WPCS Secures Private Placement Financing

WPCS Secures Private Placement Financing 
EXTON, PA -- (Marketwire) -- 12/05/12 --   WPCS International
Incorporated (NASDAQ: WPCS), a leader in design-build engineering
services for communications infrastructure, has announced that it has
entered into a private placement with six accredited investors for
the sale of $4 million of senior secured convertible notes (the
"Notes") and warrants (the "Warrants") to purchase shares of WPCS'
common stock. The closing of this transaction is conditioned upon
satisfaction of closing conditions, which have all been satisfied
except receipt of the funds, which should be completed today.  
Under the general terms of the Notes, WPCS will be able to draw down
daily against the $4 million of gross proceeds based on available
cash in a lockbox account plus 95% of available qualified accounts
receivables, less a reserve of $250,000 and less the total amount of
principal, accrued interest, fees, costs and expenses owed pursuant
to the Notes. At closing, it is anticipated that WPCS will initially
draw down approximately $2.2 million to retire the existing $2
million senior revolving line of credit with Sovereign Bank, N.A.,
and related fees and expenses. The Notes are convertible into shares
of common stock at an initial conversion price of $0.3768 per share.  
The investors will also receive warrants to purchase an aggregate of
15,923,567 shares, exercisable for five years at an initial exercise
price of $0.471 per share. The conversion and exercise prices of the
Notes and Warrants will be adjusted to 85% of market price on the
occurrence of certain future adjustment dates as defined in the
transaction documents. The Notes will mature on the eighteen-month
anniversary of the closing date and will bear interest at the rate of
4% per annum, payable quarterly in arrears. The definitive agreements
containing the details of the financing will be filed as exhibits to
a Current Report on Form 8-K, that will be filed with the Securities
and Exchange Commission.  
Joseph Heater, Chief Financial Officer of WPCS, commented, "We are
pleased to announce the successful completion of the financing. The
Notes provide adequate financing to repay Sovereign Bank and gives us
the ability to obtain additional working capital through the
available qualified accounts receivable parameters and from any
future conversion of Notes to common shares. We believe we are
completing a turnaround in operating performance while securing the
working capital needed to deliver better operating results in the
About WPCS International Incorporated: 
WPCS is a design-build engineering company that focuses on the
implementation requirements of communications infrastructure. WPCS
provides its engineering capabilities including wireless
communication, specialty construction and electrical power to the
public services, healthcare, energy and corporate enterprise markets
worldwide. For more information, please visit www.wpcs.com 
Statements about WPCS' future expectations, including future revenue
and earnings and all other statements in this press release, 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. WPCS' actual results could differ materially from expected
results. In reflecting subsequent events or circumstances, WPCS
undertakes no obligation to update forward looking statements. 
WPCS International Incorporated
610-903-0400 x101
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