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                                  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, 2007
                         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 March 31, 2007, there were 4,415,722 shares of the registrant's Common
Stock net of Treasury Stock, par value $.001 per share outstanding.
================================================================================
<PAGE>

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 2007 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, 2007
                                      INDEX

PART I. FINANCIAL INFORMATION

ITEM 1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

           Condensed Consolidated Balance Sheets March 31, 2007 (unaudited)
           and December 31, 2006.............................................. 3

           Condensed Consolidated Statements of Income for the three
           months ended March 31, 2007 and 2006 (unaudited)................... 4

           Condensed Consolidated Statements of Cash Flows for the three
           months ended March 31, 2007 and 2006 (unaudited)................... 5

           Notes to Condensed Consolidated Financial Statements ............ 6-8

ITEM 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations........................................ 8-9

ITEM 3.    Financial graphs................................................... 9

ITEM 4.    Controls and Procedures .......................................... 10

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

ITEM 1.    Company history, overview, and description of recent events ... 11-15

ITEM 2.    Risk Factors...................................................... 15

PART III.  OTHER INFORMATION

ITEM 1.    Submission of matters to a vote of Security holders............ 15-16

ITEM 2.    Signatures........................................................ 16

                                       2
<PAGE>

FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

<TABLE><CAPTION>
                                     ASSETS
                                                                                March 31,     December 31,
                                                                                  2007            2006
                                                                               ----------      ----------
                                                                                      (unaudited)
<S>                                                                            <C>             <C>
CURRENT ASSETS:
Cash and cash equivalents                                                      $      969      $      319
Marketable Securities                                                               2,192           2,135
Accounts receivable (net of allowance of
$103 and $89, respectively)                                                         1,941           1,873
Inventories                                                                         1,662           2,088
Prepaid expenses and other current assets                                             246             260
Deferred income taxes-Current                                                         127             127
Advances to foreign manufacturer under
   Distributor agreement                                                              104             287
Federal and State prepaid taxes                                                      --               135
                                                                               ----------      ----------
    Total Current Assets                                                       $    7,241      $    7,224

PROPERTY AND EQUIPMENT - Net                                                          304             340
INVESTMENTS                                                                           243             259
DEFERRED INCOME TAXES                                                                 169             169
OTHER ASSETS                                                                           37              37
                                                                               ----------      ----------
  TOTAL ASSETS                                                                 $    7,994      $    8,029
                                                                               ==========      ==========


                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:


Accounts payable                                                               $      457      $      792
Income taxes payable                                                                   50            --
Accrued payroll and related benefits                                                  104             134
Other accrued expenses                                                                 28              28
                                                                               ----------      ----------
       Total Current Liabilities                                               $      639      $      954
                                                                               ----------      ----------
STOCKHOLDERS' EQUITY
  Preferred stock, par value $.001, 1,000,000 shares authorized, no shares
  issued or outstanding Common stock, par value $.001, 10,000,000 shares
  authorized, 5,373
  issued in both 2007 and 2006                                                          5               5
  Additional paid-in-capital                                                       11,454          11,454
  Accumulated deficit                                                              (3,365)         (3,641)
  Treasury Stock at cost, 957 and 959
    in 2007 and 2006                                                                 (739)           (743)
                                                                               ----------      ----------
  Total Stockholders' Equity                                                        7,355           7,075
                                                                               ----------      ----------
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY                                      $    7,994      $    8,029
                                                                               ==========      ==========
</TABLE>

              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)

<TABLE><CAPTION>
                                                             Three Months Ended
                                                                  March 31,
                                                       ------------------------------
                                                           2007              2006
                                                       ------------      ------------
<S>                                                    <C>               <C>
NET SALES                                              $      6,073      $      5,485
COST OF SALES                                                 3,955             3,389
                                                       ------------      ------------
  Gross profit                                                2,118             2,096
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                  1,716             1,648
                                                       ------------      ------------
INCOME FROM OPERATIONS                                          402               448
OTHER INCOME:
(LOSS) ON INVESTMENTS                                           (16)             --
UNREALIZED NET GAINS FROM MARKERTABLE SECURITIES                 59              --
DIVIDEND INCOME AND CAPITAL GAINS DISTRIBUTIONS                  10                11
INTEREST INCOME                                                   5                 4
                                                       ------------      ------------
  Income before income taxes (benefit)                          460               463
INCOME TAXES (BENEFIT)                                          184                (5)
                                                       ------------      ------------
  Net Income                                           $        276      $        468
                                                       ============      ============
Net Income per common share - Basic and Diluted        $       0.06      $       0.10
                                                       ============      ============
Basic weighted average common shares outstanding          4,415,389         4,483,425
                                                       ============      ============
Diluted weighted average common shares outstanding        4,565,170         4,687,003
                                                       ============      ============
</TABLE>

