UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q


|           |                                                                                          
|---------- | -----------------------------------------------------------------------------------------
|(Mark One)
|           |                                                                                          
|x          | QUARTERLY
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|           |                                                                                          
|           | For the quarterly period ended June
 30, 2010                                            
|           |                                                                                          
|OR        
|           |                                                                                          
|o          | TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|           |                                                                                          
|           | For the transition period from
 ___________________ to ___________________               

Commission
file number1-11916

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

|                                          |  |                     
|----------------------------------------- |  | --------------------
|New Jersey                                |  | 22-2582295          
|(State
 or Other Jurisdiction             |  | (I.R.S.
 Employer   
|of
 Incorporation or Organization)        |  | Identification
 No.)
|25 Eastmans Road
 Parsippany, New Jersey  |  | 07054               
|(Address
 of Principal Executive Offices) |  | (Zip
 Code)         

(973) 386-9696(Registrants Telephone Number, Including
Area Code)

Not Applicable(Former Name, Former Address and
Former Fiscal Year, if Changed Since Last Report)

---

Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No o

Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes o No o

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company (see
the definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act). (Check one):

|                          |                     |                         |                            
|------------------------- | ------------------- | ----------------------- | ---------------------------
|Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company x

Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No x

Number of shares of Common
Stock outstanding as of August 12, 2010: 25,658,203

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WIRELESS
TELECOM GROUP, INC.

Table of
Contents

|                              |                                                                                                                        |    |        
|----------------------------- | ---------------------------------------------------------------------------------------------------------------------- | -- | -------
|                              |                                                                                                                        |    | Page(s)
|PART I. FINANCIAL INFORMATION |                                                                                                                        |   
|                              |                                                                                                                        |    |        
|                              | Item 1  Consolidated Financial
 Statements:                                                                           |    |        
|                              |                                                                                                                        |    |        
|                              | Condensed Balance Sheets as of June 30, 2010
 (unaudited)
 and December 31, 2009                                       |    | 3      
|                              |                                                                                                                        |    |        
|                              | Condensed Statements of Operations for the Three and
 Six Months
 Ended June 30, 2010 (unaudited) and 2009 (unaudited) |    | 4      
|                              |                                                                                                                        |    |        
|                              | Condensed Statements of Cash Flows for the Six Months
 Ended June 30, 2010 (unaudited) and 2009 (unaudited)            |    | 5      
|                              |                                                                                                                        |    |        
|                              | Notes to Interim Condensed Financial Statements
 (unaudited)                                                           |    | 6 - 13 
|                              |                                                                                                                        |    |        
|                              | Item 2  Managements Discussion
 and Analysis of FinancialCondition and Results of Operations                         |    | 14  18
|                              |                                                                                                                        |    |        
|                              | Item 3  Quantitative and Qualitative
 Disclosures About Market Risk                                                   |    | 19     
|                              |                                                                                                                        |    |        
|                              | Item 4T  Controls and
 Procedures                                                                                     |    | 19     
|                              |                                                                                                                        |    |        
|PART II. OTHER INFORMATION    |                                                                                                                        |   
|                              |                                                                                                                        |    |        
|                              | Item 1  Legal Proceedings                                                                                             |    | 20     
|                              |                                                                                                                        |    |        
|                              | Item 1A  Risk Factors                                                                                                 |    | 20     
|                              |                                                                                                                        |    |        
|                              | Item 2  Unregistered Sales of
 Equity Securities and Use of Proceeds                                                  |    | 20     
|                              |                                                                                                                        |    |        
|                              | Item 3  Defaults upon Senior
 Securities                                                                              |    | 20     
|                              |                                                                                                                        |    |        
|                              | Item 4  Removed and Reserved                                                                                          |    | 20     
|                              |                                                                                                                        |    |        
|                              | Item 5  Other Information                                                                                             |    | 20     
|                              |                                                                                                                        |    |        
|                              | Item 6  Exhibits                                                                                                      |    | 20     
|                              |                                                                                                                        |    |        
|Signatures                    |                                                                                                                        | 21
|                              |                                                                                                                        |    |        
|Exhibit Index                 |                                                                                                                        | 22

2

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|                                     
|-------------------------------------
|PART 1  FINANCIAL INFORMATION       
|Item 1 
 Financial Statements       
|WIRELESS
 TELECOM GROUP, INC.        
|CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                                      |  |                |            |                    |   |            |  
|--------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | ------------------ | - | ---------- | -
|                                                                                                                      |  | June 30,
 2010 |            | December 31,
 2009 |  
|                                                                                                                      |  |                |            |                    |  
|                                                                                                                      |  | (unaudited)    |            |                    |   |           
|                                                                                                                      |  |                |            |                    |   |            |  
|-
 ASSETS -                                                                                                          
|CURRENT ASSETS:                                                                                                       |  |                |            |                    |   |            |  
|Cash and cash equivalents                                                                                             |  | $              | 11,337,475 |                    | $ | 14,076,382 |  
|Accounts receivable - net of allowance for doubtful
 accounts of $86,436 and $155,173 for 2010 and 2009, respectively |  |                | 4,453,941  |                    |   | 3,023,318  |  
|Income taxes recoverable                                                                                              |  |                | 1,604,772  |                    |   | 1,910,846  |  
|Inventories                                                                                                           |  |                | 7,435,070  |                    |   | 6,944,231  |  
|Deferred income taxes-current                                                                                         |  |                | 324,724    |                    |   | 464,192    |  
|Prepaid expenses and other current assets                                                                             |  |                | 697,220    |                    |   | 523,642    |  
|Assets held for sale                                                                                                  |  |                |           |                    |   | 6,978,163  |  
|                                                                                                                      |  |                |            |                    |   |            |  
|TOTAL CURRENT ASSETS                                                                                                  |  |                | 25,853,202 |                    |   | 33,920,774 |  
|                                                                                                                      |  |                |            |                    |   |            |  
|PROPERTY, PLANT AND EQUIPMENT - NET                                                                                   |  |                | 4,293,799  |                    |   | 4,436,339  |  
|                                                                                                                      |  |                |            |                    |   |            |  
|OTHER ASSETS:                                                                                                         |  |                |            |                    |   |            |  
|Goodwill                                                                                                              |  |                | 1,351,392  |                    |   | 1,351,392  |  
|Deferred income taxes - non-current                                                                                   |  |                | 4,834,716  |                    |   | 4,560,312  |  
|Other assets                                                                                                          |  |                | 911,547    |                    |   | 863,023    |  
|                                                                                                                      |  |                |            |                    |   |            |  
|TOTAL OTHER ASSETS                                                                                                    |  |                | 7,097,655  |                    |   | 6,774,727  |  
|                                                                                                                      |  |                |            |                    |   |            |  
|TOTAL ASSETS                                                                                                          |  | $              | 37,244,656 |                    | $ | 45,131,840 |  
|                                                                                                                      |  |                |            |                    |   |            |  
|                                                                                                                      |  |                |            |                    |   |            |  
|- LIABILITIES AND SHAREHOLDERS EQUITY -                                                                             
|CURRENT LIABILITIES:                                                                                                  |  |                |            |                    |   |            |  
|Accounts payable                                                                                                      |  | $              | 808,520    |                    | $ | 904,542    |  
|Accrued expenses and other current liabilities                                                                        |  |                | 2,337,717  |                    |   | 1,930,225  |  
|Current portion of note payable - bank                                                                                |  |                |           |                    |   | 375,238    |  
|Current portion of mortgage payable                                                                                   |  |                | 65,820     |                    |   | 63,386     |  
|Liabilities held for sale                                                                                             |  |                |           |                    |   | 4,493,409  |  
|                                                                                                                      |  |                |            |                    |   |            |  
|TOTAL CURRENT LIABILITIES                                                                                             |  |                | 3,212,057  |                    |   | 7,766,800  |  
|                                                                                                                      |  |                |            |                    |   |            |  
|LONG TERM LIABILITIES:                                                                                                |  |                |            |                    |   |            |  
|Note payable - bank                                                                                                   |  |                |           |                    |   | 1,313,333  |  
|Mortgage payable                                                                                                      |  |                | 2,737,729  |                    |   | 2,771,259  |  
|Deferred rent payable                                                                                                 |  |                | 64,261     |                    |   | 90,946     |  
|                                                                                                                      |  |                |            |                    |   |            |  
|TOTAL LONG TERM LIABILITIES                                                                                           |  |                | 2,801,990  |                    |   | 4,175,538  |  
|                                                                                                                      |  |                |            |                    |   |            |  
|COMMITMENTS AND CONTINGENCIES                                                                                         |  |                |            |                    |   |            |  
|SHAREHOLDERS EQUITY:                                                                                                 |  |                |            |                    |   |            |  
|Preferred stock, $.01 par value, 2,000,000 shares
 authorized, none issued                                            |  |                |           |                    |   |           |  
|Common stock, $.01 par value, 75,000,000 shares
 authorized, 28,753,861 shares issued, 25,658,203 shares outstanding  |  |                | 287,539    |                    |   | 287,539    |  
|Additional paid-in-capital                                                                                            |  |                | 37,629,023 |                    |   | 37,528,841 |  
|Retained earnings                                                                                                     |  |                | 860,861    |                    |   | 1,985,181  |  
|Accumulated other comprehensive income                                                                                |  |                |           |                    |   | 934,755    |  
|Treasury stock at cost, 3,095,658 shares                                                                              |  |                | (7,546,814 | )                  |   | (7,546,814 | )
|                                                                                                                      |  |                |            |                    |   |            |  
|TOTAL SHAREHOLDERS EQUITY                                                                                            |  |                | 31,230,609 |                    |   | 33,189,502 |  
|                                                                                                                      |  |                |            |                    |   |            |  
|TOTAL LIABILITIES AND SHAREHOLDERS
 EQUITY                                                                           |  | $              | 37,244,656 |                    | $ | 45,131,840 |  
|                                                                                                                      |  |                |            |                    |   |            |  

