0001144204-17-063833.txt : 20171215 0001144204-17-063833.hdr.sgml : 20171215 20171215090158 ACCESSION NUMBER: 0001144204-17-063833 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 52 CONFORMED PERIOD OF REPORT: 20171031 FILED AS OF DATE: 20171215 DATE AS OF CHANGE: 20171215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WPCS INTERNATIONAL INC CENTRAL INDEX KEY: 0001086745 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 980204758 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-34643 FILM NUMBER: 171257797 BUSINESS ADDRESS: STREET 1: 521 RAILROAD AVE CITY: SUISUN STATE: CA ZIP: 94585 BUSINESS PHONE: 7074321300 MAIL ADDRESS: STREET 1: 521 RAILROAD AVE CITY: SUISUN STATE: CA ZIP: 94585 FORMER COMPANY: FORMER CONFORMED NAME: PHOENIX STAR VENTURES INC DATE OF NAME CHANGE: 20010424 FORMER COMPANY: FORMER CONFORMED NAME: WOWTOWN COM INC DATE OF NAME CHANGE: 20000315 FORMER COMPANY: FORMER CONFORMED NAME: PARAMOUNT SERVICES CORP DATE OF NAME CHANGE: 19990519 10-Q 1 tv480449_10q.htm FORM 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 October 31, 2017

 

¨    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, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth 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)  
Emerging growth company ¨  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

 

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 December 13, 2017, there were 6,284,218 shares of the registrant’s common stock outstanding.

 

 

 

 

 

TABLE OF CONTENTS

 

    PAGE
     
PART I FINANCIAL INFORMATION  
     
Item 1. Financial Statements (unaudited)  
     
  Condensed consolidated balance sheets as of October 31, 2017 and April 30, 2017 3
     
  Condensed consolidated statements of operations for the three and six months ended October 31, 2017 and 2016 4
     
  Condensed consolidated statement of stockholders’ equity for the six months ended October 31, 2017 5
     
  Condensed consolidated statements of cash flows for the six months ended October 31, 2017 and 2016

6

     
  Notes to condensed consolidated financial statements 8
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
     
Item 3. Quantitative and Qualitative Disclosures About Market Risks 29
     
Item 4. Controls and Procedures 29
     
PART II OTHER INFORMATION  
     
Item 1. Legal Proceedings 30
     
Item 1A. Risk Factors 30
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 30
     
Item 3. Defaults Upon Senior Securities 30
     
Item 4. Mine Safety Disclosures 30
     
Item 5. Other Information 30
     
Item 6. Exhibits 31
     
SIGNATURES   33

 

2 

 

 

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

    October 31,     April 30,  
    2017     2017  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 3,195,086     $ 1,659,318  
Restricted cash     500,176       500,026  
Accounts receivable, net of allowance of $247,000 at October 31, 2017 and April 30, 2017, respectively     2,922,031       4,199,674  
Costs and estimated earnings in excess of billings on uncompleted contracts     315,437       410,826  
Prepaid expenses and other current assets     41,555       41,135  
Total current assets     6,974,285       6,810,979  
                 
Property and equipment, net     389,668       322,643  
                 
Other assets     11,484       11,484  
                 
Total assets   $ 7,375,437     $ 7,145,106  
                 
LIABILITIES AND EQUITY                
Current liabilities:                
Current portion of loans payable   $ 51,590     $ 52,946  
Accounts payable and accrued expenses     1,732,411       1,790,256  
Billings in excess of costs and estimated earnings on uncompleted contracts     2,247,174       2,105,797  
Total current liabilities     4,031,175       3,948,999  
                 
Loans payable, net of current portion     99,702       124,559  
Total liabilities     4,130,877       4,073,558  
                 
Commitments and contingencies                
                 
Stockholders' equity                
Preferred stock - $0.0001 par value, 5,000,000 shares authorized at October 31, 2017 and April 30, 2017, respectively                
Convertible Series H, 8,500 shares designated - 8 shares issued and outstanding at October 31, 2017 and April 30, 2017, respectively; liquidation preference of $1,000     1,242       1,242  
Convertible Series H-1, 9,488 shares designated - 0 and 4,289 shares issued and outstanding at October 31, 2017 and April 30, 2017, respectively; liquidation preference of $0      -       437,530  
Convertible Series H-2, 3,500 shares designated - 2,066 and 3,305 shares issued and outstanding at October 31, 2017 and April 30, 2017, respectively; liquidation preference of $250,000     167,494       230,721  
Convertible Series H-3, 9,500 shares designated - 3,189 and 7,017 shares issued and outstanding at October 31, 2017 and April 30, 2017, respectively; liquidation preference of $440,000     251,233       475,185  
Common stock - $0.0001 par value, 100,000,000 shares authorized, 5,090,224 and 3,352,159 shares issued and outstanding as of October 31, 2017 and April 30, 2017, respectively     508       335  
Additional paid-in capital     91,612,396       89,003,669  
Accumulated deficit     (88,788,313 )     (87,077,134 )
Total stockholders' equity     3,244,560       3,071,548  
                 
Total liabilities and equity   $ 7,375,437     $ 7,145,106  

 

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 six months ended 
   October 31,   October 31, 
   2017   2016   2017   2016 
                 
Revenue  $3,859,617   $4,847,710   $7,382,964   $8,264,163 
                     
Costs and expenses:                    
Cost of revenue   3,061,372    3,819,187    5,815,922    6,454,695 
Selling, general and administrative expenses   1,249,147    1,567,326    2,433,648    2,920,312 
Depreciation and amortization   38,844    28,029    68,917    48,695 
    4,349,363    5,414,542    8,318,487    9,423,702 
                     
Operating loss   (489,746)   (566,832)   (935,523)   (1,159,539)
                     
Other income (expense):                    
Interest expense   (1,581)   (1,029)   (3,632)   (3,010)
Income from legal settlement   7,750    30,902    15,500    1,180,902 
Other income   27,471    117,947    27,471    122,434 
                     
(Loss) income from operations before income tax provision   (456,106)   (419,012)   (896,184)   140,787 
Income tax provision   1,020    (51)   1,020    2,567 
(Loss) income from  operations   (457,126)   (418,961)   (897,204)   138,220 
Net (loss) income   (457,126)   (418,961)   (897,204)   138,220 
Deemed dividend on convertible preferred stock, due to beneficial conversion feature   (813,975)   (19,724)   (813,975)   (19,724)
Net (loss) income attributable to WPCS common stockholders  $(1,271,101)  $(438,685)  $(1,711,179)  $118,496 
                     
Basic (loss) income per common share  $(0.34)  $(0.15)  $(0.48)  $0.04 
Diluted (loss) income per common share  $(0.34)  $(0.15)  $(0.48)  $0.03 
                     
Weighted average shares outstanding – basic   3,748,861    2,854,230    3,550,510    2,777,817 
Weighted average shares outstanding – diluted   3,748,861    2,854,230    3,550,510    3,790,800 

 

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

  

4 

 

 

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

 

                            Additional           Total  
    Preferred Stock     Common Stock     Paid-In     Accumulated     Stockholders'  
    Shares     Amount     Shares     Amount     Capital     Deficit     Equity  
Balance, April 30, 2017     14,619     $ 1,144,678       3,352,159     $ 335     $ 89,003,669     $ (87,077,134 )   $ 3,071,548  
Warrants exercised for cash     -       -       802,463       80       1,070,136       -       1,070,216  
Conversion of Series H-1 preferred stock to common stock     (4,289 )     (860,501 )     428,900       43       860,458       -       -  
Deemed dividend on conversion of Series H-1 convertible preferred stock to common stock     -       422,971       -       -       -       (422,971 )     -  
Conversion of Series H-2 preferred stock to common stock     (1,239 )     (149,919 )     123,900       12       149,907       -       -  
Deemed dividend on conversion of Series H-2 convertible preferred stock to common stock     -       86,692       -       -       -       (86,692 )     -  
Conversion of Series H-3 preferred stock to common stock     (3,828 )     (528,264 )     382,802       38       528,226       -       -  
Deemed dividend on conversion of Series H-3 convertible preferred stock to common stock     -       304,312       -       -       -       (304,312 )     -  
Net loss     -       -       -       -       -       (897,204 )     (897,204 )
Balance, October 31, 2017     5,263     $ 419,969       5,090,224     $ 508     $ 91,612,396     $ (88,788,313 )   $ 3,244,560  

 

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

 

5 

 

 

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   For the six months ended 
   October 31, 
   2017   2016 
Operating activities:          
Net (loss) income  $(897,204)  $138,220 
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:          
Depreciation and amortization   68,917    48,695 
Shares based compensation   -    22,501 
Changes in operating assets and liabilities:          
Accounts receivable   1,277,643    (324,990)
Costs and estimated earnings in excess of billings on uncompleted contracts   95,389    (372,408)
Prepaid expenses and other current assets   (420)   (46,908)
Other assets   -    1,999 
Accounts payable and accrued expenses   (57,845)   143,477 
Billings in excess of costs and estimated earnings on uncompleted contracts   141,377    372,707 
Net cash provided by (used in) operating activities   627,857    (16,707)
           
Investing activities:          
Acquisition of property and equipment   (135,942)   (96,475)
Net cash used in investing activities   (135,942)   (96,475)
           
Financing activities:          
Warrants exercised for cash   1,070,216    - 
Repayment under loan payable obligations   (26,213)   (52,027)
Net cash provided by (used in) financing activities   1,044,003    (52,027)
           
Net increase (decrease) in cash, cash equivalents and restricted cash   1,535,918    (165,209)
Cash, cash equivalents and restricted cash beginning of the year   2,159,344    2,235,597 
Cash, cash equivalents and restricted cash end of the year  $3,695,262   $2,070,388 

  

6 

 

 

WPCS INTERNATIONAL INCORPORATED AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   For the six months ended 
   October 31, 
   2017   2016 
Schedule of non-cash investing and financing activities:          
Automobile financing  $-   $72,650 
Conversion of Series H preferred stock through the issuance of common stock  $-   $219,450 
Conversion of Series H-1 preferred stock to common stock  $860,501   $36,920 
Deemed dividend on conversion of Series H-1 convertible preferred stock to common stock  $422,971   $19,724 
Conversion of Series H-2 preferred stock to common stock  $149,919   $- 
Deemed dividend on conversion of Series H-2 convertible preferred stock to common stock  $86,692   $- 
Conversion of Series H-3 preferred stock to common stock  $528,264   $- 
Deemed dividend on conversion of Series H-3 convertible preferred stock to common stock  $304,312   $- 

 

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

 

7 

 

 

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

  

WPCS International Incorporated, a Delaware corporation (“WPCS”) and its wholly and majority-owned subsidiaries (collectively, the “Company”) currently specializes in low voltage communications, audio-visual and security contracting services, conducting business in one segment at one operations center, through its wholly-owned domestic subsidiary, WPCS International - Suisun City, Inc. (“Suisun City Operations”). During the year ended April 30, 2017 the Company also conducted operations from its wholly-owned Texas subsidiary, WPCS International-Texas, Inc. (“Texas Operations”), however, as of April 30, 2017, the Texas Operations were closed.

 

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.

 

Basis of Presentation

 

The condensed consolidated financial statements of WPCS and its wholly and majority-owned subsidiaries included in this Report for the six months ended October 31, 2017 and 2016, reflect the accounts of current entities as continued operations, as discussed below.

 

Results of operations for the three and six months ended October 31, 2017 and 2016 include the results of: (i) WPCS (which primarily reflects corporate operating expenses and nonoperating income); (ii) Suisun City Operations and the Texas Operations, (the Texas Operations were closed during the year ended April 30, 2017 and therefore the Suisun Operation remains the Company’s only active operating subsidiary); (iii) WPCS Incorporated, an inactive subsidiary; (iv) WPCS International – Trenton, Inc. (“Trenton Operations”), which operations were closed in September 2013; and (v) DC Acquisition Corporation., a wholly-owned subsidiary of WPCS formed on August 7, 2017 solely for the purpose of the proposed merger between WPCS and DropCar, Inc. (see Note 11 – Proposed Merger).

 

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, 2017.

 

The results of operations for the six months ended October 31, 2017 are not necessarily indicative of the results to be expected for the full fiscal year.

 

8 

 

 

NOTE 2 – LIQUIDITY AND CAPITAL RESOURCES

 

As of October 31, 2017, the Company had a working capital surplus of approximately $2,943,000 and cash, cash equivalents and restricted cash of approximately $3,695,000. During the quarter ended October 31, 2017, the Company received proceeds of approximately $1,070,000 from the exercise of preferred stock warrants (see Note 10).

 

The Company's future plans and growth are dependent on its ability to increase revenues and continue its business development efforts surrounding its contract award backlog. If the Company continues to incur losses and revenues do not generate from the backlog as expected, the Company may need to raise additional capital to expand its business and continue as a going concern. The Company currently anticipates that its current cash position will be sufficient to meet its working capital requirements to continue its sales and marketing efforts for at least 12 months from the filing date of this report. If in the future the Company’s plans or assumptions change or prove to be inaccurate, the Company may need to raise additional funds through public or private debt or equity offerings, financings, corporate collaborations, or other means. The Company may also be required to reduce operating expenditures or investments in its infrastructure.

 

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, 2017.

 

9 

 

 

Recent Accounting Standards

 

Leases

 

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The FASB has continued to clarify this guidance and most recently issued ASU 2017-13 “Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the impact that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

 

Revenue from Contracts with Customers

 

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments of ASU 2014-09 were effective for reporting periods beginning after December 15, 2016, with early adoption prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.

 

10 

 

 

Subsequent to issuing ASU 2014-09, the FASB issued the following amendments concerning the adoption and clarification of ASU 2014-09. In August 2015, the FASB issued ASU No. 2015-14 “Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date” (“ASU 2015-14”), which deferred the effective date one year. As a result, the amendments of ASU 2014-09 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted only as of annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-08 “Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. ASU 2016-08 clarifies how an entity should identify the unit of accounting (i.e. the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements.

 

In April 2016, the FASB issued ASU No. 2016-10 “Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 “Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In December 2016, the FASB issued an update (“ASU 2016-20”) to ASC 606, Technical Corrections and Improvements, which outlines technical corrections to certain aspects of the new revenue recognition standard such as provisions for losses on construction type contracts and disclosure of remaining performance obligations, among other aspects. In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition” (Topic 605), “Revenue from Contracts with Customers” (Topic 606), “Leases” (Topic 840), and “Leases” (Topic 842), which provides additional implementation guidance on the previously issued ASU 2014-09.

 

The Company is currently evaluating the potential impact that these ASUs may have on its financial statements and related disclosures.

 

Business Combinations

 

In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance.

 

Accounting standards that have been issued or proposed by the Financial Accounting Standards Board (“FASB”), SEC or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

 

11 

 

 

NOTE 4 – CONCENTRATIONS

 

Accounts Receivable

 

The concentration of accounts receivable as of October 31, 2017 and April 30, 2017, respectively are as follows:

 

   As of 
   October 31, 2017   April 30, 2017 
Customer A   55%   24%
Customer B   11%   12%
Customer C   -    10%

 

The accounts receivable also included retainage receivable of $1,094,000 and $326,000 at October 31, 2017 and April 30, 2017, respectively, and both the retainage and aged accounts receivable are expected to be collected.

 

Revenue Recognition

 

The concentration of revenue recognition for the three and six months ended October 31, 2017 and 2016, respectively are as follows:

 

   For the three months ended   For the six months ended 
   October 31,   October 31, 
   2017   2016   2017   2016 
Customer A   51%   14%   38%   10%
Customer B   11%   11%   13%   - 

 

  - Represents less than 10%

 

12 

 

 

NOTE 5 – BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE

 

Basic and diluted net (loss) income per common share is computed as net (loss) income by the weighted average number of common shares outstanding for the period. Diluted net income 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.

 

   For the three months ended   For the six months ended 
   October 31,   October 31, 
   2017   2016   2017   2016 
Numerator:                
                 
Net (loss) income attributable to WPCS common stockholders, basic and diluted  $(1,271,101)  $(438,685)  $(1,711,179)  $118,496 
                     
Denominator:                    
                     
Weighted average shares outstanding – basic   3,748,861    2,854,230    3,550,510    2,777,817 
Stock options   -    -    -    99,783 
Series H and H-1 convertible preferred stock   -    -    -    913,200 
Weighted average shares outstanding – diluted   3,748,861    2,854,230    3,550,510    3,790,800 
                     
Basic (loss) income per common share  $(0.34)  $(0.15)  $(0.48)  $0.04 
Diluted (loss) income per common share  $(0.34)  $(0.15)  $(0.48)  $0.03 

  

The following securities were excluded from the weighted average dilutive common shares outstanding because their inclusion would have been antidilutive.

 

   As of October 31, 
   2017   2016 
Common stock equivalents:          
Common stock options   3,252,000    852,000 
Series H, H-1, H-2 and H-3 preferred stock   526,000    913,000 
Common stock purchase warrants   2,090,000    1,295,000 
Totals   5,868,000    3,060,000 

 

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 October 31, 2017 and April 30, 2017:

 

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   October 31, 2017   April 30, 2017 
         
Costs incurred on uncompleted contracts  $17,149,734   $16,362,011 
Estimated contract earnings   3,660,429    3,714,584 
    20,810,163    20,076,595 
Less: Billings to date   22,741,900    21,771,566 
Total  $(1,931,737)  $(1,694,971)
           
Costs and estimated earnings in excess of billings on uncompleted contracts  $315,437   $410,826 
Billings in excess of cost and estimated earnings on uncompleted contracts   2,247,174    2,105,797 
Total  $(1,931,737)  $(1,694,971)

 

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 – LOANS PAYABLE

 

The following tables summarize outstanding loans payable related to automobiles as of October 31, 2017 and April 30, 2017, respectively:

 

          Carrying Value         
      Stated   as of   Estimated Future Payment 
   Maturity Date  Interest Rate   October 31, 2017   Within 1 Year   After 1 year 
0% automobile loan payable 

April 2018 - June 2019

   0.0%  $14,000   $9,000   $5,000 
1% automobile loan payable  November 2022   1.0%   21,000    5,000    16,000 
3% automobile loan payable  November 2022   3.0%   21,000    5,000    16,000 
4% automobile loan payable  December 2016 - January 2020   4.0%   19,000    7,000    12,000 
5% automobile loan payable  January 2020 - February 2020   5.0%   42,000    18,000    24,000 
7% automobile loan payable  June 2019   7.0%   21,000    5,000    16,000 
8% automobile loan payable  October 2021   8.0%   13,000    3,000    10,000 
           $151,000   $52,000   $99,000 

 

          Carrying Value         
      Stated   as of   Estimated Future Payment 
   Maturity Date  Interest Rate   April 30, 2017   Within 1 Year   After 1 year 
0% automobile loan payable  April 2018 - June 2019   0.0%  $18,000   $9,000   $9,000 
1% automobile loan payable  November 2022   1.0%   23,000    5,000    18,000 
3% automobile loan payable  November 2022   3.0%   24,000    5,000    19,000 
4% automobile loan payable  December 2016 - January 2020   4.0%   25,000    9,000    16,000 
5% automobile loan payable  January 2020 - February 2020   5.0%   50,000    17,000    33,000 
7% automobile loan payable  June 2019   7.0%   23,000    5,000    18,000 
8% automobile loan payable  October 2021   8.0%   15,000    3,000    12,000 
           $178,000   $53,000   $125,000 

 

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NOTE 8 – INCOME FROM ARBITRATION SETTLEMENTS

 

For the three and six months ended October 31, 2017, the Company received approximately $8,000 and $16,000, respectively, in a settlement related to its former subsidiary, BTX Trader, Inc.

