================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

        FOR ANNUAL AND TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[X]     Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
        Act of 1934 for the fiscal year ended December 31, 2003.

                                       or

[_]     Transition Report pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934 for the transition period from ________ to ________

                           COMMISSION FILE NO. 0-27996


                         WIRELESS XCESSORIES GROUP, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          DELAWARE                                               13-3835420
------------------------------                            ----------------------
State or other jurisdiction of                                I.R.S. Employer
incorporation or organization                             Identification Number)


               1840 County Line Road, Huntingdon Valley, PA 19006
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including Area Code: (215) 494-0111

        Securities registered pursuant to section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, Par Value $.001 Per Share

                                 Title of Class
                                Over the Counter
                                 Bulletin Board
                                ----------------

Indicate by check mark whether the Registrant (1) has filed all reports 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-KSB is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  [_]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the act).    Yes [_]  No [X]

The number of outstanding shares of the Registrant's Common Stock, par value
$.001 per share, on March 3, 2004 was 5,262,080.

The aggregate market value of the voting stock held by non-affiliates of the
Registrant (computed by reference to the closing price of such stock on Over the
Counter Market on March 1, 2004 of $0.42) was approximately $1,617,383.
================================================================================
<PAGE>

                                     PART I

ITEM 1. BUSINESS

 Wireless Xcessories Group, Inc. ("Wireless Xcessories" or the "Company") was
founded in May 1995. We are engaged in the nationwide sale and distribution of a
wide range of products, accessories and components for cellular phones,
including batteries, chargers and antennas (collectively, "Wireless
Accessories"). Our products are primarily sold through third party retailers'
stores. Prior to March 20, 2000, our name was Batteries Batteries, Inc.

CURRENT OPERATIONS

Our headquarters for all operations are located at 1840 County Line Road,
Huntingdon Valley, Pennsylvania 19006.

The Wireless Accessories industry remains fragmented. Our strategy is to
effectively market one of the broadest and most complete lines of wireless
accessories products. We currently offer in excess of 2,000 different products.
We strive to leverage our distribution channels and relationships and provide
high quality technical expertise and service to our customers.

     Our business strategy involves the following components:

     o    Maintain Diversity of Products and Customers. We distribute a complete
          line of wireless accessories. We sell our products to dealers, other
          distributors, commercial and industrial businesses, communications
          carriers, and mass merchandisers. Any of these customer groups can
          also purchase our products directly from our recently upgraded web
          site.

     o    Obtain Advantageous Purchasing. All our purchasing for our
          distribution and internet retail business is under the direct control
          of a corporate purchasing manager who is responsible for assuring that
          the vendors chosen and the pricing they offer are the most
          advantageous for us.

     o    We offer a full retail solution to our customers providing specialized
          private label retail packaging in both proprietary and custom
          packaging through our semi- automated warehouse and production
          facility. We also provide and offer display and point of sale
          merchandising aids to an increasing proportion of our customers.

     o    We offer an e-commerce solution to our dealer agents for cellular
          phone accessories.

     o    We also offer a wholesale web site where our dealer agents and retail
          stores order online to commit inventory. This has streamlined our
          internal order process and facilitates the customer reorder process.

     o    Strategic acquisitions, if feasible, in regional markets other than
          the East Coast markets of the U.S. in which the Company is already
          operating.

                                        2
<PAGE>

Products. We currently market over 2,000 wireless accessories. The product
category offerings include rechargeable batteries, personal and portable hands
free kits, hands free installation kits, portable and vehicle antennas, in-car
and travel chargers, fashionable accessory faceplates and colored housings for
cellular phones, plain and colored phone carrying cases and two-way and pager
accessories.

Purchasing. We purchase approximately 72% of our wireless accessory products
from manufacturers located overseas, principally in the Far East. In 2003, the
Company purchased approximately 64% of its products from three Far East
suppliers accounting for approximately 33%, 20% and 11%, respectively of total
purchases. No other vendor accounted for 10% or more of our purchases.

Sales. We market and sell the majority of our products to dealers, other
distributors, commercial and industrial businesses, communications carriers,
mass merchandisers and retail customers. Additionally, we produce one product
line catalog that is circulated nationally and internationally.

Concentration. During the twelve months ended December 31, 2003, we affected
sales to more than 3,000 commercial and retail customers. In that same period,
our two largest customers accounted for approximately 8.4% and 7.4% of our net
sales, respectively. No customer of ours accounted for 10% or more of our net
sales. Export sales accounted for less than 1 % of net sales for the period.

EMPLOYEES

As of March 1, 2004, we employed approximately 71 persons. These employees work
in the following areas of our business: one in technical operations; 26 in
telemarketing, two in quality assurance, commercial sales and marketing; 31 in
packaging; warehousing, inventory control, shipping and receiving; two in
purchasing, and 9 in management and administration. None of the employees are
represented by a labor union. We consider our relations with our employees to be
satisfactory.

ENVIRONMENTAL MATTERS

We continue to purchase and distribute batteries, which contain chemicals such
as lithium ion. We do not manufacture the batteries. We purchase the items in
their finished state. Our operations do not involve the alteration or
penetration of the batteries. Returns of our batteries are made to a recycler
for disposition. We believe that we have operated our present and former
respective facilities in compliance with applicable environmental laws and
regulations. Accordingly, we do not believe there is any material risk of
environmental liability.

We currently are not aware of any environmental conditions relating to present
or past waste generation at or from any of our present or former facilities or
operations, that would likely have a material adverse effect on our financial
condition or our results of operations and does not anticipate any material
expenditures to comply with environmental laws, regulations or ordinances.
However, there can be no assurance that environmental liabilities in the future
will not be incurred and that they will not have a material adverse effect on
our financial condition or our results of operations.

                                        3
<PAGE>

INTELLECTUAL PROPERTY

We believe that we have all rights to trademarks and trade names necessary for
the conduct of our business.

MANAGEMENT

Effective February 26, 2002 Barbara M. Henagan resigned from our Board of
Directors due to increased outside business commitments.

On and effective June 2002 our Board elected Stephen Rade to be the Chairman of
the Board of Directors of the Company. Christopher F.McConnell, who previously
held this position, will continue to serve the Company in a director capacity.

FACTORS AFFECTING FUTURE OPERATING RESULTS

The provisions of the Private Securities Litigation Reform Act of 1995 (the
"Act") provide companies with a "safe harbor" when making forward-looking
statements. This "safe harbor" encourages companies to provide prospective
information.

We wish to take advantage of the "safe harbor" provisions of the Act and are
including this section in our Annual Report on Form 10-KSB in order to do so.
Forward-looking statements also appear in other sections of this report.
Statements that are not historical facts, including statements about
management's expectations for fiscal year 2003 and beyond, are forward-looking
statements and involve various risks and uncertainties. Factors that could cause
the actual results to differ materially from management's projections,
forecasts, estimates and expectations include, but are not limited to, the
following:

WE MAY NOT SUCCESSFULLY OFFER ATTRACTIVE MERCHANDISE TO OUR CUSTOMERS.

In order to meet our strategic goals, we must successfully locate and offer our
customers new, innovative and high quality products. Our product offerings must
be affordable, useful to the customer, well made, distinctive in design, and not
widely available from other sources. We Cannot predict with certainty that we
will successfully offer products that meet these requirements in the future.

If our products become less popular with our customers or our competitors offer
the same or similar products as we offer at lower prices, our sales may decline
or we may decide to offer our products at lower prices. If customers buy less of
our products or if we have to reduce our prices, our revenues and profits will
decline which will have a material adverse effect on our results of operations.

In addition, we must offer our merchandise in sufficient quantities to meet the
demands of our customers and deliver this merchandise to customers in a timely
manner. We must be able to maintain sufficient inventory levels, particularly
during peak selling seasons. Our future results may be affected if we are not
successful in achieving these goals.

                                        4
<PAGE>

WE MAY NOT SUCCESSFULLY DESIGN AND DEVELOP PROPRIETARY PRODUCTS.

We are dependent to some extent on the success of our proprietary products that
the Company has designed and developed for our customers. We must in certain
cases design products that meet the demands of our customers and have these
products manufactured cost-effectively. In addition, we must rely on contracted
manufacturing resources to produce these products in sufficient quantities to
meet customer demand and deliver these products in a timely manner to our
customers. The Company relies solely on its contracted manufacturers to produce
and timely deliver these proprietary products. If we are unable to successfully
design, develop, and timely deliver our proprietary products, our operating
results may be materially adversely affected.

WE FACE CERTAIN RISKS ASSOCIATED WITH EXPANSION.

We plan to continue to increase the number of retail outlets and web sites
operated by third parties in which our products are sold and to increase the
sales volume on our own web site in order to grow our revenues. Our ability to
expand will depend in part on the following factors:

     o    our ability to persuade retail stores to carry our products in their
          stores and web sites;

     o    general economic conditions; and

     o    the availability of sufficient funds for expansion.

We need to expand our management information systems and distribution systems to
facilitate possible future expansion plans. If we are unable to grow our
existing system, it may hinder future expansion efforts.

WE DEPEND ON OUR VENDORS.

Our performance depends on our ability to purchase our products in sufficient
quantities at competitive prices and on our vendors' ability to make and deliver
high quality products in a cost effective, timely manner. Some of our smaller
vendors have limited resources, production capacities and limited operating
histories. We have no long-term purchase contracts or other contracts that
provide continued supply, pricing or access to new products and any vendor or
distributor could discontinue selling to us at any time. There can be no
assurance that we will be able to acquire the products that we desire in
sufficient quantities or on terms that are acceptable to us in the future. In
addition, there can be no assurance that our vendors will make and deliver high
quality products in a cost effective, timely manner. We may also be unable to
develop relationships with new vendors. Also, all products we purchase from
vendors in the Far East must be shipped to our warehouse by freight carriers and
there can be no assurance that we will be able to obtain sufficient capacity at
favorable rates. Our inability to acquire suitable products in a cost effective,
timely manner or the loss of one or more key vendors or freight carriers could
have a negative impact on our business.

WE FACE CERTAIN RISKS RELATING TO CUSTOMER SERVICE.

Any material disruption or slowdown in our order processing systems resulting
from labor disputes, telephone down times, electrical outages, mechanical
problems, human error or accidents, fire,

                                        5
<PAGE>

natural disasters, or comparable events could cause delays in our ability to
receive and distribute orders and may cause orders to be lost or to be shipped
or delivered late. As a result, customers may cancel orders or refuse to receive
goods on account of late shipments, which would result in a reduction of net
sales and could mean increased administrative and shipping costs.

WE FACE RISKS ASSOCIATED WITH DISTRIBUTION.

