WPCS Announces Financial Results for the Three Months and Year Ended April 30, 2014

WPCS International Incorporated (NASDAQ: WPCS), which specializes in contracting services for communications infrastructure and the development of a digital currency trading platform, today announced its fiscal three month and full year 2014 financial results for the period ended April 30, 2014.

Sebastian Giordano, Interim CEO of WPCS, commented,

"We are pleased with our revenue growth for the three months and full year period ended April 30, 2014. Accounting for the strategic reduction of our unprofitable Trenton Operations during both periods, revenue on a period-over-period basis for the three month period increased approximately 47% and for the full year approximately 34%. Also worth noting is the improvement to our balance sheet. As of April 30, 2014 we had $2.2 million in cash and shareholders' equity of $6.0 million, an improvement from $1.4 million in cash and a deficit of $900,000 at April 30, 2013. We remain focused on strengthening our balance sheet and continuing to implement our strategic plan to build our profitable assets while divesting others such as Seattle, Australia and China that we anticipate will generate working capital and eliminate certain costs."

Mr. Giordano continued,

"Since acquiring BTX Trader in December 2013, we continue to enhance the technology and launch new products. Initially, we established a brand and a dedicated trader user base with limited marketing. Now, with the launch of our new product, Celery, our new web-based product committed to putting digital currency in the hands of ordinary consumers, we are excited about the additional market opportunity afforded us by being able to leverage the BTX Trader platform."

Company and Financial Highlights:

• Since acquiring the BTX Trader software platform in December 2013, the online platform has grown to 5,000 users and over 1,500 unique visitors per month;
• BTX Trader has launched Celery (www.gocelery.com), a new product providing consumers with the simplest and fastest way to buy their first digital currency using direct bank transfers, initially focused on Bitcoin and Dogecoin;
• BTX Trader has engaged the services of Clarity PR for public relations and social media marketing;
• As previously announced, for the period January 1, 2014 through May 31, 2014, Suisun City was awarded approximately $5.5 million in new contracts as compared to $2.3 million for the same period year-over-year, an increase of 139%;
• For the 2014 fiscal fourth quarter, revenue increased 25.7%. Taking into account the strategic reduction of the Company's Trenton operations, revenue for the quarter and full year ended April 30, 2014 increased 47.2% and 34.4% respectively;
• Reported cash and cash equivalents of $2.2 million as of April 30, 2014;
• Increased shareholders' equity by approximately $6.9 million from a deficit of $900,000 at April 30, 2013 to equity of $6.0 million at April 30, 2014; and
• Entered into definitive agreements to divest the Australia and Seattle Operations.

Financial Results for the Three Month Period Ended April 30, 2014
For the fourth quarter of fiscal year 2014 ended April 30, 2014, WPCS reported revenue of approximately $6.2 million, an increase of 25.7% compared to revenue of $4.9 million for the same period in the prior year. This increase was partially offset by a $721,000 decrease in revenue in our Trenton Operations due to the reduction of this unprofitable operation, which commenced in September 2013. Excluding the decrease for the Trenton Operations, the effective increase in revenue from the remaining Suisun City and China operations was approximately 47.2%.

For the fourth quarter ended April 30, 2014, WPCS reported a net loss to common shareholders of approximately $1.2 million or $0.09 per share, which included: $301,000 of severance expense recorded per the separation agreement with CFO Joseph Heater; a $567,000 loss from discontinued operations for the Australia, Seattle, Lakewood and Hartford Operations; operating losses of $95,000 from the initial start-up of the Bitcoin trading segment; and operating losses of $64,000 from the wind-down of the Trenton Operation. The Company had a net loss of $6.2 million, or $6.23 per share, for the same period in fiscal 2013.

Financial Results for the Year Ended April 30, 2014
Revenue for the year ended April 30, 2014 was approximately $21.3 million, as compared to $24.8 million for the year ended April 30, 2013. This decrease in revenue was due primarily to an $8.8 million decrease in revenue in our Trenton Operations due to the strategic reduction of this unprofitable operation that commenced in September 2013. Excluding the decrease for the Trenton Operations, the effective increase in revenue from the remaining Suisun City and China Operations was approximately 34.4%.

The net loss attributable to common shareholders was approximately $11.2 million, or $1.99 per share, for the year ended April 30, 2014, of which approximately $9.2 million was attributable to: one-time charges of $1.8 million related to severance expense recorded per the separation agreements with former CEO Andrew Hidalgo and CFO Joseph Heater; $4.3 million of non-cash interest expense for the amortization of debt discount and expenses related to the conversion of senior secured convertible notes (the "Notes") and the amendments to the Notes and warrants (the "Warrants") (the "Amendment and Note Amendment"); $1.3 million related to the loss on extinguishment of the Notes; $834,000 related to the final change in fair value of the derivative liabilities associated with the Notes and Warrants prior to the Amendment and Note Amendment, which enabled us to reclassify the former derivative liabilities to stockholders' equity; a net loss of approximately $71,000 from discontinued operations for the Australia, Seattle, Lakewood and Hartford Operations; approximately $443,000 in operating losses from the initial start-up of the Bitcoin trading segment; and approximately $438,000 of operating losses from the wind-down of the Trenton Operation. Such net loss for the year ended April 30, 2014, compares to a net loss attributable to common shareholders of $6.9 million, or $6.95 per diluted share, for the year ended April 30, 2013.

Shareholder Update Conference Call
Management will host a shareholder update conference call in August 2014. Details, including dial-in and webcast information, will be provided in an upcoming news release prior to the call.

About WPCS International Incorporated

WPCS operates in two business segments including: (1) providing communications infrastructure contracting services to the public services, healthcare, energy and corporate enterprise markets worldwide; and (2) developing a digital currency trading platform.

For more information, please visit http://www.wpcs.com/, http://www.btxtrader.com/ and http://www.gocelery.com/

Statements about the company's future expectations, including future revenue and earnings and all other statements in this press release, other than historical facts, are "forward looking" statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are subject to change at any time. The company's actual results could differ materially from expected results. In reflecting subsequent events or circumstances, the company undertakes no obligation to update forward-looking statements.