 

On June 16, 2016, the Company entered into a global settlement agreement and mutual release to resolve all disputes and claims regarding the construction of the Cooper Medical School at Rowan University, located in Camden, New Jersey, in which the Company served as an electrical prime contractor. As a result of such settlement, the Company received proceeds of $1,150,000 and recorded a gain in the Condensed Consolidated Statement of Operations for the six months ended October 31, 2016. The Cooper Medical School contract was performed under the Company’s former electrical services segment operated through its now closed Trenton Operations which is no longer part of the Company’s ongoing operation. In addition, for the three months ended October 31, 2016 the Company had a $31,000 legal settlement in its Suisun Operations.

  

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 (the “Credit Line”) for its Suisun City Operations. The Credit Line has an interest rate of prime plus 2%, is subject to a monthly borrowing base calculation based upon eligible accounts receivable and had an original expiration date of August 15, 2017, and has been extended to August 15, 2018. As of October 31, 2017, the monthly borrowing base calculation supported the entire $1,000,000 of available credit under the Credit Line. The Credit Line is secured by all of the assets of the Company. In addition, the Credit Line requires the Suisun City Operations to monthly comply with certain financial and operational covenants, such as, amongst other things, maintaining a certain quick ratio and a minimum net worth. The Suisun City Operations is currently in compliance with all such covenants. 

 

As of the filing date of this quarterly report on Form 10-Q, the Company has not drawn down on the Credit Line.

 

NOTE 10 – STOCKHOLDERS’ EQUITY

 

Conversion of Preferred Stock

 

During the quarter ended October 31, 2017, holders of Series H-1, H-2 and H-3 Preferred Stock converted 4,289 shares of Series H-1, 1,239 shares of Series H-2 and 3,828 shares of Series H-3 into 935,600 shares of the Company’s Common Stock.

 

The conversion of these Series H-1, H-2 and H-3 Preferred Shares resulted in a deemed dividend of approximately $814,000 due to the beneficial conversion feature associated with the shares converted.

 

Exercise of preferred stock warrants

 

During the quarter ended October 31, 2017, holders of Series H-1, H-2 and H-3 Preferred Stock Warrants exercised 61,898 of the Series H-1, warrants, 309,900 of the Series H-2 Warrants and 430,665 of the Series H-3 warrants for an aggregate of 802,463 shares of the Company’s Common Stock. These Warrants exercises were on a cash basis and the Company received approximately $1,070,000 in warrant exercise proceeds. These proceeds are unencumbered; however, the Company is required to have sufficient cash on hand at time of closing of the DropCar merger so as to include these funds in the closing financing being arranged by DropCar (see Note 11 – Proposed Merger).

 

NOTE 11 – PROPOSED MERGER

 

On September 6, 2017, the Company, DC Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), and DropCar, Inc., a Delaware corporation (“DropCar”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), pursuant to which, among other things, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into DropCar, with DropCar becoming a wholly-owned subsidiary of the Company and the surviving corporation of the merger (the “Merger”). The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.

  

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Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger (the “Closing”), (a) each outstanding share of DropCar common stock and DropCar preferred stock will be converted into the right to receive a number of shares of the Company’ common stock (“WPCS Common Stock”) equal to the Exchange Ratio (as defined below); and (b) each outstanding DropCar warrant that has not previously been exercised prior to the Closing will be assumed by the Company.

 

Under the exchange ratio formula in the Merger Agreement (the “Exchange Ratio”), as of immediately after the Merger, the former DropCar securityholders (including the investors in the Company Closing Financing (as defined below) and certain DropCar advisors), pursuant to Amendment No. 3 (described in Note 12 below), are expected to own approximately 84% of the outstanding shares of WPCS Common Stock on a fully-diluted basis and securityholders of the Company as of immediately prior to the Merger are expected to own approximately 16% of the outstanding shares of WPCS Common Stock on a fully-diluted basis. The Exchange Ratio and respective ownership of the DropCar securityholders and existing WPCS equity holders is subject to adjustment in the event that the Company’s “Net Cash” (as defined in the Merger Agreement) is less than, or greater than, $419,000 as of the Closing. For purposes of calculating the Exchange Ratio, the number of outstanding shares of WPCS Common Stock immediately before the Merger takes into account the dilutive effect, calculated using the Treasury Method under U.S. GAAP, of the shares of WPCS Common Stock underlying options (but not warrants) outstanding as of the date of the Merger Agreement using an assumed value of $2.50 per share of WPCS Common Stock. In addition, the shares underlying warrants to purchase DropCar common stock will be included in the DropCar 84% allocation. All the shares of the Company’s convertible preferred stock and options and warrants to purchase shares of WPCS Common Stock will remain outstanding after the Merger and all outstanding DropCar warrants will be exchanged for warrants to purchase WPCS Common Stock based upon the Exchange Ratio. No fractional shares will be issued in the Merger; rather, the Company will pay cash in lieu of any such fractional shares.

 

As a condition to the Closing, DropCar is obligated to raise up to $5 million, but not less than $4 million, in equity financing (the “Company Closing Financing”). The Company Closing Financing is expected to close immediately prior to or simultaneously with the Closing. This obligation for equity financing is reduced on a dollar for dollar basis for the amount of cash received prior to closing for any preferred warrant exercises received by the Company. As of the filing date of this report the Company has received approximately $2,546,000 in proceeds from warrant exercises. In addition, the consummation of the Merger is subject to customary conditions, including, without limitation, (a) approval by the Company and DropCar stockholders of the Merger Agreement and the transactions contemplated thereby; (b) the absence of any law, order, injunction or other legal restraint prohibiting the Merger; and (c) receipt of approval from NASDAQ to list the shares of WPCS Common Stock on the NASDAQ Capital Market post-Merger. Moreover, each party’s obligation to consummate the Merger is subject to certain other conditions, including, without limitation, (i) the accuracy of the other party’s representations and warranties (subject to customary qualifiers), and (ii) the other party’s compliance with its covenants and agreements contained in the Merger Agreement (subject to customary qualifiers). The Merger Agreement contains specified termination rights for both the Company and DropCar, and further provides that, upon termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee of $250,000, which, under specified circumstances, may include reimbursement for various expenses incurred in connection with the proposed Merger up to a maximum of $125,000.

 

On October 11, 2017, the Company filed a Registration Statement on Form S-4 with the Securities and Exchange Commission relating to the Merger. On November 21, 2017 and December 7, 2017, the Company filed Amendments Nos. 1 and 2 to the Registration Statement on Form S-4, respectively.

 

In connection with the Merger, the Company has incurred transaction costs of approximately $240,000 and $400,000 for the three and six months ended October 31, 2017, respectively, which is included in selling, general and administrative expenses in the Condensed Consolidated Statement of Operations.

 

NOTE 12 – SUBSEQUENT EVENT

 

Amendment to the Merger Agreement

 

On December 4, 2017, the Company, Merger Sub and DropCar entered into Amendment No. 3 to the Merger Agreement (“Amendment No. 3”). The primary purpose of Amendment No. 3 is to make certain changes to the definition of Exchange Ratio that were agreed to by the parties in connection with the Repricing Offer described below. The principal changes to the definition of Exchange Ratio are as follows:

 

1.The number of shares of WPCS Common Stock that are deemed to be outstanding at the time of the Merger was increased to 6,530,681. Previously it had been 6,118,689.
2.WPCS equity allocation percentage was increased to 16.01%. It had previously been 15%. Consequently, DropCar’s equity allocation percentage is reduced to 83.99% from 85%.

 

As a result of the foregoing changes, the number of shares of WPCS Common Stock that will be issued to DropCar’s securityholders and advisors will be reduced, although the DropCar securityholders and advisors will still own a majority of the issued and outstanding shares of WPCS Common Stock following the Merger. The reduction in the number of shares to be issued by WPCS in the Merger will result in a reduction in the number of shares of WPCS Common Stock that will be allocated to DropCar’s advisors in connection with the Merger. Thus, the Advisory/Commitment Allocation Percentage was reduced to 15.6% from 15.8%.

 

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Amendment No. 3 also includes a revised Exhibit D, which sets forth the formula for adjusting the equity allocation percentages in the event WPCS Net Cash (as defined in the Merger Agreement) at the time of the Merger is more or less than $419,000. The change in the formula reflects the changes set forth in paragraphs 1 and 2 above.

 

Finally, Amendment No. 3 includes a new Exhibit B-3, which is the form of an Amended and Restated Support Agreement, dated as of December 4, 2017, which was executed by Alpha Capital Anstalt (“Alpha”), DropCar’s largest stockholder, DropCar and WPCS, and which supersedes the Support Agreement that Alpha had previously entered into with DropCar in which it agreed to vote any shares of WPCS Common Stock that it owns on the record date for the Special Meeting in favor of the Merger. The Amended and Restated Support Agreement provides that Alpha will own 9.99% of the outstanding shares of WPCS Common Stock on the record date for the Special Meeting (as a result of conversion of shares of WPCS convertible preferred stock and/or exercise of warrants).

 

Repricing Offer – Series H-1 Warrants

 

 On December 4, 2017, WPCS offered (the “Repricing Offer Letter”) the holders of its Series H-1 Warrants (the “Holders”) the opportunity to exercise such Warrants for cash at a reduced exercise price of $1.21 per share (the “Reduced Exercise Price”) provided such Series H-1 Warrants are exercised for cash on or before 5:00 P.M. Eastern Standard time on December 26, 2017 (the “End Date”). In addition, if more than 50% of the Series H-1 Warrants are exercised for cash by the Holders prior to the End Date, WPCS will issue to the initial holders of the Series H-1 Warrants a “reload” warrant covering one share for each Series H-1 Warrant exercised during that period with a strike price equal to the fair market value of a share of WPCS Common Stock on the date such reload warrant becomes issuable (the “Reload Warrants”). The terms of the Reload Warrants would be substantially identical to the terms of the Series H-1 Warrants except that: (i) the expiration date of the reload warrant would be seven (7) years from the date of issuance; (ii) the Reload Warrants would have more limited cashless exercise rights than the H-1 Warrants; and (iii) WPCS’ obligation to register the resale of the shares issuable upon exercise of the Reload Warrants will be deferred. Finally, the Holders have entered into an irrevocable agreement with Alpha pursuant to which they have agreed to sell to Alpha any Series H-1 Warrants that are unexercised as of the End Date. Such sale will take place promptly after the End Date. WPCS received acceptance of the Reduced Exercise Price offer from all of the Holders on December 4, 2017.

 

If the Holders exercise all their Series H-1 Warrants, the aggregate gross proceeds to WPCS will be approximately $1,474,000.

 

Through December 12, 2017 (the date preceding the filing date of this report) (i) 1,008,931 Series H-1 Warrants have been exercised for cash at the reduced exercise price of $1.21, yielding aggregate gross proceeds to the Company of approximately $1,221,000 and 208,930 Series H-1 Warrants remained unexercised; and (ii) the Company has issued Reload Warrants for (a) 290,000 shares with an exercise price of $1.18per share, (b) 400,000 shares with an exercise price of $1.17 per share and (c) 318,931 shares with an exercise price of $1.09 per share.

 

Exercise of Series H-3 Warrants

 

For the period from October 31, 2017 until the filing date of this report, in addition to the exercise of the Series H-1 Warrants in the Repricing Offer described above, the holders of Series H-3 Warrants have exercised warrants for an aggregate of 185,063 shares of WPCS Common Stock for which the Company received aggregate gross proceeds of approximately $255,000 in cash.   

 

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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 our assumptions are based upon reasonable data derived from and known about our business and operations. 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 our services, fluctuations in pricing for materials, and competition.

 

Overview

 

WPCS International Incorporated, a Delaware corporation, and its wholly and majority-owned subsidiaries (collectively referred to as “we”, “us” or “our”) currently specialize in contracting services offering communications, security and audio-visual infrastructure through our only operating subsidiary, WPCS International - Suisun City, Inc. (“Suisun City Operations”). We previously announced that we launched WPCS International-Texas, Inc. (“Texas Operations”), in San Antonio, Texas in January 2016 and then commenced operations in Dallas, Texas in April 2016. During the year ended April 30, 2017, the Texas Operations generated approximately $1,006,000 in revenue, while incurring approximately $1,980,000 in cost of revenue and selling, general and administrative expenses in starting these two offices. During November 2016, we instituted some changes and cost reductions in the Texas Operations staffing and related expenses to better align our operational costs with short-term projected revenue expectations. We initially anticipated expending approximately $750,000 to develop these markets and the Texas Operations were taking longer than anticipated to begin generating the expected level of revenue to warrant continued operation. Therefore, in late December 2016, we decided to close the Texas Operations and, by the end of April 2017, the San Antonio and Dallas offices were closed.

 

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.

 

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For the three months ended October 31, 2017, we generated revenues of $3,860,000 as compared to $4,848,000 for the same period in fiscal year 2017. Our backlog at October 31, 2017 was $12,964,000 as compared to $14,596,000 at April 30, 2017.

 

Company Strategy

 

During the past two fiscal years, our strategy in the contracting services segment included divesting certain operations through the sale of our China Operations and closing of our Texas Operations.

 

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 our balance sheet as well as to increase revenue, profit and cash flow at our Suisun City Operations and seeking viable acquisition and/or merger candidate(s).

 

After completing our restructuring plan in fiscal year 2016, we launched a series of initiatives targeting revenue enhancement, including:

 

  · Strengthening our operations team with proven audio-visual professionals;

 

  · Uniformly deploying full-service low voltage capabilities for developing, installing and servicing structured cabling, audio-visual and security systems in our California market; and

 

  · Developing strategic alliances with contractors who have significant presence in our geographic operating area.

 

We believe that these initiatives have the potential to improve our business and provide more opportunities for organic growth.

 

In addition, we continue to aggressively explore other viable growth opportunities. (See Note 11 - Proposed Merger).

 

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Proposed Merger

 

On September 6, 2017, we, along with, DC Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of ours (“Merger Sub”), and DropCar, Inc., a Delaware corporation (“DropCar”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), pursuant to which, among other things, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into DropCar, with DropCar becoming a wholly-owned subsidiary of ours and the surviving corporation of the merger (the “Merger”). The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.

        

Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger (the “Closing”), (a) each outstanding share of DropCar common stock and DropCar preferred stock will be converted into the right to receive a number of shares of our common stock (“WPCS Common Stock”) equal to the Exchange Ratio (as defined below); and (b) each outstanding DropCar warrant that has not previously been exercised prior to the Closing will be assumed by us.

 

Under the exchange ratio formula in the Merger Agreement (the “Exchange Ratio”), as of immediately after the Merger, the former DropCar securityholders (including the investors in the WPCS Closing Financing (as defined below) and certain DropCar advisors),pursuant to Amendment No. 3 (described below), are expected to own approximately 84% of the outstanding shares of WPCS Common Stock on a fully-diluted basis and our securityholders as of immediately prior to the Merger are expected to own approximately 16% of the outstanding shares of WPCS Common Stock on a fully-diluted basis. The Exchange Ratio and respective ownership of the DropCar securityholders and existing WPCS equity holders is subject to adjustment in the event that our “Net Cash” (as defined in the Merger Agreement) is less than, or greater than, $419,000 as of the Closing. For purposes of calculating the Exchange Ratio, the number of outstanding shares of WPCS Common Stock immediately before the Merger takes into account the dilutive effect, calculated using the Treasury Method under U.S. GAAP, of the shares of WPCS Common Stock underlying options (but not warrants) outstanding as of the date of the Merger Agreement using an assumed value of $2.50 per share of WPCS Common Stock. In addition, the shares underlying warrants to purchase DropCar common stock will be included in the DropCar 84% allocation. All the shares of our convertible preferred stock and options and warrants to purchase shares of WPCS Common Stock will remain outstanding after the Merger and all outstanding DropCar warrants will be exchanged for warrants to purchase WPCS Common Stock based upon the Exchange Ratio. No fractional shares will be issued in the Merger; rather, we will pay cash in lieu of any such fractional shares.

 

As a condition to the Closing, DropCar is obligated to raise up to $5 million, but not less than $4 million, in equity financing (the “WPCS Closing Financing”). WPCS Closing Financing is expected to close immediately prior to or simultaneously with the Closing. This obligation for equity financing is reduced on a dollar for dollar basis for the amount of cash received prior to closing for any preferred warrant exercises received by us. As of the filing date of this report, we have received approximately $2,546,000 in proceeds from warrant exercises. In addition, the consummation of the Merger is subject to customary conditions, including, without limitation, (a) approval by our and DropCar stockholders of the Merger Agreement and the transactions contemplated thereby; (b) the absence of any law, order, injunction or other legal restraint prohibiting the Merger; and (c) receipt of approval from NASDAQ to list the shares of WPCS Common Stock on the NASDAQ Capital Market post-Merger. Moreover, each party’s obligation to consummate the Merger is subject to certain other conditions, including, without limitation, (i) the accuracy of the other party’s representations and warranties (subject to customary qualifiers), and (ii) the other party’s compliance with its covenants and agreements contained in the Merger Agreement (subject to customary qualifiers). The Merger Agreement contains specified termination rights for both we and DropCar, and further provides that, upon termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee of $250,000, which, under specified circumstances, may include reimbursement for various expenses incurred in connection with the proposed Merger up to a maximum of $125,000.

 

On October 11, 2017, we filed a Registration Statement on Form S-4 with the Securities and Exchange Commission relating to the Merger. On November 21, 2017 and December 7, 2017, we filed Amendment Nos. 1 and 2 to the Registration Statement on S-4, respectively. 

 

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Recent Development

 

Amendment to the Merger Agreement

 

On December 4, 2017, WPCS, Merger Sub and DropCar entered into Amendment No. 3 to the Merger Agreement (“Amendment No. 3”). The primary purpose of Amendment No. 3 is to make certain changes to the definition of Exchange Ratio that were agreed to by the parties in connection with the Repricing Offer described below. The principal changes to the definition of Exchange Ratio are as follows:

 

1.The number of shares of WPCS common stock that are deemed to be outstanding at the time of the Merger was increased to 6,530,681. Previously it had been 6,118,689.
2.WPCS equity allocation percentage was increased to 16.01%. It had previously been 15%. Consequently, DropCar’s equity allocation percentage is reduced to 83.99% from 85%.

 

As a result of the foregoing changes, the number of shares of WPCS Common Stock that will be issued to DropCar’s securityholders and advisors will be reduced, although the DropCar securityholders and advisors will still own a majority of the issued and outstanding shares of WPCS Common Stock following the Merger. The reduction in the number of shares to be issued by WPCS in the Merger will result in a reduction in the number of shares of WPCS Common Stock that will be allocated to DropCar’s advisors in connection with the Merger. Thus, the Advisory/Commitment Allocation Percentage was reduced to 15.6% from 15.8%.

 

Amendment No. 3 also includes a revised Exhibit D, which sets forth the formula for adjusting the equity allocation percentages in the event WPCS Net Cash (as defined in the Merger Agreement) at the time of the Merger is more or less than $419,000. The change in the formula reflects the changes set forth in paragraphs 1 and 2 above.

 

Finally, Amendment No. 3 includes a new exhibit, B-3, which is the form of an Amended and Restated Support Agreement, dated as of December 4, 2017, which was executed by Alpha Capital Anstalt (“Alpha”), DropCar’s largest stockholder, DropCar and WPCS, and which supersedes the Support Agreement that Alpha had previously entered into with DropCar in which it agreed to vote any shares of WPCS common stock that it owns on the record date for the Special Meeting in favor of the Merger. The Amended and Restated Support Agreement provides that Alpha will own 9.99% of the outstanding shares of WPCS common stock on the record date for the Special Meeting (as a result of conversion of shares of WPCS convertible preferred stock and/or exercise of warrants).

