<SEC-DOCUMENT>0001144204-14-019917.txt : 20140828
<SEC-HEADER>0001144204-14-019917.hdr.sgml : 20140828
<ACCEPTANCE-DATETIME>20140401161144
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ACCESSION NUMBER:		0001144204-14-019917
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20140401

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:		CORRESP

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>600 Eagleview Boulevard, Suite 300</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exton, PA 19341</B></P>

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">April 1, 2014</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><U>VIA EDGAR</U></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">United States Securities and Exchange Commission</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">100 F Street, NE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Washington, DC 20549</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">Attn:</TD><TD STYLE="text-align: justify">Larry Spirgel, Assistant Director</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Celeste M. Murphy, Legal Branch Chief</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Division of Corporation Finance</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-indent: 0.5in">Kate Beukenkamp, Esq.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Re:&#9;WPCS International Incorporated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Preliminary Proxy Statement on Schedule
14A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Filed March 7, 2014</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">File No. 001-34643</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">Ladies and Gentlemen:</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; text-indent: 0.5in">The following responses
address the comments of the reviewing staff of the Commission as set forth in a comment letter dated [March] 18, 2014 (the &quot;Comment
Letter&quot;) relating to the Preliminary Proxy Statement on Schedule 14A filed on March 7, 2014 by WPCS International Incorporated
(the &ldquo;Company&rdquo;) and the response letter dated March 7, 2014 filed by the Company. The numbers of the responses in this
letter correspond to the numbers of the staff&rsquo;s comments as set forth in the Comment Letter.</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 0pt 0.5in; text-align: justify; text-indent: -0.5in"><U>General</U></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">1.</TD><TD STYLE="text-align: justify">We note your response to comment two from our letter dated February 10, 2014, with respect to your
acquisition of BTX and your consideration of ASC 805-1-55-4 and 5. It is not clear to us that the acquisition of BTX represents
an acquisition of assets rather than a business and remind you that one of the disclosed reasons for the stock sale as described
in the Summary Term Sheet on page 6 is to &ldquo;focus on other operation centers and new line of business from its recently acquired
BTX Trader LLC (&ldquo;BTX Trader&rdquo;). Please tell us in detail how you considered ASC 805-10-55-7 through 9 which describes
other factors to be considered by development stage companies. In your response tell us how you weighed the following:</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The founders of BTX have continued as employees of BTX;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Intellectual property consisting of &ldquo;the btxtrader.com domain name, the BTX Trader name and
associated trademarks, the BTX Trader concept, and source code, and the knowledge it obtained, all of which were unpatented technology&rdquo;
was acquired; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">As described on page 21, BTX had a clearly articulated strategy to: 1) focus on trading systems
and exchanges within the Bitcoin market; 2) continue to implement advanced trading algorithms for bitcoin traders.</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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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In order to further illustrate
the Company&rsquo;s position in regards to the accounting treatment of BTX Trader LLC (&ldquo;BTX&rdquo;), the following is a summary
of pre- and post-acquisition events or circumstances considered in the analysis. <FONT STYLE="font-family: Times New Roman, Times, Serif">At
the outset, we note that the staff incorrectly presumed that the founders of BTX &ldquo;continued&rdquo; as employees of BTX. At
no time prior to the Company&rsquo;s acquisition of BTX were Messrs. Thakur or Subkhankulov employees, consultants, directors or
officers of BTX (or any other entity involved in the project). BTX was formed by financiers who acquired and funded the software
