10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the quarterly period ended January 31, 2016

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission File Number 001-34643

WPCS INTERNATIONAL INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware		98-0204758
(State or other jurisdiction of incorporation		(I.R.S. Employer Identification No.)
or organization)
521 Railroad Avenue
Suisun City, California	94585	(707) 421-1300
(Address of principal executive office)	(Zip Code)	(Registrant’s telephone number,
		Including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x   No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨   No  x

As of March 9, 2016, there were 2,685,620 shares of registrant’s common stock outstanding.

TABLE OF CONTENTS

		PAGE
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed consolidated balance sheets as of January 31, 2016 and April 30, 2015	3
	Condensed consolidated statements of operations for the three and nine months ended January 31, 2016 and 2015	4
	Condensed consolidated statements of comprehensive loss for the three and nine months ended January 31, 2016 and 2015	5
	Condensed consolidated statement of equity (deficit) for the nine months ended January 31, 2016	6
	Condensed consolidated statements of cash flows for the nine months ended January 31, 2016 and 2015	7
	Notes to condensed consolidated financial statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	26
Item 4.	Controls and Procedures	27
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
SIGNATURES		31

 2

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

	January 31,			April 30,
	2016			2015
ASSETS
Current assets:
Cash and cash equivalents	$	2,408,297		$	2,364,360
Accounts receivable, net of allowance of $92,000 at January 31, 2016 and April 30, 2015		3,769,383			6,494,890
Costs and estimated earnings in excess of billings on uncompleted contracts		416,047			420,434
Prepaid expenses and other current assets		93,558			159,769
Current assets held for sale		-			4,566,251
Total current assets		6,687,285			14,005,704
Property and equipment, net		227,300			162,986
Other assets		27,494			25,384
Other assets held for sale		-			963,119
Total assets	$	6,942,079		$	15,157,193
LIABILITIES AND EQUITY
Current liabilities:
Current portion of loans payable	$	49,747		$	39,935
Accounts payable and accrued expenses		2,264,725			5,414,269
Billings in excess of costs and estimated earnings on uncompleted contracts		1,721,301			1,346,461
Other payable to Zurich		-			360,000
Short-term promissory notes		-			1,703,000
Dividends payable		-			677,546
Current liabilities held for sale		-			5,710,807
Total current liabilities		4,035,773			15,252,018
Loans payable, net of current portion		98,492			44,239
Total liabilities		4,134,265			15,296,257
Commitments
Equity (deficit):
WPCS equity (deficit):
Preferred stock - $0.0001 par value, 5,000,000 shares authorized at January 31, 2016 and April 30, 2015, respectively
Convertible Series F - 0 and 5,268 shares issued and outstanding at January 31, 2016 and April 30, 2015, respectively		-			1,589,933
Convertible Series F-1 - 0 and 5,642 shares issued and outstanding at January 31, 2016 and April 30, 2015, respectively		-			1,702,808
Convertible Series G - 0 and 2,088 shares issued and outstanding at January 31, 2016 and April 30, 2015, respectively		-			731,706
Convertible Series G-1 - 0 and 3,128 shares issued and outstanding at January 31, 2016 and April 30, 2015, respectively		-			1,096,250
Convertible Series H - 2,638 and 0 shares issued and outstanding at January 31, 2016 and April 30, 2015, respectively; liquidation preference of $406,000		406,262			-
Convertible Series H-1 - 8,119 and 0 shares issued and outstanding at January 31, 2016 and April 30, 2015, respectively; liquidation preference of $1,348,000		699,324			-
Common stock - $0.0001 par value, 100,000,000 shares authorized, 2,673,803 and 982,660 shares issued and outstanding as of January 31, 2016 and April 30, 2015, respectively		267			98
Additional paid-in capital		85,653,220			70,380,397
Accumulated deficit		(83,951,259	)		(76,550,894	)
Accumulated other comprehensive income on foreign currency translation		-			349,723
Total WPCS equity (deficit)		2,807,814			(699,979	)
Noncontrolling interest		-			560,915
Total equity (deficit)		2,807,814			(139,064	)
Total liabilities and equity (deficit)	$	6,942,079		$	15,157,193

The accompanying notes are an integral part of these condensed consolidated financial statements.

 3

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the three months ended						For the nine months ended
	January 31,						January 31,
	2016			2015			2016			2015
Revenue	$	3,317,636		$	5,262,154		$	11,605,880		$	17,416,283
Costs and expenses:
Cost of revenue		2,521,627			4,486,949			9,263,395			14,379,893
Selling, general and administrative expenses		1,602,751			1,237,402			5,470,760			3,600,820
Depreciation and amortization		16,075			14,282			45,537			46,106
		4,140,453			5,738,633			14,779,692			18,026,819
Operating loss		(822,817	)		(476,479	)		(3,173,812	)		(610,536	)
Other income (expense):
Interest expense		(523	)		(380	)		(2,021	)		(2,837,852	)
Inducement expense		-			(3,622,344	)		-			(5,492,842	)
Income from Section 16 settlements		-			1,051,516			400,000			1,401,516
Other income, net		4,871			197,220			1,965			188,778
Loss from continuing operations before income tax provision		(818,469	)		(2,850,467	)		(2,773,868	)		(7,350,936	)
Income tax provision		607			14,726			1,706			43,914
Loss from continuing operations		(819,076	)		(2,865,193	)		(2,775,574	)		(7,394,850	)
Discontinued operations:
Income (loss) from discontinued operations		-			(88,807	)		41,261			(2,414,305	)
Gain from disposal		-			-			837,720			798,896
Gain from disposal of BTX		-			19,700			-			19,700
Income (loss) from discontinued operations, net of tax		-			(69,107	)		878,981			(1,595,709	)
Consolidated net loss		(819,076	)		(2,934,300	)		(1,896,593	)		(8,990,559	)
Net income (loss) attributable to noncontrolling interest		-			8,682			16,505			(93,453	)
Net loss attributable to WPCS		(819,076	)		(2,942,982	)		(1,913,098	)		(8,897,106	)
Dividends declared on preferred stock		(372,810	)		(509,389	)		(4,742,768	)		(700,088	)
Deemed dividends on convertible preferred Series H-1 stock, due to beneficial conversion feature		(40,729	)		-			(744,499	)		-
Net loss attributable to WPCS common shareholders	$	(1,232,615	)	$	(3,452,371	)	$	(7,400,365	)	$	(9,597,194	)
Basic and diluted net loss attributable to WPCS common shareholders:
Loss from continuing operations	$	(0.47	)	$	(5.33	)	$	(3.82	)	$	(12.80	)
Income (loss) from discontinued operations	$	-		$	(0.15	)	$	0.01		$	(3.67	)
Gain from disposal	$	-		$	0.03		$	0.39		$	1.29
Basic and diluted net income (loss) from discontinued operations	$	-		$	(0.12	)	$	0.40		$	(2.38	)
Basic and diluted net loss per common share attributable to WPCS	$	(0.47	)	$	(5.45	)	$	(3.42	)	$	(15.18	)
Basic and diluted weighted average number of common shares outstanding		2,597,952			633,158			2,161,104			632,664

The accompanying notes are an integral part of these condensed consolidated financial statements.

 4

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	For the three months ended						For the nine months ended
	January 31,						January 31,
	2016			2015			2016			2015
Consolidated net loss	$	(819,076	)	$	(2,934,300	)	$	(1,896,593	)	$	(8,990,559	)
Other comprehensive loss
Foreign currency translation adjustments		-			(23,472	)				$	(19,854	)
Reclassification adjustments of other comprehensive loss on the sale of Australia operations		-			-			-			(866,719	)
Reclassification adjustments of other comprehensive loss on the sale of China operations		-			-			349,723			-
Other comprehensive loss		-			(23,472	)		349,723			(886,573	)
Comprehensive income (loss)		(819,076	)		(2,957,772	)		(1,546,870	)		(9,877,132	)
Less: comprehensive loss attributable to noncontrolling interest		-			(6,965	)		-			(97,395	)
Comprehensive income (loss) attributable to WPCS shareholders	$	(819,076	)	$	(2,950,807	)	$	(1,546,870	)	$	(9,779,737	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

 5

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

(Unaudited)

																Accumulated
											Additional					Other						Non-
	Preferred Stock						Common Stock				Paid-In		Accumulated			Comprehensive			WPCS			Controlling			Total
	Shares			Amount			Shares		Amount		Capital		Deficit			(Loss) Income			Equity(Deficit)			Interest			Equity(Deficit)
Balance, April 30, 2015		16,126			5,120,697			982,660		98		70,380,397		(76,550,894	)		349,723			(699,979	)		560,915			(139,064	)
Issuance of Series H-1 preferred stock and warrants for cash		8,532			1,575,000			-		-		-		-			-			1,575,000			-			1,575,000
Issuance of warrants with Series H-1 preferred stock		-			(841,405	)		-		-		841,405		-			-			-			-			-
Beneficial conversion feature of Series H-1 convertible preferred stock		-			(703,770	)		-		-		703,770		-			-			-			-			-
Deemed dividends related to immediate accretion of beneficial conversion feature of Series H-1 convertible preferred stock		-			703,770			-		-		-		(703,770	)		-			-			-			-
Deemed dividend on conversion of Series H-1 convertible preferred stock to common stock		-			40,729			-		-		-		(40,729	)		-			-			-			-
Conversion of Series H-1 preferred stock to common stock		(413	)		(75,000	)		41,300		4		74,996		-			-			-			-			-
Dividends declared on Series F and F-1 preferred stock		-			-			-		-		-		(159,215	)		-			(159,215	)		-			(159,215	)
Dividends declared on Series G and G-1 preferred stock		-			-			-		-		-		(126,198	)		-			(126,198	)		-			(126,198	)
Make-whole amount on conversion of preferred F-1 and G-1 shares		-			-			-		-		-		(4,457,355	)		-			(4,457,355	)		-			(4,457,355	)
Conversion of dividends payable related to make-whole amount to common stock		-			-			204,865		21		4,457,335		-			-			4,457,356			-			4,457,356
Conversion of a portion of the dividends payable related to Series F preferred stock		-			-			13,959		1		313,185		-			-			313,186			-			313,186
Conversion of a portion of the dividends payable related to Series F-1 preferred stock		-			-			14,291		1		311,790		-			-			311,791			-			311,791
Conversion of a portion of the dividends payable related to Series G preferred stock		-			-			7,022		1		129,655		-			-			129,656			-			129,656
Conversion of a portion of the dividends payable related to Series G-1 preferred stock		-			-			11,154		1		208,324		-			-			208,325			-			208,325
Conversion of short term convertible note to Series H preferred stock		8,435			1,299,000			-		-		-		-			-			1,299,000			-			1,299,000
Conversion of Series F preferred stock to common stock		(5,268	)		(1,589,933	)		239,454		24		1,589,909		-			-			-			-			-
Conversion of Series F-1 preferred stock to common stock		(5,642	)		(1,702,808	)		256,456		26		1,702,782		-			-			-			-			-
Conversion of Series G preferred stock to common stock		(2,088	)		(731,706	)		116,453		12		731,694		-			-			-			-			-
Conversion of Series G-1 preferred stock to common stock		(3,128	)		(1,096,250	)		174,457		17		1,096,233		-			-			-			-			-
Conversion of Series H preferred stock to common stock		(5,797	)		(892,738	)		579,700		58		892,680		-			-			-			-			-
Issuance common stock for services		-			-			30,717		3		2,219,065		-			-			2,219,068			-			2,219,068
Fractional shares issued on reverse split		-			-			1,315		-		-		-			-			-			-			-
Reclassification adjustments of other comprehensive loss on sale of China operations		-			-			-		-		-		-			(349,723	)		(349,723	)		-			(349,723	)
Reclassification adjustments of net loss attributable to noncontrolling interest on sale of China operations		-			-			-		-		-		-			-			-			(560,915	)		(560,915	)
Net loss attributable to WPCS		-			-			-		-		-		(1,913,098	)		-			(1,913,098	)		-			(1,913,098	)
Balance, January 31, 2016		10,757		$	1,105,586			2,673,803	$	267	$	85,653,220	$	(83,951,259	)	$	-		$	2,807,814		$	-		$	2,807,814

The accompanying notes are an integral part of these condensed consolidated financial statements.

 6

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the nine months ended
	January 31,
	2016			2015
Operating activities:
Net loss from operations	$	(2,775,574	)	$	(7,394,850	)
Consolidated net income (loss) from discontinued operations		878,981			(1,595,709	)
Adjustments to reconcile consolidated net loss to net cash used by operating activities:
Depreciation and amortization		45,537			107,931
Amortization of notes discount		-			853,417
Inducement expenses		-			5,492,842
Share based compensation		2,219,068			115,200
Interest expense related to make-whole amount		-			1,889,716
Gain on sale of Pride		-			(798,896	)
Gain on sale of China Operations		(837,720	)		-
Gain on sale of BTX		-			(19,700	)
Loss on sale of Seattle Operations		-			374,932
Income on Section 16 settlements		(400,000	)		(1,401,516	)
Cash received on Section 16 settlements		-			650,000
Changes in operating assets and liabilities:
Accounts receivable		2,725,507			(2,889,583	)
Costs and estimated earnings in excess of billings on uncompleted contracts		4,387			(247,240	)
Current assets held for sale		(3,853,621	)		850,592
Prepaid expenses and other current assets		66,211			(146,878	)
Other assets		(2,110	)		15,591
Other assets held for sale		(34,523	)		3,580,379
Income taxes payable		-			(2,934	)
Accounts payable and accrued expenses		(3,149,544	)		2,414,902
Current liabilities held for sale		2,200,030			(3,284,660	)
Accrued severance expense		-			(550,205	)
Billings in excess of costs and estimated earnings on uncompleted contracts		374,840			447,386
Net cash (used in) operating activities		(2,538,531	)		(1,539,283	)
Investing activities:
Cash received on sale of Seattle		-			1,561,000
Sale of property and equipment, net		-			27,024
Acquisition of property and equipment		(109,851	)		-
Addition on acquisition of BTX capitalized software		-			(2,279	)
Payment for sale of BTX		-			(59,097	)
Proceeds from sale of China Operations, net of acquisition cost		1,325,744			-
Net cash provided by investing activities		1,215,893			1,526,648
Financing activities:
Proceeds from issuance of Series H-1 preferred stock and warrants		1,575,000			-
Borrowings under loan payable obligations		99,369			-
Repayment under loan payable obligations		(35,304	)		(8,627	)
Repayments under other payable to Zurich		(360,000	)		-
Repayments of short term promissory notes		(4,000	)		-
Dividends paid on preferred stock		-			(146,521	)
Net cash provided by (used in) financing activities		1,275,065			(155,148	)
Effect of exchange rate changes on cash		91,510			(132,889	)
Net increase in cash and cash equivalents		43,937			(300,672	)
Cash and cash equivalents, beginning of the period		2,364,360			2,177,070
Cash and cash equivalents, end of the period	$	2,408,297		$	1,876,398

The accompanying notes are an integral part of these condensed consolidated financial statements.

 7

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Unaudited)

	For the nine months ended
	January 31,
	2016		2015
Schedule of non-cash investing and financing activities:
Declaration of preferred dividends payable	$	4,742,768	$	700,088
Conversion of senior secured convertible note and related make-whole amount to Series F-1 preferred stock Series G-1 preferred stock	$	-	$	4,918,360
Conversion of senior secured convertible note and related make-whole amount to Series F preferred stock Series G preferred stock	$	-	$	2,321,640
Conversion of dividends payable related to make-whole amount to common stock	$	4,457,356	$	-
Conversion of dividends payable related to Series F-1 preferred stock	$	624,977	$	-
Conversion of dividends payable related to Series G-1 preferred stock	$	337,981	$	-
Conversion of short term convertible note to Series H preferred stock	$	1,299,000	$	-
Conversion of Preferred E to short term promissory note	$	-	$	2,438,000
Conversion of Series F and F-1 preferred stock through the issuance of common stock	$	3,292,741	$	181,086
Conversion of Series G and G-1 preferred stock through the issuance of common stock	$	1,827,927	$	-
Conversion of Series H preferred stock through the issuance of common stock	$	892,680	$	-
Conversion of Series H-1 preferred stock through the issuance of common stock	$	75,000	$	-
Section 16 settlements gain for cancellation of short term promissory notes	$	-	$	735,000
Section 16 settlements gain for cancellation of make-whole interest expense	$	-	$	17,000
Sale of BTX	$	-	$	79,000
Settlement of severance obligation and sale of Pride	$	-	$	970,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

 8

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description of the Business

The Company currently specializes in low voltage communications and security contracting services, conducting business in two operation centers, through its wholly-owned domestic subsidiaries, WPCS International - Suisun City, Inc. (“Suisun City Operations”) and WPCS International - Texas Operations, Inc. (“Texas Operations”).

The Company is a full-service low voltage contractor that specializes in the installation and service of Voice & Data Networks, Security Systems, Audio-Visual Solutions, and Distributed Antenna Systems and provides experienced project management and delivers complex projects to key vertical markets that include Healthcare, Education, Transportation, Energy & Utilities, Oil & Gas, Manufacturing, Commercial Real Estate, Financial, Government, etc.

The Company also has strategic alliances with technology partners to provide consulting and application software development services for collaboration, visualization and unified communications and is aligned with major manufacturers to provide the products and technology for seamless integrated and enhanced user experience for enterprise solutions.

