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

                                  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 Sept 30, 2006

                         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 September 30, 2006, there were 4,414,122 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 2006 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-KSB
and in other filings with the Securities and Exchange Commission
================================================================================
<PAGE>

                         WIRELESS XCESSORIES GROUP, INC.
               FORM 10-QSB FOR THE PERIOD ENDED SEPTEMBER 30, 2006


                                      INDEX

PART I.    FINANCIAL INFORMATION

ITEM 1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

           Condensed Consolidated Balance Sheets September 30, 2006
            (unaudited) and December 31, 2005............................      3

           Condensed Consolidated Statements of Income for the Three
            and Nine months ended September 30, 2006 and 2005
            (unaudited)..................................................      4

           Condensed Consolidated Statements of Cash Flow for the
            nine months ended September 30, 2006 and 2005 (unaudited)....      5

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

ITEM 2.    Management's Discussion and Analysis of Financial
            Condition and Results of Operations..........................   8-11

ITEM 3.    Financial graphs..............................................  11-12

ITEM 4.    Controls and Procedures ......................................  12-13


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

ITEM 1.    Company history, overview, and description of recent events...  13-15

ITEM 2.    Risk Factors..................................................  15-16


PART III.  OTHER INFORMATION

ITEM 1.    Submission of matters to a vote of Security holders...........  16-17

ITEM 2.    Signatures....................................................  18-21





                                                                               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

                                                   September 30,    December 31,
                                                       2006             2005
                                                    ----------       ----------
                                                    (unaudited)



CURRENT ASSETS:
Cash and cash equivalents                           $      210       $      774
Marketable Securities                                    1,982            1,910
Accounts receivable (net of allowance of
  $82,448 and $101,000, respectively)                    2,361            1,733
Inventories                                              2,550            2,098
Prepaid expenses and other current assets                  507              343
Prepaid Federal and State income taxes                     130               --
Current portion of deferred income taxes                   275              101
                                                    ----------       ----------
    Total Current Assets                                 8,015            6,959

PROPERTY AND EQUIPMENT - Net                               377              331

Investment in Affiliated Company                           260               --

Deferred Income taxes                                       21               --

OTHER ASSETS                                                37               36
                                                    ----------       ----------
  TOTAL ASSETS                                      $    8,710       $    7,326
                                                    ==========       ==========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable                                    $    1,658       $      863
Income taxes payable                                        --              101
Accrued payroll and related benefits                       102              141
Other accrued expenses                                      86               48
                                                    ----------       ----------
       Total Current Liabilities                         1,846            1,153
                                                    ----------       ----------
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, 5,373,080
    issued in both 2006 and 2005                             5                5
  Additional paid-in-capital                            11,454           11,411
  Accumulated deficit                                   (3,852)          (4,830)
  Treasury Stock at cost, 958,958 and 861,385
    Shares in 2006 and 2005, respectively                 (743)            (413)
                                                    ----------       ----------
  Total Stockholders' Equity                             6,864            6,173
                                                    ----------       ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $    8,710       $    7,326
                                                    ==========       ==========

                 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             Nine Months Ended
                                                             September 30                   September 30
                                                     ----------------------------   ----------------------------
                                                         2006            2005           2006            2005
                                                     ------------    ------------   ------------    ------------
<S>                                                  <C>             <C>            <C>             <C>
NET SALES                                            $      5,670    $      5,293   $     17,012    $     16,083

COST OF SALES                                               4,088           3,271         11,361           9,838
                                                     ------------    ------------   ------------    ------------

  Gross profit                                              1,582           2,022          5,651           6,245

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                1,539           1,596          4,709           4,599
                                                     ------------    ------------   ------------    ------------

INCOME FROM OPERATIONS                                         43             426            942           1,646

OTHER INCOME (EXPENSE):
BAD DEBT RECOVERIES                                            --              --             --              31
DIVIDEND INCOME AND CAPITAL GAINS DISTRIBUTIONS                55               9             76              34
INTEREST INCOME                                                 2               4              9              12
                                                     ------------    ------------   ------------    ------------
  Income before income taxes                                  100             439          1,027           1,723

(BENEFIT)PROVISION FOR INCOME TAX                             (25)            118             49             118
                                                     ------------    ------------   ------------    ------------

Net Income                                           $        125    $        321   $        978    $      1,605
                                                     ============    ============   ============    ============


Net Income per common share - Basic                  $        .03    $        .07   $        .22    $        .36
                                                     ============    ============   ============    ============