See
accompanying notes

3

---



WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|----------------------------------------------------------- |  | ------------------------------------ | --------- | ---------------------------------- | - | --------- | - | ---- | ---------- | - | - | ---------- | -
|                                                            |  | For the Three Months
 Ended June 30, |           | For the Six Months
 Ended June 30, |  
|                                                            |  |                                      |           |                                    |  
|                                                            |  | 2010                                 |           | 2009                               |   | 2010      |   | 2009 |           
|                                                            |  |                                      |           |                                    |   |           |   |      |           
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|NET SALES                                                   |  | $                                    | 6,080,604 |                                    | $ | 5,155,815 |   | $    | 12,217,946 |   | $ | 10,683,831 |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|COST OF SALES                                               |  |                                      | 3,124,767 |                                    |   | 2,933,302 |   |      | 6,459,062  |   |   | 5,835,251  |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|GROSS PROFIT                                                |  |                                      | 2,955,837 |                                    |   | 2,222,513 |   |      | 5,758,884  |   |   | 4,848,580  |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|OPERATING EXPENSES                                          |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|Research and development                                    |  |                                      | 553,735   |                                    |   | 533,795   |   |      | 1,095,067  |   |   | 1,053,723  |  
|Sales and marketing                                         |  |                                      | 966,232   |                                    |   | 1,066,124 |   |      | 1,952,488  |   |   | 2,143,423  |  
|General and administrative                                  |  |                                      | 1,114,730 |                                    |   | 1,241,244 |   |      | 2,078,645  |   |   | 2,466,440  |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|TOTAL OPERATING EXPENSES                                    |  |                                      | 2,634,697 |                                    |   | 2,841,163 |   |      | 5,126,200  |   |   | 5,663,586  |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|OPERATING INCOME (LOSS)                                     |  |                                      | 321,140   |                                    |   | (618,650  | ) |      | 632,684    |   |   | (815,006   | )
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|OTHER (INCOME) EXPENSE                                      |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|Interest (income)                                           |  |                                      | (3,327    | )                                  |   | (6,080    | ) |      | (6,778     | ) |   | (32,004    | )
|Interest expense                                            |  |                                      | 53,189    |                                    |   | 54,329    |   |      | 106,671    |   |   | 108,929    |  
|Other (income) - net                                        |  |                                      | (42,766   | )                                  |   | (72,647   | ) |      | (104,896   | ) |   | (65,616    | )
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|TOTAL OTHER (INCOME) EXPENSE                                |  |                                      | 7,096     |                                    |   | (24,398   | ) |      | (5,003     | ) |   | 11,309     |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|INCOME (LOSS) FROM CONTINUING OPERATIONS
 BEFORE INCOME TAX |  |                                      | 314,044   |                                    |   | (594,252  | ) |      | 637,687    |   |   | (826,315   | )
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|PROVISION (BENEFIT) FOR INCOME TAXES                        |  |                                      | 15,809    |                                    |   | (396,098  | ) |      | 19,154     |   |   | (404,693   | )
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|INCOME (LOSS) FROM CONTINUING OPERATIONS                    |  |                                      | 298,235   |                                    |   | (198,154  | ) |      | 618,533    |   |   | (421,622   | )
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|INCOME (LOSS) FROM DISCONTINUED
 OPERATIONS - NET OF TAXES  |  |                                      | (458,493  | )                                  |   | 121,247   |   |      | (1,742,853 | ) |   | 58,244     |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|NET (LOSS)                                                  |  | $                                    | (160,258  | )                                  | $ | (76,907   | ) | $    | (1,124,320 | ) | $ | (363,378   | )
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|INCOME (LOSS) PER COMMON SHARE:                             |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|BASIC AND DILUTED                                           |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|Continuing operations                                       |  | $                                    | 0.01      |                                    | $ | (0.01     | ) | $    | 0.02       |   | $ | (0.02      | )
|Discontinued operations                                     |  | $                                    | (0.02     | )                                  | $ | 0.00      |   | $    | (0.07      | ) | $ | 0.00       |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  
|NET (LOSS) PER COMMON SHARE:                                |  | $                                    | (0.01     | )                                  | $ | (0.01     | ) | $    | (0.05      | ) | $ | (0.02      | )
|                                                            |  |                                      |           |                                    |   |           |   |      |            |   |   |            |  

See accompanying notes

4

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WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

|                                                                                  |  |                                    |            |      |   |            |  
|--------------------------------------------------------------------------------- |  | ---------------------------------- | ---------- | ---- | - | ---------- | -
|                                                                                  |  | For the Six Months
 Ended June 30, |           
|                                                                                  |  |                                    |           
|                                                                                  |  | 2010                               |            | 2009 |  
|                                                                                  |  |                                    |            |      |  
|                                                                                  |  |                                    |            |      |   |            |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |                                    |            |      |   |            |  
|Net (loss)                                                                        |  | $                                  | (1,124,320 | )    | $ | (363,378   | )
|Adjustments to reconcile net (loss) to net cash (used for)
 operating activities: |  |                                    |            |      |   |            |  
|Depreciation and amortization                                                     |  |                                    | 366,258    |      |   | 452,288    |  
|Loss on sale of discontinued operations                                           |  |                                    | 430,565    |      |   |           |  
|Stock compensation expense                                                        |  |                                    | 100,182    |      |   | 178,548    |  
|Deferred rent                                                                     |  |                                    | (26,685    | )    |   | 1,510      |  
|Deferred income taxes                                                             |  |                                    | (134,936   | )    |   | (15,808    | )
|Provision for losses on accounts receivable                                       |  |                                    | (93,630    | )    |   | 99,875     |  
|Changes in assets and liabilities:                                                |  |                                    |            |      |   |            |  
|Accounts receivable                                                               |  |                                    | (526,839   | )    |   | (1,908,176 | )
|Inventory                                                                         |  |                                    | (814,734   | )    |   | 763,824    |  
|Prepaid expenses and other assets                                                 |  |                                    | 34,653     |      |   | (410,168   | )
|Accounts payable, accrued expenses and other current
 liabilities                 |  |                                    | (1,922,599 | )    |   | (1,022,437 | )
|                                                                                  |  |                                    |            |      |   |            |  
|Net cash (used for) operating activities                                          |  |                                    | (3,712,085 | )    |   | (2,223,922 | )
|                                                                                  |  |                                    |            |      |   |            |  
|                                                                                  |  |                                    |            |      |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |                                    |            |      |   |            |  
|Capital expenditures                                                              |  |                                    | (120,690   | )    |   | (55,538    | )
|Proceeds from dispositon of Willtek assets - net                                  |  |                                    | 2,749,975  |      |   |           |  
|Proceeds from sale of short term securities - net                                 |  |                                    |           |      |   | 2,979,969  |  
|                                                                                  |  |                                    |            |      |   |            |  
|Net cash provided by investing activities                                         |  |                                    | 2,629,285  |      |   | 2,924,431  |  
|                                                                                  |  |                                    |            |      |   |            |  
|                                                                                  |  |                                    |            |      |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |  |                                    |            |      |   |            |  
|Payments of mortgage note                                                         |  |                                    | (31,096    | )    |   | (28,838    | )
|Payment of bank note                                                              |  |                                    | (1,475,149 | )    |   | (174,774   | )
|                                                                                  |  |                                    |            |      |   |            |  
|Net cash (used for) financing activities                                          |  |                                    | (1,506,245 | )    |   | (203,612   | )
|                                                                                  |  |                                    |            |      |   |            |  
|                                                                                  |  |                                    |            |      |   |            |  
|Effect of foreign currency on cash and cash equivalents                           |  |                                    | (149,862   | )    |   | (57,365    | )
|                                                                                  |  |                                    |            |      |   |            |  
|                                                                                  |  |                                    |            |      |   |            |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              |  |                                    | (2,738,907 | )    |   | 439,532    |  
|                                                                                  |  |                                    |            |      |   |            |  
|Cash and cash equivalents, at beginning of period                                 |  |                                    | 14,076,382 |      |   | 6,627,397  |  
|                                                                                  |  |                                    |            |      |   |            |  
|                                                                                  |  |                                    |            |      |   |            |  
|CASH AND CASH EQUIVALENTS, AT END OF PERIOD                                       |  | $                                  | 11,337,475 |      | $ | 7,066,929  |  
|                                                                                  |  |                                    |            |      |   |            |  
|                                                                                  |  |                                    |            |      |   |            |  
|SUPPLEMENTAL INFORMATION:                                                         |  |                                    |            |      |   |            |  
|Cash paid during the period for:                                                  |  |                                    |            |      |   |            |  
|Taxes                                                                             |  | $                                  | 278,891    |      | $ | 257,850    |  
|                                                                                  |  |                                    |            |      |   |            |  
|Interest                                                                          |  | $                                  | 133,229    |      | $ | 148,881    |  

