|
139,557
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|
Dividend payable
|
|
|
36,993
|
|
|
-
|
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Current liabilities held for sale
|
|
|
789,555
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|
|
685,631
|
|
Total current liabilities
|
|
|
14,539,374
|
|
|
15,080,048
|
|
|
|
|
|
|
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Loans payable, net of current portion
|
|
|
643,603
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|
|
133,838
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|
Derivative liability - warrants
|
|
|
-
|
|
|
3,858,508
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|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
15,182,977
|
|
|
19,072,394
|
|
|
|
|
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COMMITMENTS AND CONTINGENCIES
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|
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|
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EQUITY:
|
|
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|
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|
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WPCS EQUITY (DEFICIT):
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|
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Preferred stock - $1,000 stated value, 5,000,000 shares authorized, 2,438 issued;
liquidation preference of $7,030,000 |
|
|
2,438,000
|
|
|
-
|
|
Common stock - $0.0001 par value, 14,285,714 shares authorized, 13,913,164 and
994,187 shares issued and outstanding at January 31, 2014 and April 30, 2013, respectively |
|
|
1,391
|
|
|
99
|
|
Additional paid-in capital
|
|
|
66,671,222
|
|
|
50,844,183
|
|
Accumulated deficit
|
|
|
(64,006,375)
|
|
|
(54,054,389)
|
|
Accumulated other comprehensive income on foreign currency translation
|
|
|
1,177,794
|
|
|
1,433,541
|
|
|
|
|
|
|
|
|
|
Total WPCS equity (deficit)
|
|
|
6,282,032
|
|
|
(1,776,566)
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
911,164
|
|
|
849,138
|
|
Total equity (deficit)
|
|
|
7,193,196
|
|
|
(927,428)
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
22,376,173
|
|
$
|
18,144,966
|
|
4 | ||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||
|
|
January 31,
|
|
January 31,
|
|
||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
||||
|
|
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|
|
(Note 1)
|
|
(Note 1)
|
|
(Note 1)
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|
|||
REVENUE
|
|
$
|
8,296,132
|
|
$
|
7,573,275
|
|
$
|
23,483,259
|
|
$
|
26,819,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
6,227,892
|
|
|
5,173,016
|
|
|
17,574,888
|
|
|
19,141,228
|
|
Selling, general and administrative expenses
|
|
|
2,278,433
|
|
|
1,674,268
|
|
|
6,116,248
|
|
|
5,830,550
|
|
Severance expense
|
|
|
-
|
|
|
-
|
|
|
1,474,277
|
|
|
-
|
|
Depreciation and amortization
|
|
|
214,212
|
|
|
268,388
|
|
|
672,164
|
|
|
840,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,720,537
|
|
|
7,115,672
|
|
|
25,837,577
|
|
|
25,812,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING (LOSS) INCOME
|
|
|
(424,405)
|
|
|
457,603
|
|
|
(2,354,318)
|
|
|
1,007,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
2,680,909
|
|
|
867,362
|
|
|
4,922,547
|
|
|
1,308,375
|
|
Loss on extinguishment of Notes
|
|
|
-
|
|
|
-
|
|
|
1,299,304
|
|
|
-
|
|
Change in fair value of derivative liabilities
|
|
|
-
|
|
|
702,574
|
|
|
833,750
|
|
|
702,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income tax provision (benefit)