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

                                       4
<PAGE>

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

<TABLE><CAPTION>
                                                                                Three Months Ended March 31,
                                                                                     2007          2006
                                                                                   --------      --------
<S>                                                                                <C>           <C>
OPERATING ACTIVITIES:
Net income                                                                         $    276      $    468
Adjustments to reconcile net income to cash
  provided by (used in) operating activities-
    Unrealized Gains on Tradable Securities
    Depreciation and amortization                                                        61            46
    Allowance for doubtful accounts                                                      31           (13)
    Stock issuance to a director and an officer                                        --              48
    Common Stock Issued to Consultants                                                    4          --
    Deferred Income taxes                                                              --             (74)
    Unrealized net gains on investments                                                 (66)         --
    Unrealized loss on investment in foreign manufacturer                                16          --
Changes in assets and liabilities:
    Marketable securities                                                                 8          (112)
    Accounts receivable                                                                 (99)           52
    Inventories                                                                         426          (168)
    Prepaid expenses and other assets                                                   333          (106)
    Accounts payable and accrued expenses                                              (315)         (278)
                                                                                   --------      --------
Net cash provided by
  (used in) operating activities                                                        675          (137)
                                                                                   --------      --------
INVESTING ACTIVITIES:
Purchase of property and equipment                                                      (25)          (10)
                                                                                   --------      --------
Net cash (used in) investing activities                                                 (25)          (10)
                                                                                   --------      --------

FINANCING ACTIVITIES:
Net payments on borrowings                                                             --             (__)
                                                                                   --------      --------

Net cash (used in) financing activities                                                --             (__)
                                                                                   --------      --------

NET INCREASE ((DECREASE) IN CASH AND CASH EQUIVALENTS                                   650          (147)
  CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                        319           774
                                                                                   --------      --------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                           $    969      $    627
                                                                                   ========      ========

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

   Common Stock issued to a Director and Officer                                   $   --        $     48
                                                                                   ========      ========

   Income tax paid                                                                 $   --        $    162
                                                                                   ========      ========
</TABLE>

         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, 2006. The results of
operations for the three months ended March 31, 2007 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

The Board of Directors had approved a stock buyback program and had authorized
management to repurchase a total of up to 1,250,000 shares of Common Stock at a
total cost not to exceed $1,000,000 through July 5, 2005. As of March 31, 2006
and 2005, the Company has repurchased cumulatively 981,775 (and subsequently
reissued approximately 152,817 shares) at an average price of $.51 per share.

On December 7, 2005, the Board authorized a Company Stock buyback program for a
one year period which expired on December 7, 2006 whereby management may make
purchases from time to time on the open market at prevailing prices or in
privately negotiated transactions of a total of up to 250,000 shares of its
Common Stock at a cost not to exceed $1,000,000. Under this Program the Company
purchased a total of 100,000 shares at an average of $3.35 per share for a total
cost of $335,000.

3. INVESTMENTS

In August 2006, the Company purchased 28,500 shares of stock in Anycom
Technologies A.G. "Anycom" Monchengladbach, Germany, at 7 Euros per share for a
total investment of approximately $259,000 in US dollars. Anycom moved ahead
with an initial public offering in early January 2007, and as a stipulation to
this transaction, the Company agreed to a 90-day post offering restriction
period in which the Company cannot trade its shares without the specific
knowledge and approval of Anycom and its underwriters. The approximate market
value of the investment on March 31, 2007 was $ 243,000 based on the closing
price of the stock on that date. Accordingly, the Company has taken an
unrealized loss of approximately $16,000 reducing the carrying value of the
investment on the balance sheet to reflect the lower market price.

                                       6
<PAGE>

As of March 31, 2007, the Company has made net advances to Anycom of $104,074,
which are fully collateralized by inventory held by the Company and Accounts
Receivable generated by billings. The company had earlier in the 2006, as
modified in November 2006, entered into a distribution agreement in which the
Company provides distributing, warehousing, financing, logistical, billing, and
collection support for certain specified items for shipment, and sales to Anycom
designated an approved customers. The Company feels the advances will be
collected in full during 2007.

