SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13D-2-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. _)
WPCS International Incorporated
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
92931L203
(CUSIP Number)
RILEY INVESTMENT MANAGEMENT LLC
ATTN: BRYANT R. RILEY
11100 SANTA MONICA BLVD.
SUITE 800
LOS ANGELES, CA 90025
(310) 966-1444
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
February 11, 2010
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: |_|
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
- --------------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 92931L203 13D Page 2
- --------------------------------------------------------------------------------
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Riley Investment Partners, L.P.
- --------------------------------------------------------------------------------
2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [_]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) WC
- --------------------------------------------------------------------------------
5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7. Sole Voting Power
NUMBER OF 146,444
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. Shared Voting Power
OWNED BY -0-
EACH -----------------------------------------------------------------
REPORTING 9. Sole Dispositive Power
PERSON 146,444
WITH -----------------------------------------------------------------
10. Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
146,444
- --------------------------------------------------------------------------------
12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
2.1%(1)
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
PN
- --------------------------------------------------------------------------------
_____________
(1) Based on 6,942,266 shares of common stock of WPCS International Inc. (the
"Issuer") outstanding as of December 10, 2009, as reported in the Issuer's
Quarterly Report on Form 10-Q for the quarter ended October 31, 2009, filed with
the Securities and Exchange Commission on December 15, 2009.
CUSIP No. 92931L203 13D Page 3
- --------------------------------------------------------------------------------
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Riley Investment Management LLC
- --------------------------------------------------------------------------------
2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [_]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions)
AF
- --------------------------------------------------------------------------------
5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7. Sole Voting Power
NUMBER OF 389,444(2)
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. Shared Voting Power
OWNED BY -0-
EACH -----------------------------------------------------------------
REPORTING 9. Sole Dispositive Power
PERSON 389,444(2)
WITH -----------------------------------------------------------------
10. Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
389,444(2)
- --------------------------------------------------------------------------------
12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
5.6%(1)
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
IA
- --------------------------------------------------------------------------------
______________
(2) Because Riley Investment Management LLC has sole investment and voting power
over 146,444 shares of common stock held by Riley Investment Partners, L.P. and
243,000 shares held in managed accounts by its investment advisory clients,
Riley Investment Management LLC may be deemed to have beneficial ownership of
these shares.
CUSIP No. 92931L203 13D Page 4
- --------------------------------------------------------------------------------
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
B. Riley & Co., LLC
- --------------------------------------------------------------------------------
2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [_]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions)
WC
- --------------------------------------------------------------------------------
5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7. Sole Voting Power
NUMBER OF 93,099
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. Shared Voting Power
OWNED BY -0-
EACH -----------------------------------------------------------------
REPORTING 9. Sole Dispositive Power
PERSON 93,099
WITH -----------------------------------------------------------------
10. Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
93,099
- --------------------------------------------------------------------------------
12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
1.3%(1)
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
BD
- --------------------------------------------------------------------------------
CUSIP No. 92931L203 13D Page 5
- --------------------------------------------------------------------------------
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Bryant R. Riley
- --------------------------------------------------------------------------------
2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [_]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions)
AF
- --------------------------------------------------------------------------------
5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
7. Sole Voting Power
NUMBER OF 482,543(3)
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. Shared Voting Power
OWNED BY -0-
EACH -----------------------------------------------------------------
REPORTING 9. Sole Dispositive Power
PERSON 482,543(3)
WITH -----------------------------------------------------------------
10. Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
482,543(3)
- --------------------------------------------------------------------------------
12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
7.0%(1)
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
IN
- --------------------------------------------------------------------------------
_________________
(3) Because Riley Investment Management LLC has sole voting and investment power
over security holdings of Riley Investment Partners, L.P. and certain managed
accounts of its investment advisory clients, and Mr. Riley, in his role as the
sole manager of Riley Investment Management LLC, controls its voting and
investment decisions Riley Investment Management LLC, Mr. Riley may be deemed to
have beneficial ownership of the 146,444 of common stock held by Riley
Investment Partners, L.P., and 389,444 shares held in managed accounts by its
investment advisory clients. Includes 93,099 shares held by B. Riley & Co., LLC
over which Mr. Riley has sole voting and dispositive power. Mr. Riley is the
Chairman and sole indirect equity owner of B. Riley & Co., LLC.
CUSIP No. 92931L203 13D Page 6
ITEM 1. SECURITY AND ISSUER.
Common Stock of
WPCS International Inc. (the "ISSUER")
One East Uwchlan Avenue
Suite 301
Exton, Pennsylvania 19341
ITEM 2. IDENTITY AND BACKGROUND.
(a) (i) Riley Investment Partners, L.P. (Delaware limited
partnership);
(ii) Riley Investment Management LLC (Delaware limited liability
company);
(iii) B. Riley & Co., LLC (Delaware limited liability company); and
(iv) Bryant Riley (individual residing in California).
(b) Address of Principal Business Office:
11100 Santa Monica Blvd.
Suite 800
Los Angeles, CA 90025
(c) Mr. Riley manages and owns all of the outstanding membership
interests of Riley Investment Management LLC ("RIM"), a California
registered investment adviser. RIM is the investment Adviser to and
general partner of Riley Investment Partners, L.P. ("RIP"). RIM is
the investment advisor to other clients pursuant to investment
advisory agreements. Mr. Riley is the sole indirect equity holder
and Chairman of B. Riley & Co., LLC ("BRC").
