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

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   Form 10-QSB

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACTS OF 1934

                  For the quarterly period ended March 31, 2005


                         Commission File Number 0-27996




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

           Delaware                                            13-3835420
           --------                                            ----------
(State or other jurisdiction of                            (I.R.S. Employer
 Incorporation or Organization)                          Identification Number)


                              1840 COUNTY LINE ROAD
                           HUNTINGDON VALLEY, PA 19006
                           ---------------------------
                    (Address of principal executive offices)

                                 (215) 322-4600
                                 --------------
              (Registrant's telephone number, including area code)

                                       N/A
              (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 [_]

As of April 1, 2005, there were 4,458,195 shares of the registrant's Common
Stock net of Treasury Stock, par value $.001 per share, outstanding.

FORWARD LOOKING STATEMENTS

Some of the information presented in this quarterly report constitutes
forward-looking statements within the meaning of the private Securities
Litigation Reform Act of 1995. Statements that are not historical facts,
including statements about management's expectations for fiscal year 2005 and
beyond, are forward looking statements and involve various risks and
uncertainties. Although the Company believes that its expectations are based on
reasonable assumptions within the bounds of its knowledge, there can be no
assurance that actual results will not differ materially from the Company's
expectations. Factors that could cause the actual results to differ materially
from expectations are discussed in the Company's Annual Report on Form 10-K and
in other filings with the Securities and Exchange Commission

================================================================================
<PAGE>

                         WIRELESS XCESSORIES GROUP, INC.
                 FORM 10-QSB FOR THE PERIOD ENDED MARCH 31, 2005

                                      INDEX

PART I.    FINANCIAL INFORMATION

ITEM 1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

           Condensed Consolidated Balance Sheets March 31, 2005
            (unaudited) and December 31, 2004...............................  3

           Condensed Consolidated Statements of Income for the
            three months ended March 31, 2005 and 2004
            (unaudited).....................................................  4

           Condensed Consolidated Statements of Cash Flow
            for the three months ended March 31, 2005 and
            2004 (unaudited)................................................  5

            Notes to Condensed Consolidated Financial Statements ........... 6-7

ITEM 2.    Management's Discussion and Analysis of Financial
            Condition and Results of Operations...........................  7-10

ITEM 3.    Financial graphs.................................................  10

ITEM 4.    Controls and Procedures .........................................  11


PART II.   COMPANY HISTORY, OVERVIEW, AND DESCRIPTION OF RECENT EVENTS

ITEM 1.    Company history, overview, and description of recent events ..  11-14

ITEM 2.    Risk Factors.....................................................  14


PART III.  OTHER INFORMATION

ITEM 1.    Submission of Matters to a Vote of Security Holders............ 14-15

           Signatures.......................................................  15

                                        2
<PAGE>

FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         WIRELESS XCESSORIES GROUP, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                                     ASSETS

                                                     March 31,     December 31,
                                                       2005            2004
                                                    -----------    -----------
                                                    (unaudited)

CURRENT ASSETS:
Cash and cash equivalents                           $     2,433    $     1,907
Accounts receivable (net of allowance of
$195 and $157, respectively)                              1,431          1,131
Inventories                                               1,389          1,559
Prepaid expenses and other current assets                   210            204
Current portion- notes receivable                           --              13
                                                    -----------    -----------

    Total Current Assets                                  5,463          4,814


PROPERTY AND EQUIPMENT - Net                                451            449

OTHER ASSETS                                                 36             36
                                                    -----------    -----------
  TOTAL ASSETS                                      $     5,950    $     5,299
                                                    ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of long-term debt                   $       --     $         2
Accounts payable                                            989            972
Net liabilities on disposal of discontinued
operations                                                   36             36
Accrued payroll and related benefits                        196            192
Other accrued expenses                                      102             45
                                                    -----------    -----------
  Total Current Liabilities                               1,323          1,247
                                                    -----------    -----------

STOCKHOLDERS' EQUITY
  Preferred stock, par value $0.001, 1,000,000
  shares authorized, no shares issued or
  outstanding
  Common stock, par value $.001, 10,000,000
  shares authorized, 5,327,080 and 5,327,080
  issued in 2005 and 2004, respectively.                      5              5
  Additional paid-in-capital                             11,364         11,364
  Accumulated deficit                                    (6,289)        (6,864)
  Treasury Stock at cost, 868,885 in 2005 and 2004         (453)          (453)
                                                    -----------    -----------
  Total Stockholders' Equity                              4,627          4,052
                                                    -----------    -----------