See accompanying notes

5

---



WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|-------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|NOTE
 1 - SUMMARY  OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | The
 condensed consolidated balance sheet as of June 30, 2010, the condensed
 consolidated statements of operations for the three and six-month periods
 ended June 30, 2010 and 2009 and the condensed consolidated statements of
 cash flows for the six month periods ended June 30, 2010 and 2009 have been
 prepared by the Company without audit. The condensed consolidated financial
 statements include the accounts of Wireless Telecom Group, Inc. and its wholly-owned
 subsidiaries Boonton Electronics Corporation, Microlab/FXR, Willtek
 Communications GmbH (Willtek), WTG Foreign Sales Corporation and NC Mahwah,
 Inc., collectively the Company. All significant intercompany transactions
 and balances have been eliminated in consolidation.                                                                                                                                      
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | As was
 disclosed by the Company in its first quarter filing, on April 9, 2010, the
 Company entered into an asset purchase agreement to sell substantially all of
 the operating assets and certain liabilities of Willtek and, on May 7, 2010,
 successfully completed this sale. Therefore, the Companys condensed
 consolidated balance sheet as of June 30, 2010 no longer includes these
 assets and liabilities. The Companys condensed consolidated balance sheet at
 December 31, 2009 presents Willteks assets and liabilities to be sold as
 assets and liabilities held for sale. Willteks operating activities through
 the May 7, 2010 sale date are included in the Companys condensed
 consolidated statement of operations as discontinued operations. The
 information presented in these notes to the financial statements pertains
 primarily to the Companys continuing operations.
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | In the
 opinion of management, the accompanying condensed consolidated financial
 statements referred to above contain all necessary adjustments, consisting of
 normal accruals and recurring entries, which are necessary to present fairly
 the Companys results for the interim periods being presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | The
 preparation of financial statements in conformity with accounting principles
 generally accepted in the United States of America (US GAAP) requires
 management to make estimates and assumptions that affect the reported amounts
 of assets and liabilities (including inventory valuation, accounts receivable
 valuation, valuation of deferred tax assets, accrued warranty expense,
 estimated fair values of stock options and assets held for sale) and
 disclosure of contingent assets and liabilities at the date of the financial
 statements and reported amounts of net revenue and expenses during the
 reporting period. Actual results could differ from those estimates.                                                                                                                                                                                                               
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | The
 accounting policies followed by the Company are set forth in Note 1 to the
 Companys financial statements included in its annual report on Form 10-K for
 the year ended December 31, 2009. Specific reference is made to that report
 since certain information and footnote disclosures normally included in
 financial statements in accordance with US GAAP have been condensed or
 omitted from this report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | The results
 of operations for the three and six-month periods ended June 30, 2010 and
 2009 are not necessarily indicative of the results to be expected for the
 full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | Financial
 instruments that potentially subject the Company to concentrations of credit
 risk consist principally of cash and U.S. Treasury investments and accounts
 receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | The
 Company maintains significant cash investments primarily with two financial
 institutions, which at times may exceed Federally insured limits. The Company
 performs periodic evaluations of the relative credit rating of these
 institutions as part of its investment strategy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | Concentrations
 of credit risk with respect to accounts receivable are limited due to the
 Companys large customer base. However, at June 30, 2010, primarily all of
 the Companys receivables do pertain to the telecommunications industry.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|                                                                     | The
 carrying amounts of cash and cash equivalents, short-term investments, trade
 receivables, other current assets and accounts payable approximate fair value
 due to the short-term nature of these instruments. The carrying value of the
 Companys mortgage payable approximates fair value based on its terms which
 reflect market conditions existing as of June 30, 2010. At June 30, 2010, the
 fair value (estimated based upon expected cash outflows discounted at current
 market rates) and carrying value of the fixed rate mortgage payable amounted
 to $3,168,403 and $2,803,549, respectively.                                                                                                                                                                                                                                                                                          

6

---



WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|-------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|NOTE
 1 - SUMMARY
 OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES (Continued)
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|                                                                                 | The
 Company considers all highly liquid investments purchased with an original
 maturity of three months or less to be cash equivalents. Cash and cash
 equivalents consist of bank and money market accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                 | The
 Company has evaluated subsequent events and has determined that there were no
 subsequent events or transactions requiring recognition or disclosure in the
 condensed consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                 | Certain
 prior period information has been reclassified to conform to the current
 periods reporting presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|NOTE
 2  RECENT
 ACCOUNTING PRONOUNCEMENTS                                     
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|                                                                                 | In
 January 2010, the Financial Accounting Standards Board (FASB) issued
 Accounting Standards Update (ASU) 2010-06, Improving Disclosures about Fair Value Measurements. This
 update provides amendments to Subtopic 820-10 that requires new disclosure as
 follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity
 should disclose separately the amounts of significant transfers in and out of
 Level 1 and Level 2 fair value measurements and describe the reasons for the
 transfers. 2) Activity in Level 3 fair value measurements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                 | In the
 reconciliation for fair value measurements using significant unobservable
 inputs (Level 3), a reporting entity should present separately information
 about purchases, sales, issuances, and settlements (that is, on a gross basis
 rather than as one net number). This update provides amendments to Subtopic
 820-10 that clarify existing disclosures as follows: 1) Level of
 disaggregation. A reporting entity should provide fair value measurement
 disclosures for each class of assets and liabilities. A class is often a subset
 of assets or liabilities within a line item in the statement of financial
 position. A reporting entity needs to use judgment in determining the
 appropriate classes of assets and liabilities. 2) Disclosures about
 inputs and valuation techniques. A reporting entity should provide
 disclosures about the valuation techniques and inputs used to measure fair
 value for both recurring and nonrecurring fair value measurements. Those
 disclosures are required for fair value measurements that fall in either
 Level 2 or Level 3.                                                                                                      
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                 | The new
 disclosures and clarifications of existing disclosures are effective for
 interim and annual reporting periods beginning after December 15, 2009,
 except for the disclosures about purchases, sales, issuances, and settlements
 in the roll forward of activity in Level 3 fair value measurements. Those
 disclosures are effective for fiscal years beginning after December 15, 2010,
 and for interim periods within those fiscal years. The adoption of ASU
 2010-06 did not have an impact on the Companys June 30, 2010 condensed
 consolidated financial statements. The Company does not expect the adoption
 of the level 3 portion of the update to have a material impact on its
 condensed consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                 | In October 2009, the Financial Accounting Standards Board (FASB)
 issued Accounting Standards Updates (ASU) 2009-13, Revenue Recognition
 (Topic 605): Multiple Deliverable Revenue Arrangements  A Consensus of the
 FASB Emerging Issues Task Force. This update provides application guidance
 on whether multiple deliverables exist, how the deliverables should be
 separated and how the consideration should be allocated to one or more units
 of accounting. This update establishes a selling price hierarchy for
 determining the selling price of a deliverable. The selling price used for
 each deliverable will be based on vendor-specific objective evidence, if
 available, third-party evidence if vendor-specific evidence is not available,
 or estimated selling price if neither vendor-specific nor third-party
 evidence is available. The Company will be required to apply this guidance
 prospectively for revenue arrangements entered into or materially modified
 after January 1, 2011; however, earlier application is permitted. The Company
 is in the process of evaluating the impact of adopting this ASU on its
 condensed consolidated financial statements.