 

Repricing Offer – Series H-1 Warrants

 

On December 4, 2017, WPCS offered (the “Repricing Offer Letter”) the holders of its Series H-1 Warrants (the “Holders”) the opportunity to exercise such Warrants for cash at a reduced exercise price of $1.21 per share (the “Reduced Exercise Price”) provided such Series H-1 Warrants are exercised for cash on or before 5:00 P.M. Eastern Standard time on December 26, 2017 (the “End Date”). In addition, if more than 50% of the Series H-1 Warrants are exercised for cash by the Holders prior to the End Date, WPCS will issue to the initial holders of the Series H-1 Warrants a “reload” warrant covering one share for each Series H-1 Warrant exercised during that period with a strike price equal to the fair market value of a share of WPCS Common Stock on the date such reload warrant becomes issuable (the “Reload Warrants”). The terms of the Reload Warrants would be substantially identical to the terms of the Series H-1 Warrants except that: (i) the expiration date of the reload warrant would be seven (7) years from the date of issuance; (ii) the Reload Warrants would have more limited cashless exercise rights than the H-1 Warrants; and (iii) WPCS’ obligation to register the resale of the shares issuable upon exercise of the Reload Warrants will be deferred. Finally, the Holders have entered into an irrevocable agreement with Alpha pursuant to which they have agreed to sell to Alpha any Series H-1 Warrants that are unexercised as of the End Date. Such sale will take place promptly after the End Date. WPCS received acceptance of the Reduced Exercise Price offer from all of the Holders on December 4, 2017.

 

If the Holders exercise all their Series H-1 Warrants, the aggregate gross proceeds to WPCS will be approximately $1,474,000.

  

Through December 12, 2017 (the date preceding the filing date of this report) (i) 1,008,931 Series H-1 Warrants have been exercised for cash at the reduced exercise price of $1.21, yielding aggregate gross proceeds to the Company of approximately $1,221,000 and 208,930 Series H-1 Warrants remained unexercised; and (ii) the Company has issued Reload Warrants for (a) 290,000 shares with an exercise price of $1.18per share, (b) 400,000 shares with an exercise price of $1.17 per share and (c) 318,931 shares with an exercise price of $1.09 per share.

 

21 

 

 

Exercise of Series H-3 Warrants

 

For the period from October 31, 2017 until the filing date of this report, in addition to the exercise of the Series H-1 Warrants in the Repricing Offer described above, the holders of Series H-3 Warrants have exercised warrants for an aggregate of 185,063 shares of WPCS Common Stock for which the Company received aggregate gross proceeds of approximately $255,000 in cash.

  

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 for the quarter ended October 31, 2017, we generated revenue of approximately $3,860,000 as compared to revenue of $4,848,000 for the same period last year. This $988,000 decrease in revenue was due primarily to a $582,000 decrease in revenue in our Suisun City Operations and a decrease of approximately $406,000 in revenue from our Texas Operations. Also, the composition of our current revenue is less reliant on one large customer contract than had been the case during previous fiscal quarters. We have closed our Texas Operations and will no longer recognize any revenues from those operations.

 

We generated a net loss to common stockholders for the three months ended October 31, 2017 of approximately $1,271,000, or ($0.34) per common share (basic and fully diluted), which includes income from our Suisun City Operations of approximately $181,000 and which was partially offset by: (i) a loss from our corporate division of approximately $637,000, which is mainly comprised of corporate operating expenses of approximately $250,000 and merger transaction costs of approximately $387,000; (ii) a loss from our Texas Operations of approximately $1,000; and (iii) recognition of $814,000 of deemed dividends associated with the conversion of Series H-1, H-2 and H-3 preferred stock.

 

The net loss for the three months ended October 31, 2017 compares to a net loss of approximately $439,000, or ($0.15) per common share (basic and fully diluted) for the three months ended October 31, 2016, which was comprised primarily of income from our : (i) Suisun City Operations of approximately $377,000; offset by a (i) loss from our corporate division, of approximately $441,000 (which is comprised of corporate operating expenses of approximately $548,000, offset by a one-time legal settlement of $107,000); (ii) a loss from our Texas Operations of approximately $355,000; and (iii) recognition of $20,000 of deemed dividends associated with the conversion of Series H-1 Preferred Stock.

 

We believe that our integrated, full service low-voltage communication infrastructure contracting services strategy will create additional opportunities. We believe that the ability to provide comprehensive communications infrastructure contracting services gives us a competitive advantage. In regard to strategic development and based upon the proposed merger (see Note 11 – Proposed Merger), our focus is on identifying organic growth opportunities. We are optimistic about such opportunities in the market we currently serve, as evidenced by our new contract awards and customers continuing to seek bids from us,due to our experience and strong reputation in these markets.

 

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Results of Operations for the Three Months Ended October 31, 2017 Compared to the Three Months Ended October 31, 2016

 

   For the three months ended 
   October 31, 
   2017   2016 
                 
Revenue  $3,859,617    100.0%  $4,847,710    100.0%
                     
Costs and expenses:                    
Cost of revenue   3,061,372    79.3%   3,819,187    78.8%
Selling, general and administrative expenses   1,249,147    32.4%   1,567,326    32.3%
Depreciation and amortization   38,844    1.0%   28,029    0.6%
    4,349,363    112.7%   5,414,542    111.7%
                     
Operating loss   (489,746)   -12.7%   (566,832)   -11.7%
                     
Other income (expense):                    
Interest expense   (1,581)   0.0%   (1,029)   0.0%
Income from legal settlement   7,750    0.2%   30,902    0.6%
Other income   27,471    0.7%   117,947    2.4%
                     
Loss from operations before income tax provision   (456,106)   -11.8%   (419,012)   -8.7%
Income tax provision   1,020    0.0%   (51)   0.0%
Loss from operations   (457,126)   -11.8%   (418,961)   -8.7%
                     
Net loss   (457,126)   -11.8%   (418,961)   -8.6%
Deemed dividend on convertible preferred stock, due to beneficial conversion feature   (813,975)   -21.1%   (19,724)   -0.4%
Net loss attributable to WPCS common stockholders  $(1,271,101)   -32.9%  $(438,685)   -9.0%

  

Operating Loss

 

We had an operating loss of approximately $490,000 for the three months ended October 31, 2017. This quarter’s operating loss was comprised primarily of $158,000 in operating income from our Suisun City Operations, which was offset by an operating loss of approximately $1,000 from our Texas Operations (final closing expenses) and $647,000 of corporate overhead expenses. For the three months ended October 31, 2016, we had an operating loss of approximately $567,000 which was comprised primarily of $338,000 in operating income from our Suisun City Operations and which was offset by approximately $548,000 of corporate overhead and $357,000 loss from our Texas Operation. The details of the operating loss are as follows:

 

Revenue

 

Revenue for the three months ended October 31, 2017 decreased approximately $988,000, or 20%, to approximately $3,860,000, as compared to approximately $4,848,000 for same period last year due to an approximately $583,000 decrease in revenue in our Suisun City Operations and an approximately $405,000 decrease in revenue from our Texas Operations. This decrease in our Suisun City Operations’ revenue was primarily the result of the addition of lower revenue contracts which reduced our reliance on a few large customers. We closed our Texas Operations in the fourth quarter of fiscal 2017 and do not expect to have any further revenue from that operation.

 

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 approximately $758,000, or 19.8%, to approximately $3,061,000, or 79.3% of revenue, for the three months ended October 31, 2017, as compared to approximately $3,819,000, or 78.8% of revenue, for the same period in 2016. This less than 1% percent increase in the cost of revenue is due to the different combination of contracts in process as compared to last year.

 

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Selling, General and Administrative Expenses

 

For the three months ended October 31, 2017, total selling, general and administrative expenses decreased approximately $318,000, or 20.3%, to approximately $1,249,000 as compared to approximately $1,567,000 for the same period in 2016, which was primarily due to $443,000 of decreased expenses in our Texas Operations, as a result of its closure during fiscal 2017, offset by an increase in expense in our Suisun City Operations of $26,000, and an increase in corporate overhead expenses of $99,000. The increase in expense at our Suisun Operations was primarily due to an increased legal expense while the increased corporate overhead expenses was comprised primarily of higher consulting and legal costs associated with the proposed merger of approximately $240,000 offset by lower salary and bonus expense of approximately $140,000.

 

Depreciation and Amortization

 

For the three months ended October 31, 2017, depreciation and amortization was approximately $39,000 as compared to approximately $28,000 for the same quarter in 2016, due primarily to the addition of vehicles and office furniture.

 

Loss from Operations

 

We had loss from operations of approximately $457,000 for the three months ended October 31, 2017 as compared to a net loss from operations of approximately $419,000 for the same period in 2016. Loss from operations is determined by adjusting the operating loss by the following items:

 

Interest Expense

 

For the three months ended October 31, 2017 and 2016, interest expense was approximately $1,600 and $1,000, respectively.

 

Income from Legal Settlement

 

For the three months ended October 31, 2017, we received approximately $7,800 in a settlement related to our former subsidiary, BTX Trader, Inc. For the three months ended October 31, 2016, we received approximately $31,000 in connection with a settlement of an outstanding contract dispute in our Suisun Operations.

 

Other Income

 

For the three months ended October 31, 2017 and 2016, other income was approximately $27,000 and approximately $118,000, respectively. These other income items relate to negotiated settlements with suppliers on outstanding accounts payable items.

 

Net Loss Attributable to WPCS Common Stockholders

 

We had net loss attributable to WPCS common stockholders of $1,271,000 for the three months ended October 31, 2017 as compared to a net loss attributable to WPCS common stockholders of $439,000 for the same period in 2016. The following items are the adjustments to the loss from operations that result in determining the net loss attributable to WPCS common stockholders:

  

Dividends Declared on Preferred Stock

 

As a result of the conversion of some of our Series H-1, H-2 and H-3 Preferred Shares during the three months ended October 31, 2017 and 2016 we recognized deemed dividends of $814,000 and $20,000, respectively, due to the beneficial conversion feature associated with these shares.

 

24 

 

 

Results of Operations for the Six Months Ended October 31, 2017 Compared to the Six Months Ended October 31, 2016

 

   For the six months ended 
   October 31, 
   2017   2016 
                 
Revenue  $7,382,964    100.0%  $8,264,163    100.0%
                     
Costs and expenses:                    
Cost of revenue   5,815,922    78.8%   6,454,695    78.1%
Selling, general and administrative expenses   2,433,648    33.0%   2,920,312    35.3%
Depreciation and amortization   68,917    0.9%   48,695    0.6%
    8,318,487    112.7%   9,423,702    194.4%
                     
Operating loss   (935,523)   -12.72%   (1,159,539)   -14.0%
                     
Other income (expense):                    
Interest expense   (3,632)   -0.0%   (3,010)   -0.1%
Income from legal settlement   15,500    0.2%   1,180,902    14.3%
Other income   27,471    0.4%   122,434    1.5%
                     
(Loss) income from operations before income tax provision   (896,184)   -12.1%   140,787    1.7%
Income tax provision   1,020    0.0%   2,567    0.0%
(Loss) income from operations   (897,204)   -12.1%   138,220    1.7%
                     
Net (loss) income   (897,204)   -12.12%   138,220    1.7%
Deemed dividend on convertible preferred stock, due to beneficial conversion feature   (813,975)   -11.1%   (19,724)   -0.3%
Net (loss) income attributable to WPCS common stockholders  $(1,711,179)   -23.2%  $118,496    1.4%

  

Operating Loss

 

We had an operating loss of approximately $935,000 for the six months ended October 31, 2017. This period’s operating loss was comprised primarily of $343,000 in operating income from our Suisun City Operations, which was offset by an operating loss of approximately $8,000 from our Texas Operations (final closing expenses) and $1,270,000 of corporate overhead expenses. For the six months ended October 31, 2016, we had an operating net loss of approximately $1,160,000 which was comprised primarily of $543,000 in operating income from our Suisun City Operations and which was offset by approximately $1,043,000 of corporate overhead and $660,000 loss from our Texas Operation. The details of the operating loss are as follows:

 

Revenue

 

Revenue for the six months ended October 31, 2017 decreased approximately $881,000, or 10.7%, to approximately $7,383,000, as compared to approximately $8,264,000 for same period last year due to an approximately $203,000 decrease in revenue in our Suisun City Operations and an approximately $678,000 decrease in revenue from our Texas Operations. This decrease in our Suisun City Operations’ revenue was primarily the result of the addition of lower revenue contracts which reduced our reliance on a few large customers. We closed our Texas Operations in the fourth quarter of fiscal 2017 and do not expect to have any further revenue from that operation.

 

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 approximately $639,000, or 9.9%, to approximately $5,816,000, or 78.8% of revenue, for the six months ended October 31, 2017, as compared to approximately $6,455,000, or 78.1% of revenue, for the same period in 2016. This less than 1% percent increase in the cost of revenue is due to the different combination of contracts in process as compared to last year.

 

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Selling, General and Administrative Expenses

 

For the six months ended October 31, 2017, total selling, general and administrative expenses decreased approximately $486,000, or 16.6%, to approximately $2,434,000 as compared to approximately $2,920,000 for the same period in 2016, which was primarily due to $813,000 of decreased expenses in our Texas Operations, as a result of its closure during fiscal 2017, offset by an increase in expense in our Suisun City Operations of $100,000, and an increase in corporate overhead expenses of $226,000. The increase in expense at our Suisun Operations was primarily due to an increased legal and salary expenses while the increased corporate overhead expenses was comprised primarily of higher consulting and legal costs associated with the proposed merger of approximately $400,000 offset by lower salary and bonus expense of approximately $174,000.

 

Depreciation and Amortization

 

For the six months ended October 31, 2017, depreciation and amortization was approximately $69,000 as compared to approximately $49,000 for the same quarter in 2016, due primarily to the addition of vehicles and office furniture.

 

Loss from Operations

 

We had loss from operations of approximately $897,000 for the six months ended October 31, 2017 as compared to income from operations of approximately $138,000 for the same period in 2016. Loss or income from operations is determined by adjusting the operating loss or income by the following items:

 

Interest Expense

 

For the six months ended October 31, 2017 and 2016, interest expense was approximately $3,600 and $3,000, respectively.

 

Income from Legal Settlements

 

For the six months ended October 31, 2017, we received $15,500 in a settlement related to our former subsidiary, BTX Trader, Inc.

 

During the six months ended October 31, 2016, we received $1,181,000 in connection with a global settlement agreement and mutual release to resolve all existing disputes and claims regarding the construction of the Cooper Medical School at Rowan University, located in Camden, New Jersey, in which the Company, through its former Trenton Operations, served as an electrical prime contractor.

 

Other Income

 

For the six months ended October 31, 2017 and 2016, other income was approximately $27,000 and approximately $122,000, respectively. These other income items relate to negotiated settlements with suppliers on outstanding accounts payable items.

 

Net Loss Attributable to WPCS Common Stockholders

 

We had net loss attributable to WPCS common stockholders of $1,711,000 for the six months ended October 31, 2017 as compared to net income attributable to WPCS common stockholders of $118,000 for the same period in 2016. The following items are the adjustments to the net loss or income from operations that result in determining the net loss attributable to WPCS common stockholders:

 

Dividends Declared on Preferred Stock

 

As a result of the conversion of some of our Series H-1, H-2 and H-3 Preferred Shares during the six months ended October 31, 2017 and 2016 we recognized deemed dividends of $814,000 and $20,000, respectively, due to the beneficial conversion feature associated with these shares.

 

26 

 

 

Effects of Inflation

 

Inflation has not had a material impact on our business.

 

Liquidity and Capital Resources

 

As of October 31, 2017, we had working capital of approximately $2,443,000, which consisted of current assets of approximately $6,974,000 and current liabilities of approximately $4,031,000. This compares to working capital of approximately $2,862,000 at April 30, 2017. The current liabilities as presented in the balance sheet at October 31, 2017 primarily include approximately $1,732,000 of accounts payable and accrued expenses and approximately $2,247,000 of billings in excess of costs and estimated earnings on uncompleted contracts.

 

Our cash and cash equivalents balance at October 31, 2017 was approximately $3,695,000 of which approximately $500,000 is classified as restricted cash.

 

In addition, our Suisun Operations has a $1,000,000 million operating line of credit (the “Credit Line”), which expires on August 15, 2018. As of December 12, 2017, we have no outstanding balance under the Credit Line. 

 

Our future plans and growth are dependent on its ability to increase revenues and continue its business development efforts surrounding its contract award backlog. If we continue to incur losses and revenues do not generate from the backlog as expected, we may need to raise additional capital to expand our business and continue as a going concern. We currently anticipate that our current cash position will be sufficient to meet our working capital requirements to continue our sales and marketing efforts for at least 12 months from the filing date of this Quarterly Report on Form 10-Q. If in the future our plans or assumptions change or prove to be inaccurate, we may need to raise additional funds through public or private debt or equity offerings, financings, corporate collaborations, or other means. We may also be required to reduce operating expenditures or investments in its infrastructure.

 

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Backlog

 

As of October 31, 2017, we had a backlog of unfilled orders of approximately $12,964,000 as compared to approximately $14,596,000 at April 30, 2017. 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, 2017. Our critical accounting policies and significant estimates have not changed substantially from those previously disclosed in the Form 10-K.

 

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ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

  

ITEM 4 - CONTROLS AND PROCEDURES

 

(a) Evaluation of disclosure controls and procedures.

 

Our management, with the participation of our 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 chief executive officer and chief financial officer concluded that, as of October 31, 2017, 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 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 October 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of our business. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and any adverse result in these or other matters may arise from time to time that could harm our business. We are not currently aware of any such legal proceedings or claims to which we are a party or of which any of our property is subject that we believe will have a material adverse effect on our business, financial condition, or results of operations.

 

ITEM 1A. RISK FACTORS

 

Not required.

 

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

 

None that have not been disclosed on Form 8-K filed with the SEC.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

  

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 October 31, 2017.

 

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ITEM 6. EXHIBITS

 

Exhibit
Number.
  Exhibit Description
     
2.1   Agreement and Plan of Merger and Reorganization, dated as of September 6, 2017, by and among WPCS International Incorporated, DC Acquisition Corporation and DropCar, Inc., as amended, incorporated by reference to Exhibit 2.1 of WPCS International Incorporated’s Current Report on Form 8-K filed December 6, 2017.
     
2.2   Final Form of Amended and Restated Support Agreement, by and among Alpha Capital Anstalt, DropCar, Inc. and WPCS International Incorporated (included as Exhibit B-3 to Exhibit 2.1).
     
3.1   Certificate of Incorporation, as amended, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s registration statement on Form SB-2 filed April 7, 2006.
     
3.2   Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on December 9, 2008, incorporated by reference to Exhibit 3.02 of WPCS International Incorporated’s Annual Report on Form 10-K filed July 29, 2015.
     
3.3   Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on March 4, 2013, incorporated by reference to Exhibit 3.01 of WPCS International Incorporated’s Current Report on Form 8-K filed March 4, 2013.
     
3.4   Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on May 16, 2013 and effective May 28, 2013, incorporated by reference to Exhibit 3.01 of WPCS International Incorporated’s Current Report on Form 8-K filed May 28, 2013.
     
3.5   Certificate of Correction to the Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on December 19, 2014, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed December 19, 2014.
     
3.6   Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on April 16, 2015 and effective April 20, 2015, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed April 16, 2015.
     
3.7   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, incorporated by reference to Exhibit 3.01 of WPCS International Incorporated’s Current Report on Form 8-K filed October 3, 2014.
     
3.8   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, incorporated by reference to Exhibit 3.02 of WPCS International Incorporated’s Current Report on Form 8-K filed October 3, 2014.
     
3.9   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, incorporated by reference to Exhibit 3.01 of WPCS International Incorporated’s Current Report on Form 8-K filed November 20, 2014.
     
3.10   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, incorporated by reference to Exhibit 3.02 of WPCS International Incorporated’s Current Report on Form 8-K filed November 20, 2014.
     
3.11   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, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed July 1, 2015.
     
3.12   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, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed July 15, 2015.
     