  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $     5,950    $     5,299
                                                    ===========    ===========

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

                                        3
<PAGE>

                         WIRELESS XCESSORIES GROUP, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


                                                        Three Months Ended
                                                              March  31,
                                                        2005           2004
                                                    -----------    -----------

NET SALES                                           $     4,955    $     3,151

COST OF SALES                                             2,889          1,690
                                                    -----------    -----------
  Gross profit                                            2,066          1,461

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES              1,512          1,397
                                                    -----------    -----------

INCOME  FROM OPERATIONS                                     554             64

OTHER INCOME (EXPENSE):
DIVIDEND INCOME AND CAPITAL GAINS DISTRIBUTIONS              18            --
INTEREST INCOME                                               3              7
INTEREST (EXPENSE), net                                     --              (3)
                                                    -----------    -----------

  Income before income taxes                                575             68


PROVISION FOR INCOME TAX                                    --             --
                                                    -----------    -----------

  Net Income                                        $       575    $        68
                                                    ===========    ===========

Net Income per common share - Basic and Diluted     $       .13    $       .01
                                                    ===========    ===========

Basic weighted average common shares outstanding      4,458,195      4,865,270
                                                    ===========    ===========

Diluted weighted average common shares outstanding    4,569,147      4,891,350
                                                    ===========    ===========

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

                                        4
<PAGE>

                         WIRELESS XCESSORIES GROUP, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                   (UNAUDITED)
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


                                                    Three Months Ended March 31
                                                        2005           2004
                                                    -----------    -----------

OPERATING ACTIVITIES:
Net income                                          $       575    $        68
Adjustments to reconcile net income to cash
  provided by operating activities-
    Depreciation and amortization                            75             77
    Provision for doubtful accounts                          29             57

Changes in assets and liabilities, net of
  effects from dispositions:

    Accounts receivable                                    (329)          (232)
    Inventories                                             170             58
    Prepaid expenses and other assets                       (15)           (21)
    Accounts payable and accrued expenses                    78            257
                                                    -----------    -----------

Net cash provided by operating activities                   583            264
                                                    -----------    -----------

INVESTING ACTIVITIES:
Purchase of property and equipment                          (68)           (44)
Principal payments on notes receivables                      13             26
                                                    -----------    -----------

Net cash (used in) investing activities                     (55)           (18)
                                                    -----------    -----------

FINANCING ACTIVITIES:
Net payments on borrowings                                   (2)            (1)
Repurchase of company stock                                 (--)           --
Net cash (used in) financing activities                      (2)            (1)
                                                    -----------    -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                   526            245

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD            1,907          1,316
                                                    -----------    -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                  2,433          1,561
                                                    ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:

    Interest                                        $       --     $         3
                                                    ===========    ===========

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

                                        5
<PAGE>

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

1. BASIS OF PRESENTATION

The condensed consolidated financial statements included herein have been
prepared by the management of Wireless Xcessories Group, Inc. ("Wireless
Xcessories" or the "Company") without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations.
These statements include all adjustments that, in the opinion of management, are
necessary to provide a fair statement of the results for the periods covered.
All such adjustments are of a normal recurring nature. These condensed
consolidated financial statements should be read in conjunction with the audited
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2004. The results of
operations for the three months ended March 31, 2005 are not necessarily
indicative of the results for the full year. Certain prior year amounts have
been reclassified to conform to current period presentations.

2. STOCK REPURCHASE PROGRAM

As of March 31, 2005, the Company under a Stock buyback program authorized by
its Board of Directors had repurchased 868,885 shares at an average approximate
price of $.51 share, recorded at cost as Treasury Stock in the accompanying
condensed consolidated balance sheet net of re-issuances as at March 31, 2005.
During the September 2004 quarter, the Board approved an increase in the Company
Stock Buyback Plan to a total of up to 1,250,000 shares at a cost not to exceed
$1,000,000 through July 20, 2005.

3. SEGMENT DISCLOSURE

The Company operates in one business segment, which distributes cellular
telephone accessory products principally in North America. The Wireless Products
Segment is headquartered in Huntingdon Valley, Pennsylvania and all revenue and
essentially all long-lived assets were related to operations in the United
States as of March 31, 2005 and during the periods presented.

4. EARNINGS PER SHARE

The Company follows the provisions of Statement of Financial Accounting
Standards No. 128, "Earnings per Share." The calculation of basic and diluted
earnings per share ("EPS") is reflected on the accompanying Condensed
Consolidated Statement of Operations.