We conduct all of our distribution and packaging operations and Internet order
processing fulfillment functions from one facility in Huntingdon Valley,
Pennsylvania. Any disruption in the operations at the distribution center could
have a negative impact on our business. In addition, we rely upon third party
carriers for our product shipments. As a result, we are subject to certain
risks, including employee strikes and inclement weather, associated with such
carriers' ability to provide delivery services to meet our shipping needs.

WE EXPERIENCE INTENSE COMPETITION IN OUR MARKETS.

We operate in a highly competitive environment. We principally compete with a
variety of small distributors of cellular phone accessories that focus on a
particular segment of the market, as well as a few single large distributors
that offer a broad range of such products.

Competition in the industry is based on maintenance of product quality,
competitive pricing, delivery efficiency, customer service and satisfaction
levels, maintenance of satisfactory dealer relationships and training programs,
and the ability to anticipate technological changes and changes in customer
preferences. No assurance can be given that any of our major suppliers
(Primarily located in the Far East) whose products we distribute or major
cellular phone manufacturers will not acquire, startup, and or expand their own
distribution systems to sell directly to commercial and retail customers.

Further, the Internet retail business market is new, rapidly evolving and
intensely competitive. We believe that the principal competitive factors in this
market include brand recognition, selection, personalized services, convenience,
price, accessibility, customer service, quality of search tools, quality of web
site content, reliability and speed of fulfillment. We expect to experience
increased competition from online commerce sites that provide goods and services
at or near cost, relying on advertising revenues to achieve profitability. As
the online commerce market continues to grow, other companies may enter into
business combinations or alliances that strengthen their competitive positions.
Competition in the Internet retail business market will likely intensify.

WE MAY FAIL TO ANTICIPATE AND ADAPT TO CHANGING CONSUMER TRENDS.

Our success depends on our ability to anticipate and respond to changing product
trends and consumer demands in a timely manner. Our products must appeal to a
broad range of consumers whose preferences cannot always be predicted with
certainty and may change between sales seasons. If we misjudge either the market
for our products or our customers' purchasing habits, our sales may decline or
we may be required to sell our products at lower prices. This would result in a
negative impact on our business.

                                        6
<PAGE>

POOR ECONOMIC CONDITIONS MAY HURT OUR BUSINESS.

Certain economic conditions affect the level of consumer spending on our
products, including, among others, the following:

     o    general business conditions;

     o    interest rates;

     o    tax law changes;

     o    consumer confidence in future economic conditions.

Our business could be negatively impacted by a protracted recession or poor
economic conditions and any related decline in consumer demand for discretionary
items such as our products. Because we purchase merchandise from foreign
entities, we are subject to risks resulting from fluctuations in the economic
conditions in foreign countries. The majority of our foreign vendors and
manufacturers are located in the Far East, and as a result, our business may be
particularly impacted by changes in the political, social, legal, and economic
conditions in the Far East. Additionally, foreign weather and product
transportation problems could affect our ability to maintain adequate inventory
levels and adversely affect our future results.

WE ARE DEPENDENT ON CERTAIN KEY PERSONNEL.

Our success depends to a significant extent upon the abilities of our senior
management. The loss of the services of any of the members of our senior
management or of certain other key employees could have a significant adverse
effect on our business. In addition, our performance will depend upon our
ability to attract and retain qualified management, merchandising and sales
personnel. There can be no assurance that the members of our existing management
team will be able to manage the Company or our growth or that we will be able to
attract and hire additional qualified personnel as needed in the future.

WE MUST SUCCESSFULLY RESPOND TO CHANGES IN THE RETAIL INDUSTRY.

The United States retail industry, and the specialty retail industry in
particular, are dynamic by nature and have undergone significant changes over
the past several years. Our ability to anticipate and successfully respond to
continuing challenges is critical to achieving our expectations.

OUR COMMON STOCK PRICE IS VOLATILE.

Our stock currently trades on the Over the Counter Bulletin Board. The price of
our common stock has experienced, and is likely to experience in the future,
significant price and volume fluctuations, which could reduce the market price
of the common stock without regard to our operating performance. We believe that
among other factors, any of the risk factors outlined in the preceding
paragraphs if realized, could cause the price of the common stock to fluctuate
substantially.

                                        7
<PAGE>

ITEM 2. PROPERTIES

All of our real properties are held under leases. The following table provides
certain information concerning our leased properties:

                                               APPROXIMATE     LEASE
                                                   AREA      EXPIRATION
  OPERATION         NATURE         LOCATION      (SQ.FT.)       DATE
  ---------         ------         --------       ------        ----
Main Facility    Warehouse and    Huntingdon      52,000       4/30/09
                    Office        Valley, PA      13,100       4/30/09

In March 2004 the above lease for both office and warehouse was extended to
4/30/09. As part of the lease extension the Company has the right to relinquish
approximately 15,000 feet of warehouse space without further obligation to the
Company upon giving the landlord six months prior notice of its intention to
vacate.

ITEM 3. LEGAL PROCEEDINGS

We, from time to time, are a party to other litigation arising in the normal
course of our business, most of which involves claims for amounts due from
merchandise or services purchased or merchandise sold to third parties We
believe that none of these actions will have a material adverse effect on our
financial condition or our results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Our annual meeting of stockholders was held on June 24, 2003. The following are
results of the voting on the proposals submitted to the stockholders at the
annual meeting:

Proposal No. 1: Election of Directors.

The following individuals were elected as directors:

          NAME                                 FOR                      AGAINST
          -----                                ---                      -------

Stephen Rade                                4,174,057                   355,548
Christopher F. McConnell                    4,293,057                   236,548
Bradley T. MacDonald                        4,293,057                   236,548
Allan Kalish                                4,292,807                   236,798
Christopher C. Cole                         4,292,807                   236,798

There were no broker non-votes or abstentions or votes withheld with respect to
this proposal.

Proposal No. 2: Proposal to ratify the appointment by our Board of Directors of
Bagell, Josephs & Company LLC as the Company's independent auditors for the
fiscal year ending December 31, 2003.

FOR:               4,342,415
AGAINST:             182,970
ABSTAIN:               4,220

                                        8
<PAGE>

The proposal passed by a majority of the vote's casts as dictated by our
by-laws. There were no broker non-votes or votes withheld with respect to this
proposal.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company trades its Common Stock under the symbol " WIRX" on the Over the
Counter Bulletin Board (" OTC"). The following tables set forth the range of
high and low closing prices for the quarters indicated for the Common Stock on
the NMS as reported by NMS for calendar year 2003 and 2002 on the OTC.

                                COMMON STOCK

2002                          HIGH        LOW
----                          ----        ---

FIRST QUARTER                 0.37        0.10
SECOND QUARTER                0.29        0.10
THIRD QUARTER                 0.29        0.12
FOURTH QUARTER                0.27        0.15

2003
----

FIRST QUARTER                 0.30        0.12
SECOND QUARTER                0.35        0.22
THIRD QUARTER                 0.40        0.15
FOURTH QUARTER                0.44        0.22

The OTC prices reflect inter-dealer quotations, without retail mark-ups,
markdowns or other fees or commissions, and may not necessarily represent actual
transactions.

There were 56 record holders of the Company's Common Stock as of March 1, 2004.
A substantially larger number of beneficial owners hold such shares of Common
Stock in depository or nominee form.

No dividends have been paid on the outstanding shares of Common Stock.

ITEM 6. SELECTED FINANCIAL DATA

INTRODUCTION

The following table sets forth the selected financial data for Wireless
Xcessories and its subsidiaries. The Income Statement Data includes the results
of operations for us and each of our subsidiaries since their dates of
acquisition (see Item 1 -- Business). The subsidiaries within the Battery
Segment (Tauber, Battery Network and Specific Energy) have been accounted for as
discontinued operations. This information should be read in conjunction with the
Consolidated Financial Statements and Notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that appear elsewhere
in this document.

                                        9
<PAGE>

The Selected Financial Data have been derived from the consolidated financial
results for the year ended December 31, 2003 and 2002 audited by Bagell, Josephs
& Company, L.L.C, respectively, appear only in this section.


                             SELECTED FINANCIAL DATA


                                                  FISCAL YEAR ENDED DECEMBER 31,
                                                  ------------------------------

                                                      2003            2002
                                                      ----            ----

                ($ IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

INCOME STATEMENT DATA:

NET SALES                                           $11,469         $14,068
COST OF SALES                                         6,204           7,834
                                                      -----           -----

GROSS PROFIT                                          5,265           6,234
                                                      -----           -----

SELLING, GENERAL &
ADMINISTRATIVE EXPENSES                               5,436           6,757
INTEREST (INCOME) EXPENSE, NET                           (7)             17
                                                      -----           -----
NET LOSS BEFORE INCOME
TAXES                                                  (164)           (541)
INCOME TAX (BENEFIT)                                      0               0
                                                      -----           -----


NET (LOSS)                                             (164)           (541)
                                                      =====           =====

 NET (LOSS) PER SHARE OF
 COMMON STOCK (BASIC AND DILUTED)                     $(0.3)         $(0.11)
                                                      =====          ======


BALANCE SHEET DATA:
                                                       AS OF DECEMBER 31,
                                                       ------------------

                                                      2003            2002
                                                      ----            ----

WORKING CAPITAL                                     $2,791          $2,512
TOTAL ASSETS                                         4,342           4,770
LONG TERM DEBT                                           2               9
STOCKHOLDERS' EQUITY                                 3,358           3,540


                                       10
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Year Ended December 31, 2003 ("2003") Compared to Year Ended December 31, 2002
("2002")

Net sales decreased by 18.5% or $2.6 million from $14.1 million in 2002 to $11.5
million in 2003. The overall percentage sales decline reduced during the year as
the Company experienced sales drops of 32%, 23% 22% and 8% for the quarters
ended March, June, September and December 31, 2003, respectively. Though the
overall sluggish market demand for new cellular phones showed some improvement
later in the year, the after market accessory sales still remained highly
competitive. The Company was able to reduce its sales declines, particularly in
the December, 2003 quarter, through the introduction of a major new product
line, the replacement of a major portion of business lost due to bankruptcy or
financial difficulties, and overall improvement in the Company's relative
competitive position due to expanded value added service, vast product
selection, marketing and overall pricing/value relationship.