after its preliminary design and beta test. The financiers formed BTX, acquired the software rights and managed and funded the
company while contemplating a sale, which occurred a short time thereafter. The managing member of BTX from formation to sale was
John O&rsquo;Rourke. The members were <FONT STYLE="color: #222222; background-color: white">Hudson Bay Master Fund Ltd., Iroquois
Master Fund Ltd., American Capital Management LLC, GRQ Consultants, Inc. Roth 401K FBO Barry Honig, Richard Molinsky, ATG Capital
LLC, Barry Honig and John Ford. Prior to the Company&rsquo;s acquisition of BTX, </FONT>Messrs. Thakur and Subkhankulov were, at
all times, either independent contractors or employees of another party, where they were developing for their employer software
<FONT STYLE="color: #333333">and desktop systems, unrelated to bitcoin, for securities trading across multiple markets. </FONT>Messrs.
Thakur or Subkhankulov invented and wrote the bitcoin software outside of their employment. Other than assigning their rights to
BTX in exchange for notes (as more fully described below and in our prior filings), they had no association with BTX. The trading
platform developed was not associated with, nor acquired from, their place of employment. Following the acquisition of BTX by WPCS,
Messrs. Thakur and Subkhankulov were invited to and agreed to be employed by BTX. The timeline below more fully describes the events
we considered:</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B><U>Pre- Acquisition</U></B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">During the first quarter of calendar 2013, based on their computer programming and trading platform
background and experience, Divya Thakur and Ilya Subkhankulov (collectively, the &ldquo;Developers&rdquo;) initiated an idea or
concept to develop source code for a Bitcoin trading platform, which they called &ldquo;BTX Trader&rdquo;. BTX had not been conceived
or formed at this time.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">From the time that the Developers developed the concept for BTX Trader until BTX was acquired by
the Company and the Developers executed employment agreements with the Company, they were independent contractors or full time
employees employed by REDI Global Technologies LLC (&ldquo;REDI&rdquo;), a former subsidiary of Goldman Sachs that was spun off
as an independent entity in August 2013. At REDI, the Developers developed trading platforms for the securities business. The bitcoin
software was developed on their own time, without any compensation or being subject to any restrictive covenants or agreements.
Therefore, without the acquisition of the BTX software and the employment of the Developers by the Company, there was no business
relating to this side project, nor did the Developers have the time, ability or resources to develop the software into a business.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">May 15, 2013 &ndash; The Developers launched the website btxtrader.com.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">June 23, 2013 &ndash; The first public beta version of a bitcoin trading platform became available
for free download from the website.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">November 18, 2013 &ndash; Further refinements such as stop loss order features are added to the
beta version of the bitcoin trading platform.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">November 25, 2013 &ndash; Potential investors signed non-disclosure agreements with the Developers
to view a demonstration of the beta version software platform; no other substantial materials were available. The purpose of this
demonstration was to gauge financial interest in order to raise capital to advance the development of the platform.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">December 4, 2013 &ndash; BTX was formed. Several investors invest $1,185,000 into BTX, and contribute
$439,408 of WPCS convertible notes (&ldquo;WPCS Notes&rdquo;), in order to facilitate the purchase of the software assets intended
to be convertible into a pre-negotiated percentage ownership ( upon conversion) of WPCS. <FONT STYLE="font-family: Times New Roman, Times, Serif">John
O&rsquo;Rourke is appointed managing member of BTX and <FONT STYLE="color: #222222; background-color: white">Hudson Bay Master
Fund Ltd., Iroquois Master Fund Ltd., American Capital Management LLC, GRQ Consultants, Inc. Roth 401K FBO Barry Honig, Richard
Molinsky, ATG Capital LLC, Barry Honig and John Ford</FONT> are issued membership interests constituting 100% of the membership
interests of BTX issued at that time.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">December 5 to December 16, 2013 &ndash; There was no business conducted, activities, operations,
employees or costs incurred by BTX. The Developers continue to be employed by REDI.</TD></TR></TABLE>