Net Income per common share - Diluted                $        .03    $        .07   $        .21    $        .35
                                                     ============    ============   ============    ============


Basic weighted average common shares outstanding        4,447,918       4,474,121      4,481,725       4,463,628
                                                     ============    ============   ============    ============


Diluted weighted average common shares outstanding      4,620,699       4,626,063      4,664,659       4,615,570
                                                     ============    ============   ============    ============
</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 FLOW
                                   (UNAUDITED)
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)




                                                    Nine Months Ended Sept 30
                                                   ----------------------------
                                                       2006            2005
                                                   ------------    ------------
OPERATING ACTIVITIES:
Net income                                         $        978    $      1,605
Adjustments to reconcile net income to cash
provided by operating activities-
    Unrealized gains on Marketable Securities               (44)             --
    Depreciation and amortization                           156             206
    Provision for doubtful accounts                          74             (15)
    Options exercised by a director and officer              48              47
    Deferred Income taxes                                  (196)             --
Changes in assets and liabilities, net of
effects from dispositions:
    Marketable Securities                                   (28)             --
    Accounts receivable                                    (702)           (399)
    Inventories                                            (452)           (586)
    Prepaid expenses and other assets                      (295)           (279)
    Accounts payable and accrued expenses                   693            (175)
                                                   ------------    ------------
Net cash provided by operating activities                   232             404
                                                   ------------    ------------

INVESTING ACTIVITIES:
Purchase of property and equipment                         (201)           (135)
Purchase of Common Stock of affiliate                      (260)             --
Principal payments on notes receivable                                       13
                                                   ------------    ------------
Net cash (used in) investing activities                    (461)           (122)
                                                   ------------    ------------

FINANCING ACTIVITIES:
Net payments on borrowings                                   --              (2)
Repurchase of company stock                                (335)             --
                                                   ------------    ------------
                                                           (335)             (2)
                                                   ------------    ------------

NET (DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS        (564)            280
    CASH AND CASH EQUIVALENTS, BEGINNING OF                 774           1,907
                                                   ------------    ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD           $        210    $      2,187
                                                   ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Income tax paid                                    $        477              --
                                                   ============    ============


                 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, 2005. The results of operations for the nine months ended September 30,
2006 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 June 30, 2006
and 2005, the Company has repurchased cumulatively 981,775 (and subsequently
reissued approximately 120,390 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 expiring 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. Through September 30, 2006 the
Company purchased 100,000 shares at an average of $ 3.35 per share or a total
cost of approximately $335,000 under this program.

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 September 30, 2006 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 172,781 and 183,500 shares were outstanding at September 30,
2006 and September 30, 2005, 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:

                                                                               6
<PAGE>
                                                       2006           2005
                                                   ------------   ------------
As reported net income:
Add: Stock-based compensation                      $        978   $      1,605
   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                        --            (24)
                                                   ------------   ------------
Pro forma net income from continuing operations    $        978   $      1,581
                                                   ============   ============

Basic net income per common share:
As reported                                        $       0.22   $       0.36
                                                   ============   ============
Pro forma                                          $       0.22   $       0.35
                                                   ============   ============

Diluted income from operations per common share:
As reported                                        $       0.21   $       0.35
                                                   ============   ============
Pro forma                                          $       0.21   $       0.34
                                                   ============   ============

5.  INVESTMENTS

In August 2006, the Company purchased 28,500 shares of stock in ANYCOM
Technologies AG " Anycom" Monchengladbach , Germany at $7.00 Euro dollars per
share for a total investment of approximately $260,000 in US Dollars. It is the
intention of Anycom to move ahead with an initial public offering within the
next six months on the Frankfurt exchange, and as a stipulation to this
transaction, the Company has 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 Company, earlier in this year,
entered into a Distribution agreement with Anycom in which the Company provides
distributing, warehousing, financing , logistical, and billing support for
certain specified fees for shipments and sales to Anycom designated and approved
customers.

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. is 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 is approximately 3% of net
sales and the Company provides reserves and allowances to provide for these
exposures, which are applied against net sales.