Gross profit decreased by $.9 million or 15.2% from $6.2 million in 2002 to $5.3
million in 2003, but as a percentage of sales increased from 44.3% to 45.9%. The
increase in gross profit percentage was a result of the following:

     o    Reductions in charges to earnings to provide for obsolete and slower
          moving inventory due primarily to enhanced controls over quantities of
          new product purchased.

     o    Increased pricing, reductions in packaging services and incentives
          given to selected lower margin accounts and overall tighter customer
          pricing guidelines.

     o    Continued favorable vendor pricing and continued reduction of freight
          cost to Customers resulting in less net cost to us...

     o    Partially offset by the continued pricing pressure due to the
          extremely competitive environment.

Selling, general and administrative ("SG&A") expenses decreased by 19.6% or $1.3
million, from $6.8 million in 2002 to $5.5 million in 2003, and as a percentage
of sales decreased from 48.0% in 2002 to 47.4 % in 2003.

The reduction in expense was a result of the Company's continuous cost cutting
program and emphasis on improved employee productivity. This resulted in major
reductions in our number of employees and overall salary and salary related
expense during the year and major cuts in general and administrative expenses
such as corporate related expenses, professional fees, bank fees, telephone,
office and warehouse supplies, rented equipment, and insurance expense. In
addition, the Company was able to reduce its warehouse, packaging and shipping
labor and related expense at a rate substantially in excess of the sales decline
percentage for the year due to reduced packaging services offered to customers,
the effect of having an increased percentage of our product offerings
pre-packaged by our vendors at lower costs, and a larger percentage of our
product drop shipped direct from our vendors to our customers.

Net interest expense decreased from $17,000 in 2002 to a net interest income of
$7,000 in 2003 due primarily to substantially decreased borrowings and interest
earned on excess cash accumulation.

                                       11
<PAGE>

The Company's effective income tax rate in calculating a possible benefit on the
net loss ion 2003 would have been 38% or a total benefit of $57,658. As of
December 31, 2003, the Company has a tax allowance of $1,517,000 inclusive of
the additional $57,658 added in 2003. Our effective income tax rate in both 2003
and 2002 is the same 38%.


NEW ACCOUNTING STANDARDS

In August 2001, the FASB issued SFAS No. 144, " Accounting for the Impairment or
Disposal of Long-Lived Assets" ("SFAS 144"). This statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This statement supersedes FASB Statement No.121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", and the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions". This statement also amends ARB No. 51, "Consolidated Financial
Statements", to eliminate the exception to consolidation for a subsidiary for
which control is likely to be temporary.

This statement requires that one accounting model be used for long-lived assets
to be disposed of by sale, whether previously held and used or newly acquired.
This statement also broadens the presentation of discontinued operations to
include more disposal transactions. SFAS 144 is effective for fiscal years
beginning after December 15, 2001 and interim periods within those fiscal years.
Adoption of SFAS 144 on January 1, 2002 did not have any impact on the Company's
financial position, cash flows or results of operations for the years ended
December 31, 2003 and 2002.

In April 2002, the FASB issued No. 145, "Recission of FASB Statements No. 4, 44
and 64, Amendment of FASB statement No.13, and Technical Corrections"("SFAS
145"). The recission of FASB No. 4 "Reporting Gains and Losses for
Extinguishment of Debt" applies to the Company. FASB No. 4 required that gains
and losses from extinguishments of debt were included in the determination of
net income be aggregated and, if material, classified as an extraordinary item,
net of related income tax effect. SFAS 145 is effective for our fiscal year
beginning January 1, 2003. Effective January 1, 2003, pursuant to SFAS 145, the
treatment of the early extinguishments of debt will be included in "other
expenses" in the financial statements. Management does not anticipate that the
adoption of SFAS 145 will have a material impact on the Company's financial
position or results of operations.

In June 2002, the FASB issued Statement No. 146 "Accounting for Costs Associated
with Exit or Disposal Activities"("SFAS 146"). The standard requires companies
to recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of commitment to an exit or disposal plan.
Examples of costs covered by the standard include lease termination costs and
certain employee severance costs that are associated with restructuring,
discontinued operation, plant closing, or other exit or disposal activity.
Previous accounting guidance provided by EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit on
Activity (Including Certain Costs Incurred in a Restructuring)" is replaced by
this statement. SFAS 146 is to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. Management does not anticipate
that the adoption of this statement will have a significant effect on the
Company's financial position or results of operations.

In December 2002, the FASB issued Statement No. 148 "Accounting for Stock-Based

                                       12
<PAGE>

Compensation- Transition and Disclosure, an amendment of FASB Statement No. 123,
Accounting for Stock-Based Compensation" ("SFAS 148"), to provide alternative
methods of transition for an entity that voluntarily changes to the fair value
based method of accounting for stock-based employee compensation. Finally, this
statement amends Accounting Principles Board ("APB") Opinion No. 28, "Interim
Financial Reporting", to require disclosure about those effects in interim
financial information. SFAS 148 is effective for financial statements for fiscal
years ending after December 15, 2002. The Company will continue to account for
stock-based employee compensation using the intrinsic value method of APB
Opinion No. 25, "Accounting for Stock Issued to Employees," but has adopted the
enhanced disclosure requirements of SFAS 148.

SIGNIFICANT ACCOUNTING POLICIES

Financial Reporting Release No. 60, which was recently released by the
Securities And Exchange Commission, requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. Our significant accounting policies are described in Note
1 of the Notes to the Consolidated Financial Statements. The significant
accounting policies that we believe are most critical to aid in fully
understanding our reported financial results are the following:

Critical Accounting Estimates -- We have made a number of estimates and
assumptions related to the reporting of assets and liabilities in preparation of
the consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America. The most significant
estimates relate to the allowance for doubtful accounts, the reserve for
Inventory obsolescence and the Deferred tax valuation allowance.
In determining the adequacy of the allowance for doubtful accounts, we consider
a number of factors including the aging of the receivable portfolio, customer
payment trends, financial condition of the customer, industry conditions and
overall credibility of the customer. Actual amounts could differ significantly
from our estimates. In determining the adequacy of the reserve for inventory
obsolescence, we consider a number of factors including the aging of the
inventory, recent sales trends, availability of the product in the market,
industry market conditions and overall economic conditions. Actual amounts could
differ significantly from our estimates.
In assessing the realizability of deferred income tax assets, we consider
whether it is more likely than not that the deferred income assets will be
realized through the future generation of taxable income.

Inventories -- Inventories, which consist solely of finished goods, are carried
at the lower of cost, determined on a first-in, first-out basis (FIFO), or
market value.

Revenue Recognition -- Revenue is recognized at the time of shipment. Revenue
related to the web site vendor agreements at AccessorySolutions.com, Inc. are
recognized ratably over the related contract period.

LIQUIDITY AND CAPITAL RESOURCES

Our requirement for capital is to fund (i) sales growth and (ii) financing for
possible acquisitions (iii) Re purchase of the Company's Common Stock, and (iv)
capital expenditures mainly related to business system upgrades. Our primary
sources of financing during 2003 and 2002 were cash flow

                                       13
<PAGE>

from operations, reduction in net assets (particularly inventory and accounts
receivable), Federal Income tax refund and principal payments of Notes
Receivable related to the disposition of its discontinued operations (Battery
Network and Tauber).
Our working capital as of December 31, 2003 and 2002 was $2,790,859 and
$2,511,635, respectively. Net cash provided by operating activities for the
years ended December 31, 2003 and 2002 was $ 487,490 and $1,486,790,
respectively. In 2003, we showed cash from operations of $572,740 from our net
loss of $164,043 as adjusted for non-cash items of depreciation and amortization
of $485,363, bad debt provision of $231,820 and Common Stock issued to
directors, Officers and employees of $19,600.

Changes in assets and liabilities in 2003 resulted in a net use of $85,250 from
a decrease in Accounts payable and accrued expenses of $191,389 and an increase
in Inventory of $56,703 offset in part, by deceases in Accounts Receivable and
Prepaid expenses and other Assets of $46,696 and $116,146, respectively.
In 2002, we showed cash provided from operations of $257,310 from our net loss
of $541,152 as adjusted for non-cash items of depreciation and amortization of
$569,079 and bad debt provision of $229,383. Cash provided from changes in
assets and liabilities totaled $1,229,480 consisting of reductions in accounts
receivable, inventory and prepaid expenses of $873,667, $426,558 and $25,233
respectively, collection of the federal income tax refund receivable of $582,751
less a net decrease in accounts payable and accrued expenses of $678,729.

Our overall combined reduction in accounts receivable covering 2002 and 2003 was
mostly attributable to tighter credit policies including the increased use of
Cash on Delivery and immediate customer credit payments on selected newer and
less credit worthy accounts, coupled with more stringent collection procedures.

Net cash used in investing activities in 2003 of $85,462 resulted from capital
expenditures of $228,608 offset in part by principal payments of $143,146
relating to the sale of discontinued operations. The bulk of Capital
Expenditures in 2003 was for the purchase and installation of a new business
system, upgrades to the Company website and on-line ordering capabilities,
introduction of Radio frequency technology in our warehousing operation, and
upgrades to selected user hardware (Computers and printers).

Net cash provided by investing activities in 2002 of $79,708 resulted from the
collection of $185,287 of principal payments related to the sale of discontinued
operations offset in part by capital expenditures of $105,579.

Cash used in financing activities in 2003 of $70,951 was due to the cost of
reacquiring Company Stock $37,135 and net payments of capital lease obligations
of $33,816.

Cash used in financing activities for the twelve months ended December 31, 2002
totaling
$1,228,555 was due to net debt repayments of $1,114,864, net payments of capital
lease obligations of $56,787 and the cost of reacquiring company stock of
$56,904.

Based upon its present plans, management believes that operating cash flow, and
available cash will be adequate to finance the stock repurchase program, to meet
the working capital cash needs of the Company and to meet anticipated capital
expenditure needs during the 12 months ending December 31, 2004. Although we
would like to issue shares of Common Stock as our primary method of financing
acquisitions, we anticipate that additional funds may be required to
successfully implement any acquisition program, and will use various methods to
finance acquisitions, including raising new equity capital. There is no
guarantee that such equity or debt financing will be available to us in the
future.

                                       14
<PAGE>

COMMITMENT:

We lease warehouse and administrative office space and warehouse forklift
equipment and copy machines non-cancelable operating lease agreements, which
expire at various dates. Certain leases for warehouse and other space contain
rental escalation clauses based on the Consumer Price Index.
Future minimum lease payments including base rent, common area charges, and
lease required real estate tax charges non-cancelable operating leases for the
year ending December 31, 2003 are as follows:

            2004                 $  423,911
            2005                    448,911
            2006                    436,411
            2007                    444,062
            2008                    480,618
            thereafter              161,494
                                 ----------
                 Total           $2,395,407
                                 ==========

During 2000, we entered into certain capital leases for warehouse equipment.
Total future lease payments under these lease obligations are $4,335 in 2004.

