WPCS INTERNATIONAL INCORPORATED (NASDAQ:WPCS) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

Securities Purchase Agreement

On March 30, 2017, WPCS International Incorporated (the Company)
entered into a Securities Purchase Agreement (the Securities
Purchase Agreement) with Alpha Capital Anstalt, Brio Capital
Master Fund Ltd., GRQ Consultants, Inc. Roth 401K FBO Barry
Honig, Iroquois Capital Investment Group, and Iroquois Master
Fund Ltd. (collectively, the Investors), to which the Company
issued to the Investors an aggregate of 7,017 shares of Series
H-3 Convertible Preferred Stock of the Company, par value $0.0001
per share (the Series H-3 Shares), and warrants to purchase
1,052,632 shares of common stock of the Company, par value
$0.0001 per share (Common Stock), with an exercise price of $1.38
per share (the Warrants). The purchase price for each Series H-3
Share was $138 per share and the purchase price for each warrant
was $0.1250 per share of underlying Common Stock, for an
aggregate purchase price for the Series H-3 Shares and Warrants
of $1,100,000.

to the Securities Purchase Agreement, $500,000 of the purchase
price (the Restricted Account Funds) was directed to and is to be
held in a separate account (the Restricted Account). While held
in the Restricted Account, the Restricted Account Funds may not
be accessed or otherwise used by the Company. The Restricted
Account Funds may be released from the Restricted Account upon
the approval of the Companys board of directors (the Board).

to the Securities Purchase Agreement, the Company agreed to not
issue further Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock, except for certain
permitted issuances, without the consent of the holders of a
majority of the outstanding Series H-3 Shares, for a period
beginning on the closing date and ending on the earlier of (i) 9
months after the closing date or (ii) a Change in Control (as
that term is defined in the Securities Purchase Agreement) of the
Company (the Restricted Period). The Company also agreed to cause
certain of its officers and directors to agree not to exercise
their Company stock options during the Restricted Period, except
in connection with a Change in Control of the Company.

As disclosed in Item 5.03 below, to the Series H-3 Certificate of
Designation (as defined below), the holders of Series H-3 Shares
shall be entitled to elect up to two members of a seven member
Board, subject to certain step downs; to the Securities Purchase
Agreement, the Company agreed to effectuate the appointment of
the designees specified by the Investors therein as directors of
the Company, as further discussed in Item 5.02 below.

The foregoing description of the Securities Purchase Agreement
and Warrants is not complete and is qualified in its entirety by
reference to the full text of the Securities Purchase Agreement
and form of Warrant attached hereto as Exhibits 10.1 and 10.2,
respectively.

Registration Rights Agreement

Simultaneously with the Securities Purchase Agreement, the
Company and the Investors entered into a Registration Rights
Agreement (the Registration Rights Agreement), to which the
Company agreed to file with the Securities and Exchange
Commission, on or before May 8, 2017, a registration statement on
Form S-3 covering the resale of the Common Stock issuable upon
conversion of the Series H-3 Shares and exercise of the Warrants.
The foregoing description of the Registration Rights Agreement is
not complete and is qualified in its entirety by reference to the
full text of the Registration Rights Agreement attached hereto as
Exhibit 10.3.

Item 3.02 Unregistered Sales of Equity
Securities.

The disclosure set forth under Item 1.01 of this Form 8-K is
incorporated by reference into this Item 3.02.

to a Placement Agent Agreement with Palladium Capital Advisors,
LLC (Palladium), at closing the Company (i) paid Palladium seven
percent (7%) of the unrestricted portion of the proceeds raised
from the sale of the Series H-3 Shares and Warrants, which was
equal to $42,000; and (ii) issued warrants with an exercise price
of $1.38 per share identical to the Warrants issued to the
Securities Purchase Agreement, equal to 7% of the Conversion
Shares issuable to the Investors upon conversion of the Series
H-3 Shares (the Placement Agent Warrants). to the Placement Agent
Agreement, the Company will also pay to Palladium seven percent
(7%) of the restricted portion of the proceeds raised from the
sale of the Series H-3 Shares and Warrants when it is released
from the Restricted Account, which is equal to $35,000.

Palladium is also entitled to comparable compensation as
described above for any sales of equity or convertible debt
securities made by the Company to the Investors through March 21,
2018.

The Company sold the Series H-3 Shares and Warrants and issued
the Placement Agent Warrants in reliance upon the exemption from
securities registration afforded by Section 4(a)(2) of the
Securities Act of 1933, as amended, and Rule 506 of Regulation D
promulgated thereunder.

Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.