Basis of Presentation

The consolidated financial statements of WPCS International Incorporated, a Delaware corporation (“WPCS”) and its wholly and majority-owned subsidiaries, (collectively, the “Company”) included in this Report for the three and nine months ended January 31, 2016 and 2015, reflect the accounts of current and former entities as either continued or discontinued operations, as discussed below.

Continued operations for the three and nine months ended January 31, 2016 and 2015 include the results of operations of the: Suisun City Operations and the Texas Operations, the Company’s only two active operations; WPCS Incorporated, an inactive subsidiary; and WPCS International – Trenton, Inc. (“Trenton Operations”), which was closed in September 2013.

With the prior divestitures of The Pride Group (QLD) Pty Ltd. (“Pride”), BTX Trader, LLC (“BTX”) and WPCS Asia Limited, a 60% joint venture interest in Tai'an AGS Pipeline Construction Co. Ltd. (the “China Operations”), as well as the various transactions involving the sale of substantially all of the assets of each of WPCS International - Seattle, Inc. (“Seattle Operations”), WPCS International - Portland, Inc. (“Portland Operations”), WPCS International - Lakewood, Inc. (“Lakewood Operations”), WPCS International - Hartford, Inc. (“Hartford Operations”) and WPCS Australia Pty Ltd. and WPCS International – Brendale Pty Ltd (together, “Australia Operations”), the results of these subsidiaries are included as part of discontinued operations for the three and nine months ended January 31, 2015 and 2016, for the China Operations only.

Notwithstanding the foregoing, the Company is in the process of dissolving the inactive domestic and international subsidiaries listed above, whose operations were discontinued due to the sale of substantially all of their assets.

The unaudited condensed consolidated financial information furnished herein reflects all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, considered necessary for a fair presentation of the financial position and the results of operations and cash flows of the Company for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These interim condensed consolidated financial statements should be read in conjunction with the financial statements included in the Annual Report on Form 10-K for the fiscal year ended April 30, 2015.

 9

The results of operations for the three and nine months ended January 31, 2016 are not necessarily indicative of the results to be expected for the full fiscal year.

NOTE 2 – LIQUIDITY AND CAPITAL RESOURCES

During the nine month period ended January 31, 2016, the Company completed a series of transactions that it believes will provide it with sufficient working capital and equity to operate its business plans for the next twelve months from the date of filing this report, while it continues to seek growth opportunities, including, but not limited: (i) organic growth to complement and enhance existing operations; (ii) acquisitions; and/or (iii) a viable merger candidate.

The transactions included the: (i) elimination of $1,703,000 of promissory notes which were due and payable on September 30, 2015; (ii) issuance of common stock to satisfy approximately $660,000 of the $677,000 of preferred stock dividends payable at April 30, 2015; (iii) completion of a $1,575,000 equity financing; (iv) closing of a $1,000,000 line of credit for the Suisun Operations; and (v) the closing on the sale of its ownership in its China Operations for $1,500,000.

Some of these events have provided cash to the Company while others eliminated future cash spending requirements. Along with expected continued operating profits from its Suisun Operations for fiscal year 2016 and lower corporate overhead, these are the primary factors that support the belief that the Company will have adequate liquidity for the next twelve months from the date of this filing.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Form 10-K for the year ended April 30, 2015.

Reclassifications

Certain reclassifications have been made in prior years’ consolidated financial statements to conform to the current year’s presentation. These reclassifications reflect the results of the BTX, China, Australia and Seattle Operations as discontinued operations for all periods presented.

NOTE 4 – CONCENTRATIONS

Accounts Receivable

As of January 31, 2016, two customers comprise 20% and 38% of the Company’s total accounts receivable. Also included in the accounts receivable is retainage receivable of $295,000 and $1,119,000 at January 31, 2016 and April 30, 2015, respectively, and both the retainer and aged accounts receivable are expected to be collected.

Revenue Recognition

For the three months ended January 31, 2016, 11% was derived from one customer as compared to one customer who generated 57% of the revenue for the same period in 2015. For the nine months ended January 31, 2016, 11% and 19% was derived from two customers as compared to one customer who generated 58% of the revenue for the same period in 2015.

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NOTE 5 – BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic and diluted net loss per common share from continuing operations is computed as net loss from continuing operations less non-controlling interest and dividends on preferred stock, divided by the weighted average number of common shares outstanding for the period. Diluted net loss per common share reflects the potential dilution that could occur from common stock issuable through the exercise of stock options and warrants and note conversions.

The table below presents the computations of loss per share from continuing operations applicable to common stockholders, after consideration of noncontrolling interest and dividends declared on preferred stock, as follows:

	For the three months ended						For the nine months ended
	January 31,						January 31,
	2016			2015			2016			2015
Numerator:
Loss from continuing operations attributable to WPCS common shareholders	$	(1,232,615	)	$	(3,374,582	)	$	(8,262,841	)	$	(8,094,938	)
Income (loss) from discontinued operations, basic and diluted		-			(77,789	)		862,476			(1,502,256	)
Net loss attributable to WPCS common shareholders, basic and diluted	$	(1,232,615	)	$	(3,452,371	)	$	(7,400,365	)	$	(9,597,194	)
Denominator:
Basic and diluted weighted average shares outstanding		2,597,952			633,158			2,161,104			632,664
Basic and diluted loss from continuing operations per common share	$	(0.47	)	$	(5.33	)	$	(3.82	)	$	(12.80	)
Basic and diluted income (loss) from discontinued operations per common share		-			(0.12	)		0.40			(2.38	)
Basic and diluted loss per common share	$	(0.47	)	$	(5.45	)	$	(3.42	)	$	(15.18	)

The following were excluded from the computation of diluted shares outstanding due to the losses from continuing operations for all periods presented, as they would have had an anti-dilutive impact on the Company’s net loss.

	As of January 31,
	2016		2015
Common stock equivalents:
Common stock options		2,824,000		35,000
Series F and F-1 preferred stock		-		720,000
Series G and G-1 preferred stock		-		308,000
Series H and H-1 preferred stock		1,076,000		-
Make-whole on preferred shares		-		283,000
Common stock purchase warrants		1,295,000		16,000
Totals		5,195,000		1,362,000

NOTE 6 – COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

The asset, “Costs and estimated earnings in excess of billings on uncompleted contracts”, represents revenue recognized in excess of amounts billed. The liability, “Billings in excess of costs and estimated earnings on uncompleted contracts”, represents billings in excess of revenue recognized. Costs and estimated earnings on uncompleted contracts consist of the following at January 31, 2016 and April 30, 2015:

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	January 31, 2016			April 30, 2015
Costs incurred on uncompleted contracts	$	29,612,932		$	32,008,307
Estimated contract earnings		4,785,975			6,031,338
		34,398,907			38,039,645
Less: Billings to date		35,704,161			38,965,672
Total	$	(1,305,254	)	$	(926,027	)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	416,047		$	420,434
Billings in excess of cost and estimated earnings on uncompleted contracts		1,721,301			1,346,461
Total	$	(1,305,254	)	$	(926,027	)

Revisions in the estimated gross profits on contracts and contract amounts are made in the period in which circumstances requiring the revisions become known. Although management believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion.

NOTE 7 – DISCONTINUED OPERATIONS

The Company previously disclosed the details regarding the sales of Pride, BTX, and substantially all the assets of its Seattle operations in its Form 10-K filed for the year ended April 30, 2015.

China Operations

On June 3, 2015, the Company entered into an Interest Purchase Agreement with Halcyon Coast Investment (Canada) Ltd. to sell TAGS in an "as-is", all-cash transaction, for a total purchase price of $1,500,000 and received a $150,000 refundable deposit at signing. The Transaction closed on August 14, 2015, whereby the Company received the remaining cash proceeds of $1,350,000, of which: (i) it paid approximately $100,000 in a broker’s fee and (ii) $100,000 is being held in escrow for up to one year from the date of the closing, pending a final determination by the Chinese government with respect to any tax obligations arising from the transaction. Otherwise, the transaction is not subject to any further post-closing adjustments. On September 20, 2015, the final tax determination was made and the Company received $93,000 of the escrow and $7,000 was paid to the buyer to settle the outstanding tax obligation.

The Company recognized a gain on the sale of the China Operations of approximately $838,000, as it received $1,500,000 in cash, offset by the sale of approximately $9,350,000 of assets, $7,935,000 of liabilities, reversal of approximately $349,000 of accumulated other comprehensive income and $577,000 noncontrolling interest and incurring approximately $174,000 in closing costs.

The Company recorded the revenue and profit from short-term contracts from its China Operations under the completed contract method, whereas income is recognized only when a contract is completed or substantially completed. Accordingly, during the period of performance, billings and deferred contract costs are accumulated on the consolidated balance sheets as deferred contract costs and deferred revenue. The Company’s accounting policy is based on the short-term nature of the work performed. Deferred contract costs include equipment lease deposits to the third party vendors of approximately $0 and $969,000 as January 31, 2016 and April 30, 2015, respectively. The revenue results from the China Operations are included in discontinued operations for the nine months ended January 31, 2016 and 2015.

Since the sale of the China Operations closed on August 14, 2015, the Company has determined that the activity of the China Operations should be classified as discontinued operations for the nine months ended January 31, 2016 and the three and nine months ended January 31, 2015. In addition, during the year ended April 30, 2015, the Company had completed the sales of Pride, BTX, and substantially all of the assets of the Seattle Operations. As a result, the Company has reported the financial activity of Pride, BTX and Seattle as discontinued operations for the three and nine months ended January 31, 2015. The following is a summary of the operating results for the discontinued operations as follows:

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	For the three months ended					For the nine months ended
	January 31,					January 31,
	2016		2015			2016			2015
Revenue	$	-	$	1,106,593		$	839,969		$	7,586,495
Costs and expenses:
Cost of revenue		-		728,134			546,296			5,510,599
Selling, general and administrative expenses		-		232,483			111,324			2,434,682
Depreciation and amortization		-		153,893			80,971			988,600
Impairment loss on capitalized software		-		-			-			827,448
		-		1,114,510			738,591			9,761,329
Operating income (loss) from discontinued operations		-		(7,917	)		101,378			(2,174,834	)
Interest expense		-		(52,813	)		(49,234	)		(187,109	)
Income (loss) from discontinued operations before income tax provision		-		(60,730	)		52,144			(2,361,943	)
Income tax provision		-		28,077			10,883			53,262
Income (loss) from discontinued operations, net of tax		-		(88,807	)		41,261			(2,414,305	)
Gain from disposal		-		19,700			837,720			818,596
Total income (loss) from discontinued operations	$	-	$	(69,107	)	$	878,981		$	(1,595,709	)

The following table summarizes assets and liabilities held for sale for the Seattle and China Operations as of January 31, 2016 and April 30, 2015:

	January 31,		April 30,
	2016		2015
Assets
Current assets:
Accounts receivable, net of allowance	$	-	$	4,264,451
Prepaid expenses and other current assets		-		34,800
Deferred contract cost		-		267,000
Total current assets held for sale		-		4,566,251
Property and equipment, net		-		963,119
Other assets		-		14,000
Total other assets held for sale		-		977,119
Total assets held for sale	$	-	$	5,543,370
Liabilities
Accounts payable and accrued expenses	$	-	$	1,700,943
Due to related party		-		785,684
Short term bank loan		-		3,224,180
Total current liabilities held for sale		-		5,710,807
Total liabilities held for sale	$	-	$	5,710,807

Short-Term Bank Loan

As of January 31, 2016 and April 30, 2015, the China Operations had a short-term bank loan of $0 and $3,224,000, respectively, with the Bank of China (the “Short-Term Bank Loan”) with an interest rate of 7.38% due quarterly. The original August 1, 2014 maturity date of the Short-Term Bank Loan was extended to July 31, 2015 at which time it was paid off.

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Due Related Party

As of January 31, 2016 and April 30, 2015, the China Operations had outstanding payables, representing interest accrued on working capital loans and cash provided for the purpose of retiring the short term bank loan in the amounts of $0 and $786,000, respectively, due on demand to a related party, TGG. This loan, which was since paid off, was not guaranteed by WPCS. Interest expense for the quarters ended January 31, 2016 and 2015 was immaterial. This payable was classified as short-term liabilities held for sale in the Company’s financial statements as of April 30, 2015.

The China Operations earned revenue for contracting services provided to TGG (noncontrolling interest in China Operations) and subsidiaries of $212,000 for the nine months ended January 31, 2016 and $835,000 and $1,565,000 for the three and nine months ended January 31, 2015, respectively.

Noncontrolling Interest

As of April 30, 2015, the Company presented the 40% noncontrolling interest associated with the China Operations as a component of equity. As a result of the sale of our entire ownership interest the balance of noncontrolling interest was eliminated.

Noncontrolling interest for the nine months ended January 31, 2016 consists of the following:

	January 31, 2016
Balance at April 30, 2015	$	560,915
Reclassification adjustments of net loss attributable to noncontrolling interest on sale of China Operations		(560,915	)
Balance at January 31, 2016	$	-

NOTE 8 – STOCKHOLDERS’ EQUITY

Preferred Shares

Series H Preferred Stock

On June 30, 2015, the Company entered into Amendment, Waiver and Exchange Agreements (the “Exchange Agreements”) with certain of its promissory note holders, who held $1,299,000 in principal amount of unsecured promissory notes of the Company. Pursuant to the terms of the Exchange Agreements, the Holders agreed to exchange all of the existing indebtedness for, and the Company agreed to issue to the Holders, an aggregate of 8,435 shares of the Company’s newly designated Series H Convertible Preferred Stock, par value $0.0001 per share (“Series H Preferred Stock”). The 8,435 shares of Series H Preferred Stock are each convertible into 100 shares of common stock at $1.54 each (the market value of the stock on date of issuance) and therefore no gain or loss was recorded on the extinguishment of debt. For the period from July 2, 2015 to January 31, 2016, holders of Series H preferred stock have converted 5,797 shares of Series H preferred into 579,700 shares of common stock.

Series H-1 Preferred Stock

Between July 14 and July 20, 2015, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with four Investors pursuant to which the Company issued to the Investors an aggregate of 8,532 shares of Series H-1 Preferred Convertible Stock of the Company, par value $0.0001 per share (“Series H-1 Shares”), and warrants to purchase 1,279,759 shares of common stock of the Company, par value $0.0001 per share (“Common Stock”), with an exercise price of between $1.63 and $1.66 per share (the “Warrants”). The purchase price for each Series H-1 Share was between $163 and $166 and the purchase price for each warrant was $0.1250 per share of Common Stock, for an aggregate purchase price for the Series H-1 Shares and Warrants of $1,575,000.

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The Company has determined that the Warrants qualify for accounting as equity classification. On the issuance date, the Company estimated the fair value of the Warrants at $1,649,000 under the Black-Scholes option pricing model using the following primary assumptions: contractual term of 5.0 years, volatility rate of 103%, risk-free interest rate of 2% and expected dividend rate of 0%. Based on the Warrant’s relative fair value to the fair value of the Series H-1 Preferred Convertible Stock, approximately $841,000 of the $1,575,000 of proceeds was allocated to the Warrants, creating a corresponding preferred stock discount in the same amount. 

Due to the reduction of allocated proceeds to Series H-1 Shares the effective conversion price was approximately $0.80 per share or $704,000 in aggregate. Since the conversion option of the preferred stock was immediately exercisable, the amount allocated to the Beneficial Conversion Feature was immediately accreted to preferred dividends, resulting in an increase in the carrying value of the preferred stock. On July 14 and July 20, 2015, the Company recorded total deemed dividends of $704,000 related to the beneficial conversion feature with the issuance of the Series H-1 Preferred Convertible Stock.

Each share of Series H-1 Preferred Stock has a stated value of $166 and is convertible into shares of Common Stock, equal to the stated value divided by the conversion price of $1.66 per share (subject to adjustment in the event of stock splits and dividends).

For the period from July 20, 2015 to January 31, 2016, holders of Series H-1 preferred stock have converted 413 shares of Series H-1 preferred into 41,300 shares of common stock. The conversion of these shares resulted in a deemed dividend of $41,000.

Conversion of Preferred Shares

For the nine month period ended January 31, 2016 the Company issued approximately 1,408,000 common stock conversion shares, 205,000 common stock make-whole shares and 46,000 common stock dividend shares upon the conversion of series F, F-1, G, G-1, H and H-1 preferred shares. As a result of these conversions, the Company has no further preferred dividend obligations under any of the former classes of Series F, F-1, G, and G-1 preferred shares.

Common Stock Purchase Warrants

The following is an approximate summary of the common stock warrant activity for the nine months ended January 31, 2016: 

			Weighted		Weighted
			Average		Average
	Number of		Exercise		Remaining
	Warrants		Price		Life in years
Outstanding, April 30, 2015		15,510	$	7.25		3.5
Warrants issued in connection with Series H-1 preferred stock for cash		1,279,759		1.66		4.5
Outstanding, January 31, 2016		1,295,269	$	1.73		4.4

NOTE 9 – BANK LINE OF CREDIT

On May 20, 2015, the Company entered into an asset-based revolving credit line agreement with a California-based bank, which provides a $1,000,000 line of credit for its Suisun Operations. The line of credit expires on May 20, 2016, has an interest rate of prime plus 2% and is subject to a monthly borrowing base calculation based upon eligible accounts receivable. The line of credit is secured by all the assets of the Company. As of the filing date of this report the Company has not drawn down on the line of credit.