4. 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, 2007 and during the periods presented.

5. 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 172,781 shares were outstanding at March 31, 2007 and March
31, 2006, respectively, with exercise prices ranging $.28 to $ 4.57.

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:

                                                     2007         2006
                                                   --------     --------
As reported net income:
Add: Stock-based compensation                      $    276     $    468
  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                                          --           --
                                                   --------     --------
Pro forma net income from
  continuing operations                            $    276     $    468
                                                   ========     ========
Basic and Diluted net income per common share:
As reported                                        $   0.06     $   0.10
                                                   ========     ========
Pro forma                                          $   0.06     $   0.10
                                                   ========     ========
Diluted net income per diluted share:
As reported                                        $   0.06     $   0.10
                                                   ========     ========
Pro forma                                          $   0.06     $   0.10
                                                   ========     ========

                                       7
<PAGE>

6. SIGNIFICANT ACCOUNTING POLICIES

Financial Reporting Release No. 60 requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. The significant accounting policies that we believe are
most critical to aid in fully understanding our reported financial results are
the following:

Business Description- Wireless Xcessories Group, Inc. and (collectively, the
"Company") are engaged in the distribution of cellular accessories and
components principally in the United States.

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.

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 was approximately 3.1% of
net sales for the quarter ended March 31, 2007 and the Company provides reserves
and allowances to provide for these exposures, which are applied against net
sales.

                                       8
<PAGE>

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,
                                                   2007           2006
                                                 --------       --------
Net Sales                                           100.0%         100.0%
Cost of Sales                                        65.1           61.8
                                                 --------       --------
Gross Profit                                         34.9           38.2
Selling, General and administrative Expenses         28.3           30.0
(Loss) on investments                                (0.3)          --
 Unrealized gains on Tradable securities              1.0           --
Gain on sale of investments                           0.2            0.2
Interest Income                                       0.1            0.1
                                                 --------       --------
Income before Income Tax                              7.6            8.4
Income tax expense ( Benefit )                        3.0           (0.1)
                                                 --------       --------

Net Income                                            4.6%           8.5%
                                                 ========       ========


                                       9
<PAGE>

MANAGEMENT DISCUSSION

THREE MONTHS ENDED MARCH 31 2007 ("2007") COMPARED TO THREE MONTHS ENDED MARCH
31, 2006 ("2006").

Net sales increased by $ .6 million or 10.7% from $5.5 million in 2006 to $ 6.1
million in 2007. The increase in sales is attributable to the expansion of our
third party distributed products and product lines such as Bluetooth and memory
cards which together provided additional sales, of approximately $840,000 and
our GE Sanyo line introduced in early 2005. These product lines are a vehicle to
not only open new markets, but also supplement sales from our regular customer
base and help to more than offset drop offs in certain aftermarket product lines
such as Industrial Strength. 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 30
person well-trained and motivated sales staff and Customer Service department,
expanded product selection, expanded marketing and overall pricing/value
relationship offered to customers.

Gross profit increased by $23,000 from $2,096,000 in 2006 to $2,118,000 in 2007,
but as a percentage of sales decreased from 38.2% to 34.9% The fall off in gross
profit percentage resulted from the following:

     (1)  The growth of lower margin third party product sales such as, but not
          limited to: Bluetooth, memory cards and GE Sanyo line sales as
          compared to higher margin direct import sales as a percentage of total
          sales as compared to 2006.

     (2)  The Company gave favorable pricing to new prospects and selected
          existing customers to expand business and offset increasing
          competitive factors.

     (3)  The Company absorbed additional charges for obsolescence expense in
          2007, resulting from the decision to freshen, expand, and upgrade its
          proprietary product lines, particularly cases, and the resultant
          decision to discontinue and aggressively move out slower moving, lower
          turn, and stale product.

The Company was able to partially off the above by reducing its freight cost in
2007 compared to 2006 as a result of having brought in a higher proportion of
its product in the fourth quarter of 2006.

Selling, general and administrative (SG&A) expenses increased by $ 68,000 or
4.1% in 2007 as compared to a sales increase of 10.7%. As a result, total SG&A
expenses as a percentage of sales decreased from 30.0% in 2006 to 28.3% in 2007.
This is a result of the Company's continuous attention to cost cutting and
emphasis on continued productivity particularly, in warehouse labor, which
resulted in continued improvement in our sales per employee ratio. Company
expenditures were up in the quarter to bolster the sales support effort
including an expansion of supporting staff, catalogs, mailings and marketing
support materials along with public related costs.