Options to purchase 183,500 and 216,500 shares were outstanding at March 31,
2005 and March 31, 2004, respectively, with exercise prices ranging $.28 to
$4.44.

As provided for in SFAS No. 123, "According for Stock-Based Compensation," The
Company utilizes the intrinsic value method of expense recognition under APB No.
25. Accordingly, no compensation cost has been recognized for the stock option
plans as all options have been issued with exercise prices equal to fair market
value. Had compensation expense for the stock option plans been determined
consistent with the provisions of SFAS No. 123 and SFAS No. 148, the Company's
net income and net income per share would have been the pro forma amounts
indicated below:

                                        6
<PAGE>

                                                        2005           2004
                                                    -----------    -----------
As reported net income:
Add: Stock-based compensation                       $       575    $        68
  expense included in reported
  net income net of related tax effects                     --             --
Deduct: Total stock-based
  employee compensation expense
  determined under fair value based
  method for all awards, net of related
  tax effects                                               --              (1)
                                                    -----------    -----------
Pro forma net income from
  continuing operations                             $       575    $        67
                                                    ===========    ===========
Basic and Diluted net income
per common share:
As reported                                             $0.13          $0.01
                                                    ===========    ===========
Pro forma                                               $0.13          $0.01
                                                    ===========    ===========

5. SIGNIFICANT ACCOUNTING POLICIES

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

Significant Estimates-- We have made a number of estimates and assumptions
related to the reporting of assets and liabilities in preparation of the
condensed consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America. The most
significant estimates relate to the allowance for doubtful accounts, the reserve
for inventory obsolescence and the deferred tax valuation allowance.

In determining the adequacy of the allowance for doubtful accounts, we consider
a number of factors including the aging of the receivable portfolio, customer
payment trends, and financial condition of the customer, industry conditions and
overall credibility of the customer. Actual amounts could differ significantly
from our estimates.

                                        7
<PAGE>

Notes to Condensed Consolidated Income Statements (Continued):

In determining the adequacy of the reserve for inventory obsolescence, we
consider a number of factors including the aging of the inventory, recent sales
trends, availability of the product in the market, industry market conditions
and overall economic conditions. Actual amounts could differ significantly from
our estimates.

In assessing the realizability of deferred income tax assets, we consider
whether it is more likely than not that the deferred income assets will be
realized through the future generation of taxable income.

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

Revenue Recognition -- Revenue is recognized at the point of shipment in
accordance with our standard shipping terms which is FOB shipping point, which
includes all groups of products and services we provide to our Customers. Any
shipment not in accordance with our standard shipping terms would recognize
revenue at the point of destination.

We uniformly warrant most of our products from defectives and provide limited
stock rotation rights on selected product within 60 days of purchase from our
customers. The total percentage of customer returns is less than 2% of net sales
and the Company provides reserves and allowances to provide for these exposures,
which are applied against net sales.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
 OF OPERATIONS


RESULTS OF OPERATIONS:

The following table represents the Company's statement of income data expressed
as a percentage of net sales for the respective periods:


                                                    Three Months Ended March 31
                                                        2005           2004
                                                    -----------    -----------
Net Sales                                              100.0%         100.0%
Cost of Sales                                           58.3           53.6
                                                      ------         ------
Gross Profit                                            41.7           46.4
Selling, General and administrative Expenses            30.5           44.3
Income from sale of Investments                          0.4            0.0
Interest Income                                          0.1            0.2
Interest Expense                                        (0.0)          (0.1)
                                                      ------         ------
Net Income before Income Tax                            11.7            2.2
Income Tax                                               0.0            0.0
                                                      ------         ------

Net Income                                              11.7%           2.2%
                                                      ======         ======


                                        8
<PAGE>

MANAGEMENT DISCUSSION
---------------------


THREE MONTHS ENDED MARCH 31, 2005 ("2005") COMPARED TO THREE MONTHS ENDED MARCH
31, 2004 ("2004").

Net sales increased by $1.8 million or 57% from $3.2 million in 2004 to $5.0
million in 2005. The increase in sales is mainly attributable to the major
expansion of our products and product lines which was triggered by the
introduction of our highly successful industrial strength line in the fall of
2003, and to the addition of and development of a few higher volume customers
set sales throughout the Wireless industry. Additionally, the Company has
significantly improved its competitive position due to the introduction of these
product lines, expanded value added services offered to customers bolstered by a
25 person well-trained and motivated sales representative and Customer Service
department employees, expanded product selection, expanded marketing and overall
pricing/value relationship offered to customers. We have made significant
progress in fostering the growth of new customers and highly compensate our
sales force for their success in booking new business.