SEASONALITY AND INFLATION

In fiscal year 2003 the Company did approximately 55% of its sales in the second
half of the year. This reflected the more traditional pick up of additional
business in the months preceding the December Holiday season. Though in the
fiscal years ended December 31, 2002 and 2001, combined sales for the third and
fourth quarters were less than the combined sales for the first and second
quarters due to the poor cellular accessory market and the timing of the loss of
key customers. In addition, our net sales could be affected in the future by
business acquisitions.

The impact of inflation on our operations has not been significant to date.
However, there can be no assurance that a high rate of inflation in the future
would not have an adverse effect on our operating results.

                                       15
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk - The Company did not have any interest rate risk at December
31, 2003, as there was no outstanding debt owed by the Company other fixed
interest capital lease obligations.

Foreign Currency Risk - We do not use foreign currency forward exchange
contracts, or purchased currency options to hedge local currency cash flows or
for trading purposes. All sales arrangements with international customers and
suppliers are denominated in U.S. dollars. We purchase approximately 72% of our
products from manufacturers located overseas, principally in the Far East. The
depreciation of the U.S. dollar against the major Asian currencies could,
therefore, cause an increase in the cost of our products and adversely affect
our results of operations or financial condition.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

As of December 31, 2003 and 2002 there are no changes in or disagreements with
Bagell, Josephs & Company LLC on accounting or financial disclosures.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The following table sets forth as of March 1, 2004, the name of each of our
directors and executive officers, his principal occupation and the nature of all
positions and offices with us held by him. Our directors will hold office until
the next Annual Meeting of Stockholders.

                                                                         FIRST
                                                                         BECAME
NAME                        AGE                OFFICE                   DIRECTOR
-----                       ---                ------                   --------

Stephen Rade                66      President, Chief Executive Officer    1996
                                     and Chairman of the Board

Christopher F. McConnell    50      Director                              1998

Ronald E. Badke             58      Chief Financial Officer and           1995
                                     Secretary

Allan Kalish                78      Director                              1998

Christopher C. Cole         48      Director                              2000

Bradley T. MacDonald        56      Director                              1999

Each executive officer serves at the discretion of the Board of Directors.

Mr. Rade has been our Chairman of the Board since June 2002 and President and
Chief Executive Officer since June 1998. From 1996 until June 1998, he was
Executive Vice President of the Company. He has been a director since April
1996. He has been the President, Chief Executive Officer and a director of
Advanced Fox Antenna, Inc. since he founded that company in 1990.

                                       16
<PAGE>

Mr. McConnell has been a director of the Company since December 1998 while
holding the title of Chairman of the Board through June 2002. In addition, he is
principal of The Founders Group, an organization dedicated to helping launch
new, technology-based companies. Mr. McConnell also co-founded CFM Technologies,
Inc., a semiconductor capital equipment company and until it merged into Matson
technologies in March 2001. He currently serves as a director of Mi8
Corporation, a leading application software provider (ASP), where he had
previously been Chairman of the Board.

Mr. Badke has been our Chief Financial Officer since November 1995 and Secretary
since March 1999. He was a Senior Vice President and the Chief Financial Officer
of Shoe Town Inc. from 1984 through September 1994, positions he later held
(September to November 1995) with Natures Elements. Mr. Badke, a certified
public accountant, had been a consultant from October 1994 through August 1995.

Mr. Kalish has been a director since 1998. He is the owner of Kalish &
Associates, a consulting firm specializing in marketing, advertising and public
relations, which he founded in 1986. Kalish & Associates serves advertisers,
marketers and advertising agencies throughout the country, including three New
York Stock Exchange companies. Prior to founding Kalish & Associates, Mr. Kalish
managed Kalish & Rice, Inc., one of the largest advertising agencies in
Philadelphia. Mr. Kalish served as a member of the Board of Directors of
Checkpoint Systems, Inc., a New York stock exchange company, from 1993 to 1997.

Mr. MacDonald was elected a director in March 1999. He is also Chairman of the
Board and Chief Executive Officer of Medifast, Inc (MED.AMEX), a position he has
held since January 1998. Prior thereto, he was appointed as Program Director of
the U.S. Olympic Coin Program of the Atlanta Centennial Olympic Games. From 1991
through 1994, Mr. MacDonald returned to active duty to be Deputy Director and
Chief Financial Officer of the Retail, Food and Hospitality and Recreation
Business for the United States Marine Corps. Prior thereto, Mr. MacDonald served
as Chief Operating Officer of the Bonnie Sunglass Company, President of
Pennsylvania Optical Co., Chairman and CEO of Mac Donald and Associates' which
had major financial interests in a retail drug, consumer candy, and pilot
sunglass companies. Mr. Mac Donald was national president of the Marine Corps
Reserve Officer Association and retired from the United States Marine Corps as a
Colonel in 1997, after 27 years of service.

Mr. Cole was elected as a director in February 2000. He is currently the CEO of
Intelligrated, Inc., a position he has held since June of 2001. From April 2000
to June 2001 Mr. Cole served as President of Cole Consulting. Until the
acquisition of Pinnacle Automation by FKI, Plc. in early 2000, Mr. Cole was
employed by Pinnacle Automation as its Chief Operating Officer and served as a
director of Pinnacle Automation since June 1997 and as Executive Vice President
from March 1994 to June 1997. Mr. Cole served as Vice President of Cincinnati
Milacron, from 1987 through March of 1994.


COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACTS OF 1934 Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the

                                       17
<PAGE>

Company's directors and executive officers and persons who own more than ten
percent of its Common Stock to file with the Securities and Exchange Commission
and The Nasdaq Stock Market initial reports of ownership and reports of changes
in ownership of Common Stock and other equity securities of the Company.

To the best of our knowledge, based solely on a review of the copies of such
reports furnished to us and written representations with respect to the year
ended December 31, 2003, our officers, directors and greater than ten percent
shareholders were in compliance with all applicable Section 16(a) filing
requirements, except that a Form 4 was not filed in respect to 10,000 shares
each of the Company's Common Stock issued to the following Directors in late
April, 2003:

     o    Christopher F. McConnell
     o    Bradley T. MacDonald
     o    Allan Kalish
     o    Christopher C. Cole

A Form 4 was not filed for the issuance of 8,000 shares of restricted stock to
Ronald Badke, CFO and Secretary in mid October, 2003.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth for the years ended December 31, 2003, 2002, and
2001; the compensation for services rendered in all capacities to the Company
and subsidiaries by the Chief Executive Officer, the Company's other executive
officer and key management personnel for the year ended December 31, 2003.

                                                 SUMMARY COMPENSATION TABLE

   NAME AND PRINCIPAL POSITION                   YEAR                SALARY
   ---------------------------                   ----                ------

Stephen Rade                                     2003               $192,808
Chief Executive Officer                          2002                198,000
President and Chairman of the Board              2001                198,000

Ronald E. Badke                                  2003               $133,212
Chief Financial Officer and                      2002                146,000
Secretary                                        2001                135,000

Susan Rade                                       2003               $192,657
Vice President                                   2002                229,047
Sales Account manager                            2001                253,760

Dawn Kenderdine                                  2003               $103,897
New Business Development Manager                 2002                113,260
Purchasing Director                              2001                102,522

EMPLOYMENT AGREEMENTS

No employment agreements exist between the Company and any the persons listed in
ITEM 11. Prior employment agreements with each of Messrs. Rade, and Badke
terminated on April 1998 and March 1999, respectively.

COMPENSATION OF DIRECTORS

We instituted the payment of fees for attendance at Board and related committee
meetings in late 2003. Each director will be paid $1,000 for each regular Board
Meeting and $500 for each Committee meeting attended. We also reimburse those
directors who are not employees of the Company for their expenses incurred, if
any, in attending meetings.

                                       18
<PAGE>

The Company previously had approved the annual grant of stock options to
purchase the Company's common stock to certain directors in accordance with the
1995 Stock Option Plan. Specifically, the board approved the following grants:

     o    to the chairperson of the board (if not also an employee of the
          Company): 15,000 options to purchase shares of common Stock (the
          "Chairperson Options");

     o    to every other director (if not also an employee of the Company):
          8,000 options to purchase shares of common stock (The "Director
          Options"); and

     o    to each director who is a member of the board committee: 3,000 options
          to purchase shares of common stock multiplied by the number of
          committees on which the director sits ("Committee Options").

A director who receives Chairperson Options may not also receive Director
Options, unless the board determines otherwise.

Half of any options granted vest on the date they are granted, with the
remaining half vesting one year later; provided that these options will
terminate and never vest if the director receiving them does not attend at least
75% of the meetings of the board (or meetings of the applicable board committee,
in the case of Committee Options) held during the one year period following the
date the options are granted.

No option shares were granted to any Director under this plan in 2003 or is any
expected to be granted in 2004.

In June 2002, the Board, in lieu of issuing option shares approved the issuance
of 40,000 shares of the Company's Common Stock to its non-employee directors for
service on the Board and it's various committees. The stock was issued in late
April 2003 and includes a total of 10,000 shares each to Christopher McConnell,
Christopher Cole, Bradley MacDonald and Allan Kalish, respectively. In Feb 2004,
the Board approved the issuance of 40,000 shares of the Company's Common Stock
to its non-employee directors for service on the Board and it's various
committees. The stock is expected to be issued in the second quarter of 2004
with a total of 10,000 shares each going to Christopher McConnell, Christopher
Cole, Bradley MacDonald and Alan Kalish, respectively.

STOCK OPTIONS

Under the Company's 1995 Stock Option Plan (the "Plan"), the Company's board of
directors or a stock option committee appointed by the board may grant stock
options to officers, key employees, directors, and independent consultants of
the Company. Currently, 1,000,000 shares of the Company's common stock are
reserved for issuance under the Plan.

                                       19
<PAGE>

The following table sets forth the details of the options held at the end of the
year December 31, 2003 by the executive officers set forth in the Summary
Compensation Table. Mr. Rade and Mr. Badke were not granted options under the
Plan during the year 2003.

                          FISCAL YEAR END OPTION VALUES

                           NUMBER OF SHARES UNDERLYING
                          UNEXERCISED OPTIONS AT FISCAL
                                   YEAR END(1)


NAME                                           EXERCISABLE        UNEXERCISABLE
----                                           -----------        -------------
Ronald E. Badke                                   16,000              4,000

(1) The exercise price of all outstanding options at December 31, 2003 was
greater than the market value of the shares covered by those options.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of March 1, 2004, as
supplied to the Company, regarding the beneficial ownership of the Common Stock
by all persons known to the Company who own more than 5% of the outstanding
shares of the Company's Common Stock, each director of the Company, each
executive officer of the Company named in the Summary Compensation Table
included elsewhere in this report and all executive officers and directors as a
group. Unless otherwise indicated, based on information provided to the Company
by the directors, executive officers and principal shareholders, the persons
named in the table below have sole voting and investment power with respect to
all shares of Common Stock shown as beneficially owned by them.