|
|
|
(3,105,314)
|
|
|
(1,112,333)
|
|
|
(9,409,919)
|
|
|
(1,003,866)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision (benefit)
|
|
|
104,225
|
|
|
(14,556)
|
|
|
122,513
|
|
|
(79,732)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM CONTINUING OPERATIONS
|
|
|
(3,209,539)
|
|
|
(1,097,777)
|
|
|
(9,532,432)
|
|
|
(924,134)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations of discontinued operations, net of
tax (benefit) provision of $0, ($199,175), $0, and $70,689, respectively |
|
|
(185,495)
|
|
|
(59,324)
|
|
|
(225,242)
|
|
|
(1,543,466)
|
|
(Loss) gain from disposal
|
|
|
(104,446)
|
|
|
(12,880)
|
|
|
(104,446)
|
|
|
1,826,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued operations, net of tax
|
|
|
(289,941)
|
|
|
(72,204)
|
|
|
(329,688)
|
|
|
283,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED NET LOSS
|
|
|
(3,499,480)
|
|
|
(1,169,981)
|
|
|
(9,862,120)
|
|
|
(641,061)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interest
|
|
|
49,439
|
|
|
54,317
|
|
|
52,873
|
|
|
82,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO WPCS
|
|
$
|
(3,548,919)
|
|
$
|
(1,224,298)
|
|
|
(9,914,993)
|
|
$
|
(723,983)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend declared on preferred stock
|
|
$
|
(36,993)
|
|
|
-
|
|
$
|
(36,993)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO WPCS COMMON
SHAREHOLDERS |
|
$
|
(3,585,912)
|
|
$
|
(1,224,298)
|
|
|
(9,951,986)
|
|
$
|
(723,983)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net (loss) income attributable to WPCS common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
$
|
(0.51)
|
|
$
|
(1.16)
|
|
$
|
(3.30)
|
|
$
|
(1.01)
|
|
(Loss) income from discontinued operations
|
|
$
|
(0.04)
|
|
$
|
(0.08)
|
|
$
|
(0.11)
|
|
$
|
0.28
|
|
Basic and diluted net loss per common share
|
|
$
|
(0.55)
|
|
$
|
(1.24)
|
|
$
|
(3.41)
|
|
$
|
(0.73)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average number of common shares
outstanding |
|
|
6,475,773
|
|
|
994,187
|
|
|
2,916,425
|
|
|
994,187
|
|
5 | ||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||
|
|
January 31,
|
|
January 31,
|
|
||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
||||
Consolidated net loss
|
|
$
|
(3,499,480)
|
|
$
|
(1,169,981)
|
|
$
|
(9,862,120)
|
|
$
|
(641,061)
|
|
Other comprehensive (loss) income - foreign currency
translation adjustments |
|
|
(118,062)
|
|
|
36,864
|
|
|
(246,594)
|
|
|
46,020
|
|
Comprehensive loss
|
|
|
(3,617,542)
|
|
|
(1,133,117)
|
|
|
(10,108,714)
|
|
|
(595,041)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to noncontrolling interest
|
|
|
48,401
|
|
|
57,321
|
|
|
62,026
|
|
|
93,320
|
|
Comprehensive loss attributable to WPCS
|
|
$
|
(3,665,943)
|
|
$
|
(1,190,438)
|
|
$
|
(10,170,740)
|
|
$
|
(688,361)
|
|
6 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
Accumulated
|
|
|
|
Non-
|
|
|
|
||||||
|
Preferred Stock
|
|
Common Stock
|
|
Paid-In
|
|
Accumulated
|
|
Other Comprehensive
|
|
WPCS
|
|
Controlling
|
|
Total
|
|
||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Income (Loss)
|
|
Equity (Deficit)
|
|
Interest
|
|
Equity (Deficit)
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, May 1, 2013
|
|
-
|
|
$
|
-
|
|
|
994,187
|
|
$
|
99
|
|
$
|
50,844,183
|
|
$
|
(54,054,389)
|
|
$
|
1,433,541
|
|
$
|
(1,776,566)
|
|
$
|
849,138
|
|
$
|
(927,428)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
23,651
|
|
|
-
|
|
|
-
|
|
|
23,651
|
|
|
-
|
|
|
23,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock from
warrant amendment, waiver and exchange agreement |
