<SEC-DOCUMENT>0001144204-12-068297.txt : 20121217
<SEC-HEADER>0001144204-12-068297.hdr.sgml : 20121217
<ACCEPTANCE-DATETIME>20121217172024
ACCESSION NUMBER:		0001144204-12-068297
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20121217
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20121217
DATE AS OF CHANGE:		20121217

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			WPCS INTERNATIONAL INC
		CENTRAL INDEX KEY:			0001086745
		STANDARD INDUSTRIAL CLASSIFICATION:	COMMUNICATION SERVICES, NEC [4899]
		IRS NUMBER:				980204758
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34643
		FILM NUMBER:		121269356

	BUSINESS ADDRESS:	
		STREET 1:		ONE EAST UWCHLAN AVENUE
		STREET 2:		SUITE 301
		CITY:			EXTON
		STATE:			PA
		ZIP:			19341
		BUSINESS PHONE:		6109030400

	MAIL ADDRESS:	
		STREET 1:		ONE EAST UWCHLAN AVENUE
		STREET 2:		SUITE 301
		CITY:			EXTON
		STATE:			PA
		ZIP:			19341

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PHOENIX STAR VENTURES INC
		DATE OF NAME CHANGE:	20010424

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	WOWTOWN COM INC
		DATE OF NAME CHANGE:	20000315