                                        NUMBER OF SHARES
NAME*                                  BENEFICIALLY OWED(1)     PERCENTAGE(2)
-----                                  --------------------     -------------

Stephen Rade                               1,173,000               24.4%
Christopher F. McConnell (3)                 211,067                4.4%
Ronald E. Badke (4)                           17,600                -- **
Christopher C. Cole (5)                       85,000                1.8%
Allan Kalish (6)                              56,500                1.2%
Bradley T. MacDonald (7)                      43,000                -- **
Directors and Officers as a group          1,586,167               32.9%
(6 persons)(8)

                                       20
<PAGE>

*    The business address of each shareholder named in this table, is Wireless
     Xcessories Group, Inc., 1840 County Line Road, Huntingdon Valley, PA 19006.

**   Less than 1%.

(1)  For purposes of this table, a person or group is deemed to have "beneficial
     ownership" of any shares, which such person has the right to acquire within
     60 days.

(2)  Percentage ownership is based on 4,813,970 shares of Common Stock
     outstanding net of Treasury Stock on March 1, 2004. For purposes of
     computing the percentage of outstanding shares held by each such person or
     group of persons named above, any security which such person or group of
     persons has the right to acquire within 60 days is deemed to be
     outstanding, but is not deemed to be outstanding for the purpose of
     computing the percentage ownership of any other person.

(3)  Includes exercisable options to purchase 45,000 shares.

(4)  Includes exercisable options to purchase 16,000 shares and 1,760 vested
     common stock shares under the Company's restricted stock program.

(5)  Includes exercisable options to purchase 42,000 shares.

(6)  Includes exercisable options to purchase 39,000 shares.

(7)  Includes exercisable options to purchase 33,000 shares.

(8)  Includes exercisable options to purchase 175,000 shares.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We employ Susan Rade, wife of Stephen Rade, current CEO, as the highest volume
sales person with certain administrative functions. In this role, Mrs. Rade
earns the bulk of her compensation as part of our sales incentive commission
programs earning $192,657, $229,047 in the twelve months December 31, 2003 and
2002, respectively, including draws, commission and a $36,000 salary for
administrative duties.


ITEM 14. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
SEC's 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. In designing and evaluating the disclosure controls and procedures,
management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, and management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and
procedures.

As of March 17, 2004, we completed an evaluation, under the supervision and with
the participation of our management, including our chief executive officer and
chief financial

                                       21
<PAGE>

officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on the foregoing, our chief executive officer and
chief financial officer concluded that the Company's disclosure controls and
procedures were effective.

Changes in Internal Controls

There have not been any significant changes in the Company's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation.



                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) The following documents are filed as a part of this Report.

     1. and 2. FINANCIAL STATEMENTS -- The financial statements and schedules
     required by this item begin on page F-1 of this report. The Reports of
     Independent Certified Public Accountants appear on pages F-2, F-3 and F-4
     of this report.

     3. EXHIBITS -- The following is a list of exhibits. Where so indicated by
     footnote, exhibits, which were previously filed, are incorporated by
     reference.

     (b) REPORTS ON FORM 8-K

     On December 26, 2002, we filed a Current Form 8-K with respect to the fact
     that on December 26, 2002 we replaced BDO Seidman LLP as the Company's
     independent auditors and appointed Bagell, Josephs & Company, L.L.C. to
     audit the Company's consolidated financial statements for the year ended
     December 31, 2002.







                                       22
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS





                                                                            PAGE
                                                                            ----


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ...................       F-2


CONSOLIDATED BALANCE SHEETS ..........................................       F-3


CONSOLIDATED STATEMENTS OF OPERATIONS ................................       F-5


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY ......................       F-6


CONSOLIDATED STATEMENTS OF CASH FLOWS ................................       F-7


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ...........................       F-9




CONSOLIDATED SUPPORTING SCHEDULE FILED:





All other schedules are omitted because they are not applicable,
not required, or the information required to be set forth therein
is included in the Consolidated Financial Statements or in the
Notes thereto.




                                       F-1
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors and Stockholders of Wireless Xcessories Group, Inc.


We have audited the accompanying consolidated balance sheets of Wireless
Xcessories Group, Inc. and Subsidiaries as of December 31, 2003 and 2002 the
related consolidated statements of operations, stockholders' equity and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements and schedule. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated
financial statements. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Wireless Xcessories
Group, Inc. and Subsidiaries as of December 31, 2003 and 2002 and the
consolidated results of its operations and changes in stockholders' equity and
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.


BAGELL, JOSEPHS & COMPANY, L.L.C.

Gibbsboro, New Jersey
March 25, 2004





                                       F-2
<PAGE>
                 WIRELESS XCESSORIES GROUP, INC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2003 AND 2002




                                     ASSETS


                                                           2003          2002
                                                        ----------    ----------
CURRENT ASSETS
   Cash and cash equivalents                            $1,316,515    $  985,438
   Accounts receivable (net of allowance for doubtful
      accounts of $316,635 and $536,345, respectively)     729,842     1,029,158
   Inventories                                           1,437,604     1,380,901
   Prepaid expenses and other assets                       127,822       154,254
   Current maturities of Notes Receivable                  161,191       183,434
                                                        ----------    ----------

          Total current assets                           3,772,974     3,733,185

PROPERTY AND EQUIPMENT - Net                               520,126       771,916

NOTES RECEIVABLE-NET OF CURRENT PORTION                     13,433       174,623

OTHER ASSETS                                                35,751        90,144
                                                        ----------    ----------
Total assets                                            $4,342,284    $4,769,868
                                                        ==========    ==========







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

                                       F-3
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002




                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE><CAPTION>
                                                            2003              2002
                                                        ------------      ------------
<S>                                                     <C>               <C>
CURRENT LIABILITIES
   Current portion of long-term debt                    $      4,335      $     31,579
   Bank overdraft                                                 --           206,772
   Accounts payable                                          652,616           405,421
   Net liabilities of discontinued operations                 35,757            58,000
   Accrued payroll and related benefits                       92,771            92,275
   Amounts due to officer                                    102,857           209,313
   Other accrued expenses                                     93,779           218,190
                                                        ------------      ------------
          Total current liabilities                          982,115         1,221,550
                                                        ------------      ------------

LONG-TERM DEBT                                                 1,938             8,510

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Preferred stock, par value $.001, 1,000,000 shares
      authorized, no shares issued or outstanding                 --                --
   Common stock, par value $.001, 10,000,000 shares
      authorized, 5,262,080 and 5,222,080 issued in
      2003 and 2002, respectively                              5,262             5,222
   Additional paid-in capital                             11,341,466        11,331,106
   Accumulated deficit                                    (7,872,036)       (7,707,993)
   Treasury stock, at cost, 448,110 and 344,810 shares,
      respectively                                          (116,461)          (88,527)
                                                        ------------      ------------

          Total stockholders' equity                       3,358,231         3,539,808
                                                        ------------      ------------

Total liabilities and stockholders' equity              $  4,342,284      $  4,769,868
                                                        ============      ============
</TABLE>



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

                                       F-4
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003, AND 2002







<TABLE><CAPTION>
                                                             2003              2002
                                                         ------------      ------------
<S>                                                      <C>               <C>
Net sales                                                $ 11,469,069      $ 14,067,672
Cost of sales                                               6,203,437         7,834,019
                                                         ------------      ------------

Gross profit                                                5,265,632         6,233,653

Selling, general and administrative expenses               (5,436,222)       (6,757,434)

Interest income (expense), net                                  6,547           (17,371)
                                                         ------------      ------------
Net (Loss) before Income taxes                               (164,043)         (541,152)

Income tax expense                                                 --                --
                                                         ------------      ------------
Net (loss)                                               $   (164,043)     $   (541,152)
                                                         ============      ============


Weighted Average Shares

(Loss) earnings per common share
-Basic and Diluted:
Net (loss)                                               $      (0.03)     $      (0.11)
                                                         ============      ============
</TABLE>





                   The accompanying notes are an integral part
                   of theseconsolidated financial statements.

                                       F-5
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002





<TABLE><CAPTION>
                                     COMMON STOCK                                               TREASURY STOCK
                             ---------------------------      PAID-IN      ACCUMULATED   ---------------------------
                                SHARES         AMOUNT         CAPITAL        DEFICIT        SHARES         AMOUNT         TOTAL
                             ------------   ------------   ------------   ------------   ------------   ------------   ------------
<S>                          <C>            <C>            <C>            <C>            <C>            <C>            <C>
BALANCE, DECEMBER 31, 2001      5,222,080   $      5,222   $ 11,331,106   ($ 7,166,841)       (78,000)  ($    31,623)  $4,137,864.00
Stock repurchased                      --             --             --             --       (266,810)       (56,904)       (56,904)
Net (loss)                             --             --             --       (541,152)            --             --       (541,152)
                             ------------   ------------   ------------   ------------   ------------   ------------   ------------

BALANCE, DECEMBER 31, 2002      5,222,080          5,222     11,331,106     (7,707,993)      (344,810)       (88,527)     3,539,808
Stock Issued                       40,000             40         10,360                        40,000          9,200         19,600
Stock repurchased                      --             --             --             --       (143,300)       (37,134)       (37,134)
Net (loss)                             --             --             --       (164,043)            --             --       (164,043)
                             ------------   ------------   ------------   ------------   ------------   ------------   ------------

BALANCE, DECEMBER 31, 2003      5,262,080   $      5,262   $ 11,341,466   ($ 7,872,036)      (448,110)  ($   116,461)  $  3,358,231
                             ============   ============   ============   ============   ============   ============   ============
</TABLE>




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

                                       F-6
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002




<TABLE><CAPTION>
                                                                    2003            2002
                                                                ------------    ------------
<S>                                                             <C>             <C>
OPERATING ACTIVITIES:
   Net (loss)                                                   $   (164,043)   $   (541,152)

Adjustments to reconcile net (loss) to net Cash provided
by operating activities:
   Depreciation and amortization                                     485,363         569,079
   Provision for doubtful accounts                                   231,820         229,383
   Common Stock issued to Directors, Officer and employees            19,600              --

