WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(UNAUDITED) | ||||||||||
July 31, | April 30, | |||||||||
2016 | 2016 | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 1,939,900 | $ | 2,235,597 | ||||||
Accounts receivable, net of allowance of $92,000 at July 31, 2016 and April 30, 2016, respectively | 4,328,118 | 2,886,154 | ||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 437,185 | 357,210 | ||||||||
Prepaid expenses and other current assets | 123,977 | 66,256 | ||||||||
Total current assets | 6,829,180 | 5,545,217 | ||||||||
Property and equipment, net | 298,559 | 237,800 | ||||||||
Other assets | 24,940 | 21,162 | ||||||||
Total assets | $ | 7,152,679 | $ | 5,804,179 | ||||||
LIABILITIES AND EQUITY | ||||||||||
Current liabilities: | ||||||||||
Current portion of loans payable | $ | 60,848 | $ | 53,996 | ||||||
Accounts payable and accrued expenses | 2,276,717 | 2,071,765 | ||||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 1,901,295 | 1,358,289 | ||||||||
Total current liabilities | 4,238,860 | 3,484,050 | ||||||||
Loans payable, net of current portion | 108,833 | 94,825 | ||||||||
Total liabilities | 4,347,693 | 3,578,875 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity | ||||||||||
Preferred stock - $0.0001 par value, 5,000,000 shares authorized at July 31, 2016 and April 30, 2016, respectively | ||||||||||
Convertible Series H, 8,500 shares designated, - 2,638 shares issued and outstanding at July 31, 2016 and April 30, 2016, respectively; liquidation preference of $406,000 | 406,262 | 406,262 | ||||||||
Convertible Series H-1, 9,488 shares designated, - 8,119 shares issued and outstanding at July 31, 2016 and April 30, 2016, respectively; liquidation preference of $1,348,000 | 699,324 | 699,324 | ||||||||
Common stock - $0.0001 par value, 100,000,000 shares authorized, 2,706,159 and 2,691,055 shares issued and outstanding as of July 31, 2016 and April 30, 2016, respectively | 271 | 269 | ||||||||
Additional paid-in capital | 85,962,888 | 85,940,389 | ||||||||
Accumulated deficit | (84,263,759 | ) | (84,820,940 | ) | ||||||
Total stockholders' equity | 2,804,986 | 2,225,304 | ||||||||
Total liabilities and stockholders' equity | $ | 7,152,679 | $ | 5,804,179 | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(UNAUDITED) | |||||||||
For the three months ended | |||||||||
July 31, | |||||||||
2016 | 2015 | ||||||||
Revenue | $ | 3,416,453 | $ | 4,464,003 | |||||
Costs and expenses: | |||||||||
Cost of revenue | 2,635,508 | 3,447,203 | |||||||
Selling, general and administrative expenses | 1,352,986 | 1,312,803 | |||||||
Depreciation and amortization | 20,666 | 14,969 | |||||||
4,009,160 | 4,774,975 | ||||||||
Operating loss | (592,707 | ) | (310,972 | ) | |||||
Other income (expense): | |||||||||
Interest expense | (1,981 | ) | (892 | ) | |||||
Income from Section 16 settlement | - | 400,000 | |||||||
Income from Arbitration settlement | 1,150,000 | - | |||||||
Other income (expense) | 4,487 | (2,906 | ) | ||||||
Income from continuing operations before income tax provision | 559,799 | 85,230 | |||||||
Income tax provision | 2,618 | 1,099 | |||||||
Income from continuing operations | 557,181 | 84,131 | |||||||
Discontinued operations: | |||||||||
Income from discontinued operations | - | 41,261 | |||||||
Consolidated net income | 557,181 | 125,392 | |||||||
Net income attributable to noncontrolling interest | - | 16,505 | |||||||
Net income attributable to WPCS | 557,181 | 108,887 | |||||||
Dividends declared on preferred stock | - | (3,587,121 | ) | ||||||
Deemed dividend on convertible preferred stock, due to beneficial conversion feature | - | (703,770 | ) | ||||||
Net income (loss) attributable to WPCS common shareholders | $ | 557,181 | $ | (4,182,004 | ) | ||||
Basic income (loss) from continuing operations per common share | $ | 0.21 | $ | (2.86 | ) | ||||
Basic income from discontinued operations per common share | - | 0.02 | |||||||
Basic income (loss) per common share | $ | 0.21 | $ | (2.84 | ) | ||||