                                                                               7
<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:
<TABLE><CAPTION>
                                                Three Months Ended Sept 30     Nine Months Ended Sept 30
                                                 -------------------------     -------------------------
                                                    2006           2005           2006           2005
                                                 ----------     ----------     ----------     ----------
<S>                                              <C>            <C>            <C>            <C>
Net Sales                                             100.0%         100.0%         100.0%         100.0%
Cost of Sales                                          72.1%          61.8           66.8           61.2
                                                 ----------     ----------     ----------     ----------
Gross Profit                                           27.9           38.2           33.2           38.8
Selling, General and administrative Expenses           27.2           30.1           27.7           28.6
Bad Debt Recoveries                                      --             --             --            0.2
Income from sale of Investments                         1.0            0.1            0.4            0.2
Interest Income                                         0.1            0.1            0.1            0.1
                                                 ----------     ----------     ----------     ----------

Income before Income Tax                                1.8            8.3            6.0           10.7
Income Tax Expense                                     (0.4)           2.2            0.3            0.7
                                                 ----------     ----------     ----------     ----------
Net Income                                              2.2%           6.1%           5.7%          10.0%
                                                 ==========     ==========     ==========     ==========
</TABLE>


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

THREE MONTHS ENDED SEPTEMBER 30, 2006 ("2006") COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2005 ("2005"). Net sales increased by $ .04 million or 7.1% from
$5.3 million in 2005 to $5.7 million in 2006. The increase in sales is mainly
attributable to the continued expansion of our third party products and product
lines such as Bluetooth, (including the Anycom Bluetooth line introduced in late
2005), sales to a major customer relating to the newly introduced GE Sanyo line
and sales from our newly introduced Extreme Fashion line. Offsetting these
factors, was a drop in our core product line particularly Industrial Strength.

Gross profit declined by $440,000 from $2,022,000 in 2005 to $1,582,000 in 2006
and as a percentage of sales decreased from 38.2% to 27.9%. The fall off in
gross margin percentage resulted from the following:
(1)  The growth of lower margin third party product sales such as, but not
     limited to, Bluetooth, GE Sanyo line sales, as compared to higher margin
     direct import sales as a percentage of total sales as compared to 2005.
(2)  The Company gave favorable pricing to new prospects and selected existing
     customers to expand business and offset increasing competitive factors.
(3)  The Company incurred additional freight cost in the 2006 quarter as
     compared to last year relating to Far East shipments in reaction to a
     tightening of product supply availability coupled with the bankruptcy of
     one of our sources. Additionally, with the proliferation of new cell phone
     offerings the Company wanted to insure a competitive advantage by having
     the product available for sale early in the Holiday selling season.
(4)  The Company wrote off additional amounts of blue tooth defective product
     that could not be returned to vendors (in one case vendor out of business)
     for credit.

Selling, general and administrative (SG&A) expenses decreased by $57,000 or a
3.6 % decrease as compared to a sales increase of 7.1%. As a result, total SG&A
expenses as a percentage of sales decreased slightly from 30.1% in 2005 to 27.2%
in 2006. 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 absorbing raises and
incentive increase and reducing its corporate and professional fee expense.
Company expenditures were up in the three months to bolster the sales support
effort including, catalogs, mailings and marketing support materials along with
charges to bad debt expected as more Customers were affected by slower sales,
heavy competition and continued stretching of payments from their air time
carriers.
                                                                               8
<PAGE>
Interest income decreased from $4,000 in 2005 to $2,000 in 2006. This is
primarily due to less funds being invested in interest bearing certificates
offset in part by increased rates earned on interest bearing certificates in
2006.

The Company's effective income tax rate for the third quarter in 2006 would have
been 38% or a total approximate expense of $38,000, however, as of September 30,
2006 the Company has applied a total of $63,000 of Federal and State tax timing
differences from its tax allowances against its 2006 income tax resulting in an
credit of $25,000 or (25 %) of taxable income. The statutory income tax rate for
both 2006 and 2005 was 38%.

NINE MONTHS ENDED SEPTEMBER 30, 2006 ("2006") COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2005 ("2005"). Net sales increased by $ .9 million or 5.8% from
$16.1 million in 2005 to $17.0 million in 2006. The increase in sales is mainly
attributable to the major expansion of our mainly distributed products and
product lines such as, but not limited to, Bluetooth, (including the Anycom
Bluetooth line introduced in late 2005), sales to a major customer relating to
the newly introduced GE Sanyo line, expanded OEM accessories line along with the
distribution of phones primarily in the first quarter. 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 representative and
Customer Service department , expanded product selection, expanded marketing and
overall pricing/value relationship offered to customers. We have made
significant progress in fostering the growth of new business, but are still
affected by the comparative loss of sales in the six months of 2005 quarter from
our largest customer.