Changes in assets and liabilities, net of effects from
dispositions:
   Accounts receivable                                                46,696         873,667
   Inventories                                                       (56,703)        426,558
   Income tax refund receivable                                           --         582,751
   Prepaid expenses and other assets                                 116,146          25,233
   Accounts payable and accrued expenses                            (191,389)       (678,729)
                                                                ------------    ------------
          Net cash provided by operating activities                  487,490       1,486,790
                                                                ------------    ------------

INVESTING ACTIVITIES:
   Purchases of property and equipment, net                         (228,608)       (105,579)
   Principal payment received on note receivables                    143,146         185,287
                                                                ------------    ------------
          Net cash (used in) provided by investing activities        (85,462)         79,708
                                                                ------------    ------------
</TABLE>




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

                                       F-7
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002




<TABLE><CAPTION>
                                                                   2003            2002
                                                               ------------    ------------
<S>                                                            <C>             <C>
FINANCING ACTIVITIES:
   Payments on capital lease obligation                        $    (33,816)   $    (56,787)
   Repurchase of common stock                                       (37,135)        (56,904)
   Net payments of borrowings                                            --      (1,114,864)
                                                               ------------    ------------

      Net cash used in financing activities                         (70,951)     (1,228,555)
                                                               ------------    ------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                           331,077         337,943

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                       985,438         647,495
                                                               ------------    ------------

CASH AND CASH EQUIVALENTS - END OF YEAR                        $  1,316,515    $    985,438
                                                               ============    ============


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during year for:
      Interest                                                 $     15,546    $     44,000
      Income taxes                                                       --          25,000

Supplemental Disclosure of non-cash activity:
      Common Stock issued to Directors,
      Officer and Employee                                     $    19,6000            --
</TABLE>





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

                                       F-8
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Business description- Wireless Xcessories Group, Inc. and subsidiaries
          (collectively, the "Company") are engaged in the distribution of
          cellular accessories and components principally in the United States.
          During the fourth quarter of 1999, the Company began selling products
          via a newly created e-commerce subsidiary, AccessorySolutions.com,
          Inc. On March 13, 2001, former subsidiaries of Wireless Xcessories
          Group, Inc, Advanced Fox Antenna, Inc., Cliffco of Tampa Bay, Inc. and
          AccessorySolutions.com, Inc. entered into an agreement to combine and
          merge with Wireless Xcessories Group, Inc., the surviving Company.

          Principles of Consolidation- The consolidated financial statements
          include the accounts of the Wireless Xcessories Group, Inc. and it's
          wholly owned subsidiaries. All material intercompany transactions have
          been eliminated.

          Cash equivalents- The Company considers all highly liquid investments
          with a maturity date of three months or less from the date of purchase
          to be cash equivalents.

          Concentration of Risk- The Company utilizes its excess cash to reduce
          its bank borrowings. The Company has not experienced any losses on its
          cash accounts or short-term investments. The Company sells its
          products to commercial businesses and retail consumers. Through its
          continuing relationships with these customers, the Company performs
          credit evaluations and generally does not require collateral. The
          Company maintains a reserve for potential credit losses. No single
          customers accounted for greater than 10% of consolidated net sales
          during any of the years presented.

          In 2003, the Company purchased approximately 64% of its products from
          three Far East suppliers accounting for approximately 33%, 20% and
          11%, respectively of total purchases. No other vendor accounted for
          10% or more of our purchases.

          The Company purchased approximately 52% of its products from three Far
          East suppliers with two vendors accounting for 19% each and one vendor
          at 14% of the total purchases.


                                       F-9
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


          In 2002, the Company purchased approximately 52% of its products from
          three Far East suppliers with two vendors accounting for 19% each and
          one vendor at 14% of the total purchases. one domestic supplier with
          each vendor accounting for 22%.

          Inventories- Inventories, which consist solely of finished goods, are
          carried at the lower of cost, determined on a first-in, first-out
          basis (FIFO), or market value.

          Property and Equipment- Property and equipment are stated at cost.
          Additions and improvements are capitalized. Maintenance and repairs
          are expensed as incurred. Depreciation and amortization of property
          and equipment is calculated under the straight-line method over the
          estimated useful lives of the respective assets. Estimated useful
          lives are five to seven years for furniture and fixtures and three to
          ten years for machinery and equipment. Leasehold improvements are
          amortized over the shorter of their estimated useful lives or the
          terms of their leases. Depreciation and amortization expense was $
          485,363 and $569,079 in 2003 and 2002, respectively, and is included
          in selling, general and administrative expense in the consolidated
          statements of operations.

          Other Assets- Consist of refundable deposits on its operating leases.

          Revenue Recognition- Revenue is recognized at the time of shipment.

          Shipping and Handling Fees- The Company records revenues derived from
          shipping and handling in net sales and the costs associated with
          shipping and handling in cost of sales.

          Income Taxes- The Company accounts for income taxes in accordance with
          Statement of Financial Accounting Standards ("SFAS") No. 109,
          "Accounting for Income Taxes." Under the liability method specified by
          SFAS No. 109, a deferred tax asset or liability is determined based on
          the difference between the financial reporting basis and tax basis of
          assets and liabilities, measured using enacted tax rates. The impact
          of changes in tax rates is reflected in income in the period in which
          the change is enacted

                                      F-10
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          Earnings (Loss) per share- Basic earning (Loss) per share (EPS) is
          computed using the weighted average number of common shares
          outstanding for the period while diluted EPS is computed assuming
          conversion of all dilutive securities such as options. Included below
          is a reconciliation of shares for the basic and diluted EPS
          computations.

                                                     2003            2002
                                                  ----------      ----------
          Basic EPS Shares                         4,829,406       5,040,657

          Dilutive effect of stock
          options and warrants                            --              --
                                                  ----------      ----------
          Diluted EPS shares                       4,829,406       5,040,657
                                                  ==========      ==========


          Options to purchase 216,500, and 302,152 shares with exercise prices
          ranging from $.28 to $4.44 and $ .28 to $5.00 were outstanding at
          December 31, 2003 and 2002, respectively, but were not included in the
          computation of diluted EPS because inclusion would be anti dilutive.

          Disclosures About Fair Value of Financial Instruments- The carrying
          values of cash, and cash equivalents, and long-term debt approximate
          their respective fair values.

          Employee Stock Options- The Company applies Accounting Principles
          Board Opinion No. 25 ("APB No. 25"), "Accounting for Stock Issued to
          Employees," which recognizes compensation costs based on the intrinsic
          value of an equity instrument. The Company has applied APB No. 25 to
          its stock compensation awards to employees and has disclosed the
          required pro forma effect on net (loss) income per share in accordance
          with the provisions of SFAS No. 123, "Accounting for Stock-Based
          Compensation" and has adopted the enhanced disclosure provisions of

          SFAS No. 148 "Accounting for Stock-Based Compensation- Transition and
          Disclosure, an amendment of SFAS No. 123" (See Note 4).


                                      F-11
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


          Reclassifications- Certain prior year amounts may have been
          reclassified to conform to current year presentation.

          Use of Estimates in the Preparation of Financial Statements- The
          preparation of financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities and disclosure of contingent assets
          and liabilities at the date of the financial statements and the
          reported amounts of revenues and expenses during the reporting period.
          Actual results could differ from those estimates.

          RECENT ACCOUNTING PRONOUNCEMENTS-

          In August 2001, the Financial Accounting Standards Board ("FASB")
          issued SFAS No. 144, "Accounting for the Impairment or Disposal of
          Long-Lived Assets" ("SFAS 144"). This statement addresses financial
          accounting and reporting for the impairment or disposal of long-lived
          assets. The new guidance resolves significant implementation issues
          related to SFAS 121, "Accounting for the Impairment of Long-Lived
          Assets to be Disposed Of." SFAS 144 is affected for fiscal years
          beginning after December 21, 2001 and interim periods within those
          fiscal years. Adoption of SFAS 144 on January 1, 2002 did not have any
          impact on the Company's financial position, cash flows, or results of
          operations for the years ended December 31, 2003 AND 2002.

          In April 2002, the FASB issued SFAS No. 145, "Recission of FASB
          Statements No. 4, 44 and 64, Amendment of FASB statement No. 13, and
          Technical Corrections" ("SFAS 145"). The recission of FASB No. 4,
          "Reporting Gains and Losses for Extinguishment of Debt" applies to the
          Company. FASB No. 4 required that gains and losses from
          extinguishments of debt were included in the determination of net
          income be aggregated and, if material, classified as an extraordinary
          item, net of related income tax effect. SFAS 145 is effective for the
          Company's our fiscal year beginning January 1, 2003. Effective January
          1, 2003, pursuant to SFAS 145, the treatment of the early
          extinguishments of debt will be included in "other expenses" in the
          financial statements. Management does not anticipate that the adoption
          of SFAS 145 will not expected to have a material impact on the
          Company's financial position and results of operations.

                                      F-12
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


          RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

          In June 2002, the FASB issued Statement No. 146 "Accounting for Costs
          Associated with Exit or Disposal Activities" ("SFAS 146"). The
          standard requires companies to recognize costs associated with exit or
          disposal activities when they are incurred rather than at the date of
          commitment to an exit or disposal plan. Examples of costs covered by
          the standard include lease termination costs and certain employee
          severance costs that are associated with restructuring, discontinued
          operation, plant closing, or other exit or disposal activities.
          Previous accounting guidance provided by EITF Issue No. 94-3,
          "Liability Recognition for Certain Employee Termination Benefits and
          Other Costs to Exit on Activity (Including Certain Costs Incurred in a
          Restructuring)" is replaced by this statement. SFAS 146 is to be
          applied prospectively to exit or disposal activities initiated after
          December 31, 2002. Management does not anticipate that the adoption of
          this statement will have a significant effect on the Company's
          financial position or results of operations.