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NOTE 10 – SHORT-TERM PROMISSORY NOTES

As of April 30, 2015 the Company had $1,703,000 of short-term promissory notes that was originally due to be paid on September 30, 2015. However, on June 30, 2015, the Company entered into Amendment, Waiver and Exchange.

Agreements with certain of its promissory note holders, who held $1,299,000 in principal amount of unsecured promissory notes of the Company. Pursuant to the terms of the Exchange Agreements, the Holders agreed to exchange all of the existing indebtedness for, and the Company agreed to issue to the Holders, an aggregate of 8,435 shares of the Company’s newly designated Series H Convertible Preferred Stock. In addition, one note holder was paid $4,000 for full and complete settlement of his note balance.

In addition, on June 30, 2015, the Company and the shareholder plaintiff entered into a settlement (the “Settlement”) with the two remaining defendants (the “Defendants”) in a case pending in the United States District Court for the Southern District of New York to resolve claims under Section 16 of the Securities Exchange Act of 1934. Under the terms of the Settlement, the Defendants agreed to the following: (i) payment of $315,0000 for the plaintiff’s attorney’s fees; (ii) forgiveness of $400,000 of principal amount of debt owed by the Company to the Defendants; (iii) an exchange of the remaining $405,000 of debt owed by the Company to the Defendants into shares of Series H Convertible Preferred Stock of the Company; (iv) waiver of certain conditions preventing the Company from paying accrued dividends on its Series F-1 Convertible Preferred Stock and Series G-1 Convertible Preferred Stock in shares of the Company’s common stock; and (v) relinquishment of all voting rights the Defendants have in all shares of the Company’s preferred stock now held or hereinafter acquired.

The following is a summary of promissory notes as of January 31, 2016:

	January 31, 2016
Balance at April 30, 2015	$	1,703,000
Repayments of short term convertible note		(4,000	)
Section 16 settlement		(400,000	)
Conversion of short term convertible notes to Series H preferred stock		(1,299,000	)
Balance at January 31, 2016	$	-

NOTE 11 – STOCK OPTION COMPENSATION EXPENSE

On November 2, 2015, pursuant to and subject to the available number of shares reserved under the Company’s 2014 Equity Incentive Plan, the Company issued 100,000 non-qualified options (“November Options”) with a term of 10 years and an exercise price of $1.53 to an employee of the Company. 25,000 of the November Options will vest on April 30, 2016, and the remaining 75,000 of the November Options vest upon either the Company completing a change in control merger by September 1, 2016 or achieving $30 million in revenue for the fiscal year May 1, 2015 to April 30, 2016.

On September 29, 2015, pursuant to and subject to the available number of shares reserved under the Company’s 2014 Equity Incentive Plan, the Company issued 2,573,000 non-qualified options (“September Options”) with a term of 10 years and an exercise price of $1.32 to the Company’s directors and employees. 1,191,500 of the September Options vested immediately, 655,250 of the September Options will vest on April 30, 2016, and the remaining 726,250 of the September Option vest upon either the Company completing a change in control merger by September 1, 2016 or achieving $30 million in revenue for the fiscal year May 1, 2015 to April 30, 2016.

On August 6, 2015, pursuant to and subject to the available number of shares reserved under the Company’s 2014 Equity Incentive Plan, the Company issued 110,000 non-qualified options (“August Options”) with a term of 10 years and an exercise price of $1.19 to the Company’s directors and employees. The August Options vested immediately.

The aggregate grant date fair value of the August Options, September Options and November Options were approximately $2,817,000.

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The fair value of options granted during the nine months ended January 31, 2016 was estimated using the following weighted averages:

	For the Nine
	Months Ended
	January 31, 2016
Exercise price	$1.36
Expected stock price volatility	103%
Risk-free rate of interest	1.5%
Expected term (years)	5.2

A summary of option activities under the Company’s employee stock option plan for the nine months ended January 31, 2016 is presented below:

	Number of Shares			Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of April 30, 2015		40,688		$	18.79	$	-		5.88
Employee options granted		2,783,000			1.32		-		9.66
Forfeited/expired		(6	)		61.82		-		-
Outstanding as of January 31, 2016		2,823,682		$	1.57	$	-		9.60
Options vested and exercisable		1,342,182		$	1.84	$	-		9.51

Stock-based compensation associated with the amortization of stock option expense was approximately $2,174,000 for the nine months ended January 31, 2016 and is included in general and administration expense.

Estimated future stock-based compensation expense relating to unvested stock options is approximately $643,000. The weighted average remaining vesting period of options outstanding at January 31, 2016 is approximately 0.25 years.

NOTE 12 – COMMITMENTS

On September 29, 2015, the Company entered into change in control agreements (the “Agreements”) with its Interim Chief Executive Officer (“Interim CEO”) and its Chief Financial Officer (“CFO”).

The Agreements have initial terms of four years and automatically extend for additional one-year periods at the expiration of the initial term and on each anniversary thereafter unless either party notifies the other party of non-renewal no later than 30 days prior to such anniversary. Under the Agreements, The Interim CEO and CFO are entitled to payments of $350,000 and $150,000, respectively, upon a change in control of the Company.

All payments under the Agreements are contingent upon the respective officer’s execution and non-revocation of a general release of claims against the Company.

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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management's current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that its assumptions are based upon reasonable data derived from and known about our business and operations and the business and operations of the Company. No assurances are made that actual results of operations or the results of our future activities will not differ materially from its assumptions. Factors that could cause differences include, but are not limited to, expected market demand for the Company’s services, fluctuations in pricing for materials, and competition.

Overview

The Company currently specializes in contracting services offering communications infrastructure through its Suisun City Operations. In addition, on January 18, 2016 we announced the launch of our Texas Operations where we plan to build a communication and security infrastructure business. On August 14, 2015 we closed on the sale of our joint venture interest in our China Operations and therefore, the financial results of our China Operations for the three and nine months ended January 31, 2016 and 2015, are now included in the results from discontinued operations in our financial statements.

Our Suisun City Operations communication infrastructure services offers low voltage communications infrastructure contracting services to the public services, healthcare, energy and corporate enterprise markets. We provide an integrated approach to project coordination that creates cost-effective solutions. Corporations, government entities, healthcare organizations and educational institutions depend on the reliability and accuracy of voice, data and video communications. However, the potential for this new technology cannot be realized without the right infrastructure to support the convergence of technology. In this regard, we create integrated building systems, including the installation of advanced structured cabling systems. We specialize in wireless technology and a combination of various technologies to develop a cost effective network for a customer's wireless communication requirements. This includes Wi-Fi networks, point-to-point systems, cellular networks, in-building systems and two-way communication systems. We support the integration of telecommunications, life safety, security and HVAC and design for future growth by building in additional capacity for expansion as new capabilities are added.

For the three and nine months ended January 31, 2016, we generated revenues from continuing operations of $3,318,000 and $11,606,000, respectively, as compared to $5,262,000 and $17,416,000, respectively, for the same periods in 2015. Our backlog at January 31, 2016 was $13,836,000 as compared to $10,000,000 at January 31, 2015.

Company Strategy

During the past two fiscal years, our strategy in the contracting services segment included divesting certain operations through the sales of Pride and the Seattle Operations and closing the Trenton Operations. More recently, the Company completed the sale of its China Operations. In addition, the Company sold BTX, which was focused on opportunities within the digital currency market. With the sale of BTX, the Company no longer conducts business in the virtual currency segment.

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We divested and/or closed these operations either because they were not profitable, or were part of our plan to reduce expenses and liabilities, improve operational performance, as well as to generate cash for working capital and general corporate purposes.

Meanwhile, our ongoing plan continues to be to strengthen the Company’s balance sheet as well as to increase revenue, profit and cash flow at our Suisun City Operations and Texas Operations by developing new organic growth opportunities for the Company and seeking viable acquisition and/or merger candidate(s).

Current Operating Trends and Financial Highlights

Management currently considers the following events, trends and uncertainties to be important in understanding our results of operations and financial condition during the current fiscal year.

With regards to our financial results from continuing operations for the quarter ended January 31, 2016, we generated revenue of approximately $3,318,000 as compared to revenue of $5,262,000 for the same period last year. This $1,944,000 decrease in revenue was due primarily to a $2,000,000 decrease in revenue in our Suisun Operations related to work on one major contract with San Francisco General Hospital, which was effectively completed during the last fiscal year.

We generated a net loss to common shareholders for the three months ended January 31, 2016 of approximately $1,233,000, or $.47 per common share, which includes: (i) a loss from continuing operations of approximately $819,000, of which approximately $656,000 was non-cash compensation expense related to the issuance of employee stock options; and (ii) approximately $413,000 of non-cash dividends declared on preferred stock.

The net loss to common shareholders for the three months ended January 31, 2016 compares to a net loss of approximately $3,452,000, or $5.45 per common share for the three months ended January 31, 2015, which includes: (i) a loss from operations of approximately $476,000; (ii) inducement expense of approximately $3,622,000; (iii) a loss from discontinued China Operations of approximately $89,000; and (iv) approximately $509,000 of non-cash dividends declared on preferred stock, which were partially offset by income of $1,052,000 from section 16 settlements.

We believe that our low voltage communication infrastructure contracting services for public services, healthcare, energy and corporate enterprise markets will create additional opportunities. We believe that the ability to provide comprehensive communications infrastructure contracting services gives us a competitive advantage. In regards to strategic development, our focus is on identifying growth opportunities and we feel optimistic about the markets we serve as evidenced by our new contract awards and customers continuing to seek bids from us, due to our experience in these markets.

While we continue to consider and develop growth opportunities, we have completed numerous transactions to improve our balance sheet. These transactions included the: (i) elimination of $1,703,000 of promissory notes which were due and payable on September 30, 2015; (ii) issuance of common stock to satisfy all of the $677,000 of preferred stock dividends payable at April 30, 2015; (iii) completion of a $1,575,000 equity financing; (iv) closing of a $1,000,000 line of credit for our Suisun Operations; and (v) closing on the sale of our China Operations for $1,500,000.

In addition, we previously divested certain operations through the sales of our Pride, BTX, the assets of the Seattle Operations, and the closure of unprofitable Trenton Operations.

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Results of Operations for the Three Months Ended January 31, 2016 Compared to the Three Months Ended January 31, 2015

	For the three months ended
	January 31,
	2016					2015
Revenue	$	3,317,636		100.0	%	$	5,262,154		100.0	%
Costs and expenses:
Cost of revenue		2,521,627		76.0	%		4,486,949		85.3	%
Selling, general and administrative expenses		1,602,751		48.3	%		1,237,402		23.5	%
Depreciation and amortization		16,075		0.5	%		14,282		0.3	%
		4,140,453		124.8	%		5,738,633		109.1	%
Operating loss		(822,817	)	-24.8	%		(476,479	)	-9.1	%
Other income (expense):
Interest expense		(523	)	0.0	%		(380	)	0.0	%
Inducement expense		-		0.0	%		(3,622,344	)	-68.8	%
Income from Section 16 settlements		-		0.0	%		1,051,516		20.0	%
Other expenses		4,871		0.1	%		197,220		3.8	%
Loss from continuing operations before income tax provision		(818,469	)	-24.7	%		(2,850,467	)	-54.2	%
Income tax provision		607		0.0	%		14,726		0.3	%
Loss from continuing operations		(819,076	)	-24.7	%		(2,865,193	)	-54.5	%
Discontinued operations:
Income (loss) from discontinued operations		-		0.0	%		(88,807	)	-1.6	%
Gain from disposal of BTX		-		0.0	%		19,700		0.4	%
Income (loss) from discontinued operations, net of tax		-		0.0	%		(69,107	)	-1.2	%
Consolidated net loss		(819,076	)	24.7	%		(2,934,300	)	-55.7	%
Net income (loss) attributable to noncontrolling interest		-		0.0	%		8,682		0.2	%
Net loss attributable to WPCS		(819,076	)	24.7	%		(2,942,982	)	-55.9	%
Dividends declared on preferred stock		(372,810	)	-11.3	%		(509,389	)	-9.7	%
Deemed dividends on convertible preferred stock, due to beneficial conversion feature		(40,729	)	-1.2	%		-		0.0	%
Net loss attributable to WPCS common shareholders	$	(1,232,615	)	-37.2	%	$	(3,452,371	)	-65.6	%

Operating Loss

The Company had an operating loss of approximately $823,000 for the three months ended January 31, 2016. This quarter’s operating loss was comprised primarily of $286,000 in operating income from Suisun City Operations and which was offset by $1,077,000 of corporate overhead expenses, of which approximately $656,000 related to non-cash compensation expense recognized on the issuance of employee stock options and a $32,000 loss from the start up of our Texas Operations. For the three months ended January 31, 2015, the Company had an operating loss of approximately $476,000 which was comprised primarily of $236,000 in operating income from Suisun City Operations and which was offset by approximately $712,000 of corporate overhead. The details of the operating loss are as follows:

Revenue

Revenue for the three months ended January 31, 2016 decreased $1,944,000, or 37%, to $3,318,000, as compared to $5,262,000 for same period last year due to a $1,944,000 decrease in revenue in Suisun City Operations. This decrease was primarily comprised of $2,000,000 related to one customer contract that was completed during the prior fiscal year.

 Cost of Revenue

Cost of revenue, which consists of direct costs on contracts: materials, direct labor, third party subcontractor services, union benefits and other overhead costs decreased $1,965,000, or 44%, to $2,522,000, or 76% of revenue, for the three months ended January 31, 2016, as compared to $4,487,000, or 85% of revenue, for the same period in 2015. Such decrease in the cost of revenue was due primarily to attracting new contracts with lower subcontracting costs in the Suisun City Operations. Lower costs, on the jobs that were completed, account for the nine percent decrease in cost of revenue.

 20

Selling, General and Administrative Expenses

For the three months ended January 31, 2016, total selling, general and administrative expenses increased $365,000 or 30% to $1,603,000 as compared to $1,237,000 for the same period in 2015 and which was primarily due to higher: (i) stock compensation expense of $541,000 for stock options issued (ii), salary expense of $30,000; and (iii) various miscellaneous costs of approximately $125,000, all of which were partially offset by lower: (i) professional fees for legal, accounting, consulting and investor relations services of $470,000; and (ii) various miscellaneous costs of approximately $128,000. In addition, for the three months ended January 31, 2015, the Company had $267,000 of Trenton facility lease and Delaware franchise tax reductions which lowered the prior period selling, general and administrative expenses.

Depreciation and Amortization

For the three months ended January 31, 2016, depreciation and amortization was approximately $16,000 as compared to approximately $14,000 for the same quarter in 2015.

Loss from Continuing Operations

The Company had a net loss from continuing operations of $819,000 for the three months ended January 31, 2016 as compared to $2,865,000 for the same period in 2015. Loss from continuing operations is determined by adjusting the operating loss by the following items:

Interest Expense

For the three months ended January 31, 2016 and 2015, interest expense was approximately $523 and $380, respectively.

Inducement Expense

While there was no inducement expense for the quarter ended January 31, 2016, the Company had previously recorded an inducement expense of approximately $3,622,000 relating to the exchange of certain senior secured convertible debt and preferred stock during the quarter ended January 31, 2015.

Income from Section 16 Settlements

During the quarter ended January 31, 2015, the Company recorded income of $1,052,000 as it received cash and forgiveness of certain promissory notes as part of the settlements with certain note holders who were the remaining defendants named in a Section 16 litigation brought by a shareholder of WPCS.

Other Income

For the three months ended January 31, 2016 and 2015, other income was approximately $5,000 as compared to approximately $197,000 for the same period in 2015, which was primarily related to forgiveness of certain accounts payable.

Net Loss Attributable to WPCS Common Shareholders

The Company incurred a net loss attributable to WPCS common shareholders of $1,233,000 for the three months ended January31, 2016 as compared to net loss attributable to WPCS common shareholders of $3,452,000 for the same period in 2015. The following items are the adjustments to the loss from continuing operations that result in determining the net loss attributable to WPCS common shareholders:

 21

Income (Loss) From Discontinued Operations

As a result of the disposition of BTX, and the China Operations, we have recorded all activity related to those subsidiaries as income (loss) from discontinued operations. The cumulative effect is no income or loss for the three months ended January 31, 2016 as compared to a loss of $69,000 for the same period in 2015. The loss for the quarter ended January 31, 2015 relates to a loss from the Company’s China Operations and a gain on the disposal of BTX.

Dividends Declared on Preferred Stock

As a result of the issuance of preferred stock, we declared dividends, make-whole dividends, and deemed dividends of $413,000 for the three months ended January 31, 2016 as compared to $509,000 for the same period in 2015. These dividends are non-cash and were paid in common shares.