7

---



WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 3  DISCONTINUED OPERATIONS
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                 | On April 9, 2010, the Company entered into an asset purchase
 agreement to sell substantially all of the operating assets and certain
 liabilities of Willtek and, on May 7, 2010, successfully completed this sale.
 Although no longer included in its condensed consolidated balance sheet as of
 June 30, 2010, the table below presents the Willtek assets and liabilities
 held for sale as of the May 7, 2010 sale date and as of December 31, 2009.
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                 | Additionally, Willteks operating activities through the May 7, 2010
 sale date are included in the Companys condensed consolidated statement of
 operations as discontinued operations.                                                                                                                                                                                                                                                                  
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                 | Assets and liabilities held for sale as of the May 7, 2010 sale date
 and at December 31, 2009 consists of the following:                                                                                                                                                                                                                                                                                                                                  

|                                                 |  |        |           |              |   |           | 
|------------------------------------------------ |  | ------ | --------- | ------------ | - | --------- | 
|                                                 |  | May 7, |           | December 31, |  
|                                                 |  |        |           |              |  
|                                                 |  | 2010   |           | 2009         |  
|                                                 |  |        |           |              |  
|Assets held for
 sale                            |  |        |           |              |   |           | 
|Accounts
 receivable -net                        |  | $      | 1,028,443 |              | $ | 2,037,731 | 
|Inventory  net                                  |  |        | 968,019   |              |   | 1,284,005 | 
|Prepaid expenses
 and other current assets  net |  |        | 314,722   |              |   | 235,457   | 
|Property, plant
 and equipment - net             |  |        |          |              |   |          | 
|Pension insurance
 and other long-term assets    |  |        | 2,670,873 |              |   | 3,420,970 | 
|                                                 |  |        |           |              |   |           | 
|                                                 |  | $      | 4,982,057 |              | $ | 6,978,163 | 
|                                                 |  |        |           |              |   |           | 
|Liabilities held
 for sale                       |  |        |           |              |   |           | 
|Accounts payable                                 |  | $      | 1,562,083 |              | $ | 1,546,794 | 
|Accrued expenses                                 |  |        | 1,180,434 |              |   | 1,332,607 | 
|Pension liability                                |  |        | 1,420,673 |              |   | 1,268,582 | 
|Other long-term
 liabilities                     |  |        |          |              |   | 345,426   | 
|                                                 |  |        |           |              |   |           | 
|                                                 |  | $      | 4,163,190 |              | $ | 4,493,409 | 
|                                                 |  |        |           |              |   |           | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As a result of the sale of Willtek, the Company has recorded a loss
 on sale of discontinued operations of $3,778,687, which represents the excess
 of net assets, and the related realization of other comprehensive income,
 over the net sales price. Of this amount, $430,565 was recognized during the
 six-months ended June 30, 2010 to reflect a change in the estimate of the
 fair value less the cost to dispose Willtek. The loss on sale of discontinued
 operations has been reflected as a reduction of assets held for sale in the
 May 7, 2010 column in the table above.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | The following table summarizes the components of discontinued
 operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

|                                                         |  |                                       |           |                                     |   |           |  |      |            |   |   |            | 
|-------------------------------------------------------- |  | ------------------------------------- | --------- | ----------------------------------- | - | --------- |  | ---- | ---------- | - | - | ---------- | 
|                                                         |  | For the Three Months 
 Ended June 30, |           | For the Six Months 
 Ended June 30, |  
|                                                         |  |                                       |           |                                     |  
|                                                         |  | 2010                                  |           | 2009                                |   | 2010      |  | 2009 |           
|                                                         |  |                                       |           |                                     |   |           |  |      |           
|Net sales                                                |  | $                                     | 1,533,173 |                                     | $ | 6,347,074 |  | $    | 6,642,152  |   | $ | 12,180,801 | 
|Gross profit                                             |  |                                       | 403,038   |                                     |   | 3,313,346 |  |      | 2,609,331  |   |   | 6,338,365  | 
|Income (loss) from discontinued operations
 before taxes |  |                                       | (638,543  | )                                   |   | 127,233   |  |      | (1,313,032 | ) |   | 64,230     | 
|Provision (benefit) for income taxes                     |  |                                       | (985      | )                                   |   | 5,986     |  |      | (744       | ) |   | 5,986      | 
|Income (loss) from discontinued operations               |  |                                       | (637,558  | )                                   |   | 121,247   |  |      | (1,312,288 | ) |   | 58,244     | 
|Gain (loss) on sale of discontinued operations           |  |                                       | 179,065   |                                     |   |          |  |      | (430,565   | ) |   |           | 
|                                                         |  |                                       |           |                                     |   |           |  |      |            |   |   |            | 
|Net income (loss) from discontinued
 operations          |  | $                                     | (458,493  | )                                   | $ | 121,247   |  | $    | (1,742,853 | ) | $ | 58,244     | 
|                                                         |  |                                       |           |                                     |   |           |  |      |            |   |   |            | 

8

---



WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|                                             |                                                                                                                                                                                                                                                   
|-------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 3  DISCONTINUED OPERATIONS (Continued)
|                                             |                                                                                                                                                                                                                                                   
|                                             | Cash flows from discontinued operations for the six-months ended June
 30, 2010 and 2009 are combined with the cash flows from operations within
 each of the three categories presented. Cash flows from discontinued
 operations are as follows:

|                                      |  |                                     |          |      |   |         |  
|------------------------------------- |  | ----------------------------------- | -------- | ---- | - | ------- | -
|                                      |  | For the Six Months 
 Ended June 30, |         
|                                      |  |                                     |         
|                                      |  | 2010                                |          | 2009 |  
|                                      |  |                                     |          |      |  
|Cash flows from
 operating activities |  | $                                   | (64,445  | )    | $ | 16,624  |  
|Cash flows from
 investing activities |  |                                     | (3,136   | )    |   | (25,325 | )
|Cash flows from
 financing activities |  | $                                   | (256,702 | )    | $ | 417,408 |  

|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 4 |  INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | The Company records deferred taxes in accordance with ASC 740,
 Accounting for Income Taxes. This ASC requires recognition of deferred tax
 assets and liabilities for temporary differences between tax basis of assets
 and liabilities and the amounts at which they are carried in the financial
 statements, based upon the enacted rates in effect for the year in which the
 differences are expected to reverse. The Company establishes a valuation
 allowance when necessary to reduce deferred tax assets to the amount expected
 to be realized. The Company periodically assesses the value of its deferred
 tax asset and determines the necessity for a valuation allowance. The Company
 evaluates which portion, if any, will more likely than not be realized by
 offsetting future taxable income, taking into consideration any limitations
 that may exist on its use of its net operating loss carry-forwards.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | The components of deferred income taxes are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|                                                            |  |          |             |              |   |             |  
|----------------------------------------------------------- |  | -------- | ----------- | ------------ | - | ----------- | -
|                                                            |  | June 30, |             | December 31, |  
|                                                            |  | 2010     |             | 2009         |  
|                                                            |  |          |             |              |  
|Deferred tax assets:                                        |  |          |             |              |   |             |  
|Uniform capitalization of inventory costs
 for tax purposes |  | $        | 198,310     |              | $ | 185,322     |  
|Allowances for doubtful accounts                            |  |          | 34,574      |              |   | 62,069      |  
|Accruals                                                    |  |          | 91,840      |              |   | 216,800     |  
|Tax effect of goodwill                                      |  |          | (64,876     | )            |   | (13,524     | )
|Book depreciation over tax                                  |  |          | 10,980      |              |   | (7,644      | )
|Net operating loss carryforward                             |  |          | 18,054,718  |              |   | 18,572,869  |  
|                                                            |  |          |             |              |   |             |  
|                                                            |  |          | 18,325,546  |              |   | 19,015,892  |  
|Valuation allowance for deferred tax assets                 |  |          | (13,166,106 | )            |   | (13,991,388 | )
|                                                            |  |          |             |              |   |             |  
|                                                            |  | $        | 5,159,440   |              | $ | 5,024,504   |  
|                                                            |  |          |             |              |   |             |  

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under ASC 740, the Company must recognize the tax benefit from an
 uncertain position only if it is more-likely-than-not the tax position will
 be sustained on examination by the taxing authority, based on the technical
 merits of the position. The tax benefits recognized in the financial
 statements attributable to such position are measured based on the largest
 benefit that has a greater than 50% likelihood of being realized upon the
 ultimate resolution of the position.                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | By adoption of ASC 740, the Company has analyzed its filing positions
 in all of the federal, state and foreign jurisdictions where it is required
 to file income tax returns. As of June 30, 2010, the Company has identified
 its federal tax return, its state tax return in New Jersey and its foreign
 return in Germany as major tax jurisdictions, as defined, in which it is
 required to file income tax returns. Based on the evaluations noted above,
 the Company has concluded that there are no significant uncertain tax
 positions requiring recognition or disclosure in its condensed consolidated
 financial statements.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Based on a review of tax positions for all open years and contingencies
 as set out in Companys notes to the consolidated financial statements, no
 reserves for uncertain income tax positions have been recorded pursuant to
 ASC 740 during the periods ended June 30, 2010 and 2009.                                                                                                                                                                                                                                                                                                                                                     

9

---



WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)



|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE
 5 | -
 INCOME (LOSS) PER COMMON SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | Basic earnings (loss) per share is calculated by dividing income
 (loss) available to common shareholders by the weighted average number of
 shares of common stock outstanding during the period. Diluted earnings (loss)
 per share are calculated by using the weighted average number of shares of
 common stock outstanding and, when dilutive, potential shares from stock
 options and warrants to purchase common stock, using the treasury stock
 method.

|                                                               |  |                               |            |                             |  |            |  |      |            |  |  |            | 
|-------------------------------------------------------------- |  | ----------------------------- | ---------- | --------------------------- |  | ---------- |  | ---- | ---------- |  |  | ---------- | 
|                                                               |  | Three Months Ended 
 June 30, |            | Six Months Ended 
 June 30, | 
|                                                               |  | 2010                          |            | 2009                        |  | 2010       |  | 2009 |           
|                                                               |  |                               |            |                             |  |            |  |      |           
|                                                               |  |                               |            |                             |  |            |  |      |            |  |  |            | 
|Weighted average common shares outstanding                     |  |                               | 25,658,203 |                             |  | 25,658,203 |  |      | 25,658,203 |  |  | 25,658,203 | 
|Potentially dilutive stock options                             |  |                               | 42,744     |                             |  |           |  |      | 40,502     |  |  |           | 
|                                                               |  |                               |            |                             |  |            |  |      |            |  |  |            | 
|Weighted average common shares outstanding, assuming
 dilution |  |                               | 25,700,947 |                             |  | 25,658,203 |  |      | 25,698,705 |  |  | 25,658,203 | 
|                                                               |  |                               |            |                             |  |            |  |      |            |  |  |            | 