          In December 2002, the FASB issued Statement No. 148, "Accounting for
          Stock-Based Compensation-Transition and Disclosure, an amendment of
          FASB Statement No. 123"("SFAS 148"). SFAS 148 amends FASB Statement
          No. 123, "Accounting for Stock-Based Compensation," to provide
          alternative methods of transition for an entity that voluntarily
          changes to the fair value based method of accounting for stock-based
          employee compensation. It also amends the disclosure provisions of
          that Statement to require prominent disclosure about the effects on
          reported net income of an entity's accounting policy decisions with
          respect to stock-based employee compensation. Finally, this Statement
          amends Accounting Principles Board ("APB") Opinion No. 28, "Interim
          Financial Reporting", to require disclosure about those effects in
          interim financial information. SFAS 148 is effective for financial
          statements for fiscal years ending after December 15, 2002. The
          Company will continue to account for stock-based employee compensation
          using the intrinsic value method of APB Opinion No. 25, "Accounting
          for Stock Issued to Employees," but has adopted the enhanced
          disclosure requirements of SFAS 148


                                      F-13
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002

NOTE 2 -  PROPERTY AND EQUIPMENT - NET

          Property and equipment consists of the following:

                                                     DECEMBER 31,
                                            ------------------------------
                                                2003              2002
                                            ------------      ------------
          Machinery and equipment           $  2,669,243      $  2,440,634
          Furniture and fixtures                 416,153           416,153
          Vehicles                                38,463            38,463
          Leasehold improvements                 246,926           246,926
                                            ------------      ------------
                                               3,370,785         3,142,176

          Less accumulated depreciation
            and amortization                  (2,850,659)       (2,370,260)
                                            ------------      ------------
          Property and equipment, net       $    520,126      $    771,916
                                            ============      ============



NOTE 3 -  LONG-TERM DEBT

          Long-term debt consists of the following:

                                                      DECEMBER 31,
                                            ------------------------------
                                                2003              2002
                                            ------------      ------------
          Revolving Credit Facility         $         --      $         --
          Capital Leases                           6,273            40,089
                                            ------------      ------------
                                                   6,273            40,089
          Less current portion                    (4,335)          (31,579)
                                            ------------      ------------
          Long-term debt, net of
          current portion                   $      1,938      $      8,510
                                            ============      ============


          The interest rates in effect on debt for the years ended December 31,
          2003, and 2002, were 9.1 % and 6.9%, respectively



                                      F-14
<PAGE>
               WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


NOTE 4 -  STOCKHOLDERS' EQUITY

          PREFERRED STOCK- The Board of Directors of the Company, without action
          by the stockholders, is authorized to issue shares of Preferred Stock
          in one or more series and, within certain limitations, to determine
          the voting rights (including the right to vote as a series on
          particular matters), preferences as to dividends and in liquidation,
          conversion, redemption, and other rights of each such series. The
          Board of Directors could issue series with rights more favorable with
          respect to dividends, liquidation and voting than those held by the
          holders of any class of Common Stock.

          COMMON STOCK- The shares of Common Stock have one vote per share. None
          of the shares have preemptive or cumulative voting rights, redemption
          rights, are or will be liable for assessment or further calls. The
          holders of the Common Stock are entitled to dividends when declared
          from funds legally available therefore.

          On January 11, 2001, the Board of Directors approved a stock buyback
          program whereby the Company will repurchase a total of up to 500,000
          shares of Common Stock at a total cost not to exceed $250,000 through
          July 10, 2004. As of December 31, 2003 and 2002, the Company has
          repurchased 488,110 and 344,810 shares at an average price of $0.26
          and $0.21 per share, respectively.

          In April 2003, the Company issued 10,000 shares of the Company's
          Common Stock to each of the four non-employee directors of the Company
          for a total of 40,000 shares. Compensation expense of $9,200 has been
          charged to the financial statements as of December 31, 2003 to
          recognize the fair value of the shares as of the date of issuance.

          In August of 2003, the Board approved the adoption by the Company of a
          restricted employee stock plan authorizing the Company to issue up to
          250,000 shares of its common Stock to an officer and key managers and
          employees of the Company. Each share issuance to a designated employee
          is subject to the following vesting provision:
          20% upon on the issuance of each individual grant.
          20% on each consecutive one year anniversary from the original date of
          issuance.

                                      F-15
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


          In October 2003 the Company under this plan issued 8,000 shares of
          Common Stock to an officer of the Company and 32,000 to four other key
          Managers with 1,600 and 6,400 shares, respectively, being immediately
          vested. Compensation expense of $10,400 has been charged to the
          financial statements as of December 31, 2003 to recognize the fair
          value of the shares as of the date of issuance.

          STOCK OPTIONS- The Company, on June 6, 1995, adopted the Company's
          Stock Option Plan (the "Plan"), which as amended in December 1995,
          authorizes the Board of Directors or a Stock Option Committee
          appointed by the Board to grant up to 250,000 qualified stock options
          and non-qualified stock options to officers and key employees,
          directors, and independent consultants. Directors who are not
          employees and consultants are eligible only to receive non-qualified
          stock options. The Board of Directors in 1995 granted under the Plan
          options to purchase 20,720 shares of Common Stock to two directors at
          a price of $2.89 per share. In 1996, the Company granted under the
          Plan five-year options to purchase an aggregate of 195,000 shares of
          Common Stock to employees. The options are exercisable at the initial
          offering price per share of $5.00. In 1997, the Company granted, under
          the Plan, five-year options to purchase an aggregate of 75,000 shares
          of Common Stock to employees of the Company. The options are
          exercisable at prices ranging from $2.80 to $4.50 per share. In 1998,
          the shareholders of the Company approved an amendment to the Plan
          increasing the number of shares granted by 350,000 to an aggregate
          total of 600,000 for the Plan. In addition in 1998, the Company
          granted, under the Plan, five-year options to purchase an aggregate of
          455,000 shares of Common Stock to directors and employees of the
          Company. The options are exercisable at prices ranging from $1.38 to
          $2.69 per share. In 1999, the Company granted, under the Plan,
          one-year options to purchase 85,000 shares of Common Stock to a
          director of the Company. The options are exercisable at prices ranging
          from $1.38 to $1.88 per share. The Company also granted, under the
          Plan, ten-year options to purchase 95,000 shares of Common Stock to
          directors and employees of the Company. The options are exercisable at
          $1.38 per share.



                                      F-16
<PAGE>
               WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


NOTE 4 -  STOCKHOLDERS' EQUITY (CONTINUED)

          In 2000, the stockholders of the Company approved an amendment to the
          Plan increasing the number of shares reserved for issuance by 400,000
          to an aggregate of 1,000,000 under the Plan. In addition in 2000, the
          Company granted, under the Plan, ten-year options to purchase an
          aggregate of 138,500 shares of Common Stock to directors and employees
          of the Company. In 2001, the Company granted, under the Plan, ten-year
          options to purchase a total of 65,000 shares of Common Stock at $.375
          per share to the directors of the Company. In 2002, the Company
          granted, under the plan, ten-year options to purchase a total of
          51,000 shares of Common Stock at $0.28 per share to the directors of
          the Company. In 2003, the Company did not grant any options under the
          plan. At December 31, 2003 and 2002, there were a total of 694,152 and
          608,500, respectively, shares available for grant.

          The following information pertains to the stock options outstanding
          for the two years ending December 31, 2003:
<TABLE><CAPTION>
                                                                                                     Exercisable
                                                                       Weighted                        Wtd. Avg.
                                                        Number of       Average         Options        Exercise
                                                         Shares       Share Price        Shares          Price
                                                       ----------      ----------      ----------     ----------
          <S>                                          <C>             <C>             <C>            <C>
          Options outstanding at December 31, 2001        315,612            1.58         244,112           1.78
               Granted ...........................         51,000            0.28
               Forfeited .........................        (64,460)          (2.62)
                                                       ----------      ----------      ----------     ----------
          Options outstanding at December 31, 2002        302,152      $     1.18         256,152     $     1.21
               Granted ...........................             --              --
               Forfeited .........................        (85,652)          (1.37)
                                                       ----------      ----------      ----------     ----------
          Options outstanding at December 31, 2003        216,500      $     1.05         207,000     $     1.04
                                                       ==========      ==========      ==========     ==========
</TABLE>


          The following table summarizes information as of December 31, 2003
          concerning currently outstanding and exercisable options:




                                      F-17
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


NOTE 4 -  STOCKHOLDERS' EQUITY (CONTINUED)



                       Option Outstanding                Options Exercisable
                -----------------------------------  ---------------------------
                            Weighted
                            Average
                            Remaining
                           Contractual
                                        Weighted                     Weighted
   Range of        Number      Life     Average        Number         Average
Exercise Price  Outstanding  (Years) Exercise Price  Exercisable  Exercise Price
--------------  -----------  ------- --------------  -----------  --------------
 $0.28-$0.375     102,000      7.7       $ 0.33        102,000       $ 0.33
 $1.01-$2.00      103,500      6.2       $ 1.41         94,000       $ 1.41
 $4.01-$5.00       11,000      6.1       $ 4.44         11,000       $ 4.44



          The outstanding stock options as of December 31, 2003 vest as follows:
          (a) half of the options shares are vested on the date of the grant
          with an additional one-half vesting in the first anniversary therefrom
          (169,000 options outstanding at December 31, 2003) or (b) one-fifth of
          the options shares are vested on the date of grant with an additional
          one-fifth vesting on the first, second, third, and forth anniversaries
          therefrom, respectively (47,500 shares outstanding at December 31,
          2002).

          As provided for in SFAS No. 123, "According for Stock-Based
          Compensation," The Company utilizes the intrinsic value method of
          expense recognition under APB No. 25. Accordingly, no compensation
          cost has been recognized for the stock option plans as all options
          have been issued with exercise prices equal to fair market value. Had







                                      F-18
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


NOTE 4 -  STOCKHOLDERS' EQUITY (CONTINUED

          compensation expense for the stock option plans been determined
          consistent with the provisions of SFAS No. 123 and SFAS No. 148, the
          Company's net income and net income per share would have been the pro
          forma amounts indicated below:


                                                        2003            2002
                                                     ----------      ----------
          As reported (loss)
            from continuing operations:
          Add: Stock-based compensation              $ (164,043)     $ (541,152)
            expense included in reported (loss)
            income from continuing operations
            net of related tax effects                       --              --
          Deduct: Total stock-based employee
            compensation expense determined
            under fair value based method for
            all awards, net of related tax effects       (6,521)        (24,086)
                                                     ----------      ----------
          Pro forma (loss) income from continuing
            operations                               $ (170,564)     $ (565,238)
                                                     ==========      ==========

          Basic and Diluted (loss) from continuing
          operations per common share:
          As reported                                $    (0.03)     $    (0.11)
          Pro forma                                       (0.03)          (0.11)






                                      F-19
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


NOTE 4 -  STOCKHOLDERS' EQUITY (CONTINUED)

          The weighted average fair value of those options granted during the
          year ended December 31 2002 (there were no grants in 2003) was
          estimated at $.26, respectively. The fair value of each option grant
          was estimated on the date of grant using the Black-Scholes option
          pricing model with the following weighted average assumptions:
          risk-free interest rate of 5.7%, for both 2003 and 2002; expected
          dividend yield of 0%; expected life of 6.9 years; and expected
          volatility of 100% for 2003 and 2002, respectively.