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PARAMOUNT SERVICES CORP
		DATE OF NAME CHANGE:	19990519
</SEC-HEADER>
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<TYPE>8-K
<SEQUENCE>1
<FILENAME>v330421_8k.htm
<DESCRIPTION>FORM 8-K
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<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Date of report (date of earliest event
reported): December 17, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WPCS INTERNATIONAL INCORPORATED</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Exact name of registrant as specified
in its charter)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">Delaware</TD>
    <TD STYLE="width: 33%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">001-34643</TD>
    <TD STYLE="width: 33%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">98-0204758</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(State or Other Jurisdiction</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>of Incorporation)</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Commission</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>File Number)</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(IRS Employer</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Identification No.)</B></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">One East Uwchlan Avenue, Suite 301,
Exton, PA 19341</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Address of principal executive offices
and zip code)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Registrant&rsquo;s telephone number,
including area code: (610) 903-0400</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Copy of correspondence to:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Marc J. Ross, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Thomas A. Rose, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">James M. Turner, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Sichenzia Ross Friedman Ference LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">61 Broadway</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">New York, New York 10006</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Tel: (212) 930-9700 Fax: (212) 930-9725</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Wingdings">o</FONT>
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Wingdings">o</FONT>
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Wingdings">o</FONT>
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Wingdings">o</FONT>
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>ITEM 7.01&#9;Regulation FD Disclosure.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 17, 2012,
the Company held an earnings conference call to discuss its unaudited financial results for the second fiscal quarter ended October
31, 2012. The script of the earnings conference call is attached hereto as Exhibit&nbsp;99.1 and is incorporated by reference into
this Item 7.01.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>ITEM 9.01&#9;Financial Statements and Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(d)&#9;Exhibits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">99.1&#9;Script of December 17,
2012 Earnings Conference Call.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirement
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt"><B>WPCS INTERNATIONAL INCORPORATED</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 44%; font-size: 10pt">Date:&nbsp; December 17, 2012</TD>
    <TD STYLE="width: 56%; font-size: 10pt">By:<I><U> /s/ JOSEPH HEATER</U></I></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">Joseph Heater</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">Chief Financial Officer</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>v330421_ex99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Exhibit 99.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">INVESTOR CONFERENCE CALL SCRIPT &ndash;
DECEMBER 17, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>[OPERATOR]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Good afternoon ladies and gentlemen. Thank
you for standing by. Welcome to the WPCS International Incorporated fiscal year 2013 second quarter investor conference call. Your
host for today&rsquo;s call is Andy Hidalgo, chairman and CEO of WPCS International Incorporated. Before I turn the call over to
Mr. Hidalgo, please be advised that the participants on today&rsquo;s call will be in a listen only mode until Mr. Hidalgo has
concluded his opening remarks. Upon conclusion of the opening remarks, there will be a question and answer session.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, we would like to note that
statements about the company&rsquo;s future expectations, including future revenue and earnings and all other statements made during
this investor conference call, other than historical facts, are forward looking statements and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve risks and uncertainties
and are subject to change at any time. The company&rsquo;s actual results could differ materially from expected results. In reflecting
subsequent events or circumstances, the company undertakes no obligation to update forward looking statements. I will now turn
the call over to Mr. Hidalgo.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>[ANDY HIDALGO]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Good afternoon ladies and gentlemen and
welcome to our fiscal year 2013 second quarter investor conference call. The agenda for today&rsquo;s call will include a discussion
of our second quarter financial results and a review of our company&rsquo;s goals going forward.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are pleased to report a second consecutive
quarter of EBITDA profitability from our operation centers. For the second quarter of fiscal year 2013 ended October 31, 2012,
our five operation centers generated $1.4 million in EBITDA on revenue of $9.9 million. This is a significant improvement from
the $894,000 of EBITDA on revenue of $21.7 million that was generated in the same period one year ago.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the second quarter, WPCS posted consolidated
EBITDA of $681,000 which includes corporate expenses. This is also a significant improvement from the $104,000 of EBITDA generated
for the same period one year ago. For the six month period of fiscal year 2013 ended October 31, 2012, WPCS posted EBITDA of $2.1
million from our five operation centers on revenue of $23.4 million. This compares to EBITDA of $2.9 million on revenue of $40.4
million for the same period one year ago. In the six month period of fiscal year 2013, WPCS has posted consolidated EBITDA of $600,000
which includes corporate expenses. This compares to $1.3 million of EBITDA for the same period one year ago.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For clarification, WPCS defines EBITDA
as earnings before interest, income taxes, depreciation and amortization but in addition, WPCS has incurred one-time credits and
charges from discontinued operations and the strategic alternatives effort as well as non-cash charges from deferred tax asset
valuation allowances, acquisition-related earn-out costs and goodwill and other intangible assets impairments. These credits and
charges are excluded from the EBITDA calculation so that we can provide a more meaningful perspective on the financial performance
of our continuing operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe our future quarters continue
to look promising. The bid list at the end of our second quarter stood at $56.3 million. We are continuing to see active bidding
in the market. Our commitment to quality workmanship and our special certifications in design-build engineering continue to give
us a competitive advantage during this economic recovery. As evidenced in the press releases announcing new contracts, customers
continue to seek bids from WPCS because of our outstanding reputation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At the end of the second quarter, WPCS
had a backlog of approximately $28.9 million comprised of a variety of projects in the public services, healthcare and energy sectors.
Our goal continues to be converting more of our bids into backlog. We are confident we can do so. The conversion of these bids
to backlog and the effective management of projects through completion will give us the opportunity to build shareholder value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our management team continues to implement
cost efficiencies as well as emphasizing the improvement of gross margins. For the six months of fiscal year 2013 ended October
31, 2012, our consolidated gross margin was 28%, a significant improvement from the 19% gross margin generated in the same period
one year ago.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The improving margins are the result of
cost efficiencies and management changes implemented as well as $1.5 million in change orders for a project which incurred the
cost of the change orders last fiscal year. Excluding these change orders, our consolidated gross margin is 23%, which remains
an improvement over the prior year and in line with our expectations. The total SG&amp;A expense was lower as compared to the same
period last year, due to cost savings from headcount reductions and operational efficiencies. The revenue segmentation for the
operations year to date was approximately 40% wireless communication, 8% specialty construction and 52% electrical power.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We announced in a prior call that our revenue
and EBITDA expectation for fiscal year 2013 ending April 30, 2013 will be $60 million in revenue and $1 million in EBITDA respectively.
The management team believes we are still on track to achieve these targets. From our continuing operations, for the second quarter
of fiscal year 2013 ended October 31, 2012, WPCS reported net income of approximately $80,000, or $0.01 per diluted share, compared
to a net loss of $352,000, or $0.05 per diluted share, for the same period one year ago.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the second quarter on a consolidated
basis, WPCS reported a net loss of $493,000 or $0.07 per diluted share, which includes a loss from discontinued operations of approximately
$573,000, or $0.08 per diluted share, related to the asset sale of the Hartford and Lakewood Operations in the first quarter. This
compares to a net loss of $1,665,000 or $0.24 per diluted share for the same period a year ago, which includes a loss from discontinued
operations of approximately $1,313,000, primarily related to the sale of the St. Louis and Sarasota Operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the six months of fiscal year 2013
ended October 31, 2012, we generated net income of approximately $500,000, or $0.07 per diluted share, which includes income from
discontinued operations for the Hartford and Lakewood Operations of $1.1 million or $0.16 per diluted share. This compares to a
net loss of approximately $1.7 million, or $0.24 per diluted share, which includes a loss from discontinued operations of approximately
$1.5 million, or $0.22 per diluted share for the same period in the prior year, primarily related to the sale of the St. Louis
and Sarasota Operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Recently, WPCS replaced the Sovereign Bank
asset based lending facility with new private placement financing. The new $4 million senior secured convertible notes private
placement gives us the ability to obtain additional working capital through the borrowing base parameters and from the future conversion
of debt to equity. With this new financing, WPCS can now adequately support our operations while looking for strategic opportunities
to increase shareholder value in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In summary, we worked through a difficult
prior fiscal year, and the recent results will show that we are turning around our operating performance and improving the organization.
We have a healthier balance sheet, positive operating results and now we have obtained financing to support our working capital
needs and growth prospects. It has been a challenge but we have made great progress. The management team is encouraged about the
future and we sincerely believe we can deliver increased shareholder value. I would like to now turn the call over to the operator
to begin the question and answer session.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>[OPERATOR]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We will now begin the question and answer
session. You can submit your question by pressing *1 and can be removed from the queue by pressing the # sign.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If there are no further questions, I would
like to thank all the participants on today&rsquo;s WPCS International Incorporated fiscal year 2013 second quarter investor conference
call. Please keep in mind that a replay of this investor conference call will be available for a period of five days by dialing
402-220-2946 and entering 36248 as the program identification number.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This will conclude the call.&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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