Gross profit declined by $594,000 from $6,245,000 in 2005 to $5,651,000 in 2006
and as a percentage of sales decreased from 38.8% to 33.2%. The fall off in
gross margin percentage resulted from the following:
(1)  The growth of lower margin third party product sales such as, but not
     limited to, Bluetooth, GE Sanyo line sales, as compared to higher margin
     direct import sales as a percentage of total sales as compared to 2005.
(2)  The Company gave favorable pricing to new prospects and selected existing
     customers to expand business and offset increasing competitive factors.
(3)  The Company wrote off additional amounts of blue tooth defective product
     that could not be returned to vendors (in one case vendor out of business)
     for credit.

Selling, general and administrative (SG&A) expenses increased by $110,000 or 2.4
% as compared to a sales increase of 5.8%. As a result, total SG&A expenses as a
percentage of sales increased from 28.6% in 2005 to 27.7% in 2006. The Company's
continues to give full attention to cost cutting particularly of General and
Administrative expenses and emphasis on continued productivity particularly, in
warehouse labor, which resulted in continued improvement in our sales per
employee ratio and salesperson productivity, which helped to hold our warehouse
expenses down as a percentage of sales and absorb increases given to our
employee base. Company expenditures were up in the nine months period to bolster
the sales support effort including an expansion of supporting staff, catalogs,
mailings and marketing support materials along with charges to bad debt expected
as more Customers were effected by slower sales, heavy competition and continued
stretching of payments from their air time carriers and salary increases given
to our employee base in 2006.

Interest income decreased from $12,000 in 2005 to $9,000 in 2006. This is
primarily due to less funds being invested in interest bearing certificates
offset in part by increased rates earned on interest bearing certificates in
2006.

The Company's effective income tax rate for the nine months in 2006 would have
been 38% or a total approximate expense of approximately $385,000. As of
September 30, 2006 the Company has applied a total of approximately $335,000
consisting of Federal and State tax timing differences from its tax allowances
against its 2005 income tax expense resulting in an expense of $ 49,000 or
approximately 4.9 % of taxable income. The statutory income tax rate for both
2006 and 2005 was 38%.

The increase in Accounts Receivable of approximately $816,000 in comparing
September 30, 2006 to September 30, 2005 as compared to the prior year consists
of the timing of the net effect of large orders in the September 2006 quarter
from two of our largest Customers totaling approximately $534,359 (20% of gross
accounts receivable at September 30, 2006) and $109,692 respectively, (of which
we have subsequently collected approximately $552,000 through November 6, 2006).
These accounts have more extended payment terms than our Customer base taken as
a whole and to a lesser degree by some smaller accounts due to slow business and
delays in carrier payments to them.
                                                                               9
<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 sources of financing during the nine months ended September
30, 2006 was cash flow from operations.

The Company's working capital as of September 30, 2006 and 2005 was $ 6,169,000
and $5,239,000, respectively. Net cash provided by operating activities for the
nine months ended September 30, 2006 and 2005 were $232,000 and $404,000
respectively. In 2006, the Company provided $1,015,682 from operations from its
net income of $978,464 as adjusted for non-cash items of depreciation and
amortization of $ 155,522, a bad debt provision of $74,452, and issuance of
stock to an officer and director of $47,510 less, unrealized gains from
Marketable securities, of $44,679 and an increase in deferred income taxes of
$195,587.

Cash used in changes in assets and liabilities of $782,503 resulted from
increases in marketable securities, accounts receivable , inventory, prepaid
taxes, expenses and other assets of $27,394, $702,467, $451,520,and $294,941
offset in part by an increase in accounts payable and accrued expenses of $
693,819.

Net cash used in investing activities for the nine months ended September 30,
2006 was $460,401 including approximately $165,000 for the implementation and
installation of an upgraded business system including software and hardware cost
during the last week of June, 2006 and $35,672 of assorted computer equipment
and peripherals. Additionally, the Company purchased 28,500 shares at a value of
$7.00 per share in Euro Dollars of common stock of Anycom Technologies AG,
Monchengladbach (Germany) Inc, A German based manufacturer of blue tooth with a
sales operations in the United States for a total Investment of approximately
$260,000 in US dollars.

Net cash utilized in financing activities of $335,000 resulted from the
repurchase of 100,000 shares of its common stock at an average price of
approximately $3.35 per share.

