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WPCS International Incorporated (NASDAQ: WPCS) 
"Bitcoin is a digital or virtual currency that was created in 2009 and which uses peer-to-peer technology to facilitate instant payments. Bitcoin is a type of alternative currency known as a cryptocurrency, which uses cryptography for security, making it difficult to counterfeit. Bitcoin issuance and transactions are carried out collectively by the network, with no central authority, and allows users to make secure, verified transfers. BTX has developed and is currently beta testing a trading system to offer bitcoin traders advanced charting, trading blotters, and trading integration across five of the major bitcoin exchanges, which will allow users to see liquidity, route orders, identify arbitrage opportunities across all platforms, and to control trading risks with access to stop loss orders. The BTX business is intended to become a data and service provider for users and exchanges of bitcoin, but is not presently a bitcoin exchange itself (although the Company may determine to invest in and develop a bitcoin exchange in the future). Obviously, there can be no assurance that the Company or bitcoin in general, will be successful, but we think that it presents the best opportunity for WPCS at this time.
There has certainly been a significant amount of press about bitcoin recently, and the growing ecosystem of companies around it, as well as the investments by venture capital firms and others in bitcoin ventures. More and more vendors are accepting bitcoin, governments and regulators are creating more rules to deal with it, and the bad actors associated with bitcoin’s early days are being weeded out by law enforcement as legitimate users move in.
We are very excited about bitcoin and being on the forefront of what we, and other experts see, as a growing space. The opportunities that bitcoin creates, both as an asset class, a currency, and a money transfer mechanism, are an important disruption in the financial space. We believe that we can capture a share of the growing market through best-of-breed technology and a differentiated feature set.
BTX Trader is a company founded by two engineers and bitcoin enthusiasts who formerly worked on front-office trading software at Goldman Sachs. While they are the technology and development experts, we are currently launching a search for a seasoned executive to become President of BTX.
BTX Trader will initially be focused on two product categories within the bitcoin space: trading systems and exchanges. The trading system is a cloud-hosted service that is in an early beta stage. It incorporates some high-end features traders may be familiar with from other asset classes, including advanced charting, trading blotters, and consolidated level 2 order books. It is currently the only product that offers trading integration against all of the major bitcoin exchanges, allowing users to see liquidity across all platforms, route orders to the best platforms, and identify possible arbitrage opportunities across platforms. Additionally, it allows users to place synthetic stop loss orders against those exchanges, a badly needed insurance given bitcoin’s current volatility, which is not a feature available on any other current software. Our current business strategy is to continue to implement advanced trading algorithms for bitcoin traders, of the sort available in best-of-breed software for other asset classes on Wall Street but nowhere to be found in the bitcoin world.
The software is currently implemented as a Windows client program, and it is backed by a sophisticated server in the cloud, exposing an application programming interface for other clients. We intend to follow on our Windows client with web-based and mobile platforms for easy use by consumers.
The second prong of our strategy is to open a bitcoin exchange to allow low-latency execution of trades in bitcoin. We hope to launch such an exchange in the coming months, opening first in a jurisdiction where the regulations surrounding bitcoin are clear, with the ultimate goal of moving into the United States once we can resolve legal and regulatory questions with a certainty of compliance.
We are excited about this acquisition. The financing provided with the acquisition of BTX Trader will allow us to execute on the initial stages of BTX’s strategy, with the priority of building a truly first-class set of technologies and services for this growing and disruptive industry. To the best of our knowledge, WPCS appears to be the first public company involved in the Bitcoin business, and we believe we BTX will be perfectly positioned for strategic opportunities in the bitcoin space.
In closing we are very encouraged by the improvements that have been made and will continue to make to improve WPCS’ balance sheet and profitability. And we are excited about bitcoin and the prospect offered by BTX to participate in a quickly evolving marketplace, as one of the first publicly traded companies to make an early entrance into the bitcoin space. Although there are numerous risks, we believe that the software platform being developed by BTX will support the opportunities to advance bitcoin as an asset class, currency, money transfer mechanism, and important alternative in the financial markets space.
As a result, we believe that the actions we have taken in the past few months the additional measures we may take in the future, together with this forward-thinking acquisition, will contribute favorably to providing the Company with an opportunity to deliver improved shareholder value in the future." [http://www.sec.gov/Archives/edgar/data/1086745/000114420413068236/v363519_ex99-01.htm, Dec 19, 2013.]
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| | 2014 Fiscal Year | | 2013 Fiscal Year | | 2012 Fiscal Year | |
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| 2Q ended October 31 | ||||||
| 2Q Revenue | $5,475(t) | $5,801(t) | $21,754(t) | |||
| 2Q EPS | 0.29 (10/31/2013) | -0.49 (10/31/2012) | -1.61 (10/31/2011) | |||
| 2Q Dividends | N/A | N/A | N/A | |||
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