3.13   Certificate of Designations, Preferences and Rights of Series H-2 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on December 20, 2016, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed December 22, 2016.
     
3.14   Certificate of Designations, Preferences and Rights of the Series H-3 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on March 30, 2017, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed April 4, 2017.

 

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3.15   Amended and Restated Bylaws of WPCS International Incorporated as of January 12, 2016, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed January 13, 2016.
     
10.1   Final form of Repricing Offer Letter, dated December 4, 2017, from WPCS International Incorporated to each of Iroquois Master Fund, Iroquois Capital Investment Group, LLC and American Capital Management, LLC, incorporated by reference to Exhibit 10.1 of WPCS International Incorporated’s Current Report on Form 8-K filed December 6, 2017.
     
10.2   Final form of Reload Warrant by and between WPCS International Incorporated and each of Iroquois Master Fund, Iroquois Capital Investment Group, LLC and American Capital Management, LLC (included as Exhibit 1 to Exhibit 10.1).
     
31.1*   Certification of 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 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.DEF*   XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB*   XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE*   XBRL Taxonomy Extension Presentation Linkbase Document

  

* Filed herewith

 

** Furnished herewith

 

32 

 

 

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:

Chief Executive Officer

(Principal Executive Officer)

 

  By: /s/ David Allen
    Name:  David Allen
    Title:

Chief Financial Officer

(Principal Financial Officer)

Date: December 15, 2017      

 

33 

 

 

Index to Exhibits 

 

Exhibit
Number.
  Exhibit Description
     
2.1   Agreement and Plan of Merger and Reorganization, dated as of September 6, 2017, by and among WPCS International Incorporated, DC Acquisition Corporation and DropCar, Inc., as amended, incorporated by reference to Exhibit 2.1 of WPCS International Incorporated’s Current Report on Form 8-K filed December 6, 2017.
     
2.2   Final Form of Amended and Restated Support Agreement, by and among Alpha Capital Anstalt, DropCar, Inc. and WPCS International Incorporated (included as Exhibit B-3 to Exhibit 2.1).
     
3.1   Certificate of Incorporation, as amended, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s registration statement on Form SB-2 filed April 7, 2006.
     
3.2   Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on December 9, 2008, incorporated by reference to Exhibit 3.02 of WPCS International Incorporated’s Annual Report on Form 10-K filed July 29, 2015.
     
3.3   Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on March 4, 2013, incorporated by reference to Exhibit 3.01 of WPCS International Incorporated’s Current Report on Form 8-K filed March 4, 2013.
     
3.4   Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on May 16, 2013 and effective May 28, 2013, incorporated by reference to Exhibit 3.01 of WPCS International Incorporated’s Current Report on Form 8-K filed May 28, 2013.
     
3.5   Certificate of Correction to the Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on December 19, 2014, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed December 19, 2014.
     
3.6   Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on April 16, 2015 and effective April 20, 2015, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed April 16, 2015.
     
3.7   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, incorporated by reference to Exhibit 3.01 of WPCS International Incorporated’s Current Report on Form 8-K filed October 3, 2014.
     
3.8   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, incorporated by reference to Exhibit 3.02 of WPCS International Incorporated’s Current Report on Form 8-K filed October 3, 2014.
     
3.9   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, incorporated by reference to Exhibit 3.01 of WPCS International Incorporated’s Current Report on Form 8-K filed November 20, 2014.
     
3.10   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, incorporated by reference to Exhibit 3.02 of WPCS International Incorporated’s Current Report on Form 8-K filed November 20, 2014.
     
3.11   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, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed July 1, 2015.
     
3.12   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, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed July 15, 2015.

 

34 

 

 

3.13   Certificate of Designations, Preferences and Rights of Series H-2 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on December 20, 2016, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed December 22, 2016.
     
3.14   Certificate of Designations, Preferences and Rights of the Series H-3 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on March 30, 2017, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed April 4, 2017.
     
3.15   Amended and Restated Bylaws of WPCS International Incorporated as of January 12, 2016, incorporated by reference to Exhibit 3.1 of WPCS International Incorporated’s Current Report on Form 8-K filed January 13, 2016.
     
10.1   Final form of Repricing Offer Letter, dated December 4, 2017, from WPCS International Incorporated to each of Iroquois Master Fund, Iroquois Capital Investment Group, LLC and American Capital Management, LLC, incorporated by reference to Exhibit 10.1 of WPCS International Incorporated’s Current Report on Form 8-K filed December 6, 2017.
     
10.2   Final form of Reload Warrant by and between WPCS International Incorporated and each of Iroquois Master Fund, Iroquois Capital Investment Group, LLC and American Capital Management, LLC (included as Exhibit 1 to Exhibit 10.1).
     
31.1*   Certification of 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 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.DEF*   XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB*   XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE*   XBRL Taxonomy Extension Presentation Linkbase Document

 

* Filed herewith

 

** Furnished herewith

 

35 

 

EX-31.1 2 tv480449_ex31-1.htm EXHIBIT 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(s) 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: December 15, 2017  
   
/s/ Sebastian Giordano  
Name:   Sebastian Giordano  
Title:

Chief Executive Officer

(Principal Executive Officer) 

 

 

 

EX-31.2 3 tv480449_ex31-2.htm EXHIBIT 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(s) 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: December 15, 2017  
   
/s/ David Allen  
Name:   David Allen  
Title:

Chief Financial Officer

(Principal Financial Officer)

 

 

 

EX-32.1 4 tv480449_ex32-1.htm EXHIBIT 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 October 31, 2017, 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: December 15, 2017 Name: Sebastian Giordano
  Title: Chief Executive Officer
    (Principal Executive Officer)

 

 

EX-32.2 5 tv480449_ex32-2.htm EXHIBIT 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 October 31, 2017 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: December 15, 2017 Name: David Allen
  Title:

Chief Financial Officer

(Principal Financial Officer)

 

 