Results of Operations for the Nine Months Ended January 31, 2016 Compared to the Nine Months Ended January 31, 2015

	For the nine months ended
	January 31,
	2016					2015
Revenue	$	11,605,880		100.0	%	$	17,416,283		100.0	%
Costs and expenses:
Cost of revenue		9,263,395		79.8	%		14,379,893		82.6	%
Selling, general and administrative expenses		5,470,760		47.1	%		3,600,820		20.7	%
Depreciation and amortization		45,537		0.4	%		46,106		0.3	%
		14,779,692		127.3	%		18,026,819		103.6	%
Operating loss		(3,173,812	)	-27.3	%		(610,536	)	-3.5	%
Other income (expense):
Interest expense		(2,021	)	0.0	%		(2,837,852	)	-16.3	%
Inducement expense		-		0.0	%		(5,492,842	)	-31.5	%
Income from Section 16 settlements		400,000		3.4	%		1,401,516		8.0	%
Other expenses		1,965		0.0	%		188,778		1.1	%
Loss from continuing operations before income tax provision		(2,773,868	)	-23.9	%		(7,350,936	)	-42.2	%
Income tax provision		1,706		0.0	%		43,914		0.3	%
Loss from continuing operations		(2,775,574	)	-23.9	%		(7,394,850	)	-42.5	%
Discontinued operations:
Income (loss) from discontinued operations		41,261		0.4	%		(2,414,305	)	-13.8	%
Gain from disposal		837,720		7.2	%		798,896		4.6	%
Gain from disposal of BTX		-		0.0	%		19,700		0.1	%
Income (loss) from discontinued operations, net of tax		878,981		7.6	%		(1,595,709	)	-9.1	%
Consolidated net loss		(1,896,593	)	-16.3	%		(8,990,559	)	-51.6	%
Net income (loss) attributable to noncontrolling interest		16,505		0.1	%		(93,453	)	-0.5	%
Net loss attributable to WPCS		(1,913,098	)	-16.4	%		(8,897,106	)	-51.1	%
Dividends declared on preferred stock		(4,742,768	)	-40.9	%		(700,088	)	-4.0	%
Deemed dividend on convertible preferred stock, due to beneficial conversion feature		(744,499	)	-6.4	%		-		0.0	%
Net loss attributable to WPCS common shareholders	$	(7,400,365	)	-63.7	%	$	(9,597,194	)	-55.1	%

Operating Loss

The Company had an operating loss of approximately $3,174,000 for the nine months ended January 31, 2016. This period’s operating loss was comprised primarily of $886,000 in operating income from Suisun City Operations and which was offset by $4,029,000 of corporate overhead expenses, of which approximately $2,174,000 related to non-cash compensation expense recognized on the issuance of employee stock options and a $32,000 loss from the start up of our Texas Operations. For the nine months ended January 31, 2015, the Company had an operating loss of approximately $611,000 which was comprised primarily of $1,289,000 in operating income from Suisun City Operations and which was offset by approximately $2,055,000 of corporate overheads. The details of the operating loss are as follows:

 22

Revenue

Revenue for the nine months ended January 31, 2016 decreased $5,810,000, or 33%, to $11,606,000, as compared to $17,416,000 for same period last year due primarily from a $5,800,000 decrease in revenue in Suisun City Operations attributable to the completion of one customer contract that was completed during the last fiscal year.  

Cost of Revenue

Cost of revenue, which consists of direct costs on contracts: materials, direct labor, third party subcontractor services, union benefits and other overhead costs decreased $5,117,000, or 36%, to $9,263,000, or 80% of revenue, for the nine months ended January 31, 2016, as compared to $14,380,000, or 83% of revenue, for the same period in 2015. Such decrease in the cost of revenue was due primarily to lower subcontracting costs in connection with lower revenue contracts in the Suisun City Operations.

Selling, General and Administrative Expenses

For the nine months ended January 31, 2016, total selling, general and administrative expenses increased $1,870,000, or 52%, to $5,471,000 as compared to $3,601,000 for the same period in 2015 and which was primarily due to higher: (i) stock compensation expense of $2,059,000 for stock options issued and (ii) salary expense of $161,000; and (iii) various miscellaneous costs of approximately $163,000, all of which were partially offset by lower: (i) professional fees for accounting, consulting and investor relations services of $714,000; and (ii) various miscellaneous costs of approximately $285,000. In addition, for the nine months ended January 31, 2015, the Company had $496,000 of Trenton facility lease, Delaware franchise tax and insurance reductions which lowered the prior period selling, general and administrative expenses.

Depreciation and Amortization

For the nine months ended January 31, 2016, depreciation and amortization was approximately $46,000 as compared to approximately $46,000 for the same quarter in 2015.

Loss from Continuing Operations

The Company had a net loss from continuing operations of $2,776,000 for the nine months ended January 31, 2016 as compared to a net loss from continuing operations of $7,395,000 for the same period in 2015. Loss from continuing operations is determined by adjusting the operating loss by the following items:

Interest Expense

For the nine months ended January 31, 2016 and 2015, interest expense was approximately $2,000 and $2,838,000, respectively. The significant reduction in interest expense in 2016 as compared to the same period in 2015 is attributable to the exchange of senior secured convertible notes that was completed in November 2014.

Inducement Expense

While there was no inducement expense for the nine months ended January 31, 2016, the Company recorded an inducement expense of approximately $5,493,000 relating to the exchange of certain senior secured convertible debt and preferred stock during the nine months ended January 31, 2015.

 23

Income from Section 16 Settlements

For the nine months ended January 31, 2016 and 2015, income from Section 16 settlements was approximately $400,000 and $1,402,000, respectively, as the Company received $400,000 and $1,402,000 in forgiveness of certain promissory notes and receipt of cash as part of the settlements with certain note holders who were defendants named in a Section 16 litigation brought by a shareholder of WPCS. These settlements resolved all issues related to this litigation.

Other Income

For the nine months ended January 31, 2016 and 2015, other income was approximately $2,000 compared to approximately $189,000 for the same period in 2015. The large other income item in 2015 relates to the negotiation and eventual reduction of certain accounts payable balances.

Net Loss Attributable to WPCS Common Shareholders

The Company incurred a net loss attributable to WPCS common shareholders of $7,401,000 for the nine months ended January 31, 2016 as compared to net loss attributable to WPCS common shareholders of $9,597,000 for the same period in 2015. The following items are the adjustments to the loss from continuing operations that result in determining the net loss attributable to WPCS common shareholders:

Income (Loss) From Discontinued Operations

As a result of the disposition of Pride, BTX, China and Seattle Operations, we have recorded all activity related to those subsidiaries as income (loss) from discontinued operations. The cumulative effect is income of $879,000 for the nine months ended January 31, 2016 as compared to a loss of $1,596,000 for the same period in 2015.

Net Income Attributable to Noncontrolling Interest

The Company’s net income attributable to noncontrolling interest related to its China Operations for the nine months ended January 31, 2016 was $17,000 as compared to a net loss of $93,000 for the same period last year. The entire $17,000 net income recorded in 2016 was prior to the sale of the China Operations.

Dividends Declared on Preferred Stock

As a result of the issuance of preferred stock, we declared dividends, make-whole dividends, and deemed dividends of $5,487,000 for the nine months ended January 31, 2016 as compared to $700,000 for the same period in 2014. These dividends are non-cash and were paid in common shares.

Effects of Inflation

Inflations has not had a material impact on our business. 

Liquidity and Capital Resources as of January 31, 2016

As of January 31, 2016, we had working capital of approximately $2,652,000, which consisted of current assets of approximately $6,687,000 and current liabilities of approximately $4,036,000. This compares to a working capital deficiency of approximately $1,246,000 at April 30, 2015. The current liabilities as presented in the balance sheet at January 31, 2016 primarily include approximately $2,265,000 of accounts payable and accrued expenses and approximately $1,721,000 of billings in excess of costs and estimated earnings on uncompleted contracts.

Our cash and cash equivalents balance at January 31, 2016 was approximately $2,408,000.

 24

During the nine months ended January 31, 2016 the Company completed a series of transactions that it believes will provide it with sufficient working capital and equity to operate its business plans for the next twelve months from the date of filing this report, while it continues to seek growth opportunities, including, but not limited to, (i) organic growth to complement and enhance existing operations; (ii) acquisitions; and/or (iii) a viable merger candidate.

The transactions included the: (i) elimination of $1,703,000 of promissory notes which were due and payable on September 30, 2015; (ii) issuance of common stock to satisfy the $677,000 of preferred stock dividends payable at April 30, 2015; (iii) completion of a $1,575,000 equity financing; (iv) closing of a $1,000,000 line of credit for our Suisun Operations; and (v) the sale of our China Operations for approximately $1,500,000.

Some of these events have provided cash to the Company while others eliminated future cash spending requirements. Along with expected continued operating profits from its Suisun Operations for fiscal year 2016 and lower corporate overhead, these are the primary factors that support the belief that the Company will have adequate liquidity for the next twelve months from the filing date of this report.

Backlog

As of January 31, 2016, we had a backlog of unfilled orders of approximately $13,836,000 as compared to approximately $14,100,000 at April 30, 2015. We define backlog as the value of work-in-hand to be provided for customers as of a specific date where the following conditions are met (with the exception of engineering change orders): (i) the price of the work to be done is fixed; (ii) the scope of the work to be done is fixed, both in definition and amount; and (iii) there is a written contract, purchase order, agreement or other documentary evidence which represents a firm commitment by the customer to pay us for the work to be performed. These backlog amounts are based on contract values and purchase orders and may not result in actual receipt of revenue in the originally anticipated period or at all. We have experienced variances in the realization of our backlog because of project delays or cancellations resulting from external market factors and economic factors beyond our control and we may experience such delays or cancellations in the future. Backlog does not include new firm commitments that may be awarded to us by our customers from time to time in future periods. These new project awards could be started and completed in this same future period. Accordingly, our backlog does not necessarily represent the total revenue that could be earned by us in future periods.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements other than operating lease commitments.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses.

On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates.

Our critical accounting policies and significant estimates are detailed in the Form 10-K for the year ended April 30, 2015. Our critical accounting policies and significant estimates have not changed substantially from those previously disclosed in the Form 10-K.

 25

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

 26

ITEM 4 - CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Our management, with the participation of our interim chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our interim chief executive officer and chief financial officer concluded that, as of January 31, 2016, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our interim chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended January 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material developments in any legal proceedings since the disclosures contained in the Registrant’s Form 10-K for the year ended April 30, 2015.

ITEM 1A. RISK FACTORS

Not required.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Conversion of Convertible Preferred Stock

From December 11, 2015 through March 10, 2016, the Company issued 102,492 shares of Common Stock in transactions that were not registered under the Securities Act of 1933. The shares of Common Stock were issued upon the conversion of shares of Series G-1 Convertible Preferred Stock in reliance upon the exemption from registration in Section 3(a)(9) of the Securities Act of 1933.

Investment Banking Agreement

On August 1, 2015, the Company entered into an engagement letter with an investment bank to provide investment banking services for a period of twelve (12) months, which may be extended by mutual consent of the parties.  The Company agreed to pay a $7,500 monthly fee to the investment bank payable in shares of Common Stock, calculated based on the closing bid price of the Common Stock on the trading day immediately prior to date payment is due.  On each date of payment, the Common Stock is issued in reliance upon the exemption from registration in Section 4(a)(2) of the Securities Act of 1933.  The shares issued for the payments due for the period from December 11, 2015 through March 10, 2016 were 17,213 and the total shares issued under this agreement to date is 42,534.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

 27

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) There is no information required to be disclosed on Form 8-K during the period covered by this Form 10-Q that was not so reported.

(b) There were no material changes to the procedures by which security holders may recommend nominees to the Company’s board of directors during the quarter ended January 31, 2016.

ITEM 6. EXHIBITS

3.1(1)	Certificate of Incorporation, as amended
3.2(2)	Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on March 4, 2013
3.3(3)	Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on May 16, 2013 and effective May 28, 2013
3.4(4)	Certificate of Correction to the Certificate of Amendment of the Certificate of Incorporation, filed with the Delaware Secretary of State on December 19, 2014
3.5(5)	Amended and Restated Bylaws
3.6(6)	Certificate of Designations, Preferences and Rights of Series F Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on September 30, 2014
3.7(6)	Certificate of Designations, Preferences and Rights of the Series G Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on September 30, 2014
3.8(7)	Certificate of Designations, Preferences and Rights of Series F-1 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on November 20, 2014
3.9(7)	Certificate of Designations, Preferences and Rights of Series G-1 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on November 20, 2014
3.10(8)	Certificate of Designations, Preferences and Rights of Series H Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on June 30, 2015
3.11(9)	Certificate of Designations, Preferences and Rights of Series H-1 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on July 14, 2015

 28

10.1(10)	Change in Control Agreement, dated as of September 29, 2015, by and between WPCS International Incorporated and Sebastian Giordano, Interim Chief Executive Officer
10.2(10)	Change in Control Agreement, dated as of September 29, 2015, by and between WPCS International Incorporated and Dave Fallen, Chief Financial Officer
10.3(11)	Change in Control Agreement, dated as of October 21, 2015, by and between WPCS International - Suisun City, Inc. and Robert Roller, President of the Suisun City Operations
31.1*	Certification of Interim Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Interim Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

 29

*	Filed herewith
**	Furnished herewith
(1)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 2, 2014.
(2)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 4, 2013.
(3)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 28, 2013.
(4)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 19, 2014.
(5)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2016.
(6)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 3, 2014.
(7)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 20, 2014.
(8)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 2015.
(9)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 15, 2015.
(10)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2015.
(11)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 23, 2015.

 30

SIGNATURES

Pursuant to the requirements 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.

WPCS INTERNATIONAL INCORPORATED
By:	/s/ Sebastian Giordano
	Name:	Sebastian Giordano
	Title:	Interim Chief Executive Officer

By:	/s/ David Allen
	Name:	David Allen
	Title:	Chief Financial Officer

Date: March 9, 2016

 31

Index to Exhibits 

Exhibit Number	Exhibit
3.1(1)	Certificate of Incorporation, as amended
3.2(2)	Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on March 4, 2013
3.3(3)	Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on May 16, 2013 and effective May 28, 2013
3.4(4)	Certificate of Correction to the Certificate of Amendment of the Certificate of Incorporation, filed with the Delaware Secretary of State on December 19, 2014
3.5(5)	Amended and Restated Bylaws
3.6(6)	Certificate of Designations, Preferences and Rights of Series F Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on September 30, 2014
3.7(6)	Certificate of Designations, Preferences and Rights of the Series G Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on September 30, 2014
3.8(7)	Certificate of Designations, Preferences and Rights of Series F-1 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on November 20, 2014
3.9(7)	Certificate of Designations, Preferences and Rights of Series G-1 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on November 20, 2014
3.10(8)	Certificate of Designations, Preferences and Rights of Series H Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on June 30, 2015
3.11(9)	Certificate of Designations, Preferences and Rights of Series H-1 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on July 14, 2015
10.1(10)	Change in Control Agreement, dated as of September 29, 2015, by and between WPCS International Incorporated and Sebastian Giordano, Interim Chief Executive Officer.
10.2(10)	Change in Control Agreement, dated as of September 29, 2015, by and between WPCS International Incorporated and Dave Fallen, Chief Financial Officer.
10.3(11)	Change in Control Agreement, dated as of October 21, 2015, by and between WPCS International - Suisun City, Inc. and Robert Roller, President of the Suisun City Operations.
31.1*	Certification of Interim Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Interim Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

 32

*	Filed herewith
**	Furnished herewith
(1)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 2, 2014.
(2)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 4, 2013.
(3)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 28, 2013.
(4)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 19, 2014.
(5)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2016.
(6)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 3, 2014.
(7)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 20, 2014.
(8)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 2015.
(9)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 15, 2015.
(10)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2015.
(11)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 23, 2015.