(d) N/A
(e) N/A
(f) United States
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The shares owned by Riley Investment Partners, L.P. ("RIP"), by B.
Riley & Co., LLC ("BRC"), were acquired with working capital. The
shares owned by certain managed accounts of Riley Investment Management
LLC ("RIM") and by Mr. Riley were acquired with affiliated funds.
Each of RIP, RIM and BRC effects purchases of securities primarily
through margin accounts maintained for it with prime brokers or other
custodians, which may extend margin credit to it as and when required
to open or carry positions in the margin accounts, subject to
applicable federal margin regulations, stock exchange rules and the
prime brokers' or custodians' credit policies. In such instances, the
positions held in the margin accounts are pledged as collateral
security for the repayment of debit balances in the accounts.
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons purchased the shares based on the Reporting
Persons' belief that the shares, when purchased, were undervalued and
represented an attractive investment opportunity. Depending upon
overall market conditions, other investment opportunities available to
the Reporting Persons, and the availability of shares at prices that
would make the purchase of additional shares desirable, the Reporting
Persons may endeavor to increase their position in the Issuer through,
among other things, the purchase of shares on the open market or in
private transactions or otherwise, on such terms and at such times as
the Reporting Persons may deem advisable.
No Reporting Person has any present plan or proposal which would relate
to or result in any of the matters set forth in subparagraphs (a) - (j)
of Item 4 of Schedule 13D except as set forth herein or such as would
occur upon completion of any of the actions discussed above. The
Reporting Persons have serious concerns with the five year evergreen
employment agreements that the Issuer has entered into with its Chief
Executive Officer and Chief Financial Officer. The Reporting Persons
believe that the terms of these agreements represent corporate waste
and mismanagement by the Issuer's Board of Directors (the "Board"). The
Reporting Persons have submitted a books and records request pursuant
to Section 220 of the Delaware General Corporation Law in order to
obtain information in connection with any potential assertion that such
actions constitute a breach of fiduciary duty by the Board.
(continued)
CUSIP No. 92931L203 13D Page 7
ITEM 4. PURPOSE OF TRANSACTION (CONTINUED).
The Reporting Persons intend to review their investments in the Issuer
on a continuing basis and engage in discussions with management and the
Board of Directors of the Issuer concerning the business, operations
and future plans of the Issuer. Depending on various factors including,
without limitation, the Issuer's financial position and investment
strategy, the price levels of the shares, conditions in the securities
markets and general economic and industry conditions, the Reporting
Persons may in the future take such actions with respect to their
investments in the Issuer as they deem appropriate including, without
limitation, seeking Board representation, making proposals to the
Issuer concerning changes to the capitalization, ownership structure or
operations of the Issuer, purchasing additional shares, selling some or
all of their shares, engaging in short selling of or any hedging or
similar transaction with respect to the shares or changing their
intention with respect to any and all matters referred to in Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) With respect to each Reporting Person, see the responses set
forth in Rows 11 and 13 (including the footnotes thereto) on
the cover pages hereto.
(b) See Item 5(a) and, with respect to each Reporting Person, the
responses to Rows 7 through 10 (including the footnotes
thereto) on the cover pages hereto.
(c) In the ordinary course of business, BRC may effect
transactions in connection with its ordinary course market
making activities, as well as for customer transactions. The
following table contains the other transactions in the past 60
days:
TRAN TRADE
TYPE CODE QUANTITY PRICE DATE
Riley Investment Partners, L.P. B 146,444 3.00 02/11/2010
Investment Advisory Clients B 243,000 3.00 02/11/2010
B. Riley & Co., LLC B 2,300 3.1 01/28/2010
B 110 3.05 02/02/2010
B 1,120 3.05 02/05/2010
SL 2,400 3.10 02/08/2010
B 34,600 3.02 02/09/2010
SL 6,100 3.1295 02/09/2010
B 6,101 3.02 02/10/2010
SL 100 3.15 02/10/2010
B 15,000 3.02 02/11/2010
B 50,000 3.00 02/11/2010
SL 2,550 3.0549 02/11/2010
SL 2,482 3.09 02/12/2010
SL 2,500 3.09 02/16/2010
(d) RIM's advisory clients are entitled to any dividends or
proceeds paid with respect to stock held by such persons.
(e) Not applicable.
CUSIP No. 92931L203 13D Page 8
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
The relationships between Mr. Riley, RIM, RIP and BRC are described
above under Item 2(c) above. The relationship between RIM and other
investment advisory clients is described under Item 2(c) above. See
also footnotes (2) and (3) on the cover pages hereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
None.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: February 22, 2010
Riley Investment Partners, L.P.
By: Riley Investment Management LLC, its
General Partner
By: /s/ Bryant R. Riley
---------------------------------------
Bryant R. Riley, Managing Member
Riley Investment Management LLC
By: /s/ Bryant R. Riley
---------------------------------------
Bryant R. Riley, Managing Member
B. Riley & Co, LLC
By: /s/ Bryant R. Riley
---------------------------------------
Bryant R. Riley, Chairman
By: /s/ Bryant R. Riley
---------------------------------------
Bryant R. Riley