Gross profit increased by $.6 million from $1.5 million in 2004 to $2.1 million
in 2005 and as a percentage of sales decreased from 46.4% to 41.7%. The fall off
in percentage resulted from a large expansion of lower priced brand name product
sales and favorable pricing given to new and selected existing customers to
expand business. Offsetting this in part are the following factors:

     o    Reductions in charges in earnings and as a percentage of sales to
          provide for obsolete and slower moving inventory due primarily to
          enhanced controls over new purchases, and faster identification and
          promotion of overstocked and slow moving product.

     o    Increase in our core product lines including industrial strength,
          platinum and standard lines carry significantly higher margins and are
          subject to less competitive pressures than our branded product lines.

Selling, general and administrative (SG&A) expenses increased by only $115,000
or 8 % as compared to a sales increase of 57%. As a result, total SG&A expenses
as a percentage of sales decreased from 44.3% in 2004 to 30.5% in 2005. This is
a result of the Company's continuous cost cutting program and emphasis on
improved employee productivity particularly, in warehouse labor, which resulted
in a significant improvement in our sales per employee ratio, and in several
other general and administrative line items such as professional fees, bank
fees, telephone costs, significant bad debts due to stringent collection
procedures, rent expense and various other administrative expenses.

Interest (income) decreased from $7,000 in 2004 to $3,000 in 2005. This is
primarily due to a major part of the Company's excess cash in 2005 in
non-interest bearing money market instruments.

The Company's effective income tax rate in calculating a possible expense based
on the net income for the first quarter in 2005 would have been 38% or a total
approximate expense of $218,000. As result of a Company decision to provide an
offsetting tax valuation allowance to cover the amount of the net deferred tax
asset, the net benefit was reduced to $0. The Company has provided the tax
allowance as a result of the uncertainty that the Company will generate
sufficient income in the future to fully or partially realize the net deferred
tax asset of approximately $650,000 at March 31, 2005 inclusive of the
additional $218,000 deducted in this quarter. The effective income tax rate for
both 2004 and 2005 is 38%.


                        LIQUIDITY AND CAPITAL RESOURCES:

The Company's requirements for capital are to fund (i) sales growth, (ii)
financing for possible acquisitions, (iii) repurchase of stock, and (iv) capital
expenditures mainly related to business system and warehouse upgrades. The
Company's primary sources of financing during the three months ended March 31,
2005 were cash flow from operations and reductions in accounts receivable,
inventory and principal and interest payments of notes receivable.

The Company's working capital as of March 31, 2005 and 2004 was $4,140,000 and
$2,901,000 respectively. Net cash provided by operating activities for the three
months ended March 31, 2005 and 2004 were $583,000 and $264,000 respectively. In
2005, the Company provided $679,000 from operations from its net income of
$575,000 as adjusted for non-cash items of depreciation and amortization of
$75,000 and a bad debt provision of $29,000. Cash used in changes in assets and
liabilities of $96,000 resulted from increases in accounts receivable and in
prepaid expense and other assets of $329,000,and $15,000 respectively, offset in
part by a decrease in Inventory of 170,000 and an increase in accounts payable
and accrued expenses of $78,000. The increase in accounts receivable was
directly attributable to substantially higher customer billings in March 2005,
compared to December 2004, offset in part by continued in improvement in
customer collections.

                                        9
<PAGE>

In the three months ended March 31, 2004, the Company provided cash from
operations of $202,000 from its net income of $68,000 as adjusted for non-cash
items of depreciation and amortization of $77,000 and a bad debt provision of
$57,000. Cash provided from changes in assets and liabilities totaled $62,000
resulting from net decreases in inventory of $58,000 and an increase in accounts
payable and accrued expenses of $257,000 offset in part by an increase in
Accounts Receivable of $232,000 and an increase in prepaid expense and other
assets of $21,000.

Net cash used in investing activities for the three months ended March 31, 2005
was $55,000 resulting from the purchase of property and equipment of $68,000
(Principally software related to enhancements in our business system and
computer equipment and peripherals), offset in part by $13,000 of principal note
receivable receipts.

Cash used in financing activities for the three months ended March 31, 2005 was
$2,000 resulting from net reductions in capital leases of $2,000.