|
-
|
|
|
-
|
|
|
38,740
|
|
|
4
|
|
|
88,711
|
|
|
-
|
|
|
-
|
|
|
88,715
|
|
|
-
|
|
|
88,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification of derivative
liability upon conversion of Notes |
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
686,856
|
|
|
-
|
|
|
-
|
|
|
686,856
|
|
|
-
|
|
|
686,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification of derivative
liability from Notes and Warrant amendment |
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
7,166,991
|
|
|
-
|
|
|
-
|
|
|
7,166,991
|
|
|
-
|
|
|
7,166,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unamortized debt discount from
Notes amendment |
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,400,000
|
|
|
-
|
|
|
-
|
|
|
3,400,000
|
|
|
-
|
|
|
3,400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of Notes and accrued
interest |
|
-
|
|
|
-
|
|
|
12,880,237
|
|
|
1,288
|
|
|
3,113,528
|
|
|
-
|
|
|
-
|
|
|
3,114,816
|
|
|
-
|
|
|
3,114,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of BTX warrants for
acquisition of BTX Software |
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,150,155
|
|
|
-
|
|
|
-
|
|
|
1,150,155
|
|
|
-
|
|
|
1,150,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Series E preferred stock
- acquisition of BTX Software |
|
2,438
|
|
|
2,438,000
|
|
|
-
|
|
|
-
|
|
|
197,147
|
|
|
-
|
|
|
-
|
|
|
2,635,147
|
|
|
|
|
|
2,635,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend declared on Series E
preferred stock |
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(36,993)
|
|
|
-
|
|
|
(36,993)
|
|
|
-
|
|
|
(36,993)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(255,747)
|
|
|
(255,747)
|
|
|
9,153
|
|
|
(246,594)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
noncontrolling interest |
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
52,873
|
|
|
52,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to WPCS
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(9,914,993)
|
|
|
-
|
|
|
(9,914,993)
|
|
|
-
|
|
|
(9,914,993)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, January 31, 2014
|
|
2,438
|
|
$
|
2,438,000
|
|
|
13,913,164
|
|
$
|
1,391
|
|
$
|
66,671,222
|
|
$
|
(64,006,375)
|
|
$
|
1,177,794
|
|
$
|
6,282,032
|
|
$
|
911,164
|
|
$
|
7,193,196
|
|
7 | ||
|
|
Nine Months Ended
January 31, |
|
||||
|
|
|
|||||
|
|
2014
|
|
2013
|
|
||
OPERATING ACTIVITIES :
|
|
|
|
|
|
|
|
Consolidated net loss
|
|
$
|
(9,862,120)
|
|
$
|
(641,061)
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile consolidated net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
672,164
|
|
|
1,106,806
|
|
Gain from disposition of operations
|
|
|
-
|
|
|
(1,826,539)
|
|
Amortization of debt discount
|
|
|
4,278,687
|
|
|
688,460
|
|
Loss on extinguishment of Notes
|
|
|
1,299,304
|
|
|
|
|
Change in the fair value of derivative liabilities
|
|
|
833,750
|
|
|
702,574
|
|
Stock-based compensation
|
|
|
23,651
|
|
|
102,673
|
|
Provision for doubtful accounts
|
|
|
33,223
|
|
|
(15,226)
|
|
Amortization of debt issuance costs
|
|
|
277,970
|
|
|
399,335
|
|
Loss (gain) on sale of fixed assets, net
|
|
|
8,601
|
|
|
(31,294)
|
|
Deferred income taxes
|
|
|
-
|
|
|
(229,896)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
1,869,178
|
|
|
(926,389)
|
|
Accounts receivable
|
|
|
(2,343,976)
|
|
|
1,377,734
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts
|
|
|
82,978
|
|
|
142,359
|
|
Deferred contract costs
|
|
|
(457,041)
|
|
|
(72,723)
|
|
Prepaid expenses and other current assets
|
|
|
(240,886)
|
|
|