Effective as of March 30, 2017 the Board resolved to increase the
size of the Board by two directors, for a total of seven
directors. Simultaneously therewith, the Board appointed Brian F.
Daly and Jonathan Schechter as Series H-3 Directors (as defined
below) to fill the two newly created vacancies.

As disclosed in Item 1.01 above, the Company agreed in the
Securities Purchase Agreement to effectuate the appointment of
the designees specified by the Investors therein as Series H-3
Directors of the Company. Mr. Daly and Mr. Schechter were each
specified by the Investors in the Securities Purchase Agreement
as their designees to serve as Series H-3 Directors.

Mr. Schechter is currently the Director of Investment Banking at
Chardan Capital Markets, LLC, where he helps microcap companies
with the restructuring of their balance sheets, financing needs,
and MA opportunities. From 2005 until 2007, Mr. Schechter served
as the general counsel for a hedge fund specializing in PIPE
transactions and structured products. From 1999 until 2005, Mr.
Schechter worked as a corporate associate at Bryan Cave LLP
specializing in representing investors and investment banks in
PIPE transactions. He also represented and advised numerous
public companies in all aspects of corporate law. Mr. Schechter
graduated from Duke University in 1995, cum laude, with an A.B.
in political science and graduated from Fordham Law School with a
J.D., and is licensed to practice law in the State of New York.
Mr. Schechters extensive knowledge of the capital markets and
experience as an attorney representing public companies well
qualifies him for service on the Board.

Mr. Daly is currently the Managing Partner and Chief Operating
Officer of B3D, LLC, a private equity company, as well as a
member of the Board of Directors and Investment Committee. Mr.
Daly has over thirty years of experience on Wall Street, both as
an investment banker and as a manager in operations. From April
2006 to December 2016, Mr. Daly was a partner, CFO, and member of
the investment committee of the Rockmore group of funds. He
participated in all aspects of the funds operations, with a
specific focus on portfolio management, investor relations, and
supervision of back office. Mr. Daly began his career on Wall
Street in 1985 with Smith Barney. He joined the asset management
group at Solomon Brothers in 1988, developing financial models
and systems. In 1992, Mr. Daly moved to the investment banking
division of PaineWebber, focusing on structured products. In
1998, he joined Omicron Capital as its Chief Financial Officer,
where he was responsible for the daily operations and valuation
of the funds portfolio. He developed a proprietary risk and
trading system for both Omicron and Rockmore. Mr. Daly received
his Bachelors degree in Accounting from Fordham University and an
MBA from Columbia University. Mr. Dalys extensive knowledge of
the capital markets and financial experience well qualifies him
for service on the Board.

There are no family relationships between any of the Companys
officers or directors and Mr. Daly or Mr. Schechter.

Neither Mr. Daly nor Mr. Schechter has a direct or indirect
interest in any transaction or proposed transaction required to
be disclosed to Item 404(a) of Regulation S-K.

For their services as members of the Board, Mr. Daly and Mr.
Schechter will each receive $24,000 per year. They will also be
entitled to receive discretionary cash bonuses and stock options
under the Companys stock option plans as determined by the Board.

Each of Mr. Daly and Mr. Schechter entered into an
indemnification agreement with the Company in connection with his
appointment as a director.

Item 5.03 Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year.

On March 30, 2017, the Company filed with the Secretary of State
of the State of Delaware a Certificate of Designations,
Preferences and Rights of the Series H-3 Convertible Preferred
Stock (the Series H-3 Certificate of Designation).

Under the terms of the Series H-3 Certificate of Designation,
each share of Series H-3 Convertible Preferred Stock has a stated
value of $138 and is convertible into shares of Common Stock,
equal to the stated value divided by the conversion price of
$1.38 per share (subject to adjustment in the event of stock
splits and dividends). The Company is prohibited from effecting
the conversion of any share of the Series H-3 Convertible
Preferred Stock to the extent that, as a result of such
conversion, the holder or any affiliates would beneficially own
more than 9.99%, in the aggregate, of the issued and outstanding
shares of the Companys Common Stock calculated immediately after
giving effect to the issuance of shares of Common Stock upon the
conversion of the Series H-3 Convertible Preferred Stock.

Except as required by law and as set forth in the Series H-3
Certificate of Designation, the Series H-3 Convertible Preferred
Stock shall have no voting rights.

Subject to the following limitations, the holders of Series H-3
Convertible Preferred Stock shall be entitled to elect up to two
directors to the Board (each a Series H-3 Director, and
collectively the Series H-3 Directors). Each Series H-3 Director
shall be entitled to identical voting rights, compensation, and
benefits as are granted to each other director of the Company in
his or her capacity as such, and may serve as a member of any
committee of the Board, provided that the Series H-3 Director
meets the requisite qualifications, and if applicable,
independence criteria.