 33

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Sebastian Giordano, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WPCS International Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: March 9, 2016

/s/ Sebastian Giordano
Name:	Sebastian Giordano
Title:	Interim Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, David Allen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WPCS International Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: March 9, 2016

/s/ David Allen
Name:	David Allen
Title:	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of WPCS International Incorporated. (the “Company”) on Form 10-Q for the quarter ended January 31, 2016, as filed with the Securities and Exchange Commission (the “Report”), I, Sebastian Giordano, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)         The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ Sebastian Giordano
Date: March 9, 2016	Name:	Sebastian Giordano
	Title:	Interim Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of WPCS International Incorporated. (the “Company”) on Form 10-Q for the quarter ended January 31, 2016 as filed with the Securities and Exchange Commission (the “Report”), I, David Allen, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)         The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ David Allen
Date: March 9, 2016	Name:	David Allen
	Title:	Chief Financial Officer

XML

Document And Entity Information - shares	9 Months Ended
	Jan. 31, 2016	Mar. 09, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Entity Registrant Name	WPCS INTERNATIONAL INC
Entity Central Index Key	0001086745
Current Fiscal Year End Date	--04-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	WPCS
Entity Common Stock, Shares Outstanding		2,685,620

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jan. 31, 2016	Apr. 30, 2015
Current assets:
Cash and cash equivalents	$ 2,408,297	$ 2,364,360
Accounts receivable, net of allowance of $92,000 at January 31, 2016 and April 30, 2015	3,769,383	6,494,890
Costs and estimated earnings in excess of billings on uncompleted contracts	416,047	420,434
Prepaid expenses and other current assets	93,558	159,769
Current assets held for sale	0	4,566,251
Total current assets	6,687,285	14,005,704
Property and equipment, net	227,300	162,986
Other assets	27,494	25,384
Other assets held for sale	0	963,119
Total assets	6,942,079	15,157,193
Current liabilities:
Current portion of loans payable	49,747	39,935
Accounts payable and accrued expenses	2,264,725	5,414,269
Billings in excess of costs and estimated earnings on uncompleted contracts	1,721,301	1,346,461
Other payable to Zurich	0	360,000
Short-term promissory notes	0	1,703,000
Dividends payable	0	677,546
Current liabilities held for sale	0	5,710,807
Total current liabilities	4,035,773	15,252,018
Loans payable, net of current portion	98,492	44,239
Total liabilities	$ 4,134,265	$ 15,296,257
Commitments
WPCS equity (deficit):
Common stock - $0.0001 par value, 100,000,000 shares authorized, 2,673,803 and 982,660 shares issued and outstanding as of January 31, 2016 and April 30, 2015, respectively	$ 267	$ 98
Additional paid-in capital	85,653,220	70,380,397
Accumulated deficit	(83,951,259)	(76,550,894)
Accumulated other comprehensive income on foreign currency translation	0	349,723
Total WPCS equity (deficit)	2,807,814	(699,979)
Noncontrolling interest	0	560,915
Total equity (deficit)	2,807,814	(139,064)
Total liabilities and equity (deficit)	6,942,079	15,157,193
Convertible Series F [Member]
WPCS equity (deficit):
Preferred stock	0	1,589,933
Convertible Series F-1 [Member]
WPCS equity (deficit):
Preferred stock	0	1,702,808
Convertible Series G [Member]
WPCS equity (deficit):
Preferred stock	0	731,706
Convertible Series G-1 [Member]
WPCS equity (deficit):
Preferred stock	0	1,096,250
Convertible Series H [Member]
WPCS equity (deficit):
Preferred stock	406,262	0
Convertible Series H-1 [Member]
WPCS equity (deficit):
Preferred stock	$ 699,324	$ 0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($)	Jan. 31, 2016	Apr. 30, 2015
Allowance for accounts receivable	$ 92,000	$ 92,000
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	2,673,803	2,673,803
Common stock, shares outstanding	982,660	982,660
Convertible Series F [Member]
Preferred stock, shares issued	0	5,268
Preferred Stock, Shares Outstanding	0	5,268
Convertible Series F-1 [Member]
Preferred stock, shares issued	0	5,642
Preferred Stock, Shares Outstanding	0	5,642
Convertible Series G [Member]
Preferred stock, shares issued	0	2,088
Preferred Stock, Shares Outstanding	0	2,088
Convertible Series G-1 [Member]
Preferred stock, shares issued	0	3,128
Preferred Stock, Shares Outstanding	0	3,128
Convertible Series H [Member]
Preferred stock, shares issued	2,638	2,638
Preferred Stock, Shares Outstanding	0	0
Preferred Stock, liquidation preference (in dollars)	$ 406,000	$ 406,000
Convertible Series H-1 [Member]
Preferred stock, shares issued	8,119	8,119
Preferred Stock, Shares Outstanding	0	0
Preferred Stock, liquidation preference (in dollars)	$ 1,348,000	$ 1,348,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Jan. 31, 2015	Jan. 31, 2016	Jan. 31, 2015
Revenue	$ 3,317,636	$ 5,262,154	$ 11,605,880	$ 17,416,283
Costs and expenses:
Cost of revenue	2,521,627	4,486,949	9,263,395	14,379,893
Selling, general and administrative expenses	1,602,751	1,237,402	5,470,760	3,600,820
Depreciation and amortization	16,075	14,282	45,537	46,106
Costs and expenses	4,140,453	5,738,633	14,779,692	18,026,819
Operating loss	(822,817)	(476,479)	(3,173,812)	(610,536)
Other income (expense):
Interest expense	(523)	(380)	(2,021)	(2,837,852)
Inducement expense	0	(3,622,344)	0	(5,492,842)
Income from Section 16 settlement	0	1,051,516	400,000	1,401,516
Other income, net	4,871	197,220	1,965	188,778
Loss from continuing operations before income tax provision	(818,469)	(2,850,467)	(2,773,868)	(7,350,936)
Income tax provision	607	14,726	1,706	43,914
Loss from continuing operations	(819,076)	(2,865,193)	(2,775,574)	(7,394,850)
Discontinued operations:
Income (loss) from discontinued operations	0	(88,807)	41,261	(2,414,305)
Gain from disposal	0	0	837,720	798,896
Income (loss) from discontinued operations, net of tax	0	(69,107)	878,981	(1,595,709)
Consolidated net loss	(819,076)	(2,934,300)	(1,896,593)	(8,990,559)
Net income (loss) attributable to noncontrolling interest	0	8,682	16,505	(93,453)
Net loss attributable to WPCS	(819,076)	(2,942,982)	(1,913,098)	(8,897,106)
Dividends declared on preferred stock	(372,810)	(509,389)	(4,742,768)	(700,088)
Deemed dividends on convertible preferred Series H-1 stock, due to beneficial conversion feature	(40,729)	0	(744,499)	0
Net loss attributable to WPCS common shareholders	$ (1,232,615)	$ (3,452,371)	$ (7,400,365)	$ (9,597,194)
Basic and diluted net loss attributable to WPCS common shareholders:
Loss from continuing operations (in dollars per share)	$ (0.47)	$ (5.33)	$ (3.82)	$ (12.8)
Income (loss) from discontinued operations (in dollars per share)	0	(0.15)	0.01	(3.67)
Gain from disposal (in dollars per share)	0	0.03	0.39	1.29
Basic and diluted net income (loss) from discontinued operations (in dollars per share)	0	(0.12)	0.4	(2.38)
Basic and diluted net loss per common share attributable to WPCS (in dollars per share)	$ (0.47)	$ (5.45)	$ (3.42)	$ (15.18)
Basic and diluted weighted average number of common shares outstanding (in shares)	2,597,952	633,158	2,161,104	632,664
BTX Trader LLC [Member]
Discontinued operations:
Gain from disposal	$ 0	$ 19,700	$ 0	$ 19,700

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Jan. 31, 2015	Jan. 31, 2016	Jan. 31, 2015
Consolidated net loss	$ (819,076)	$ (2,934,300)	$ (1,896,593)	$ (8,990,559)
Other comprehensive loss
Foreign currency translation adjustments	0	(23,472)		(19,854)
Other comprehensive loss	0	(23,472)	349,723	(886,573)
Comprehensive income (loss)	(819,076)	(2,957,772)	(1,546,870)	(9,877,132)
Less: comprehensive loss attributable to noncontrolling interest	0	(6,965)	0	(97,395)
Comprehensive income (loss) attributable to WPCS shareholders	(819,076)	(2,950,807)	(1,546,870)	(9,779,737)
Australia Operations [Member]
Other comprehensive loss
Reclassification adjustments of other comprehensive loss on the sale	0	0	0	(866,719)
China Operations [Member]
Other comprehensive loss
Reclassification adjustments of other comprehensive loss on the sale	$ 0	$ 0	$ 349,723	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) - 9 months ended Jan. 31, 2016 - USD ($)	Total	Series F Preferred Stock [Member]	Series G Preferred Stock [Member]	Series F1 Preferred Stock [Member]	Series G1 Preferred Stock [Member]	Series G And G1 Preferred Stock [Member]	Series F And F1 Preferred Stock [Member]	Series H Preferred Stock [Member]	Series H-1 Preferred Convertible Stock [Member]	Series F-1 And G-1 Convertible Stock [Member]	Series H-1 Preferred Stock [Member]	Preferred Stock [Member]	Preferred Stock [Member] Series F Preferred Stock [Member]	Preferred Stock [Member] Series G Preferred Stock [Member]	Preferred Stock [Member] Series F1 Preferred Stock [Member]	Preferred Stock [Member] Series G1 Preferred Stock [Member]	Preferred Stock [Member] Series G And G1 Preferred Stock [Member]	Preferred Stock [Member] Series F And F1 Preferred Stock [Member]	Preferred Stock [Member] Series H Preferred Stock [Member]	Preferred Stock [Member] Series H-1 Preferred Convertible Stock [Member]	Preferred Stock [Member] Series F-1 And G-1 Convertible Stock [Member]	Preferred Stock [Member] Series H-1 Preferred Stock [Member]	Common Stock [Member]	Common Stock [Member] Series F Preferred Stock [Member]	Common Stock [Member] Series G Preferred Stock [Member]	Common Stock [Member] Series F1 Preferred Stock [Member]	Common Stock [Member] Series G1 Preferred Stock [Member]	Common Stock [Member] Series G And G1 Preferred Stock [Member]	Common Stock [Member] Series F And F1 Preferred Stock [Member]	Common Stock [Member] Series H Preferred Stock [Member]	Common Stock [Member] Series H-1 Preferred Convertible Stock [Member]	Common Stock [Member] Series F-1 And G-1 Convertible Stock [Member]	Common Stock [Member] Series H-1 Preferred Stock [Member]	Additional Paid-in Capital [Member]	Additional Paid-in Capital [Member] Series F Preferred Stock [Member]	Additional Paid-in Capital [Member] Series G Preferred Stock [Member]	Additional Paid-in Capital [Member] Series F1 Preferred Stock [Member]	Additional Paid-in Capital [Member] Series G1 Preferred Stock [Member]	Additional Paid-in Capital [Member] Series G And G1 Preferred Stock [Member]	Additional Paid-in Capital [Member] Series F And F1 Preferred Stock [Member]	Additional Paid-in Capital [Member] Series H Preferred Stock [Member]	Additional Paid-in Capital [Member] Series H-1 Preferred Convertible Stock [Member]	Additional Paid-in Capital [Member] Series F-1 And G-1 Convertible Stock [Member]	Additional Paid-in Capital [Member] Series H-1 Preferred Stock [Member]	Accumulated Deficit [Member]	Accumulated Deficit [Member] Series F Preferred Stock [Member]	Accumulated Deficit [Member] Series G Preferred Stock [Member]	Accumulated Deficit [Member] Series F1 Preferred Stock [Member]	Accumulated Deficit [Member] Series G1 Preferred Stock [Member]	Accumulated Deficit [Member] Series G And G1 Preferred Stock [Member]	Accumulated Deficit [Member] Series F And F1 Preferred Stock [Member]	Accumulated Deficit [Member] Series H Preferred Stock [Member]	Accumulated Deficit [Member] Series H-1 Preferred Convertible Stock [Member]	Accumulated Deficit [Member] Series F-1 And G-1 Convertible Stock [Member]	Accumulated Deficit [Member] Series H-1 Preferred Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series F Preferred Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series G Preferred Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series F1 Preferred Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series G1 Preferred Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series G And G1 Preferred Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series F And F1 Preferred Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series H Preferred Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series H-1 Preferred Convertible Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series F-1 And G-1 Convertible Stock [Member]	Accumulated Other Comprehensive (Loss) Income [Member] Series H-1 Preferred Stock [Member]	WPCS Equity (Deficit) [Member]	WPCS Equity (Deficit) [Member] Series F Preferred Stock [Member]	WPCS Equity (Deficit) [Member] Series G Preferred Stock [Member]	WPCS Equity (Deficit) [Member] Series F1 Preferred Stock [Member]	WPCS Equity (Deficit) [Member] Series G1 Preferred Stock [Member]	WPCS Equity (Deficit) [Member] Series G And G1 Preferred Stock [Member]	WPCS Equity (Deficit) [Member] Series F And F1 Preferred Stock [Member]	WPCS Equity (Deficit) [Member] Series H Preferred Stock [Member]	WPCS Equity (Deficit) [Member] Series H-1 Preferred Convertible Stock [Member]	WPCS Equity (Deficit) [Member] Series F-1 And G-1 Convertible Stock [Member]	WPCS Equity (Deficit) [Member] Series H-1 Preferred Stock [Member]	Non-Controlling Interest [Member]	Non-Controlling Interest [Member] Series F Preferred Stock [Member]	Non-Controlling Interest [Member] Series G Preferred Stock [Member]	Non-Controlling Interest [Member] Series F1 Preferred Stock [Member]	Non-Controlling Interest [Member] Series G1 Preferred Stock [Member]	Non-Controlling Interest [Member] Series G And G1 Preferred Stock [Member]	Non-Controlling Interest [Member] Series F And F1 Preferred Stock [Member]	Non-Controlling Interest [Member] Series H Preferred Stock [Member]	Non-Controlling Interest [Member] Series H-1 Preferred Convertible Stock [Member]	Non-Controlling Interest [Member] Series F-1 And G-1 Convertible Stock [Member]	Non-Controlling Interest [Member] Series H-1 Preferred Stock [Member]
Balance at Apr. 30, 2015	$ (139,064)											$ 5,120,697											$ 98											$ 70,380,397											$ (76,550,894)											$ 349,723											$ (699,979)											$ 560,915
Balance (in shares) at Apr. 30, 2015												16,126											982,660
Issuance of Series H-1 preferred stock and warrants for cash											$ 1,575,000											$ 1,575,000											$ 0											$ 0											$ 0											$ 0											$ 1,575,000											$ 0
Issuance of Series H-1 preferred stock and warrants for cash (in shares)																						8,532											0
Issuance of warrants with Series H-1 preferred stock											$ 0											$ (841,405)											$ 0											$ 841,405											$ 0											$ 0											$ 0											$ 0
Beneficial conversion feature of Series H-1 convertible preferred stock									$ 0											$ (703,770)											$ 0											$ 703,770											$ 0											$ 0											$ 0											$ 0
Deemed dividends related to immediate accretion of beneficial conversion feature of Series H-1 convertible preferred stock									0											703,770											0											0											(703,770)											0											0											0
Dividend declared on preferred stock	(4,742,768)					$ (126,198)	$ (159,215)		0								$ 0	$ 0		$ 40,729								$ 0	$ 0		$ 0								$ 0	$ 0		0								$ (126,198)	$ (159,215)		(40,729)								$ 0	$ 0		0								$ (126,198)	$ (159,215)		0								$ 0	$ 0		0
Make-whole amount on conversion of preferred F-1 and G-1 shares										$ (4,457,355)											$ 0											$ 0											$ 0											$ (4,457,355)											$ 0											$ (4,457,355)											$ 0
Convertible Dividend Payable Shares Converted To Other Securities	4,457,356	$ 313,186	$ 129,656	$ 311,791	$ 208,325							$ 0	$ 0	$ 0	$ 0	$ 0							$ 21	$ 1	$ 1	$ 1	$ 1							4,457,335	$ 313,185	$ 129,655	$ 311,790	$ 208,324							0	$ 0	$ 0	$ 0	$ 0							0	$ 0	$ 0	$ 0	$ 0							4,457,356	$ 313,186	$ 129,656	$ 311,791	$ 208,325							0	$ 0	$ 0	$ 0	$ 0
Convertible Dividend Payable Shares Converted To Other Securities (In Shares)												0	0	0	0	0							204,865	13,959	7,022	14,291	11,154
Conversion of convertible note to Series preferred stock								$ 1,299,000											$ 1,299,000											$ 0											$ 0											$ 0											$ 0											$ 1,299,000											$ 0
Conversion of convertible note to Series preferred stock (in shares)																			8,435											0
Stock Issued During Period Value Conversion Of Units (In Shares)												5,797	(5,268)	(2,088)	(5,642)	(3,128)			(5,797)	(413)			579,700	239,454	116,453	256,456	174,457			579,700	41,300
Stock Issued During Period Value Conversion Of Units		$ 0	$ 0	$ 0	$ 0			$ 0	$ 0				$ (1,589,933)	$ (731,706)	$ (1,702,808)	$ (1,096,250)			$ (892,738)	$ (75,000)				$ 24	$ 12	$ 26	$ 17			$ 58	$ 4				$ 1,589,909	$ 731,694	$ 1,702,782	$ 1,096,233			$ 892,680	$ 74,996				$ 0	$ 0	$ 0	$ 0			$ 0	$ 0				$ 0	$ 0	$ 0	$ 0			$ 0	$ 0				$ 0	$ 0	$ 0	$ 0			$ 0	$ 0				$ 0	$ 0	$ 0	$ 0			$ 0	$ 0
Issuance common stock for services	2,219,068											$ 0											$ 3											2,219,065											0											0											2,219,068											0
Issuance common stock for services (in Shares)												0											30,717
Fractional Shares Issued on reverse split	0											$ 0											$ 0											0											0											0											0											0
Fractional Shares Issued on reverse split (in shares)												0											1,315
Reclassification adjustments of other comprehensive loss on sale of China operations	(349,723)											$ 0											$ 0											0											0											(349,723)											(349,723)											0
Reclassification adjustments of net loss attributable to noncontrolling interest on sale of China operations	(560,915)											0											0											0											0											0											0											(560,915)
Net loss attributable to WPCS	(1,913,098)											0											0											0											(1,913,098)											0											(1,913,098)											0
Balance at Jan. 31, 2016	$ 2,807,814											$ 1,105,586											$ 267											$ 85,653,220											$ (83,951,259)											$ 0											$ 2,807,814											$ 0
Balance (in shares) at Jan. 31, 2016												10,757											2,673,803