(307,623)
|
|
Other assets
|
|
|
(26,996)
|
|
|
(113,403)
|
|
Other assets held for sale
|
|
|
322,646
|
|
|
-
|
|
Accounts payable and accrued expenses
|
|
|
679,703
|
|
|
(1,857,462)
|
|
Accrued severance
|
|
|
1,300,000
|
|
|
-
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
|
|
37,567
|
|
|
(1,869,180)
|
|
Deferred revenue
|
|
|
179,772
|
|
|
661,564
|
|
Income taxes payable
|
|
|
(130,326)
|
|
|
(24,002)
|
|
NET CASH USED IN OPERATING ACTIVITIES
|
|
|
(1,162,151)
|
|
|
(2,733,293)
|
|
8 | ||
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Acquisition of property and equipment, net
|
|
$
|
(54,400)
|
|
$
|
(249,093)
|
|
Proceeds from sale of operations, net of transaction costs
|
|
|
-
|
|
|
4,547,049
|
|
Cash received from acquisition of BTX software
|
|
|
1,185,000
|
|
|
-
|
|
NET CASH PROVIDED BY INVESTING ACTIVITIES
|
|
|
1,130,600
|
|
|
4,297,956
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Net proceeds from Section 16(b) settlement
|
|
|
-
|
|
|
222,413
|
|
Debt issuance costs
|
|
|
(102,182)
|
|
|
(230,794)
|
|
Repayments under lines of credit
|
|
|
-
|
|
|
(4,964,140)
|
|
(Repayment) borrowings of senior secured convertible notes
|
|
|
(9,507)
|
|
|
4,000,000
|
|
Repayments under loans payable, net
|
|
|
(35,753)
|
|
|
(66,537)
|
|
Borrowings (repayments) from related party
|
|
|
790,256
|
|
|
(2,355,526)
|
|
Repayments of capital lease obligations
|
|
|
-
|
|
|
(15,465)
|
|
Borrowings under short-term bank loan
|
|
|
818,550
|
|
|
2,380,605
|
|
Repayments under other payable
|
|
|
(210,229)
|
|
|
-
|
|
Borrowings under other payable
|
|
|
-
|
|
|
793,927
|
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
|
|
1,251,135
|
|
|
(235,517)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
(65,886)
|
|
|
(4,384)
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
|
|
1,153,698
|
|
|
1,324,762
|
|
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD
|
|
|
915,752
|
|
|
811,283
|
|
CASH AND CASH EQUIVALENTS, END OF THE PERIOD
|
|
$
|
2,069,450
|
|
$
|
2,136,045
|
|
|
Nine Months Ended
|
|
|||||
|
January 31,
|
|
|||||
|
|
2014
|
|
2013
|
|
||
|
|
|
|
|
|
|
|
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for the conversion of Notes and accrued interest
|
|
$
|
3,114,816
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Acquisition of BTX Software from issuance of Series E Preferred Stock
|
|
$
|
2,635,147
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Reclassification of fair value of derivative liability on Notes and Warrants to
additional paid-in capital upon the Amendment and Note Amendment |
|
$
|
7,166,991
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Reclassification of fair value of derivative liability on Notes to additional paid-in capital
upon conversion of Notes |
|
$
|
686,856
|
|
$
|
-
|
|
9 | ||
10 | ||
11 | ||
12 | ||
|
|
Estimated useful life
|
|
|
January 31,
|
|
|
April 30,
|
|
|
|
(years)
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Customer list
|
|
3-9
|
|
$
|
1,078,250
|
|
$
|
1,190,083
|
|
Less accumulated amortization
|
|
|
|
|
(1,078,250)
|
|
|
(1,173,855)
|
|
|
|
|
|
$
|
-
|
|
$
|
16,228
|
|
13 | ||
14 | ||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||
|
|
January 31,
|
|
January 31,
|
|
||||||||
|
|
2014
|
|
|
2013
|
|
2014
|
|
|
2013
|
|
||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to WPCS common shareholders
|
|
$
|
(3,295,971)
|
|
$
|
(1,152,094)
|
|
|
(9,622,298)
|
|
$
|
(1,007,056)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding
|
|
|
6,475,773
|
|
|
994,187
|
|
|
2,916,425
|
|
|