Interest income increased from $3,587 in 2006 to $ 5,269 in 2007. This is
primarily due to more funds being invested in interest bearing certificates and
increased rates earned on interest bearing certificates in 2007.

The Company's effective income tax rate in calculating a possible expense based
on the net income for the first quarter in 2007 would have been 40% or a total
approximate expense of $ 184,000. For the quarter ending of March 31, 2006 the
Company has applied a total of $ 178,118 consisting of unapplied Federal and
State tax timing differences from its tax allowances against its 2006 income tax
expense resulting in a benefit of ($5,278) or (1%) of taxable income. The
effective income tax rate for 2007 was 40% as compared to 39% in 2006.

                                       10
<PAGE>

                        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 source of financing during the three months ended March 31,
2007 was cash flow from operations.

The Company's working capital as of March 31, 2007 and 2006 was $ 6,602,000 and
$6,335,000 , respectively. Net cash provided (utilized) by operating activities
for the three months ended March 31, 2007 and 2006 were $ 674,654 and
($137,000), respectively. In 2007, the Company provided $ 322,814 from
operations from its net income of $ 276,240 as adjusted for non-cash items of
depreciation and amortization of $ 60,792 and issuance of stock to an outside
consultants of $4,125 less allowance for doubtful accounts of $30,686, loss on
Investment of $16,538 less unrealized gains on marketable securities $65,567.
Cash used in changes in assets and liabilities of $343,543 resulted from
decreases in marketable securities purchased, inventory and in prepaid expense
of $8,297, 426,491 and $331,987, respectively offset in part by an increase in
accounts receivable of $99,445 and a decrease in accounts payable and accrued
expenses of $315,490.

Net cash used in investing activities for the three months ended March 31, 2007
was $ 25,000 resulting from the purchase of property and equipment related
primarily to software costs and new computer equipment. Net cash used in
investing activities for the three months ended March 31, 2006 was $10,383
related primarily to computer equipment. The Company estimates that it will
incur capital expenditures of approximately $ 150,000 during the twelve months
ended March 31, 2008 principally on enhancements to our business system,
computer servers and related peripherals 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, 2008.

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.

                                       11
<PAGE>

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

SEASONALITY AND INFLATION

In fiscal years 2006 and 2005 the Company did approximately 49% and 51 %,
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.


GRAPHS

Total Revenue - Quarterly
Dollars in Millions

      5,835    5,293     5,976     5,485     5,857    5,670    5,857    6,073
      --------------------------------------------------------------------------
QTR       2        3         4         1         2        3        4        1
 FY      05       05        05        06        06       06       06       07


Gross Profit - Quarterly
Dollars in Millions

      2,157    2,022     2,151     2,096     1,972    1,582    1,740    2,118
      --------------------------------------------------------------------------
QTR       2        3         4         1         2        3        4        1
 FY      05       05        05        06        06       06       06       07


Operating cash flow - Quarterly
Dollars in Thousands


       -423      244       502       -25        77      180      126      675
      --------------------------------------------------------------------------
QTR       2        3         4         1         2        3        4        1
 FY      05       05        05        06        06       06       06       07


Earnings per share - Quarterly
Dollars


        .16       07       .09       .10       .09      .03      .05      .06
      --------------------------------------------------------------------------
          2        3         4         1         2        3        4        1
 FY      05       05        05        06        06       06       06       07

                                       12
<PAGE>

ITEM 3. - CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The term " disclosure controls and procedures " is defined in Rules 13(a)-15e
and 15(d) - 15(e) of the Securities Exchange Act of 1934, as amended (the
Exchange Act). Our principal executive officer and principal financial officer
have evaluated the effectiveness of our disclosure controls and procedures as of
March 31, 2007. They have concluded that, as of March 31, 2007 our disclosures
were effective to ensure that:

     (1)  That information required to be disclosed by the Company in reports
          that it files or submits under the act is recorded, processed,
          summarized and reported, within the time periods specified in the
          Commissions' rules and forms, and

     (2)  Controls and procedures are designed by the Company to ensure that
          information required to be disclosed by Wirex in the reports it files
          or submits under the Act is accumulated and communicated to the
          issuer's management including the principal executive and principal
          financial officers or persons performing similar functions, as
          appropriate to allow timely decisions regarding financial disclosure.