The Company estimates that it will incur capital expenditures of approximately
$100,000 during the twelve months ended September 30, 2007 principally for an
upgraded 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 September 30, 2007.
                                                                              10
<PAGE>
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 booked approximately 51% and 54 %,
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

     4,176    4,955    5,835    5,293    5,976    5,485    5,857    5,670
     --------------------------------------------------------------------
QTR      4        1        2        3        4        1        2        3
FY      04       05       05       05       05       06       06       06


Gross Profit - Quarterly
Dollars in Millions

     1,846    2,066    2,157    2,022    2,151    2,096   1,972     1,582
     --------------------------------------------------------------------
QTR      4        1        2        3        4        1        2        3
FY      04       05       05       05       05       06       06       06


Operating cash flow - Quarterly
Dollars in Thousands

      -290      583     -423      244      502      -25       77      180
     --------------------------------------------------------------------
QTR      4        1        2        3        4        1        2        3
FY      04       05       05       05       05       06       06       06


Earnings per share - Quarterly
Dollars

       .07      .13      .16      .07      .09      .10      .09      .03
     --------------------------------------------------------------------
QTR      4        1        2        3        4        1        2        3
FY      04       05       05       05       05       06       06       06

                                                                              11
<PAGE>
ITEM THREE -- 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 September 30, 2006. They have
          concluded that, as of September 30 2006 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 Wireless Xcessories
               Group, Inc. 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 September 30, 2006 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
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation.


ITEM FOUR -- 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 September 30, 2006 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 September 30, 2006. There were no changes
in our internal control over financial reporting that occurred during the nine
months ended September 30, 2006 that has materially affected or is reasonably
likely to materially affect our internal control as required by item 308(c) of
Regulation S-B.
                                                                              12
<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
3,000 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 the "Extreme Fashion Line".

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.

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, Anycom, and Blue Ant.

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
|X| Private Label E-commerce websites that allow customers to offer our full
    product line to their end users

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 7.5% of our 2006 year to date sales and
another customer who accounted for 12.1% of our 2005 year to date sales,
respectively. No other customer accounted for 5% or more of our sales in either
period.
                                                                              13
<PAGE>
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 smart
phone accessories, 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, Nextel-Sprint, and T-Mobile.


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 give
incentive to 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 I pods, Mp3 players, as well as a 300 item line of OEM Accessories.

F) In early 2006, we partnered with GE Sanyo to provide an exclusive line of
accessories, which they sell to mass retailers. GE Sanyo has given us exclusive
rights to market this product line to the independent wireless dealer channel.

G) During the first quarter of 2006 we introduced a new line of Fashion phone
cases and a new line of Bluetooth accessories by Anycom of Germany.

H) 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.

I) at the end of the fourth quarter of 2006, we will be introducing our largest
ever accessory catalog; approximately 100 pages, and featuring accessories for
over 150 phones.

EMPLOYEES
---------

Wireless Xcessories Group employs approximately 78 full time workers divided
into accounting, sales, customer services, marketing, purchasing/product
development, MIS, quality control, and warehouse picking and packing. Our
9-person management team has been with the company from 2-15 years, with most
managers having 5-10 years experience.
                                                                              14
<PAGE>
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.

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 2006 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.

                                                                              15
<PAGE>
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 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 losses on its cash accounts or short-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.

                                                                              16
<PAGE>
ITEM 2.   PROPERTIES

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

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

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.

                                                                              17
<PAGE>
                                    PART III
                                OTHER INFORMATION

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------

At the Annual Meeting of shareholders held on April 12, 2006, pursuant to the
Notice of Annual Meeting of Stockholders dated March 10, 2006 the following
actions were taken:

Proposal No 1:  Election of Directors.

The following individuals were elected as Directors:

       Name                               For                 Against
-------------------                   -----------           -----------
Stephen Rade                           3,911,338              50,611
Christopher McConnell                  3,910,639              50,865
Bradley T. MacDonald                   3,910,389              51,115
Allan Kalish                           3,910,389              51,115
Christopher C. Cole                    3,897,939              63,565


No other matters were submitted to a vote of the Company's stockholders during
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, Levine & Company, L.L.C the Company's independent auditors for
the fiscal year ending December 31, 2006.

For: 3,907,379   Against: 50,275   Abstained 3,849


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

                                                                              18
<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: NOVEMBER 14, 2006                BY: /S/ STEPHEN RADE
                                       ---------------------------
                                       STEPHEN RADE
                                       CHIEF EXECUTIVE OFFICER





DATE: NOVEMBER 14, 2006                BY: /S/ RONALD E. BADKE
                                       ---------------------------
                                       RONALD E. BADKE
                                       CHIEF FINANCIAL OFFICER















                                                                              19