NOTE 7 - OTHER DEBT

Short-Term Bank Loan

China Operations has a short-term bank loan of $3,200,000 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 recently extended to July 31, 2015. Such Short-Term Bank Loan is secured by the assets of TGG only, and not guaranteed by WPCS.

Due Related Party

As of January 31, 2015 and April 30, 2104, the China Operations had outstanding payables, representing interest accrued on working capital loans in the amounts of $796,000 and $779,000, respectively, due on demand to a related party, TGG. This loan is not guaranteed by WPCS. Interest expense for the quarter ended January 31, 2015 was immaterial.

Short Term Promissory Notes

As described in Note 1, the Company issued the 2014 Notes, with an initial principal amount of $2,438,000, pursuant to the Exchange. The 2014 Notes mature on September 30, 2015 and accrue no interest. On January 28, 2014, 2014 Notes with a principal amount of $735,000 were returned to the Company as part of various Section 16 settlements and therefore, the outstanding principal balance of the 2014 Notes as of January 31, 2015 was $1,703,000.