The Company estimates that it will incur capital expenditures of approximately
$125,000 during the twelve months ended March 31, 2006, principally for business
and warehouse upgrades.

Based upon its present plans, management believes that operating cash flow,
available cash and available credit resources will be adequate to meet the
working capital cash and capital expenditure needs of the Company during the
twelve months ending March 31, 2006.


CRITICAL ACCOUNTING POLICY AND ESTIMATES

Our Management's Discussion and Analysis of Financial Condition and Results of
Operations section discusses our condensed consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America as promulgated by the Public Company
Accounting Oversight Board. The preparation of these financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. On an
ongoing basis, management evaluates its estimates and judgments, including those
related to revenue recognition, accrued expenses, financing operations, and
contingencies and litigation. Management bases its estimates and judgments on
historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions and conditions. The most significant
accounting estimates inherent in the preparation of our financial statements
include estimates as to the appropriate carrying value of certain assets and
liabilities which are not readily apparent from other sources. These accounting
policies are described at relevant sections in this discussion and analysis and
in the condensed consolidated financial statements included in this quarterly
report.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

SEASONALITY AND INFLATION

In fiscal years 2005 and 2004 the Company did approximately 54% and 55%,
respectively, of its sales in the second half of the year. This reflected the
more traditional pick up of additional business in the months preceding the
December Holiday season.

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

                                       10
<PAGE>

GRAPHS

Total Revenue - Quarterly
Dollars in Millions

        2.809   3.279   3.003   3.151   3.905   4.075   4.176   4.955
       ---------------------------------------------------------------
QTR       2       3       4       1       2       3       4       1
 FY      03      03      03      04      04      04      04      05

Gross Profit - Quarterly
Dollars in Millions

        1.290   1.538   1.419   1.461   1.765   1.746   1.846   2.066
       ---------------------------------------------------------------
QTR       2       3       4       1       2       3       4       1
 FY      03      03      03      04      04      04      04      05

Operating cash flow - Quarterly
Dollars in Thousands

         319    -231     31     263     473     619    -290     583
       ---------------------------------------------------------------
QTR       2       3       4       1       2       3       4       1
 FY      03      03      03      04      04      04      04      05

Earnings per share - Quarterly
Dollars

          0     .03     .02     .01     .07     .06     .07     .13
       ---------------------------------------------------------------
QTR       2       3       4       1       2       3       4       1
 FY      03      03      03      04      04      04      04      05


ITEM THREE- CONTROLS AND PROCEDURES

                EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The term " disclosure controls and procedures " is defined in Rules 13a-15d-15e
and 15d and 15e of the Securities Exchange Act of 1934, as amended (the Exchange
Act). This term refers to the controls and procedures of a Company that are
designed to ensure that information required to be disclosed by a Company in the
reports that it files under the Exchange Act is recorded, processed, summarized
and reported within the required time periods. Our principal executive officer
and principal financial officer have evaluated the effectiveness of our
disclosure controls and procedures as of the end of the period covered by this
quarterly report. They have concluded that, as of March 31, 2005 our disclosure
and procedures were effective in ensuring that required information will be
disclosed on a timely basis in our reports filed under the exchange act.

                                       11
<PAGE>

                          CHANGES IN INTERNAL CONTROLS

There have not been any significant changes in the Company's internal controls
data provided in our form 10-KSB for December 31, 2004. There were no changes in
our internal control over financial reporting that occurred during the quarter
ended March 31, 2005 that has materially affected or is reasonably likely to
materially affect our internal control as required by item 308(c) of Regulation
S-B.


PART II. COMPANY HISTORY
------------------------

ITEM 1 - NARRATIVE
------------------

OVERVIEW & HISTORY
------------------

Wireless Xcessories Group is a leading provider of accessories to dealers,
distributors, retailers, agents and airtime carriers throughout the United
States and Canada. We have created a variety of product lines, totaling over
4,000 items designed to appeal to the widest possible spectrum of wholesale
buyers.

In addition to our products, we support our customers with a wide assortment of
Value Added services, including customized retail packaging, displays, posters,
marketing, and sales training materials, and free e-commerce websites.