NOTE 5 -  INCOME TAXES

          The provision (benefit) for income taxes on continuing operations
          consists of:

                                     2003            2002
                                  ----------      ----------
          Current:
          Federal                 $ (132,385)     $ (181,271)
          State                      (18,804)        (21,379)
                                  ----------      ----------
                                    (151,189)       (202,650)
                                  ----------      ----------
          Deferred:
          Federal                 $ (132,385)        181,271
          State                      (18,804)         21,379
                                  ----------      ----------
                                    (151,189)        202,650
                                  ----------      ----------
          Total provision
          for income taxes        $       --      $       --
                                  ==========      ==========


          In conformity with SFAS No. 109, deferred tax assets and liabilities
          are classified based on the financial reporting classification of the
          related assets and liabilities, which give rise to temporary book/tax
          differences. Deferred taxes related to the following temporary
          differences:


                                      F-20
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


NOTE 5 -  INCOME TAXES (CONTINUED)

                                                               DECEMBER 31,
                                                        ------------------------
                                                           2003          2002
                                                        ----------    ----------
          Deferred income tax assets:
          Benefit of net operating loss carryforward    $  920,370    $  769,181
          Accrued compensation                              39,086        79,539
          Inventory reserve                                106,011        80,073
          Bad debts reserve                                131,416       203,811
          Sales returns and allowances                      35,254        35,090
          Goodwill                                         278,700       305,790
          Other                                             28,500        11,571
                                                        ----------    ----------
                                                         1,539,337     1,485,055
          Deduct:  Deferred income tax liabilities:
          State taxes                                       22,337        25,713
                                                                      ----------
          Valuation allowance                            1,517,000     1,459,342
                                                        ----------    ----------
          Net deferred tax asset                        $       --    $       --
                                                        ==========    ==========


          The effective income tax rate varied from the U.S. Federal statutory
          tax rate as follows:

                                                 2003             2002
                                              ----------       ----------
          Statutory income tax rate                (34.0%)          (34.0%)
          State income (benefit) taxes,
            net of federal tax benefit              (3.0)            (4.0)
          Meals and entertainment                    1.6               --
          Other                                     (0.5)            (0.5)
          Valuation allowance                       35.1             38.5
                                              ----------       ----------
          Effective tax rate                           0%             2.5%
                                              ==========       ==========


          As of December 31, 2003, the Company has federal and state net
          operating loss carry forward amounts of approximately $2,028,069 and
          $3,584,728, respectively. These net operating loss carryforward
          amounts begin to expire in 2011. SFAS No. 109 requires the
          establishment of a deferred tax asset for all deductible temporary
          difference including

                                      F-21
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


NOTE 5 -  INCOME TAXES (CONTINUED)

          operating loss carryforwards. The Company has provided a valuation
          allowance for all of its deferred tax assets as a result of the
          uncertainty that the Company will generate sufficient income in the
          future to fully or partially realize the net deferred tax asset of
          approximately $1,517,000. At December 31, 2003, the deferred tax asset
          has been offset by a valuation allowance of the same amount. Under the
          Tax Reform Act of 1986, the utilization of a corporation's net
          operating loss carryforward is limited following a greater than 50%
          change in ownership. Due to the Company's prior and current equity
          transactions, the Company's net operating loss carryforwards may be
          subject to an annual limitation generally determined by multiplying
          the value of the Company on the date of the ownership change by the
          federal long-term tax exempt rate. Any unused annual limitation may be
          carried forward to future years for the balance of the net operating
          loss carryforward period.


NOTE 6 -  COMMITMENTS AND CONTINGENCIES

          The Company is, from time to time, party to litigation arising in the
          normal course of its business. Based on consultation with legal
          counsel, management of the Company does not believe that any such
          claims or litigation will have a material adverse effect on the
          financial position or results of operations of the Company.

          The Company leases various types of warehouse and other space and
          equipment, furniture, and fixtures under non-cancelable operating
          lease agreements, which expire at various dates. Certain leases for
          warehouse and other space contain rental escalation clauses based on
          the Consumer Price Index. Future minimum lease payments under
          non-cancelable operating leases for the years ending December 31 are
          as follows:

                     2004                                $  423,911
                     2005                                   448,911
                     2006                                   436,411
                     2007                                   444,062
                     2008                                   480,618
                     thereafter                             161,494
                                                         ----------
                     Total:                              $2,395,407
                                                         ==========


                                      F-22
<PAGE>
                WIRELESS XCESSORIES GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2003 AND 2002


NOTE 6 -  COMMITMENTS AND CONTINGENCIES

          Rent expense exclusive of common area maintenance and real estate
          taxes, where applicable for all operating leases for the years ended
          December 31, 2003, and 2002 was $384,118 and $378,950, respectively.

          During 2000, the Company entered into certain capital leases for
          warehouse equipment. Total future lease payments under these lease
          obligations are $4,749 and $1,979 in 2004 and 2005, respectively.
          Included in future lease payments are $455 representing interest.


NOTE 7 -  RELATED PARTY TRANSACTIONS

          The Company employs Susan Rade, wife of Stephen Rade, current Chief
          Executive Officer of the Company, as a sales person with certain
          administrative duties. In this role, Mrs. Rade earns the bulk of her
          compensation as part of the Company's sales incentive commission
          programs earning $192,657 and $229,047 in 2003 and 2002, respectively,
          including draws, commission and a $36,000 salary for administration
          duties.


NOTE 8 -  SEGMENT DISCLOSURE

          The Company effectively operates in one business segment, the Wireless
          Products Segment, which distributes cellular telephone accessory
          products including batteries, chargers, and antennas throughout North
          America. The Wireless Products Segment is headquartered in Huntingdon
          Valley, Pennsylvania. All revenue and essentially all long-lived
          assets were related to operations in the United States as of and for
          the years ended December 31, 2003, and 2002.

          Export sales for the years ended December 31, 2003 and 2002 were as
          follows:

                                                       2003           2002
                                                     --------       --------
          Europe, Middle East & Africa               $     --       $     --
          Asia and Pacific                                 --             --
          Americas excluding United States             38,829        285,703
                                                     --------       --------
                                                     $ 38,829       $285,703
                                                     ========       ========


          Receivables from export sales at December 31, 2003 and 2002 were
          $9,173 and $37,344, respectively.



                                      F-23

<PAGE>
EXHIBIT
NUMBER

3.1      Certificate of Incorporation of Company and amendments thereto*

3.2      By-Laws*

4.1      Form of Common Stock Certificate*

4.2      Form of Warrant*

10.1     Warrant Agreement related to Redeemable Stock Purchase Warrants*

10.2     Form of Purchase Option issued to underwriter of initial public
         offering*

10.3     Form of Preferred Stock, Series A Certificate*

10.4     1995 Stock Option Plan of Company*

10.5     Forms of Option Agreement under the Plan

10.6     Option issued to Mr. Robert W. Tauber*

10.7     Management Services Agreement between the Company and Founders
         Management Services, Inc., as amended*

10.8     Lease between Advanced Fox Antenna, Inc. and Rade Limited Partners*

10.9     Registration Rights Agreement between the Company and Messrs. Tauber
         and Rade*

10.10    Revolving Credit, Term Loan and Security Agreement, dated January 6,
         1997 among IBJ Schroder Bank & Trust Company as Agent and the Company,
         Advanced Fox Antenna, Inc., Tauber Electronics Inc., Battery
         Acquisition Corp., Specific Energy Corporation, Battery Network, Inc.
         and W.S. Battery & Sales Company, Inc.**

10.11    Amendment No. 1 and Joinder Agreement dated __________ among the
         Company, certain of its affiliates and IBJ Schroder Bank & Trust
         Company***

10.12    Waiver and Amendment to Revolving Credit, Term Loan and Security
         Agreement dated __________ by and among the Company, certain of its
         affiliates and IBJ Schroder Bank & Trust Company****

10.13    Waiver and Amendment to Revolving Credit, Term Loan and Security
         Agreement dated __________ by and among the Company, certain of its
         affiliates and IBJ Schroder Bank & Trust Company*****

                                      F-24
<PAGE>

10.14    Asset Purchase Agreement dated Jan 26, 2000 with respect to the sale of
         substantially all of the assets of Tauber Electronics, Inc.******

10.15    Agreement and Plan of Merger dated February 28, 2001, by and among
         Wireless Xcessories Group, Inc., Accessory Solutions.com Inc.,
         Advanced Fox Antenna, Inc. and Cliffco of Tampa Bay.

10.16    Waiver and Amendment to Revolving Credit, Term Loan and Security
         Agreement dated March 30, 2001 by and among the Company, certain of
         its affiliates and IBJ Schroder Bank & Trust Company.

10.17    Form of Warrant issued to each of Warren H. Haber and John L. Teeger**

21       List of Subsidiaries.

*        Filed as an exhibit to the Company's Registration Statement on Form S-1
         (File No. 33-80939) and incorporated by reference thereto.

**       Filed as an exhibit to the Company's Current Report on Form
         8-K for January 7, 1997 and incorporated by reference thereto.

***      Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
         the three months ended June 30, 1997 and incorporated by reference
         thereto.

****     Filed as an exhibit to the Company's Annual Report on Form 10-K for the
         year ended December 31, 1997 and incorporated by reference hereto.

*****    Filed as an exhibit to the Company's Quarterly Report for the three
         months ended June 30, 1998 and incorporated by reference thereto.

******   Filed as an exhibit to the Company's Current Report on Form 8-K for
         January 27, 2000 and incorporated by reference thereto.

31.1      Certification Pursuant to Rule 13a-14(a) of the Exchange Act, as
          Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2      Certification Pursuant to Rule 13a-14(a) of the Exchange Act, as
          Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1      Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2      Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.

                                      F-25
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

WIRELESS XCESSORIES GROUP, INC.

By: /s/ Stephen Rade
    ---------------------
    Stephen Rade
    Chairman of the Board,
    Chief Executive Officer and
    President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the date indicated.


          NAME                              TITLE                      DATE
          ----                              -----                      ----

/s/ Stephen Rade                  Chairman of the Board,          March 30, 2003
-----------------------------     Chief Executive Officer,
Stephen Rade                      and President (principal
                                  executive officer)

/s/ Ronald E. Badke               Chief Financial Officer         March 30, 2003
-----------------------------     and Secretary (principal
Ronald E. Badke                   financial officer)

/s/ Christopher F. McConnell      Director                        March 30, 2003
-----------------------------
Christopher F. McConnell

/s/ Allan Kalish                  Director                        March 30, 2003
-----------------------------
Allan Kalish

/s/ Christopher C. Cole           Director                        March 30, 2003
-----------------------------
Christopher C. Cole


/s/ Bradley T. MacDonald          Director                        March 30, 2003
-----------------------------
Bradley T. MacDonald


                                      F-26