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The Credit Line has an interest rate of prime plus 2%, is subject to a monthly borrowing base calculation based upon eligible accounts receivable and had an original expiration date of August 15, 2017, and has been extended to August 15, 2018. As of October 31, 2017, the monthly borrowing base calculation supported the entire $1,000,000 of available credit under the Credit Line. The Credit Line is secured by all of the assets of the Company. In addition, the Credit Line requires the Suisun City Operations to&#160;monthly comply with certain financial and operational covenants, such as, amongst other things, maintaining a certain quick ratio and a minimum net worth. 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style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="9%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="9%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr style="height:12px;"> <td width="67%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">Common stock options</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="9%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">3,252,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="9%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">852,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="67%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">Series H, H-1, H-2 and H-3 preferred stock</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new 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font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"><br/></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; 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10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">The asset, &#8220;Costs and estimated earnings in excess of billings on uncompleted contracts&#8221;, represents revenue recognized in excess of amounts billed. 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font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">Costs incurred on uncompleted contracts</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px 5px 0px 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">17,149,734</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px 5px 0px 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">16,362,011</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">Estimated contract earnings</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">3,660,429</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">3,714,584</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px 5px 0px 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">20,810,163</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px 5px 0px 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">20,076,595</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">Less: Billings to date</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">22,741,900</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">21,771,566</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">Total</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">(1,931,737)</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">(1,694,971)</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">Costs and estimated earnings in excess of billings on uncompleted contracts</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px 5px 0px 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">315,437</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px 5px 0px 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">410,826</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">Billings in excess of cost and estimated earnings on uncompleted contracts</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">2,247,174</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">2,105,797</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">Total</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">(1,931,737)</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">(1,694,971)</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr> </table></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">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.</div><div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"></div></div><table border="0" style="border-collapse:collapse; clear:both;width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td style="background-color: #fff"></td></tr></table><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 20076595 20810163 0.16 0.84 419000 2.50 250000 125000 2546000 As a condition to the Closing, DropCar is obligated to raise up to $5 million, but not less than $4 million, in equity financing (the &#8220;Company Closing Financing&#8221;). The Company Closing Financing is expected to close immediately prior to or simultaneously with the Closing. This obligation for equity financing is reduced on a dollar for dollar basis for the amount of cash received prior to closing for any preferred warrant exercises received by the Company. As of the filing date of this report the Company has received approximately $1,325,000 in proceeds from warrant exercises. In addition, the consummation of the Merger is subject to customary conditions, including, without limitation, (a) approval by the Company and DropCar stockholders of the Merger Agreement and the transactions contemplated thereby; (b) the absence of any law, order, injunction or other legal restraint prohibiting the Merger; and (c) receipt of approval from NASDAQ to list the shares of WPCS common stock on the NASDAQ Capital Market post-Merger. 8500 8500 9488 0 0 9488 3500 3500 16000 9500 860501 9500 250000 250000 440000 440000 <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-size: 13.3333px; color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; 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font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-size: 13.3333px; color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="display:inline;background-color: transparent;"></div></div><div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;; font-weight: 400;"></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; font-size: 13.3333px;"><div style="display:inline;background-color: transparent; font-size: 10pt;"></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; font-size: 13.3333px;"><div style="display:inline;background-color: transparent; font-size: 10pt;">The&#160;concentration&#160;of accounts receivable as of October 31, 2017 and April 30, 2017, respectively are as follows:</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-size: 13.3333px; color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; 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padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="23%" style="overflow:hidden; color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;; background-color: rgb(255, 255, 255)" colspan="5" rowspan="1">As&#160;of</td><td width="1%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="70%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="11%" style="overflow:hidden; color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;; background-color: rgb(255, 255, 255)" colspan="2" rowspan="1">October&#160;31,&#160;2017</td><td width="1%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="11%" style="overflow:hidden; color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;; 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text-align: justify;">For the three <div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="display:inline;font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, serif; ; margin-right: 0px; font-style: normal; font-weight: 400;">and six </div></div><div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div>months ended October<div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"> </div>31, 2017, the Company received approximately $8,000 <div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="display:inline;font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, serif; ; margin-right: 0px; font-style: normal; font-weight: 400;">and $16,000, respectively,&#160;</div></div><div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div>in a settlement related to its former subsidiary, BTX Trader, Inc.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; 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The Cooper Medical School contract was performed under the <div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="display:inline;font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, serif; ; margin-right: 0px; font-style: normal; font-weight: 400;">Company&#8217;s former </div></div><div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div>electrical services segment <div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="display:inline;font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, serif; ; margin-right: 0px; font-style: normal; font-weight: 400;">operated through its now closed Trenton Operations which</div></div><div style="display:inline;font-style: normal; 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text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style='font-style:italic;display:inline;'>Conversion of Preferred Stock</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">During the quarter ended October 31, 2017, holders of Series<div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"> </div>H-1, H-2 and H-3 Preferred Stock converted 4,289 shares of Series H-1, 1,239 shares of Series H-2 and 3,828 shares of Series H-3 into 935,600 shares of the Company&#8217;s Common Stock.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">The conversion of these Series H-1, H-2 and H-3 Preferred Shares resulted in a deemed dividend of approximately $814,000 due to the beneficial conversion feature associated with the shares converted.</div><div style="CLEAR:both;CLEAR:both; 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text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style='font-style:italic;display:inline;'>Exercise of preferred stock warrants</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px 0pt 0in; text-align: justify;">During the quarter ended October 31, 2017, holders of Series<div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"> </div>H-1, H-2 and H-3 Preferred Stock<div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="display:inline;font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, serif; ; margin-right: 0px; 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style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="5" rowspan="1">October&#160;31,</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="23%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="5" rowspan="1">October&#160;31,</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr 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style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">2016</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">2017</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">2016</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="51%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">Numerator:</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New 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style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="51%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">Denominator:</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New 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style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td></tr><tr style="height:12px;"> <td width="51%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New 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&#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="11%" style="overflow:hidden; color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;; background-color: rgb(255, 255, 255)" colspan="2" rowspan="1">October&#160;31,&#160;2017</td><td width="1%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 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width="1%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: center; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; font-weight: bold; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; 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roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px 5px 0px 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">16,362,011</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: 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font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">Less: Billings to date</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">22,741,900</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">21,771,566</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">Total</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">(1,931,737)</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">(1,694,971)</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">Costs and estimated earnings in excess of billings on uncompleted contracts</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px 5px 0px 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">315,437</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow: hidden; color: black; text-align: right; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px 5px 0px 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">410,826</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">Billings in excess of cost and estimated earnings on uncompleted contracts</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">2,247,174</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(255, 255, 255)">&#160;</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;; background-color: rgb(255, 255, 255)">2,105,797</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: white;; background-color: rgb(255, 255, 255)">&#160;</td> </tr><tr style="height:12px;"> <td width="75%" style="overflow: hidden; color: black; text-align: left; vertical-align: bottom; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">Total</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">(1,931,737)</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td><td width="1%" style="overflow:hidden; color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">$</td><td width="10%" style="overflow:hidden; color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;; background-color: rgb(204, 238, 255)">(1,694,971)</td><td width="1%" style="overflow: hidden; color: black; vertical-align: top; font-family: &#34;times new roman&#34;; font-size: 10pt; padding: 0px; border-bottom-color: rgb(204, 238, 255);; background-color: rgb(204, 238, 255)">&#160;</td> </tr> </table></div><table border="0" style="border-collapse:collapse; clear:both;width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td style="background-color: #fff"></td></tr></table><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">NOTE 2 &#150; LIQUIDITY AND CAPITAL RESOURCES</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">As of October 31, 2017, the Company had a working capital surplus of approximately $2,943,000 and cash, cash equivalents and restricted cash of approximately $3,695,000. During the quarter ended October 31, 2017<div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">,</div> the Company received proceeds of approximately $1,070,000 from the exercise of preferred stock warrants (see Note 10).</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">The Company's future plans and growth are dependent on its ability to increase revenues and continue its business development efforts surrounding its contract award backlog. If the Company continues to incur losses and revenues do not generate from the backlog as expected, the Company may need to raise additional capital to expand its business and continue as a going concern. The Company currently anticipates that its current cash position will be sufficient to meet its working capital requirements to continue its sales and marketing efforts for at least 12 months from the filing date of this report. If in the future the Company&#8217;s plans or assumptions change or prove to be inaccurate, the Company may need to raise additional funds through public or private debt or equity offerings, financings, corporate collaborations, or other means. The Company may also be required to reduce operating expenditures or investments in its infrastructure.</div></div><table border="0" style="border-collapse:collapse; clear:both;width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td style="background-color: #fff"></td></tr></table><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 0.0 0.010 0.030 0.040 0.050 0.070 0.080 151000 14000 21000 21000 19000 42000 21000 13000 52000 9000 5000 5000 7000 18000 5000 3000 99000 5000 16000 16000 12000 24000 16000 10000 April 2018 - June 2019 November 2022 November 2022 December 2016 - January 2020 January 2020 - February 2020 June 2019 October 2021 April 2018 - June 2019 November 2022 November 2022 December 2016 - January 2020 January 2020 - February 2020 June 2019 October 2021 0.0 0.010 0.030 0.040 0.050 0.070 0.080 178000 18000 23000 24000 25000 50000 23000 15000 53000 9000 5000 5000 9000 17000 5000 3000 125000 9000 18000 19000 16000 33000 18000 12000 31000 240000 400000 1474000 1.21 1221000 290000 1.18 400000 1.17 318931 1.09 208930 1008931 6530681 6118689 WPCS equity allocation percentage was increased to 16.01%. It had previously been 15%. Consequently, DropCar&#8217;s equity allocation percentage is reduced to 83.99% from 85%.As a result of the foregoing changes, the number of shares of WPCS Common Stock that will be issued to DropCar&#8217;s securityholders and advisors will be reduced, although the DropCar securityholders and advisors will still own a majority of the issued and outstanding shares of WPCS Common Stock following the Merger. The reduction in the number of shares to be issued by WPCS in the Merger will result in a reduction in the number of shares of WPCS Common Stock that will be allocated to DropCar&#8217;s advisors in connection with the Merger. Thus, the Advisory/Commitment Allocation Percentage was reduced to 15.6% from 15.8%. 0.0999 0.5 10-Q false 2017-10-31 2018 Q2 WPCS INTERNATIONAL INC 0001086745 WPCS 6284218 --04-30 Smaller Reporting Company 3189 1 1 3189 <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-size: 13.3333px; margin: 0in 0in 0pt; font-style: normal; font-family: &#34;Times New Roman&#34;; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">NOTE 5 &#150; BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">Basic and diluted net (loss) income per common share is computed as net (loss) income by the weighted average number of common shares outstanding for the period. 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Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">-</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">-</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New 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style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New 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style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="21%" style="overflow:hidden;color:#000000;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="5" rowspan="1">As&#160;of&#160;October&#160;31,</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="67%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff" colspan="2" rowspan="1">2017</td><td width="1%" style="overflow:hidden;color:#000000;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff" colspan="2" rowspan="1">2016</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="67%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">Common stock equivalents:</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="9%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="9%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr style="height:12px;"> <td width="67%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">Common stock options</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="9%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">3,252,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new 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roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">913,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr style="height:12px;"> <td width="67%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">Common stock purchase warrants</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="9%" 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roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">1,295,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="67%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">Totals</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;border-bottom-width:3px;border-bottom-color:black;border-bottom-style:double;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="9%" 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normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">NOTE 11 &#150; PROPOSED MERGER</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">On September 6, 2017, the Company, DC Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company (&#8220;Merger Sub&#8221;), and DropCar, Inc., a Delaware corporation (&#8220;DropCar&#8221;), entered into an Agreement and Plan of Merger and Reorganization (the &#8220;Merger Agreement&#8221;), pursuant to which, among other things, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into DropCar, with DropCar becoming a wholly-owned subsidiary of the Company and the surviving corporation of the merger (the &#8220;Merger&#8221;). The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><br/></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger (the &#8220;Closing&#8221;), (a) each outstanding share of DropCar common stock and DropCar preferred stock will be converted into the right to receive a number of shares of the Company&#8217; common stock (&#8220;WPCS Common Stock&#8221;) equal to the Exchange Ratio (as defined below); and (b) each outstanding DropCar warrant that has not previously been exercised prior to the Closing will be assumed by the Company.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px 0pt 0in; text-align: justify;">Under the exchange ratio formula in the Merger Agreement (the &#8220;Exchange Ratio&#8221;), as of immediately after the Merger, the former DropCar securityholders (including the investors in the Company Closing Financing (as defined below) and certain DropCar advisors)<div style="display:inline; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">,&#160;</div><div style="display:inline;font-family: Calibri, sans-serif; font-size: 14.6667px; font-style: normal; font-weight: 400;"><div style="display:inline;font-size: 13.3333px; line-height: 115%; font-family: &#34;Times New Roman&#34;, serif; margin-right: 0px; font-style: normal; font-weight: 400;">pursuant to Amendment No. 3 (described in Note 12 below),&#160;</div></div><div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">are expected to own approximately </div>84<div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">% of the outstanding shares of </div><div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">WPCS&#160;</div><div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">Common Stock on a fully-diluted basis and securityholders of the Company as of immediately prior to the Merger are expected to own approximately </div>16<div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">% of the outstanding shares of WPCS Common Stock on a fully-diluted basis. The Exchange Ratio and respective ownership of the DropCar securityholders and existing WPCS equity holders is subject to adjustment in the event that the Company&#8217;s &#8220;Net Cash&#8221; (as defined in the Merger Agreement) is less than, or greater than, $</div>419,000<div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"> as of the Closing. For purposes of calculating the Exchange Ratio, the number of outstanding shares of WPCS Common Stock immediately before the Merger takes into account the dilutive effect, calculated using the Treasury Method under U.S. GAAP, of the shares of WPCS Common Stock underlying options (but not warrants) outstanding as of the date of the Merger Agreement using an assumed value of $</div>2.50<div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"> per share of WPCS Common Stock. In addition, the shares underlying warrants to purchase DropCar common stock will be included in the DropCar 8<div style="display:inline; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">4</div>% allocation. All the shares of the Company&#8217;s convertible preferred stock and options and warrants to purchase shares of WPCS Common Stock will remain outstanding after the Merger and all outstanding DropCar warrants will be exchanged for warrants to purchase WPCS Common Stock based upon the Exchange Ratio. No fractional shares will be issued in the Merger; rather, the Company will pay cash in lieu of any such fractional shares.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px 0pt 0in; text-align: justify;">As a condition to the Closing, DropCar is obligated to raise up to $5 million, but not less than $4 million, in equity financing (the &#8220;Company Closing Financing&#8221;). The Company Closing Financing is expected to close immediately prior to or simultaneously with the Closing. <div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="display:inline;font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, serif; ; margin-right: 0px; font-style: normal; font-weight: 400;">This obligation for equity financing is reduced on a dollar for dollar basis for the amount of cash received prior to closing for any preferred warrant exercises received by the Company. As of the filing date of this report the Company has received approximately $2,546,000 in proceeds from warrant exercises. </div></div><div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div>In addition, the consummation of the Merger is subject to customary conditions, including, without limitation, (a) approval by the Company and DropCar stockholders of the Merger Agreement and the transactions contemplated thereby; (b) the absence of any law, order, injunction or other legal restraint prohibiting the Merger; and (c) receipt of approval from NASDAQ to list the shares of WPCS <div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">C</div>ommon <div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">S</div>tock on the NASDAQ Capital Market post-Merger. Moreover, each party&#8217;s obligation to consummate the Merger is subject to certain other conditions, including, without limitation, (i) the accuracy of the other party&#8217;s representations and warranties (subject to customary qualifiers), and (ii) the other party&#8217;s compliance with its covenants and agreements contained in the Merger Agreement (subject to customary qualifiers). The Merger Agreement contains specified termination rights for both the Company and DropCar, and further provides that, upon termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee of $250,000, which, under specified circumstances, may include reimbursement for various expenses incurred in connection with the proposed Merger up to a maximum of $125,000.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px 0pt 0in; text-align: justify;"><div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-align: justify; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">On October 11, 2017, the Company filed a Registration Statement on Form S-4 with the Securities and Exchange Commission relating to the Merger. 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font-family: &#34;Times New Roman&#34;; font-weight: 400;"></div><div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"></div><br/><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"><div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; 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text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0in; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px 0pt 0in; text-align: justify;"><div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-indent: 0px; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;display1:inline;display1:inline;display1:inline;display1:inline;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">Amendment to the Merger Agreement</div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-indent: 0.5in; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; 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The primary purpose of Amendment No. 3 is to make certain changes to the definition of Exchange Ratio that were agreed to by the parties in connection with the Repricing Offer described below. The principal changes to the definition of Exchange Ratio are as follows:</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">&#160;</div></div><table style="clear:both;clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in;;"><div style="CLEAR:both;CLEAR:both;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div></td> <td style="WIDTH: 0.25in;;"><div style="CLEAR:both;CLEAR:both;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">1.</div></td> <td><div style="CLEAR:both;CLEAR:both;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">The number of shares of WPCS Common Stock that are deemed to be outstanding at the time of the Merger was increased to 6,530,681. Previously it had been 6,118,689.</div></td></tr></table><table style="clear:both;clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in;;"><div style="CLEAR:both;CLEAR:both;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div></td> <td style="WIDTH: 0.25in;;"><div style="CLEAR:both;CLEAR:both;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">2.</div></td> <td><div style="CLEAR:both;CLEAR:both;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">WPCS equity allocation percentage was increased to 16.01%. It had previously been 15%. Consequently, DropCar&#8217;s equity allocation percentage is reduced to 83.99% from 85%.</div></td></tr></table><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">As a result of the foregoing changes, the number of shares of WPCS Common Stock that will be issued to DropCar&#8217;s securityholders and advisors will be reduced, although the DropCar securityholders and advisors will still own a majority of the issued and outstanding shares of WPCS Common Stock following the Merger. The reduction in the number of shares to be issued by WPCS in the Merger will result in a reduction in the number of shares of WPCS Common Stock that will be allocated to DropCar&#8217;s advisors in connection with the Merger. Thus, the Advisory/Commitment Allocation Percentage was reduced to 15.6% from 15.8%.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">Amendment No. 3 also includes a revised Exhibit D, which sets forth the formula for adjusting the equity allocation percentages in the event WPCS Net Cash (as defined in the Merger Agreement) at the time of the Merger is more or less than $419,000. The change in the formula reflects the changes set forth in paragraphs 1 and 2 above.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">Finally, Amendment No. 3 includes a new Exhibit B-3, which is the form of an Amended and Restated Support Agreement, dated as of December 4, 2017, which was executed by Alpha Capital Anstalt (&#8220;<div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">Alpha</div>&#8221;), DropCar&#8217;s largest stockholder, DropCar and WPCS, and which supersedes the Support Agreement that Alpha had previously entered into with DropCar in which it agreed to vote any shares of WPCS Common Stock that it owns on the record date for the Special Meeting in favor of the Merger. The Amended and Restated Support Agreement provides that Alpha will own 9.99% of the outstanding shares of WPCS Common Stock on the record date for the Special Meeting (as a result of conversion of shares of WPCS convertible preferred stock and/or exercise of warrants).</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-indent: 0px; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;display1:inline;display1:inline;display1:inline;display1:inline;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">Repricing Offer &#150; Series H-1 Warrants</div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-indent: 0.5in; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;display1:inline;display1:inline;display1:inline;display1:inline;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-indent: 0px; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;display1:inline;display1:inline;display1:inline;display1:inline;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div>On December 4, 2017, WPCS offered (the &#8220;Repricing Offer Letter&#8221;) the holders of its Series H-1 Warrants (the &#8220;Holders&#8221;) the opportunity to exercise such Warrants for cash at a reduced exercise price of $1.21 per share (the &#8220;Reduced Exercise Price&#8221;) provided such Series H-1 Warrants are exercised for cash on or before 5:00 P.M. Eastern Standard time on December 26, 2017 (the &#8220;End Date&#8221;). In addition, if more than 50% of the Series H-1 Warrants are exercised for cash by the Holders prior to the End Date, WPCS will issue to the initial holders of the Series H-1 Warrants a &#8220;reload&#8221; warrant covering one share for each Series H-1 Warrant exercised during that period with a strike price equal to the fair market value of a share of WPCS Common Stock on the date such reload warrant becomes issuable (the &#8220;Reload Warrants&#8221;). The terms of the Reload Warrants would be substantially identical to the terms of the Series H-1 Warrants except that: (i) the expiration date of the reload warrant would be seven (7) years from the date of issuance; (ii) the Reload Warrants would have more limited cashless exercise rights than the H-1 Warrants; and (iii) WPCS&#8217; obligation to register the resale of the shares issuable upon exercise of the Reload Warrants will be deferred. Finally, the Holders have entered into an irrevocable agreement with Alpha pursuant to which they have agreed to sell to Alpha any Series H-1 Warrants that are unexercised as of the End Date. Such sale will take place promptly after the End Date. WPCS received acceptance of the Reduced Exercise Price offer from all of the Holders on December 4, 2017.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-indent: 0.5in; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;display1:inline;display1:inline;display1:inline;display1:inline;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-indent: 0px; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;display1:inline;display1:inline;display1:inline;display1:inline;">If the Holders exercise all their Series H-1 Warrants, the aggregate gross proceeds to WPCS will be approximately $1,474,000.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-indent: 0.5in; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;display1:inline;display1:inline;display1:inline;display1:inline;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-indent: 0px; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; 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font-weight: 400;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">Exercise of Series H-3 Warrants</div></div></div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><br/></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px 0pt 0in; text-align: justify;"><div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">For the period from October 31, 2017 until the filing date of this report, in addition to the exercise of the Series H-1 Warrants in the Repricing Offer described above, the holders of Series H-3 Warrants have exercised warrants for an aggregate of</div><div style="display:inline;font-size: 13.3333px; 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background-color: rgb(255, 255, 255); font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"> in cash.</div></div></div></div></div><table border="0" style="border-collapse:collapse; clear:both;width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td style="background-color: #fff"></td></tr></table><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">Recent Accounting Standards</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style='font-style:italic;display:inline;'>Leases</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 31.9pt;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px 0pt 0in; text-align: justify;"><div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-align: justify; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">In February 2016, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) No. 2016-02,&#160;<div style='font-style:italic;display:inline;'>Leases (Topic 842)</div>&#160;which supersedes FASB ASC Topic 840,&#160;<div style='font-style:italic;display:inline;'>Leases (Topic 840)</div>&#160;and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The FASB has continued to clarify this guidance and most recently issued ASU 2017-13 &#8220;Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.&#8221; The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the impact that ASU 2016-02 will have on its consolidated financial statements and related disclosures.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-align: justify; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div></div><div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style='font-style:italic;display:inline;'>Revenue from Contracts with Customers</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;"><div style='font-style:italic;display:inline;'>&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">In May 2014, the FASB issued ASU No. 2014-09, &#8220;Revenue from Contracts with Customers (Topic 606)&#8221; (&#8220;ASU 2014-09&#8221;). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments of ASU 2014-09 were effective for reporting periods beginning after December 15, 2016, with early adoption prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><br/></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">S<div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">ubsequent to issuing ASU 2014-09, the FASB issued the following amendments concerning the adoption and clarification of ASU 2014-09. In August 2015, the FASB issued ASU No. 2015-14 &#8220;Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date&#8221; (&#8220;ASU 2015-14&#8221;), which deferred the effective date one year. As a result, the amendments of ASU 2014-09 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted only as of annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-08 &#8220;Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net)&#8221; (&#8220;ASU 2016-08&#8221;), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. ASU 2016-08 clarifies how an entity should identify the unit of accounting (i.e. the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">In April 2016, the FASB issued ASU No. 2016-10 &#8220;Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing&#8221; (&#8220;ASU 2016-10&#8221;), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 &#8220;Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients&#8221; (&#8220;ASU 2016-12&#8221;), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard&#8217;s contract criteria. In December 2016, the FASB issued an update (&#8220;ASU 2016-20&#8221;) to ASC 606, Technical Corrections and Improvements, which outlines technical corrections to certain aspects of the new revenue recognition standard such as provisions for losses on construction type contracts and disclosure of remaining performance obligations, among other aspects.<div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">&#160;<div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div></div><div style="display:inline;; font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">In September 2017, the FASB issued ASU 2017-13, &#8220;Revenue Recognition&#8221; (Topic 605), &#8220;Revenue from Contracts with Customers&#8221; (Topic 606), &#8220;Leases&#8221; (Topic 840), and &#8220;Leases&#8221; (Topic 842)</div><div style='font-style:italic;display:inline;'>,&#160;<div style="display:inline;; font-style: italic; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">w</div></div><div style="display:inline;; font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">hich provides additional implementation guidance on the previously issued ASU 2014-09.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">The Company is currently evaluating the potential impact <div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">that&#160;</div>these ASUs may have on its financial statements and related disclosures.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style='font-style:italic;display:inline;'>Business Combinations</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;"><div style='font-style:italic;display:inline;'>&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">In January 2017, the FASB issued an ASU 2017-01,&#160;Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 29.7pt;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">Accounting standards that have been issued or proposed by the Financial Accounting Standards Board (&#8220;FASB&#8221;), SEC or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.</div></div><table border="0" style="border-collapse:collapse; clear:both;width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td style="background-color: #fff"></td></tr></table><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">NOTE 3 &#150; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-indent: 0.5in;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"><div style='font-style:italic;display:inline;'></div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"><div style='font-style:italic;display:inline;'>Significant Accounting Policies</div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-indent: 27.5pt;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"><div style='font-style:italic;display:inline;'>&#160;</div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">There have been no material changes in the Company&#8217;s significant accounting policies to those&#160;previously disclosed in the Form 10-K for the year ended April 30, 2017.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"><br/></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">Recent Accounting Standards</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style='font-style:italic;display:inline;'>Leases</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 31.9pt;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px 0pt 0in; text-align: justify;"><div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-align: justify; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">In February 2016, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) No. 2016-02,&#160;<div style='font-style:italic;display:inline;'>Leases (Topic 842)</div>&#160;which supersedes FASB ASC Topic 840,&#160;<div style='font-style:italic;display:inline;'>Leases (Topic 840)</div>&#160;and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The FASB has continued to clarify this guidance and most recently issued ASU 2017-13 &#8220;Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.&#8221; The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the impact that ASU 2016-02 will have on its consolidated financial statements and related disclosures.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;text-align: justify; margin: 0pt 0px; font-style: normal; font-variant: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div></div><div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style='font-style:italic;display:inline;'>Revenue from Contracts with Customers</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;"><div style='font-style:italic;display:inline;'>&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">In May 2014, the FASB issued ASU No. 2014-09, &#8220;Revenue from Contracts with Customers (Topic 606)&#8221; (&#8220;ASU 2014-09&#8221;). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments of ASU 2014-09 were effective for reporting periods beginning after December 15, 2016, with early adoption prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><br/></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">S<div style="display:inline;font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">ubsequent to issuing ASU 2014-09, the FASB issued the following amendments concerning the adoption and clarification of ASU 2014-09. In August 2015, the FASB issued ASU No. 2015-14 &#8220;Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date&#8221; (&#8220;ASU 2015-14&#8221;), which deferred the effective date one year. As a result, the amendments of ASU 2014-09 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted only as of annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-08 &#8220;Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net)&#8221; (&#8220;ASU 2016-08&#8221;), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. ASU 2016-08 clarifies how an entity should identify the unit of accounting (i.e. the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">In April 2016, the FASB issued ASU No. 2016-10 &#8220;Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing&#8221; (&#8220;ASU 2016-10&#8221;), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 &#8220;Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients&#8221; (&#8220;ASU 2016-12&#8221;), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard&#8217;s contract criteria. In December 2016, the FASB issued an update (&#8220;ASU 2016-20&#8221;) to ASC 606, Technical Corrections and Improvements, which outlines technical corrections to certain aspects of the new revenue recognition standard such as provisions for losses on construction type contracts and disclosure of remaining performance obligations, among other aspects.<div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">&#160;<div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"></div></div><div style="display:inline;; font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">In September 2017, the FASB issued ASU 2017-13, &#8220;Revenue Recognition&#8221; (Topic 605), &#8220;Revenue from Contracts with Customers&#8221; (Topic 606), &#8220;Leases&#8221; (Topic 840), and &#8220;Leases&#8221; (Topic 842)</div><div style='font-style:italic;display:inline;'>,&#160;<div style="display:inline;; font-style: italic; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">w</div></div><div style="display:inline;; font-size: 13.3333px; font-style: normal; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">hich provides additional implementation guidance on the previously issued ASU 2014-09.</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">The Company is currently evaluating the potential impact <div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">that&#160;</div>these ASUs may have on its financial statements and related disclosures.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style='font-style:italic;display:inline;'>Business Combinations</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;"><div style='font-style:italic;display:inline;'>&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">In January 2017, the FASB issued an ASU 2017-01,&#160;Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 29.7pt;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">Accounting standards that have been issued or proposed by the Financial Accounting Standards Board (&#8220;FASB&#8221;), SEC or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.</div></div><table border="0" style="border-collapse:collapse; clear:both;width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td style="background-color: #fff"></td></tr></table><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">NOTE 1 &#150; DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-indent: 0.5in;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"><div style='font-style:italic;display:inline;'>Description of the Business</div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-indent: 0.5in;">&#160;&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">WPCS International Incorporated, a Delaware corporation (&#8220;WPCS&#8221;) and its wholly and majority-owned subsidiaries (collectively, the &#8220;Company&#8221;) currently specializes in low voltage communications, audio-visual and security contracting services, conducting business in one segment at one operations center, through its wholly-owned domestic subsidiary, WPCS International - Suisun City, Inc. (&#8220;Suisun City Operations&#8221;). During the year ended April 30, 2017 the Company also conducted operations from its wholly-owned Texas subsidiary, WPCS International-Texas, Inc. (&#8220;Texas Operations&#8221;), however, as of April 30, 2017, the Texas Operations <div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;">were</div> closed.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">The Company is a full-service low voltage contractor that specializes in the installation and service of Voice &#38; 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 &#38; Utilities, Oil &#38; Gas, Manufacturing, Commercial Real Estate, Financial, Government, etc.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;"><div style='font-style:italic;display:inline;'>Basis of Presentation</div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">The condensed consolidated financial statements of WPCS and its wholly and majority-owned subsidiaries included in this Report for the six months ended October 31, 2017 and 2016, reflect the accounts of current entities as continued operations, as discussed below.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px 0pt 0in; text-align: justify;"></div><div style="display:inline;; margin-right: 0px; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;margin: 0in 0in 0.0001pt; text-align: justify; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"><div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"><div style="display:inline;font-size: 13.3333px; ; margin-right: 0px; font-style: normal; font-family: &#34;Times New Roman&#34;; font-weight: 400;">Results of operations for the three and six months ended October 31, 2017 and 2016 include the results of: (i) WPCS (which primarily reflects corporate operating expenses and nonoperating income); (ii) Suisun City Operations and the Texas Operations, (the Texas Operations were closed during the year ended April 30, 2017 and therefore the Suisun Operation remains the Company&#8217;s only active operating subsidiary); (iii) WPCS Incorporated, an inactive subsidiary; (iv) WPCS International &#150; Trenton, Inc. (&#8220;Trenton Operations&#8221;), which operations were closed in September 2013; and (v) DC Acquisition Corporation., a wholly-owned subsidiary of WPCS formed on <div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;">August 7, 2017&#160;</div>solely for the purpose of the proposed merger between WPCS and DropCar, Inc. (see Note 11 &#150; Proposed Merger).</div></div></div></div><div style="display:inline;font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">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, 2017.</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;color: rgb(0, 0, 0); font-family: &#34;Times New Roman&#34;, Times, serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; transparent-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-stretch: normal; line-height: normal; margin: 0pt 0px; text-align: justify;">The results of operations for the six months ended October 31, 2017 are not necessarily indicative of the results to be expected for the full fiscal year.</div></div><table border="0" style="border-collapse:collapse; clear:both;width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td style="background-color: #fff"></td></tr></table><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "><div 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style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">NOTE 7 &#150; LOANS PAYABLE</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif; margin: 0pt 0px; text-align: justify; text-indent: 0.5in;"><div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-weight:bold;display:inline;width:100%;">&#160;</div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif; margin: 0pt 0px; text-align: justify;"></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif; margin: 0pt 0px; text-align: justify;">The following tables summarize outstanding&#160;loans payable related to automobiles as of October<div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"> </div>31, 2017 and April 30, 2017, respectively:</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif; margin: 0pt 0px; text-align: justify;">&#160;</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left;position: relative; width: 100%; text-indent: 0in; float: none; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left;position:relative; width:100%;TEXT-INDENT:0.0in;"><table cellspacing="0" cellpadding="0" style="clear:both;clear:both;width:100%;float: inherit;border-collapse:collapse;border-width:100%;float: inherit;MARGIN: 0in 0in 0in 0in;" align="left"><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">Carrying&#160;Value</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">Stated</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">as&#160;of</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="23%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="5" rowspan="1">Estimated&#160;Future&#160;Payment</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">Maturity&#160;Date</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">Interest&#160;Rate</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">October&#160;31,&#160;2017</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">Within&#160;1&#160;Year</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">After&#160;1&#160;year</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">0% automobile loan payable</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">April 2018 - June 2019</td><td width="1%" 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style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">14,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">$</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">9,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">$</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">5,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">1% automobile loan payable</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">November 2022</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">1.0</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">%</td><td width="1%" 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Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">5,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">16,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" 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style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">3.0</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">%</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">21,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">5,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">16,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">4% automobile loan payable</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">December 2016 - January 2020</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">4.0</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">%</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New 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Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">24,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">7% automobile loan payable</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">June 2019</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">7.0</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">%</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">21,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">5,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">16,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" 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Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">3,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">10,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">$</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">151,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">$</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">52,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">$</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">99,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td></tr> </table></div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif; margin: 0pt 0px;">&#160;</div><br/><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left;position: relative; width: 100%; 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style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="11%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="2" rowspan="1">Carrying&#160;Value</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="11%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="2" rowspan="1">Stated</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="11%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="2" rowspan="1">as&#160;of</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="23%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="5" rowspan="1">Estimated&#160;Future&#160;Payment</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">Maturity&#160;Date</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="11%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="2" rowspan="1">Interest Rate</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="11%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="2" rowspan="1">April&#160;30,&#160;2017</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="11%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="2" rowspan="1">Within&#160;1&#160;Year</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="11%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="2" rowspan="1">After&#160;1&#160;year</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">0% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">April 2018 - June 2019</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">0.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">$</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">18,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">$</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">9,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">$</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">9,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">1% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">November 2022</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">1.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">23,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">5,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">18,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">3% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">November 2022</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">3.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">24,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">5,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">19,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">4% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">December 2016 - January 2020</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">4.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">25,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">9,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">16,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">5% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">January 2020 - February 2020</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">5.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">50,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">17,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">33,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">7% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">June 2019</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">7.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">23,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">5,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">18,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">8% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">October 2021</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">8.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new 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roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">$</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">178,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" 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roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">$</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">125,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td></tr> </table></div></div><table border="0" style="border-collapse:collapse; clear:both;width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td style="background-color: #fff"></td></tr></table><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-size: 13.3333px; margin: 0in 0in 0pt; font-style: normal; font-family: &#34;Times New Roman&#34;; font-weight: 400;"><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif; margin: 0pt 0px; text-align: justify;">The following tables summarize outstanding&#160;loans payable related to automobiles as of October<div style="display:inline;; font-style: normal; font-size: 13.3333px; font-family: &#34;Times New Roman&#34;, Times, serif; font-weight: 400;"> </div>31, 2017 and April 30, 2017, respectively:</div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; 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Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">Carrying&#160;Value</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">Stated</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">as&#160;of</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="23%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="5" rowspan="1">Estimated&#160;Future&#160;Payment</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">Maturity&#160;Date</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">Interest&#160;Rate</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td 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Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="11%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF" colspan="2" rowspan="1">After&#160;1&#160;year</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">0% automobile loan payable</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New 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Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">9,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">$</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">5,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">1% automobile loan payable</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">November 2022</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">1.0</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">%</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">21,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" 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Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">16,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">3% automobile loan payable</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">November 2022</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">3.0</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">%</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New 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Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">16,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">4% automobile loan payable</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New 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Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">12,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">5% automobile loan payable</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">January 2020 - February 2020</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">5.0</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">%</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:Black;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">42,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">18,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">24,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" 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Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">5,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">16,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New 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Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">8.0</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">%</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:Black;text-align:Right;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">13,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">3,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:1px;border-bottom-color:Black;border-bottom-style:Solid;font-family:Times New Roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#CCEEFF">10,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#CCEEFF">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="16%" style="overflow:hidden;color:#000000;text-align:Center;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Bottom;font-family:Times New Roman;font-size:10pt;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">$</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">151,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">$</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">52,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td><td width="1%" style="overflow:hidden;color:#000000;text-align:Left;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">$</td><td width="10%" style="overflow:hidden;color:#000000;text-align:Right;vertical-align:Bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:Double;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#FFFFFF">99,000</td><td width="1%" style="overflow:hidden;color:#000000;vertical-align:Top;font-family:Times New Roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#FFFFFF">&#160;</td></tr> </table></div></div></div><div style="CLEAR:both;CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; font-stretch: normal; font-size: 13.3333px; line-height: normal; font-family: &#34;Times New Roman&#34;, Times, serif; margin: 0pt 0px;">&#160;</div><br/><div style="CLEAR:both;CLEAR:both; 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roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="11%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="2" rowspan="1">Within&#160;1&#160;Year</td><td width="1%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="11%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff" colspan="2" rowspan="1">After&#160;1&#160;year</td><td width="1%" 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style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">$</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">9,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">$</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">9,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">1% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">November 2022</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">1.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times 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roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">18,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">3% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">November 2022</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">3.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">24,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">5,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">19,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">4% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">December 2016 - January 2020</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">4.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">25,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">9,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">16,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">5% automobile loan payable</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">January 2020 - February 2020</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">5.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">50,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">17,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">33,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr 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style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">5,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">18,000</td><td 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roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">8.0</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">%</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">15,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">3,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;border-bottom-width:1px;border-bottom-color:black;border-bottom-style:solid;font-family:times new roman;font-size:10pt;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#cceeff">12,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#cceeff">&#160;</td></tr><tr style="height:12px;"> <td width="34%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="16%" style="overflow:hidden;color:black;text-align:center;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;vertical-align:bottom;font-family:times new roman;font-size:10pt;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" style="overflow:hidden;color:black;text-align:left;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">$</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">178,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td><td width="1%" 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roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">$</td><td width="10%" style="overflow:hidden;color:black;text-align:right;vertical-align:bottom;border-bottom-width:3px;border-bottom-color:#000000;border-bottom-style:double;font-family:times new roman;font-size:10pt;font-weight:bold;padding-top:0px;padding-right:5px;padding-bottom:0px;padding-left:0px;;background-color:#ffffff">125,000</td><td width="1%" style="overflow:hidden;color:black;vertical-align:top;font-family:times new roman;font-size:10pt;font-weight:bold;padding:0px;;background-color:#ffffff">&#160;</td></tr> </table></div></div><table border="0" style="border-collapse:collapse; clear:both;width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td style="background-color: #fff"></td></tr></table><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> Represents less than 10% EX-101.SCH 7 wpcs-20171031.xsd XBRL TAXONOMY EXTENSION SCHEMA 101 - Document - Document And Entity Information link:presentationLink link:definitionLink link:calculationLink 102 - Statement - CONDENSED CONSOLIDATED BALANCE SHEETS link:presentationLink link:definitionLink link:calculationLink 103 - Statement - CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] link:presentationLink link:definitionLink link:calculationLink 104 - Statement - CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS link:presentationLink link:definitionLink link:calculationLink 105 - Statement - CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY link:presentationLink link:definitionLink link:calculationLink 106 - Statement - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS link:presentationLink link:definitionLink link:calculationLink 107 - Disclosure - DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION link:presentationLink link:definitionLink link:calculationLink 108 - Disclosure - LIQUIDITY AND CAPITAL RESOURCES link:presentationLink 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Document And Entity Information - shares
6 Months Ended
Oct. 31, 2017
Dec. 13, 2017
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Oct. 31, 2017  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q2  
Entity Registrant Name WPCS INTERNATIONAL INC  
Entity Central Index Key 0001086745  
Trading Symbol WPCS  
Entity Common Stock, Shares Outstanding   6,284,218
Current Fiscal Year End Date --04-30  
Entity Filer Category Smaller Reporting Company  
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
Oct. 31, 2017
Apr. 30, 2017
Current assets:    
Cash and cash equivalents $ 3,195,086 $ 1,659,318
Restricted cash 500,176 500,026
Accounts receivable, net of allowance of $247,000 at October 31, 2017 and April 30, 2017, respectively 2,922,031 4,199,674
Costs and estimated earnings in excess of billings on uncompleted contracts 315,437 410,826
Prepaid expenses and other current assets 41,555 41,135
Total current assets 6,974,285 6,810,979
Property and equipment, net 389,668 322,643
Other assets 11,484 11,484
Total assets 7,375,437 7,145,106
Current liabilities:    
Current portion of loans payable 51,590 52,946
Accounts payable and accrued expenses 1,732,411 1,790,256
Billings in excess of costs and estimated earnings on uncompleted contracts 2,247,174 2,105,797
Total current liabilities 4,031,175 3,948,999
Loans payable, net of current portion 99,702 124,559
Total liabilities 4,130,877 4,073,558
Commitments and contingencies
Stockholders' equity    
Common stock - $0.0001 par value, 100,000,000 shares authorized, 5,090,224 and 3,352,159 shares issued and outstanding as of October 31, 2017 and April 30, 2017, respectively 508 335
Additional paid-in capital 91,612,396 89,003,669
Accumulated deficit (88,788,313) (87,077,134)
Total stockholders' equity 3,244,560 3,071,548
Total liabilities and equity 7,375,437 7,145,106
Convertible Series H [Member]    
Stockholders' equity    
Preferred stock 1,242 1,242
Convertible Series H-1 [Member]    
Stockholders' equity    
Preferred stock 0 437,530
Convertible Series H-2 [Member]    
Stockholders' equity    
Preferred stock 167,494 230,721
Convertible Series H-3 [Member]    
Stockholders' equity    
Preferred stock $ 251,233 $ 475,185
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($)
Oct. 31, 2017
Apr. 30, 2017
Allowance for accounts receivable $ 247,000 $ 247,000
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 5,090,224 3,352,159
Common stock, shares outstanding 5,090,224 3,352,159
Convertible Series H [Member]    
Preferred stock, shares authorized 8,500 8,500
Preferred stock, shares issued 8 8
Preferred Stock, Shares Outstanding 8 8
Preferred Stock, liquidation preference (in dollars) $ 1,000 $ 1,000
Convertible Series H-1 [Member]    
Preferred stock, shares authorized 9,488 9,488
Preferred stock, shares issued 0 4,289
Preferred Stock, Shares Outstanding 0 4,289
Preferred Stock, liquidation preference (in dollars) $ 0 $ 0
Convertible Series H-2 [Member]    
Preferred stock, shares authorized 3,500 3,500
Preferred stock, shares issued 2,066 3,305
Preferred Stock, Shares Outstanding 2,066 3,305
Preferred Stock, liquidation preference (in dollars) $ 250,000 $ 250,000
Convertible Series H-3 [Member]    
Preferred stock, shares authorized 9,500 9,500
Preferred stock, shares issued 3,189 7,017
Preferred Stock, Shares Outstanding 3,189 7,017
Preferred Stock, liquidation preference (in dollars) $ 440,000 $ 440,000
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended 6 Months Ended
Oct. 31, 2017
Oct. 31, 2016
Oct. 31, 2017
Oct. 31, 2016
Revenue $ 3,859,617 $ 4,847,710 $ 7,382,964 $ 8,264,163
Costs and expenses:        
Cost of revenue 3,061,372 3,819,187 5,815,922 6,454,695
Selling, general and administrative expenses 1,249,147 1,567,326 2,433,648 2,920,312
Depreciation and amortization 38,844 28,029 68,917 48,695
Costs and expenses 4,349,363 5,414,542 8,318,487 9,423,702
Operating loss (489,746) (566,832) (935,523) (1,159,539)
Other income (expense):        
Interest expense (1,581) (1,029) (3,632) (3,010)
Income from legal settlement 7,750 30,902 15,500 1,180,902
Other income 27,471 117,947 27,471 122,434
(Loss) income from operations before income tax provision (456,106) (419,012) (896,184) 140,787
Income tax provision 1,020 (51) 1,020 2,567
(Loss) income from operations (457,126) (418,961) (897,204) 138,220
Discontinued operations:        
Net (loss) income (457,126) (418,961) (897,204) 138,220
Deemed dividend on convertible preferred stock, due to beneficial conversion feature (813,975) (19,724) (813,975) (19,724)
Net (loss) income attributable to WPCS common stockholders $ (1,271,101) $ (438,685) $ (1,711,179) $ 118,496
Basic (loss) income per common share $ (0.34) $ (0.15) $ (0.48) $ 0.04
Diluted (loss) income per common share $ (0.34) $ (0.15) $ (0.48) $ 0.03
Weighted average shares outstanding - basic 3,748,861 2,854,230 3,550,510 2,777,817
Weighted average shares outstanding - diluted 3,748,861 2,854,230 3,550,510 3,790,800
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - 6 months ended Oct. 31, 2017 - USD ($)
Total
Series H-1 Preferred Stock [Member]
Series H-2 Preferred Stock [Member]
Series H-3 Preferred Stock [Member]
Preferred Stock [Member]
Preferred Stock [Member]
Series H-1 Preferred Stock [Member]
Preferred Stock [Member]
Series H-2 Preferred Stock [Member]
Preferred Stock [Member]
Series H-3 Preferred Stock [Member]
Common Stock [Member]
Common Stock [Member]
Series H-1 Preferred Stock [Member]
Common Stock [Member]
Series H-2 Preferred Stock [Member]
Common Stock [Member]
Series H-3 Preferred Stock [Member]
Additional Paid-in Capital [Member]
Additional Paid-in Capital [Member]
Series H-1 Preferred Stock [Member]
Additional Paid-in Capital [Member]
Series H-2 Preferred Stock [Member]
Additional Paid-in Capital [Member]
Series H-3 Preferred Stock [Member]
Accumulated Deficit [Member]
Accumulated Deficit [Member]
Series H-1 Preferred Stock [Member]
Accumulated Deficit [Member]
Series H-2 Preferred Stock [Member]
Accumulated Deficit [Member]
Series H-3 Preferred Stock [Member]
Balance at Apr. 30, 2017 $ 3,071,548       $ 1,144,678       $ 335       $ 89,003,669       $ (87,077,134)      
Balance (in shares) at Apr. 30, 2017         14,619       3,352,159                      
Warrants exercised for cash 1,070,216       $ 0       $ 80       1,070,136       0      
Warrants exercised for cash (in shares)         0       802,463                      
Conversion of Series preferred stock to common stock   $ 0 $ 0 $ 0   $ (860,501) $ (149,919) $ (528,264)   $ 43 $ 12 $ 38   $ 860,458 $ 149,907 $ 528,226   $ 0 $ 0 $ 0
Conversion of Series preferred stock to common stock (in shares)           (4,289) (1,239) (3,828)   428,900 123,900 382,802                
Net loss (897,204)       $ 0       $ 0       0       (897,204)      
Deemed dividend on conversion of convertible preferred stock to common stock   $ 0 $ 0 $ 0   $ 422,971 $ 86,692 $ 304,312   $ 0 $ 0 $ 0   $ 0 $ 0 $ 0   $ (422,971) $ (86,692) $ (304,312)
Balance at Oct. 31, 2017 $ 3,244,560       $ 419,969       $ 508       $ 91,612,396       $ (88,788,313)      
Balance (in shares) at Oct. 31, 2017         5,263       5,090,224                      
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
6 Months Ended
Oct. 31, 2017
Oct. 31, 2016
Operating activities:    
Net (loss) income $ (897,204) $ 138,220
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:    
Depreciation and amortization 68,917 48,695
Shares based compensation 0 22,501
Changes in operating assets and liabilities:    
Accounts receivable 1,277,643 (324,990)
Costs and estimated earnings in excess of billings on uncompleted contracts 95,389 (372,408)
Prepaid expenses and other current assets (420) (46,908)
Other assets 0 1,999
Accounts payable and accrued expenses (57,845) 143,477
Billings in excess of costs and estimated earnings on uncompleted contracts 141,377 372,707
Net cash provided by (used in) operating activities 627,857 (16,707)
Investing activities:    
Acquisition of property and equipment (135,942) (96,475)
Net cash used in investing activities (135,942) (96,475)
Financing activities:    
Warrants exercised for cash 1,070,216 0
Repayment under loan payable obligations (26,213) (52,027)
Net cash provided by (used in) financing activities 1,044,003 (52,027)
Net increase (decrease) in cash, cash equivalents and restricted cash 1,535,918 (165,209)
Cash, cash equivalents and restricted cash beginning of the year 2,159,344 2,235,597
Cash, cash equivalents and restricted cash end of the year 3,695,262 2,070,388
Schedule of non-cash investing and financing activities:    
Automobile financing 0 72,650
Deemed dividend on conversion of convertible preferred stock to common stock 813,975 19,724
Series H Preferred Stock [Member]    
Schedule of non-cash investing and financing activities:    
Conversion of preferred stock through the issuance of common stock 0 219,450
Series H-1 Preferred Stock [Member]    
Schedule of non-cash investing and financing activities:    
Deemed dividend on conversion of convertible preferred stock to common stock 422,971 19,724
Conversion of preferred stock through the issuance of common stock 860,501 36,920
Series H-2 Preferred Stock [Member]    
Schedule of non-cash investing and financing activities:    
Deemed dividend on conversion of convertible preferred stock to common stock 86,692 0
Conversion of preferred stock through the issuance of common stock 149,919 0
Series H-3 Preferred Stock [Member]    
Schedule of non-cash investing and financing activities:    
Deemed dividend on conversion of convertible preferred stock to common stock 304,312 0
Conversion of preferred stock through the issuance of common stock $ 528,264 $ 0
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.8.0.1
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION
6 Months Ended
Oct. 31, 2017
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
  