At such time as the number of shares of Common Stock issuable
upon conversion of the then outstanding Series H-3 Shares is
equal to an amount less than 15% of the number of shares of
Common Stock issuable upon conversion of the then outstanding
Series H-3 Shares plus the number of shares of Common
Stock then issued and outstanding, the holders of Series H-3
Convertible Preferred Stock shall only be entitled to elect one
Series H-3 Director (the First Step Down Event). If, upon the
occurrence of the First Step Down Event, there are two Series H-3
Directors then in office, the holders of the Series H-3
Convertible Preferred Stock shall designate, by vote of a
majority of the outstanding shares of Series H-3 Convertible
Preferred Stock, voting as a single class, one Series H-3
Director to continue to serve as a Series H-3 Director (the
Continuing Director); the other Series H-3 Director (or both
Series H-3 Directors, if the holders of the Series H-3
Convertible Preferred Stock fail to designate a Continuing
Director) shall be automatically removed from the Board without
the further action of any person.

At such time as the number of shares of Common Stock issuable
upon conversion of the then outstanding Series H-3 Shares is
equal to an amount less than 5% of the number of shares of Common
Stock issuable upon conversion of the then outstanding Series H-3
Shares plus the number of shares of Common Stock then
issued and outstanding, the holders of Series H-3 Convertible
Preferred Stock shall not be entitled to elect any directors of
the Company (the Second Step Down Event). Upon the occurrence of
the Second Step Down Event, any Series H-3 Director then in
office will be automatically removed from the Board without the
further action of any person, and there shall be no Series H-3
Directors.

The foregoing description of the Series H-3 Convertible Preferred
Stock and the Series H-3 Certificate of Designation is not
complete and is qualified in its entirety by reference to the
full text of the Series H-3 Certificate of Designation, a copy of
which is attached hereto as Exhibit 3.1.

Item 8.01 Other Events.

Stockholders Equity

As previously disclosed in a Current Report on Form 8-K filed on
December 19, 2016, the Company received a notification (the
Notification) from the Nasdaq Listings Qualification Department
(Nasdaq) on December 19, 2016, indicating that the Companys
stockholders equity as reported for its then most recently
completed fiscal quarter did not meet the minimum requirement of
$2,500,000 for continued listing on The Nasdaq Capital Market, as
set forth in Nasdaq Listing Rule 5550(b)(1). As reported in the
Companys Quarterly Report on Form 10-Q for the period ended
October 31, 2016, as filed with the Securities and Exchange
Commission on December 15, 2016, the Companys stockholders equity
was $2,386,025 as of October 31, 2016. Nasdaq subsequently
granted the Company an extension through March 31, 2017 to regain
compliance with the stockholders equity requirement. As a result
of the Series H-3 Convertible Preferred Stock financing described
herein, the Company believes that, as of the date of this Current
Report on Form 8-K, its stockholders equity exceeds the minimum
$2,500,000 requirement for continued listing on The Nasdaq
Capital Market. The Company has been formally notified by Nasdaq
that the Company has evidenced full compliance with the minimum
stockholders equity requirement and all other requirements for
listing on The Nasdaq Capital Market.

Item 9.01 Financial Statements and Exhibits.

The exhibits listed in the following Exhibit Index are filed as
part of this Current Report on Form 8-K.

About WPCS INTERNATIONAL INCORPORATED (NASDAQ:WPCS)

WPCS International Incorporated (WPCS) is a low voltage contractor that specializes in the installation and service of voice and data networks, security systems, audio-visual solutions, and distributed antenna systems, and provides project management and delivers complex projects to vertical markets that include healthcare, education, transportation, energy and utilities, oil and gas, manufacturing, commercial real estate, financial and government. The Company specializes in low voltage communications, audio-visual and security contracting services, conducting business in approximately two operation centers, through its domestic subsidiaries, WPCS International-Suisun City, Inc. (Suisun City Operations) and WPCS International-Texas Operations, Inc. (Texas Operations). The Company also has strategic alliances with technology partners to provide consulting and application software development services for collaboration, visualization and unified communications.

WPCS INTERNATIONAL INCORPORATED (NASDAQ:WPCS) Recent Trading Information

WPCS INTERNATIONAL INCORPORATED (NASDAQ:WPCS) closed its last trading session down -0.04 at 1.27 with 22,088 shares trading hands.