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, 2007 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.

                          CHANGES IN INTERNAL CONTROLS

There have not been any significant changes in the Company's internal controls
data provided in our form 10-QSB for March 31, 2007. There were no changes in
our internal control over financial reporting that occurred during the quarter
ended March 31, 2007 that has materially affected or is reasonably likely to
materially affect our internal control as required by item 308(c) of Regulation
S-B.

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, 2007 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.

Bagell, Josephs, Levine & Company, L.L.C. our independent registered public
accounting firm, has provided us with an unqualified report on our consolidated
financial statements for the year ended December 31, 2006. However, in the
course of conducting its assessment of our internal

                                       13
<PAGE>

controls for its audit of our financial statements, Bagell, Josephs, Levine &
Company, L.L.C. has advised the audit committee and management that the
following material weaknesses exist as of December 31, 2006 and March 31, 2007:

     (1)  A material weakness exists in that no written Information Technology
          (I/T) policies and procedures exist, nor do I/T internal control
          functions exist to monitor the I/T control environment and assess
          security.

     (2)  A material weakness exists in that access to the LAN is not
          appropriately restricted by firewalls and routers, file access on the
          server is not adequately configured to restrict access to sensitive
          information and no evidence exists that user access management is
          being properly maintained and administered.

     (3)  A material weakness exists in that the server room does not contain
          adequate physical or environmental control, the network is not
          adequately secured against virus or malicious software, no evidence
          exists that system event logs, change logs, and access logs are being
          monitored and reviewed and a problem management system for I/T issues
          does not exist. Additionally, back-up procedures are not adequate to
          reasonably ensure that all backups of critical data are consistently
          successful and financial data would be recoverable in the event of a
          disaster at our main office location.

While these material weaknesses did not have an effect on our reported results,
they nevertheless constituted deficiencies in our controls. In light of these
material weaknesses and the requirements enacted by the Sarbanes - Oxley act of
2002, and the related rules and regulations adopted by the SEC, our Chief
Executive Officer and Chief Financial Officer concluded that, as of December 31,
2006 and March 31, 2007, our controls and procedures needed improvement and were
not effective at a reasonable assurance level. Despite those deficiencies in our
disclosure controls, management believes that there were no material
inaccuracies or omissions of material fact in this report.

Since the discovery of the material weaknesses in I/T internal controls
described above, management is strengthening the Company's oversight over the
I/T functions and its attendant controls, procedures, documentation and security
beyond what has existed in prior years. Specifically, we have taken, and plan to
take, whatever additional steps necessary to improve our I/T controls and
procedures and to remediate any deficiencies including, but not limited to, the
following:

     (1)  We have hired a new higher level I/T Manager in early April, 2007
          whose assigned responsibility is not only run the function at a high
          level but to put in place the necessary staff, procedures and controls
          to properly remediate the deficiencies as sighted above.

     (2)  The Company's steering committee has taken on a more active oversight
          role to review in detail all deficiencies and to develop with the
          assistance of I/T personnel a line by line remedial written action
          plan sighting and defining the deficiency, corrective action to be
          taken, person(s) responsible and appropriate completion dates. The
          Company is in the process of documenting and implementing corrective
          action on a line by line basis. A written progress report was
          submitted to and discussed with the audit committee for their review
          and approval on May 3, 2007.

     (3)  The preparation of the plan will be the overall responsibility of the
          steering committee and senior mangers in coordination with the I/T
          Director, who will be closely assisted and monitored by the two
          steering committee members and will include, but not limited to, the
          following:

          (a)  establishing a formal policy and procedure plan, to address the
               overall security framework, including password usage, intrusion
               detection and

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<PAGE>

               system security monitoring.

          (b)  improving our security measures to safeguard our data, including
               enhancing our recovery plan and better securing access to and
               environmental improvements to our computer operations facility.

          (c)  improve our policies, procedures and attendant documentation for
               system maintenance and handling back up and recovery tapes.