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        | Common stock options are included in the diluted earnings (loss) per
 share calculation for the periods presented when the various option exercise
 prices are greater than the average market price of the common shares for
 each respective period presented. The weighted average number of options not
 included in diluted earnings (loss) per share, because the effects are
 anti-dilutive, was 2,480,626 and 3,336,967 for the three-months ended June
 30, 2010 and 2009, respectively. For the six months ended June 30, 2010, the
 weighted average number of potentially dilutive options not included in
 diluted earnings (loss) per share was 2,525,430 and 3,336,967, respectively.
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|NOTE
 6 | 
 SHAREHOLDERS EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | Comprehensive income (loss) represents changes in equity during a
 period, except those resulting from investments by owners and distributions
 to owners.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | The following table reconciles net income (loss) to comprehensive
 income (loss):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|                                             |  |                                       |          |                                     |   |         |   |      |            |   |   |          |  
|-------------------------------------------- |  | ------------------------------------- | -------- | ----------------------------------- | - | ------- | - | ---- | ---------- | - | - | -------- | -
|                                             |  | For the Three Months 
 Ended June 30, |          | For the Six Months 
 Ended June 30, |  
|                                             |  | 2010                                  |          | 2009                                |   | 2010    |   | 2009 |           
|                                             |  |                                       |          |                                     |   |         |   |      |           
|                                             |  |                                       |          |                                     |   |         |   |      |           
|Net (loss)                                   |  | $                                     | (160,258 | )                                   | $ | (76,907 | ) | $    | (1,124,320 | ) | $ | (363,378 | )
|Changes in other comprehensive income (loss) |  |                                       | (701,413 | )                                   |   | 245,374 |   |      | (934,755   | ) |   | 25,161   |  
|                                             |  |                                       |          |                                     |   |         |   |      |            |   |   |          |  
|Comprehensive income (loss)                  |  | $                                     | (861,671 | )                                   | $ | 168,467 |   | $    | (2,059,075 | ) | $ | (338,217 | )
|                                             |  |                                       |          |                                     |   |         |   |      |            |   |   |          |  

|        |                                                                                                                                       
|------- | --------------------------------------------------------------------------------------------------------------------------------------
|NOTE
 7 | 
 INVENTORIES                                                                                                                        
|        |                                                                                                                                       
|        | Inventory carrying
 value is net of inventory reserves of $716,428 and $810,904 at June 30, 2010
 and December 31, 2009, respectively.
|        |                                                                                                                                       
|        | Inventories
 consist of:                                                                                                              

|                |  |               |           |                  |   |           | 
|--------------- |  | ------------- | --------- | ---------------- | - | --------- | 
|                |  | June 30, 2010 |           | December 31,2009 |  
|                |  |               |           |                  |  
|                |  |               |           |                  |  
|Raw materials   |  | $             | 4,884,729 |                  | $ | 4,393,992 | 
|Work-in-process |  |               | 1,051,293 |                  |   | 1,252,251 | 
|Finished goods  |  |               | 1,499,048 |                  |   | 1,297,988 | 
|                |  |               |           |                  |   |           | 
|                |  | $             | 7,435,070 |                  | $ | 6,944,231 | 
|                |  |               |           |                  |   |           | 

10

---



WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE
 8 | -
 GOODWILL AND LONG-LIVED ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | The Company reviews its goodwill for impairment whenever events or
 changes in circumstances indicate that the carrying amount of these assets
 may not be recoverable, and also reviews goodwill annually in accordance with
 Accounting Standards Codification (ASC) 350, Accounting for Business
 Combinations, Goodwill, and Other Intangible Assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | Long-lived assets are reviewed for impairment whenever events or
 changes in circumstances indicate that the carrying amount of such assets may
 not be recoverable. Determination of recoverability is based on an estimate
 of undiscounted cash flows resulting from the use of the assets and its
 eventual disposition. Measurement of an impairment loss for long-lived assets
 that management expects to hold for sale is based on the fair value of the
 assets. Long-lived assets to be disposed of are reported at the lower of
 carrying amount or fair value less costs to sell.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|NOTE
 9 | - ACCOUNTING FOR STOCK BASED COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | The Company follows the provisions of ASC
 718, Share-Based Payment. The Companys results for the three and six-month
 periods ended June 30, 2010 include share-based compensation expense totaling
 $50,091 and $100,182, respectively. Results for the three and six-month
 periods ended June 30, 2009 include share-based compensation expense of
 $89,274 and $178,548, respectively. Such amounts have been included in the
 Condensed Consolidated Statements of Operations within operating expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | Stock option compensation expense relative to service-based options
 is the estimated fair value of options granted, amortized on a straight-line
 basis over the requisite service period. Stock option compensation expense
 relating to performance-based options is the estimated fair value of options
 granted, recognized when stated performance targets are achieved, or expected
 to be achieved.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | The fair value of options is estimated at the date of grant using the
 Black-Scholes option pricing model. For the options granted, the Company took
 into consideration guidance under ASC 718 and SEC Staff Accounting Bulletin
 No. 107 (SAB 107) when reviewing and updating assumptions. The expected
 option life is derived from assumed exercise rates based upon historical
 exercise patterns and represents the period of time that options granted are
 expected to be outstanding. The expected volatility is based upon historical
 volatility of our shares using weekly price observations over an observation
 period of three years. The risk-free rate is based on the U.S. treasury yield
 curve rate in effect at the time of grant for periods similar to the expected
 option life.                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | During the three months ended June 30, 2010, the Company entered into
 a stock option agreement dated as of April 15, 2010, pursuant to which an
 employee of the Company was awarded options to purchase up to 300,000 shares
 of the Companys common stock at an exercise price of $0.96 per share,
 representing a 5% premium over the average closing bid and asked prices of
 the Companys common stock for the five trading days previous to the date of
 grant. The options are performance-based and are subject to the same
 performance criteria as those granted to the Companys Chief Executive
 Officer in November of 2009. Additionally, during the three-months ended June
 30, 2010, the Company adjusted its outstanding stock options by 301,300
 shares due to expiration. No other stock options were granted, exercised,
 forfeited or canceled for the periods presented. At June 30, 2010, the total
 number of stock option shares outstanding, which includes both service-based
 and performance-based options, was 2,307,667.

11

---



WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|                                                             |                                                                                                                                                 
|------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 9 - ACCOUNTING FOR STOCK BASED COMPENSATION (Continued)
|                                                             |                                                                                                                                                 
|                                                             | The
 following table represents our service-based stock options granted,
 exercised, forfeited and canceled during the first six months of 2010:

|                                                             |  |                   |           |                                              |   |                                                 |  |                             |  |   |  |  | 
|------------------------------------------------------------ |  | ----------------- | --------- | -------------------------------------------- | - | ----------------------------------------------- |  | --------------------------- |  | - |  |  | 
|                                                             |  | Number of
 Shares |           | Weighted
 Average
 Exercise
 Price per share |   | Weighted
 Average
 Remaining
 Contractual
 Term |  | Aggregate
 Intrinsic
 Value | 
|                                                             |  |                   |           |                                              |   |                                                 |  |                             | 
|Service-based
 Stock Options
 Outstanding at January 1, 2010 |  |                   | 1,588,967 |                                              | $ | 2.54                                            |  |                             |  |   |  |  | 
|Granted                                                      |  |                   |          |                                              |   |                                                 |  |                             |  |   |  |  | 
|Exercised                                                    |  |                   |          |                                              |   |                                                 |  |                             |  |   |  |  | 
|Forfeited/Expired                                            |  |                   | (301,300  | )                                            |   |                                                 |  |                             |  |   |  |  | 
|Canceled                                                     |  |                   |          |                                              |   |                                                 |  |                             |  |   |  |  | 
|                                                             |  |                   |           |                                              |   |                                                 |  |                             |  |   |  |  | 
|Outstanding at June 30, 2010                                 |  |                   | 1,287,667 |                                              | $ | 2.57                                            |  | 3.7                         |  |  | 
|                                                             |  |                   |           |                                              |   |                                                 |  |                             |  |   |  |  | 
|                                                             |  |                   |           |                                              |   |                                                 |  |                             |  |   |  |  | 
|Exercisable at June 30, 2010                                 |  |                   | 1,036,917 |                                              | $ | 2.55                                            |  | 3.1                         |  |  | 
|                                                             |  |                   |           |                                              |   |                                                 |  |                             |  |   |  |  | 

| |                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | The
 following table represents our performance-based stock options granted,
 exercised, forfeited and canceled during the first six months of 2010:

|                                                                 |  |                  |           |                                              |   |                                                 |  |                             |  |   |  |  | 
|---------------------------------------------------------------- |  | ---------------- | --------- | -------------------------------------------- | - | ----------------------------------------------- |  | --------------------------- |  | - |  |  | 
|                                                                 |  | Number of Shares |           | Weighted
 Average
 Exercise
 Price per share |   | Weighted
 Average
 Remaining
 Contractual
 Term |  | Aggregate
 Intrinsic
 Value | 
|                                                                 |  |                  |           |                                              |   |                                                 |  |                             | 
|Performance-based
 Stock Options
 Outstanding at January 1, 2010 |  |                  | 720,000   |                                              | $ | 0.97                                            |  |                             |  |   |  |  | 
|Granted                                                          |  |                  | 300,000   |                                              | $ | 0.96                                            |  |                             |  |   |  |  | 
|Exercised                                                        |  |                  |          |                                              |   |                                                 |  |                             |  |   |  |  | 
|Forfeited/Expired                                                |  |                  |          |                                              |   |                                                 |  |                             |  |   |  |  | 
|Canceled                                                         |  |                  |          |                                              |   |                                                 |  |                             |  |   |  |  | 
|                                                                 |  |                  |           |                                              |   |                                                 |  |                             |  |   |  |  | 
|Outstanding at June 30, 2010                                     |  |                  | 1,020,000 |                                              | $ | 0.97                                            |  | 8.9                         |  |  | 
|                                                                 |  |                  |           |                                              |   |                                                 |  |                             |  |   |  |  | 
|                                                                 |  |                  |           |                                              |   |                                                 |  |                             |  |   |  |  | 
|Exercisable at June 30, 2010                                     |  |                  |          |                                              |   |                                                |  |                            |  |  | 
|                                                                 |  |                  |           |                                              |   |                                                 |  |                             |  |   |  |  | 

|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                              | As
 of June 30, 2010, the unearned compensation related to Company granted
 service-based incentive stock options is $152,187 which will continue to be
 amortized over the next two years. The fair value, and unamortized amount, of
 performance-based options granted by the Company as of June 30, 2010 is
 $640,104. This unearned compensation will not be recognized until certain
 performance conditions are achieved. 
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                              | On
 June 8, 2010, the Company issued 40,000 shares of restricted common stock to
 select members of its board of directors. The shares were granted at the June
 8th closing market price of $0.84 per share and will vest on the
 date of the Companys next annual shareholders meeting, a vesting period of
 approximately one year. The total compensation expense to be recognized over
 the vesting period will be $33,600.
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|NOTE 10  SEGMENT INFORMATION: REGIONAL SALES
|                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                              | The
 Company, in accordance with ASC 280, Disclosures about Segments of an
 Enterprise and Related Information, has disclosed the following segment
 information:                                                                                                                                                                                                                                                              

|                                    |  |                                       |           |                                     |   |           |  |      |            |  |   |            | 
|----------------------------------- |  | ------------------------------------- | --------- | ----------------------------------- | - | --------- |  | ---- | ---------- |  | - | ---------- | 
|                                    |  | For
 the Three Months
 Ended June 30, |           | For
 the Six Months
 Ended June 30, |  
|Revenues
 by region                 |  | 2010                                  |           | 2009                                |   | 2010      |  | 2009 |           
|                                    |  |                                       |           |                                     |   |           |  |      |           
|Americas                            |  | $                                     | 4,462,514 |                                     | $ | 3,173,666 |  | $    | 8,687,911  |  | $ | 7,056,674  | 
|Europe,
 Middle East, Africa (EMEA) |  |                                       | 1,055,734 |                                     |   | 1,519,207 |  |      | 2,463,835  |  |   | 2,580,282  | 
|Asia
 Pacific (APAC)                |  |                                       | 562,356   |                                     |   | 462,942   |  |      | 1,066,200  |  |   | 1,046,875  | 
|                                    |  |                                       |           |                                     |   |           |  |      |            |  |   |            | 
|                                    |  | $                                     | 6,080,604 |                                     | $ | 5,155,815 |  | $    | 12,217,946 |  | $ | 10,683,831 | 
|                                    |  |                                       |           |                                     |   |           |  |      |            |  |   |            | 

| |                                                                                                   
| | --------------------------------------------------------------------------------------------------
| | Net sales are attributable
 to a geographic area based on the destination of the product shipment.

12

---



WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 11 - COMMITMENTS AND CONTINGENCIES
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                        | Following
 an investigation by the New Jersey Department of Environmental Protection
 (NJDEP) in 1982, of the waste disposal practices at a certain site formerly
 leased by Boonton, the Company put a ground water management plan into effect
 as approved by the NJDEP. Costs associated with this site are charged
 directly to income as incurred. The owner of this site has notified the
 Company that if the NJDEP investigation proves to have interfered with a sale
 of the property, the owner may seek to hold the Company liable for any loss
 it suffers as a result. However, corporate counsel has informed management
 that, in their opinion, the owner would not prevail in any lawsuit filed due
 to the imposition by law of the statute of limitations.                                                                                                                                                                                                                                                                                                                                                   
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                        | In
 September 2009, the Company secured a line of credit with its investment
 bank. The credit facility provides borrowing availability of up to 100% of
 the Companys money market account balance and 99% of the Companys
 short-term investment securities (U.S. Treasury bills) and, under the terms
 and conditions of the loan agreement, is fully secured by said money fund
 account and short-term investment holdings. Advances under the facility will
 bear interest at a variable rate equal to the London InterBank Offered Rate
 (LIBOR) in effect at time of borrowing. Additionally, under the terms and
 conditions of the loan agreement, there is no annual fee and any amount
 outstanding under the loan facility may be paid at any time in whole or in
 part without penalty. As of June 30, 2010, the Company had no borrowings
 outstanding under the facility and approximately $6,000,000 of borrowing
 availability. The Company has no current plans to borrow from this credit
 facility as it believes its present cash balances will adequately meet
 near-term working capital requirements.
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                        | Proprietary
 information and know-how are important to the Companys commercial success.
 There can be no assurance that others will not either develop independently
 the same or similar information or obtain and use proprietary information of
 the Company. Certain key employees have signed confidentiality and
 non-compete agreements regarding the Companys proprietary information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                        | The
 Company believes that its products do not infringe the proprietary rights of
 third parties. There can be no assurance, however, that third parties will
 not assert infringement claims in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

13

---



|                                                                                                | 
|----------------------------------------------------------------------------------------------- | 
|ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 AND RESULTS OF OPERATIONS

INTRODUCTION

Wireless
Telecom Group, Inc., and its operating subsidiaries, (collectively, the
Company), develop, manufacture and market a wide variety of electronic noise
sources, electronic testing and measuring instruments including power meters,
voltmeters and modulation meters and high-power passive microwave components
for wireless products. The Companys products have historically been primarily
used to test the performance and capability of cellular/PCS and satellite
communication systems and to measure the power of RF and microwave systems.
Other applications include radio, radar, wireless local area network (WLAN) and
digital television.

As
was disclosed by the Company in its first quarter filing, on April 9, 2010, the
Company entered into an asset purchase agreement to sell substantially all of
the operating assets and certain liabilities of Willtek and, on May 7, 2010,
successfully completed this sale. Therefore, the Companys condensed
consolidated balance sheet as of June 30, 2010 no longer includes these assets
and liabilities. The Companys condensed consolidated balance sheet at December
31, 2009 presents Willteks assets and liabilities to be sold as assets and
liabilities held for sale. Willteks operating activities through the May 7,
2010 sale date are included in the Companys condensed consolidated statement
of operations as discontinued operations. The information presented in these
notes to the financial statements pertains primarily to the Companys
continuing operations.

As
a result of the sale of Willtek, the Company has reflected its foreign business
activities as assets and liabilities held for sale and discontinued operations
in its 2010 and 2009 condensed consolidated financial statements disclosed in
Item 1. Further to this disclosure, managements discussion and analysis
pertains primarily to the Companys continuing operations.

The
financial information presented herein includes:


(i)
Condensed Consolidated Balance Sheets as of June 30, 2010 (unaudited) and as of
December 31, 2009 (ii) Condensed Consolidated Statements of Operations for the
three and six-month periods ended June 30, 2010 (unaudited) and 2009
(unaudited) and (iii) Condensed Consolidated Statements of Cash Flows for the
six-month periods ended June 30, 2010 (unaudited) and 2009 (unaudited).


FORWARD LOOKING STATEMENTS

The
statements contained in this Quarterly Report on Form 10-Q that are not
historical facts, including, without limitation, the statements under
Managements Discussion and Analysis of Financial Condition and Results of
Operations, are forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements may
be identified by, among other things, the use of forward-looking terminology
such as believes, expects, intends, plans, may, will, should,
anticipates or continues or the negative thereof of other variations
thereon or comparable terminology, or by discussions of strategy that involve
risks and uncertainties. These statements are based on the Companys current
expectations of future events and are subject to a number of risks and
uncertainties that may cause the Companys actual results to differ materially
from those described in the forward-looking statements. These risks and uncertainties
include, but are not limited to, product demand and development of competitive
technologies in our market sector, the impact of competitive products and
pricing, the loss of any significant customers, the effects of adoption of
newly announced accounting standards, the effects of economic conditions and
trade, legal and other economic risks, among others. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
estimated or projected. These risks and uncertainties are disclosed from time
to time in the Companys filings with the Securities and Exchange Commission,
the Companys press releases and in oral statements made by or with the approval
of authorized personnel. The Company assumes no obligation to update any
forward-looking statements as a result of new information or future events or
developments.