Our corporation was formed in 1988, as Advanced Fox Antenna, and our product
line increased steadily as handheld cell phones grew in popularity. As part of
an IPO in April 1996, Advanced Fox Antenna, along with two battery-related
companies were acquired by the parent company Batteries Batteries, Inc. Between
1997 and 2001 we sold off or otherwise divested ourselves of the battery
companies' businesses, merged a similar cell phone accessory company into our
main operation and changed our name to Wireless Xcessories Group. We have, since
then, focused on our core strengths. We consider ourselves to be the largest
distributor of accessories to independent wireless dealers in the Unites States.
Our website address is Wirexgroup.com


PRODUCTS & SERVICES
-------------------

We source, design, create, market and sell a series of accessory product lines
that appeal to all categories of wireless resellers. The bulk of our lines are
aftermarket accessories that our customers offer in lieu of OEM accessories sold
by the cell phone manufacturers.

Our current product lines are called "Standard," "Platinum," and "Industrial
Strength(R)."

In 2004 we created a product design and development division and produced a
series of cases, vehicle power adapters, hands free headsets, and a line of
accessories for popular PDA'S such as Treo and Blackberry. Our current projects
involve a series of Blue Tooth hands free accessories. The mission of our
product development department is to design and create accessories with
exclusive styling and functionality. We offer these items to phone manufacturers
and major distributors under our name or as a private labeled product.

The close working relationship with our Chinese factories also allows us to
replicate the most popular accessories appearing on the world market at costs
30-40% below their current wholesale pricing.

In the fourth quarter of 2004 and in early 2005 we added new product lines such
as Apple-IPod accessories, entertainment accessories such as headsets and
chargers for players, and became a national distributor for a new line of phones
manufactured by Hop-on MP3. The majority of our products are manufactured in
China and Taiwan. In addition, we also act as a master distributor for
well-known brand name products such as Plantronics, Body Glove, and Nextel.

Our product lines are sold along with comprehensive sales and marketing
programs, and a series of value added products designed to separate and
distinguish us in the minds of wireless resellers.

                                       12
<PAGE>

These Services Are Offered Free of Charge:
------------------------------------------

   |X|   Airtime carrier phone and accessories compatible charts
   |X|   E-Mail blast management programs
   |X|   Customized retail packaging
   |X|   Sales training materials
   |X|   In store displays and posters
   |X|   Private Label E-commerce websites that allow customers to offer our
         full product line to their end users

Also in 2004, we introduced an on-line ordering option to our customers which
permits them to view our current inventory along with our next receive date if
an item is out of stock.

CUSTOMERS
---------

Our customer base consists of more than 2,500 independent dealers from a
one-location mall kiosk to multi-store retail franchisers covering 250 locations
and more. In addition, we sell to some of the largest distributors of cell
phones, computers, and infrastructure products. These distributors in turn
resell to airtime carriers, mass retailers, and prepaid phone distributors. We
have one customer who accounted for 16.7% and 18.4% of our 2005 and 2004 sales,
respectively. No other customer accounted for 5% or more of our sales.

About 25% of our customers either repackage our products for resale through
their resale channels or ask us to provide custom packaging as part of our value
added services.

BUSINESS MODEL
--------------

With our recent introduction of entertainment accessories, Blackberry and
smartphone accessories plus a new line of phones, we have the widest product
line in America and are truly a "One stop shopping source" for all types of
wireless resellers.

We believe we are virtually the only organization that offers resellers three
full product lines to provide a "good, better, best" choice for end users to
purchase.

The wireless phone industry is characterized by the continuous introduction of
new model handsets with design changes, new operating features, and enhancements
that limit the ability of all but a few of our competitors to compete with
aftermarket accessories, especially by having them available for purchase soon
after the phone manufacturers introduces their new models.

In addition to being quick to market on new accessories, it is necessary to have
inventory for some handsets for 1-2 years because of their continuing popularity
in certain parts of the country that do not follow the latest fashion trends.
Our customers have come to expect same day shipping on orders placed before 3pm,
and we meet this commitment on more then 99% of our orders.

We encourage customers to try selected new products by offering a no risk,
60-day opportunity to stock balance and return products that do not sell up to
their expectations. This "guaranteed sale" option has proven very popular with
our customers. We encourage customers to place orders on line 24/7 which ensures
them same day shipment and reduces our order processing costs.

Because of the rapid pace of new handset introductions, retail sales people find
it hard to keep current on which accessories are compatible among various brands
and models. We help solve this problem by publishing a monthly chart of phone
and accessory compatibilities for our customers who are agents of Verizon,
Cingular, Nextel, T-Mobile, AT&T, and Sprint.

                                       13
<PAGE>

MANAGEMENT DISCUSSION OF FACTORS THAT HAVE AFFECTED OUR SALES GROWTH:
---------------------------------------------------------------------

     A)   During the fourth quarter of 2003 we introduced a new line of rugged
          accessories, which we named Industrial Strength. This line has
          received an enthusiastic reception and is an important factor in our
          sales growth.