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Operating activities:
Net loss from operations	$ (2,775,574)	$ (7,394,850)
Consolidated net income (loss) from discontinued operations	878,981	(1,595,709)
Adjustments to reconcile consolidated net loss to net cash used by operating activities:
Depreciation and amortization	45,537	107,931
Amortization of notes discount	0	853,417
Inducement expense	0	5,492,842
Shares based compensation	2,219,068	115,200
Interest expense related to make-whole amount	0	1,889,716
Loss on sale of Seattle Operations	0	374,932
Income on section 16 settlements	(400,000)	(1,401,516)
Cash received on section 16 settlement	0	650,000
Changes in operating assets and liabilities:
Accounts receivable	2,725,507	(2,889,583)
Costs and estimated earnings in excess of billings on uncompleted contracts	4,387	(247,240)
Current assets held for sale	(3,853,621)	850,592
Prepaid expenses and other current assets	66,211	(146,878)
Other assets	(2,110)	15,591
Other assets held for sale	(34,523)	3,580,379
Income taxes payable	0	(2,934)
Accounts payable and accrued expenses	(3,149,544)	2,414,902
Current liabilities held for sale	2,200,030	(3,284,660)
Accrued severance expense	0	(550,205)
Billings in excess of costs and estimated earnings on uncompleted contracts	374,840	447,386
Net cash (used in) operating activities	(2,538,531)	(1,539,283)
Investing activities:
Cash received on sale of Seattle	0	1,561,000
Sale of property and equipment, net	0	27,024
Acquisition of property and equipment	(109,851)	0
Addition on acquisition of BTX capitalized software	0	(2,279)
Payment for sale of BTX	0	(59,097)
Proceeds from sale of China Operations, net of acquisition cost	1,325,744	0
Net cash provided by investing activities	1,215,893	1,526,648
Financing activities:
Proceeds from issuance of Series H-1 preferred stock and warrants	1,575,000	0
Borrowings under loan payable obligations	99,369	0
Repayment under loan payable obligations	(35,304)	(8,627)
Repayments under other payable to Zurich	(360,000)	0
Repayments of short term promissory notes	(4,000)	0
Dividends paid on preferred stock	0	(146,521)
Net cash provided by (used in) financing activities	1,275,065	(155,148)
Effect of exchange rate changes on cash	91,510	(132,889)
Net increase in cash and cash equivalents	43,937	(300,672)
Cash and cash equivalents, beginning of the period	2,364,360	2,177,070
Cash and cash equivalents, end of the period	2,408,297	1,876,398
Schedule of non-cash investing and financing activities:
Declaration of preferred dividends payable	4,742,768	700,088
Conversion of dividends payable related to make-whole amount to common stock	4,457,356	0
Section 16 settlements gain for cancellation of short term promissory notes	0	735,000
Section 16 settlements gain for cancellation of make-whole interest expense	0	17,000
Series F-1 preferred stock Series G-1 preferred stock [Member]
Schedule of non-cash investing and financing activities:
Conversion of senior secured convertible note and related make-whole amount	0	4,918,360
Series F preferred stock Series G preferred stock [Member]
Schedule of non-cash investing and financing activities:
Conversion of senior secured convertible note and related make-whole amount	0	2,321,640
Series F-1 Preferred Stock [Member]
Schedule of non-cash investing and financing activities:
Conversion of dividends payable related to make-whole amount to common stock	624,977	0
Series G-1 Preferred Stock [Member]
Schedule of non-cash investing and financing activities:
Conversion of dividends payable related to make-whole amount to common stock	337,981	0
Series F And F1 Preferred Stock [Member]
Schedule of non-cash investing and financing activities:
Conversion of preferred stock through the issuance of common stock	3,292,741	181,086
Series G And G1 Preferred Stock [Member]
Schedule of non-cash investing and financing activities:
Conversion of preferred stock through the issuance of common stock	1,827,927	0
Series H Preferred Stock [Member]
Schedule of non-cash investing and financing activities:
Conversion of Stock, Amount Converted	1,299,000	0
Conversion of preferred stock through the issuance of common stock	892,680	0
Series H-1 Preferred Stock [Member]
Schedule of non-cash investing and financing activities:
Conversion of senior secured convertible note and related make-whole amount	704,000
Conversion of preferred stock through the issuance of common stock	75,000	0
Series E Preferred Stock [Member]
Schedule of non-cash investing and financing activities:
Conversion of Stock, Amount Converted	0	2,438,000
Pride [Member]
Adjustments to reconcile consolidated net loss to net cash used by operating activities:
Gain on sale	0	(798,896)
Schedule of non-cash investing and financing activities:
Settlement of severance obligation and sale of Pride	0	970,000
China Operations [Member]
Adjustments to reconcile consolidated net loss to net cash used by operating activities:
Gain on sale	(837,720)	0
BTX Trade [Member]
Adjustments to reconcile consolidated net loss to net cash used by operating activities:
Gain on sale	0	(19,700)
Schedule of non-cash investing and financing activities:
Sale of BTX	$ 0	$ 79,000

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DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Jan. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

NOTE 1 – DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description of the Business

The Company currently specializes in low voltage communications and security contracting services, conducting business in two operation centers, through its wholly-owned domestic subsidiaries, WPCS International - Suisun City, Inc. (“Suisun City Operations”) and WPCS International - Texas Operations, Inc. (“Texas Operations”).

The Company is a full-service low voltage contractor that specializes in the installation and service of Voice & Data Networks, Security Systems, Audio-Visual Solutions, and Distributed Antenna Systems and provides experienced project management and delivers complex projects to key vertical markets that include Healthcare, Education, Transportation, Energy & Utilities, Oil & Gas, Manufacturing, Commercial Real Estate, Financial, Government, etc.

The Company also has strategic alliances with technology partners to provide consulting and application software development services for collaboration, visualization and unified communications and is aligned with major manufacturers to provide the products and technology for seamless integrated and enhanced user experience for enterprise solutions. 

Basis of Presentation

The consolidated financial statements of WPCS International Incorporated, a Delaware corporation (“WPCS”) and its wholly and majority-owned subsidiaries, (collectively, the “Company”) included in this Report for the three and nine months ended January 31, 2016 and 2015, reflect the accounts of current and former entities as either continued or discontinued operations, as discussed below.

Continued operations for the three and nine months ended January 31, 2016 and 2015 include the results of operations of the: Suisun City Operations and the Texas Operations, the Company’s only two active operations; WPCS Incorporated, an inactive subsidiary; and WPCS International – Trenton, Inc. (“Trenton Operations”), which was closed in September 2013.

With the prior divestitures of The Pride Group (QLD) Pty Ltd. (“Pride”), BTX Trader, LLC (“BTX”) and WPCS Asia Limited, a 60% joint venture interest in Tai'an AGS Pipeline Construction Co. Ltd. (the “China Operations”), as well as the various transactions involving the sale of substantially all of the assets of each of WPCS International - Seattle, Inc. (“Seattle Operations”), WPCS International - Portland, Inc. (“Portland Operations”), WPCS International - Lakewood, Inc. (“Lakewood Operations”), WPCS International - Hartford, Inc. (“Hartford Operations”) and WPCS Australia Pty Ltd. and WPCS International – Brendale Pty Ltd (together, “Australia Operations”), the results of these subsidiaries are included as part of discontinued operations for the three and nine months ended January 31, 2015 and 2016, for the China Operations only.

Notwithstanding the foregoing, the Company is in the process of dissolving the inactive domestic and international subsidiaries listed above, whose operations were discontinued due to the sale of substantially all of their assets.

The unaudited condensed consolidated financial information furnished herein reflects all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, considered necessary for a fair presentation of the financial position and the results of operations and cash flows of the Company for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These interim condensed consolidated financial statements should be read in conjunction with the financial statements included in the Annual Report on Form 10-K for the fiscal year ended April 30, 2015.

The results of operations for the three and nine months ended January 31, 2016 are not necessarily indicative of the results to be expected for the full fiscal year.

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LIQUIDITY AND CAPITAL RESOURCES

9 Months Ended

Jan. 31, 2016

Liquidity and Capital Resources [Abstract]

LIQUIDITY AND CAPITAL RESOURCES

NOTE 2 – LIQUIDITY AND CAPITAL RESOURCES

During the nine month period ended January 31, 2016, the Company completed a series of transactions that it believes will provide it with sufficient working capital and equity to operate its business plans for the next twelve months from the date of filing this report, while it continues to seek growth opportunities, including, but not limited: (i) organic growth to complement and enhance existing operations; (ii) acquisitions; and/or (iii) a viable merger candidate.

The transactions included the: (i) elimination of $1,703,000 of promissory notes which were due and payable on September 30, 2015; (ii) issuance of common stock to satisfy approximately $660,000 of the $677,000 of preferred stock dividends payable at April 30, 2015; (iii) completion of a $1,575,000 equity financing; (iv) closing of a $1,000,000 line of credit for the Suisun Operations; and (v) the closing on the sale of its ownership in its China Operations for $1,500,000.

Some of these events have provided cash to the Company while others eliminated future cash spending requirements. Along with expected continued operating profits from its Suisun Operations for fiscal year 2016 and lower corporate overhead, these are the primary factors that support the belief that the Company will have adequate liquidity for the next twelve months from the date of this filing.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Jan. 31, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Form 10-K for the year ended April 30, 2015.

Reclassifications

Certain reclassifications have been made in prior years’ consolidated financial statements to conform to the current year’s presentation. These reclassifications reflect the results of the BTX, China, Australia and Seattle Operations as discontinued operations for all periods presented.

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CONCENTRATIONS

9 Months Ended

Jan. 31, 2016

Risks and Uncertainties [Abstract]

CONCENTRATIONS

NOTE 4 – CONCENTRATIONS

Accounts Receivable

As of January 31, 2016, two customers comprise 20% and 38% of the Company’s total accounts receivable. Also included in the accounts receivable is retainage receivable of $295,000 and $1,119,000 at January 31, 2016 and April 30, 2015, respectively, and both the retainer and aged accounts receivable are expected to be collected.

Revenue Recognition

For the three months ended January 31, 2016, 11% was derived from one customer as compared to one customer who generated 57% of the revenue for the same period in 2015. For the nine months ended January 31, 2016, 11% and 19% was derived from two customers as compared to one customer who generated 58% of the revenue for the same period in 2015.

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BASIC AND DILUTED NET LOSS PER COMMON SHARE

9 Months Ended

Jan. 31, 2016

Earnings Per Share [Abstract]

BASIC AND DILUTED NET LOSS PER COMMON SHARE

NOTE 5 – BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic and diluted net loss per common share from continuing operations is computed as net loss from continuing operations less non-controlling interest and dividends on preferred stock, divided by the weighted average number of common shares outstanding for the period. Diluted net loss per common share reflects the potential dilution that could occur from common stock issuable through the exercise of stock options and warrants and note conversions.

The table below presents the computations of loss per share from continuing operations applicable to common stockholders, after consideration of noncontrolling interest and dividends declared on preferred stock, as follows:

	For the three months ended				For the nine months ended
	January 31,				January 31,
	2016		2015		2016		2015
Numerator:
Loss from continuing operations attributable to WPCS common shareholders	$	(1,232,615)	$	(3,374,582)	$	(8,262,841)	$	(8,094,938)
Income (loss) from discontinued operations, basic and diluted		-		(77,789)		862,476		(1,502,256)
Net loss attributable to WPCS common shareholders, basic and diluted	$	(1,232,615)	$	(3,452,371)	$	(7,400,365)	$	(9,597,194)
Denominator:
Basic and diluted weighted average shares outstanding		2,597,952		633,158		2,161,104		632,664
Basic and diluted loss from continuing operations per common share	$	(0.47)	$	(5.33)	$	(3.82)	$	(12.80)
Basic and diluted income (loss) from discontinued operations per common share		-		(0.12)		0.40		(2.38)
Basic and diluted loss per common share	$	(0.47)	$	(5.45)	$	(3.42)	$	(15.18)

The following were excluded from the computation of diluted shares outstanding due to the losses from continuing operations for all periods presented, as they would have had an anti-dilutive impact on the Company’s net loss.

	As of January 31,
	2016		2015
Common stock equivalents:
Common stock options		2,824,000		35,000
Series F and F-1 preferred stock		-		720,000
Series G and G-1 preferred stock		-		308,000
Series H and H-1 preferred stock		1,076,000		-
Make-whole on preferred shares		-		283,000
Common stock purchase warrants		1,295,000		16,000
Totals		5,195,000		1,362,000

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COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

9 Months Ended

Jan. 31, 2016

Contractors [Abstract]

COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

NOTE 6 – COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

The asset, “Costs and estimated earnings in excess of billings on uncompleted contracts”, represents revenue recognized in excess of amounts billed. The liability, “Billings in excess of costs and estimated earnings on uncompleted contracts”, represents billings in excess of revenue recognized. Costs and estimated earnings on uncompleted contracts consist of the following at January 31, 2016 and April 30, 2015:

	January 31, 2016		April 30, 2015
Costs incurred on uncompleted contracts	$	29,612,932	$	32,008,307
Estimated contract earnings		4,785,975		6,031,338
		34,398,907		38,039,645
Less: Billings to date		35,704,161		38,965,672
Total	$	(1,305,254)	$	(926,027)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	416,047	$	420,434
Billings in excess of cost and estimated earnings on uncompleted contracts		1,721,301		1,346,461
Total	$	(1,305,254)	$	(926,027)

Revisions in the estimated gross profits on contracts and contract amounts are made in the period in which circumstances requiring the revisions become known. Although management believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion.

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DISCONTINUED OPERATIONS

9 Months Ended

Jan. 31, 2016

Discontinued Operations

DISCONTINUED OPERATIONS

NOTE 7 – DISCONTINUED OPERATIONS

The Company previously disclosed the details regarding the sales of Pride, BTX, and substantially all the assets of its Seattle operations in its Form 10-K filed for the year ended April 30, 2015.

China Operations

On June 3, 2015, the Company entered into an Interest Purchase Agreement with Halcyon Coast Investment (Canada) Ltd. to sell TAGS in an "as-is", all-cash transaction, for a total purchase price of $1,500,000 and received a $150,000 refundable deposit at signing. The Transaction closed on August 14, 2015, whereby the Company received the remaining cash proceeds of $1,350,000, of which: (i) it paid approximately $100,000 in a broker’s fee and (ii) $100,000 is being held in escrow for up to one year from the date of the closing, pending a final determination by the Chinese government with respect to any tax obligations arising from the transaction. Otherwise, the transaction is not subject to any further post-closing adjustments. On September 20, 2015, the final tax determination was made and the Company received $93,000 of the escrow and $7,000 was paid to the buyer to settle the outstanding tax obligation.

The Company recognized a gain on the sale of the China Operations of approximately $838,000, as it received $1,500,000 in cash, offset by the sale of approximately $9,350,000 of assets, $7,935,000 of liabilities, reversal of approximately $349,000 of accumulated other comprehensive income and $577,000 noncontrolling interest and incurring approximately $174,000 in closing costs.

The Company recorded the revenue and profit from short-term contracts from its China Operations under the completed contract method, whereas income is recognized only when a contract is completed or substantially completed. Accordingly, during the period of performance, billings and deferred contract costs are accumulated on the consolidated balance sheets as deferred contract costs and deferred revenue. The Company’s accounting policy is based on the short-term nature of the work performed. Deferred contract costs include equipment lease deposits to the third party vendors of approximately $0 and $969,000 as January 31, 2016 and April 30, 2015, respectively. The revenue results from the China Operations are included in discontinued operations for the nine months ended January 31, 2016 and 2015.

Since the sale of the China Operations closed on August 14, 2015, the Company has determined that the activity of the China Operations should be classified as discontinued operations for the nine months ended January 31, 2016 and the three and nine months ended January 31, 2015. In addition, during the year ended April 30, 2015, the Company had completed the sales of Pride, BTX, and substantially all of the assets of the Seattle Operations. As a result, the Company has reported the financial activity of Pride, BTX and Seattle as discontinued operations for the three and nine months ended January 31, 2015. The following is a summary of the operating results for the discontinued operations as follows:

	For the three months ended				For the nine months ended
	January 31,				January 31,
	2016		2015		2016		2015
Revenue	$	-	$	1,106,593	$	839,969	$	7,586,495
Costs and expenses:
Cost of revenue		-		728,134		546,296		5,510,599
Selling, general and administrative expenses		-		232,483		111,324		2,434,682
Depreciation and amortization		-		153,893		80,971		988,600
Impairment loss on capitalized software		-		-		-		827,448
		-		1,114,510		738,591		9,761,329
Operating income (loss) from discontinued operations		-		(7,917)		101,378		(2,174,834)
Interest expense		-		(52,813)		(49,234)		(187,109)
Income (loss) from discontinued operations before income tax provision		-		(60,730)		52,144		(2,361,943)
Income tax provision		-		28,077		10,883		53,262
Income (loss) from discontinued operations, net of tax		-		(88,807)		41,261		(2,414,305)
Gain from disposal		-		19,700		837,720		818,596
Total income (loss) from discontinued operations	$	-	$	(69,107)	$	878,981	$	(1,595,709)

The following table summarizes assets and liabilities held for sale for the Seattle and China Operations as of January 31, 2016 and April 30, 2015:

	January 31,		April 30,
	2016		2015
Assets
Current assets:
Accounts receivable, net of allowance	$	-	$	4,264,451
Prepaid expenses and other current assets		-		34,800
Deferred contract cost		-		267,000
Total current assets held for sale		-		4,566,251
Property and equipment, net		-		963,119
Other assets		-		14,000
Total other assets held for sale		-		977,119
Total assets held for sale	$	-	$	5,543,370
Liabilities
Accounts payable and accrued expenses	$	-	$	1,700,943
Due to related party		-		785,684
Short term bank loan		-		3,224,180
Total current liabilities held for sale		-		5,710,807
Total liabilities held for sale	$	-	$	5,710,807

Short-Term Bank Loan

As of January 31, 2016 and April 30, 2015, the China Operations had a short-term bank loan of $0 and $3,224,000, respectively, with the Bank of China (the “Short-Term Bank Loan”) with an interest rate of 7.38% due quarterly. The original August 1, 2014 maturity date of the Short-Term Bank Loan was extended to July 31, 2015 at which time it was paid off.

Due Related Party

As of January 31, 2016 and April 30, 2015, the China Operations had outstanding payables, representing interest accrued on working capital loans and cash provided for the purpose of retiring the short term bank loan in the amounts of $0 and $786,000, respectively, due on demand to a related party, TGG. This loan, which was since paid off, was not guaranteed by WPCS. Interest expense for the quarters ended January 31, 2016 and 2015 was immaterial. This payable was classified as short-term liabilities held for sale in the Company’s financial statements as of April 30, 2015.