Diluted income (loss) from continuing operations per common share | $ | 0.14 | $ | (2.86 | ) | ||||
Diluted income from discontinued operations per common share | - | 0.02 | |||||||
Diluted income (loss) per common share | $ | 0.14 | $ | (2.84 | ) | ||||
Weighted average shares outstanding - basic | 2,701,404 | 1,470,248 | |||||||
Weighted average shares outstanding - diluted | 3,937,628 | 1,470,248 | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(UNAUDITED) | ||||||||||
For the three months ended | ||||||||||
July 31, | ||||||||||
2016 | 2015 | |||||||||
Operating activities: | ||||||||||
Net income from operations | $ | 557,181 | $ | 84,131 | ||||||
Consolidated net income from discontinued operations | - | 41,261 | ||||||||
Adjustments to reconcile consolidated net income to net cash (used in) provided by operating activities: | ||||||||||
Depreciation and amortization | 20,666 | 14,969 | ||||||||
Shares based compensation | 22,501 | |||||||||
Income on Section 16 settlement | - | (400,000 | ) | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (1,441,964 | ) | 1,424,935 | |||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | (79,975 | ) | (103,324 | ) | ||||||
Current assets held for sale | - | (506,215 | ) | |||||||
Prepaid expenses and other current assets | (57,721 | ) | 84,464 | |||||||
Other assets | (3,778 | ) | - | |||||||
Other assets held for sale | - | (34,522 | ) | |||||||
Income taxes payable | - | (2,658 | ) | |||||||
Accounts payable and accrued expenses | 204,952 | (1,277,741 | ) | |||||||
Current liabilities held for sale | - | 2,200,030 | ||||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 543,006 | 125,355 | ||||||||
Net cash (used in) provided by operating activities | (235,132 | ) | 1,650,685 | |||||||
Investing activities: | ||||||||||
Acquisition of property and equipment | (30,803 | ) | (10,707 | ) | ||||||
Net cash used in investing activities | (30,803 | ) | (10,707 | ) | ||||||
Financing activities: | ||||||||||
Proceeds from issuance of Series H-1 preferred stock and warrants | - | 1,575,000 | ||||||||
Borrowings under loan payable obligations | - | 7,762 | ||||||||
Repayment under loan payable obligations | (29,762 | ) | - | |||||||
Repayments under other payable to Zurich | - | (135,000 | ) | |||||||
Repayments of short term convertible note | - | (4,000 | ) | |||||||
Net cash (used in) provided by financing activities | (29,762 | ) | 1,443,762 | |||||||
Effect of exchange rate changes on cash | - | 91,510 | ||||||||
Net (decrease) increase in cash and cash equivalents | (295,697 | ) | 3,175,250 | |||||||
Cash and cash equivalents, beginning of the period | 2,235,597 | 2,364,360 | ||||||||
Cash and cash equivalents, end of the period | $ | 1,939,900 | $ | 5,539,610 | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) | |||||||
(UNAUDITED) | |||||||
For the three months ended | |||||||
July 31, | |||||||
2016 | 2015 | ||||||
Schedule of non-cash investing and financing activities: | |||||||
Asset financing | $ | 50,622 | $ | - | |||
Declaration on preferred dividend payable | $ | - | $ | 3,587,121 | |||
Warrants issued with convertible preferred stock | $ | - | $ | 841,405 | |||
Deemed dividend on conversion of preferred stock to common stock | $ | - | $ | 703,770 | |||
Conversion of dividends payable related to make-whole amount to common stock | $ | - | $ | 3,375,792 | |||
Conversion of dividends payable related to Series F-1 preferred stock | $ | - | $ | 501,826 | |||
Conversion of dividends payable related to Series G-1 preferred stock | $ | - | $ | 158,481 | |||
Conversion of short term convertible note to Series H preferred stock | $ | - | $ | 1,299,000 | |||
Conversion of Series F and F-1 preferred stock to common stock | $ | - | $ | 2,731,984 | |||
Conversion of Series G and G-1 preferred stock to common stock | $ | - | $ | 1,084,230 | |||
Conversion of Series H preferred stock to common stock | $ | - | $ | 691,768 | |||
The accompanying notes are an integral part of these condensed consolidated financial statements.