     B)   Early in 2004 we introduced a value-added catalog that shows our
          customers and prospects all of the free services that are available to
          grow their business. To our knowledge, we are the only organization
          that offers this variety and depth of market and sales assistance.

     C)   In the third quarter of 2004, we introduced The Platinum Collection of
          accessories, which have features and benefits equal or superior to
          higher priced OEM accessories.

     D)   In 2004 we realigned our sales force and our sales compensation plan
          to incentivize and reward the sales people who grow their business.

     E)   In early, 2005 we have introduced handsets to supplement our numerous
          product offerings. Also, in 2005, we introduced an extensive line of
          accessories for Apple Bipods, Mp3 players, as well as a 300 item line
          of OEM Accessories.

     F)   We continue to introduce new products and product lines so that there
          is always something new to offer customers and prospects.

EMPLOYEES
---------

Wireless Xcessories Group employs approximately 80 full time workers divided
into accounting, sales, customer services, marketing, purchasing/product
development, MIS, quality control, and warehouse picking and packing. Our
8-person management team has been with the company from 2-15 years, with most
managers having 5-10 years experience.

Most members of our management team receive restricted stock grants tied to an
agreement not to compete and have incentive to remain with the company for at
least 5 years as a result of the vesting provisions of the stock grants.

No employee is covered by collective bargaining and we consider our employee
relations to be excellent.


COMPETITION
-----------

The aftermarket wireless accessory industry is both competitive and fragmented.
There are a number of local and regional distributors who import their products
from the Far East, and there are 15 or more national distributors.

Barriers to entry are low assuming one wants to market a limited product line.
We believe that it would require a large investment in inventory, quality
assurance, packaging capabilities, sales training, purchasing, and marketing to
duplicate the total program we have developed.

The continual introduction of new phone models combined with popularity changes
that can be measured in weeks and months have caused some of the larger
distributors to seek out accessory specialists like Wireless Xcessories Group,
Inc. to manage the selection, packaging and sourcing of their accessory
programs.


INTELLECTUAL PROPERTY
---------------------

We seek to protect our intellectual property through a combination of
trademarks, service marks, and confidentiality agreements, non-compete
agreements, and patent protection when appropriate.

We maintain a number of registered trade names and registered trademarks,
including Industrial Strength(R), IndustrialStrength.com(R),
Platinumaccessories.com and WireXGroup.com.

As our product development initiatives bear fruit we intend to seek protection
for the patentable technology we create.

                                       14
<PAGE>

PROPERTIES AND FACILITIES
-------------------------

We lease a total of close to 65,000 square feet of warehouse space in Huntingdon
Valley, Pa., which we have occupied since 2001.

Our facility is divided into 13,000 square feet of office and administrative
space and 52,000 square feet of warehouse pick, pack, and quality control
facilities.

In March 2004, we signed a new 5-year lease, expiring in 2009, with no increase
in costs. Our rent is approximately $450,000 annually.

LEGAL PROCEEDINGS
-----------------

Lawsuits are filed against us from time to time in the ordinary course of
business. We do not believe that any lawsuits or claims currently pending
against our company are material or will have a material adverse affect on our
financial condition.

INDUSTRY RISK FACTORS THAT COULD AFFECT OUR PERFORMANCE
-------------------------------------------------------

     A)   General economic conditions deteriorate, thereby reducing the demand
          for phones and accessories.

     B)   Manufacturers reduce the number of new phone introductions, thereby
          reducing our competitive advantage of speed to market new accessories.

FACTORS AFFECTING FUTURE OPERATING RESULTS

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

We wish to take advantage of the "safe harbor" provisions of the Act and are
including this section in our Annual Report on Form 10-KSB in order to do so.
Forward-looking statements also appear in other sections of this report.
Statements that are not historical facts, including statements about
management's expectations for fiscal year 2005 and beyond, are forward-looking
statements and involve various risks and uncertainties. Factors that could cause
the actual results to differ materially from management's projections,
forecasts, estimates and expectations include, but are not limited to, the
following:

WE MAY NOT SUCCESSFULLY OFFER ATTRACTIVE MERCHANDISE TO OUR CUSTOMERS.

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


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

                                       15
<PAGE>

WE FACE CERTAIN RISKS RELATING TO CUSTOMER SERVICE.