WPCS International Incorporated, a Delaware corporation (“WPCS”) and its wholly and majority-owned subsidiaries (collectively, the “Company”) currently specializes in low voltage communications, audio-visual and security contracting services, conducting business in one segment at one operations center, through its wholly-owned domestic subsidiary, WPCS International - Suisun City, Inc. (“Suisun City Operations”). During the year ended April 30, 2017 the Company also conducted operations from its wholly-owned Texas subsidiary, WPCS International-Texas, Inc. (“Texas Operations”), however, as of April 30, 2017, the Texas Operations
were
closed.
 
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.
 
Basis of Presentation
 
The condensed consolidated financial statements of WPCS and its wholly and majority-owned subsidiaries included in this Report for the six months ended October 31, 2017 and 2016, reflect the accounts of current entities as continued operations, as discussed below.
 
Results of operations for the three and six months ended October 31, 2017 and 2016 include the results of: (i) WPCS (which primarily reflects corporate operating expenses and nonoperating income); (ii) Suisun City Operations and the Texas Operations, (the Texas Operations were closed during the year ended April 30, 2017 and therefore the Suisun Operation remains the Company’s only active operating subsidiary); (iii) WPCS Incorporated, an inactive subsidiary; (iv) WPCS International – Trenton, Inc. (“Trenton Operations”), which operations were closed in September 2013; and (v) DC Acquisition Corporation., a wholly-owned subsidiary of WPCS formed on
August 7, 2017 
solely for the purpose of the proposed merger between WPCS and DropCar, Inc. (see Note 11 – Proposed Merger).
 
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, 2017.
 
The results of operations for the six months ended October 31, 2017 are not necessarily indicative of the results to be expected for the full fiscal year.
XML 19 R8.htm IDEA: XBRL DOCUMENT v3.8.0.1
LIQUIDITY AND CAPITAL RESOURCES
6 Months Ended
Oct. 31, 2017
Liquidity and Capital Resources [Abstract]  
LIQUIDITY AND CAPITAL RESOURCES
NOTE 2 – LIQUIDITY AND CAPITAL RESOURCES
 
As of October 31, 2017, the Company had a working capital surplus of approximately $2,943,000 and cash, cash equivalents and restricted cash of approximately $3,695,000. During the quarter ended October 31, 2017
,
the Company received proceeds of approximately $1,070,000 from the exercise of preferred stock warrants (see Note 10).
 
The Company's future plans and growth are dependent on its ability to increase revenues and continue its business development efforts surrounding its contract award backlog. If the Company continues to incur losses and revenues do not generate from the backlog as expected, the Company may need to raise additional capital to expand its business and continue as a going concern. The Company currently anticipates that its current cash position will be sufficient to meet its working capital requirements to continue its sales and marketing efforts for at least 12 months from the filing date of this report. If in the future the Company’s plans or assumptions change or prove to be inaccurate, the Company may need to raise additional funds through public or private debt or equity offerings, financings, corporate collaborations, or other means. The Company may also be required to reduce operating expenditures or investments in its infrastructure.
XML 20 R9.htm IDEA: XBRL DOCUMENT v3.8.0.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Oct. 31, 2017
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, 2017.