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

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    <!-- Field: /Page -->

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B><U>Acquisition Date (December
17, 2013)</U></B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">BTX purchased the software from the Developers in exchange for (a) $439,408 of the WPCS Notes and
(b) $500,000 in promissory notes of BTX.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Immediately following the closing of the above transaction, the members sold 100% of their membership
interests in BTX to the Company in exchange for (1) 2,438 shares of the Company&rsquo;s Series E Convertible Preferred Stock, and
(2) warrants to purchase up to an aggregate of 1,500,000 shares of the Company&rsquo;s common stock. As a result of the transaction,
BTX becomes a wholly owned subsidiary of the Company.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The Company, through BTX, executes employment agreements with the Developers to become full time
employees to continue to develop the software on the Company&rsquo;s behalf for future commercialization.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B><U>Post-acquisition</U></B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">December 18, 2013- The Developers commence their first day of employment with BTX and assume responsibility
for the commercialization and development of the bitcoin software.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">December 26, 2013 &ndash; The Company announces the release of a Windows-based beta version of
the bitcoin trading platform available for download, providing the market a glimpse of the features and capabilities of the this
software technology, and stating that the public beta release is the &ldquo;first step towards establishing and then growing the
Bitcoin segment of our business.&rdquo;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">January 21, 2014 &ndash; The Company announces enhancements to the functionality of the Windows-based
beta version, and states that &ldquo;we will disclose our BTX revenue model at a future date, and we are still projecting an official
launch of the BTX platform in the 2<SUP>nd</SUP> Quarter of calendar 2014.&rdquo; In addition, the Company announced the engagement
of a law firm experienced in money transmission, check cashing, and foreign exchange to help guide the Company through the regulatory
requirements necessary to operate a Bitcoin trading platform.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">February 19, 2014 &ndash; WPCS announces the appointment of an investor relations firm who represents
other companies in the digital currency industry.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">March 19, 2014 &ndash; WPCS announces
that a web-based version of the bitcoin trading platform is now available directly from the website, along with a downloadable
version compatible with Mac and Linux operating systems.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We believe that the post-acquisition
activities detailed above demonstrate the Company&rsquo;s objective to develop a business and strategy regarding the software acquired
through BTX.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In regards to the reference on
the Summary Term Sheet on page 6 to &ldquo;new line of business&rdquo;, although we make reference to a Company segment, the purpose
of this statement is to indicate that on a going forward basis, the Company&rsquo;s goal is to build a revenue-producing business
around the acquisition of the software technology asset, which will result in the development of a separate business and separate
reporting segment for Bitcoin. We will clarify the disclosure in this and all future filings to more clearly explain this line
of business reference, which is to focus on other operation centers, to further develop the beta-stage Bitcoin trading software,
and to develop a new line of business around that software from the acquisition of BTX Trader.</P>