14

---



ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

CRITICAL ACCOUNTING POLICIES

Managements
discussion and analysis of the financial condition and results of operations
are based upon the Companys condensed consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these financial statements
requires the Company to make estimates and judgments 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 amount of
revenues and expenses for each period. The following represents a summary of
the Companys critical accounting policies, defined as those policies that the
Company believes are: (a) the most important to the portrayal of its financial
condition and results of operations, and (b) that require managements most
difficult, subjective or complex judgments, often as a result of the need to
make estimates about the effects of matters that are inherently uncertain.

Share-Based Compensation

The Company follows the provisions of Accounting
Standards Codification (ASC) 718, Share-Based Payment. The fair value of options at the date of grant
was estimated using the Black-Scholes option pricing model. For the
performance-based options granted, the Company takes into consideration
guidance under ASC 718 and SEC Staff Accounting Bulletin No. 107 (SAB 107)
when reviewing and updating assumptions. The expected option life is derived
from assumed exercise rates based upon historical exercise patterns and
represents the period of time that options granted are expected to be
outstanding. The expected volatility is based upon historical volatility of our
shares using weekly price observations over an observation period of three
years. The risk-free rate is based on the U.S. Treasury yield curve rate in
effect at the time of grant for periods similar to the expected option life.
The estimated forfeiture rate included in the option valuation was zero.

Revenue Recognition

Revenue
from product shipments, including shipping and handling fees, is recognized
once delivery has occurred provided that persuasive evidence of an arrangement
exists, the price is fixed or determinable, and collectibility is reasonably
assured. Delivery is considered to have occurred when title and risk of loss
have transferred to the customer. Sales to international distributors are
recognized in the same manner. If title does not pass until the product reaches
the customers delivery site, then recognition of revenue is deferred until
that time. There are no formal sales incentives offered to any of the Companys
customers. Volume discounts may be offered from time to time to customers
purchasing large quantities on a per transaction basis. There are no special
post shipment obligations or acceptance provisions that exist with any sales
arrangements.

Valuation
of Inventory

Raw
material inventories are stated at the lower of cost (first-in, first-out
method) or market. Finished goods and work-in-process are valued at average
cost of production, which includes material, labor and manufacturing expenses.

Comprehensive
(loss)/Foreign currency

Assets
and liabilities of the Companys foreign subsidiaries are translated at
period-end exchange rates, while income and expenses are translated at average
rates for the period. Translation gains and losses are reported as a component
of accumulated other comprehensive (loss) in accordance with ASC 220,
Comprehensive Income.

Allowances for
Doubtful Accounts

The
Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. A key
consideration in estimating the allowance for doubtful accounts has been, and
will continue to be, our customers payment history and aging of its accounts
receivable balance. If the financial condition of any of its customers were to
decline, additional allowances might be required.

15

---



ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Income Taxes

The
Company records deferred taxes in accordance with ASC 740, Accounting for
Income Taxes. This ASC requires recognition of deferred tax assets and
liabilities for temporary differences between tax basis of assets and
liabilities and the amounts at which they are carried in the financial
statements, based upon the enacted rates in effect for the year in which the
differences are expected to reverse. The Company establishes a valuation
allowance when necessary to reduce deferred tax assets to the amount expected
to be realized. The Company periodically assesses the value of its deferred tax
asset, a majority of which has been generated by a history of net operating losses
and determines the necessity for a valuation allowance. The Company evaluates
which portion, if any, will more likely than not be realized by offsetting
future taxable income, taking into consideration any limitations that may exist
on its use of its net operating loss carry-forwards.

Uncertain Tax Positions

Under
ASC 740, the Company must recognize the tax benefit from an uncertain position
only if it is more-likely-than-not the tax position will be sustained on
examination by the taxing authority, based on the technical merits of the
position. The tax benefits recognized in the financial statements attributable
to such position are measured based on the largest benefit that has a greater
than 50% likelihood of being realized upon the ultimate resolution of the
position.

By
adoption of ASC 740, the Company has analyzed its filing positions in all of
the federal, state and foreign jurisdictions where it is required to file
income tax returns. As of June 30, 2010 and December 31, 2009, the Company has
identified its federal tax return, its state tax return in New Jersey and its
foreign return in Germany as major tax jurisdictions, as defined, in which it
is required to file income tax returns. Based on the evaluations noted above,
the Company has concluded that there are no significant uncertain tax positions
requiring recognition or disclosure in its consolidated financial statements.

Based
on a review of tax positions for all open years and contingencies as set out in
Companys notes to the consolidated financial statements, no reserves for
uncertain income tax positions have been recorded pursuant to ASC 740 during
the periods ended June 30, 2010 and 2009.

RESULTS OF OPERATIONS

The following discussion of our financial condition and
results of operations should be read in conjunction with our interim condensed
consolidated financial statements and the notes to those statements included in
Part I, Item I of this Quarterly Report on Form 10-Q and in conjunction with
the consolidated financial statements contained in our Annual Report on Form
10-K for the year ended December 31, 2009.

For
the six-months ended June 30, 2010 as compared to the corresponding period of
the previous year, net sales increased to approximately $12,218,000 from
approximately $10,684,000, an increase of approximately $1,534,000 or 14.0%.
For the three-months ended June 30, 2010 as compared to the corresponding
period of the previous year, net sales increased to approximately $6,081,000
from approximately $5,156,000, an increase of approximately $925,000 or 18%.
These increases are primarily due to strengthening demand for the Companys
domestic subsidiaries products and services.

Gross
profit on net sales for the six-months ended June 30, 2010 was approximately
$5,759,000 or 47.1% as compared to approximately $4,849,000 or 45.4% of net
sales for the six-months ended June 30, 2009. Gross profit on net sales for the
three-months ended June 30, 2010 was approximately $2,956,000 or 48.6% as
compared to approximately $2,223,000 or 43.1% of net sales for the three-months
ended June 30, 2009. Gross profit margins are higher primarily due increased
revenue volume and favorable product mix. Manufacturing labor and overhead
costs remained relatively stable period over period. The Company can experience
variations in gross profit based upon the mix of products sold as well as
variations due to revenue volume and economies of scale. The Company continues
to carefully monitor costs associated with material acquisition, manufacturing
and production.

16

---



ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Operating
expenses for the six-months ended June 30, 2010 were approximately $5,126,000
or 42% of net sales as compared to approximately $5,664,000 or 53% of net sales
for the six-months ended June 30, 2009. Operating expenses for the three-months
ended June 30, 2010 were approximately $2,635,000 or 43% as compared to
approximately $2,841,000 or 55% of net sales for the three-months ended June 30,
2009. Operating expenses are lower for the three and six-months ended June 30,
2010 due to decreases in both sales and marketing expenses and general and
administrative expenses, partially off-set by a slight increase in research and
development expenses. The decreases in general and administrative expenses are
primarily due to lower administrative salaries and stock option expense.

Interest
income decreased by approximately $3,000 and approximately $25,000 for the
three and six-months ended June 30, 2010, respectively, as compared to the
corresponding periods of the previous year. These decreases were primarily due
to the decline in interest rates in the Companys interest bearing accounts. In
reaction to uncertain financial market conditions, the Company has reallocated
substantially all of its cash investments to more secure money market funds.
Other income decreased by approximately $30,000 for the three-months ended June
30, 2010. For the six-months ended June 30, 2010, other income increased
approximately $39,000. The fluctuations in other income and expense are
primarily due to foreign currency gains and losses realized during the periods
reported. The Company can experience these fluctuations depending on the timing
and percentage of sales recorded in foreign currencies compared to overall
reported sales.

For
the six-months ended June 30, 2010, the Company realized net income from
continuing operations of approximately $619,000 or $0.02 per share on a diluted
basis, as compared to a net loss of approximately $422,000 or $0.02 per share
on a diluted basis for the six-months ended June 30, 2009, an increase of
approximately $1,041,000. Net income from continuing operations was
approximately $298,000 or $0.01 per share on a diluted basis for the quarter ended
June 30, 2010 as compared to a net loss from continuing operations of
approximately $198,000 or $0.01 per share on a diluted basis for the quarter
ended June 30, 2009, an increase of approximately $496,000. These increases
were primarily due to the analysis mentioned above.

The
results from continuing operations for all periods presented include certain
general and administrative expenses which are allocated amongst the Companys
individual business units. Due to the presentation of Willtek as a discontinued
operation, these expenses were removed from Willtek and re-allocated back to
the Companys remaining continuing operations. Additionally, for the three and
six-months ended June 30, 2009, included in the results from discontinued
operations are significant non-recurring sales that make the comparison to 2010
unfavorable.