Recent Accounting Standards
 
Leases
 
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, 
Leases (Topic 842)
 which supersedes FASB ASC Topic 840, 
Leases (Topic 840)
 and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The FASB has continued to clarify this guidance and most recently issued ASU 2017-13 “Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the impact that ASU 2016-02 will have on its consolidated financial statements and related disclosures.
 
Revenue from Contracts with Customers
 
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments of ASU 2014-09 were effective for reporting periods beginning after December 15, 2016, with early adoption prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.

S
ubsequent to issuing ASU 2014-09, the FASB issued the following amendments concerning the adoption and clarification of ASU 2014-09. In August 2015, the FASB issued ASU No. 2015-14 “Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date” (“ASU 2015-14”), which deferred the effective date one year. As a result, the amendments of ASU 2014-09 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted only as of annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-08 “Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. ASU 2016-08 clarifies how an entity should identify the unit of accounting (i.e. the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements.
 
In April 2016, the FASB issued ASU No. 2016-10 “Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 “Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In December 2016, the FASB issued an update (“ASU 2016-20”) to ASC 606, Technical Corrections and Improvements, which outlines technical corrections to certain aspects of the new revenue recognition standard such as provisions for losses on construction type contracts and disclosure of remaining performance obligations, among other aspects.
 
In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition” (Topic 605), “Revenue from Contracts with Customers” (Topic 606), “Leases” (Topic 840), and “Leases” (Topic 842)
w
hich provides additional implementation guidance on the previously issued ASU 2014-09.
 
The Company is currently evaluating the potential impact
that 
these ASUs may have on its financial statements and related disclosures.
 
Business Combinations
 
In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance.
 
Accounting standards that have been issued or proposed by the Financial Accounting Standards Board (“FASB”), SEC or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.
XML 21 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONCENTRATIONS
6 Months Ended
Oct. 31, 2017
Risks and Uncertainties [Abstract]  
CONCENTRATIONS
NOTE 4 – CONCENTRATIONS
 
Accounts Receivable
 
The concentration of accounts receivable as of October 31, 2017 and April 30, 2017, respectively are as follows:
 
  As of 
  October 31, 2017 April 30, 2017 
Customer A  55% 24%
Customer B  11% 12%
Customer C  -  10%
 
The accounts receivable also included retainage receivable of $1,094,000 and $326,000 at October
31, 2017 and April 30, 2017, respectively, and both the retainage and aged accounts receivable are expected to be collected.
 
Revenue Recognition
 
The concentration of revenue recognition for the three and six months ended
October
31, 2017 and 2016, respectively are as follows:
 
  For the three months ended For the six months ended 
  October 31, October 31, 
  2017  2016 2017 2016 
Customer A  51%  14% 38% 10%
Customer B  11%  11% 13% - 
 
 
-
Represents less than 10%
XML 22 R11.htm IDEA: XBRL DOCUMENT v3.8.0.1
BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE
6 Months Ended
Oct. 31, 2017
Earnings Per Share [Abstract]  
BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE
NOTE 5 – BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE
 
Basic and diluted net (loss) income per common share is computed as net (loss) income by the weighted average number of common shares outstanding for the period. Diluted net income 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.
 
  For the three months ended For the six months ended 
  October 31, October 31, 
  2017 2016 2017 2016 
Numerator:             
              
Net (loss) income attributable to WPCS common stockholders, basic and diluted $(1,271,101) $(438,685) $(1,711,179) $118,496 
              
Denominator:             
              
Weighted average shares outstanding – basic  3,748,861  2,854,230  3,550,510  2,777,817 
Stock options  -  -  -  99,783 
Series H and H-1 convertible preferred stock  -  -  -  913,200 
Weighted average shares outstanding – diluted  3,748,861  2,854,230  3,550,510  3,790,800 
              
Basic (loss) income per common share $(0.34) $(0.15) $(0.48) $0.04 
Diluted (loss) income per common share $(0.34) $(0.15) $(0.48) $0.03 
 
The following securities were excluded from the weighted average dilutive common shares outstanding because their inclusion would have been antidilutive.
 
  As of October 31, 
  2017 2016 
Common stock equivalents:       
Common stock options  3,252,000  852,000 
Series H, H-1, H-2 and H-3 preferred stock  526,000  913,000 
Common stock purchase warrants  2,090,000  1,295,000 
Totals  5,868,000  3,060,000 
XML 23 R12.htm IDEA: XBRL DOCUMENT v3.8.0.1
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
6 Months Ended
Oct. 31, 2017
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 October 31, 2017 and April 30, 2017:


  October 31, 2017 April 30, 2017 
        
Costs incurred on uncompleted contracts $17,149,734 $16,362,011 
Estimated contract earnings  3,660,429  3,714,584 
   20,810,163  20,076,595 
Less: Billings to date  22,741,900  21,771,566 
Total $(1,931,737) $(1,694,971) 
        
Costs and estimated earnings in excess of billings on uncompleted contracts $315,437 $410,826 
Billings in excess of cost and estimated earnings on uncompleted contracts  2,247,174  2,105,797 
Total $(1,931,737) $(1,694,971) 
 
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.
XML 24 R13.htm IDEA: XBRL DOCUMENT v3.8.0.1
LOANS PAYABLE
6 Months Ended
Oct. 31, 2017
Debt Disclosure [Abstract]  
LOANS PAYABLE
NOTE 7 – LOANS PAYABLE
 
The following tables summarize outstanding loans payable related to automobiles as of October
31, 2017 and April 30, 2017, respectively:
 
       Carrying Value       
    Stated as of Estimated Future Payment 
  Maturity Date Interest Rate October 31, 2017 Within 1 Year After 1 year 
0% automobile loan payable April 2018 - June 2019  0.0%$14,000 $9,000 $5,000 
1% automobile loan payable November 2022  1.0% 21,000  5,000  16,000 
3% automobile loan payable November 2022  3.0% 21,000  5,000  16,000 
4% automobile loan payable December 2016 - January 2020  4.0% 19,000  7,000  12,000 
5% automobile loan payable January 2020 - February 2020  5.0% 42,000  18,000  24,000 
7% automobile loan payable June 2019  7.0% 21,000  5,000  16,000 
8% automobile loan payable October 2021  8.0% 13,000  3,000  10,000 
       $151,000 $52,000 $99,000 
 

       Carrying Value       
    Stated as of Estimated Future Payment 
  Maturity Date Interest Rate April 30, 2017 Within 1 Year After 1 year 
0% automobile loan payable April 2018 - June 2019  0.0%$18,000 $9,000 $9,000 
1% automobile loan payable November 2022  1.0% 23,000  5,000  18,000 
3% automobile loan payable November 2022  3.0% 24,000  5,000  19,000 
4% automobile loan payable December 2016 - January 2020  4.0% 25,000  9,000  16,000 
5% automobile loan payable January 2020 - February 2020  5.0% 50,000  17,000  33,000 
7% automobile loan payable June 2019  7.0% 23,000  5,000  18,000 
8% automobile loan payable October 2021  8.0% 15,000  3,000  12,000 
       $178,000 $53,000 $125,000 
XML 25 R14.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME FROM ARBITRATION SETTLEMENTS
6 Months Ended
Oct. 31, 2017
Income From Legal Settlements [Abstract]  
Legal Matters and Contingencies
NOTE 8 – INCOME FROM ARBITRATION SETTLEMENTS
 
For the three
and six
months ended October
31, 2017, the Company received approximately $8,000
and $16,000, respectively, 
in a settlement related to its former subsidiary, BTX Trader, Inc.
 
On June 16, 2016, the Company entered into a global settlement agreement and mutual release to resolve all disputes and claims regarding the construction of the Cooper Medical School at Rowan University, located in Camden, New Jersey, in which the Company served as an electrical prime contractor. As a result of such settlement, the Company received proceeds of $1,150,000 and recorded a gain in the Condensed Consolidated Statement of Operations for the
six
months ended
O
ctober
 31, 2016. The Cooper Medical School contract was performed under the
Company’s former
electrical services segment
operated through its now closed Trenton Operations which
is no longer part of the Company’s ongoing operation. 
In addition, for the three months ended October 31, 2016 the Company had a $31,000 legal settlement in its Suisun Operations.
XML 26 R15.htm IDEA: XBRL DOCUMENT v3.8.0.1
BANK LINE OF CREDIT
6 Months Ended
Oct. 31, 2017
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 (the “Credit Line”) for its Suisun City Operations. The Credit Line has an interest rate of prime plus 2%, is subject to a monthly borrowing base calculation based upon eligible accounts receivable and had an original expiration date of August 15, 2017, and has been extended to August 15, 2018. As of October 31, 2017, the monthly borrowing base calculation supported the entire $1,000,000 of available credit under the Credit Line. The Credit Line is secured by all of the assets of the Company. In addition, the Credit Line requires the Suisun City Operations to monthly comply with certain financial and operational covenants, such as, amongst other things, maintaining a certain quick ratio and a minimum net worth. The Suisun City Operations is currently in compliance with all such covenants.
 
As of the filing date of this quarterly report on Form 10-Q, the Company has not drawn down on the Credit Line.
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STOCKHOLDERS' EQUITY
6 Months Ended
Oct. 31, 2017
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS’ EQUITY
N
OTE 10 – S
TOCK
HOLDERS’ EQUITY
 
Conversion of Preferred Stock
 
During the quarter ended October 31, 2017, holders of Series
H-1, H-2 and H-3 Preferred Stock converted 4,289 shares of Series H-1, 1,239 shares of Series H-2 and 3,828 shares of Series H-3 into 935,600 shares of the Company’s Common Stock.
 
The conversion of these Series H-1, H-2 and H-3 Preferred Shares resulted in a deemed dividend of approximately $814,000 due to the beneficial conversion feature associated with the shares converted.
 
Exercise of preferred stock warrants
 
During the quarter ended October 31, 2017, holders of Series
H-1, H-2 and H-3 Preferred Stock
 
Warrants
exercised 61,898 of the Series H-1, warrants, 309,900 of the Series H-2 Warrants and 430,665 of the Series H-3 warrants
fo
r an aggregate of
 802,463 shares of the Company’s Common Stock. These Warrants exercises were on a cash basis and the Company received approximately $1,070,000 in warrant exercise proceeds. These proceeds are unencumbered; however, the Company is required to have sufficient cash on hand at time of closing of the DropCar merger so as to include these funds in the closing financing being arranged by DropCar
(see Note 11 – Proposed Merger).
XML 28 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
PROPOSED MERGER
6 Months Ended
Oct. 31, 2017
Business Combinations [Abstract]  
PROPOSED MERGER
NOTE 11 – PROPOSED MERGER
 
On September 6, 2017, the Company, DC Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), and DropCar, Inc., a Delaware corporation (“DropCar”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), pursuant to which, among other things, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into DropCar, with DropCar becoming a wholly-owned subsidiary of the Company and the surviving corporation of the merger (the “Merger”). The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.

Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger (the “Closing”), (a) each outstanding share of DropCar common stock and DropCar preferred stock will be converted into the right to receive a number of shares of the Company’ common stock (“WPCS Common Stock”) equal to the Exchange Ratio (as defined below); and (b) each outstanding DropCar warrant that has not previously been exercised prior to the Closing will be assumed by the Company.
 
Under the exchange ratio formula in the Merger Agreement (the “Exchange Ratio”), as of immediately after the Merger, the former DropCar securityholders (including the investors in the Company Closing Financing (as defined below) and certain DropCar advisors)
pursuant to Amendment No. 3 (described in Note 12 below), 
are expected to own approximately
84
% of the outstanding shares of
WPCS 
Common Stock on a fully-diluted basis and securityholders of the Company as of immediately prior to the Merger are expected to own approximately
16
% of the outstanding shares of WPCS Common Stock on a fully-diluted basis. The Exchange Ratio and respective ownership of the DropCar securityholders and existing WPCS equity holders is subject to adjustment in the event that the Company’s “Net Cash” (as defined in the Merger Agreement) is less than, or greater than, $
419,000
as of the Closing. For purposes of calculating the Exchange Ratio, the number of outstanding shares of WPCS Common Stock immediately before the Merger takes into account the dilutive effect, calculated using the Treasury Method under U.S. GAAP, of the shares of WPCS Common Stock underlying options (but not warrants) outstanding as of the date of the Merger Agreement using an assumed value of $
2.50
per share of WPCS Common Stock. In addition, the shares underlying warrants to purchase DropCar common stock will be included in the DropCar 8
4
% allocation. All the shares of the Company’s convertible preferred stock and options and warrants to purchase shares of WPCS Common Stock will remain outstanding after the Merger and all outstanding DropCar warrants will be exchanged for warrants to purchase WPCS Common Stock based upon the Exchange Ratio. No fractional shares will be issued in the Merger; rather, the Company will pay cash in lieu of any such fractional shares.
 
As a condition to the Closing, DropCar is obligated to raise up to $5 million, but not less than $4 million, in equity financing (the “Company Closing Financing”). The Company Closing Financing is expected to close immediately prior to or simultaneously with the Closing.
This obligation for equity financing is reduced on a dollar for dollar basis for the amount of cash received prior to closing for any preferred warrant exercises received by the Company. As of the filing date of this report the Company has received approximately $2,546,000 in proceeds from warrant exercises.
In addition, the consummation of the Merger is subject to customary conditions, including, without limitation, (a) approval by the Company and DropCar stockholders of the Merger Agreement and the transactions contemplated thereby; (b) the absence of any law, order, injunction or other legal restraint prohibiting the Merger; and (c) receipt of approval from NASDAQ to list the shares of WPCS
C
ommon
S
tock on the NASDAQ Capital Market post-Merger. Moreover, each party’s obligation to consummate the Merger is subject to certain other conditions, including, without limitation, (i) the accuracy of the other party’s representations and warranties (subject to customary qualifiers), and (ii) the other party’s compliance with its covenants and agreements contained in the Merger Agreement (subject to customary qualifiers). The Merger Agreement contains specified termination rights for both the Company and DropCar, and further provides that, upon termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee of $250,000, which, under specified circumstances, may include reimbursement for various expenses incurred in connection with the proposed Merger up to a maximum of $125,000.
 
On October 11, 2017, the Company filed a Registration Statement on Form S-4 with the Securities and Exchange Commission relating to the Merger. On November 21, 2017 and December 7, 2017, the Company filed Amendments Nos. 1 and 2 to the Registration Statement on Form S-4, respectively
.

In connection with the Merger, the Company has incurred transaction costs of approximately $240,000 and $400,000 for the three and six months ended October 31, 2017, respectively, which is included in selling, general and administrative expenses in the Condensed Consolidated Statement of Operations.
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SUBSEQUENT EVENT
6 Months Ended
Oct. 31, 2017
Subsequent Events [Abstract]  
SUBSEQUENT EVENT
NOTE 12 – SUBSEQUENT EVENT
 
Amendment to the Merger Agreement
 
On December 4, 2017, the Company, Merger Sub and DropCar entered into Amendment No. 3 to the Merger Agreement (“Amendment No. 3”). The primary purpose of Amendment No. 3 is to make certain changes to the definition of Exchange Ratio that were agreed to by the parties in connection with the Repricing Offer described below. The principal changes to the definition of Exchange Ratio are as follows:
 
1.
The number of shares of WPCS Common Stock that are deemed to be outstanding at the time of the Merger was increased to 6,530,681. Previously it had been 6,118,689.
2.
WPCS equity allocation percentage was increased to 16.01%. It had previously been 15%. Consequently, DropCar’s equity allocation percentage is reduced to 83.99% from 85%.
 
As a result of the foregoing changes, the number of shares of WPCS Common Stock that will be issued to DropCar’s securityholders and advisors will be reduced, although the DropCar securityholders and advisors will still own a majority of the issued and outstanding shares of WPCS Common Stock following the Merger. The reduction in the number of shares to be issued by WPCS in the Merger will result in a reduction in the number of shares of WPCS Common Stock that will be allocated to DropCar’s advisors in connection with the Merger. Thus, the Advisory/Commitment Allocation Percentage was reduced to 15.6% from 15.8%.
 
Amendment No. 3 also includes a revised Exhibit D, which sets forth the formula for adjusting the equity allocation percentages in the event WPCS Net Cash (as defined in the Merger Agreement) at the time of the Merger is more or less than $419,000. The change in the formula reflects the changes set forth in paragraphs 1 and 2 above.
 
Finally, Amendment No. 3 includes a new Exhibit B-3, which is the form of an Amended and Restated Support Agreement, dated as of December 4, 2017, which was executed by Alpha Capital Anstalt (“
Alpha
”), DropCar’s largest stockholder, DropCar and WPCS, and which supersedes the Support Agreement that Alpha had previously entered into with DropCar in which it agreed to vote any shares of WPCS Common Stock that it owns on the record date for the Special Meeting in favor of the Merger. The Amended and Restated Support Agreement provides that Alpha will own 9.99% of the outstanding shares of WPCS Common Stock on the record date for the Special Meeting (as a result of conversion of shares of WPCS convertible preferred stock and/or exercise of warrants).
 
Repricing Offer – Series H-1 Warrants
 
 
On December 4, 2017, WPCS offered (the “Repricing Offer Letter”) the holders of its Series H-1 Warrants (the “Holders”) the opportunity to exercise such Warrants for cash at a reduced exercise price of $1.21 per share (the “Reduced Exercise Price”) provided such Series H-1 Warrants are exercised for cash on or before 5:00 P.M. Eastern Standard time on December 26, 2017 (the “End Date”). In addition, if more than 50% of the Series H-1 Warrants are exercised for cash by the Holders prior to the End Date, WPCS will issue to the initial holders of the Series H-1 Warrants a “reload” warrant covering one share for each Series H-1 Warrant exercised during that period with a strike price equal to the fair market value of a share of WPCS Common Stock on the date such reload warrant becomes issuable (the “Reload Warrants”). The terms of the Reload Warrants would be substantially identical to the terms of the Series H-1 Warrants except that: (i) the expiration date of the reload warrant would be seven (7) years from the date of issuance; (ii) the Reload Warrants would have more limited cashless exercise rights than the H-1 Warrants; and (iii) WPCS’ obligation to register the resale of the shares issuable upon exercise of the Reload Warrants will be deferred. Finally, the Holders have entered into an irrevocable agreement with Alpha pursuant to which they have agreed to sell to Alpha any Series H-1 Warrants that are unexercised as of the End Date. Such sale will take place promptly after the End Date. WPCS received acceptance of the Reduced Exercise Price offer from all of the Holders on December 4, 2017.
 
If the Holders exercise all their Series H-1 Warrants, the aggregate gross proceeds to WPCS will be approximately $1,474,000.
 
Through December 12, 2017 (the date preceding the filing date of this report) (i) 1,008,931 Series H-1 Warrants have been exercised for cash at the reduced exercise price of $1.21, yielding aggregate gross proceeds to the Company of approximately $1,221,000 and 208,930 Series H-1 Warrants remained unexercised; and (ii) the Company has issued Reload Warrants for (a) 290,000 shares with an exercise price of $1.18per share, (b) 400,000 shares with an exercise price of $1.17 per share
 and
 (c) 318,931 shares with an exercise price of $1.09 per share.
 
Exercise of Series H-3 Warrants

For the period from October 31, 2017 until the filing date of this report, in addition to the exercise of the Series H-1 Warrants in the Repricing Offer described above, the holders of Series H-3 Warrants have exercised warrants for an aggregate of
 
185,063
 
shares of WPCS Common Stock for which the Company received aggregate gross proceeds of approximately 
$
255,000
in cash.
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
6 Months Ended
Oct. 31, 2017
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, 2017.
Recent Accounting Standards
Recent Accounting Standards
 
Leases
 
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, 
Leases (Topic 842)
 which supersedes FASB ASC Topic 840, 
Leases (Topic 840)
 and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The FASB has continued to clarify this guidance and most recently issued ASU 2017-13 “Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the impact that ASU 2016-02 will have on its consolidated financial statements and related disclosures.
 