The China Operations earned revenue for contracting services provided to TGG (noncontrolling interest in China Operations) and subsidiaries of $212,000 for the nine months ended January 31, 2016 and $835,000 and $1,565,000 for the three and nine months ended January 31, 2015, respectively.

Noncontrolling Interest

As of April 30, 2015, the Company presented the 40% noncontrolling interest associated with the China Operations as a component of equity. As a result of the sale of our entire ownership interest the balance of noncontrolling interest was eliminated.

Noncontrolling interest for the nine months ended January 31, 2016 consists of the following:

	January 31, 2016
Balance at April 30, 2015	$	560,915
Reclassification adjustments of net loss attributable to noncontrolling interest on sale of China Operations		(560,915)
Balance at January 31, 2016	$	-

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STOCKHOLDERS' EQUITY

9 Months Ended

Jan. 31, 2016

Stockholders' Equity Note [Abstract]

STOCKHOLDERS’ EQUITY

NOTE 8 – STOCKHOLDERS’ EQUITY

Preferred Shares

Series H Preferred Stock

On June 30, 2015, the Company entered into Amendment, Waiver and Exchange Agreements (the “Exchange Agreements”) with certain of its promissory note holders, who held $1,299,000 in principal amount of unsecured promissory notes of the Company. Pursuant to the terms of the Exchange Agreements, the Holders agreed to exchange all of the existing indebtedness for, and the Company agreed to issue to the Holders, an aggregate of 8,435 shares of the Company’s newly designated Series H Convertible Preferred Stock, par value $0.0001 per share (“Series H Preferred Stock”). The 8,435 shares of Series H Preferred Stock are each convertible into 100 shares of common stock at $1.54 each (the market value of the stock on date of issuance) and therefore no gain or loss was recorded on the extinguishment of debt. For the period from July 2, 2015 to January 31, 2016, holders of Series H preferred stock have converted 5,797 shares of Series H preferred into 579,700 shares of common stock.

Series H-1 Preferred Stock

Between July 14 and July 20, 2015, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with four Investors pursuant to which the Company issued to the Investors an aggregate of 8,532 shares of Series H-1 Preferred Convertible Stock of the Company, par value $0.0001 per share (“Series H-1 Shares”), and warrants to purchase 1,279,759 shares of common stock of the Company, par value $0.0001 per share (“Common Stock”), with an exercise price of between $1.63 and $1.66 per share (the “Warrants”). The purchase price for each Series H-1 Share was between $163 and $166 and the purchase price for each warrant was $0.1250 per share of Common Stock, for an aggregate purchase price for the Series H-1 Shares and Warrants of $1,575,000.

The Company has determined that the Warrants qualify for accounting as equity classification. On the issuance date, the Company estimated the fair value of the Warrants at $1,649,000 under the Black-Scholes option pricing model using the following primary assumptions: contractual term of  5.0 years, volatility rate of  103%, risk-free interest rate of  2% and expected dividend rate of  0%. Based on the Warrant’s relative fair value to the fair value of the Series H-1 Preferred Convertible Stock, approximately $841,000 of the $1,575,000 of proceeds was allocated to the Warrants, creating a corresponding preferred stock discount in the same amount. 

Due to the reduction of allocated proceeds to Series H-1 Shares the effective conversion price was approximately $0.80 per share or $704,000 in aggregate. Since the conversion option of the preferred stock was immediately exercisable, the amount allocated to the Beneficial Conversion Feature was immediately accreted to preferred dividends, resulting in an increase in the carrying value of the preferred stock. On July 14 and July 20, 2015, the Company recorded total deemed dividends of $704,000 related to the beneficial conversion feature with the issuance of the Series H-1 Preferred Convertible Stock.

Each share of Series H-1 Preferred Stock has a stated value of $166 and is convertible into shares of Common Stock, equal to the stated value divided by the conversion price of $1.66 per share (subject to adjustment in the event of stock splits and dividends).

For the period from July 20, 2015 to January 31, 2016, holders of Series H-1 preferred stock have converted 413 shares of Series H-1 preferred into 41,300 shares of common stock. The conversion of these shares resulted in a deemed dividend of $41,000.

Conversion of Preferred Shares

For the nine month period ended January 31, 2016 the Company issued approximately 1,408,000 common stock conversion shares, 205,000 common stock make-whole shares and 46,000 common stock dividend shares upon the conversion of series F, F-1, G, G-1, H and H-1 preferred shares. As a result of these conversions, the Company has no further preferred dividend obligations under any of the former classes of Series F, F-1, G, and G-1 preferred shares.

Common Stock Purchase Warrants

The following is an approximate summary of the common stock warrant activity for the nine months ended January 31, 2016: 

			Weighted		Weighted
			Average		Average
	Number of		Exercise		Remaining
	Warrants		Price		Life in years
Outstanding, April 30, 2015		15,510	$	7.25		3.5
Warrants issued in connection with Series H-1 preferred stock for cash		1,279,759		1.66		4.5
Outstanding, January 31, 2016		1,295,269	$	1.73		4.4

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BANK LINE OF CREDIT

9 Months Ended

Jan. 31, 2016

Line of Credit Facility [Abstract]

BANK LINE OF CREDIT

NOTE 9 – BANK LINE OF CREDIT

On May 20, 2015, the Company entered into an asset-based revolving credit line agreement with a California-based bank, which provides a $1,000,000 line of credit for its Suisun Operations. The line of credit expires on May 20, 2016, has an interest rate of prime plus 2% and is subject to a monthly borrowing base calculation based upon eligible accounts receivable. The line of credit is secured by all the assets of the Company. As of the filing date of this report the Company has not drawn down on the line of credit.

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SHORT-TERM PROMISSORY NOTES

9 Months Ended

Jan. 31, 2016

Debt Disclosure [Abstract]

SHORT-TERM PROMISSORY NOTES

NOTE 10 – SHORT-TERM PROMISSORY NOTES

As of April 30, 2015 the Company had $1,703,000 of short-term promissory notes that was originally due to be paid on September 30, 2015. However, on June 30, 2015, the Company entered into Amendment, Waiver and Exchange.

Agreements with certain of its promissory note holders, who held $1,299,000 in principal amount of unsecured promissory notes of the Company. Pursuant to the terms of the Exchange Agreements, the Holders agreed to exchange all of the existing indebtedness for, and the Company agreed to issue to the Holders, an aggregate of 8,435 shares of the Company’s newly designated Series H Convertible Preferred Stock. In addition, one note holder was paid $4,000 for full and complete settlement of his note balance.

In addition, on June 30, 2015, the Company and the shareholder plaintiff entered into a settlement (the “Settlement”) with the two remaining defendants (the “Defendants”) in a case pending in the United States District Court for the Southern District of New York to resolve claims under Section 16 of the Securities Exchange Act of 1934. Under the terms of the Settlement, the Defendants agreed to the following: (i) payment of $315,0000 for the plaintiff’s attorney’s fees; (ii) forgiveness of $400,000 of principal amount of debt owed by the Company to the Defendants; (iii) an exchange of the remaining $405,000 of debt owed by the Company to the Defendants into shares of Series H Convertible Preferred Stock of the Company; (iv) waiver of certain conditions preventing the Company from paying accrued dividends on its Series F-1 Convertible Preferred Stock and Series G-1 Convertible Preferred Stock in shares of the Company’s common stock; and (v) relinquishment of all voting rights the Defendants have in all shares of the Company’s preferred stock now held or hereinafter acquired.

The following is a summary of promissory notes as of January 31, 2016:

	January 31, 2016
Balance at April 30, 2015	$	1,703,000
Repayments of short term convertible note		(4,000)
Section 16 settlement		(400,000)
Conversion of short term convertible notes to Series H preferred stock		(1,299,000)
Balance at January 31, 2016	$	-

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STOCK OPTION COMPENSATION EXPENSE

9 Months Ended

Jan. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK OPTION COMPENSATION EXPENSE

NOTE 11 – STOCK OPTION COMPENSATION EXPENSE

On November 2, 2015, pursuant to and subject to the available number of shares reserved under the Company’s 2014 Equity Incentive Plan, the Company issued 100,000 non-qualified options (“November Options”) with a term of 10 years and an exercise price of $1.53 to an employee of the Company. 25,000 of the November Options will vest on April 30, 2016, and the remaining 75,000 of the November Options vest upon either the Company completing a change in control merger by September 1, 2016 or achieving $30 million in revenue for the fiscal year May 1, 2015 to April 30, 2016.

On September 29, 2015, pursuant to and subject to the available number of shares reserved under the Company’s 2014 Equity Incentive Plan, the Company issued 2,573,000 non-qualified options (“September Options”) with a term of 10 years and an exercise price of $1.32 to the Company’s directors and employees. 1,191,500 of the September Options vested immediately, 655,250 of the September Options will vest on April 30, 2016, and the remaining 726,250 of the September Option vest upon either the Company completing a change in control merger by September 1, 2016 or achieving $30 million in revenue for the fiscal year May 1, 2015 to April 30, 2016.

On August 6, 2015, pursuant to and subject to the available number of shares reserved under the Company’s 2014 Equity Incentive Plan, the Company issued 110,000 non-qualified options (“August Options”) with a term of 10 years and an exercise price of $1.19 to the Company’s directors and employees. The August Options vested immediately.

The aggregate grant date fair value of the August Options, September Options and November Options were approximately $2,817,000.

The fair value of options granted during the nine months ended January 31, 2016 was estimated using the following weighted averages:

	For the Nine
	Months Ended
	January 31, 2016
Exercise price		$1.36
Expected stock price volatility		103	%
Risk-free rate of interest		1.5	%
Expected term (years)		5.2

The fair value of options granted during the nine months ended January 31, 2016 was estimated using the following weighted averages:

							Weighted Average Remaining Contractual Life
	Number of Shares		Weighted Average Exercise Price		Total Intrinsic Value		(in years)
Outstanding as of April 30, 2015		40,688	$	18.79	$	-		5.88
Employee options granted		2,783,000		1.32		-		9.66
Forfeited/expired		(6)		61.82		-		-
Outstanding as of January 31, 2016		2,823,682	$	1.57	$	-		9.60
Options vested and exercisable		1,342,182	$	1.84	$	-		9.51

Stock-based compensation associated with the amortization of stock option expense was approximately $2,174,000 for the nine months ended January 31, 2016 and is included in general and administration expense.

Estimated future stock-based compensation expense relating to unvested stock options is approximately $643,000. The weighted average remaining vesting period of options outstanding at January 31, 2016 is approximately 0.25 years.

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COMMITMENTS

9 Months Ended

Jan. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS

NOTE 12 – COMMITMENTS

On September 29, 2015, the Company entered into change in control agreements (the “Agreements”) with its Interim Chief Executive Officer (“Interim CEO”) and its Chief Financial Officer (“CFO”).

The Agreements have initial terms of four years and automatically extend for additional one-year periods at the expiration of the initial term and on each anniversary thereafter unless either party notifies the other party of non-renewal no later than 30 days prior to such anniversary. Under the Agreements, The Interim CEO and CFO are entitled to payments of $350,000 and $150,000, respectively, upon a change in control of the Company.

All payments under the Agreements are contingent upon the respective officer’s execution and non-revocation of a general release of claims against the Company.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Jan. 31, 2016

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Form 10-K for the year ended April 30, 2015.

Reclassifications

Reclassifications

Certain reclassifications have been made in prior years’ consolidated financial statements to conform to the current year’s presentation. These reclassifications reflect the results of the BTX, China, Australia and Seattle Operations as discontinued operations for all periods presented.

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BASIC AND DILUTED NET LOSS PER COMMON SHARE (Tables)

9 Months Ended

Jan. 31, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The table below presents the computations of loss per share from continuing operations applicable to common stockholders, after consideration of noncontrolling interest and dividends declared on preferred stock, as follows:

	For the three months ended				For the nine months ended
	January 31,				January 31,
	2016		2015		2016		2015
Numerator:
Loss from continuing operations attributable to WPCS common shareholders	$	(1,232,615)	$	(3,374,582)	$	(8,262,841)	$	(8,094,938)
Income (loss) from discontinued operations, basic and diluted		-		(77,789)		862,476		(1,502,256)
Net loss attributable to WPCS common shareholders, basic and diluted	$	(1,232,615)	$	(3,452,371)	$	(7,400,365)	$	(9,597,194)
Denominator:
Basic and diluted weighted average shares outstanding		2,597,952		633,158		2,161,104		632,664
Basic and diluted loss from continuing operations per common share	$	(0.47)	$	(5.33)	$	(3.82)	$	(12.80)
Basic and diluted income (loss) from discontinued operations per common share		-		(0.12)		0.40		(2.38)
Basic and diluted loss per common share	$	(0.47)	$	(5.45)	$	(3.42)	$	(15.18)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following were excluded from the computation of diluted shares outstanding due to the losses from continuing operations for all periods presented, as they would have had an anti-dilutive impact on the Company’s net loss.

	As of January 31,
	2016		2015
Common stock equivalents:
Common stock options		2,824,000		35,000
Series F and F-1 preferred stock		-		720,000
Series G and G-1 preferred stock		-		308,000
Series H and H-1 preferred stock		1,076,000		-
Make-whole on preferred shares		-		283,000
Common stock purchase warrants		1,295,000		16,000
Totals		5,195,000		1,362,000

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COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Tables)

9 Months Ended

Jan. 31, 2016

Contractors [Abstract]

Schedule of Costs and Estimated Earnings on Uncompleted Contracts

Costs and estimated earnings on uncompleted contracts consist of the following at January 31, 2016 and April 30, 2015:

	January 31, 2016		April 30, 2015
Costs incurred on uncompleted contracts	$	29,612,932	$	32,008,307
Estimated contract earnings		4,785,975		6,031,338
		34,398,907		38,039,645
Less: Billings to date		35,704,161		38,965,672
Total	$	(1,305,254)	$	(926,027)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	416,047	$	420,434
Billings in excess of cost and estimated earnings on uncompleted contracts		1,721,301		1,346,461
Total	$	(1,305,254)	$	(926,027)

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DISCONTINUED OPERATIONS (Tables)

9 Months Ended

Jan. 31, 2016

Discontinued Operations

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement

The following is a summary of the operating results for the discontinued operations as follows:

	For the three months ended				For the nine months ended
	January 31,				January 31,
	2016		2015		2016		2015
Revenue	$	-	$	1,106,593	$	839,969	$	7,586,495
Costs and expenses:
Cost of revenue		-		728,134		546,296		5,510,599
Selling, general and administrative expenses		-		232,483		111,324		2,434,682
Depreciation and amortization		-		153,893		80,971		988,600
Impairment loss on capitalized software		-		-		-		827,448
		-		1,114,510		738,591		9,761,329
Operating income (loss) from discontinued operations		-		(7,917)		101,378		(2,174,834)
Interest expense		-		(52,813)		(49,234)		(187,109)
Income (loss) from discontinued operations before income tax provision		-		(60,730)		52,144		(2,361,943)
Income tax provision		-		28,077		10,883		53,262
Income (loss) from discontinued operations, net of tax		-		(88,807)		41,261		(2,414,305)
Gain from disposal		-		19,700		837,720		818,596
Total income (loss) from discontinued operations	$	-	$	(69,107)	$	878,981	$	(1,595,709)

Schedule of Disposal Groups, Including Discontinued Operations, Balance Sheet

The following table summarizes assets and liabilities held for sale for the Seattle and China Operations as of January 31, 2016 and April 30, 2015:

	January 31,		April 30,
	2016		2015
Assets
Current assets:
Accounts receivable, net of allowance	$	-	$	4,264,451
Prepaid expenses and other current assets		-		34,800
Deferred contract cost		-		267,000
Total current assets held for sale		-		4,566,251
Property and equipment, net		-		963,119
Other assets		-		14,000
Total other assets held for sale		-		977,119
Total assets held for sale	$	-	$	5,543,370
Liabilities
Accounts payable and accrued expenses	$	-	$	1,700,943
Due to related party		-		785,684
Short term bank loan		-		3,224,180
Total current liabilities held for sale		-		5,710,807
Total liabilities held for sale	$	-	$	5,710,807

Schedule of Noncontrolling

Noncontrolling interest for the nine months ended January 31, 2016 consists of the following:

	January 31, 2016
Balance at April 30, 2015	$	560,915
Reclassification adjustments of net loss attributable to noncontrolling interest on sale of China Operations		(560,915)
Balance at January 31, 2016	$	-

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Jan. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule Of Common Stock Warrant Activity

The following is an approximate summary of the common stock warrant activity for the nine months ended January 31, 2016: 

			Weighted		Weighted
			Average		Average
	Number of		Exercise		Remaining
	Warrants		Price		Life in years
Outstanding, April 30, 2015		15,510	$	7.25		3.5
Warrants issued in connection with Series H-1 preferred stock for cash		1,279,759		1.66		4.5
Outstanding, January 31, 2016		1,295,269	$	1.73		4.4

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SHORT-TERM PROMISSORY NOTES (Tables)

9 Months Ended

Jan. 31, 2016

Debt Disclosure [Abstract]

Schedule of Short-term Debt

The following is a summary of promissory notes as of January 31, 2016:

	January 31, 2016
Balance at April 30, 2015	$	1,703,000
Repayments of short term convertible note		(4,000)
Section 16 settlement		(400,000)
Conversion of short term convertible notes to Series H preferred stock		(1,299,000)
Balance at January 31, 2016	$	-

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STOCK OPTION COMPENSATION EXPENSE (Tables)

9 Months Ended

Jan. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The fair value of options granted during the nine months ended January 31, 2016 was estimated using the following weighted averages:

	For the Nine
	Months Ended
	January 31, 2016
Exercise price		$1.36
Expected stock price volatility		103	%
Risk-free rate of interest		1.5	%
Expected term (years)		5.2

Schedule of Share-based Compensation, Stock Options, Activity

A summary of option activities under the Company’s employee stock option plan for the six months ended October 31, 2015 is presented below:

							Weighted Average Remaining Contractual Life
	Number of Shares		Weighted Average Exercise Price		Total Intrinsic Value		(in years)
Outstanding as of April 30, 2015		40,688	$	18.79	$	-		5.88
Employee options granted		2,783,000		1.32		-		9.66
Forfeited/expired		(6)		61.82		-		-
Outstanding as of January 31, 2016		2,823,682	$	1.57	$	-		9.60
Options vested and exercisable		1,342,182	$	1.84	$	-		9.51

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DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION (Details Textual)	9 Months Ended
	Jan. 31, 2016
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage Of International Operation	60.00%

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LIQUIDITY AND CAPITAL RESOURCES (Details Textual) - USD ($)	9 Months Ended
	Jan. 31, 2016	Apr. 30, 2015
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Common Stock, Value, Issued	$ 267	$ 98
Dividends Payable, Current	0	$ 677,546
Purchase Price	1,575,000
Short Term Promissory Notes [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Debt Instrument, Remaining Debt	1,703,000
Suisun Operation [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Long-term Line of Credit	1,000,000
China Operations [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Long-term Line of Credit	1,500,000
Dividend Payable [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Common Stock, Value, Issued	$ 660,000

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CONCENTRATIONS (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Jan. 31, 2015	Jan. 31, 2016	Jan. 31, 2015	Apr. 30, 2015
Concentration Risk [Line Items]
Contract Receivable Retainage, Total	$ 295,000		$ 295,000		$ 1,119,000
Accounts Receivable [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			20.00%
Accounts Receivable [Member] | Customer Two [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			38.00%
Sales Revenue, Net [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	11.00%	57.00%	11.00%	58.00%
Sales Revenue, Net [Member] | Customer Two [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			19.00%

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BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Jan. 31, 2015	Jan. 31, 2016	Jan. 31, 2015
Numerator:
Loss from continuing operations attributable to WPCS common shareholders	$ (1,232,615)	$ (3,374,582)	$ (8,262,841)	$ (8,094,938)
Income (loss) from discontinued operations, basic and diluted	0	(69,107)	878,981	(1,595,709)
Net loss attributable to WPCS common shareholders, basic and diluted	$ (1,232,615)	$ (3,452,371)	$ (7,400,365)	$ (9,597,194)
Denominator:
Basic and diluted weighted average shares outstanding (in shares)	2,597,952	633,158	2,161,104	632,664
Basic and diluted loss from continuing operations per common share (in dollars per share)	$ (0.47)	$ (5.33)	$ (3.82)	$ (12.8)
Basic and diluted income (loss) from discontinued operations per common share (in dollars per share)	0	(0.12)	0.4	(2.38)
Basic and diluted loss per common share (in dollars per share)	$ (0.47)	$ (5.45)	$ (3.42)	$ (15.18)

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BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details 1) - shares	9 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	5,195,000	1,362,000
Common stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,824,000	35,000
Make-whole on preferred shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	283,000
Common stock purchase warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,295,000	16,000
Series F and F1 Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	720,000
Series G and G1 Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	308,000
Series H and H1 Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,076,000	0

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COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Details) - USD ($)	Jan. 31, 2016	Apr. 30, 2015
Costs incurred on uncompleted contracts	$ 29,612,932	$ 32,008,307
Estimated contract earnings	4,785,975	6,031,338
Gross Total	34,398,907	38,039,645
Less: Billings to date	35,704,161	38,965,672
Total	(1,305,254)	(926,027)
Costs and estimated earnings in excess of billings on uncompleted contracts	416,047	420,434
Billings in excess of cost and estimated earnings on uncompleted contracts	1,721,301	1,346,461
Total	$ (1,305,254)	$ (926,027)

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DISCONTINUED OPERATIONS (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Jan. 31, 2015	Jan. 31, 2016	Jan. 31, 2015
Revenue	$ 0	$ 1,106,593	$ 839,969	$ 7,586,495
Costs and expenses:
Cost of revenue	0	728,134	546,296	5,510,599
Selling, general and administrative expenses	0	232,483	111,324	2,434,682
Depreciation and amortization	0	153,893	80,971	988,600
Impairment loss on capitalized software	0	0	0	827,448
Disposal Group, Including Discontinued Operation, Operating Expense	0	1,114,510	738,591	9,761,329
Operating income (loss) from discontinued operations	0	(7,917)	101,378	(2,174,834)
Interest expense	0	(52,813)	(49,234)	(187,109)
Income (loss) from discontinued operations before income tax provision	0	(60,730)	52,144	(2,361,943)
Income tax provision	0	28,077	10,883	53,262
Income (loss) from discontinued operations, net of tax	0	(88,807)	41,261	(2,414,305)
Gain from disposal	0	0	837,720	798,896
Total income (loss) from discontinued operations	$ 0	$ (69,107)	$ 878,981	$ (1,595,709)

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DISCONTINUED OPERATIONS (Details 1) - USD ($)	Jan. 31, 2016	Apr. 30, 2015
Current assets:
Accounts receivable, net of allowance	$ 0	$ 4,264,451
Prepaid expenses and other current assets	0	34,800
Deferred contract cost	0	267,000
Total current assets held for sale	0	4,566,251
Property and equipment, net	0	963,119
Other assets	0	14,000
Total other assets held for sale	0	977,119
Total assets held for sale	0	5,543,370
Liabilities
Accounts payable and accrued expenses	0	1,700,943
Due to related party	0	785,684
Short term bank loan	0	3,224,180
Total current liabilities held for sale	0	5,710,807
Total liabilities held for sale	$ 0	$ 5,710,807

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DISCONTINUED OPERATIONS (Details 2)	9 Months Ended
	Jan. 31, 2016 USD ($)
Balance at April 30, 2015	$ 560,915
Reclassification adjustments of net loss attributable to noncontrolling interest on sale of China Operations	(560,915)
Balance at January 31, 2016	$ 0

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DISCONTINUED OPERATIONS (Details Textual) - USD ($)			1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 14, 2015	Jun. 03, 2015	Sep. 20, 2015	Jan. 31, 2016	Jan. 31, 2015	Jan. 31, 2016	Jan. 31, 2015	Apr. 30, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Short term bank loan				$ 0		$ 0		$ 3,224,180
Disposal Group, Including Discontinued Operation, Interest rate				7.38%		7.38%
Security Deposit				$ 0		$ 0		969,000
Stockholders' Equity Attributable To Noncontrolling Interest				0		0		$ 560,915
Disposal Group, Including Discontinued Operation, Revenue				0	$ 1,106,593	839,969	$ 7,586,495
China Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Equity Method Investment, Ownership Percentage								40.00%
Disposal Group, Including Discontinued Operation, Short term bank loan				0		0		$ 3,224,000
Disposal Group, Including Discontinued Operation, Accrued Liabilities, Current				0		0		$ 786,000
Refundable deposit received		$ 150,000
Proceeds From Received Remaining Cash		1,350,000
Payments For Broker’s Fee	$ 100,000
Escrow Deposit	$ 100,000		$ 93,000
Payments To Buyer For Outstanding Tax			$ 7,000
Gain (Loss) on Sale of Investments						838,000
Proceeds from Sale of Investment Projects						1,500,000
Gain (Loss) on Disposition of Assets						9,350,000
Gain Loss On Disposition Of Liabilities						7,935,000
Accumulated Other Comprehensive Income (Loss), Net of Tax				349,000		349,000
Stockholders' Equity Attributable To Noncontrolling Interest				$ 577,000		577,000
Disposal Group, Including Discontinued Operation, Other Expense						174,000
China Operations [Member] | Tgg [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue					$ 835,000	$ 212,000	$ 1,565,000
China Operations [Member] | Halcyon Coast Investment [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discontinued Operation Sale Price		$ 1,500,000

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STOCKHOLDERS' EQUITY (Details) - $ / shares	9 Months Ended	12 Months Ended
	Jan. 31, 2016	Apr. 30, 2015
Class of Stock [Line Items]
Number of Warrants, Outstanding Beginning Balance	15,510
Number Of Warrants, Warrants issued in connection with Series H-1 preferred stock for cash	1,279,759
Number of Warrants, Outstanding Ending Balance	1,295,269	15,510
Weighted Average Exercise Price, Outstanding Beginning Balance	$ 7.25
Weighted Average Exercise Price, Warrants issued in connection with Series H-1 preferred stock for cash	1.66
Weighted Average Exercise Price, Outstanding Ending Balance	$ 1.73	$ 7.25
Weighted Average Remaining Life in years, Contractual Term	4 years 4 months 24 days	3 years 6 months
Weighted Average Remaining Life In Years, Contractual Term	4 years 6 months

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STOCKHOLDERS' EQUITY (Details Textual) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
	Jul. 20, 2015	Jun. 30, 2015	Jan. 31, 2016	Jan. 31, 2015	Jan. 31, 2016	Jan. 31, 2015	Apr. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred Stock, Par or Stated Value Per Share			$ 0.0001		$ 0.0001		$ 0.0001
Purchase Price					$ 1,575,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term					5 years 2 months 12 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate					103.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate					1.50%
Other Preferred Stock Dividends and Adjustments			$ 40,729	$ 0	$ 744,499	$ 0
Securities Purchase Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,279,759
Purchase Price	$ 1,575,000
promissory notes [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unsecured Debt, Current		$ 1,299,000
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Conversion of Units					579,700
Common Stock [Member] | Securities Purchase Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Price	$ 0.1250
Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Conversion of Units					5,797
Minimum [Member] | Securities Purchase Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1.63
Maximum [Member] | Securities Purchase Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1.66
Series H Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues		8,435			8,435
Convertible Preferred Stock, Shares Issued upon Conversion			100		100
Convertible Preferred Stock, Conversion Price			$ 1.54		$ 1.54
Series H Preferred Stock [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Conversion of Units					579,700
Series H Preferred Stock [Member] | Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Conversion of Units					(5,797)
Series H Convertible Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues		8,435
Preferred Stock, Par or Stated Value Per Share		$ 0.0001
Series H-1 Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Debt Instrument, Convertible, Conversion Price			0.80		$ 0.80
Debt Conversion, Converted Instrument, Amount					$ 704,000
Series H-1 Preferred Convertible Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred Stock, Par or Stated Value Per Share			166		$ 166
Convertible Preferred Stock, Conversion Price			$ 1.66		$ 1.66
Fair Value Of Warrants					$ 1,649,000
Fair Value Of Convertible Preferred Stock					$ 841,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term					5 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate					103.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate					2.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate					0.00%
Proceeds from Issuance of Warrants					$ 1,575,000
Other Preferred Stock Dividends and Adjustments	$ 704,000
Series H-1 Preferred Convertible Stock [Member] | Securities Purchase Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred Stock, Par or Stated Value Per Share	$ 0.0001
Number Shares To Be Issued	8,532
Series H-1 Preferred Convertible Stock [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Conversion of Units					41,300
Series H-1 Preferred Convertible Stock [Member] | Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Conversion of Units					(413)
Series H-1 Preferred Convertible Stock [Member] | Minimum [Member] | Securities Purchase Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase Price	$ 163
Series H-1 Preferred Convertible Stock [Member] | Maximum [Member] | Securities Purchase Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase Price	$ 166
Convertible Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion of Stock, Shares Issued					1,408,000
Convertible Preferred Stock [Member] | Make Whole Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion of Stock, Shares Issued					205,000
Convertible Preferred Stock [Member] | Dividend Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion of Stock, Shares Issued					46,000

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BANK LINE OF CREDIT (Details Textual) - Revolving Credit Facility [Member]	1 Months Ended
	May. 20, 2015 USD ($)
Line of Credit Facility [Line Items]
Proceeds from Lines of Credit	$ 1,000,000
Line of Credit Facility, Initiation Date	May 20, 2015
Line of Credit Facility, Interest Rate During Period	2.00%
Line of Credit Facility, Expiration Date	May 20, 2016

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SHORT-TERM PROMISSORY NOTES (Details) - Series H Preferred Stock [Member] - USD ($)	1 Months Ended	9 Months Ended
	Jun. 30, 2015	Jan. 31, 2016
Short-term Debt [Line Items]
Balance at April 30, 2015		$ 1,703,000
Repayments of short term convertible note	$ 4,000	(4,000)
Section 16 settlement		(400,000)
Conversion of short term convertible notes to Series H preferred stock	$ 1,299,000	(1,299,000)
Balance at January 31, 2016		$ 0

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SHORT-TERM PROMISSORY NOTES (Details Textual) - USD ($)	1 Months Ended	9 Months Ended
	Jun. 30, 2015	Jan. 31, 2016	Apr. 30, 2015
Short-term Debt [Line Items]
Litigation Settlement, Expense		$ 3,150,000
Line of Credit Facility, Decrease, Forgiveness		400,000
Loss Contingency, Estimate of Possible Loss		405,000
Series H Preferred Stock [Member]
Short-term Debt [Line Items]
Short-term Debt		0	$ 1,703,000
Short Term Debt In Principal Amount	$ 1,299,000	$ (1,299,000)
Stock Issued During Period, Shares, New Issues	8,435	8,435
Payments for Repurchase of Convertible Preferred Stock	$ 4,000	$ (4,000)

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STOCK OPTION COMPENSATION EXPENSE (Details)	9 Months Ended
	Jan. 31, 2016 $ / shares
Exercise price	$ 1.36
Expected stock price volatility	103.00%
Risk-free rate of interest	1.50%
Expected term (years)	5 years 2 months 12 days

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STOCK OPTION COMPENSATION EXPENSE (Details 1) - USD ($)	9 Months Ended	12 Months Ended
	Jan. 31, 2016	Apr. 30, 2015
Number of shares, Outstanding at beginning	40,688
Number of shares, Employee options granted	2,783,000
Number of shares, Forfeited/expired	(6)
Number of shares, Outstanding at ending	2,823,682	40,688
Number of shares, Options vested	1,342,182
Weighted Average Exercise Price, Outstanding at beginning	$ 18.79
Weighted Average Exercise Price, Employee options granted	1.32
Weighted Average Exercise Price, Forfeited/expired	61.82
Weighted Average Exercise Price, Outstanding at ending	1.57	$ 18.79
Weighted Average Exercise Price, Options vested	$ 1.84
Total Intrinsic Value, Outstanding at beginning	$ 0
Total Intrinsic Value, Employee options granted	$ 0
Total Intrinsic Value, Forfeited/expired	$ 0
Total Intrinsic Value, Outstanding at ending	$ 0	$ 0
Total Intrinsic Value, Options vested and exercisable	$ 0
Weighted Average Remaining Contractual Life (in years) Outstanding at beginning	9 years 7 months 6 days	5 years 10 months 17 days
Weighted Average Remaining Contractual Life (in years) Options granted	9 years 7 months 28 days
Weighted Average Remaining Contractual Life (in years) Forfeited/expired	0 years
Weighted Average Remaining Contractual Life (in years) Outstanding at ending	9 years 7 months 6 days	5 years 10 months 17 days
Weighted Average Remaining Contractual Life (in years) Options vested and exercisable	9 years 6 months 4 days

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STOCK OPTION COMPENSATION EXPENSE (Details Textual) - USD ($)			1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 02, 2015	Aug. 06, 2015	Sep. 29, 2015	Jan. 31, 2016	Jan. 31, 2015	Jan. 31, 2016	Jan. 31, 2015
Revenues				$ 3,317,636	$ 5,262,154	$ 11,605,880	$ 17,416,283
Share-based Compensation						2,219,068	$ 115,200
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options				$ 643,000		$ 643,000
Sharebased Compensation Arrangement By Sharebased Payment Award Vesting Period Options Outstanding Weighted Average Remaining Contractual Term						3 months
Equity Option [Member]
Share-based Compensation						$ 2,174,000
Equity Incentive Plan 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted	100,000	110,000	2,573,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 1.53	$ 1.19	$ 1.32
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Issued Weighted Average Remaining Contractual Terms	10 years	10 years	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares	25,000		1,191,500
Sharebased Compensation Arrangement By Sharebased Payment Award Options To Be Vest Number Of Shares	75,000		655,250
Sharebased Compensation Arrangement By Sharebased Payment Award Remaining Options Vest Number Of Shares			726,250
Revenues	$ 30,000,000		$ 30,000,000
ShareBased Compensation Arrangement By ShareBased Payment Award Equity Instruments Other Than Options Grant Date Fair Value						$ 2,817,000

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COMMITMENTS (Details Textual)	1 Months Ended
	Sep. 29, 2015 USD ($)
Chief Executive Officer [Member]
Gain Contingencies [Line Items]
Salaries, Wages and Officers' Compensation, Total	$ 350,000
Chief Financial Officer [Member]
Gain Contingencies [Line Items]
Salaries, Wages and Officers' Compensation, Total	$ 150,000