Any material disruption or slowdown in our order processing systems resulting
from labor disputes, telephone down times, electrical outages, mechanical
problems, human error or accidents, fire, natural disasters, or comparable
events could cause delays in our ability to receive and distribute orders and
may cause orders to be lost or to be shipped or delivered late. As a result,
customers may cancel orders or refuse to receive goods on account of late
shipments, which would result in a reduction of net sales and could mean
increased administrative and shipping costs.


WE EXPERIENCE INTENSE COMPETITION IN OUR MARKETS.
-------------------------------------------------

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


WE ARE DEPENDENT ON CERTAIN KEY PERSONNEL.
------------------------------------------

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

ITEM 2. PROPERTIES

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

                                                       APPROXIMATE      LEASE
                                                           AREA       EXPIRATION
OPERATION         NATURE             LOCATION            (SQ.FT.)        DATE
---------         --------           --------             ------       -------
Main Facility   Warehouse and   Huntingdon Valley, PA     52,000       3/31/09
                   Office                                 13,100       3/31/09

In March 2004, the above lease for both office and warehouse was extended to
March 31, 2009. As part of the lease extension the Company has the right to
relinquish approximately 15,000 feet of warehouse space without further
obligation to the Company upon giving the landlord six months prior notice of
its intention to vacate.


LEGAL PROCEEDINGS
-----------------

Lawsuits and claims are filed against us from time to time in the ordinary
course of business. We do not believe that any lawsuits or claims currently
pending against our company are material or will have a material adverse affect
on our financial condition.

INDUSTRY RISK FACTORS THAT COULD AFFECT OUR PERFORMANCE
-------------------------------------------------------

     A)   General economic conditions deteriorate, thereby reducing the demand
          for handsets and accessories.

     B)   Manufacturers reduce the number of new handset introductions, thereby
          reducing our competitive advantage of speed to market new accessories.

COMPANY SPECIFIC RISKS
----------------------

     A)   Our sales and marketing plans are ineffective or poorly executed.


                                       16
<PAGE>

     B)   One or more major customers decide to buy elsewhere or suffer
          financial difficulties resulting in reduced purchasing of our
          products.

     C)   One or more competitors successfully take customers from us.

     D)   Lawsuits resulting from alleged infringement of another of another
          company's designs or products.

     E)   Key employee resignation or sickness.

     F)   Failure of our products to be accepted in the market place based on
          poor quality, design, or features.

     G)   Disruption in our Far East supply chain due to accidents, shipping
          delays or intensive customs inspections.

     H)   Problems experienced by our factories in China. These could be based
          on component scarcity, labor problems, production delays, all of which
          are beyond our control.


                                    PART III
                                OTHER INFORMATION

Submission of Matters to a vote of Security Holders
---------------------------------------------------

At the Annual Meeting of shareholders held on June 23, 2004, pursuant to the
Notice of Annual Meeting of Stockholders dated May 21, 2004 the following
actions were taken:

Proposal No 1: Election of Directors.

The following individuals were elected as Directors:

       Name                               For                 Against
       ----                               ---                 -------
Stephen Rade                           4,274,636              630,923
Christopher McConnell                  4,515,059              390,500
Bradley T. MacDonald                   4,274,636              630,923
Allan Kalish                           4,515,059              390,500
Christopher C. Cole                    4,274,636              630,923


No other matters were submitted to a vote of the Company's stockholders during
the third quarter of the fiscal year covered by this report through the
solicitation of proxies or otherwise.

Proposal No 2: Proposal to ratify the appointment by our Board of Directors of
Bagell, Josephs & Company, L.L.C the Company's independent auditors for the
fiscal year ending December 31, 2004.


For: 4,716,577      Against: 185,082      Abstained 3,900

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    (a) Exhibits


     31.1  Certification of Principal Executive Officer Pursuant to Rule 13a-14
           and 15d-14 of the Securities and Exchange Act of 1934

     31.2  Certification of Principal Financial Officer Pursuant to Rule 13a-14
           and 15d-14 of the Securities and Exchange Act of 1934

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

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


    (b) Reports on Form 8-K
        None

                                       17
<PAGE>

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.



            Date: May 3, 2005                  By: /s/ Stephen Rade
                                                   ---------------------------
                                                   Stephen Rade
                                                   Chief Executive Officer

            Date: May 3, 2005                  By: /s/ Ronald E. Badke
                                                   ---------------------------
                                                   Ronald E. Badke
                                                   Chief Financial Officer




























                                       18