Revenue from Contracts with Customers
 
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments of ASU 2014-09 were effective for reporting periods beginning after December 15, 2016, with early adoption prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.

S
ubsequent to issuing ASU 2014-09, the FASB issued the following amendments concerning the adoption and clarification of ASU 2014-09. In August 2015, the FASB issued ASU No. 2015-14 “Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date” (“ASU 2015-14”), which deferred the effective date one year. As a result, the amendments of ASU 2014-09 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted only as of annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-08 “Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. ASU 2016-08 clarifies how an entity should identify the unit of accounting (i.e. the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements.
 
In April 2016, the FASB issued ASU No. 2016-10 “Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 “Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In December 2016, the FASB issued an update (“ASU 2016-20”) to ASC 606, Technical Corrections and Improvements, which outlines technical corrections to certain aspects of the new revenue recognition standard such as provisions for losses on construction type contracts and disclosure of remaining performance obligations, among other aspects.
 
In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition” (Topic 605), “Revenue from Contracts with Customers” (Topic 606), “Leases” (Topic 840), and “Leases” (Topic 842)
w
hich provides additional implementation guidance on the previously issued ASU 2014-09.
 
The Company is currently evaluating the potential impact
that 
these ASUs may have on its financial statements and related disclosures.
 
Business Combinations
 
In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance.
 
Accounting standards that have been issued or proposed by the Financial Accounting Standards Board (“FASB”), SEC or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONCENTRATIONS (Tables)
6 Months Ended
Oct. 31, 2017
Accounts Receivable [Member]  
Concentration Risk [Line Items]  
Schedules of Concentration of Risk, by Risk Factor
The concentration of accounts receivable as of October 31, 2017 and April 30, 2017, respectively are as follows:
 
  As of 
  October 31, 2017 April 30, 2017 
Customer A  55% 24%
Customer B  11% 12%
Customer C  -  10%
Sales Revenue, Net [Member]  
Concentration Risk [Line Items]  
Schedules of Concentration of Risk, by Risk Factor
The concentration of revenue recognition for the three and six months ended
October
31, 2017 and 2016, respectively are as follows:
 
  For the three months ended For the six months ended 
  October 31, October 31, 
  2017  2016 2017 2016 
Customer A  51%  14% 38% 10%
Customer B  11%  11% 13% - 
 
 
-
Represents less than 10%
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE (Tables)
6 Months Ended
Oct. 31, 2017
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
  For the three months ended For the six months ended 
  October 31, October 31, 
  2017 2016 2017 2016 
Numerator:             
              
Net (loss) income attributable to WPCS common stockholders, basic and diluted $(1,271,101) $(438,685) $(1,711,179) $118,496 
              
Denominator:             
              
Weighted average shares outstanding – basic  3,748,861  2,854,230  3,550,510  2,777,817 
Stock options  -  -  -  99,783 
Series H and H-1 convertible preferred stock  -  -  -  913,200 
Weighted average shares outstanding – diluted  3,748,861  2,854,230  3,550,510  3,790,800 
              
Basic (loss) income per common share $(0.34) $(0.15) $(0.48) $0.04 
Diluted (loss) income per common share $(0.34) $(0.15) $(0.48) $0.03 
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
The following securities were excluded from the weighted average dilutive common shares outstanding because their inclusion would have been antidilutive.
 
  As of October 31, 
  2017 2016 
Common stock equivalents:       
Common stock options  3,252,000  852,000 
Series H, H-1, H-2 and H-3 preferred stock  526,000  913,000 
Common stock purchase warrants  2,090,000  1,295,000 
Totals  5,868,000  3,060,000 
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.8.0.1
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Tables)
6 Months Ended
Oct. 31, 2017
Contractors [Abstract]  
Schedule of Costs and Estimated Earnings on Uncompleted Contracts
Costs and estimated earnings on uncompleted contracts consist of the following at October 31, 2017 and April 30, 2017:
  October 31, 2017 April 30, 2017 
        
Costs incurred on uncompleted contracts $17,149,734 $16,362,011 
Estimated contract earnings  3,660,429  3,714,584 
   20,810,163  20,076,595 
Less: Billings to date  22,741,900  21,771,566 
Total $(1,931,737) $(1,694,971) 
        
Costs and estimated earnings in excess of billings on uncompleted contracts $315,437 $410,826 
Billings in excess of cost and estimated earnings on uncompleted contracts  2,247,174  2,105,797 
Total $(1,931,737) $(1,694,971) 
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.8.0.1
LOANS PAYABLE (Tables)
6 Months Ended
Oct. 31, 2017
Debt Disclosure [Abstract]  
Schedule of Debt
The following tables summarize outstanding loans payable related to automobiles as of October
31, 2017 and April 30, 2017, respectively:
 
       Carrying Value       
    Stated as of Estimated Future Payment 
  Maturity Date Interest Rate October 31, 2017 Within 1 Year After 1 year 
0% automobile loan payable April 2018 - June 2019  0.0%$14,000 $9,000 $5,000 
1% automobile loan payable November 2022  1.0% 21,000  5,000  16,000 
3% automobile loan payable November 2022  3.0% 21,000  5,000  16,000 
4% automobile loan payable December 2016 - January 2020  4.0% 19,000  7,000  12,000 
5% automobile loan payable January 2020 - February 2020  5.0% 42,000  18,000  24,000 
7% automobile loan payable June 2019  7.0% 21,000  5,000  16,000 
8% automobile loan payable October 2021  8.0% 13,000  3,000  10,000 
       $151,000 $52,000 $99,000 
 

       Carrying Value       
    Stated as of Estimated Future Payment 
  Maturity Date Interest Rate April 30, 2017 Within 1 Year After 1 year 
0% automobile loan payable April 2018 - June 2019  0.0%$18,000 $9,000 $9,000 
1% automobile loan payable November 2022  1.0% 23,000  5,000  18,000 
3% automobile loan payable November 2022  3.0% 24,000  5,000  19,000 
4% automobile loan payable December 2016 - January 2020  4.0% 25,000  9,000  16,000 
5% automobile loan payable January 2020 - February 2020  5.0% 50,000  17,000  33,000 
7% automobile loan payable June 2019  7.0% 23,000  5,000  18,000 
8% automobile loan payable October 2021  8.0% 15,000  3,000  12,000 
       $178,000 $53,000 $125,000 
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.8.0.1
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION (Details Textual)
12 Months Ended
Apr. 30, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]  
Number of Reportable Segments 1
Number of Operating Segments 1
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.8.0.1
LIQUIDITY AND CAPITAL RESOURCES (Details Textual) - USD ($)
3 Months Ended 6 Months Ended
Dec. 12, 2017
Oct. 31, 2017
Oct. 31, 2017
Oct. 31, 2016
Apr. 30, 2017
Apr. 30, 2016
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]            
Working Capital Surplus   $ 2,943,000 $ 2,943,000      
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents   3,695,262 3,695,262 $ 2,070,388 $ 2,159,344 $ 2,235,597
Proceeds from Warrant Exercises   $ 1,070,000 $ 1,070,216 $ 0    
Subsequent Event [Member]            
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]            
Proceeds from Warrant Exercises $ 2,546,000          
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONCENTRATIONS (Details)
3 Months Ended 6 Months Ended 12 Months Ended
Oct. 31, 2017
Oct. 31, 2016
Oct. 31, 2017
Oct. 31, 2016
Apr. 30, 2017
Accounts Receivable [Member] | Customer A [Member]          
Concentration Risk [Line Items]          
Concentration Risk, Percentage     55.00%   24.00%
Accounts Receivable [Member] | Customer B [Member]          
Concentration Risk [Line Items]          
Concentration Risk, Percentage     11.00%   12.00%
Accounts Receivable [Member] | Customer C [Member]          
Concentration Risk [Line Items]          
Concentration Risk, Percentage     0.00% [1]   10.00%
Sales Revenue, Net [Member] | Customer A [Member]          
Concentration Risk [Line Items]          
Concentration Risk, Percentage 51.00% 14.00% 38.00% 10.00%  
Sales Revenue, Net [Member] | Customer B [Member]          
Concentration Risk [Line Items]          
Concentration Risk, Percentage 11.00% 11.00% 13.00% 0.00% [1]  
[1] Represents less than 10%
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONCENTRATIONS (Details Textual) - USD ($)
Oct. 31, 2017
Apr. 30, 2017
Concentration Risk [Line Items]    
Contract Receivable Retainage, Total $ 1,094,000 $ 326,000
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.8.0.1
BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE (Details) - USD ($)
3 Months Ended 6 Months Ended
Oct. 31, 2017
Oct. 31, 2016
Oct. 31, 2017
Oct. 31, 2016
Numerator:        
Net (loss) income attributable to WPCS common stockholders, basic and diluted $ (1,271,101) $ (438,685) $ (1,711,179) $ 118,496
Denominator:        
Weighted average shares outstanding - basic 3,748,861 2,854,230 3,550,510 2,777,817
Stock options 0 0 0 99,783
Series H and H-1 convertible preferred stock 0 0 0 913,200
Weighted average shares outstanding - diluted 3,748,861 2,854,230 3,550,510 3,790,800
Basic (loss) income per common share $ (0.34) $ (0.15) $ (0.48) $ 0.04
Diluted (loss) income per common share $ (0.34) $ (0.15) $ (0.48) $ 0.03
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.8.0.1
BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE (Details 1) - shares
6 Months Ended
Oct. 31, 2017
Oct. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 5,868,000 3,060,000
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 3,252,000 852,000
Series H, H-1, H-2 and H-3 Preferred Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 526,000 913,000
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 2,090,000 1,295,000
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.8.0.1
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Details) - USD ($)
Oct. 31, 2017
Apr. 30, 2017
Costs incurred on uncompleted contracts $ 17,149,734 $ 16,362,011
Estimated contract earnings 3,660,429 3,714,584
Gross Total 20,810,163 20,076,595
Less: Billings to date 22,741,900 21,771,566
Total (1,931,737) (1,694,971)
Costs and estimated earnings in excess of billings on uncompleted contracts 315,437 410,826
Billings in excess of cost and estimated earnings on uncompleted contracts 2,247,174 2,105,797
Total $ (1,931,737) $ (1,694,971)
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.8.0.1
LOANS PAYABLE (Details) - USD ($)
6 Months Ended 12 Months Ended
Oct. 31, 2017
Apr. 30, 2017
Debt Instrument [Line Items]    
Carrying Value $ 151,000 $ 178,000
Estimated Future Payment Within 1 Year 52,000 53,000
Estimated Future Payment After 1 year $ 99,000 $ 125,000
0% automobile loan payable [Member]    
Debt Instrument [Line Items]    
Maturity Date April 2018 - June 2019 April 2018 - June 2019
Stated Interest Rate 0.00% 0.00%
Carrying Value $ 14,000 $ 18,000
Estimated Future Payment Within 1 Year 9,000 9,000
Estimated Future Payment After 1 year $ 5,000 $ 9,000
1% automobile loan payable [Member]    
Debt Instrument [Line Items]    
Maturity Date November 2022 November 2022
Stated Interest Rate 1.00% 1.00%
Carrying Value $ 21,000 $ 23,000
Estimated Future Payment Within 1 Year 5,000 5,000
Estimated Future Payment After 1 year $ 16,000 $ 18,000
3% automobile loan payable [Member]    
Debt Instrument [Line Items]    
Maturity Date November 2022 November 2022
Stated Interest Rate 3.00% 3.00%
Carrying Value $ 21,000 $ 24,000
Estimated Future Payment Within 1 Year 5,000 5,000
Estimated Future Payment After 1 year $ 16,000 $ 19,000
4% automobile loan payable [Member]    
Debt Instrument [Line Items]    
Maturity Date December 2016 - January 2020 December 2016 - January 2020
Stated Interest Rate 4.00% 4.00%
Carrying Value $ 19,000 $ 25,000
Estimated Future Payment Within 1 Year 7,000 9,000
Estimated Future Payment After 1 year $ 12,000 $ 16,000
5% automobile loan payable [Member]    
Debt Instrument [Line Items]    
Maturity Date January 2020 - February 2020 January 2020 - February 2020
Stated Interest Rate 5.00% 5.00%
Carrying Value $ 42,000 $ 50,000
Estimated Future Payment Within 1 Year 18,000 17,000
Estimated Future Payment After 1 year $ 24,000 $ 33,000
7% automobile loan payable [Member]    
Debt Instrument [Line Items]    
Maturity Date June 2019 June 2019
Stated Interest Rate 7.00% 7.00%
Carrying Value $ 21,000 $ 23,000
Estimated Future Payment Within 1 Year 5,000 5,000
Estimated Future Payment After 1 year $ 16,000 $ 18,000
8% automobile loan payable [Member]    
Debt Instrument [Line Items]    
Maturity Date October 2021 October 2021
Stated Interest Rate 8.00% 8.00%
Carrying Value $ 13,000 $ 15,000
Estimated Future Payment Within 1 Year 3,000 3,000
Estimated Future Payment After 1 year $ 10,000 $ 12,000
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME FROM ARBITRATION SETTLEMENTS (Details Textual) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended
Jun. 16, 2016
Oct. 31, 2017
Oct. 31, 2016
Oct. 31, 2017
Suisun Operation [Member]        
Proceeds from Legal Settlements     $ 31,000  
Cooper Medical School [Member]        
Proceeds from Legal Settlements $ 1,150,000      
BTX Trader Inc [Member]        
Proceeds from Legal Settlements   $ 8,000   $ 16,000
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.8.0.1
BANK LINE OF CREDIT (Details Textual) - Revolving Credit Facility [Member] - USD ($)
1 Months Ended
May 20, 2015
Oct. 31, 2017
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 Aug. 15, 2017  
Long-term Line of Credit   $ 1,000,000
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.8.0.1
STOCKHOLDERS' EQUITY (Details Textual) - USD ($)
3 Months Ended 6 Months Ended
Oct. 31, 2017
Oct. 31, 2017
Oct. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock Issued During Period, Shares, Other 802,463    
Proceeds from Warrant Exercises $ 1,070,000 $ 1,070,216 $ 0
Series H-1 Preferred Stock Warrant [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Class of Warrant or Right,Excercised 61,898    
Series H-2 Preferred Stock Warrant [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Class of Warrant or Right,Excercised 309,900    
Series H-3 Preferred Stock Warrant [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Class of Warrant or Right,Excercised 430,665    
Common Stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Convertible Preferred Stock, Shares Issued upon Conversion 935,600 935,600  
Stock Issued During Period, Shares, Other   802,463  
Preferred Stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock Issued During Period, Shares, Other   0  
Series H-1 Preferred Stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Conversion of Stock, Shares Converted 4,289    
Series H-2 Preferred Stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Conversion of Stock, Shares Converted 1,239    
Series H3 Preferred Stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Conversion of Stock, Shares Converted 3,828    
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.8.0.1
PROPOSED MERGER (Details Textual) - USD ($)
3 Months Ended 6 Months Ended
Dec. 12, 2017
Sep. 06, 2017
Oct. 31, 2017
Oct. 31, 2017
Oct. 31, 2016
Dec. 04, 2017
Percentage Of Common Stock Outstanding   16.00%        
Description Of Equity Financing   As a condition to the Closing, DropCar is obligated to raise up to $5 million, but not less than $4 million, in equity financing (the “Company Closing Financing”). The Company Closing Financing is expected to close immediately prior to or simultaneously with the Closing. This obligation for equity financing is reduced on a dollar for dollar basis for the amount of cash received prior to closing for any preferred warrant exercises received by the Company. As of the filing date of this report the Company has received approximately $1,325,000 in proceeds from warrant exercises. In addition, the consummation of the Merger is subject to customary conditions, including, without limitation, (a) approval by the Company and DropCar stockholders of the Merger Agreement and the transactions contemplated thereby; (b) the absence of any law, order, injunction or other legal restraint prohibiting the Merger; and (c) receipt of approval from NASDAQ to list the shares of WPCS common stock on the NASDAQ Capital Market post-Merger.        
Proceeds from Warrant Exercises     $ 1,070,000 $ 1,070,216 $ 0  
Selling, General and Administrative Expenses [Member]            
Business Combination, Integration Related Costs     $ 240,000 $ 400,000    
Subsequent Event [Member]            
Proceeds from Warrant Exercises $ 2,546,000          
Merger Agreement [Member]            
Share Price   $ 2.50        
Percentage Of Common Stock Outstanding   84.00%        
Cash   $ 419,000        
Termination Fee   250,000        
Maximum Reimbursement Expenses   $ 125,000        
Merger Agreement [Member] | Subsequent Event [Member]            
Cash           $ 419,000
XML 47 R36.htm IDEA: XBRL DOCUMENT v3.8.0.1
SUBSEQUENT EVENT (Details Textual) - USD ($)
3 Months Ended 6 Months Ended
Dec. 12, 2017
Dec. 04, 2017
Oct. 31, 2017
Oct. 31, 2017
Oct. 31, 2016
Sep. 06, 2017
Apr. 30, 2017
Subsequent Event [Line Items]              
Common Stock, Shares, Outstanding     5,090,224 5,090,224     3,352,159
Proceeds from Warrant Exercises     $ 1,070,000 $ 1,070,216 $ 0    
Subsequent Event [Member]              
Subsequent Event [Line Items]              
Proceeds from Warrant Exercises $ 2,546,000            
Subsequent Event [Member] | Exercise Price 1.18 Per Share [Member]              
Subsequent Event [Line Items]              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights 290,000            
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 1.18            
Subsequent Event [Member] | Exercise Price 1.17 Per Share [Member]              
Subsequent Event [Line Items]              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights 400,000            
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 1.17            
Subsequent Event [Member] | Exercise Price 1.09 Per Share [Member]              
Subsequent Event [Line Items]              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights 318,931            
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 1.09            
Subsequent Event [Member] | Series H1 Warrants [Member]              
Subsequent Event [Line Items]              
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 1.21            
Proceeds from Warrant Exercises $ 1,221,000            
Class of Warrant or Right, Outstanding 208,930            
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period 1,008,931            
Percentage Of Warrants Exercised   50.00%          
Subsequent Event [Member] | Series H3 Warrants [Member]              
Subsequent Event [Line Items]              
Class of Warrant or Right,Excercised 185,063            
Proceeds from Warrant Exercises $ 255,000            
Subsequent Event [Member] | Merger [Member] | Series H1 Warrants [Member]              
Subsequent Event [Line Items]              
Proceeds from Warrant Exercises $ 1,474,000            
Merger Agreement [Member]              
Subsequent Event [Line Items]              
Common Stock, Shares, Outstanding     6,118,689 6,118,689      
Cash           $ 419,000  
Merger Agreement [Member] | Subsequent Event [Member]              
Subsequent Event [Line Items]              
Common Stock, Shares, Outstanding   6,530,681          
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners   9.99%          
Cash   $ 419,000          
Business Acquisition, Planned Restructuring Activities, Description   WPCS equity allocation percentage was increased to 16.01%. It had previously been 15%. Consequently, DropCar’s equity allocation percentage is reduced to 83.99% from 85%.As a result of the foregoing changes, the number of shares of WPCS Common Stock that will be issued to DropCar’s securityholders and advisors will be reduced, although the DropCar securityholders and advisors will still own a majority of the issued and outstanding shares of WPCS Common Stock following the Merger. The reduction in the number of shares to be issued by WPCS in the Merger will result in a reduction in the number of shares of WPCS Common Stock that will be allocated to DropCar’s advisors in connection with the Merger. Thus, the Advisory/Commitment Allocation Percentage was reduced to 15.6% from 15.8%.          
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