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

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 100%">Securities and Exchange Commission<br>April 1, 2014<br>Page <!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --> of 5</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Based on the above facts, we
considered ASC 805-10-55-7 through 9 in reaching our conclusion that BTX was not a business at the time of acquisition. Specifically,
our analysis was as follows:</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>805-10-55-7</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 92.7pt"></TD><TD STYLE="width: 18pt">a.</TD><TD STYLE="text-align: justify"><I>Has begun planned principal activities</I>. BTX had not begun its principal activities. The
Developers of the bitcoin trading platform were creating a software technology while employed by another company. There were no
costs, operating activities or customers, prior to the acquisition of the assets.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 92.7pt"></TD><TD STYLE="width: 18pt">b.</TD><TD STYLE="text-align: justify"><I>Have employees, intellectual property, and other inputs and process that could be applied to
those inputs</I>. We agree that the intellectual property acquired was an asset, which is the acquired software technology. However,
BTX had neither employees nor processes that could be applied to the software technology being developed.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 92.7pt"></TD><TD STYLE="width: 18pt">c.</TD><TD STYLE="text-align: justify"><I>Is pursuing a plan to produce outputs</I>. BTX had neither the ability to, nor any plan to,
produce any outputs. The sole plan of BTX was to acquire the software technology and immediately transfer those assets to the Company.
At or prior to the time of acquisition, the Developers had a concept related to the use of software technology under development.
This concept could only become a feasible strategy subsequent to the acquisition of BTX by the Company, the employment of the Developers
to build out the software and the provision of the resources of WPCS. As we stated previously, the Company is in the process of
creating a business around the acquired technology, including the addition of processes to begin conducting a business. We agree
that we have articulated the strategy, which includes a Bitcoin trading platform and an exchange, but this formal strategy process
was developed by the Company only after the acquisition of BTX. Without the acquisition, there was no strategy in place or even
a plan to develop such a strategy.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 92.7pt"></TD><TD STYLE="width: 18pt">d.</TD><TD STYLE="text-align: justify"><I>Will be able to obtain access to customers that will purchase the output</I>. At the time of
the acquisition, BTX had no customer base and had no customer service capability.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 110.7pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>805-10-55-8</B> &ndash; <I>Is
the integrated set of assets and activities capable of being conducted and managed as a business by a market participant?</I> There
was no integrated set of assets and activities prior to the acquisition. The only asset consisted of the acquired software technology
that was being developed.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>805-10-55-9</B> &ndash; <I>Is
goodwill present in the particular set of activities and assets?</I> At the time of acquisition, BTX had no identifiable intangible
assets, such as an assembled workforce, a customer base, customer service capabilities, a marketplace presence, potential contracts,
etc., that are normally attributable to goodwill. Management believes that the purchase price represents fair value for the sole
asset acquired, the software under development, and therefore no goodwill was present in the purchase price.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">2.</TD><TD STYLE="text-align: justify">We also note your response to comment two with respect to your analysis under Rule 11-01(d) of
Regulation S-X. Please tell us in more detail why you do not believe that there is sufficient continuity of the acquired entity&rsquo;s
operations prior to and after the transaction such that disclosure of prior financial information is not material to an understanding
of future operations. In this regard, we note that the founders of BTX are continuing in significant capacity in what appears to
be an effort to support the BTX strategy and focus along with the intellectual property transferred in the acquisition.</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; text-align: justify; text-indent: 0.5in"><U>Response:</U></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">There were no financial operations
related to BTX prior to our acquisition. Messrs. Thakur and Subkhankulov were at all times either independent contractors or employees
of another party, developing for their employer software and desktop systems (unrelated to bitcoin) for securities trading across
multiple markets. They invented and wrote the bitcoin software outside of their employment, and did not receive compensation from
BTX, as they were not employed by BTX. As such, there is nothing to report for prior operations of BTX. That is, there is no prior
financial information and therefore nothing with which to understand the future operations.</P>

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

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 100%">Securities and Exchange Commission<br>April 1, 2014<br>Page <!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --> of 5</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<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>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">3.</TD><TD STYLE="text-align: justify">As reflected in the above comments, we continue to believe Schedule 14A Item 14 information is
applicable. Please revise your disclosure to include appropriate Item 14 disclosure related to the transaction with BTX.</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; text-align: justify; text-indent: 0.5in"><U>Response:</U></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">There is no financial information
for BTX prior to the acquisition, as there were no financial operating activities. We acquired software technology under development
that was accounted for as an asset acquisition. As such, there is no additional information under Item 14 required for disclosure.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We trust that the foregoing
appropriately addresses the issues raised by your recent Comment Letter. Thank you in advance for your prompt review and assistance.</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 41.05pt 0pt 0.5in; text-align: justify">The Company hereby acknowledges
the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 41.05pt 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 40.5pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The Company is responsible for the adequacy and accuracy of the disclosure in the filing;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 40.5pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission
from taking any action with respect to the filing; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 40.5pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The Company may not assert staff comments as a defense in any proceeding initiated by the Commission
or any person under the federal securities laws of the United States.</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">Please do not hesitate to contact the undersigned if you have
any questions or comments. Thank you.</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-indent: 5.5in">Very truly yours,</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-indent: 5.5in"><U>/s/ JOSEPH HEATER</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 5.5in">Joseph Heater</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 5.5in">Chief Financial Officer</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">Cc:</TD><TD STYLE="text-align: justify">Thomas A. Rose, Esq.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">James M. Turner, Esq.</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 0pt 0.5in; text-align: justify"></P>

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