Net
loss from discontinued operations was approximately $1,743,000 or $0.07 per
share on a diluted basis for the six-months ended June 30, 2010 as compared to
net income from discontinued operations of approximately $58,000 or $0.00 per
share on a diluted basis for the six-months ended June 30, 2009, a decrease of
approximately $1,801,000. The loss for the six-months ended June 30, 2010 was
primarily due to approximately $431,000 of a loss recognized on the sale of
Willtek and approximately $1,312,000 of operating losses in Willtek for this
six- month period. For the three-months ended June 30, 2010, net loss from
discontinued operations was approximately $459,000 or $0.02 per share on a
diluted basis as compared to net income of approximately $121,000 or $0.00 per
share on a diluted basis for the three-months ended June 30, 2009, a decrease
of approximately $580,000. The loss for the three-months ended June 30, 2010
was primarily due to approximately $638,000 of operating losses in Willtek
off-set by a $179,000 adjustment to the loss on the sale of Willtek recognized
in this three-month period.

For
the six-months ended June 30, 2010, the Company incurred a net loss of
approximately $1,124,000 or $0.05 per share on a diluted basis, compared to a
net loss of approximately $363,000 or $0.02 per share on a diluted basis for
the six-months ended June 30, 2009, a loss increase of approximately $761,000.
Net loss was approximately $160,000 or $0.01 per share on a diluted basis for
the quarter ended June 30, 2010 as compared to a net loss of approximately
$77,000 or $0.01 per share on a diluted basis for the quarter ended June 30,
2009, a loss increase of approximately $83,000. The net loss fluctuation was
primarily due to the analysis mentioned above.

LIQUIDITY AND CAPITAL RESOURCES:

The
Companys working capital has decreased by approximately $3,513,000 to
approximately $22,641,000 at June 30, 2010, from approximately $26,154,000 at
December 31, 2009. At June 30, 2010 the Company had a current ratio of 8.1 to
1, and a ratio of debt to tangible net worth of .2 to 1. At December 31, 2009,
the Company had a current ratio of 4.4 to 1, and ratio of debt to tangible net
worth of .4 to 1.

17

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ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The
Company had a cash and cash equivalents balance of approximately $11,337,000 at
June 30, 2010, compared to approximately $14,076,000 at December 31, 2009. The
Company believes its current level of cash and cash equivalents is sufficient
enough to fund the current operating, investing and financing activities.

The
Company used cash for operating activities, including discontinued operations,
of approximately $3,712,000 for the six-month period ending June 30, 2010. The
primary use of this cash was due to a loss from operations as well as a
decrease in accounts payable, accrued expenses and other current liabilities,
an increase in inventory, and an increase in accounts receivable, partially
off-set by a decrease in prepaid expenses and other assets.

The
Company has historically been able to turn over its accounts receivable
approximately every two months. This average collection period has been
sufficient to provide the working capital and liquidity necessary to operate
the Company.

The
Company used cash for operating activities, including discontinued operations,
of approximately $2,224,000 for the six-month period ending June 30, 2009. The
primary use of this cash was due to an increase in accounts receivable, a
decrease in accounts payable, accrued expenses and other current liabilities,
and an increase in prepaid expenses and other assets, partially off-set by a
decrease in inventory.

Net
cash provided by investing activities for the six-months ended June 30, 2010
was approximately $2,629,000. The source of these funds was from proceeds
relating to the disposition of Willtek, off-set by capital expenditures. For
the six-months ended June 30, 2009, net cash provided by investing activities
was approximately $2,924,000. The primary source of these funds was from the
sale of short-term securities, off-set by capital expenditures.

Cash
used for financing activities for the six-months ended June 30, 2010 and 2009
was approximately $1,506,000 and $204,000, respectively. The use of these funds
for the six-months ended June 30, 2010 was for the re-payment of a bank loan
and periodic payments of a mortgage note. For the six-months ended June 30,
2009, the use of these funds was for the periodic payments of a bank loan and
mortgage note.

In
2010, the Company satisfied the entire outstanding principal and interest due
on its bank note payable through payment of approximately $1,475,000. Since
this bank note was in principle a Euro denominated loan, the outstanding loan
balance was subject to foreign currency fluctuations. The Company benefited
from the weakening Euro at time of payment.

Other
than contractual obligations incurred in the normal course of business, the
Company does not have any off-balance sheet arrangements.

In
September 2009, the Company secured a line of credit with its investment bank.
The credit facility provides borrowing availability of up to 100% of the
Companys money market account balance and 99% of the Companys short-term
investment securities (U.S. Treasury bills) and, under the terms and conditions
of the loan agreement, is fully secured by said money fund account and
short-term investment holdings. Advances under the facility will bear interest
at a variable rate equal to the London InterBank Offered Rate (LIBOR) in
effect at time of borrowing. Additionally, under the terms and conditions of
the loan agreement, there is no annual fee and any amount outstanding under the
loan facility may be paid at any time in whole or in part without penalty. As
of June 30, 2010, the Company had no borrowings outstanding under the facility
and approximately $6,000,000 of borrowing availability.

The
Company believes that its financial resources from working capital are adequate
to meet its current needs. However, should current global economic conditions
continue to deteriorate, additional working capital funding may be required
which may be difficult to obtain due to restrictive credit markets.

Throughout
its ownership of Willtek, the Company had been required to fund its foreign
operations through cash loans and advances. Due to the successful completion of
the sale of Willteks assets, this funding will no longer be required.

INFLATION AND
SEASONALITY

The
Company does not anticipate that inflation will significantly impact its
business or its results of operations nor does it believe that its business is
seasonal.

18

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ITEM 3 -
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not
applicable.

ITEM 4T -
CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure
Controls and Procedures

Under
the supervision and with the participation of our management, including our
principal executive officer and principal financial officer, as of the end of
the period covered by this report, we conducted an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Act of 1934. Our disclosure controls and procedures are designed to provide
reasonable assurance that the information required to be included in our
Securities and Exchange Commission (SEC) reports is recorded, processed,
summarized and reported within the time periods specified in SEC rules and forms,
relating to Wireless Telecom Group, Inc., including our consolidated
subsidiaries, and was made known to them by others within those entities,
particularly during the period when this report was being prepared. Based on
this evaluation, our principal executive officer and principal financial
officer concluded that, as of the period covered by this report, our disclosure
controls and procedures are effective at these reasonable assurance levels.

(b) Changes in Internal
Controls over Financial Reporting

In
connection with the evaluation required by paragraph (d) of Rule 13a-15
under the Exchange Act, there was no change identified in our internal control
over financial reporting that occurred during the last fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

19

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PART II - OTHER
INFORMATION

|                                                                     |                                                                                                                                                    
|-------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|Item
 1. LEGAL PROCEEDINGS                                          
|                                                                    
|                                                                     | The Company is not aware of any
 material legal proceeding against the Company or in which any of their
 property is subject.                      
|                                                                     |                                                                                                                                                    
|Item
 1A. RISK FACTORS                                              
|                                                                    
|                                                                     | The Company is not aware of any
 material changes from risk factors as previously disclosed in its Form 10-K
 for the year ended December 31, 2009.
|                                                                     |                                                                                                                                                    
|Item
 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|                                                                    
|                                                                     | None.                                                                                                                                              
|                                                                     |                                                                                                                                                    
|Item
 3. DEFAULTS UPON SENIOR SECURITIES                            
|                                                                    
|                                                                     | None.                                                                                                                                              
|                                                                     |                                                                                                                                                    
|Item
 4. REMOVED AND RESERVED                                       
|                                                                     |                                                                                                                                                    
|                                                                    
|Item
 5. OTHER INFORMATION                                          
|                                                                    
|                                                                     | None.                                                                                                                                              
|                                                                     |                                                                                                                                                    
|Item
 6. EXHIBITS                                                   

|            |  |                                                                                                                                                                                        |  | 
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit No. |  | Description                                                                                                                                                                            |  | 
|            |  |                                                                                                                                                                                        |  | 
|            |  |                                                                                                                                                                                        |  | 
|31.1        |  | Certification Pursuant to Section
 302 of The Sarbanes-Oxley Act of 2002 (Principal Executive Officer and
 Principal Financial Officer)                                               
|            |  |                                                                                                                                                                                        | 
|32.1        |  | Certification Pursuant to 18
 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley
 Act of 2002 (Principal Executive Officer and Principal Financial Officer)

20

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                       |                                  | 
|---------------------- | -------------------------------- | 
|                       | WIRELESS TELECOM
 GROUP, INC.    | 
|                       |                                  | 
|                       | (Registrant)                     | 
|                       |                                  | 
|Date: August 12,
 2010 | /S/Paul Genova                   | 
|                       |                                  | 
|                       | Paul Genova                      | 
|                       | Chief Executive
 Officer and CFO | 

21

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EXHIBIT
LIST

|             |  |                                                                                                                                                                                         |  | 
|------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit
 No. |  | Description                                                                                                                                                                             |  | 
|             |  |                                                                                                                                                                                         |  | 
|             |  |                                                                                                                                                                                         |  | 
|31.1         |  | Certification
 Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 (Principal
 Executive Officer and Principal Financial Officer)                                                
|             |  |                                                                                                                                                                                         | 
|32.1         |  | Certification
 Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The
 Sarbanes-Oxley Act of 2002 (Principal Executive Officer and Principal
 Financial Officer)

22

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