994,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share attributable to WPCS common shareholders
|
|
$
|
(0.51)
|
|
$
|
(1.16)
|
|
$
|
(3.30)
|
|
$
|
(1.01)
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||
|
|
January 31,
|
|
January 31,
|
|
||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Common stock equivalents:
|
|
|
|
|
|
|
|
|
|
Conversion of stock options
|
|
-
|
|
-
|
|
918
|
|
3,843
|
|
Conversion of stock warrants
|
|
27,235
|
|
49,036
|
|
608,237
|
|
142,200
|
|
Conversion of senior secured convertible notes
|
|
4,079,610
|
|
223,961
|
|
4,186,134
|
|
141,776
|
|
Conversion of Series E Preferred Stock
|
|
-
|
|
|
|
-
|
|
|
|
Totals
|
|
4,106,845
|
|
272,997
|
|
4,795,289
|
|
287,819
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||
|
|
January 31,
|
|
January 31,
|
|
||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
||||
Balance, beginning of period
|
|
$
|
862,763
|
|
$
|
1,153,321
|
|
$
|
849,138
|
|
$
|
1,117,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interest
|
|
|
49,439
|
|
|
54,317
|
|
|
52,873
|
|
|
82,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income attributable to noncontrolling interest
|
|
|
(1,038)
|
|
|
3,004
|
|
|
9,153
|
|
|
10,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$
|
911,164
|
|
$
|
1,210,642
|
|
$
|
911,164
|
|
$
|
1,210,641
|
|
15 | ||
16 | ||
Fair value of Series E Preferred Stock
|
|
$
|
2,635,147
|
|
Fair value of BTX Warrants
|
|
|
1,150,155
|
|
BTX Note
|
|
|
500,000
|
|
Less: Cash received
|
|
|
(1,185,000)
|
|
Total acquired value of BTX Software
|
|
|
3,100,302
|
|
|
|
|
|
|
Additional capitalized software costs
|
|
|
24,439
|
|
|
|
|
|
|
Total
|
|
$
|
3,124,741
|
|
17 | ||
|
|
January 31, 2014
|
|
April 30, 2013
|
|
||
|
|
|
|
|
|
|
|
Costs incurred on uncompleted contracts
|
|
$
|
51,678,539
|
|
$
|
72,951,142
|
|
Provision for loss on uncompleted contracts
|
|
|
(18,154)
|
|
|
(23,376)
|
|
Estimated contract profit
|
|
|
1,975,753
|
|
|
2,391,027
|
|
|
|
|
53,636,138
|
|
|
75,318,793
|
|
Less: Billings to date
|
|
|
54,296,623
|
|
|
75,858,733
|
|
Total
|
|
$
|
(660,485)
|
|
$
|
(539,940)
|
|
|
|
|
|
|
|
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts
|
|
$
|
996,389
|
|
$
|
1,079,367
|
|
Billings in excess of cost and estimated earnings on uncompleted contracts
|
|
|
1,656,874
|
|
|
1,619,307
|
|
Total
|
|
$
|
(660,485)
|
|
$
|
(539,940)
|
|
18 | ||
19 | ||
|
|
Notes
|
|
Debt Discount
|
|
Total
|
|
|||
Beginning balance- Senior secured convertible notes, interest at 4% per annum to maturity June 5, 2014
|
|
$
|
4,000,000
|
|
$
|
(2,888,889)
|
|
$
|
1,111,111
|
|
Conversion of Notes before Note Amendment
|
|
|
(593,923)
|
|
|
-
|
|
|
(593,923)
|
|
Amortization of debt discount, Notes
|
|
|
-
|
|
|
1,589,585
|
|
|
1,589,585
|
|
Redemption of Notes
|
|
|
(6,077)
|
|
|
-
|
|
|
(6,077)
|
|
Extinguishment of Notes
|
|
|
(3,400,000)
|
|
|
-
|
|
|
(3,400,000)
|
|
Loss on extinguishment of debt , Notes
|
|
|
-
|
|
|
1,299,304
|
|
|
1,299,304
|
|
Senior secured convertible notes, interest at 15% per annum to maturity October 31, 2023
|
|
|
3,400,000
|
|
|
-
|
|
|
3,400,000
|
|
Debt discount - value attributable to beneficial conversion features, Notes
|
|
|
-
|
|
|
(3,400,000)
|
|
|
(3,400,000)
|
|
Conversion of Notes, and accelerated write off of unamortized debt discount after Note Amendment
|
|
|
(2,501,666)
|
|
|
2,501,666
|
|
|
-
|
|
Amortization of debt discount, Notes
|
|
|
-
|
|
|
22,458
|
|
|
22,458
|
|
Ending balance- Notes
|
|
$
|
898,334
|
|
$
|
(875,876)
|
|
$
|
22,458
|
|
20 | ||