          (d)  improve documentation, testing and access controls relating to
               new programs and provide high level control over any possible
               back end entry into the system. (e) establishment of a plan for
               uniform upgrade of workstations and software, including virus
               protection and software fixes. (f) the preparation of an IT
               policy and procedure manual to document all of our updated
               procedures/standards on a company-wide basis


     (4)  The Company, as of May 3, 2007, has made significant progress on
          implementing changes and correcting some of the individual
          deficiencies covered under three summarized categories of material
          weaknesses pointed out above. Progress has been made particularly, in
          the preparation and development of policies and procedures, computer
          room environment, documentation and security. This is a good start and
          the Company expects to accelerate its progress over the next quarter.
          As outlined in points 5 and 6 below the Company is actively working
          with our current business system software provider and servicer and
          considering various sources of outside technical support.

     (5)  Additionally, the steering committee including senior management has
          met with top managers of our Business system "Vision " provider and
          servicer during the week ending April 5, 2007 to discuss their
          responsibility and role in the process along with any access, system
          and programming controls we will require from them. Since that time
          our new I/T director has had on an on sight training session at the
          Vision office in New Jersey and outlined further compliance steps with
          them and timetables necessary to assure the Company can meet its
          remedial objectives.

     (6)  To enhance the implementation process the Company in April 2007 has
          met with a Sarbanes -Oxley consulting group and with a Company
          specializing in the sale of Sarbanes - Oxley Software and has received
          proposals. At this point the Company is considering the proposals and
          no specific determination has been made as to the scope or the nature
          of any consulting assignment or the acquisition of software.

The continued implementation of the initiatives described above is among our
highest priorities. We have discussed our corrective actions and future plans
with our audit committee and Bagell, Josephs, Levine & Company, L.L.C. as of the
date of this report, believe the actions outlined above should serve to correct
the above listed material weaknesses to our internal controls. However, in
designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assistance of achieving the desires
control objectives and are subject to certain limitations, including the
exercise of judgment by individuals, the inability to identify unlikely future
events, and the inability to eliminate misconduct completely. As a result, there
can be no assurance that our disclosure controls and procedures will prevent all
errors or fraud or ensure that all material information will be made known to
management in a timely manner. In addition, we cannot assure you that neither
we, nor our independent auditors, will in the future identify further material
weaknesses or significant deficiencies in our internal control over financial
reporting that we have not discovered to date.

                                       15
<PAGE>

                            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," Industrial
Strength(R). And our newest line which is our "Limited Collection".

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.

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.

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

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<PAGE>

|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. The on-line system is currently in the process of being
streamlined and upgraded.

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
had one customer who accounted for 5.2 % of our 2007 March quarter sales and
another customer who accounted for 5.8% of 2006 March quarter sales. No other
customer accounted for 5% or more of our sales in either period.

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 Limited collection accessories, Blackberry and
smart phone 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.

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, Sprint/Nextel, T-Mobile, and AT&T.

MANAGEMENT DISCUSSION OF FACTORS THAT HAVE AFFECTED OUR SALES GROWTH:

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

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<PAGE>

B) In the third quarter of 2006, we partnered with two leading Point of Sale
software Companies to integrate our real time Inventory with their accounting
software packages, We are jointly promoting Wireless Xcessories Group to their
wireless dealers throughout the U.S.

C) In early 2007 we introduced our Limited Collection of higher quality cases.

D) In March 2007, we introduced our largest ever accessory catalog;
approximately 80 pages, and featuring accessories for over 150 phones.

E) The Company is continuing the process of upgrading its Website and on-line
ordering facilities and has a very comprehensive e-mail blast program to
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.

Key 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) and IndustrialStrength.com(R).

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

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<PAGE>

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 2007 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.

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

                                       19
<PAGE>

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.

WE FACE CERTAIN RISKS RELATED TO CASH ACCOUNTS, SHORT-TERM INVESTMENTS AND
CREDIT LOSSES.

The Company has not experienced any material losses on its cash accounts or its
short and long -term investments. The Company sells its products to commercial
businesses. Through its continuing relationships with these customers, the
Company performs credit evaluations and generally does not require collateral.
The Company maintains a reserve for potential credit losses.

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       04/30/09
                Office                                    13,100       04/30/09


In March 2004, the above lease for both office and warehouse was extended to
April 30, 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.

                                       20
<PAGE>

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.

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

(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

                                       21
<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 15, 2007         By: /s/ Stephen Rade
                                          ---------------------------
                                          Stephen Rade
                                          Chief Executive Officer

           Date: May 15, 2007         By: /s/ Ronald E. Badke
                                          ---------------------------
                                          Ronald E. Badke
                                          Chief Financial Officer






















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